HomeMy WebLinkAboutKEYSER MARSTON ASSOCIATES, INC. - KMA - 1985-07-01T' of&EkC y
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ctrtm/KAT, COUNCIL ACTION ��
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Date November 2, 1992
Submitted to:
Honorable Mayor and City Council Mem s��
Submitted by:
Michael T. Uberuaga, City Administrator
Prepared by:
Barbara Kaiser, Director Economic Development~
Subject: Michael Adams, Director of Community Developmen
APPROPRIATION OF 20% SET -A -SIDE FUNDS
FOR CONSULTANT SERVICES
Consistent with Council Policy? V] Yes [ ] New Policy or Exception
Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments:
STATEMENT OF ISSUE:
Consulting services have been completed on the first phase of a
housing nexus study. Though the amount of the services does not
exceed $4,000, and the consulting firm has an existing contract with
the City, City Council action is needed to appropriate housing funds
for payment of services rendered.
RECOMMENDATION•
Authorize the allocation and expenditure of $4,000 in the City's 20%
Set -A -Side funds for consultant services.
ANALYSIS:
At the direction of the City Administrator, staff is developing an
in -lieu housing fee program as a means of financing affordable
housing throughout the City. The first phase of developing such a
program is performing an economic analysis of the costs associated
with providing affordable housing units in Huntington Beach.
Keyser Marston Associates (KMA) has completed the required nexus
study, and has an existing contract with the City/Redevelopment
Agency. Because the in -lieu fee program is under consideration to
support affordable housing, redevelopment housing set -aside funds
should be utilized for the payment of consulting services by KMA.
Keys eNarston&socige-,tnc.
Golden Gateway Commons
4v"))X 55 Pacific Avenue Mall
�'�j//��/� San Francisco, California 94111
415/398-3050 -
Diane M. Chambers
BUSINESS MANAGER
1(0
Real Estate &DevelopmentConsulting
PIO 5/85
Page Two
RCA - APPROPRIATION FOR CONSULTANT SERVICES
E,INQ SOURCE:
Undesignated 20% Set -A -Side Housing Funds
ALTERNATIVE ACTION:
1. Direct staff to encumber funds for consultant services from
currently budgeted contractual services account.
&�ACMNTS :
None
MTU : MA :fm : j r
(4064d)
CITY OF HUNTINGTON BEACH
2000 MAIN STREET
OFFICE OF THE CITY CLERK
CONNIE BROCKWAY
CITY CLERK
July 8, 1992
Keyser Marston Associates, Inc.
500 South Grand Avenue
Suite 1480
Los Angeles, CA 90071
Attn: Kathleen H. Head
CALIFORNIA 92648
The Redevelopment Agency of the City of Huntington Beach at the regular
meeting held Monday, July 6, 1992, approved Agreement between the
Redevelopment Agency of the City of Huntington Beach and Keyser Marston
Associates to provide Economic Professional Services.
Enclosed is an executed copy of the Agreement for your records.
Connie Brockway
City Clerk
CB:bt
Enc.
{Telephone: 71 A-53b3227)
`.REQUEST FO REDEVE
NT t aENCY ACTION
APPROVED BY CITY
r•�^�19
ED 92-27
Date June 1S, 1992
Honorable airman and Redevelopment Agency Members
Submitted to:
Michael T. Uberuaga, Executive Direct /
Submitted by:
Barbara A. Kaiser, Deputy City Administrator/Economic Development
Prepared by:
Approval of Contract Betwee:a Keyser Marston Associates, Inc., and the
Subject: Redevelopment Agency for Ecoromic Consultant Services
Consistent with Council Policy? W Yes [ ] New Policy or Exception
Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: ir./
Staff is requesting approval of a contract with Keyser Marston Associates, Inc. to
provide the Redevelopment Agency with economic consulting services. A consultant
services contract needs Agency approval if the contract is over $10,000.
REMbRENDATiON:
Approve and authorize Agency officers to execute the attached two year contract
between Keyser Marston Associates, Inc. and the Redevelopment Agency of the City of
Huntington Beach.
Economic consultant services differ from tasks performed by existing staff who is
responsible for the daily administration of the budget and other managerial duties. The
economic consultant's tasks include:
* financial analyses
• fiscal impact analyses
s market demand analyses
9 developer solicitation and evaluation
• public financing services
The information obtained through these tinalyses are used in evaluating the economy,
development firms and the feasibility of development projects. The information is also
used in negotiations. Some projects result in a written report. whereas other services
require the consultant to be present in negotiation sessions with Agency staff and the
developer.
The complex financial studies sometimes need state of the art financial computer
models which incorporate up to date financial and statistical data. At times the
consultant must meet stringent deadlines which would detract from the daily
administration if performed by city staff. The costs to have this level of expertise on
staff would be greater than through contractual services. Although there is no Iegal
requirement of hire a private consultant, staff recommends using a professional
economic consultant.
t
IV.
1�
PI OI1l85
RCA/RAA ED 92-27
June 15, 1992
Page two
The provisions of the Huntington Beach Municipal Code Section 3.03 regarding contracts
for professional services has been met in this instance through a formal Request for
Qualifications process. Qualifications were solicited from thirty firms and seven
responded with statements of qualifications. The Request for Qualifications (RFQ) was
distributed in March, 1992 and a copy is included here as attachment B. Over the next
approximately forty-five days, staff of three city departments reviewed statements of
qualifications submitted from the following firms:
1) Coopers & Lybrand (602) 280-1800
2901 North Central Avenue Edward McDonough
Phoenix, AZ 85012
2) Halcyon Real Estate Advisors/Emst & Young (213) 977-4304
515 South Flower Street Suite 24CO Edward Lubieniecki
Los Angeles, CA 90071 Mark Pickell
3) Kenneth Leventhal & Company 640-5000
660 Newport Center Drive Stephen Duffy
Newport Beach, CA 92660 Marc Berger
4) Keyser Marston Associates, Inc. (213) 622-8095
500 South Brand Avenue Suite 100 Kathleen Head
Los Angeles, CA 90071
5) Kosmont & Associates, Inc. (818) 840-8565
610 North Hollywood Way, Suite ?50 Larry Kosmont
Burbank, CA 91505
6) The Ashley Company 644-0111
P.O. Box 15535 Thomas Ashley
Newport Beach, CA 92659-5535
7) Williams-Kuebelbeck & Associate;:, Inc. 474-1606
7 Corporate Park Suite 260 Lawrence Williams
Irvine, CA 92714
Each firm's qualifications were judged based on it's experience relevant to the activities
of the Huntington Beach Redevelopment Agency, caliber of the principal members of
each firm, the reputation of the firm in the field, and the competitiveness of the
proposed fees. As a result of this analysis staff is recommending renewal of the
contract with the firm of Keyser Marstor, and Associates.
Historically, Keyser Marston Associates, Inc. has assisted the Agency by providing
economic consultant services since 1982. The firm has shown extensive experience in
both the public and private sectors. The quality of their work meets the standards
necessary for the Redevelopment Agency to perform in negotiations and evaluating
financial information.
RCA/RAA ED 92-27
June 15, 1992
Page three
The Keyser Marston Associates, Inc. contract with the Redevelopment Agency is a two
year contract. The contract limits expenditures to $155,000 in the first year and limits
compensation to a 5% increase in the second year subject to budget appropriation.
There is no need for annual solicitation of'professional services and a two year contract
will save staff time in preparing the RFQ, interviewing, and requesting Agency action
next year. However, a new recruitment process will be conducted at the end of the two
year term of this contract. Keyser Marston Associates, Inc. has the required insurance
certificates for professional services, Attachment D.
FUNDING SOURCE:
As approved in the 1992-1993 Fiscal Year budget.
ALTERNATIVE ACTION:
1. Do not approve the attached contract.
ATTACHMENTS:
A. Keyser Marston Associates, Inc. Contract
B. Request for Qualifications for Economic Consultants
C. Insurance Certificates
MTU/BAK/CR:jar
0832r
�1
AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY
OF THE CITY OF HUNTINGTON BEACH AND
KEYSER MARSTON ASSOCIATES TO PROVIDE
ECONOMIC PROFESSIONAL SERVICES
TABLIOF-CONTENTS
1.
WORK STATEMENT . . . . . . . . . . . .
. . . . . . . .
PAGE
1
2.
AGENCY STAFF ASSISTANCE . . . . . . .
. . . . . . . .
1
3.
TIME OF PERFORMANCE . . . . . . . ...
. . . . . . . .
2
4.
COMPENSATION . . . . . . . . . . . . .
. . . . . . . .
2
5.
EXTRA WORK . . . . . . . . . . . . . .
. . . . . . . .
2
6.
METHOD OF PAYMENT . . . . . . . . . .
. . . . . . . .
2
7.
DISPOSITION OF MATERIALS . . . . . . .
. . . . . . . .
4
8.
INDEMNIFICATION AND HOLD HA"ILESS . .
. . . . . . . .
4
9.
WORKERS' COMPENSATION . . . . . . . .
. . . . .
5
10.
INSURANCE . . . . . . . . . . . . . .
. . . . . . . .
5
11.
CERTIFICATES OF INSURANCE:; ADDITIONAL
INSURED
ENDORSEMENTS. . . . . . . . . . . . .
. . . . . . . .
6
12.
INDEPENDENT CONTRACTOR . . . . . . . .
. . . . . . . .
7
13.
TERMINATION OF AGREEMENT . . . . . . .
. . . . . . . .
8
14.
ASSIGNMENT AND SUBCONTRACTING . . . .
. . . . . . . .
8
15.
AGENCY EMPLOYEES AND OFFICIALS . . . .
. . . . . . . .
8
16.
COPYRIGHTS/PATENTS . . . . . . . . . .
. .
8
17.
NOTICES . . . . . . . . . . 4.
8
18.
IMMIGRATION . . . .
9
19.
LEGAL SERVICES SUBCONTRACTING PROHIBITED . . . . . . .
. 9
20.
ENTIRETY . . . . . . . . 6 0 . 0 0
. 4 . 0
10
AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY
OF THE CITY OF HUNTINGTON BEACH AND
KEYSER MARSTON ASSOCIATES TO PROVIDE
ECONOMIC PROFESSIONAL SERVICES
THIS AGREEMENT is made and entered into this 6th day
of July , 1992, by and between the REDEVELOPMENT AGENCY OF
THE CITY OF HUNTINGTON BEACH, hereinafter referred to as
"AGENCY," and KEYSER MARSTON ASSOCIATES, INC., a California
corporation, hereinafter referred to as "CONTRACTOR."
WHEREAS, AGENCY desires to engage the services of
CONTRACTOR to provide economic consulting services in the City
of Huntington Beach and the county of Orange; and
CONTRACTOR has been selected to_perform said services
pursuant to the provisions of Huntington Beach Municipal Code
Section 3.03 regarding contracts for professional services;
NOW, THEREFORE, AGENCY AND CONTRACTOR agree as follows:
1. WORK STATEMENT
CONTRACTOR shall provide all economic consultant
services as reflected on Exhibit "A," attached hereto and
incorporated herein by this reference. Said services shall
sometimes hereinafter be referred to as the "PROJECT.". -
CONTRACTOR hereby designates Kathleen H. Head, who shall
represent it and be its contact and agent in all consultations
with AGENCY during the performance of this Agreement.
2. AGENCY STAFF ASSISTANCE
AGENCY assigns the Director of Economic Development or
her designee as staff coordinator to work directly with
CONTRACTOR in the performance. of this Agreement.
- 1 -
Time is of the essence of this Agreement. The
services of the CONTRACTOR are to commence as practicable after
the execution of this Agreement. The contract will not exceed
a two-year period, commencing with the date of the signing of
this Agreement, without written authorization by the Agency's
Executive Director.
4. COMPENSATION
In consideration of the performance of the services
described in Section 1 above, AGENCY agrees to pay CONTRACTOR
as described in Exhibit "B," not to exceed One Hundred
Fifty -Five Thousand Dollars ($155,000) in the first year, and a
maximum of five percent (5%) increase in the second year.
5. EXTRA WORK
In the event of authorization in writing by the AGENCY
of changes from the work described in the Exhibit "A," or for
other written permission authorizing additional work not
contemplated herein, additional compensation shall be allowed
for such Extra Work, so long as the prior written approval of
AGENCY is obtained by virtue of an amendment hereto.
6. METHOD OF PAYMENT
A. progress Pavmer&A. CONTRACTOR shall be entitled
to monthly progress payments toward the fees set forth in
Section 4 herein, in accordance with the progress on the work
described in the Exhibit "A," which is authorized by AGENCY for
time and materials not to exceed the compensation limits for
each project performed.
- 2 -
B. Delivery -of Work Pr-oduct. Copies of memos and
reports prepared by CONTRACTOR shall be submitted to the AGENCY
to demonstrate progress toward completion of tasks. In the
event AGENCY rejects or has comments on any such product,
AGENCY shall identify specific requirements for satisfactory
completion. Any such product. which has not been formally
accepted or rejected by AGENCT shall be deemed accepted.
C. Invoices. The CONTRACTOR shall submit to the
AGENCY an invoice for each progress payment due. Such invoice
shall:
1) Reference this Agreement;
2) Describe the services performed;
3) Reference the Redevelopment Project Area if
applicable;
4) Show the tctal amount of the payment due;
5) Include a certification by a principal member
of the CONTRACTOR'S firm that the work has
been performed in accordance with the
provisions of this Agreement; and
6) For all payments, include an estimate of the
percentage of work completed.
Upon submission of any such invoice, if AGENCY is
satisfied that CONTRACTOR is making satisfactory progress
toward completion of tasks in accordance with this Agreement,
AGENCY shall promptly approve the invoice, in which event
payment shall be made within thirty (30) days of receipt of the
invoice by AGENCY. Such approval shall not be unreasonably
- 3 -
withheld. In the event of a dispute regarding payment of fees,
CONTRACTOR shall remain obligated to, and at AGENCY'S option,
continue to perform the services. If the AGENCY does not
approve all or any portion of an invoice, the AGENCY shall so
notify CONTRACTOR within ten (10) calendar days of receipt of
the invoice. CONTRACTOR shall be paid for that portion of the
invoice not in dispute.
7. DISPOSITION OF MATEitIAL-6
CONTRACTOR agrees that all materials prepared
hereunder, including all original drawings, designs, reports,
photographs, videotapes, calculations, and other related
documents, shall be turned over to AGENCY upon termination of
this Agreement or upon Project completion, whichever occurs
first. In the event this Agreement is terminated, said
materials may be used by AGENCY in the completion of PROJECT or
as it otherwise sees fit. Title to said materials shall pass
to the AGENCY upon payment of: fees determined to be earned by
CONTRACTOR to the point of termination or completion of the
PROJECT, whichever is applicable. CONTRACTOR shall be entitled
to retain copies of all materials prepared hereunder; however,
such materials may not be used by CONTRACTOR in any manner,
other than as contemplated by this Agreement, without the prior
express written consent of the AGENCY.
CONTRACTOR hereby agrees to indemnify, defend, and
hold and save harmless AGENCY, its officers and employees from
any and all liability, including any claim of liability and any
- 4 -
LA
`.i
and all losses or costs arising from the negligent performance
of this Agreement by CONTRACTOR, its officers, or employees.
9. WORKERS' COMPENSATION
CONTRACTOR shall conply with all of the provisions of
the workers' Compensation Insurance and Safety Acts of the
State of California, the applicable provisions of Division 4
and 5 of the California Labor Cocle, and all amendments thereto;
and all similar state or federal acts or laws applicable; and
shall indemnify, defend, and hold harmless AGENCY from and
against all claims, demands, payments, suits, actions,
proceedings, and judgments of every nature and description,
including attorneys fees and costs -presented, brought or
recovered against AGENCY, for or on account of, any liability
under any of said acts which may be incurred by reason of any
work to be performed by CONTRACTOR under this Agreement.
CONTRACTOR shall obtain and furnish evidence to AGENCY
of maintenance of statutory workers' compensation insurance and
employers' liability in an arlount of not less than $100,000
bodily injury by accident, each occurrence, $100,000 bodily
injury by disease, each employee, and $250,000 bodily injury by
disease, policy limit.
10. INSURANCE
In addition to the workers, compensation insurance and
CONTRACTOR'S covenant to indemnify AGENCY, CONTRACTOR shall
obtain and furnish to AGENCY a policy of general public
liability insurance, including motor vehicle coverage. Said
policy shall indemnify CONTRACTOR, its officers, agents, and
.. 5 -
employees, while acting within the scope of their duties,
against any and all claims of: arising out of or in connection
with the PROJECT, and shall provide coverage in not less than
the following amount: combined single -limit bodily injury and
property damage, including products/completed operations
liability and blanket contractual liability of $1,000,000 per
occurrence. If coverage is provided under a form which
includes a designated general. aggregate limit, the aggregate
limit must be no less than $1.,000,000. Said policy shall name
AGENCY, its officers, and employees as Additional Insureds, and
shall specifically provide that any other insurance coverage
which may be applicable to'ti.e PROJECT shall be deemed excess
coverage and that CONTRACTOR'S insurance shall be primary.
A. PrQfessional Lietility Insurance.
CONTRACTOR shall acquire a professional liability
insurance policy covering the work performed by it hereunder.
Said policy shall provide coverage for CONTRACTOR S
professional liability in an amount no less than $1,000,000 per
claim. A claims made policy shall be acceptable.
11. CERTIFICATES _OF INSURANCE: ADDITIONAL INURED
ENDORSEMENTS
Prior to commencing performance of the work hereunder,
CONTRACTOR shall furnish to AGENCY certificates of insurance
subject to approval of the City Attorney, evidencing the
foregoing insurance coverages as required by this Agreement;
said certificates shall provide the name and policy number of
each carrier and policy, and shall state that the policy is
currently in force and shall promise to provide that such
policies will not be canceled or modified without thirty (30)
days prior written notice to AGENCY, CONTRACTOR shall maintain
the foregoing insurance coverages in force until the work under
this Agreement is fully completed and accepted by AGENCY.
The requirement for carrying the foregoing coverages
shall not derogate from the provisions for indemnification of
AGENCY by CONTRACTOR under Section 8 of this Agreement. AGENCY
or its representative shall, at all times, have the right to
demand the original or a copy of all said policies of
insurance. CONTRACTOR shall pay, in a prompt and timely
manner, the premiums on all insurance hereinabove required.
A separate copy of the additional insured endorsement
to each of the CONTRACTOR'S insurance policies, naming the
AGENCY, its officers, and employees as Additional Insureds,
shall be provided to the City Attorney for approval prior to
any payment hereunder.
12. INDEPENDENT CONTRAC�Q
CONTRACTOR is, and shall be, acting at all times in
the performance of this Agreement as an independent
contractor. CONTRACTOR shall secure at its expense, and be
responsible for any and all payments of all taxes, social
security, state disability insurance compensation, unemployment
compensation, and other payroll deductions for CONTRACTOR and
its officers, agents, and employees and all business licenses,
if any, in connection with the services to be performed
hereunder.
- 7 -
13. TERMINATIQN OF -AGREI-,MEN:[
All work required hereunder shall be performed in a
good and workmanlike manner. AGENCY may terminate CONTRACTOR'S
services hereunder at any tine with or without cause, and
whether or not PROJECT is fully complete. Any termination of
this Agreement by AGENCY shall be made in writing through the
Director of Economic Developrient, notice of which shall be
delivered to CONTRACTOR as provided in Section 17 herein.
14. ASSIGN-MENASSIGN-MENT AND 1NTRF&TING
This Agreement is a personal service contract and the
supervisory work hereunder small not be delegated by CONTRACTOR
to any other person or entity without the prior written consent
of AGENCY.
15. AGENCY EMPLOYEES AN) OFFICIALS
CONTRACTOR shall employ no AGENCY official or any
regular AGENCY employee in the work performed pursuant to this
Agreement. No officer or employee of AGENCY shall have any
financial interest in this Agreement in violation of California
Government Code Section 1090, et seq.
16. COPYRIGHTS/PATENTS
AGENCY shall own all rights to any patent or copyright
on any work, item, or material produced as a result of this
Agreement.
17. NOTICES
Any notices or special instructions required to be
given in writing under this Agreement shall be given either by
personal delivery to CONTRACTOR'S agent (as designated in
8 ..
Section 1 hereinabove) or to AGENCY'S Director of Economic
Development, as the situation shall warrant, by facsimile
transmission, or by enclosing the same in a sealed envelope,
first-class postage prepaid, and depositing the same in the
United States Postal Services, addressed as follows:
TO AGENCY:
Director of Economic Development
Redevelopment Agency
City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92646
18. IMMIGRATION
TO CONSULTANT:
Kathleen H. Head
Keyser Marston
Associates, Inc.
500 South Grand Avenue
Suite 1480
Los Angeles, CA 90071
CONTRACTOR shall be responsible for full compliance
with the immigration and naturalization laws of the United
States ad shall, in particulE.r, comply with the provisions of
8 U.S.C. 1324a, regarding employment verification.
CONTRACTOR and CITY agree that CITY is not liable for
payment of any subcontractor work involving legal services, and
that such legal services are expressly outside the scope of
services contemplated hereunder. CONTRACTOR understands that
pursuant to Huntington Beach City Charter 5 309, the City
Attorney is the exclusive legal counsel for CITY; and CITY
shall not be liable for payment of any legal services expenses
incurred by CONTRACTOR.
MM
MAY-;27-1992 13: 47 FROM EGC0°I9M I C L)EI„ELGPMEHT
TO
9171362-252I.714 P.02
The: foregoing Agreement and Exhibits A & B attached
hereto„ constitute the entire Agreement between 'the parties.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by and through their authorized
officers the day, month, and year first above written.
CONTRACO'TOR
resi
Secretary
ATTEST:
4ww�
:Agency Clerk
IN]:TIATZO, REVIEWED AND
API?ROVED
REDVELOPMNT AGENCY OF THE
CITY OF H�MTINGTTC.N BEA10,H
Chairman
APPROVED AS TO FORM
124
Agency CoutselT
AP R i1 D
bi rect-or of Economic - 3 - 2 Z Executive Director
Development
10 -
0
TOTAL P.02
EXHIBIT A
ECONOMIC CONSULTANT SERVICES
KEYSER MARSTON ASSOCIATES, INC.
ECONOMIC CONSULTANT SERVICES:
I. Financial Analyses
A. Retail/Mixed Use
B. Residential
C. Office
D. Hotel
II. Fiscal Impact Analyses
III. Market Demand Analyses
A. Retail
B. Residential
C. Office
D. Hotel
IV. Developer Solicitation and Evaluation
V. Public Financing Services
SELECTED COMPUTER ANALYSIS:
I. Financial Analysis
A. Pro Forma Model
B. Sources and Uses of Funds
C. Cost/Benefit Model
D. Redevelopment Project Implementation Model
II. Market Analysis
A. Trend Projection
B. Market Evaluation
C. Retail Allocation 31odel
D. Land Use Database
KEYSER NARSTOR ASSOCIATES, INC. EXHIBIT B
HOURLY FEE SCHEDULE
----------•--------------
1992
A. JERRY KEYSER* $150.00
SENIOR PRINCIPALS* $145.00
PRINCIPALS* $140.00
SENIOR ASSOCIATES+ $120.00
ASSOCIATES $105.00
SENIOR ANALYST $ 90.00
ANALYST $ 80.00
TECHNICAL STAFF .. $ 50.00
ADMINISTRATIVE STAFF $ 45.00
Directly related job expenses not included in the above rates
are: auto mileage, air fares, hotels and motels, meals, car
rentals, taxies, telephone calls, delivery, electronic data
processing, graphics and printing. Directly related job ex-
penses will be billed at 110% of cost. .
Monthly billings for staff time and expenses during the period
will be payable within thirty (30) days of invoice date. A
charge of 1t per month will bit added to all past due accounts.
*Rates for individuals in these categories will be increased
by 50% for time spent in court testimony.
REQUEST FOR QUALIFICATIONS
FOR
ECONOMIC ANALYSIS CONSULTANTS
1. Invitation to Submit Qualifications. The Redevelopment
Agency of the City of Huntington Beach is seeking an Economic
Analysis Consultant who can advise the Agency in all aspects of
economic development and performance. The consultant must be
able to conduct proformas on any business venture, including
joint public and private sector ventures, and advise staff on the
economic feasibility of any development. Each candidate
submitting their qualifications must furnish the following
information:
A. Company Experience and History.
B. Staff Experience. Include education and professional
experience in real estate, business development,
redevelopment, economic analysis, business proformas,
bonds and other economic tools. Experience
with governmental agencies must be included.
C. Client List. Provide a minimum of three public sector
and three private sector clients your firm represented
within the last three years.
D. Cost Estimates and Rate Schedule for Professional
Services. Provide a time and materials analysis where
appropriate.
E. Insurance Information. As required by Resolution No.
6277, consultants must provide Workers Compensation
Insurance for its employees and provide $1,000,000
general liability insurance naming the City as additional
insurred. Please provide a statement which says that you
will be able to meet such requirements if awarded a
contract for professional services.
2. Agency commitment. The Agency is prepared to facilitate the
success of the assignments by providing a reasonable amount of
staff support and access to needed information, where available.
3. Selection Process. Of primary importance in the selection
of a consultant will be the overall quality of the application as
evidenced by previous accomplishments and a demonstrated
willingness to work with city officials and Agency staff.
The selection process includes staff screening the RFQ responses
to evaluate the capabilities -to implement the described
assignments. Follow up with former clients to ascertain service
satisfaction and a personal interview May also be required at
staff's discretion.
The Agency reserves the right to reject any or all RFQ responses
and to waive requirements absent in any response.
4. Agency Time schedule for Selection:
April 15
April 22
May 5
May 18
S. submit three copies to:
6. Contact Person:
RFQ Response Deadline
Interviews Begin
Insurance Certificates Due
Agency Action on Contracts
Barbara A. Kaiser
Deputy City Administrator/Economic
Development
City of Huntington Beach
Redevelopment Agency
2000 Main Street
Huntington Beach, California 92648
Carol Runtel, Development Specialist
(714) 536-5529
CITY OF HIJNTINGTON BEACH PROFILE:
Huntington Beach, incorporated in 1909, is
located on the Southern California coast 35
miles southeast of Los Angeles. With a
population over 187,000 in the 27 square
miles adjacent to the 405 freeway, the City
provides high quality community services
through recreation, cultural activities,
police and fire protection. Redevelopment
efforts are concentrated in five areas,
specifically in the downtown near the newly
constructed Huntington Beach pier, scheduled
to be reopened this summer. The City looks
forward to preserving and improving the city
though quality work today.
Economic Consultants (April 15, 1992)
1. Coopers & Lybrand (CPA's)
2901 North Central Ave
Phoenix, AZ 85012
(602)280-1800
Edward McDonough
2. Halcyon Real Estate Advisors/Ernst & Young
(213) 977-4304
515 South Flower St., Ste 2401) Edward Lubieniecki
Los Angeles, CA 90071 Mark Pickell
3. Kenneth Leventhal & Company
660 newport Center Dr
Newport Beach, Ca 92660
4. Keyser Marston Associates, Inc.
500 South Brand Ave, Suite 14€:0
Los Angeles, CA.
5. Kosmont & Associates, Inc.
610 North Hollywood Way, Ste ?,50
Burbank, CA 91505
6. The Ashley Company
P.O. Box 15535
Newport Beach, CA 92659-5535
640-5000
Stephen Duffy
Marc Berger
(213) 622-8095
Kathleen Head
(818) 840-8565
Larry Kosmont
644-0111
Thomas Ashley
7. Williams-Kuebelbeck & Associates, Inc.474-1606
7 Corporate Park, Suite 260 Lawrence Williams
Irvine, CA 92714
•E5-04-1992 1":12 213 622 5204 KEV5ER MARSTON ASSOC. P.C2
L1
CERTIFICATE OF INSURANCE '>'AuiO..i,vm,c:rrr"
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THTH1qTWRArK
I= I U At; A MAT IR OF INFORMATION ChLY Aw0
CCNFKAS NO RIQNTS UPON THE CI FITIFICArl HCLOIR. THIS CERTIFICATE
DOIS NO=
Al 9N0. EXTRNO OR ALTIA TNi COVKRACE AI17CRego 9Y TNL
�h�Itney & Bnird
vaLlelsis
ICI
B -LOW.
r i
350 3an3nma Street
COMPANIES AF50RDING COVERAGE
S:.n Francisco. CA 94104
• 0•
'
ecf,A"r
A
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St. Faut Firs ►os4rance Co.
RiD
Lima
Kemper Insursncs Co.
Keyser Marston Aeeociatas,
Inc. LLarru,"rC
Raqublit Western 2nsurane" fa.
SS Pacific Av4due M41x
_... ..-----..-.—.�_
San Francisco, CA 94111
ppr.kr
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TWO INTO CNATIPY THATTM11 POL10111 019INSUPIANCII LII170 31LO4, HAVE MEN I13U10 TC TWO INIVA10 NAAIID AICVC FCA THE FOLICY FtAIIOC
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cocvMIYT WITH A1ss1CT Tv^ wmcm TN13
CORTICCATI MAY RE ISIVIC CA MAY PRATAIN, TNJ INIUNANCI AFF•2ADIC 1Y TNI POLICIII CISCAIIs[O NIRIIN Id JIJIJICT TO ALL T141 TIAMS.
EXCLUVONS AhO CCARNTIONS CP SUCH PCLIC,[S. LIMrrl $MOWN IAAY MAW REIN AVOLICED SY PAID CLAIMS.
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�ATII�ICAt><i40LDUi CAtt•�W►TiGN ,•
City of Huntington Beach
2000 Main Street
Huntla tan Basch, CA 9264C
APPP.OVED AS TO I'Oi3L[:
GAIL HUTTON, City Attorney
By:. Deputy City Attorney
e> rAn ANY DI" THI A@M O;eCxlsan rGLICIK$ Of CANCItLM IIP"I T"t
W1111ATION OATS TKA40F. THE IISUIN4 COMPWY WILL
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i
SUPPLEMENTAL AGREEMENT NO. 5 TO AGREEMENT FOR ECONOMIC
EVALUATION OF SERVICES BY AND BETWEEN THE REDEVELOPMENT
AGENCY OF THE CITY 01' HUNTINGTON BEACH AND KEYSER,
MARSTON ASSOCIATES, INC.
This Supplemental Agreement No. 5 is made as of the date of
execution hereof by the Redevelopment Agency of the City of
Huntington Beach between the Redevelopment Agency of the City of
Huntington Beach ("Agency") and Keyser, Marston Associates, Inc.,
("KMA") .
WHEREAS, the Agency and RMA have heretofore entered into that
certain agreement dated as of July 21, 1986 as amended by
previous supplemental agreements herein collectively referred to
as "Agreement"; and
The Agency and KMA now wish to further supplement such
Agreement at this time with respect to compensation and hourly
rates;
NOW, THEREFORE, in consideration of the premises, the Agency
and KMA do hereby amend the Agreement as follows:
1. Section 4 is deleted in its entirety effective July 1,
1991 and a new Section 4 is substituted therefor as follows:
4. COMPENSATION
In consideration of the performance of the services
described in Section 1 above, AGENCY agrees to pay KMA
and KMA agrees to accept compensation on an hourly basis
according to the following fee schedule which will
remain in effect through June 31, 1992. This contract
is limited to payment of such charges not to exceed the
further sum of One Hundred Thousand ($100,000) Dollars
including both hourly charges and directly related
expenses:
- 1 -
It
JERRY KEYSER*
$150.00
SENIOR PRINCIPALS*
$145.00
PRINCIPALS*
$140.00
SENIOR ASSOCIATES*
$120.00
ASSOCIATES
$105.00
SENIOR ANALYST
$ 90.00
ANALYST
$ 80.00
TECHNICAL STAFF
$ 50.00
ADMINISTRATIVE :TA£F
$ 45.00
Directly related jot) expenses not included in the
above rates are: auto nileage, air fares, hotels
and motels, meals, czar rentals, taxies, telephone
calls, delivery, electronic data processing,
graphics and printing.
DIRECTLY RELATED J0I3 EXPENSES WILL BE BILLED AT
110% OF COST.
Monthly billings for staff time and expenses
incurred during the period will be payable
within thirty (30) clays of invoice date.
A CHARGE OF 1% PER MONTH WILL BE ADDED TO ALL
PAST DUE ACCOUNTS.
*Rates for individuals in these categories will
be increased by 50% for time spent in court
testimony.
2. All other terms and conditions of the Agreement shall
remain in full force and effect.
(PAGE END)
-- 2 -
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Agreement Number 5 to be executed by and through
their authorized officers on the day and year set opposite the
name of each of the parties.
KEYSER, MARSTON, ASSOCIATES, INC.
BY: 1/ DATE:
ITS. Y/« F11,5 -elf
BY: DATE:
ITS:
ATTEST:
-- a��e
Agency Clerk
- 3 -
REDEVELOPMENT AGENCY OF THE
CITY OF HUNTINGTON BEACH,
icipal corporation of
the S to of Crlifornia
Chairman DATE:
APPROVED AS TO FORM:
Agency Counsel
Ibc.(! 6- b `1 I C1,
REQUEST F%.,,R REDEVELOPMEN i.-%GENCY ACTION
RH 91-40
Sul ] 1991
Date 1
7 - i �9
Submitted to: Honorable Chairman and Redevelopment Agency Members
Submitted by: Michael T. Uberuaga, Executive Director p'f C1 Y cL x"
-�..-G
Prepared by: Barbara A. Kaiser, Deputy City Administrator conomic Development
Fiscal Year 1991/92 Amendments to Contracts Between the Redevelopment
Subject: Agency of the City of Huntington Beach and the Firms who Provide Consultant
Services to the Agency
Consistent with Council Policy? P4 Yes () New Policy or Exception
Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments:
qr: _so►d 21lKelis
Redevelopment Agency staff has prepared amendments to contracts with the various firms
who provide consultant services to the Agency for the 1991/92 fiscal year. Attached are
five amended contracts for consultant services that provide adjustments to hourly rate
schedules and total compensation.
Approve and authorize the Agency Clerk and Chairman to execute the following
amendments to contracts between the Redevelopment Agency and:
EIAM AMOUNT SERVICE OR] TNAL CONTRACT
1)
Stradling, Yocca
$
250,000
Legal Counsel
05/17/92
Carlson, & Rauth
2)
Keyser Marston
$
I00,000
Financial Analysis
07/21/86
Associates
3)
MacMillin
$
55,000
Appraisals
02/I8/86
& Associates
4)
Cutler & Assoc.
$
25,000
Prop. Acquisition
09/15/86
5)
Pacific Relocation
$
30.000
Relocation
06/24/85
Consultants
TOTAL:
$ 440,000
P10/1185
M
ANALYSIS:
The Redevelopment Agency uses the five consultants to provide legal, financial, appraisal,
relocation, and acquisition advice and expertise in all five redevelopment project areas.
Agency staff tries to minimize the use of consultants where possible, depending on the
number of projects that are brought to the .Agency for review.
The relatively high use of Stradling, Yocca, Carlson, & Rauth and Keyser Marston
Associates on legal and financial analysis services is the direct result of continuing intense
review of the Waterfront, Pierside Restaurants, and Main —Pier Phase II projects.
Each consultant is used to provide the follo aving services:
String. Yucca. Carlson. & Rauth — Prepares Exclusive Negotiation Agreements (ENA),
Disposition and Development Agreements (DDA) and assists staff in negotiating with
developers; provides legal counsel as needed.
Keyser Marston Associates — Provide 33433 Reports, (a report which describes the cost of
the sale agreement to the Agency, the estimated value of the property to be conveyed
determined at its highest uses permitted raider the redevelopment plan, and the purchase
price to be paid by the developer), conducts financial and pro forria analysis of proposed
development. Recommends amount of Agency financial assistance needed to attract
development.
MacMillin & Associates -- Provide real property appraisals to the Agency for land
acquisition, valuation of parcels held by developers and/or property owners. MacMillin is
our "staff' appraiser, but for individual large appraisals, the Agency will issue an RFP and
select the appropriate firm.
John Cutler ,& Associates — Assist the Agency with acquisition of real estate, negotiate
with businesses to meet the Agency's fixtures and equipment obligations during business
relocation. Where possible, the Agency use:; the city Real Estate Services division to
acquire property, however, relies on Cutler for F & E negotiations.
Assist the Agency with acquisition of real estate,
negotiate with businesses to meet the Agency's relocation obligations during business
relocation. State relocation laws are precise and complex. It could be costly to the
Agency to make a relocation error and end •ap in court. Pacific Relocation has been
providing relocation services to the Agency since 1985, and it would be cost prohibitive to
retain another firm and recreate all existing; files. Staff is looking into the possibility of
loading all files into our computer so we can reduce the need for Pacific Relocation in
some cases.
FUNDING SOURCE:
Fiscal Year 1991/92 Redevelopment Project Area budgets.
ALURNA'TIVE ACTIQN:
1) Do not approve the amendments, in which case the Agency would depend on staff
solely to provide these services.
a
909
1) Original contract and Amendment No. 3 — Stradling, Yocca, Carlson, & Rauth
2) Original Contract and Amendment No. S — Keyser Marston Associates
3) Original contract and Amendment No. 2 — MacMillin & Associates
4) Original contract and Amendment No. 3 — John Cutler & Associates
S} Original contract and Amendment No. 2 — Pacific Relocation Consultants
6) 1990/91 Project List
MTU/BAK/MJG:ls
91S0r
Ke-serMarstonAssodateslnc.
Transmittal 500 South'Grand Avenue, Suite 1480
Los Angeles, California 90071
213/622-8095 Fax 213/622-5204
To: Ms. Connie Brockway
10/18/91
Date:
City of Huntington Beach
Project Number:
City Clerks Office
Project Name:
CHANGE OF ADDRESS 2ND NOTICE
Comments:
I have informed the offzOle:: of
We are sending you:
the City of Huntington Beach of
our address change.
,WIAttached
❑ Under separate cover
Please make note of it:
via:
❑ Myssenger
500 S . Grand Avenue
1st (`►ass Mail
Suite 1480
❑ Express Mail
Los Angeles, Ca 90071
❑ Air Courier
Thank you
Transmitted:
❑ As
C+"requested
Fo, your use
❑ For review and comment
Real Estate Predevelopment & Evaluation Services
CITY OF HUNTINGTON BEACH
2000 MAIN STREET
OFFICE OF THE CITY CLERK
October 11, 1991
C
r, MarstonAssociates, Inc.
. Hill Street, Suite 980.ngeles, CA 90013-2410
CALIFORNIA 92648
Enclosed is an executed copy of Supplemental Agreement No. 5 to
Agreement for economic evaluation of services by and between the
Redevelopment Agency of the City of Huntington Beach and Keyser
Marston Associates, Inc., which was approved on July 1, 1991.
Connie Brockway
City Clerk
CB:bt
Enc.
( Telephone: 714-536-5227 )
CITY OF HUNTINGTON BEACH
2000 MAIN STREET
OFFICE OF THE CITY CLERK
October 11, 1991
Keyser, Marston Associates, Inc.
550 S. Hill Street, Suite 980
Los Angeles, CA 90013-2410
CALIFORNIA 92648
Enclosed is an executed copy of Supplemental Agreement No. 5 to
Agreement for economic evaluation of services by and between the
Redevelopment Agency of the City of Huntington Beach and Keyser
Marston Associates, Inc., which was approved on July 1, 1991.
Connie Brockway
City Clerk
CB:bt
Enc.
(Telephone: 714-536-5227 )
REQUEST RR REDEVELOPMENI.AGENCY ACTION
RH 91-40
June 17, 1991
Date
Submitted to: Honorable Chairman and Redevelopment Agency Members
Submitted by: Michael T. Uberuaga, Executive Director tL l J
Prepared by: Barbara A. Kaiser, Deputy City AdministratoffEconomic Development
Fiscal Year 1991192 Amendments to Contracts Between the Redevelopment
Subject: Agency of the City of Huntington Beach and the Firms who Provide Consultant
Services to the Agency
Consistent with Council Policy? P4 Yes [ ] New Policy or Exception Eli ��9�
Statement of Issue, Recommendation, Analysts, Funding Source, Alternative Actions, Attachments: '
Redevelopment Agency staff has prepared :amendments to contracts with the various firms
who provide consultant services to the Agency for the 1991/92 fiscal year. Attached are
five amended contracts for consultant services that provide adjustments to hourly rate
schedules and total compensation.
Approve and authorize the Agency Clerk and Chairman to execute the following
amendments to contracts between the Red,=velopment Agency and: .
:� :u•WARVALIP
1)
Stradling, Yocca
$
250,000
Carlson, & Rauth
2)
Keyser Marston
$
100,000
Associates
3)
MacMillin
$
55,000
4)
Cutler & Assoc.
$
25,000
5)
Pacific Reloc.
$
25,000
Legal counsel
Financial analysis
Appraisals
Prop. Acquisition
Relocation
May 17, 1982
July 21, 1996
February 19,1996
September 15, 1986
June 24, 1985
The Redevelopment Agency uses the five consultants to provide legal, financial, appraisal,
relocation, and acquisition advice and expertise in all five redevelopment project areas.
Agency staff tries to minimize the use of consultants where possible, depending on the
number of projects that are brought to the Agency for review,
P301118s
The relatively high use of Stradling, Yocca, Carlson, & Rauth and Keyser Marston
Associates on legal and financial analysis services is the direct result of continuing intense
review of the Waterfront, Pierside Restaurs.nts, and Main -Pier Phase 11 projects.
Each consultant is used to provide the following services:
Stradling, Yocca. Carlson. & Rauth - Prepares Exclusive Negotiation Agreements (ENA),
Disposition and Development Agreements (DDA) and assists staff in negotiating with
developers; provides legal counsel as needed.
Keyser MaatQn AssQciates - Provide 33433 Reports, conduct financial and pro forma
analysis of proposed development. Review and recommend amount of Agency financial
assistance needed to attract development.
Macl il)iIly4 _AssQslates - Provide real property appraisals to the Agency for land
acquisition, valuation of parcels held by developers and/or property owners.
Zphn Cutler & Associates - Assist the Agency with acquisition of real estate, negotiate
with businesses to meet the Agency's fixtures and equipment obligtations during business
relocation.
Piacific RelQQalion Consultants - Assist the Agency with acquisition of real estate,
negotiate with businesses to meet the Agency's relocation obligations during business
relocation.
FUNDING SOURCE:
Fiscal Year 1991/92 Redevelopment Project Area budgets.
ALTERNAT M ACITON:
1) Do not approve the amendments, in which case the Agency would depend on staff
solely to provide these services.
A11ACHMENTS:
1) Original contract and Amendment No. 3 -- Stradling. Yocca, Carlson, & Rauth
2) Original contract and Amendment No. 5 -- Keyser Marston Associates
3) Original contract and Amendment No. 2 -- MacMillin & Associates
4) Original contract and Amendment No. 3 -- John Cutler & Associates
5) Original contract and Amendment No. 2 -- Pacific Relocation Consultants
MTU/BA1Ub4JG:ls
91SOr
REDEVELOPMENT AGENCY CONSULTANTS
1990-91 PROJECTS
STRADDLING, YOCCA, CARLSON & RAUTH
1. Waterfront- 1st amended DDA, Driftwood relocation,
Performance Mobile Home litigation.
2. Third Block West- Disposition and Development Agreement.
3. Seaview Village- Disposition and Development Agreement.
4. Abdelmuti Development Co.- Owner Participation Agreement.
5. Coultrup- Exclusive Negotiation Agreement.
6. Affordable Housing- Research state law and present options
and alternatives.
7. Main Promenade Parking Structure- Finalize documents.
8. Block 101- Review possible ENA and consolidation of 5 blocks
for zoning and condemnation purposes.
9. Pierside Restaurants- Prepare and revise lease and sub -lease.
10. Town Square- Review developer request for additional self -
funding of $2 million.
KEYSER MARSTON & ASSOC
1. Abdelmuti Development Co.- 33433 report, financial analysis
for retail, restaurant, office and residential space.
2. Coultrup- Review of developer's proposal and counter
proposal.
3. Pierside Restaurants- 33433 report, analyze various ground
lease structures.
4. Town Square- Review cost data from developer and Sumitomo
bank.
5. Huntington Beach Center- Review potential revenues from
proposed expansion.
6. Five Points- Analysis of developer proposal.
7. Breakers- Review of potential condominium conversion.
8. Third Block West- 33433 report, financial analysis of
developer pro forma.
9. Seaview Village- 33433 report, review developer pro forma.
10. Waterfront- Financial analysis for 1st amended DDA.
11. Shank House- 33433 report.
12. Block 101- Analyze developer pro forma for possible ENA.
MACMILLIAN & ASSOC
1. Third Block West- Appraisal.
2. Phase II- Appraisals for block 105.
3. Seaview Village- Appraisal of agency owned parcel.
4. Huntington Center Project Area- Appraisal of Mercury Savings
parcel held by RTC.
)�rT��#M �Nr 0
is
JOHN CUTLER & ASSOC
5
1. Seaview Village- Acquisition of 3 oil lots.
2. Chuck Dent Surfboards- Fixtures and equipment negotiations.
3. Terry's Coffee Shop- Fixtures and equipment negotiations.
4. First Interstate Bank- Fixtures and equipment negotiations.
PACIFIC RELOCATION CONSULTANTS
1. Third Block West- Relocation Estimates for entire project.
2. Phase II- Relocation estimates for entire project.
3. Terry's Coffee Shop- Relocation negotiations.
4. Chuck Dent Surfboards- Relocation negotiations.
5. Jan's Health Bar- Relocation negotiations.
S. First Interstate Bank- Relocation negotiations.
REDEVELOPMENT AGENCY
CONSULTANT COSTS: 1990/91 VS. 1991/92
1990-91
1. Straddling, Yocca, $277,286.19
Carlson & Rauth
2. Keyser Marston Assoc. 114,464.50
3. MacMillan & Assoc. 50,360.00
4. John Cutler & Assoc. 12,341.45
5. Pacific Relocation 9,605.00
Consultants
TOTAL $464,057.14
PERCa'T DECREASE
1991-92
$250,000.00
100,000.00
55,000.00
25,000.00
10,000.00
$450,000.00
5%
r,
FEB 06
, AI I SS1.18DATE P. 1/1
—
'91 1-- 6: 26 & BURROF INSURANCE 2/5 /91
15 ISSUED AS 'TTER OF 1105RMATION ONLY AND
CONFERS k0 ra UPON THE FICATE HOLDER. THIS CERTIFICATE
Whitney & 3aird DOES Nd7 AMEND, EXTEND OR AL. .A THE COVERAGE AFFORDED 13Y THE
350 Sarlsome St.
San Francisco,Ca. 94104 COMPANIES AFFORDING COVERAGE
c""A"y A St. Paul Fire Insurance C,,,.).'
'E"111
jB Kernner insurance Co .
INSURED
Keyser Marston Associates, Inc. Lc,`)Tm,`EA,Ny C Reputfl i c Western Insurance Co
1. � OT V15
55 Pacific Avenue Mall
San Francisco,Ca. 94111 'L-iGM'h'Ah'D National Union Fire a'AnwscV
—t-- 11 "
LETTER E
COVERAGES
THIS IS 70 CERTIFY THAT THE PCLICAS OF NSURANCZ Lis rLD BELOW HAVE BEEN ISSUED TO nE INSURED NAVE[) ABOVE FOR THE POI-Icfpemoo
INDICATEC, NOTW7HS7ANI).NG ANY REQUIREMENT. TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH FISSFECTTO WHICH THIS
CERTIFICATE MAY SE ISSUED OR MAV PERTAIN. THE INSURANCE AFFORDED SY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,
EXCLUSIONS AND CONDITIONS OF SUCH POUCIE0,,LIMTS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS,
Ica
TN TYPE OF INSURANCE POLICY NUMBER POLICYEFFECTIVE POLICY EXPIRATION LIMITS
DATE IM6UDDtYY1 LATE (ISMIDCOVYI
.NIERAL LIABILITY ;GENEPAILAGGAEOATE
$ �, 000 000
CCNIM�IACLAL GENERAL LIABILITY jPPQDUCTS-CQMP0WZ—G- -$2
'CLAIMSIVADE� X'tCCLJP.j RP06619456 1/11/91 1/11/92
nNNFR'$ & CONTRACTOR'S PROT,
OCCUPIREALE 00"o-30
FIRE DAMAGE lAffYonflra) !S 0 000
VED, EJ'(PEN4* AIV .. ) s 5, 000
AIOW'8ll!! LIABILITY
CCMSINFC SIWLE
UNIT
a F3CO25280 11111/90 11/11/91 i 1.000.000
w,t OWNrP) AUTOS
800;Ly IWuqy
SCHEVIILi O AUTOS
mwaD AQICS
BCDILY INJURY
NCN O'4NFD AUTOS
--_(jAqAGE LAOIJUTY
PROPERTY DAMAGE s
6%GE89 LIABILITY
X
RUL05-45159
11
1/11/91 1: 1/11/92
12ACHCOZILAPENCE
�1,5 2 050 000 —
i(YDIFF. THANJMBRELLA FORM
WORKER I CCUPENSATION
3CM637909
11 1 v I JI/ 6TATWORY LIMITS - 1
go 9 F9,CH ACOZIENT
Oppµ:
Aw
GIs
CIS EASE—POLIO�l LIMB
0.0-0.,00.0-
FIVIPLOYERS' LLABILFTY
- I �S_ , -2
EMPLOYEE , 1
ValuaGle Papers
RP06619456
1/11/91 1/11192 180,000 Limit
0 Professional Liab.
MCPL1946662
10/5/90 IC/5/91 $2,000,000 per claim/agg.
A Property
RP06619456
1/11/91 1/11/92 $102,000 Special, Repl. cosi
S:Ph,isical Damage
F3c-025i8l')
11111190 11111/91 $250 Comp/$500 Coll ded.
DESCRIPTION Of CPERAIIONWLUCATIUNSIVLNI�LrA&Pkl$Ai. rE*13
The belou, named certificate holder is
addition); 'insured with regard to contract with named
insured.
7�RIft—t7 -7 IC
"
Ct Kuncington Beach
ax
SHOULD ANY OF THE ABOVE DESCSI8ED POLICIES BE CANCELLED BEFORE THE
200C ijain St.
EXPIRATION DATE THEREOF, THE ISSU:NQ COMPANY WILL 99AM601b
Huntington Beach. -;-Ca.
92648
m.,!i- 11. DAYS wATrew NOTICE TO THE CERTIFICATE HOLDERNAMED TO THE
UIT"PRIZE RrerAlIVIlf)
L C AD n-s j7"90)
a�;��f.�►. ISSUE DATEIMMID3/YYy
CERTIFICATE OF-INSUF ANCE ,
4 , amene-4 -cert. ' 11 20/90
I pAgDUiER THI:i CERTIFICATE IS ISSUED A MATTER OF INFORMATION ONLY AND
Whitney & Baird
350 Sansome St.
San Francisco,Ca. 94104
ti
INS JRED
Keyser Marston Associates, Inc.
55 Pacific Avenue Mall
San Francisco,Ca. 94111
3�
CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE
DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE
POLICIES BELOW.
COMPANIES AFFORDING COVERAGE
COM ZANY
LETTER A St. Paul Fire Insurance Co.
COMPANY
- LETTER B Kemper Insurance Co.
COMPANY
LETTER C Republic Western Insurance Co.
COMPANY
LETr:R National Union Fire Insurance Co.
COMPANY LETT"A E _
COVERAGES
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEV ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD
INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFCRDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,
EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MA" HAVE BEEN REDUCED BY PAID CLAIMS.
CO TYPE OF INSURANCE POLICY NUMBER . POLICY EFFECTIVE POLICY EXPIRATIONi LIMITS
TR DATE (MWDD(YY) DATE (MMIDDNY)
GENERAL LIABILITY '10ENERAL AGGREGATE 13 2 _ 000,000—
A X
COMMERCIAL GENERAL LIABILITY jI PRODUCTS•COMWOP AGG�t 2O0Qr
,oa0
CLAIMS MADE PQ0662142I 1/1I/90 I/11/91 �PERsoNALaAOv.IruuRY s '
__. _.. 11.,000,000-_.
OWNER'S a CONTRACTOR'S PROT. EACH OCCURRENCE _ • = 1 , 000,000..E
AFIRE DAMAGE (Any one Ore) !< Ct
0,000-._
MED. EXPENSE (,k�r^ wu n) i ;own
AUTOMOBILE LIABILITY
COMBINED SINGLE I Z
LIMIT 11000,000
ANY AUTO :
ALL OWNED AUTOS BODILY INJURY
_
SCHEDULED AUTOS (Per person) ; s
A—HREDAUTOS BODILY F3CO25280 ; 11/11/90 1 11/11/91 S
rX _NON•OWNEO AUTOS I (Per awdent)
GAAjGE LIABILITY ( ,
PROPERTY DAMAGE )t
EXCESS LIABILITY + (
`X^UMBRELLA
EACH OCCURRENCE
C FORM i RU005-45159 11/11/89 ' 1/11/9I
AGGREGATE
OTHER THAN UMBRELLA FORM
I t STATUTORY LIMITS _
YYOFKER'S COMPENSATION; - - - � - ���__�_ ��•' ." ••'
<
< I EACH ACCIDENT ' i~ �• 00�' ODa •�
B �-•L~ AHD 3CM637909 11/11/90 : 11/11/91
;O-SEASC—POUCYLIMIT s 1'000;000—
•
EiIPLOYER9' LIABILITY i
t DISEASE —EACH EMPLOYEE t 1 non
'Mn
0 PFUessional Liab. MCPL1946662 10/5/90 10/5/91 j$2,000,000 per claim/Agg.
': Special,Repi.
A Property PQ06221420 1/11/90 1/11/91 $102,000 cost
B Physical damage F3CO25280 I1/11/90 11/11/91 -$250 comp/$500 coil ded.
DESCRIPTIQ14 QF OPERAT ON CATIQNS/VENICLE SPE 11. I EMS
Certificate er 1s named alai tonal insured with regard to contract with named insured.
CERTIFICATE HOLDER "�: ' '•�.trrfi�. =�.. ...+y.: i.Yf.AN{:ELLATION ��w..-::lm;_:�y;Ly •x-��.a.�:.iSw •__ :.,.- Syr_:
_.� :. .� ---''�+4.r.:.i: �- .:r.YiYwLii:...._�.���:.�•.� "�_y:.:..�._- ._.... � •w'•.:.}s C• i •'..::c�+�-�.ai--.
.-.. -
City of Huntington Beach . SHCULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE
2000 Main St. EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL Wxxx ==
e9 NAMED THE
TO THE CERTIFICATE
Huntington Beach, Ca. 92F�4�$,C rr,�li`ttoMAN -.3a DAYS WRITTEN NOTICE HOLDER TO
Yg� ,3Y` c�t� o��eY//y+� yLE�r�rykyXyk7yyet/l��►ri9�7y(y9��X4cc�yy�t4l�yliyt4�1�9(p1yt4�(�yt7y�y��(Ayv7��Qdy�9(A�7y(yt,'��/UGXIl7SyXy�yf?µGµf�(
�'� Y ���. - , y `�.1 hlSYthA/{/li'./�n'l1ItTYtihT`/�AYtIM'RY:II'ARA'!t'/YTIiFAlkil l�ri•�r1CYYfrFR•
��rr
�i�L ��j' �� AUTH]AIZED pE 9E GN74TiV ,
51,
ACORD 25-S Q 90) CACORD CORPORATION 1990
.. ..c.. w � ..w-.rr.F--cr`.+'*"� :v�`.s-r.,t•.?^r-.ter-.. . q.r. a3 a+w•+n .�. .- . :.'�".�„'•�.x:�+•..wc .
CITY OF HUNTINGTON . BEACH
2000 MAIN STREET
O=FICE OF THE CITY CLERK
February 5, 1991
Keyser Marston Associates, Inc.
550 S. Hill Street, #980
Los Angeles, CA 90013-2410
CALIFORNIA 92648
The City Council of the City of Huntington Beach at the regular meeting
held Monday, February 4, 1991, approved Supplemental Agreement Pao. 4 to
Agreement for Economic Evaluation of Services by and between the
Redevelopment Agency of the City of Huntington Beach and keyser, Marston
Associates, Inc.
Enclosed is an executed copy of the agreement for your records.
Connie Brockway
City Clerk
CB:bt
Enc.
ITOop10ns: 714-536•52271
Coo, 3 a
REQUEST FCC REDEVELOPMENT%AGENCY ACTION
APPROVED BY C117- COUNCIL
gg ED 91-03
e Date February 4, 1991
'c:•rY cc.e
Honorable Chairman and Redevelopment Agency Members
Submitted to:
Michael T. Uberuaga, Chief Executive Office
Submitted by: `�� .r�~
Barbara A. Kaiser, Deputy City Administrator/Economic Development'
Prepared by:
AMENDMENT TO CONTRACT FOR CONSULTANT SERVICES — KEYSER
Subject: MARSTON ASSOCIATES, INC.
Consistent with Council Policy? DQ Yes [) New Policy or Exception
Statement of Issue, Recommendation, Analysh, Funding Source, Alternative Actions, Attachments:
STATEMENT OF ISSUD.
The Agency has exceeded its $35,000 contract with Keyser Marston Associates, Inc. for
FY 90/91. To date, the Agency has received approximately $50,000 in financial
feasibility study services.
RECOMMENDATION:
Approve Supplemental Agreement No. 4 which has a maximum compensation amount of
$65,000.
ANALYSIS:
The Redevelopment Agency has retained the services of Keyser Marston Associates
since June of 1985. The intent of their services is to review pro formas submitted by
both city staff and developers, and to conduct an independent analysis of project costs
and revenues to assist in determining if financial assistance is warranted for a specific
development project. Keyser Marston's broad experience has provided the Agency with
In—depth knowledge of proposed development costs, various types of revenues to be
derived, and the ability to analyze independently the actual return on a specific project
to its proponent.
In FY 90/91, there has been a greater than anticipated need for financial review by
Keyser Marston Associates, Inc. First. Pierside restaurants, Third Block West and
Seaview homes all went through several n:)unds of changes after Keyser Marston's initial
analysis. In addition, Keyser Marston is attending weekly Waterfront meetings to
prepare for an amended DDA and a potential bond issue. By approving the Agreement,
the Agency will make our account cu:Tent ($15,000) and provide for an additional
$50,000 in services from Keyser Marston, Inc.
FUNDING SOURCE:
Redevelopment Project Area FY 90/ 91 Budget.
P1o11195
ED 9I-03
February 4, 1991
Page Two
ALTERNATIVE ACTION:
Do not approve the request for an increase in compensation for Supplemental
Agreement No. 3, concluding Keyser Mamton's assistance.
ATTACHMENTS:
I. Supplemental Agreement No. 4.
2. Original Agreements.
MTU/BAK/hIJG:sar
8322r
-.Aev01 ::L;-"W CATE OF INSUFANCE
IssUE
2/5/-41
FRCOUCER `.J
THIS CERTIFICATE IS ISSUED y'A MATTER OF INFORMATION ONLY AND
CON=ERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE
Whitney S Baird
DOEi NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE
350 Sanser a St.
San Francisco,Ca. 94104
COWANIES AFFORDING COVERAGE
CC'AFAyY
LETTER A St. Paul Fire Insurance Co. '
INSURED
LETTER D Kemper Insurance Co.
Keyser Marston Associates, Inc.
ig EAYC Republic Western insurance Co.
55 Pacific Averue.Mall
San Francisco,Ca. 0,4111
COMPAN
LETTER Y D National Union Fire Insurance Co.
OE� Ik
COMPANY t--�•--^-•--..._.�._.__�...w.._.�- �..
LETTER G
COVERAGES
THIS IS TO CERTIFY THAT T+iE POLICIES OF INSURANCE LISTED BELC* HAVE SEEN ISSUED TO THE fNS4RED NAMED ABOVE FOR THE POLICY PERIOD
!NCICATED. NOTWITHGNDING ANY REQUIREMENT, TEPIA CA
CONDITION OF ANY CONTRACT OR OTHER DOCUMENT VOTH RESPECT TO WHICH THIS
CEGtT;FIwATE MAY BE ISSUED OR MAY PERTA'N, THE INSURANCE AFFOIIJED BY THE POLICES DESCRIBED HEPIE114 IS SU3.IECT TO ALL THE TEAMS.
EXCLIJSmCNS AND C; J'_ TONS OF SUCH POLICIES. LIMIT$ S_H_OWN MAY HAVE EEEN REDUCED BY PAID CLAIMS.
� '-
CO TYPE OF INSURANCE PCLICY NUMBER
TR
POLICY EFFECTIVE POLICY EXPIRATIONY LIMITS
DATE QAkV:) YY) DAT! WMIDDITYI ,
GEHCqA.LIAS!LITT
0Efti1R/1_AG3RE7.A'=ems 2AQQQ�QQa._
A X rS%1UERC1AL0ENERALlU61LITY
PAODL'CTS.CCMPCPA30. 000, 000
: - CLA:VSYAoE:_X OCCUR.: RP06619456
1/11/91 1/11/92 :PERSONAL AACV MVRY :2 1•,000=400Y :
CIiNER S A CCYTRACTOR'S PROT.
EACH OCCURRENCE i 1 A 01jQ T QQQ
--
Fll,r DAMAGE IA,y ore yr,l >< 0-) 000 .
MED. EXPENSE W om wvr+l S Ej 000
aU:CM061LE LIABILITY
: CCMe!NED S,ftGLE S
B X L..v A,,,. F3CO25280
11/11/90 11/11/9I 1MIT 1,99910000—.
>' 'IN NED AUTOS .
BODILY INJURY ;
S"HESULEDAUTO$ Ap1'Y.OVED AS TU HER: IF* po cnl
X PUREDAjTos GAIL HUTTUI;, City Attorney rsoxt
� 600'LY INJuttY i
_
X KCNOWNED AUT03 ! By:
Deputy ty Attorney IPerPcetl«+g
�yGAFAGE LLAMILITY
DAMAGE B
I PROPERTY
f
- !ACESS LIAWLITY
EACH OCCURAE:4E 13 2.000,PQC i
C - X U115PELLAFCRM I RUL05-45109
1 11/91 1111/92 ;AGGRE3ATE is 2,Qr10,000 I
• 'OTI-eR THAN UM13RELLA FORM i
I ".,�"-: �','�'+"!' •Y -�- '- F
1
WORKER'S COMPENSATION '
o 3CM637939
, I STATUTORY UMMS _
•-c
11/11/90 11/11/91 E�cHAccIDENT� !s 1,430,fl00
Rho
----�- OMEASE—PouLCYI.WiT f l.,o30 030
EMPLOYERS' LIABILITY ..
.. _ - - ^•_•. _^^ - -__ "�, �+r-
C,SEASEwEACi EMPLOYE: i 1 000 000 '
OT-rx valuable apers RP066194_Cb __1
11/91 1111192 ' 80,000 Limit
.
0 Professional Liab. MCP1.19+56E2
10/5/90 E 10/5/91 $9,000,000 per claim/agg.
A Property' I RP06619456,
'1/11/91 i 1/11/92 I $102,000 Special, Repl, cost
B Physical Gana e ' F3CO25280
11 11 90 111/11/91 S250 Corip/$500 Coll ded.
DESCRIPTION OF CPERAT101197LOCATIONSfYEiICLES,•EPECIAL:TEMS
The below named certificate holder is additioral in,,UrCd with regard to contract with narred
insured.
`r
CERTIFICATE HOLDER - . - -."-.CANCELLATION _
- .. _. __. - _.�.�J..M�.�i._�11rJCYL•-�:_i :rriJ.3:/:-SJ.li4-i
.. ..- •l•..r."�r;W�wa .��- -� iM.rn.+�.4' - u..
City of Huntington Beach
.4 SHO'JLC ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED !!SPORE THE
2000 Main St.
'1 EXPIRATION DATE THEREOF. THE ISSUING COMPANY WILL 99z Y-61(Xfo
Huntington Beach, -Ca. 92648
y NIA1 3Q. DAYS WR1T;E4 NOTICE TO THS CERTIFICATE 14OLtER NAM:-V T'^ -r"s
LEFT, % *%:K�JK �!� 14��i xx�#��iLKUX1XWdWKb OWVAN!
AUTIICRIZi k1314TAT3v
ACORD 25.8 (7l90)� • - _ ___
_'_ _ " " CACORDCORPORAT:O'V 1990
SUPPLEMENTAL AGREEMENT NO. 4 TO AGREEMENT FOR ECONOMIC
EVALUATION OF SERVICES BY AND BETWEEN THE REDEVELOPMENT
AGENCY OF THE CITY 01' HUNTINGTON BEACH AND KEYSER,
MARSTON ASSOCIATES, INC.
This Supplemental Agreement No. 4 is made as of the date of
execution hereof by the Redevelopment Agency of the City of
Huntington Beach between the Redevelopment Agency of the City of
Huntington Beach ("Agency") and Keyser, Marston Associates, Inc.,
( "XMA") •
WHEREAS, the Agency and FMA have heretofore entered into that
certain agreement dated as of July 21, 1986 as amended by
previous supplemental agreements herein collectively referred to
as "Agreement"; and
The Agency and KMA now wish to further supplement such
Agreement at this time with respect to the compensation cap only;
NOW, THEREFORE, in consideration of the premises, the Agency
and KMA do hereby amend the Agreement as follows:
1. Section 4 is deleted in its entirety effective upon
execution hereof and a new Section 4 is substituted therefor as
follows:
4. COMPENSATION
In consideration of the performance of the services
described in Section 1 above, AGENCY agrees to pay KMA
and KMA agrees to accept compensation on an hourly basis
according to the following fee schedule which will
remain in effect through June 31, 1991. This contract
is limited to payment of such charges not to exceed the
further sum of Sixty -Five Thousand ($65,000) Dollars
including both hourly charges and directly related
expenses:
- 1 -
JERRY KEYSER*
$145.00
SENIOR PRINCIPALS*
$140.00
PRINCIPALS*
$135.00
SENIOR ASSOCIATES*
$115.00
ASSOCIATES
$100.00
SENIOR ANALYST
$ 85.00
ANALYST
$ 75.00
TECHNICAL STAFF
$ 48.00
ADMINISTRATIVE STAFF
$ 43.00
Directly related job expenses not included in the
above rates are: auto mileage, air fares, hotels
and motels, meals, car rentals, taxies, telephone
calls, delivery, electronic data processing,
graphics and printing. Directly related job
expenses will be billed at 110% of cost.
Monthly billings for staff time and expenses
incurred during the period will be payable
within thirty (30) days of invoice date.
A charge of 1% per month will be added to all
past due accounts.
*Rates for individuals in these categories will
be increased by 50% for time spent in court
testimony.
2. All other terms and conditions of the Agreement shall
remain in full force and effe=t.
(PAGE END)
- 2 -
a% ~O' �%.%
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Agreement Number 4 to be executed by and through
their authorized officers on the day and year set opposite the
name of each of the parties.
KEYSER, MARSTON, ASSOCIATES, INC.
11 1 /.?- vt
BY: .� ATE.
ITS: Trfno*PAt
BY:
ITS:
ATT
EST:
Agency Clerk
DATE:
REDEVELOPMENT AGENCY OF THE
CITY OF HUNTINGTON BEACH,
a municipal corporation of
fFe t*te of California
C h a i`Pkn9h✓ -"`. DATE:
APPROV D AS TO
Agency Counsel6L
- 3 -
01-25-91 09:20AM P02
,
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental. Agreement Number 4 to be executed by and through
their authorized officers on the day and year set opposite the
name of each of the parties.
KEYSER, MARSTON, ASSOCIATES, INC.
a 9
BY: VATE.
ITS: 0Dd
--T
' IR
Y- DATE:
ITS;
ATT ST : _ 01
4�4
Agency Clerk
REDEVELOPMENT AGENCY OF THE
CITY OF HUNTINGTON BEACH,
a municipal corporation of
fF�ie'St�ate of California
Cha i)*ngb,/ -' . DATE:
APPROV D AS TO .
�gency Counsel
- 3 -
CITY OF HUNTINGTON BEACH
2000 MAIN STREET
September 27, 1990
Keyser Marston Associates, Inc.
550 S. Hill Street, #980
Los Angeles, CA 90013-2410
CALIFORNIA 92648
CFFICE OF THE CITY CLERK
Enclosed is an executed copy of Supplemental Agreement too. 3 to
agreement for economic evaluatior. of services by and between the
Redevelopment Agency of the City of Huntington Beach and Keyser,
Marston Associates, Inc.
Connie Brockway
City Clerk
CB:bt
Enc.
(Telephon v 714-53G-5227)
36
REQUEST ReR REDEVE:LOPMENI•-AGENCY ACTION
Mi 90-30
August 20, 1990
Date
Honorable Chairman and Redeveloprrert Agency A'imbers
Submitted to:
Michael T. Uberuaga, Executive Director
Submitted by: Barbara A. Kaiser, Deputy City Aftinistrator/Eeonca:iic Development
V>
Prepared by: AMENE14W TO CCtnM2%= RE C ONSiLTAW SEIMCM -
Subject:
AS90G'I =, INC. APPROYEI> BY CITY COUNCIL
Consistent with Council Policy? [ 1 Yes 19,"
y [ [New Policy or exception
Statement of Issue, Recommendation, Analysis, Funding Source, Alternati a ctions, ttac mqn
SM7TMTNi' OF zsS[7E:
In June of 1985, the Redevelopment Agm y entered into a contract with Keyser
tbxston Associates, Inc. for assistance -in arnlyzing the business aspects and
financial feasibility of development prtTosals being presented within various
redevelopment project areas. This original contract provided for a maximum.
oorpensation of $50,000. Subsequent to this action, Courrail amended the
original contract three times, on July :1, 1986, for an additional $50,000; cn
July 18, 1988 for an additional $75,000; and an July 17, 1989, for an
additional $60,000.
Since the existing Keyser Marston contract hors reached its maxim=
compensation amount, staff is recca:s:�endbng that the Redevelcprent Agency
authorize the Chaiztran and Agency Clerk to execute the attached Supplemental
;greemnt No. 3 between the Agency and Yeyser Marston Associates, Inc. This
action will provide continuing econca:aic cori ultant services for a naxm. n.
compensation in an ar,:aunt not to exceed $35,000. This Supplemental Agreement:
also includes Keyser Marston's 1990 hourly fee schodule.
MMSIS:
The Redevelopment Agency has retained the services of Keyser Mrston
Associates since June of 1985. The intent of their services is to review pro
forr.:as submitted by both city staff and developers, and to conduct an
independent analysis of project costs and revenues to assist in determining if
financial assistance is warranted for a specific development project. Keyser
11arston's broad experience has provided the I!gency with in-depth knowledge of
proposed developrrant costs, various types of revenues to be derived, and the
ability to analyze independently the actual return on a specific project to
its proponent.
P10111 /85
fUNEM SU]RCE:
1) Redevelop m. nt project area FY 90/91 program budget.
2) Relents frcan developers of approved projects.
AITERNATIVFS
1) Do not apprcve the attached Supplemntal Agreement, concluding Kayser
Marston's assistance.
2) Direct staff to seek proposals fron other qualified firms.
ATrAaM=:
1) original contracts,
rQv/aAYVTffc:lp
SUPPLEMENTAL AGREEMENT NO. 3 TO AGREEMENT FOR ECONOMIC
EVALUATION OF SERVICES BY AND BETWEEN THE REDEVELOPMENT
AGENCY OF THE CITY OF HUNTINGTON BEACH AND KEYSER,
MARSTON ASSOCIATES, INC.
This Supplemental Agreement no. 3 is made as of the date of
execution hereof by the Redevelopment Agency of the City of
Huntington Beach between the ]redevelopment Agency of the City of
Huntington Beach ("Agency") and Keyser, Marston Associates, Inc.,
("RM" )
WHEREAS, the Agency and 101A have heretofore entered into that
certain agreement dated as of July 21, 1986 as amended by
previous supplemental agreements herein referred to as
"Agreement"; and
The Agency and KMA now wish to further supplement such
Agreement at this time with respect to compensation only;
NOW, THEREFORE, in consideration of the premises, the Agency
and KMA do hereby amend the Agreement as follows:
1. Section 4 is deleted in its entirety effective August 1,
1990 and a new Section 4 is substituted therefor as follows:
4. COMPENSATION
In consideration of the performance of the
services described in Section-1 above, AGENCY
agrees to pay KMA and M4A agrees to accept
compensation on an hourly basis according to the
following fee schedule which will remain in effect
through June 31, 1991. This contract is limited
to payment of such charges not to exceed the sum of
Thirty -Five Thousand ($35,000) Dollars including
both hourly charges and directly related expenses:
- 1 -
A. JERRY KEYSER*
$145.00
SENIOR PRINCIPALS*
$140.00
PRINCIPALS*
$135.00
SENIOR ASSOCIATES*
$115.00
ASSOCIATES
$100.00
SENIOR ANALYST
$ 85.00
ANALYST
$ 75.00
TECHNICAL STAFF
$ 48.00
ADMINISTRATIVE STAFF
$ 43.00
Directly related job expenses not included in the
above rates are: auto mileage, air fares, hotels
and motels, meals, ct.r rentals, taxies, telephone
calls, delivery, electronic data processing,
graphics and printing. Directly related job
expenses will be billed at 110% of cost.
Monthly billings for staff time and expenses
incurred during the period will be payable
within thirty (30) days of invoice date.
A charge of 1% per month will be added to all
past due accounts.
*Rates for individuals in these categories will
be increased by 50% for time spent in court
testimony.
2. All other terms and conditions of the Agreement shall
remain in full force and effect.
(PAGE END)
- 2 -
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Agreement Number 3 to be executed by and through
their authorized officers on the day and year set opposite the
name of each of the parties.
KEYSER, MARSTON, ASSOCIATES, INC.
)6�r�8// -4/5`0
BY: KATHE HEAD DATE:
ITS:
" � � s
BY: DATE:
ITS:
ATTTEEST:
aw"
q��
Agency Clerk :441+O
- 3 -
REDEVELOPMENT AGENCY OF THE
CITY OF HUNTINGTON BEACH,
a municipal corporation of
the S to of California
Chairman DATE:
APPROVED AS TO FORM:
Agency Counsel
+ J"i�i���i�'• dtRtjrjCAlvd Or INSURANCE NCE ISSUE DATEIMWOONY1
1/3/90
PRCDVCER THI:i CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS
++ (N_0J1IGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND,
WHITNEY S BAYRD INSUR?,VCE BROKE`fk��' I ERTSND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW
350 SANSOME STREET, SUITE 600
SAN FRANCISCO, CA 94104 I 3 `r� COMPANIES AFFORDING COVERAGE
(415) 781-1965 ��tl; L COMPANY L
LETTER A ST. PAUL INSURANCE COXPANY
CODE SUB -CODE
COM
INSURED
LEERY g KEMPER INSURANCE CROUP
3 (/ COMPANY
KEYSER MARSTON ASSOCIATES, INC. LETTER C REPUBLIC WESTERN INSURANCE COMPANY
55 PACIFIC AVENUE MALL COMPANY
SAN FRANCISCO, CA 94111 LETTEi D NATIONAL UNION FIRE INSURANCE CO.
COMPANY
LETTER
COVERAGES'
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW I- AVE BEEN ISSUED TO THE INSURED,FIAMED ABOVE. FOR THE POLICY PERIOD
INDICATED, NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DQCUMENT WITH RESPECT TO WHSCH THIS
CERTIFICATE MAY BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFOFDED BY THE POLICIES DESCRIEED HEREIN IS SUBJECT TO ALL THE TERMS.
EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAIO CLAIMS.
CO TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE POLICY EXPIRATICN ALL LIMITS IN THOUSAND
LTR DATE (MM'DDIYY) DATE (MMIDD"
GENERAL LIABILITY GENERAL AGGREGATE - i 2,000
X COM-MERCIAL GENERAL LIABILITY PRODUCTS•COMPIOPS AGGREGATE S 2,000
A' CLAIMS MADE X OCCUR. FQ06621421 1-11-90 1-11-91 PERSONAL& ADVERTISING INJURY 9 1,000
OWNER'S & CONTRACTOR'S PROT. EACH OCCURRENCE S 1,000
0 c0'ttoeY FIRE DAMAGE (Any one fire) s 100
..rram� AS � tl VQeY;L'1IEDICAL EXPENSE (Any one yArson) i 5
AUTOMOBILE LIABILITY �0g �C • �/ ty /r[ COMBINED
1 i� u Ci t� " SINGLE $ 1,000
ANY AUTO
4�
B LIMIT _ ALLCWN-
ED AUTOS $y • il'�� NJURY :
SCHE13ULED AUTOS (Per PWson)
g HIRED AUTOS F3CO25280-4 11-11-90 BODILY
INJURY IS
X NON -OWNED AUTOS (Per a ardent)
GARAGE LIABILITY PROPERTY
X _ ALL COMERCIAL AUTOS DAMAGE _
EXCESS LIABILITY
IC X, UMBRELLA RUL0545159
OTHER THAN UMBRELLA FORM
WORKER-8 COMPENSATION
1B. AND 3CM637909-03
I EMPLOYE AS' LIABILITY
OTTER
D PROF. LIABILITY N.CPL 1946662
A PROPERTY PQ06221420
B PHYSICAL DAMAGE F3CO25280-4
DESCRIPTION OF OPERATIONS/LOCATIONSNEIUCLESIRESTRICTIONS!SPECIAL ITEMS
EACH AGGREGATE
OCCURRENCE
LI-11-89 11-11-90 : 2,000 s 2,000
STATUTORY
11-11-89 11-11-90 s-- 1,400..
3 1,000 I[NSEASE—POLICY L.IMM)
1 1,000 (DISEASE -EACH EMPLOY
l(r 5-89 10-5-90 $2,000, per claim/Aggreg.
1-11-89 1-11-90 $1,000, Special/Replacement
11-11-89 11-11-90 $ 250. Comp Ded./$500. Coll
CERTIFICATE HOLDER IS NAMED AS ADDITIONAL INSURED.
CERTIFICATE HOLDER'
CITY OF HUNTINGTON BEACH
2000 11AIN STREET
HUNTINGTON BEACH, CALIF_ORNIA 92648
ATTN• LM PAT SPENCER
CANCEL.LATIOy -
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE
EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO
i1.. MAIL —•DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE
LEFT, 3UT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO O8L(GATIO1N OR
UABILI rY OF A+IY KIND UPO?4 THE COMPANY, ITS AGENTS OR REPRESENTATIVES.
AUTHORS EEO REPP.ESENTATIVE ( ri
___ _ ROBIN D. BAUER, CPCU _ �1`"�-{'_
ORD 2 S {-1OR ------ - .-- -•=: ��s .r— - ► = { = -- -' ' -- ®ACORD CORPORATION 1988
CITY OF HUNTINGTON BEACH
2000 MAIN STREET
OFFICE OF THE CITY CLERK
August 30, 1989
Keyser Marston Associates, Inc.
550 S. Hill Street, #980
Los Angeles, CA 90013-2410
CALIFORNIA 92648
Enclosed is an executed copy of Supplemental Agreement No. 2 to
Agreement for economic evaluation services by and between the
Redevelopment Agency of the City of Huntington Beach and Keyser,
Marston Associates, Inc. which was approved by the City Council
of the City of Huntington Beach on July 17, 1989.
Connie Brockway, CMC
City Clerk
CB:bt
Enc.
Mlephone:714-53"227) _
REQUEST Fly-{"IEDEIl �LQPMENT� ENCY ACTION
APPROVED Br CITY COUNCIL.
-� 1907
— TY CLERJU
RH 89-64
July 17, 1989
Submitted to: Honorable Chairman and Redevelopment Agency Members
Submitted by:
Paul Cook, Executive Direr K Q_.
Prepared by: Douglas La Belle, Deputy City Administrator/Economic Developme t`
Subject: AMENDMENT TO CONTRACT I'OR CONSULTANT SERVICES — KEYSER
MARSTON ASSOCIATES, INC.
Consistent with Council Policy? N Yes - [ ] New Policy or Exception
Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments:
STATEMENT OF ISSUE:
In June of 1985, the Redevelopment Agency entered into a contract with Keyser Marston
Associates, Inc., for assistance in analyzing the business aspects and financial feasibility
of development proposals being presented within various redevelopment project areas.
This original contract provided for a maximum compensation of $50,000. Subsequent to
this action, Council amended the original contract twice — on July 21, 1986 for an
additional $50,000, and on July 18, 1988, for an additional $75,000.
Since the existing Keyser Marston contract has reached its maximum compensation
amount, staff is recommending that he R-adevelopment Agency authorize the Chairman
and Agency Clerk to execute the attached Supplemental Agreement No. 2 between the
Agency and Keyser Marston Associates, Izc. This action will provide continuing economic
consultant services for a maximum compensation in an amount not to exceed $60,000.
This Supplemental Agreement also includes Keyser Marston's 1989 hourly rate fee
schedule.
ANALYSIS:
The Redevelopment Agency has retained the services of Keyser Marston since .tune of
1985. The intent of their services is to review pro formas submitted by both city staff
and developers, and to conduct an independent analysis of project costs and revenues to
assist in determining if financial assistance is warranted for a specific development
project. Keyser Marston's broad experience has provided the Agency with In—depth
knowledge of proposed development costs, various types of revenues to be derived, and
the ability to analyze independently the anual return on a specific project to its
proponent.
I
i
Pt IMS
■
`r.-%.Od
W• '
1) Redevelopment Project Area FY 89.190 program budget.
2) Reimbursements from developers of approved projects.
1) Do not approve the attached Supplemental Agreement, concluding Keyser Marston's
assistance.
2) Direct staff to seek proposals from ether qualified firms.
ATTAM ENTS:
1) Original Contracts.
PEC/DLB/CPS:lp
��-
- ISSUE DATE (MWDD/YY)
�d \ram
5-10-89
PRODUCER
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS
_
NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND,
wHn7NE r& BAM RISK M 1 9 A G
EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.
COMPANIES AFFORDING COVERAGE
r i
350 SA1+iSOME ST. #M
SAN rRANGt. O CA 94104
TELL: (411) 741-i9i6
8
MAY 1D ( q 2 9Y
A St. Paul Insurance
k
Company
COMPANY
LETTER B
INSURED 3�76
Kemper Insurance Group
COMPANY C
Keyser Marston Associates, Inc
LETTER Republic Western Insurance Company
COMPANY
D
55 Pacific Avenue Mall
San Francisco, Ca. 94111
LETTER
National Union Fire Insurance Company
COMPANY E
LETTER
THIS IS TO CERTIFY THAT POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED,
NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY
BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS, AND CONDI-
TIONS OF SUCH POLICIES.
CO
LTR
TYPE OF INSURANCE
POLICY NUMBER
POLICY EFFECTIVE
DATE (MMIDONY')
POLICY EXPIRATION
DATE IMMIODNY)
ALL LIMITS IN THOUSANDS
GENERAL
LIABILITY
GENERAL AGGREGATE
$
COMMERCIAL GENERAL LIABILITY
Z
PRODUCTS COMPIOPS AGGREGATE
--2210
$
DO
CLAIMS MADE ®OCCURRENCE
PQ06621420
1-11-89
1-11-90
PERSONAL & ADVERTISING INJURY
$ QQ7
A
OWNER'S 8 CONTRACTORS PROTECTIVE
EACH OCCURRENCE
$ -000
FIRE DAMAGE (ANY ONE FIRE)
$ 100
MEDICAL EXPENSE (ANY ONE PERSON)
$
AUTOMOBILE
LIABILITY
ANY AUTO
CSL
$
BODILY
INJURY
ALL OWNED AUTOS
F3CO25280-3
11-11-8a
11-11-89
B
SCHEDULED AUTOS
iPER PERSON)
$
HIRED AUTOS
BODILY
INJURY
NON -OWNED AUTOS
QccIDENTI
$
PROPERTY
GARAGE LIABILITY
DAMAGE
$
EACH
OCCURRENCE
AGGREGATE
EXCESS
LIABILITY
C'
Umbrella
RUL0545159
11-11-88
11-11-89
$ 2,000,
$ 2,000,
OTHER THAN UMBRELLA FORM
STATUTORY
WORKERS' COMPENSATION
$ (EACH ACCIDENT)
B
AND
3CH637909-02
11-11-88
11-11-89
i
Oa
$(DISEASELIMIT)
I EMPLOYERS' LIABILITY
-?OLICY
$ 1 0007 (DISEASE-i4Ln EMPLu'Y'EE)
r
OTHER
D
Prof. liability
MCPL 1946662
10-5-88
10-5-89
$2,000, per claim / aggreg
Ap
Property
PQ06621420
1-11-89
1-11-90
$1,000, All Risk/Rep. Cost
B
Physical Damage
F3CO25280-3
_
Il-I1-88
L11-11-89
.��CemgrToti/ $500. Coll
DESCRIPTION OF OPERATIONS / LOCATIONS/ VEHICLES IRESTRICTIONS/ SPECIAL ITEMS
Certificate holder is namend as additional insured.
City of Huntington Beach
2000 Main Street
Huntington Beach, Ca. 92648
Attn: Mr. Pat Spencer
_
. ..
G�_IL ILU:Ciorr_e: �—
Sf;IOOLD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EX.
PIRATION DATE THEREOF, THE ISSUING COMPANY WILL k�RR
MAIL 30 DAYS LN,NUIjCL TO Ta =5 I MCA!" r L LJEAi TO ;6E.
LEFCT' j Mj A?4ALK 754X #LX PING
mxeamx�l��x�m>����as�s�x�xl�ss�
.UTHORIZED REPRESENTATIVE
Y� a �
w..
�1
SUPPLEMENTAL AGREEMENT NO. 2 TO AGREEMENT FOR ECONOMIC
EVALUATION SERVICES BY AND BETWEEN THE REDEVELOPMENT
AGENCY OF THE CITY OF HUNTINGTON BEACH AND KEYSER,
MARSTON ASSOCIATES, INC.
This Supplemental Agreement No. 2 is made as of the date of
execution hereof by the Redevelopment Agency of the City of
Huntington Beach between the Redevelopment Agency of the City of
Huntington Beach ("Agency",) and Keyser, Marston Associates, Inc.,
(Nimes).
WHEREAS, the Agency and 124A have heretofore entered into that
certain agreement dated as of July 21, 1986 herein referred to as
"Agreement"; and
The Agency and KMA wish to supplement such Agreement at this
time with respect to compensation only;
NOW THEREFORE, in consideration of the premises, the Agency
and KMA do hereby amend the Agreement as follows:
1. Section 4 is deleted in its entirety effective August
1, 1989 and a new Section 4 is substituted.therefor as follows:
4.
In consideration of the performance of the
services described in Section 1 above, AGENCY
agrees to pay KMA and 101A agrees to accept
compensation on an hourly basis according to the
following fee schedule which will remain in effect
through June 31, 1950. This contract is limited
to payment of these charges up to Sixty Thousand
Dollars ($60,000.00) including both hourly charges
and directly related expenses:
'A. JERRY KEYSER*
$140.00
SENIOR PRINCIPALS*
$135.00
PRINCIPALS*
$130.00
SENIOR ASSOCIATES*
$110.00
ASSOCIATES
$ 95.00
SENIOR ANALYST
$ 80.00
ANALYST
$ 70.00
TECHNICAL STAFF
$ 46.00
ADMINISTRATIVE STAFF
$ 41.00
-1-
Directly related job expenses not included in the
above rates are: delivery, electronic data
processing, graphics and printing. Directly
related job expenses will be billed at 110% of
cost.
Monthly billing for staff time and expenses
incurred during the period will be payable within
thirty (30) days of invoice date. A charge of 1%
per month will be added to all past due accounts.
*Rates for individuals in these categories will be
increased by 50% for time spent in court testimony.
2. All other terms and conditions of the Agreement shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Agreement Number 2 to be executed by and through their
authorized officers on the day and year set opposite the name of
each of the parties.
KEYSER, MARSTON, ASSOCIATES, INC.
By: Date:
By: Date:
ATTEST:
Agency C-terk�
REDEVELOPMENT AGENCY OF THE
CITY OF HUNTINGTON BEACH,
a mun'cipal corporation o e
State of Califor
Chairman Date:
APPROVED AS TO FORM:
gen y Counsel
6--Y�
-2-
KEYSER MARSTON ASSOCIATES, INC.
HOURLY FEE SCHEDULE
MI
A. JERRY KEYSER*
S140.00
SENIOR PRINCIPALS'
$135.00
PRINCIPALS'
$130.00
SENIOR ASSOCIATES'
S110.00
ASSOCIATES
$ 95.00
SENIOR ANALYST
$ 50.00
ANALYST
$ 70.00
TECHNICAL STAFF S 46.00
ADMINISTRATIVE STAFF S 41.00
Directly related job expenses not included in the above rates are: delivery, electronic data
processing, graphics and printing. Directly related job expenses will be billed at 11070 of
cost.
Monthly billings for staff time and expenses incurred during the period will be payable
within thirty (30) days of invoice date. A charge of 15-e per month will be added to all
past due accounts.
'Rates for individuals in these categories will be increased by 50% for time spent in court
testimony.
a,lelCITY OF HU NTINGTON BEACH:
2000 MAIN STREET CALIFORNIA 92648
OFFICE OF THE CITY CLERK
October 31, 1988
Calvin E. Hollis
Keyser Marston Associates, Inc.
550 S. Hill Street, #980
Los Angeles, CA 90013-2410
The Redevelopment Agency of the City of Huntington Beach approved a
supplemental agreement with your film for consultant services on July 5,
1988.
Enclosed is a duly executed copy of said agreement along with a copy of
the Certificate of Insurance which you submitted.
Connie Brockway
City Clerk
CB:bt
Enc.
CC: Douglas LaBelle, Redevelopment
Wayne Lee, Finance
(Telephone: 714-536-5227)
REQUEST F9 R V!=LC)PMENT
APPROVED HY CITY COUNCIL
CIO
!8
�C/31 l - a� C.ee�
k., EN CY ACTION
1 1�
RH 88-28
July 5, 1988
Honorable Chairman and Redevelopment Agency Members
Submitted to:
Paul E. Cook, Executive Directorv�
Submitted by:
Douglas N. La Belle, Deputy City Administrator/Community Development
Prepared by:
CONTRACT AMENDMENT FOR CONSULTANT SERVICES -- KEYSER
Subject: MARSTON ASSOCIATES, INC.
Consistent with Council Policy? N Yes [ j New Policy or Exception
Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments:
STATEMENT_ OF_ISSUE:
In June of 1985, the Redevelopment Agency entered into a contract with Keyser Marston
Associates, Inc., for assistance in analyfing the business aspects and financial feasibility
of development proposals being presented within redevelopment project areas. The
contract provided for a maximum compensation of $50,000 which was amended to include
an additional $50,000 by the Redevelopment Agency Action on July 21, 1986.
I;+ K� ..1 ► : Ili a�
Since the Keyser Marston contract has reached its maximum compensation amount, staff
is recommending that the Redevelopment Agency authorize the Chairman and Agency
Clerk to execute the attached contract between the Agency and Keyser Marston
Associates, Inc., to provide continuing economic consultant services for a maximum
compensation not to exceed an additional $75,000. This contract should also be updated
to include Keyser Marston's 1989 hourly rate fee schedule.
ANALYST :
The Redevelopment Agency has retained the contractual services of Keyser Marston since
June of -1985. The intent of their services is to review pro formas submitted by both city
staff and developers, and to conduct an independent analysis of project costs and revenues
to assist t6 determining If financial assistance for a specific development project is
warranted. Keyser Marston's broad experience has provided the Agency with in-depth
knowledge of proposed development costs, various types of revenues to be derived, and
the ability to analyze independently the :actual return on a specific project to its
proponent.
Staff anticipates utilizing Keyser Marston during the next fiscal year for the following
project areas: Main -Pier, Huntington Center, Yorktown -Lake, and Oakview.
Plo/1/85
I) Redevelopment Agency Project Area program budgets.
2) Future reimbursement from developers of approved projects.
ALTERNATIVI=�:
l) Do not approve the attached contract, which will conclude Keyser Marston's
assistance.
2) Direct staff to seek proposals from other qualified firms.
Contract between the Redevelopment Agency of the City of Huntington Beach and Keyser
Marston Associates, Inc.
PEC/DLBICPS:lp
3843h
da
ISSUE DATE {MM.'DOJYYjt
i
322
8/10/88
PRODUCER
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS
WHITNEY & BAIRD
NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND.
INSURANCE BRO �4i .V t ENT
�00
EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.
COMPANIES AFFORDING COVERAGE
350 SANSON ST�,
SAN FRANCISCO, CA 94104
TEL: (415) 781.1965 q (' I
� ��
J 0 3 j V U' -
^�i
COMPANY
LE -TER TRANSAMERICA INS. CO.
RECtIt�_���:,
LETTER v 50 KEMPER INSURANCE CO.
INSURED
31�
KEYSER MARSTON ASSOCIATES, INC.
LE�"iERNY C OXFORD PROPERTY & CASU
55 PACIFIC AVENUE MALL
SAN FRANCISCO, CA 94111
COVPANY C r
LETTER NATIONAL UNION APPROVED AS TO FORM
'
AMENDED CERTIFICATE
COMPANY GArt HUTTUN,y Atorney
LE'TER By: Deputy City Attorney
THIS IS TO CERTIFY THAT POLICIES OF INSURANCE LISTED BELOW HAVE
BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED.
NOTWITHSTANDING ANY REQUIREMENT. TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY
BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES OESCA:BED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS, AND CONDI-
TIONS OF SUCH POLICIES.
CD
VTR
TYPE OF INSURANCE
POLICY NUMBER
POLO EFFECTIVE
DATE IMr+uZ"
POKY WvTch
CAI (>7
LIABILRXL)MIT8 IN THOUSANDS
I � H
_
CUp Et+CE
- E'ATE
GENERAL
LIABILITY
.
90DMLrF
Z.
X
COMPREHENSIVE FORMA
*kwy
$
$
X
PROPERTY
P3EMOPE
A
UvEIERGSESJROUNDRMTIONS
DAMAGE
$
$
EXPLOS" & COLLAPSE HAZARD
X
PROOUCT&WMPtETEOOPERATIONS
T2 19824897
11/11/87
11/11/88
X
CONTRACTUAL
PO
CONONED
$ 11000
$ 1,000
X
INDEPENDENT CONTRACTORS
x
BROAD FORM PROPERTY DAMAGE
X
PERSONAL INJURY
PERSONAL -INJURY
f 1,QQ0
AUTOMOBILE LIABILITY
wmvkLft
-
X ANY AUTO
PEN PrProsoh)
ALL CIANED AUTOS (M. PASS)
r " a
pp�T�H�E
ALL DINNED AUTDS ( I T"N)
/ry EhT1
1:3C 025280-01
11/11/87
11/11/88
PA0KRTY
B
HIRED AUTOS
X NCN-CPANED AUTOS
DAMAGE
$
GARAGE LIABILITY
'
8;APO
COMBINED
OQO
EXCESS LIABILITY
C
K UY RELLAfOFW
O'er 05 42414
11/11/87,11/11/88COMOINE01$
2,000
$2,000
OCHER THAN UMBRELLA FORM
WORKERS' COMPENSATION
STATUTORY I
=,
$ 000(EACH ACCIDENT)
E
3CL271233
11/11/87
11/11/88
'.'_
$ i 000MME-PaV LMAIT)
E64PLOYERSDLIA9tLITY
-:
$1 000��-LAc�Eu�LOYt:E7
OTHER
D
PROFESSIONAL LIABILI
Y MCPL 1946352
10/5/87
10/5/88
$2,000,000
DESCRIPTrON OF OPERATtONSROCATIONSNEHICLESrSI'ECUu ITEMS
CERTIFICATE HOLDER NAMED BELOW IS NAMED AS ADDITIONAL ISURED.
• ►
•
S4OULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EX-
CITY OF HUNTINGTON
PIRATION DATE THEREOF. THE ISSUING COMPANY WILL }t'=ft/EV0W-M
BEACH
MAR 30 . DAYS wRETTEN NOTICE TO THE CERTIFICATE HOLDER,y 'tlp�R9
�000' MAIN STREET
z; ZKAa
HUNTINGTON BEACH, CA 92648
AUTiOR1ZED ENTAQIVE
ATTN: MR. PAT SPENCER
FRc._Pz%�a -
1NHTTNEY & BAIRD
350 SANSOME ST.
SAN FRANCISCO, CA 94104
TEU (4I5j 761•J96S
IIISURED
Keyser 1Iarston Associates
55 Pacific Avenue Mali
San Francisco,Ca.- 94111
THIS CERTIFICATE IS ISSUED AS A .ATT
NO RIGHTS UPON THE CERTIFICATE HOLI
EXTEND OR ALTER THE COVERAGE AFF,
1'sS•.E DATE I?-'AL•C;: YYj
I?L1L86
POLICIES
I COMPANIES AFFORDING COVERAGE 11
COMPANY
ALETTER
Transamerica In
COMPANY
LET''ER
`Q Kemper
Ins. Co.
COMPANY
C
r
LETT ER
1
LETTERNY
�pY
COM ZANY
E
LETTER
�3 '
-FTk`ht rnc`f
THIS IS TO CERTIFY THAT POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED.
NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY COI•ITRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE: MAY
BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS, AND CONDI-
TIONS OF SUCH POLICIES.
CO
;.TR
TYPE OF INSURANCE
POLICY NUMBERGA•E
POLCY EFFECTruE
(W X)1M
POLICY E%RRATOY
DATE IkK'DUYYI
LIABILITY LIMITS IN THOUSANDS
A;,M
CVAgE4CE
AGGREGATE
GENERAL LIABILITY
BODILY
A
X C3IVPREme4sIVE FORM
I"''URY
$
$
X PREMISESIOPERATIDNS
PROPERTY
UNDIASROUND
DAMAGE
$
$
EkPL0510N & COLLAPSE HAZARD
X PROCUCTS' =PLETED OPERATIONS
X C i RACTUAL
at PO
COMB ItIED
$
$
X INDE°ENOENTCOI,TWTORS
T2 19824897
11/11/86
11/11/87
1 000
1 000
X MAO FORM PROPERTY DAMAGE
X PERSOkk II{JURY
PERSONAL INJURY
$ 1 ,Q()O
AUTOMOBILE LIABILITY
B X xxv AUTO
ALL OWNED AUTOS (PRIV. PASS.) 1
ALL OANE0 AUTOS l$'HERpTHA /
SS -
HIRED AUTOS
NOII-Cro"ED AUTOS
GARAGE LIABILITY
EXCESS LIABILITY
UMOR.LLA FORM
OTHER THAN UMBRELLA FORD!
6 WORKERS' COMPENSATION
AND
EMPLOYERS' LIABILITY
(OTHER
F3C 025280-01
3CL 271233
11/11/86 j11/11/87
11/11/86 I11/11/87
My
FUMY
eaotT
wun
PER A=h-1 $
PROPERTY
OAUAGE is
of & PO
COMBINED 1 $
BI a PO
COUBNE9 $ $
STATUTORY
(EACH ACCOENTI
{L`ISEASE-POLICY LIMIT)
0SEASE-EACH EIAPLOYEEI
C•ESCa1PTION OF OPERATIONS'LOCATIONWEHICLEWSPECIAL ITEMS
The -City of Huntington Beach, its officers, agents & employees, while acting within the scope 11
their duties shall be indemnified by above mentioned coverages. Any other insurance which may
City of Huntington Beach SHOULD ANY CF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EX•
20DC Main St. PIRI.TION DATE THEREOF, THE ISSUING COMPANY WILL XXX&Y!�,�( N
MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER 6
Huntington Beach,Ca, 92648 x x"xxxxxu:�xxa�x: xxx: Wtux txXM-
AUT 3 cD4I--P °NlT!ALTIv`•
!•. •.l ._.. .. - .:.� - . _ _ .. .i .`,, fir. __. ._ _ ti:`k ?' ... ..♦ fl' !■ -- !/ _ --. YI • . 1'•.
a�
Iwr
�J
SUPPLEMENTAL AGREEMENT NO. 1 TO AGREEMENT FOR ECONOMIC
CONSULTANT SERVICES BY AND BETWEEN THE REDEVELOPMENT
AGENCY OF THE CITY OF HUNTINGTON BEACH AND KEYSER,
MARSTON ASSOCIATES, INC.
This Supplemental Agreement No. I is made as of the date of
execution hereof by the Redevelopnent Agency of the City of
Huntington Beach between the Redevelopment Agency of the City of
Huntington Beach ("Agency") and Keyser, Marston Associates, Inc.,
("Consultant").
WHEREAS, -the Agency and Consultant have heretofore entered
into that certain consultant Fgreement dated as of July 21, 1986
herein referred to as "Agreement"; and
The Agency and Consultant wish to supplement such Agreement
at this time with respect to compensation only;
NOW THEREFORE, in consideration of the premises, the Agency
and Consultant do hereby amend the Agreement as follows:
1. Section 4 subsection A is deleted in its entirety
effective August 1, 1988 and a new Section 4 subsection A is
substituted therefor as follows:
"A. JERRY KEYSER*
135.00
SENIOR PRINCIPALS*
130.00
PRINCIPALS*
125.00
SENIOR ASSOCIATES*
105.00
ASSOCIATES
90.00
SENIOR ANALYST
75.00
ANALYST
65.00
TECHNICAL STAFF
44.00
ADMINISTRATIVE STAFF
39.00
Directly related job expenses not included in the above
rates are: delivery, electronic data processing, graphics, and
printing. Directly related job expenses will be billed at 110%
of cost.
Monthly billings for staff time and expenses incurred during
-1-
the period will be payable within thirty (30) days of invoice
date. A charge of 1-1/2% per month will be added to all past
due accounts.
*Rates for individuals in there categories will be increased by
50% for time spent in court testimony.
2. All other terms and conditions of the Agreement shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Agreement Number 1 to be executed by and through
their authorized officers on the day and year set opposite the
name of each of the parties.
KEYSER, MARSTON, ASSOCIATES, INC.
By. Date
cb
REDEVELOPMENT AGENCY OF THE
CITY OF HUNTINGTON BEACH,
a municipal corporation of the
State of California
Ch irman Date
ATTEST:
"WN4& ' q�f�
Agency Clerk
APPROVED AS TO FORM:
.A-4 &2K� -
�rAenvy Counsel
-2-
REUSE ANALYSIS
TOWN SQUARE RESIDENTIAWRETAIL DEVELOPMENT
Huntington Beach, California
Prepared for
HUNTINGTON BEACH REDEVELOPMENT AGENCY
2000 Main Street
Huntington Beach, California 92648
By
KEYSER MARSTON ASSOCIATES, INC.
550 South Hill Street, Suite 980
Los Angeles, California 90013 ,
and
55 Pacific: Avenue Mall
San Francisco, California 94111
and
7690 El Camino Real, Suite 202
Carlsbad, California 92008
April, 1988
VI
TABLE OF CONTENTS
- Page
Cover Letter
I. Summary of Salient Factors and Conclusions......... 1
II. Nature of the Assignment ........................... 4
III. Description of Existir_g Environs ................... 6
IV. Description of the Site and Proposed Development... 7
V. Valuation .......................................... 10
VI. Conclusions and Limiting Conditions ................ 26
VII. Section 33433 - Fair Market Value ................... -30
VIII. Certification ...................................... 33
a
KeyserMarstonAssociatesIne.
Richard L. Botti 500 SOnth Grand Avcnue.Suitc 1480
Calvin E•. 11ollis.11 Los Angeles.California 90071
213/622-8095 Fax 211,622.5204
SAN DIEGO 619; 9s2-0380
Heinz A. Schilling
SAN FRANCISCO 415/398.3050
A. Jerry Keyser
__- Kate Earle Funk "-
Robert I Wetmore
Michael Conlon
Denise E. Conley
April 26, 1988
Mr. Douglas La Belle
Deputy City Administrator
City of Huntington Beach
2000 Main Street
Huntington Beach, California 92648
Dear Mr. La Belle:
In accordance with your request, Keyser Marston Associates, Inc.
(KMA) is pleased to submit this reuse analysis of the 3.7 acre Town
Square site in downtown Huntington Beach.
The established value of the subject site is based upon the
development of a residential/retail mixed -use project consisting of
16 townhouse units, 73 flat condominium units, and 10,000 square
feet of convenience retail space. However, it should be noted that
this project, at a density of 24 units per acre, is at the low -end
of the density range typically found for multi -family home develop-
ments. It is also important to consider that this is.an integrated
project of a magnitude relatively unique within the downtown"area,
where the majority of recent residential development has consisted
of small infill residential projects. Therefore, the reuse value
takes these unique characteristics into account.
Based upon our review and analysis of the development economics of
the proposed residential/retail development, as well as an examina-
tion of recent land sales for riedium density residential projects
in coastal Orange County, it is our opinion that the subject
property has a fair -reuse value of $3.2 million or $19.85 per
square foot of land area.' However, the developer owns a portion of
the site that we have been instructed to assume has a value of $1
million. Thus, the property being conveyed by the City/Agency has
an allocated value of $2.2 million. This reuse value assumes that
the property is purchased for near -term development, and not for
land speculation.
calFstat Prcdcvelopment&EvaluationServiic
Mr. Douglas La Belle
April 26, 1988
Page 2
As you recall, California State Redevelopment-:- Law- allows the ---
Redevelopment Agency to establish a land value for a specific
development and use. Therefore.. if the development proposed for
the subject site is significantly :codified in terms -of number of
units.(upward or downward), if the size of the site is altered, or
if the mix of uses is changed, our conclusion as to the fair reuse
value would no longer be valid.
Section 33433 of the California Health and Safety Code also re-
quires the identification of the fair market value of the subject
property at its highest and best use. The determination of the
highest and best use of the property is dependent on whether the
Redevelopment Agency will require the entire site to be developed
as one integrated project, or if it would be possible to subdivide
the site into smaller development parcels. Additionally, this
highest and best use value is predicated on the assumption that
redevelopment law prohibits the sale of land for speculation pur-
poses.
On the basis of the assumption the site can be parcelized, it is
our opinion that small lot single family home development will
provide the highest value to the land. Given the current land
values being achieved in the downtown, it is our opinion that this
type of development, at a density of 9 units per acre, could gener-
ate a land value of $3,900,000, or $24.20 per square foot. When
this value'is reduced by the assumed value of the developer owned
portion of the site, the City/;agency parcel has a value of -$2.9
million.
If, however, the Downtown Specific Plan guidelines are followed,
this site must be developed as cane integrated mixed -use or commer-
cial project. In that case it is our opinion that the highest and
best use, given current market conditions, is condominium develop-
ment at ±35 units per acre, with ancillary convenience retail uses.
Based on recent gondominium rand sales in the area, it is our
opinion that this site, if developed under guidelines contained in
the Downtown Specific Plan, could generate a value of $27,000 per
unit, or $3.5 million for condominium development. Whereas in the
proposed development the parking for the retail use would be
provided off -site, in this scenario it is assumed that a retail use
would have to provide all the necessary parking. Therefore, retail
use would not add to the land value materially. Thus, the fair
market value for condominium/retail development is estimated at
$3.5 million, or $21.72 per square foot of land area. When this is
reduced by the value of the developer's land holdings, the
City/Agency parcel has a value of- $2.5 million.
y rM t nA iateslnc
Mr. Douglas La Belle
April 26, 1988
Page 3
We appreciate this opportunity to assist you, and will be happy to
answer any questions you may have.
Yours very truly,
KEYSER MARSTON ASSOCIATES, INC.
Richard L. Botti
Kathleen H. Head
RLB:KHH:gbd
88159.HTB
14066.0006
91
KeyserMarstonAssociatesI nc.
S
. .I. SUM ARY OF SALIENT FACTORS AND CONCLUSIONS ,
A. Assignment
.. Yam•: '_.�---'-'- -, ___ _�.._. .. _ _---�-=.�- =. -- �r .. . .. �-- .. ->~ s.�w--- - •--a_.".- ....- -.. —'ram --. "-�" _
_-_Determine the fair reuse value af.the subject site for the.develop-
ment of 16 townhouses, 73 condominium units and 10,000 square feet
of retail space.
B. Project Pescgiption
The Town Square site has been earmarked as the eastern anchor to
downtown Huntington Beach development. The large integrated
residential complex and ancillary detail development proposed for
this site is designed to create a buffer between the proposed
higher intensity downtown development and the single family
residential neighborhoods to the east.
The proposed residential development consists of 16 three bedroom
townhouses with attached garages, and 73 condominium units served
by 166 subterranean parking spaces. The two residential components
are linked by a common circulation system and also share recrea-
tional facilities. The retail facility is located at ground level
in the condominium building along Main Street, and is served by 14
adjacent surface parking spaces and 18 off -site structured spaces.
C. Location
They subject site is located .in downtown Huntington Beach and
generally occupies the area bounded by realigned 6th Street, Main
Street and Orange Avenue. However, approximately 35,000 square
feet of land area, including existing development, located along
Main Street and Orange Avenue have been excluded from the subject'
site.
1
ti
D. Land Area
The subject site, assuming the proposed realignment of 6th Street
occurs, consists of approximately 3.7 acres.
E. Zoning
The subject site is located within the area regulated by the
Downtown Specific Plan. This site is designated for mixed -use or
commercial development. The proposed development conforms to the
specific plan guidelines.
F. Utilities
Utilities sufficient in capacity to serve the proposed project
presently exist in the streets surrounding the subject site.
G. Date of Valuation
April 26, 1988
H. Reuse Conditions
1. The number, type and size of the residential units, as well as
the gross building area, shall not vary by more'than 5% from
the estimates presented in this report.
2. The townhouse units must be of two-story construction and in-
clude attached garages.
3. The condominium flat units must be constructed in three-story
buildings, and must include a 1-1/2 level subterranean parking
garage with 166 spaces.
2
4. At least 20% of the site must be set -aside for open space and
recreational facilities. This open space must be landscaped
at an above -average quality level.
structed along Main Street. The developer must construct 14
surface parking spaces on -site, and the City will provide 18
spaces in an off -site parking structure.
6. The developer must contribute $300,000 for the required off -
site improvements, which include the realignment of 6th Street
as well as gas and sewer line relocation costs, in addition to
more typical costs such as curbs, gutters, sidewalks and
street lights. The City will be responsible for the costs in
excess of $300,000.
I. Final Estimate of Value
1. Reuse value of the entire site:
Three million two hundred thousand dollars
($3,200,000)
($19.85 per square foot of land area).
2. Reuse value of City/Agency parcel: a
Two million two hundred thousand dollars
($2,200,000).
3
II. NATURE OF THE ASSIGNMENT
A. Purpose of the Appraisal
The 3.7 acre subject parcel is under several ownerships, with the
City/Agency and the developer controlling the. majority of the site.
At the present time, both the Agency and the developer are complet-
ing the assemblage of the balance of the site. The purpose of this
reuse appraisal is to determine the fair reuse value of the entire
site, given the proposed scope of development. This value will
then be allocated between the portion of the site owned by the
developer and the City/Agency owned portion to be conveyed to the
developer. The conveyance of the site will take place within the
controls and restrictions embodied in the Owner Participation
Agreement (OPA) entered into by both the developer (buyer) and the
Huntington Beach Redevelopment Agency (seller). Fundamental to
this appraisal is the fact that the site is being sold for develop-
ment and not land speculation. Thus, the OPA restricts, among
other things, the scope of development and establishes a time
framework under which development must proceed.
This appraisal and the final estimate of value specifically re-
quires compliance with the Limiting Conditions and Assumptions to
this report as stated in Section VI. t.
B. Definition - Reuse Value
The reuse value is the highest price in terms of money that a
property is expected to bring for a specified use in a competitive
and open market under the reuse conditions established by the
Agency with the buyer and seller (Redevelopment Agency) each acting
prudently, knowledgeably and assuming the price is not affected by
undue stimulus. Also, essential to an estimate of a fair reuse
value is the notion that the Agency is interested in selling land
that will result in near -term development and that the.land is not
4 t.
sold for speculation.
Implicit in this definition is the consummation of a sale as of a
specified date and passing of title from seller to buyer under con-
.
1. Both parties are well informed or well advised and each
acting in what he/she considers his/her own best inter-
est.
2. That the property will be assembled and cleared in a
reasonable time.
3. Financing, if any, is on terms generally available in the
community for the uses proposed at the date the property
is available for construction.
C. Rights Appraised
The site has been appraised in fee simple estate, free and clear of
all encumbrances, special assessments and liens.
D. Date of Valuation
April 26, 1988
E. Function of the Report
It is understood that this appraisal will be used to estimate the
fair reuse value for the subject site under the premise that the
site will be developed as soon. as it is transferred to the buyer.
67
F
ORANGE AVE
PARCEL MAP
(6)
III. DESCRIPTION OF EXISTING E1iVIROMS
The subject site is located in downtown Huntington Beach, which
�8--.fit°-=.y
—�.r• - ��wrr - . - a.. - ...ram-��_ - _ —.�-- - -_
munity. The subject site at one time served as the municipal
government center, including City Hall, and the police and fire
departments. The site is located at the eastern boundary of the
downtown, and serves as a buffer between the -single family home
neighborhoods further to the east, and the commercial uses located
to the west. The proposed development is designed to create a
transition zone between these two diverse types of uses.
In the late 1960's and early.1970's, coastal Orange County ex-
perienced a period of rapid growth, and as a result Huntington
Beach was one of the fastest growing cities in the nation.
However, the growth within the City occurred largely in the inland
areas where large tracts of vacant land were available. Given the
shift in population away from the coast, the commercial dominance
of the downtown has diminished dramatically over time, resulting in
a change in the nature of the retail uses found downtown.
While the downtown presently lacks the residential base to support
quality commercial development, the proximity to the coast offered
by sites in the downtown creates significant benefits for such
development. These opportunities will be further enhanced by the
multi -phased commercial development program being launched by the
Redevelopment Agency, which should revitalize and diversify the
retail uses, and upgrade the environmental quality and image of the
downtown.
L
IV. DESCRIPTION OF THE SITE AND PROPOSED DEVELOPMENT
A. Description of the Subject Property
1. Ownership
The parcels included in the subject site are owned by a number
of parties including the City/Agency and the developer. Cur-
rently both the Agency and the developer are assembling the
balance of the site. Additionally, it was assumed that 6th
Street would be realigned, resulting in the site configuration
shown on the attached parcel map. Upon the completion of as-
semblage, the City/Agency will convey their property to the
developer, at a value equal to the pro rata share of the reuse
value.
2. Legal Description
No legal description was furnished to us. Therefore, we are
assuming that the subject site consists of approximately 3.7
acres.
3. Soils
9.
No soil bearing tests have been furnished for the subject
site. Therefore, it is assumed that the soil and sub -soil
conditions are suitable for the proposed development.
4. Utilities
It is assumed that all public utilities are available to the
site in adequate capacities for the proposed uses on the sub-
ject site. Gas and sewer lines currently located on the site
will have to be relocated to allow for the proposed develop-
ment.
7
5. Zoning
The subject site is designated for mixed -use or commercial
development by the Downtown Specific Plan. The proposed
residential/commercial development is allowed by the Specific
B. Description of Improvementi
The proposed project consists of two major residential components
,and 10,000 square feet of ancillary retail space. The townhouse
component includes 16 three bedroom two and one-half bathroom
2-story units, with attached garages. The condominium component
includes 73 units ranging in size from 1 bedroom units to 2 bedroom
and den units. These buildings are three stories above ground,
with 166 parking spaces located in a 1-1/2 level below ground park-
ing -garage. This represents tin average of 2.3 spaces per unit.
The -entire project is integrated by a common circulation system,
and shared recreational facilities and open space. The primary ac-
cess to the project and parking is provided from Main Street at the
western end of the condominium/retail complex. Secondary access is
provided from orange Avenue.
The project as proposed is being developed at a density of 24 units
per acre, which is at the low -end of typical multi -family residen-
tial densities. This is attributable to the inclusion of low -
density townhouse units, as well as the 3-story height limitation
imposed on the condominium structures. The proposed unit mix is as
follows:
ZMg__of unit S&Mgre Feet Number
JQwnhouses
Plan 1 3 bedrooms
2-1/2 bathrooms 21025 6
Plan 2 3 bedrooms
2-1/2 bathrooms 21225 10
N.
4.
Condominiums
Plan A 1 bedroom
1 bathroom 865 23
Plan
B
1
bedroom
1-1/2
bathrooms
995
27
Plan
C
2
bedrooms
2
bathrooms
1,160
13
Plan
D
2
bedrooms
2
bathrooms
den
1,250
6
Plan
E
1
bedroom
2
bathrooms
den
1,120
4
Weighted Average Square Feet Per Unit:
Townhouses 2,150
Condominiums 1,010
4
C
V. VALUATION
The valuation of real estate is derived principally through three
comparison approach and the income approach. From the indications
of these separate analyses, an opinion of value is reached, based
on the quantity and quality of the factual data considered, tem-
pered by the judgment and experience of the appraiser who is
utilizing commonly accepted methods and techniques within the
framework of the appraisal process. Due to the fact that this ap-
praisal is for the valuation of an undeveloped parcel of land, the
cost approach is not applicable.
Income properties are normally valued in proportion to their
ability to produce income. For the purposes of determining the
reuse value of the land, the residual value can be defined as the
difference between the development cost of the project, excluding
land, and the total amount a private developer or investor can af-
ford to invest. The amount the investor can afford is based upon
the economics of the project and the present and anticipated money
market conditions impacting such things as the cost of mortgage
money and required rate of return.
The market data comparison approach to value is based upon the
principle of substitution; that is, when a property is replaceable
in the market, its value tends to be set at the cost of acquiring
10
an equally desirable substitute property, assuming no cost delay in
making the substitution. The typical appraisal technique used to
estimate values through substitution involves the collection and
many similar characteristics (uses) as the uses on the property
being appraised.
The subject site, at 3.7 acres, represents a significantly larger
site than is typically found in downtown Huntington Beach. As a
result, the vast majority of recent development has consisted of
small infill projects, on lots of less than 1/2 an acre. Thus, the
integrated project as proposed, with a mixture of townhouse and
condominium units, represents a somewhat unique project within the
context of the downtown. Therefore, it is difficult to find
directly comparable projects to use as value indicators for the
subject site. Given these factors, the income approach to land
valuation represents the strongest indication of value for the sub-
ject site, and therefore primary reliance has been placed on this
approach. However, the market data comparison approach to valua-
tion has been used as a crosscheck to the conclusions arrived at
using the income approach.
Given the differing nature of the proposed uses, the reuse value
for the residential portion of the project was analyzed separately
from the retail use being proposed for the site. The fair reuse
value of the entire site represents the summation of the values
determined for both the residential and retail uses.
11
TABLE 1
ESTIMATED DEVELOPMENT COSTS
TOWN SQUARE CONDOMINIUM PROJECT
16 TOWNHOUSES - 73 FLAT CONDOMINIUM UNITS
HUNTINGTON BEACH, CALIFORNIA
DIRECT COSTS
BUILDING SHELL
TOWNHOUSES (INC GARAGES)
34,400
SF
W .00
/SF
$1,376,000
FLAT UNITS
73,380
SF
$45.00
/SF
$3,325,000
PARKING
1 1/2 LEVEL SUBTERRANEAN
34,000
SF
$24.00
/SF
816,000
1/2 LEVEL SUBTERRANEAN'
37,000
SF
$18.00
/SF
666,000
LANDSCAPING/ON-SITES
ALLOWANCE
475,000
OFF -SITES
ALLOWANCE
285,000
TOTAL DIRECT COSTS
INDIRECT COSTS
ARCHITECTURE & ENGINEERING
CITY PERMITS AND FEES
TAXES & INSURANCE
LEGAL & CLOSING
INTEREST DURING CONST AND SALES PERIOD
FINANCING FEES
MODEL DECORATION/MARKETING
DEVELOPMENT MANAGEMENT
CONTINGENCY
TOTAL INDIRECT COSTS
COST OF SALES
TOTAL DEVELOPMENT COSTS
SOURCE: KEYSER MARSTON ASSOCIATES, INC.
APRIL, 1988
TABLE NAME = 2TOWNSGUARE
ALLOWANCE
ALLOWANCE
1.501 DIRECT COSTS
1.501 DIRECT COSTS
0.025 POINTS
ALLOWANCE
2.00% DIRECT COSTS
3.00% DIRECT COSTS
E6,943,000
$475,000
605,000
104,000
104,000
702,000
348,000
150,000
139,000
208,000
$2,835,000
$423,000
$10,201,000
OR SAY
$10,201,000
(12)
,�
' A. Income Approa`�'t� - Resident:.al Use
1. Development Costs
unit townhouse/condominium. project. As can'be seen in Table
1, the shell costs for the townhouse units are estimated at
$40 per square foot of building area, which includes the costs
of constructing attached garages. The shell costs for the
three-story condominium fl€its are estimated at $45 per square
foot, including the required circulation/corridor areas.
r
The parking costs include the construction of 166 subterranean
\parking spaces to meet the needs of the condominium complex.
These spaces will be provided in a 1-1/2 level parking struc-
ture with 76 spaces on the- first level and 90 spaces on the
second level. The costs to build the level that is only 1/2
level below ground are estimated at $16 per square foot, while
the fully subterranean level costs are estimated at $24 per
square foot. •
The site work is divided into on -site and off -site expendi-
tures. In this instance, the off -site expenditures are
limited to a $300,000 contribution to the realignment of 6th
Street, gas and sewer line relocation, curbs, gutters,
sidewalks and street lights. The on -site costs include
landscaping and recreational facilities, which were estimated
1.2
k
at $10 per square foot for the open space hardscaping and
landscaping, and $150,000 for recreational facilities.
Ninety-five percent of both the on- and off -site costs were
-- ---.v_ - al -located- to the residential component,- -and. 5% were allocated
to the retail component. As indicated in Table 1, the total
direct costs for the residential component, including its
share of on- and off -sites, is estimated at $6.9 million.
The indirect cost
and city permits
staff at $500,000
allocated between
ditionally, allo,
legal and closing
:s include architecture and engineering fees
and fees, which were estimated by the City
and $637,000'respectively. These costs were
the residential and retail components. Ad-
wances were provided for taxes, insurance,
costs at 3% of direct costs or $208,000.
Another major component of the indirect costs is the interest
during construction. Given the existence of subterranean
parking, excavation and initial construction of the garage
must commence before construction of the residential struc-
tures begins. It is assumed that this initial construction
will require 5 months, and that the building construction and
completion of the parking will require an additional 8 months.
Therefore, the land and parking costs must be financed over a
13 month period, while the building cost must be financed over
an 8 month period. In addition, the unsold units must con-
tinue to be financed during the absorption period, which was
assumed to be 10 months from the project's completion. This
13
TABLE 2
RESIDUAL LAND VALUE
TOWN SQUARE CONDOMINIUM PROJECT__„
16 TOWNHOUSES - 73 FLAT CONDOMINIUM UNITS
HUNTINGTON BEACH, CALIFORNIA
Gross Sales Proceeds
16 Townhouse Units @ $269,000/Unit
73 Condominium Flats @ $152,000/Unit
Model Decoration Costs Recapture =,
Total
(less) Construction Costs
(less) Developer's Profit
Residual Land Value and
Carrying Costs
(less) Interest on Land Costs
Residual Land Value
Land Value Per Residential Unit
----------------------------------
SOURCE: Keyser Marston Associates, Inc.
April, 1988
88159.HTB
$ 4,304,000
11,096,000
75,000
$15,475,000
10,202,000
1,719,000
$ 3,554,000 Q
532,000
$ 3,022,000
$ 33,955
(14)
represents average absorption of 9 units per month, which is
within the range achieved by other Huntington Beach projects.
The total interest costs are estimated at $702,000. The
_financing fees are estimated at 2.5 points, and total
$348,000.
The balance of the indirect costs include model decoration and
marketing expenses of $150,000; an allowance for development
management to provide for the developer's out-of-pocket
management expenses; and a contingency allowance of 3% of
direct costs. The total indirect costs are estimated at ap-
proximately $2.84 million.
In addition to construction costs, the developer must incur
costs associated with selling the units, such as closing costs
and sales commissions. There also are costs during the ab-
sorption period to maintain the model units and the grounds.
These closing and maintenance costs are estimated at $423,000.
Thus, as shown in Table 1, the total construction costs, ex-
cluding land, are estimated at $10.2 million.
2. Revenue Projection
As can be seen in Table 2, the gross sales proceeds from the
townhouses and condominiums are projected at approximately
$15.5 million. The sales projections were based on a market
survey performed throughout coastal Orange County, as sum-
14
TABLE 3
CONDOMINIUM/TOWNHOUSE SALES SURVEY
TOWN SQUARE CONDOMINIUM PROJECT
16 TOWNHOUSES - 73 FLAT CONDOMINIUM UNITS
HUNTINGTON REACH, CALIFORNIA
TOTAL
UNIT
1 OF
UNIT
UNIT
PRICE
1
---
DEVELOPMENT
-----------
UNITS
-----
UNIT
---------
TYPE
S.F.
-----
PRICE
-----
PER S.F
-------
AGE
---
COMMENTS
--------
I
PACIFIC RANCH TOWNHOUES
252
28,
2b
TRI-LEVEL
2,100-2,200
1250,000-1270,000
$119-1123
1984
AVERAGE SALES OF 7 UNITS PER MONTH
YORKTOWN AVE, EAST OF MAIN
38,
2.5b
TRI-LEVEL
2,700
1295,0001310,000
11091115
HUNTINGTON BEACH
2
PACIFIC RANCH VILLAS
306
28,
1-2b
SINGLE LEVEL
950-1,225
1126,0001142,000
11331116
1984
ALL UNITS SOLD OUT. AVERAGE SALES
YORKTOWN AVE, EAST OF MAIN
2B,
2-2.5b
TWO LEVELS
1,280-1,780
1130,000-1161,000
1102190
OF 12 UNITS PER MONTH.
HUNTINGTON BEACH
3
SEA CLIFF ON THE GREENS
142
1B,
lb
TWO LEVELS
(2,000
NA
NA
1984
ALL UNITS SOLD OUT
PALM AVE NW GOLDENWEST ST
28,
2.5b
TWO LEVELS
2,000
$250,000
$125
HUNTINGTON BEACH
3B,
2.5b
TWO LEVELS
2,000
$290,000
$145
4
BROADMOOR COMPLEX
244
2B,
2b
1,400-1,700
1194,900- $265,000
11141155
5 YRS
GUARDED, GATED COMMUNITY. LOCATION
HUNTINGTON HARBOR
3B,
2.5b
1,800
1216,000- $224,000
11201124
PREMIUM FOR SITES ON THE WATER
Ln N
HUNTINGTON BEACH
ESTIMATED AT $30,000.
5
SEA HARBOR CONDOMINIUMS
25
1B,
lb
900
$110,000-1120,000
1122-$133
10 YRS
ALL UNITS ARE I-BDRM, 1-BATH WITH
BROADMOOR-HUNTINGTON HARBOR
HARBOR VIEW.
BLUE WATER LANE
HUNTINGTON BEACH
6
HUNTINGTON PACIFIC
106
1B,
lb
PRIVATE DECK W/VIEW 800
$235,000
$293
1965
BUILT AS APARTMENTS IN 1965. CON-
PCH BETWEEN MAIN i 17TH
28,
1.5b
WITH VIEW
(1,000
$275,000
$275
VERTED TO CONDOS IN 1978. SALES
HUNTINGTON BEACH
28,
2b
NO VIEW-1 STORY
1,100
$161,000
$146
QUOTED ARE TYPICAL FOR THE
DEVELOPMENT,
7
SEA FAIR CONDOMINIUMS
54
STUDIO
SINGLE LEVEL °
671
1103,000-$165,000
1154-1246
4/88
48 UNITS PRESOLD BEFORE CONSTRUCTION .
230 LILLY LANE
IB,
lb
SINGLE LEVEL
914
1133,000-1190,000
1146-1208
COMPLETED AND DURING FIRST MONTH OF
(OFF SUPERIOR)
28,
2b
SINGLE LEVEL
1,110-1,635
1180,000-1397,000
1162-1243
SALES PERIOD. 251 TO 601 SALES
38,
3b
SINGLE LEVEL
1,850
1320,000-1400,000
1173-1216
PREMIUM ACHIEVED FOR VIEW UNITS,
DEPENDING ON UNIT SIZE.
SOURCE: KEYSER MARSTON ASSOCIATES, INC.
APRIL, 1988
TABLE NAME - COND03
marized in Table 3. As can be seen in Table 3, the townhouse
units range in size from 1,800 to 2,700 square feet, and are
achieving values of $110 to $145 per square foot of living
--.- area. Given the range of sales values, it was -assumed that
the proposed Town Square units could generate values of $125
per square foot, or a weighted average price of $269,000 per
unit.
The condominium units identified in Table 3 range in size from
670 to 1,850 square feet, and in price from $100 to nearly
$300 per square foot of building area. However, those units
at the uppermost end of the range are at beachfront locations
and/or have significant premiums for white water ocean views.
The proposed project provides a high quality environment and
is located near the coast. Therefore, it was assumed that the
units could achieve average sales values of $150 per square
foot. This represents a weighted average sales price of
$153,000 for the 670 to 1,850 square foot units.
n
3. Residual Land Value
Table 2 presents the residual land value for the subject site
assuming the proposed residential use. As can be seen in
Table 2, the gross sales proceeds are estimated at $15.5 mil-
lion, and construction costs were estimated at $10.2 million.
Additionally, it was assumed that the developer's profit for a
project of the proposed magnitude should be in the range of
15
TABLE 4
CONDOMINIUM LAND SALES
TOWN SQUARE CONDOMINIUM PROJECT
16 TOWNHOUSES - 73 FLAT CONDOMINIUM UNITS
HUNTINGTON BEACH, CALIFORNIA
SITE
SALE
AREA
# Of
------------SALES
PRICE ------------
I
---
LOCATION
---------
DATE
----
(ACRES)
-------
UNITS
-----
DENSITY/ACRE
-------------
TOTAL
-----
PER UNIT
--------
PER SF
------
COMMENTS
--------
I
LAKE ST AND ATLANTA AVE
SPRING
4.84
159
33
UNITS
$4,145,000
$26,100
$19.66
CURRENTLY UNDER CONSTRUCTION.
HUNTINGTON BEACH
1997
ORIGINALLY PLANNED AS APART-
MENTS BUT WILL BE SOLD AS
CONDOS UPON COMPLETION OF
CONSTRUCTION.
2
WARNER AVE, WEST OF SINS
9/87
2.42
60
25
UNITS
$1,650,000
$27,500
$15.65
HUNTINGTON BEACH
3
PCH BETWEEN 15TH AND 16TH
1987
0.91
42
46
UNITS
$1,350,000
$32,150
$34.06
THIS SITE REQUIRED OIL WELL
HUNTINGTON BEACH
REABANDONMENT. PROJECT IS
CURRENTLY UNDER CONSTRUCTION.
4
NEC OCEAN AVE AND 20TH
10/87
0.75
36
48
UNITS
$1,200,000
$33,300
$36.73
THIS SITE REQUIRED OIL WELL
HUNTINGTON BEACH
REABANDONMENT. THIS SALE
COMPLETED ASSEMBLAGE OF THE
PROPERTIES ON THE BLOCK. CON-
SOLIDATED SITE IS CURRENTLY
UNDER CONSTRUCTION.
5
NEC PCH AND LOTH
5/87
0.86
35
41
UNITS
$2,100,000
$60,000
$56.06
PROJECT IS CURRENTLY UNDER
HUNTINGTON BEACH
CONSTRUCTION. MANY UNITS WILL
10
HAVE OCEAN VIEWS.
SOURCE:
KEYSER MARSTON ASSOCIATES,
INC.
APRIL, 1988
TABLE NAME - CONDOS 2
12.5% of development costs including land, or $1.7 million.
Thus, the residual land value, after interest costs are
deducted, totals $3.02 million or $33,955 per unit.
B. Comparable Sales Approach
In determining the value of the subject site through the use
of market comparables, recent land sales that were purchased
for subsequent condominium development are used as value in-
dicators for the site. This indication of value is typically
measured on the basis of land lost per unit constructed. The
proposed project is somewhat unique in that it is sig-
nificantly larger in terms of the absolute number of units,
but lower in terms of density than the recent development in
downtown Huntington Beach. Additionally, this project con-
tains a mix of townhouse units and flat condominium units,
while the sales used as value indicators were developed solely
with condominium flats. Therefore, adjustments must be made
to the recent land sales to accurately measure the land value
attributable to the townhouse units.
Table 4 presents five recent land sales for condominium
development on sites within close proximity to the coast. As
can be seen in Table 4, the sites range in size from .75 acres
to 4.84 acres, with densities ranging from 25 to 46 units per
acre. Comparatively, the proposed project is located on a 3.7
acre site at a density of 24 units per acre. It should be
16
noted that within given ranges the land value per unit con-
structed remains relatively stable as the densities increase,
which implicitly results in increases in the value per square
foot of land area. However, as densities increase above given
threshold levels, it becomes necessary to intensify the type
of parking provided. For example, at densities of less than
17 units per acre, such as would be found for townhouse
development, it is possible to provide inexpensive surface
parking or attached garages. As the density increases to the
25 to 35 units to the acre level, it is necessary to provide
structured parking which typ-ically is a semi -subterranean
garage. Densities above this level require fully subterranean
parking. Thus, as the densities increase above these given
levels, the land value per unit decreases to reflect the addi-
tional costs associated with constructing parking.
Comparable number 1 is similar to the subject site in terms of
location and the project quality level and amenities level
being provided. Thus, this sale serves as an excellent value
indicator for the subject site. However, comparable number 1
is being developed at 33 units per acre, which represents a
40% greater density level than found on the subject site.
This reflects the fact that the entire site is developed with
flat condominium units. Thus, an adjustment must be made in
the land value per unit to account for the fact that the sub-
ject site must be developed with 16 low density townhouse
units. As can be seen in Table 4, this property was sold in
17
the spring of 1987 for approximately $26,000 per unit.
Given the lack of recent townhouse development in downtown
Huntington Beach, KMA gathered data regarding_ single-family
home development on small lots, i.e. 4,000 to 5,000 square
feet. It was determined that in general, this type of lot has
a value of $115,000 to $125,000 in the downtown Huntington
Beach area, and that the completed homes have a value in the
$350,000 range. Factoring this value range against the
achievable value for completed townhouses of $250,000 to
$275,000, it was determined that townhouse land has a value of
approximately $80,000 per unit. However, a townhouse develop-
ment requires substantial internal circulation improvements
not required for single-family homes built on small lots ac-
cessible from existing streets in downtown Huntington Beach.
The costs associated with these additional improvements effec-
tively reduce the land value to approximately $55,000 per
unit.
L.
Assuming the comparable number 1 site was required to be
developed with the same proportionate mix of units required
for the Town Square site, the adjusted value would be $2.78
million, or $31,200 per unit.
Comparable number 2 is similar to the subject site despite the
fact that it is located outside of the downtown area. This
value indicator sold in September of 1987 for $27,500 per
unit. Using the same methodology employed to adjust the value
of comparable number 1, the value indicated for comparable
number 2 is $2.89 million, or $32,400 per unit.
Comparables number 3 and 4 are located on Pacific Coast High-
way, and development on these sites will provide ocean views
from many of the units. Thus, these sites embody stronger
locational attributes than found on the subject site. These
sites were both sold during 1987 at values of $32,150 and
$33,300 per unit respectively. However, each of the sites had
oil wells that required reabandonment, which can involve sig-
nificant cost premiums. While KMA was unable to ascertain the
actual costs associated with the required reabandonment of
each of these sites, these costs were estimated at $100,000
for each site based on discussions with developers. This
results in net land costs of approximately $34,500 and $36,100
per unit respectively.
Adjustments must be made to comparables numbe_r 3 and 4 to
reflect their superior locational attributes, as well as the
smaller site sizes and higher allowable density levels. Each
of these factors require significant downward adjustments to
allow their use as value indicators for the subject site.
These comparables should be adjusted by 10% to reflect the
location differential, and 15% to reflect the size and density
differences. Thus, the adjusted land value for the con-
dominium units before adjustments for the passage of time, is
19
$25,900 to $27,100 per unit. Assuming townhouses generate a
land value of $55,000 per unit, as determined previously, the
adjusted values of comparables number 3 and 4 are $31,100 and
$32,100 per unit. - -
Comparable number 5 is located in the same general vicinity as
comparable numbers 3 and 4, and is essentially the same size
and is being developed at approximately the same allowable
density level. However, comparable number 5 was purchased for
$60,000 per unit, an 80% to 85% premium over these other
sites. The developer of this property is of the opinion that
this property is substantially superior to other properties
,along Pacific Coast Highway given the existence of superior
views. While it is conceivable that a project developed on
this site could offer more view units than provided at either
the comparable number 3 or 4 sites, it is unlikely that the
addition of these units could create a value differential of
this magnitude. Thus, it is likely that this property was
s
purchased in anticipation of its potential future value,
rather than the value warranted by today's market conditions.
Inasmuch as a reuse value is based on the value created by
near -term development, and the fact that this value represents
an anomaly in the marketplace, comparable number 5 has been
disregarded as a value indicator.
20
TABLE 5
ESTIMATED DEVELOPMENT COSTS
TOWN SQUARE RETAIL COMPONENT
HUNTINGTON BEACH, CALIFORNIA
DIRECT COSTS
SHELL
TENANT IMPROVEMENTS
LANDSCAPING/ON-SITES
OFF -SITES
SURFACE PARKING
TOTAL DIRECT COSTS
INDIRECT
ARCHITECTURE & ENGINEERING
CITY PERMITS & FEES
INTEREST DURING CONSTRUCTION
FINANCING FEES/CLOSING COSTS
LEGAL/ACCOUNTING
LEASING FEES
TAXES/INSURANCE
DEVELOPMENT MANAGEMENT
CONTINGENCY
TOTAL INDIRECT COSTS
TOTAL DEVELOPMENT COSTS
SOURCE: KEYSER MARSTON ASSOCIATES, INC.
APRIL, 1988
10,000 SF @ $45.00 /SF
$450,000
10,000 SF 0 $15.00 /SF
150,000
ALLOWANCE
25,000
ALLOWANCE
15,000
14 SPACES @ $750 /SPACE
10,500
$650,500
ALLOWANCE
$25,000
ALLOWANCE
31,900
40,700
0.025
POINTS
21,800
1.505
DIRECT COSTS
9,800
15.001
GROSS INCOME
17,100
1.50X
DIRECT COSTS
91800
2.001
DIRECT COSTS
13,000
3.00X
DIRECT COSTS
19,500
$188,600
$839,100
OR SAY
$839,000
s
After taking the various location, density and size factors
into consideration, it is our opinion that comparables number
1 and 2 represent the strongest value indicators for the sub-
ject site. Therefore, in determining the -land -value for the
subject site, the most weight was placed on these value in-
dicators. The analysis of market data indicates a land value
for the 16 townhouses and 73 condominium units of $32,000 per
unit, or $2.85 million. Adjusting this value for the passage
of time would indicate a land value of $3.1 million.
C. Retail Reuse Value
1. Development Costs
The proposed project also includes 10,000 square feet of an-
cillary retail space, which must be constructed on the ground
floor of the residential building located on Main Street.
Therefore, the costs associated with this development include
the premium associated with constructing the project on the
ground floor of a residential building. The shell costs are
estimated at $45 per square foot, and an allowance of $15 per
square foot was provided for the tenant improvements required
to finish the interior of the space. Additionally, the pro
rata share of the on- and off -sites costs were included at
$25,000 and $15,000 respectively. The developer must provide
14 surface parking spaces on -site, and the 18 additional
spaces required will be provided off -site at no cost to the
21
TABLE 6
ESTIMATED NET INCOME
TOWN SQUARE RETAIL COMPONENT
HUNTINGTON BEACH, CALIFORNIA
INCOME
SHOPS
10,000
SF @
$12.00
/SF
$120,000
GROSS INCOME
$120,000
(LESS) VACANCY 6 COLLECTION
5.00X
GROSS
INCOME
6,000
GROSS EFFECTIVE INCOME
$114,000
OPERATING EXPENSES
MANAGEMENT
5.002
GROSS
EFFECTIVE INCOME
$5,700
CAM REIMBURSEMENTS
500
SF @
$3.00
/SF
1,500
RESERVES
10,000
SF @
$0.15
/SF
1,500
TOTAL EXPENSES
$0,700
NET OPERATING INCOME
$105,300
OR SAY
$105,000
SOURCE: KEYSER MARSTON ASSOCIATES, INC.
APRIL, 1988
(22)
developer. As shown in Table 5, the costs of providing sur-
face parking are estimated at $750 per space, which brings to-
tal direct costs to $650,500.
The indirect costs include architecture, engineering, permits
and fees of $56,900, which represents the pro rata share of
the fees estimate provided by the City staff for the entire
project. The other indirect costs consist of interest during
construction and financing fees of $62,500; legal, closing,
taxes and insurance of $19,600; leasing fees of $17,100; and
development management and contingency allowances totaling
$32,500. The total indirect costs are estimated at $188,600,
resulting in total development costs of $839,000.
2. Project Revenues
The average annual rent for the 10,000 square feet of retail
space was estimated at $12 per square foot, based on the
e
market rate for small convenience uses in downtown Huntington
Beach. It has been assumed that the retail space is leased on
a triple net basis, and thus the tenant is responsible for all
operating expenses. However, the developer will incur ongoing
management costs, common area maintenance costs attributable
to vacant space, and reserves for capital improvements. These
costs, including an allowance for vacancy and collections are
estimated at $14,700. As shown in Table 6, the resulting net
income before debt service is $105,000.
22
TABLE 7
RESIDUAL LAND VALUE
TOWN SQUARE RETAIL COMPONENT
HUNTINGTON BEACH, CALIFORNIA
-----------------------------------RETURN TO EQUITY -----------------------------------
NET INCOME BEFORE DEBT SERVICE
$105,000
AVAILABLE FOR DEBT SERVICE
1.20
COVERAGE
88,000
NET INCOME AFTER DEBT SERVICE
17,000
CONVENTIONAL FINANCING
10.091
CONSTANT
872,000
WARRANTED INVESTMENT
DEBT
072,000
EQUITY
8.001
RETURN
213,000
TOTAL WARRANTED INVESTMENT
1,085,000
ESTIMATED LAND VALUE
WARRANTED INVESTMENT
1,085,000
(LESS) DEVELOPMENT COSTS
839,000
RESIDUAL LAND VALUE AND CARRYING COSTS
$246,000
RESIDUAL LAND VALUE
$222,000
-----------------------------------VALUE
UPON COMPLETION -----------------------------------
NET INCOME BEFORE DEBT SERVICE
$105,300
CAPITALIZED VALUE
9.001
1,170,000
(LESS) DEVELOPMENT COSTS
839,000
(LESS) COST OF SALE
3.001
VALUE
35,000
(LESS) DEVELOPERS PROFIT
11.001
VALUE
129,000
RESIDUAL LAND VALUE AND CARRYING COSTS
$167,000
RESIDUAL LAND VALUE $151,000
SOURCE: KEYSER MARSTON ASSOCIATES, INC.
APRIL, 1988
(23)
3. Residual Land Value
The estimated value of the retail component of the proposed
project is presented in Table 7. As can be seen in Table 7,_
this value was estimated using two different methodologies.
The first method, the return to equity approach, is based on
the assumption that the project will be held as a long-term
investment. Assuming a standard debt average ratio, the maxi-
mum warranted debt is $872,000 at a 9-1/2% interest rate amor-
tized over 30 years. The warranted equity contribution is
$213,000, assuming an 8% stabilized return on the equity in-
vestment. The total warranted investment is estimated at
$1,085,000. This must be reduced by the estimated development
costs of $839,000 to determine the residual land value. After
calculating the carrying costs on the land acquisition, the
warranted land value under the return to equity approach is
$222,000.
9
The second approach to determining the residual land value is
based upon the project value upon completion. This value is
estimated by capitalizing the stabilized net income at the
rate found for similar retail uses in the area. Capitalizing
the estimated net income at 9%, the project value is $1.17
million. When that is reduced by development costs, imputed
costs of sale, and an 11% developer's profit, the residual
land value and carrying costs are $167,000. Reducing this
23
value by the interest costs on the land acquisition results in
an estimated land value of $151,000.
After evaluating the results of each approach to valuation,
the residual land value of the 10,000 square feet of retail
space has been estimated at $180,000. However, it is our
opinion that if the developer were required to provide all 34
parking spaces required for this project on -site, the war-
ranted land value would be reduced to a nominal level.
D. Conclusions
The income approach to valuation results in a residual value of the
residential component of the $3.1 million. The analysis of com-
parable land sales, as adjusted for location, site size and project
density indicates a value of $2.85 million. Given the magnitude of
the adjustments to recent land sales required to account for the
inclusion of large townhouse units in the proposed project, it is
our opinion that the income approach to valuation9provides the
strongest indication of the land value of the site. Therefore, it
is our opinion that the fair reuse value for the residential com-
ponent is $3.02 million. The retail reuse value was established at
$180,000, resulting in a total reuse value of $3.2 million, or
$19.85 per square foot.
24
As stated previously, both the developer and the City/Agency own
portions of the subject site. Thus, the reuse value must be allo-
cated to the portion of the site that will be conveyed to the
developer. We have been instructed to assume that the land owned
by the developer has a value of $1 million. Thus, the total reuse
value of $3.2 million must be reduced by $1.0 million, resulting in
a value of $2.2 million for the property being conveyed.
2
25
VI. CONCLUSIONS AND LIMITING CONDITIONS
The previous section of this report discussed the approach to the
determination of value. Based upon this analysis, it is our
opinion that as of April 26, 1988, the fair reuse value of the sub-
ject site is:
Three Million Two Hundred Thousand Dollars
($3,200,600)
The value of the property being conveyed to the developer is:
Two Million Two Hundred Thousand Dollars
($2,200,000)
U
A. Statement of Limiting Conditions and Assumptions
The conduct of any appraisal is necessarily guided, and its results
influenced, by the terms of the assignment and the assumptions
which together form the basis of the study. The following condi-
tions and assumptions, together with lesser assumptions embodied in
this report, constitute the framework of our analysis and conclu-
sions.
The estimate of market value for the proposed project assumes com-
pliance with the following:
1. The number, type and size of the residential units, as
well as the gross building area, shall not vary by more
than 5% from the estimates presented in this report.
2. The townhouse units must be of two-story construction and
include attached garages.
3. The condominium flat units must be constructed in three-
story buildings, and must include a 1-1/2 level subter-
ranean parking garage with 166 spaces.
4. At least 20% of the site must be set -aside for open space
and recreational facilities. This open space must be
landscaped at an above -average quality level.
5. At least 10,000 square feet of retail space must be con-
structed along Main Street. The developer must construct
14 surface parking spaces on -site, and the City will
provide 18 spaces in an off -site parking structure.
6. The developer must contribute $300,000 for the required
off -site improvements, which include the realignment of
6th Street, and gas and sewer line relocation, in addi-
tion to more typical costs such as curbs, gutters,
27
sidewalks and street lights. The City will be respon-
sible for the costs in excess of $300,000.
It is assumed that the title of the property is good and
marketable, no title search has been made, nor have we attempted to
determine the ownership of the property. The value estimates are
given without regard to any questions Qf title, boundaries, en-
cumbrances or encroachments. It is assumed that all assessments,
if any, are paid.
No legal description of the property was_turnished. In lieu of the
legal description, our understanding of the property was il-
lustrated by the Plot Plan provided to us by the Redevelopment
Agency.
We assume that the subject site will be in conformance with the ap-
plicable zoning and building ordinances over the economic life of
the property.
P
Information provided by such informed local sources as governmental
agencies, financial institutions, realtars, buyers, sellers and
others was weighed in the light in which it was supplied and
checked by secondary means; however, no responsibility is assumed
for possible misinformation.
The analyst is not required to give testimony or appear in court
because of having made this reuse value estimate, with reference to
28
the property in question, unless arrangements have been previously
made therefor.
No one other than the undersigned prepared the analysis, conclu-
sions and opinions concerning real estate that are set forth in
this appraisal report.
91
29
VII. SECTION 33433 - FAIR MARKET VALUE
Pursuant to Section 33433 of the California Health and Safety Code,
this section presents an analysis of the fair market value of the
subject property at the highest and best use. In contrast to the
preceding analysis, no specific development plan is assumed.
However, the proposed use on the site must be consistent with the
redevelopment plan and the site must be developed soon after the
transfer of the site; i.e., speculation is not allowed.
In appraisal terminology, the highest and best use can be defined
as the legal use (i.e., uses allowed under the redevelopment plan)
that will yield to land the highest value. Therefore, the defini-
tion of highest and best use is based solely on the value created,
and not on whether or not it enhances or carries out the redevelop-
ment goals and policies established by the Huntington Beach
Redevelopment Agency.
u
In determining the fair market value for the site, it is important
to distinguish whether the Redevelopment Agency will require the
entire 3.7 acre Town Square site to be developed as one integrated
project, or if it would be possible to subdivide the site into
smaller development parcels. In the event this site can be parcel-
ized, it is our opinion that the highest land value could be
achieved by allowing single family homes to be developed on lots of
less than 5,000 square feet. At a density of 9 units per acre, the
30
3.7 acre site could be developed with 33 single family homes.
Given the current land values of $115,000 to $125,000 being
achieved for lots of this size in downtown Huntington Beach, it is
our opinion that if the Town Square site were sold as individual
lots, it would generate a total sales price of $4,125,000, or
$25.59 per square foot. However, it must be recognized that such
parcelization.of the property would require a significant marketing
effort over a period of at least a year. Thus, on a present value
basis and after allowance for the costs of sale, the subject
property has a net value of $3.9 million. Assuming the portion of
the site that is owned by the developer has a value.of $1.0 mil-
lion, the net value of the City/Agency property is $2.9 million.
It is important to note, however, that the Downtown Specific Plan
currently designates the entire Town Square site for commercial or
mixed -use development. Moreover, this site was earmarked to serve
as the anchor of the eastern portion of downtown Huntington Beach.
Therefore, it would appear that an integrated project, utilizing
P
the entire site, would more appropriately fulfill the Specific Plan
guidelines. If it is assumed that the Town Square site cannot be
subdivided, and that it must include commercial uses, it is our
opinion that the use of the site for condominiums and convenience
retail development currently represents the highest and best use.
Given current market conditions, we believe that a project at a
density of +35 units to the acre would maximize the land value.
Based on recent condominium land sales in the area, this site could
generate a value in the range of $26,000 to $28,000 per unit, or
31
$3.5 million for condominium development. Assuming that a retail
use would be required to provide all the necessary parking on site,
this use would generate only a nominal land value. Thus, it is our
opinion that the market value for the property, assuming the entire
site must be developed as an integrated project, is $3.5 million,
or $21.72 per square foot of land area. After deducting the $1.0
million value of the developer parcel the City/Agency parcel has a
value of $2.5 million
9
32
VIII. CERTIFICATION
We hereby certify that neither Keyser Marston Associates, Inc. nor
any of its officers have any present or prospective interest in the
property appraised; that our employment is not contingent in -any
way upon the value reported; that we have personally inspected the
property and the environment; that the statements made and the in-
formation contained in this appraisal report are true, to the best
of our knowledge and belief.
Respectfully submitted,
KEYSER MARSTON ASSOCIATES, INC.
Richard L. Botti
Cyr_
Kathleen H. Head
RLB:KHH:gbd
88159.HTB
14066.0006
q
33
-�� CITY4 OF HUNTINGTON BEACH CA 88-53
COUNCIL - ADMINISTRATOR COMMUNICATION
lfUNTINGTUN �fACI!
To Honorable Mayor and From Paul E. Cook(
City Council Members City Administ for
Subject RESIDENTIAL DEVELOPMENT Date May 18, 1988
IMPACT ON DOWNTOWN
RETAILING
Pursuant to your request, attached to th's memorandum you will find a report prepared by
Keyser Marston Associates which reviews residential development impacts on downtown
retailing. Their report does not represent a market study, but is intended to provide a
perspective on the relative impacts associated with limiting residential growth in the
area. The memorandum assesses the impacts related to the types of uses planned for the
downtown, including convenience, comparison, and destination retail. A strong residential
base which varies in distance based upon the type of goods or services provided, is
required to provide adequate support for retail development.
As indicated in the summary/conclusion section of their report, assuming an aggressive
capture rate of 50% for the downtown retail, the total area supported by redevelopment
project area residents ranges from 4,500 square feet assuming no new major growth, to
25,500 square feet under the full growth scenario. As the residential area analyzed is
expanded, the retail area supported Increases. For example, nearly 150,000 square feet of
retail area is supported under the no grolyth scenario, assuming a 2.5 mile radius.
Comparatively, using a conservative 25°k capture rate for the downtown uses,
redevelopment project area residents generate support ranging from 2,300 to nearly
13,000 square feet of retail space depeneing on the level of residential growth that is
allowed. This increases to a range of between 60,000 — 90,000 square feet when it is
assumed that the downtown retail draws patrons from a 2.5 mile radius.
Of significant note, irrespective of the capture rate used, varying the Ievel of future
residential development creates a significant impact on the amount of retail area that can
be supported in the area. This is particularly pronounced within the redevelopment
project area where the addition of the 2,000 residential units currently proposed creates
support for 21,000 square feet of additional retail development over that supported with
no major growth, a 450% increase. Whilc an additional 21,000 square feet does not
represent a great amount of retail space, the addition of any new retail uses is an
important catalyst for other retail development in the downtown. It is also important to
recognize that future residential growth in the surrounding areas also impacts the
downtown retail potential. Based on this preliminary analysis, the supportable downtown
retail area increases by approximately 50% under the full growth scenario versus the no
growth scenario. Assuming one—half of the currently proposed residential development is
allowed, the supportable retail area increases by 30% over the no growth scenario.
Page --2-
CA 88-53
Although Keyser Marston Associates prepared their report around the concept of how
much additional retail space could be strpported by higher residential densities in the
downtown area, I feel that it is more important to look at what higher densities will do to
make existing retail on Main Street and Sth Street more successful. Using the
conservative 25% capture rate, the full growth scenario of 2,500 residential units in the
redevelopment project area generates $:1,07S,000 of net convenience sales potential
versus the no growth alternative which generates only $527,000 sales potential.
Additional sales for potential eating and drinking amounts to $5,390,000 for full growth as
compared to $900,000 for no growth. Assuming a 2.5 mile radius area from which to
draw, the full growth alternative generates $30 million comparison goods sales potential
more annually than the no growth alternative. These figures, in my opinion, point out the
Importance of not reducing residential densities now allowable under the Downtown
Specific Plan. The residential base as envisioned in the village concept will enhance and
Improve the viability of existing retail within the core area by returning convenience and
comparison shoppers to our "Main Street Village." Staff and representatives from Keyser
Marston will be prepared to review this report and answer questions you may have at your
meeting of May 23, 1988.
PEC:DLB:lp
Attachment
3786h
KewererMarstonAssoci atesl nc.
Richard L. Botti 550 South Hill Street.Suite 9,90
Calvin E. Hollis, 11 Los AngeltmCali [omia 900I3
2111622-8095
SAN DIEGO 6191942-0300
Heinz A. Schilling
SAN FRANCISCO 4151398-3050
Timothy C. Kelly
A. Jerry Keyser
Kate Earle Funk
Robert J. Wetmore
Michael Conlon
Denise E. Conley
MEMORANDUM
R.ECEIVrwo
MAY 13
��AaRtM�NT OF
�M1,INlijr aEVCLppMEW
Fw,ti
TO: Mr. Douglas La Belle, Deputy City Administrator
City of Huntington Beach
FROM: KEYSER MARSTON ASSOCIATES, INC.
SUBJECT: Residential Development Impact on Downtown Retailing
DATE: May 12, 1988
In accordance with your request, Keyser Marston Associates, Inc.
(KMA) determined, on a preliminary basis, the relationship between
residential development levels eLnd the downtown Huntington Beach
retail development potential. Fly utilizing data sources such as
the United States Census, the Census of Retail Trade, State Board
of Equalization Taxable Sales records, and City Planing Department
information, KMA was able to project the sales potential generated
within the immediate downtown vicinity, under a variety of develop-
ment scenarios. However, it must be noted that this analysis
should not be construed as a market study. Rather, it should be
used to provide a perspective of the relative impacts associated
with varying the allowable residential development level in the
area.
METHODOLOGY
The sales potential exhibited within an area is based on the size
of the population, the income levels achieved by the residents, and
the percentage of income spent on the type of merchandise in ques-
tion. To determine the potential generated within the downtown
vicinity, KMA reviewed the following data for the redevelopment
project area, and radii ranging from 1.0 to 2.5 miles:
1. Population growth between 1970 and 1987.
2. Per capita income growth between 1970 and 1987, as ad-
justed to reflect inflationary changes occurring during
this period. l
___ _ Real Estatc:Prrdesrk+rmentBEraluationSenii
TABLE '1
POTENTIAL HOUSING PROJECTS
DOWNTOWN HUNTINGTON BEACH
RETAIL POTENTIAL ANALYSIS
HUNTINGTON BEACH, CALIFORNIA
TOWN SQUARE
BAYSHORE
ACREAGE BETWEEN TOWN SQUARE
AREA B/T 3RD & LAKE/ORANGE
PHASE I
BLOCK ADJACENT TO PHASE I
PHASE II
2 BLOCKS NORTH OF PHASE II
WATERFRONT
TOTAL UNITS
& BAYSHORE
WALNUT
OR SAY
SOURCE: HUNTINGTON BEACH CITY PLANNING DEPARTMENT
KEYSER MARSTON ASSOCIATES, INC.
MAY, 1933
PLANNED
NUMBER OF UNITS
39
159
110
ISO
130
50
220
I50
900
1,983
2,000
Page 2
3. Historical taxable
California and Los
the percentage of
retail items.
sales data for the State, Southern
Angeles/Orange Counties to determine
per capita income spent on relevant
4. Sales productivity levels for retail facilities located
throughout Southern California.
The preceding information was analyzed, and used as the basis for
projections of future conditions in each of the areas. Using these
projections, KKA evaluated the impacts associated with varying the
future residential development allowed in each of the areas
studied. The growth scenario:; tested for this analysis can be
defined as follows:
1. No growth - No major residential projects are undertaken
in the area. New development consists largely of infill
construction. Donnelley Marketing Information Services
projections serve as the basis of this scenario.
2. Full growth - Assumes the development of 2,000 residen-
tial units in the redevelopment project area, based on
City Planning Department estimates, as shown in Table I.
Additionally, the annr:al growth in the outlying areas was
based on the average annual growth rate achieved in each
of these areas between 1970 and 1987.
3. 50% growth - Assumes the development of 1,000 residential
units in the redevelopment project area and areawide
growth equal to 1/2 the average annual growth rate ex-
perienced between 1970 and 1987.
ANALYSIS
The retail potential projection:; were based on the preceding growth
scenarios, using 1992 as the stcbilized year for analysis purposes.
However, all projections were adjusted to reflect current dollars.
It is our understanding that the existing downtown retail uses and
developments in the planning :stages consist largely of outlets
selling convenience and comparison goods, as well as eating and
drinking facilities. For the purposes of this analysis, these mer-
chandise categories can be defined as follows:
1. Convenience - Food, liquor and drugstores.
2. Comparison - Apparel, general merchandise, specialty
retail and home furnishings. This category includes
major department and discount stores.
KeyscrNlarstonAssociateslnc.
TABLE 2
TOTAL CONVENIENCE GOODS SALES POTENTIAL PROJECTIONS
DEVELOPMENT AT VARYING INTENSITY LEVELS
RETAIL POTENTIAL ANALYSIS - 1992
HUNTINGTON BEACH, CALIFORNIA
1998 DOLLARS
TOTAL HOUSEHOLDS
POPULATION
PER CAPITA INCOME
NET CONVENIENCE SALES POTENTIAL (1)
WARRANTED AREA (2)
1) 141 AGGREGATE INCOME WITH 251 CAPTURE RATE
2) SALES AT t250JSF
REDEVELOPMENT PROJECT
AREA
NO GROWTH
---------
50% GROWTH
----------
FULL GROWTH
-----------
50&
1,500
2,500
11000
2,900
4,900
t15,100
t11,600
511,900
t527,000
tl,783,000
t3,075,000
2,000
7,000
12,000
SOURCE: DONNELLEY MARKETING INFORMATION SERVICES, INC.
STATE BOARD OF EQUALIZATION
KEYSER MARSTON ASSOCIATES, INC.
MAY, 1988
Page 3
.t _� -t - •� _�
Table 2 presents a summary of the convenience goods sales potential
generated by redevelopment project area residents under each of the
growth scenarios analyzed. Thec;e projections are based on the fol-
lowing assumptions:
1. The per capita income was increased from $15,100 in the
no growth scenario, to $17,600 in the 50% growth
scenario, and $17,900 in the full growth scenario to
reflect the higher income levels expected to be exhibited
by the residents in the nevr residential projects, as com-
pared to the existing population base.
2. 14% of per capita income will be spent on convenience
type goods, based on historical taxable sales data, and
the Census of Retail `.trade.
3. 25% of convenience sales will occur outside major neigh-
borhood and community retail centers.
4. Convenience retail facilities will achieve average sales
volumes of $250 per square foot.
As shown in Table 2, the total household population increases from
500 in the no growth scenario, to .2,500 in the full growth
scenario, resulting in a total population of 1,000 and 4,900,
respectively. Assuming per capita convenience expenditures range
from approximately $2,100 to $',500 (14% of income) annually, and
25% of these sales occur in facilities such as those that will be
found downtown, the net convenience sales potential varies from
$527,000 to $3.1 million. At a standard productivity level of $250
per square foot, the convenience retail area warranted ranges from
2,000 to 12,000 square feet depending on the residential growth
level allowed.
Com_parisor. Sgles Potential
Table 3 provides an. illustration of the comparison goods sales
potential created by the redevelopment project area residents under
the various growth scenarios. These projections are based on the
following assumptions:
1. The estimated per capita income was $15,100 under the no
growth scenario, $17,600 under the 50% growth scenario,
and $17,900 under the full growth scenario.
2. 15% of per capita income will be spent on comparison type
merchandise, based on historical taxable sales data. -
Keyser larstonAssociatesinc.
TABLE 3
TOTAL COMPARISON GOODS SALES POTENTIAL PROJECTIONS
DEVELOPMENT AT VARYING INTENSITY LEVELS
RETAIL POTENTIAL ANALYSIS - 1992
HUNTINGTON BEACH, CALIFORNIA
1988 DOLLARS
TOTAL HOUSEHOLDS
POPULATION
PER CAPITA INCOME
NET COMPARISON SALES POTENTIAL (1)
WARRANTED AREA (2)
1) 151 AGGREGATE INCOME WITH 351 CAPTURE RATE
2) SALES AT $225(SF
REDEVELOPMENT PROJECT
AREA
NO GROWTH
----------
501 GROWTH
----------
FULL GROWTH
-----------
500
1,500
2,500
11000
2,900
4,900
$15,100
$17,600
$17,900
$794,000
$2,680,000
$4,613,000
4,000
12,000
21,000
SOURCE: DONNELLEY MARKETING INFORMATION SERVICES, INC.
STATE BOARD OF EQUALIZATION
KEYSER MARSTON ASSOCIATES, INC.
MAY, 19oo
Page 4
3. 35% of comparison goods sales will occur outside regional
malls or large freesteinding department/ discount stores.
4. Comparison goods outlets will achieve average sales
volumes of $225 per scpuare foot.
As was the case in the analysiE, of convenience items sales poten-
tial, the redevelopment project area population increases from
1,000 under the no growth scenario, to 4,900 under the full growth
scenario. Assuming these residents spend 15% of their income on
comparison type merchandise, the average per capita expenditures
range from $2,270 to $2,690. Titus, the net comparison sales poten-
tial, in facilities that might be found in the downtown, is
$794,000 under the no growth scenario, and $4.6 million under the
full growth scenario. These sales levels would support 4,000 to
21,000 square feet ofOXcompariscin retail space at a standard produc-
tivity of $225 per square foot.
Eating and Drinking -Facilities Eales Potential
Table 4 presents a summary of the potential sales in eating and
drinking facilities, generated by the redevelopment project area
population base. These projections were performed for each of the
alternative growth scenarios, based on the following assumptions:
1. The estimated per capita income was $15,100, $17,600 and
$17,900, respectively, for the three growth scenarios
analyzed.
2. 6% of per capita income will be spent on eating and
drinking in restaurants or fast food outlets, based on
historical taxable sales data.
3. Eating and drinking facilities will achieve average sales
volumes of $300 per square foot.
Under the no growth scenario, -he estimated population is 1,000,
increasing to 4,900 under the full growth scenario. Based on his-
torical taxable sales information, it was assumed that 6% of per
capita income would be spent in eating and drinking facilities,
which equates to $900 to $1,100 annually, This results in net
eating and drinking sales potential of $900,000 under the no growth
scenario, increasing to nearly $5.4 million under the full growth
scenario. Assuming restaurants and fast food outlets will achieve
average sales volumes of $300 per square foot, 3,000 to 188000
square feet of new space could he supported, depending on the level
of growth allowed.
KeyserLI;Mtgn�ssociatesInc.
TABLE 4
TOTAL EATING AND DRINKING SALES POTENTIAL PROJECTIONS
DEVELOPMENT AT VARYING INTENSITY LEVELS
RETAIL POTENTIAL ANALYSIS - 1992
HUNTINGTON BEACH, CALIFORNIA
1988 DOLLARS
REDEVELOPMENT PROJECT
AREA
NO GROWTH
---------
SOX GROWTH
----------
FULL GROWTH
TOTAL HOUSEHOLDS
S00
11500
-----------
2,500
POPULATION
1,000
2,900
4,900
PER CAPITA INCOME
$15,100
$17,600
$17,900
NET E&D SALES POTENTIAL (1)
$900,000
$3,190,000
$5,390,000
WARRANTED AREA (2)
3,000
11,000
13,000
1) 141 AGGREGATE INWHE WITH 251 CAPTURE RATE
2) SALES AT $250/SF
SOURCE: DONHELLEY MARKETING INFORMATION SERVICES, INC.
STATE BOARD OF EQUALIZATION
KEYSER MARSTON ASSOCIATES, INC.
MAY, 1930
TABLE 5
SUMMARY - SUPPORTABLE DOWNTOWN RETAIL WARRANTED AREA
DEVELOPMENT AT VARYING INTENSITY LEVELS
RETAIL POTENTIAL ANALYSIS - 1992
HUNTINGTON BEACH, CALIFORNIA
1988 DOLLARS
--------------AGGRESSIVE ESTIMATE ----------------
---------------CONSERVATIVE ESTIMATE -------------
NO GROWTH
---------
501 GROWTH
----------
FULL GROWTH
-----------
NO GROWTH
---------
50% GROWTH
----------
FULL GROWTH
-----------
REDEVELOPMENT PR0IECT AREA
4,500
15,000
25,500
2,300
7,600
12,2300
1 MILE RADIUS
51,100
71,400
82,300
21,900
30,600
35,300
1.5 MIL.E RADIUS
70,100
93,000
109,100
29,000
37,200
43,200
- 0 MILE RADIUS
96,600
127,900
155,800
38,600
51,100
62,300
2.5 MILE RADIUS
147,900
188,900
230,900
59,100
75,500
92,300
SOURCE: DONNELLEY MARKETING INFORMATION SERVICES, INC.
STATE BOARD OF EQUALIZATION
KEYSER MARSTON ASSOCIATES, INC.
MAY, 1988
Page 5
SUMKARY/CONCLUSIONS
As stated previously, this analysis does not represent a market
study that can be used to predict the demand for new retail
facilities in the area. It is merely meant to provide a perspec-
tive on the relative impacts associated with limiting residential
growth in this area. The preceding section provided an explanation
of the analytical framework used to arrive at the additional retail
area supported by increases in the population base. However, to
understand the general effect of residential development on
downtown retailing, KMA also examined the impacts associated with
varying allowable growth level; within the immediate surrounding
areas.
Table 5 presents a summary of the supportable downtown retail area
assuming both aggressive and conservative capture rates. The ag-
gressive scenario assumes that the downtown retail uses capture 50%
of the demand generated by residents within the redevelopment
project area and within a 1 mile radius. This capture rate was
factored downward, as the distance to the downtown increases, to
reflect the existence of alterne-tive shopping opportunities for the
residents. The conservative capture rate analysis was based on a
25% capture rate within the redevelopment project area, factored
downward on a proportional basiE to reflect the increasing distance
from the downtown.
The findings in Table 5 represent the total convenience and com-
parison goods potential, as well as eating and drinking facilities
potential generated by the residents within each of the areas, un-
der the various growth scenarios. The full analysis for each
scenario is presented in the ap;?endices found at the conclusion of
this memorandum. As can be seen in Table 5, using the aggressive
capture rate, the total area supported by redevelopment project
area residents ranges from 4,501) square feet assuming no new major
growth, to 25,500 square feet under the full growth scenario. The
retail area supported increases as the area used for analysis pur-
poses is widened, reaching nearly 150,000 square feet under the no
growth scenario and 230,000 square feet under the full growth
scenario for a 2.5 mile radius. Comparatively, using the conserva-
tive capture rate, redevelopment project area residents generate
support for 2,300 to nearly 1:3,000 square feet of retail space
depending on the level residential of growth that is allowed. This
increases to 60,000 to 90,000 square feet when a 2.5 mile radius is
used.
As can be seen in Table 5, irrespective of the capture rate used,
varying the level of future residential development creates a sig-
nificant impact on the amount o:! retail area that can be supported
in the area. This is particularly pronounced within the redevelop-
ment project area, where the addition of the 2,000 residential
KeyserNlar^stonAssociatesi nc.
Page 6
units currently proposed creates support for 21,000 square feet of
additional retail development over that supported with no major
growth, a 450% increase. While an additional 21,000 square feet
does not represent a great amount of retail space, the addition of
any new retail uses is an important catalyst for other retail
development in the downtown. It is also important to recognize
that future residential growth in the surrounding areas also im-
pacts the downtown retail potential. Based on this preliminary
analysis, the supportable downtown retail area increases by ap-
proximately 50% under the full ctrowth scenario versus the no growth
scenario, and increases by 30$ for the 50% growth scenario versus
the no growth scenario.
KHH:lp
88183.HTB
14066.0014
Keyser%MantonAssodatesInc.
APP;SNDYZ A
TABLE IA
TOTAL CONVENIENCE GOODS SALES POTENTIAL PROJECTIONS
NO GROWTH SCENARIO
RETAIL POTENTIAL ANALYSIS - 1992
HUNTINGTON BEACH, CALIFORNIA
1988 DOLLARS
TOTAL HOUSEHOLDS
AVERAGE HOUSFHOLD SIZE
POPULATION
PER CAPITA INCOME
PER CAPITA COVFNIENCE POTENTIAL (1)
TOTAL CONVENIENCE POTENTIAL
(LESS SALES IN MAJOR CENTERS
NET CONVENIENCE SALES POTENTIAL
WARRANTED AREA (2)
POTENTIAL DOWNTOWN CAPTURE
HIGH ESTIMATE
LOW ESTIMATE
1) 14% PER CAPITA INCOME
2) SALES AT $250/SF
PROJECT
AREA
-------
1 MILE
------
1.5 MILES
---------
2.0 MILES
---------
2.5 MILES
---------
500
8,300
13,500
19,300
25,600
1.95
1.99
2.14
2.22
2.45
1,000
16,500
28,900
40,600
62,700
$15,100
$15,600
$17,000
$16,500
$16,300
$2,110
$2,180
$2,390
$2,310
$2,280
$2,110,000
$35,970,000
$68,782,000
$93,786,000
$142,956,000
$1,593,000
$26,978,000
$51,587,000
$70,340,000
$107,217,000
$527,000
$0,992,000
$17,195,000
$23,446,000
$35,739,000
2,000
36,000
69,000
94,000
143,000
1,000
12,600
17,300
23,500
35,800
500
5,400
6,900
9,400
14,300
SOURCE: DONNELLEY MARKETING INFORMATION SERVICES, INC.
STATE BOARD OF EQUALIZATION
KEYSER MARSTON ASSOCIATES, INC.
MAY, 1988
TABLE 18
TOTAL CONVENIENCE GOODS SALES POTENTIAL PROJECTIONS
501 GROWTH SCENARIO
RETAIL POTENTIAL ANALYSIS - 1992
HUNTINGTON BEACH, CALIFORNIA
1988 DOLLARS
PROJECT
AREA
TOTAL HOUSEHOLDS
AVERAGE HOUSEHOLD SIZE
POPULATION
PER CAPITA INCOME
PER CAPITA COVENIENCE POTENTIAL (1)
TOTAL CONVENIENCE POTENTIAL
(LESS SALES IN MAJOR CENTERS
NET CONVENIENCE SALES POTENTIAL
WARRANTED AREA (2)
POTENTIAL DOWNTOWN CAPTURE
HIGH ESTIMATE
LOW ESTIMATE
1) 14% PER CAPITA INCOME
2) SALES AT $250JSF
1,500
1.95
2,900
$17,600
$2,460
$7,134,000
$5,351,000
$1,783,000
7,000
3,500
1,800
SOURCE: DONNELLFY MARKETING INFORMATION SERVICES, INC.
STATE BOARD OF EQUALIZATION
KEYSFR MARSTON ASSOCIATES, INC.
MAY, 1988
MILE
10,500
1.99
2.0,900
$17,200
$2,410
$50,369,000
$37,777,000
$12,592,000
50,000
17,500
7,500
1.5 MILES
16,800
2.14
36,000
$17,800
$2,490
$89,640,000
$67,230,000
$22,410,000
90,000
22,500
9,000
2.0 MILES
22,500
2.22
50,000
$17,600
$2,460
$123,000,000
$92,250,000
$30,750,000
123,000
30,800
12,300
2.5 MILES
30,200
2.45
74,000
$17,500
$2,450
$181,300,000
$135,975,000
$45,325,000
181,000
45,300
10,100
TABLE IC
TOTAL CONVENIENCE GOODS SALES POTENTIAL PROJECTIONS
FULL GROWTH SCENARIO
RETAIL POTENTIAL ANALYSIS - 1992
HUNTINGTON BEACH, CALIFORNIA
1980 DOLLARS
PROJECT
AREA
1 MILE 1.5 MILES 2.0 MILES 2.5 MILES
------ --------- --------- ---------
TOTAL HOUSEHOLDS
21500
12,000
19,500
27,300
36,800
AVERAGE HOUSEHOLD SIZE
1.95
1.99
2.14
2.22
2.45
POPULATION
4,900
23,900
41,700
60,600
90,200
PER CAPITA INCOME
$17,900
$17,300
$17,900
$17,700
$17,600
PER CAPITA COVENIENCE POTENTIAL (1)
$2,510
$2,420
$2,510
$2,480
$2,460
TOTAL CONVENIENCE POTENTIAL
$12,299,000
$57,838,000
$104,667,000
$150,288,000
$221,892,000
(LESS SALES IN MAJOR CENTERS
$9,224,000
$43,379,000
$78,500,000
$112,716,000
$166,419,000
NET CONVENIENCF SALES POTENTIAL
$3,075,000
$14,459,000
$26,167,000
$37,572,000
$55,473,000
WARRANTED AREA (2)
12,000
58,000
105,000
150,000
222,000
POTENTIAL DOWNTOWN CAPTURE
HIGH FSTIMATF
6,000
20,300
26,300
37,500
55,500
LOW ESTIMATE
3,000
8,700
10,500
15,000
22,200
1) 14% PER CAPITA INCOME
2) SALES AT $250/SF
SOURCE.: DONNELLEY MARKETING INFORMATION SERVICES, INC.
STATE BOARD OF EQUALIZATION
KEYSF.R MARSTON ASSOCIATES, INC.
MAY, 19OUU
TABLE 2A
TOTAL COMPARISON GOODS SALES POTENTIAL PROJECTIONS
NO GROWTH SCENARIO
RETAIL POTENTIAL ANALYSIS - 1992
HUNTINGTON BEACH, CALIFORNIA
1988 DOLLARS
TOTAL HOUSEHOLDS
AVERAGE HOUSEHOLD SIZE
POPULATION
PER CAPITA INCOME
PER CAPITA COMPARISON POTENTIAL (1)
TOTAL COMPARISON POTENTIAL
(LESS) SALES IN REGIONAL MALLS OR
MAJOR FREESTANDING DISCIDEPT STORES (2)
NET COMPARISON SALES POTENTIAL
WARRANTED AREA (3)
POTENTIAL CAPTURE
HIGH ESTIMATE
LOW ESTIMATE
PROJECT
AREA
-------
I MILE
------
1.5 MILES
---------
2.0 MILES
---------
2.5 MILES
---------
500
81300
13,500
18,300
25,600
1.95
1.99
2.14
2.22
2.45
1,000
16,500
28,900
40,600
62,700
$15,100
$15,600
$17,000
$16,500
$16,300
$2,270
$2,340
$2,550
$2,480
$2,450
$2,270,000
$30,610,000
$73,695,000
$100,688,000
$153,615,000
$1,476,000
$25,097,000
$47,902,000
$65,447,000
$99,850,000
$794,000
$13,513,000
$25,793,000
$35,241,000
$53,765,000
4,000
60,000
115,000
157,000
239,000
2,000
21,000
28,800
39,300
59,800
1,000
9,000
11,500
15,700
23,900
1) 15% PER CAPITA INCOME
2) 651 TOTAL COMPARISON POTENTIAL
3) SALES AT $225JSF
SOURCE: DONNELLEY MARKETING INFORMATION SERVICES, INC.
STATE BOARD OF EOUALIIATION
KEYSER MARSTON ASSOCIATES, INC.
MAY, 1988
TABLE 2B
TOTAL COMPARISON GOODS SALES POTENTIAL PROJECTIONS
50% GROWTH SCENARIO
RETAIL POTENTIAL. ANALYSIS - 1992
HUNTINGTON BEACH, CALIFORNIA
1908 DOLLARS
PROJECT
AREA
-------
1 MILE
------
1.5 MILES
---------
2.0 MILES
---------
2.5 MILES
---------
TOTAL HOUSEHOLDS
1,500
10,500
16,800
22,500
30,200
AVERAGE HOUSEHOLD SIZE
1.95
1.99
2.14
2.22
2.45
POPULATION
2,900
20,900
36,000
50,000
74,000
PER CAPITA INCOME
$17,600
$17,200
$17,800
$17,600
$17,500
PER CAPITA COMPARISON POTENTIAL (1)
$2,640
$2,500
$2,670
$2,640
"$2,630
TOTAL COMPARISON POTENTIAL
$7,656,000
$53,922,000
$96,120,000
$132,000,000
$194,620,000
(LESS) SALES IN REGIONAL MALLS OR
MAJOR FREESTANDING DISC/DEPT STORES (2)
$4,976,000
$35,049,000
$62,478,000
$85,800,000
$126,503,000
NET COMPARISON SALES POTENTIAL
$2,680,000
$18,873,000
$33,642,000
$46,200,000
$68,117,000
WARRANTED AREA (3)
12,000
84,000
150,000
205,000
303,000
POTENTIAL DOWNTOWN CAPTURE
HIGH FSTIMATE
6,000
29,400
37,500
51,300
75,800
LOW ESTIMATE
3,000
12,600
15,000
20,500
30,300
1) 15% PER CAPITA INCOME
2) 651 TOTAL COMPARISON POTENTIAL
3) SALES AT $225/SF
SOURCE: DONNELLEY MARKETING INFORMATION SERVICES, INC.
STATE BOARD OF EQUALIZATION
KEYSFR MARSTON ASSOCIATES, INC.
MAY, 191"a
TABLE 2C
TOTAL COMPARISON GOODS SALES POTENTIAL PROJECTIONS
FULL GROWTH SCENARIO
RETAIL POTENTIAL ANALYSIS - 1992
HUNTINGTON REACH, CALIFORNIA
1'jr8 DOLLARS
TOTAL HOUSEHOLDS
AVERAGE HOUSEHOLD SIZE
POPULATION
PER CAPITA INCOME
PER CAPITA COMPARISON POTENTIAL (1)
TOTAL COMPARISON POTENTIAL
(LESS) SALES IN REGIONAL MALLS OR
MAJOR FREESTANDING DISC/DEPT STORES (2)
NET COMPARISON SALES POTENTIAL
WARRANTED AREA (3)
POTENTIAL DOWNTOWN CAPTURE
HIGH ESTIMATE
LOW EST[MATE
1) 15% PER CAPITA INCOME
2) 65% TOTAL COMPARISON POTENTIAL
i) SALES AT $225/5F
PROJECT
AREA
-------
1 MILE
------
1.5 MILES
---------
2.0 MILES
---------
2.5 MILES
---------
2,500
12,000
19,500
27,300
36,800
1.95
1.99
2.14
2.22
2.45
4,900
23,900
41,700
60,600
90,200
$17,900
$17,300
$17,900
$17,700
$17,600
$2,690
$2,600
$2,690
$2,660
$2,640
$13,181,000
$62,I40,000
$112,173,000
$161,196,000
$238,128,000
$8,568,000
$40,391,000
$72,912,000
$104,777,000
$154,783,000
$4,613,000
$21,749,000
$39,261,000
$56,419,000
$83,345,000
21,000
97,000
174,000
251,000
370,000
10,500
34,000
43,500
62,800
92,500
5,300
14,600
17,400
25,100
37,000
SOURCE: DONNFLLFY MARKETING INFORMATION SERVICES, INC.
STATE BOARD OF EOUALIZATION
Y,EYSER MARSTON ASSOCIATES, INC.
MAY, 1988
TABLE 3A
TOTAL EATING AND DRINKING SALES POTENTIAL PROJECTIONS
NO GROWTH SCENARIO
RETAIL POTENTIAL ANALYSIS - 1992
HUNTINGTON BEACH, CALIFORNIA
1988 DOLLARS
PROJECT
AREA I MILE 1.5 MILES 2.0 MILES 2.5 MILES
------- ------ --------- --------- ---------
TOTAL HOUSEHOLDS
500
8,300
13,500
18,300
25,600
AVERAGE HOUSEHOLD SIZE
1.95
1.99
2.14
2.22
2.45
POPULATION
1,000
16,500
28,900
40,600
62,700•
PER CAPITA INCOME
$15,100
$15,600
$17,000
$16,500
$16,300
PER CAPITA E&D POTENTIAL (1)
$900
$900
$1,000
$1,000
$1,000
TOTAL E&D POTENTIAL
$900,000
$14,850,000
$28,900,000
$40,600,000
$62,700,000
WARRANTED AREA (2)
3,000
50,000
96,000
135,000
209,000
POTENTIAL DOWNTOWN CAPTURE
HIGH ESTIMATE
11500
17,500
- .24,000
33,800
52,300
LOW ESTIMATE
800
7,500
9,600
13,500
20,900
1) 6% PER CAPITA INCOME
2) SALES AT $300/SF
SOURCE: DONNELLFY MARKETING INFORMATION SERVICES, INC.
STATE BOARD OF EQUALIZATION
KEYSER MARSTON ASSOCIATES, INC.
MAY, 19u8
TABLE 3B
TOTAL EATING AND DRINKING SALES POTENTIAL PROJECTIONS
501 GROWTH SCENARIO
RETAIL POTENTIAL ANALYSIS - 1992
HUNTINGTON BEACH, CALIFORNIA
1988 DOLLARS
PROJECT
AREA
-------
1 MILE
------
1.5 MILES
---------
2.0 MILES
---------
2.5 MILES
---------
TOTAL HOUSEHOLDS
1,500
10,500
16,800
22,500
30,200
AVERAGE HOUSEHOLD SIZE
1.95
1.99
2.14
2.22
2.45
POPULATION
2,900
20,900
36,000
50,000
74,000
PER CAPITA INCOME
$17,600
$17,200
$17,800
$17,600
$17,500
PER CAPITA E&D POTENTIAL (1)
$1,100
$1,000
$1,100
$1,100
$1,100
TOTAL E&D POTENTIAL
$3,190,000
$20,900,000
$39,600,000
$55,000,000
$81,400,000
WARRANTED AREA (2)
11,000
70,000
132,000
183,000
271,000
POTENTIAL DOWNTOWN CAPTURE
HIGH ESTIMATE
5,500
24,500
33,000
45,800
67,800
LOW ESTIMATE
2,800
10,500
13,200
19,300
27,100
1) 61 PER CAPITA INCOME
2) SALES AT $300/SF
SOURCE: DONNELLEY MARKETING INFORMATION SERVICES, INC.
STATE BOARD OF EQUALIZATION
KEYSER MARSTON ASSOCIATES, INC.
MAY, 1980
TABLE 3C
TOTAL EATING AND DRINKING SALES POTENTIAL PROJECTIONS
FULL GROWTH SCENARIO
RETAIL POTENTIAL ANALYSIS - 1992
HUNTINGTON BEACH, CALIFORNIA
19LR DOLLARS
TOTAL HOUSEHOLDS
AVERAGE HOUSEHOLD SIZE
POPULATION
PER CAPITA INCOME
PER CAPITA F&D POTENTIAL (1)
TOTAL E&D POTENTIAL
WARRANTED AREA (2)
POTENTIAL DOWNTOWN CAPTURE
HIGH ESTIMATE
LOW ESTIMATE
1) 6% PER CAPITA INCOME
2) SALES AT $300/SF
PROJECT
AREA
-------
1 MILE
------
1.5 MILES
---------
2.0 MILES
---------
2.5 MILES
---------
2,500
12,000
19,500
27,300
36,800
1.95
1.99
2.14
2.22
2.45
4,900
23,900
41,700
60,600
90,200
$17,900
$17,300
$17,900
$17,700
$17,600
$1,100
$1,000
$1,100
$1,100
$1,100
$5,390,000
$23,900,000
$45,870,000
$66,660,000
$99,220,000
18,000
80,000
153,000
222,000
331,000
9,000
28,000
38,300
55,500
82,800
4,500
12,000
15,300
22,200
33,100
SOURCE: DONNELLEY MARKETING INFORMATION SERVICES, INC.
STATE BOARD OF EOUALIZATION
KEYSER MARSTON ASSOCIATES, INC.
MAY, 198a
t
September 1, 1987
Members of the Huntington Beach
city Council and Planning Commission
2001 Main Street
Huntington Beach, CA 92648
RE: TOWN SQUARE REDEVELOPMENT PROJECT
I have many concerns about the Town Square Redevelopment Project.
I feel the circulation plan needs to be further addressed. on
many of the maps of the project:, it shows the closure of Main and
Fifth streets. A study, contracted and paid for by the City of
Huntington Beach, indicated that the closure of Main and Fifth
streets would severely handicap the businesses on those streets.
If those streets are closed the traffic would be diverted down
Lake street and Sixth street, e: residential street. This
planning does not show good judgement in my estimation. It
appears to me that ruin Street should be left open to protect the
security of the business on Main Street. I also feel that the
use of some "one way" streets in that area could be beneficial.
Also the density of the condominium complex at this site will
severely impact the traffic in this area.
Sincere
744- J
Lois Freeman
415 6th Street
Huntington Beach, CA
WHITNEY & BAIRD
356� SANSOME ST.
SAN FRANCISCO, CA 94104
TEL (415) 7814965
v 0 �e Rf.�ladiJ'`
12/1/86
GNLY AND CONFERS
+,', + i-WN CIATE DOES NOT AMEND,
;81E POLICIES BELOW.
t b� NiES AFFORDING COVERAGE
Transamerica Ins. Co.
INSURED
Kemper
.
Keyser Marston Associates
.Ins.
C
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.�oTn
55 Pacific Avenue Mall
FT`
oog'
San Francisco,Ca. 94111
COMPANY D
ETTEFR
AP�g' �rL`1 ty
COMPANY
E
'
LETTER
TI-9
COVERAGES
THIS IS TO CERTIFY THAT POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED.
NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY
BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS, AND CONDI-
TIONS OF SUCH POLICIES.
CO
LTRI
7'PE OF INSURAN E
T
'LI t FECTLJt
POLICY NUMBER �-)A G +MMnolyl(i
(OLI �Y ; XPIRA 'CN
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LIABILITY LIMITS IN THOUSANDS
EACH
AGGREGATE
OCCURRENCE
GENERAL LIABILITY
BODILY
A
x
COMPREHENSIVE FORM
INJURY
$
$
�(
PREMISES/OPERATIONS
PROPERTY
UNDERGROUND
DAMAGE
$
$
EXPLOSION & COLLAPSE HAZARD
X
PRODUCTS/COMPLETFO OPERATIONS
X
CONTRACTUAL
61 a PD
COMBINED
$
$
X
INDEPENDENT CDNTRAr,TORs
T2 19824897
j 11/11/86
111/11/87
1,000
1,000
�X�
BROAD 'FORM PROPERTY DAMAGE
X!
PERSONAL INJURV
PERSONAL INJURY
$ 11000
I AUTOMOBILE LIABILITY
B X ANY P,UTO
�J
ALL OWNED AUTOS IPRIV PASS I
AL_ OWNED AUTOS OTHER THAN!
PRIJ PASF I
HIRED AUTOS
NONOWNEDAUTOS
GARAGE LIABILITY
! EXCESS LIABILITY
UMBRELLA FORM
r OTHER THAN JMBRELLA FORM
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AND
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F3C 025280-01 11/11/86
3CL 271233 111/11/86
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$
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11/11/87 $
(EACH ACCIDENT)
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$
!DISEASE -EACH EMPLOY
OTHER
i
j
DESCRIPTION OF OPERATIONSII.00ATIONS/VEHICLES/SPECIAL ITEMS
The City of Huntington Beach, its officers, agents & employees, while acting within the scope
their duties shall be indemnified by above mentioned coverages. Any other insurance which may
City of Huntington Beach SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED
2000 Main St. PIRATION DATE THEREOF, THE ISSUING COMPANY WILL
MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDEI
Huntington Beach,Ca, 92648 Kau1��(�ix>�C6�►Y,K,1(sX�6k
A,UT R G'REp E�jT�A7V
C
CITY OF HUNTINGTON BEACH
�r 2000 MAIN STREET CALIFORNIA 92648
OFFICE OF THE CITY CLERK
September 17, 1906
Calvin E. Hollis
Keyser Marston Associates, Inc.
550 S. Hill Street #980
Los Angeles, CA 90013-2410
On July 21, 1986, the Redevelopment Agency of the City of Huntington
Beach approved a consultant agreement renewal with your firm for economic
consultant services.
Enclosed is a duly executed copy of said agreement together with a copy
of the Certificate of Insurance which you submitted.
Alicia M. Wentworth
City Clerk
AMW:CB: js
Enclosure
cc: Douglas LaBelle, Deputy City Administrator/Redevelopment
Wayne Lee, Finance Department
(Tdaphwq: 714-536ZZV)
�l7 x0.
_ REQUEST FOUR EDEVELOPMENT p,,ENCY ACTION
` Rfl 86-51
Date
July 11, 1986
Submitted to:
Honorable Chairman and Redevelopment Agency M VED BY CITY COUNCIL
Submitted by:
Charles W. Thompson, Chief Executive Officer 91
Douglas N. LaBelle, Deputy City Administrator/Re Pvp nmPn
Prepared by: CITY CLERKP
CONTRACT FOR CONSULTANT SERVICES - KEYSER M RSTON
Subject: ASSOCIATES, INC.
Consistent with Council Policy? Yes [ New Policy or Exception
Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: IM
STATEMENT OF ISSUE:
In June of 1985 the Redevelopment Agency executed a contract with Keyser Marston
Associates, Inc. for assistance in analyzing the business aspects and financial feasibility
of projects with developers in project areas.
RECOMMENDATION:
Since the Keyser Marston Contract is nearing its maximum amount of $50,000, staff is
recommending that the Redevelopment Agency authorize the City Clerk to renew and
execute the attached Contract between the Redevelopment Agency of the City of
Huntington Beach and Keyser Marston Associates, Inc. to provide ongoing economic
consultant services with maximum compensation not -to -exceed $50,000.
ANALYSIS:
The Agency has retained Keyser Marston since June 1985 to review pro formas as
submitted by developers and to conduct an independent analysis on the viability of costs
and revenues to assist in determining if financial assistance for a specific project is
warranted. Keyser Marston's broad experience has provided them with in-depth
knowledge of the costs of proposed develcpments, the various types of revenues to be
derived, and the ability to analyze, independently, the actual return on a specific
project to its sponsor. Specifically, Keyser ;Marston has prepared analyses for
Commodore Circle, Town Square, Huntington Center expansion, DDA for Walnut -Main
hotel/retail complex, and the Pier Side retail complex and Main -Pier Phase 11.
Staff anticipates using Keyser Marston during the next fiscal year for the following
projects: Main -Pier Phase I, Main -Pier Phase II, Town Square, the Charter Centre
expansion, and other projects as they evolve within the several project areas.'
Prior to executing the initial contract with Keyser Marston, staf f had requested
proposals from consultant firms which provide economic development information.
After reviewing these proposals, it was s:aff's analysis that the Keyser Marston firm
would best meet the needs of the Huntington Beach Redevelopment Agency.
p'
PI o/t,'85
R H 86-51
July 11, 1996
Page Two
FUNDING SOURCE:
Redevelopment Agency budget.
ALTERNATIVES•
Do not approve the attached Contract. This will soon conclude assistance of the Keyser
Marston firm when the $50,000 maximurr, is reached.
ATTACHMENT:
Contract between the Redevelopment Af;ency and Keyser Marston Associates, Inc.
CW T/DLB/SJ H:sar
2579h
orc��
PRODUCER
WHITNEY & BAIRD
35D SANSOME ST. , :, r• > ��
SAN FRANCISCO,' CA 94104
7EL• (415) 781.1965
• I i$SUE GATEAAMEND,
' 1 1 01/15/THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY ANDNO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOEXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELO
COMPANIES AFFORDING COVERAGE
C0"PANY
LE'TER
A
TRANSAMERICA
COMPANY
LEI -TER
13 KEMPER
INSURED
LETER
C
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Keyser Marston Associates, Inc.
55 Pacific Avenue Hall
San Francisco, CA 94111
CCMPA Y DLE_
1rl�S,
COMPANY
LE rTER
E
THIS IS TO CERTIFY THAT POLICIES OF INSURANCE LISTED BELOW HAVE BEEN Ic�SUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED.
NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY
BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POL 3ES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS, AND CONDF
TIONS OF SUCH POLICIES.
CO
TYPE OF INSURANCE
POLICY NUMBER
POUIC! ffifum
POLCY U P'RATXIH
LIAWLI I Y LIMI I S IN I HOU5ANOS
A,,H
cUppE W_E
AGGREGATE
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DAT (MMIXIlyn
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$
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PREWSESMPERATIONS
VNCERrFWNO
T219821936/7 -
11/11/85
11/11/86
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EXPLOSION & COLLAPSE HAZARD
X PROOUCTS'COI.!PLETED OPERATIONS
X COI,TRACTUAL
BCOMT-ED
$ 1,000
$ 1,000
X INDEPENDENT CONTRACTORS
BRCAD FORM PROPERTY DAMAGE
PERSONAL MIJURY
PERSONAL INUURY
S 1,000
AUTOMOBILE LIABILITY
MY
AW WTO
F3CO25280
01/01/86
11/11/86
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ALL MNED AUTOS (M'V. PASS-)
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MY Attor
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$
EXCESS LIABILITY
UMBRELLA FORIA -
- - ;';--- --
-- -- -
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S
$
OTHER THAN UMBRELLA FORIA
�R=��wT' "�,'I
k'yr. ,ala
WORKERS' COMPENSATION
AND
EMPLOYERS' LIABILITY
TBD
01/01/860
11/11/86
STATUTORY
S (EACH ACCCENT)
$ (DISEASEPOLICf IILIM
S (DISEASE -EACH EMPL01E)
OTHER
DESCRIPTION OF OPERATX)NSrLOCATIONSNEHICLESrSPECIAL ITEMS The City Of Huntington Beach, its officers, agents
and employees, while acting within the scope of their duties shall be indemnified by above
mentioned coverages. Any other insurance which may be applicable to this project shall be
City of Huntington Beach SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EX-
PIRATION Main St. AIRATION DATE THEREOF, THE ISSUING COMPANY WILL f%N. V f'RXTV
30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDEFa X3q=xs VX
Huntington Beach CA 9264$ :xsz�ex-lEx:Eacxa�N>r x : orb x,gt;*r
g -XXkx
Attn.: Agency Attorney ,AIM �',_n+aNdt,E vL
�1/1 to
CONSULTANT AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY
Of THE CITY OF HUNTINGTFN BEACH AND KEYSER MARSTON
ASS CIATES, INC. FOR ECONOMIC CONSULTANT SERVICES
THIS AGREEMENT, made and entered into this P/s0' day
of , 19.&_, by and between the Redevelopment Agency of the
City of Huntington Beach, hereinafter referred to as "AGENCY,* and
KEYSER MARSTON ASSOCIATES, INC. a California corporation,
hereinafter referred to as 'CONSULTANT."
WHEREAS, AGENCY desires to engage the services of an economic
consultant to assess the financial feasibility of certain private
developments within AGENCY'S project areas and to determine the
need for AGENCY financial incentives to such developments, and
CONSULTANT has been selected to perform said services.
NOW, THEREFORE, it is agreed by AGENCY and CONSULTANT as
follows:
1. WORK STATEMENT
CONSULTANT shall provide all services as described in the
Scope of Services (hereinafter referred to as Exhibit "A"), which
is incorporated in this Agreement by this reference. Said
services shall sometimes hereinafter be referred to as "PROJECT."
CONSULTANT hereby designates CALVIN E. HOLLIS, who shall
represent it and be its sole contact and agent in all
consultations with AGENCY during the performance of this Agreement.
2, AGENCY STAFF ASSISTANCE
AGENCY shall assign a staff coordinator to work directly with
CONSULTANT in the prosecution of this Agreement.
3. TIME OF PERFORMANCE
Time is of the essence of this Agreement. The services of
the consultant are to be on a continuing basis as
1.
`J
authorized by the AGENCY staff. The time for performance of tasks
identified in the Scope of Services are generally to be as in the
Method and Time of Performance .identified in Exhibit "A." This
schedule may be amended to benefit the PROJECT if mutually agreed
by the AGENCY and CONSULTANT.
4. COMPENSATION
In consideration of the performance of the services described
in Section 1 above, AGENCY agrees to pay CONSULTANT and
CONSULTANT agrees to accept compensation on an hourly basis
according to the following fee :schedule which will remain in
effect through December 31, 198__. This contract is limited to
payment of these charges up to Fifty Thousand Dollars ($50,000.00)
including both hourly charges and directly related expenses:
A. Jerry Keyser* and
Michael Marston
125.00
per
hr
Senior Principal*
120.00
per
hr
Principal*
115.00
per
hr
Senior Associate*
95.00
per
hr
Associate
70.00
per
hr
Senior Analyst
60.00
per
hr
Analyst
55.00
per
hr
Technical Start
40.00
per
hr
Administrative Staff
35.00
per
hr
Directly related job expenses
not included in
the above rates
are: Delivery, electronic data processing, graphics and
printing. Directly related job expenses will be billed at 110% of
cost.
*Rates for individuals in these categories will be increased
by 50% for time spent in court testimony if requested by AGENCY.
2.
5. EXTRA WORK
In the event of authorization, in writing by the AGENCY, of
changes from the work described in Exhibit "A," or for other
written permission authorizing additional work not contemplated
herein, additional compensation shall be allowed for such Extra
Work, so long as the prior written approval of AGENCY is obtained.
b. METHOD OF PAYMENT
A. The CONSULTANT shall submit monthly requisitions to
Agency for services performed by Consultants' staff and a list of
incurred expenses for the past calendar month. Each invoice will:
1. Reference this Agreement;
2. Describe the services performed;
3. Show the total amount of the payment due;
4. Include a certification by a principal member of the
CONSULTANT'S firm that the work has been performed in
accordance with the provisions of the Agreement.
Upon approval of the services performed and the requisition,
Agency shall, within thirty (30) days of invoice date, pay
Consultant in accordance with such requisition up to the agreed
upon maximum.
If the Agency does not approve an invoice, Agency shall
notify Consultant in writing of the reasons for non approval,
within seven (7) calendar days of receipt of the invoice, and
further work shall be suspended until the parties agree that past
performance by Consultant is in, or has been brought into
compliance, or until this Agreement is terminated pursuant to
Section 12 hereof.
D. Any billing for extra work or additional services
authorized by the AGENCY shall be invoiced separately to the
AGENCY. Such invoice shall contain all of the information
3.
required under paragraph 6C, and in addition shall list the hours
pending and hourly rate charges for subcontractor time. Such
invoices shall be approved by AGENCY if the work performed is in
accordance with the extra work -or additional service requested,
and if AGENCY is satisfied that the statement of hours worked and
costs increased is accurate. Such approval shall not be
unreasonably withheld. Any dispute between the parties concerning
payment of such an invoice shall be treated as separate and apart
from the ongoing performance of the remainder of the Agreement.
7. DISPOSITION OF PLANS, ESTIMATES AND OTHER DOCUMENTS
CONSULTANT agrees that all materials prepared hereunder,
including all original drawings, designs, reports, both field and
office notes, calculations, maps and other documents, shall be
turned over to AGENCY upon termination of this Agreement or upon
PROJECT completion, whichever shall occur first. In the event
this Agreement is terminated, said materials may be used by AGENCY
in the completion of PROJECT or as it otherwise sees fit. Title
to said materials shall pass to the AGENCY upon payment of fees
determined to be earned by CONSULTANT, CONSULTANT shall be
entitled to obtain copies of all data prepared hereunder.
8. INDEMNIFICATION, DEFENSE, EiOLD HARMLESS
CONSULTANT hereby agrees to defend, indemnify and hold
harmless AGENCY, its officers, agents and employees, from and
against any and all liability, damages, costs, losses, claims and
expenses, however caused, resulting directly or indirectly from or
connected with CONSULTANT'S performance of this Agreement
(including, but not limited to .such liability, costs, damage,
A.
loss; claim, or expense arising from the death or injury to an
agent or employee of CONSULTANT, subcontractor, if any, City of
Huntington Beach, or AGENCY, or damage to the property of
CONSULTANT, subcontractor, if any, or AGENCY, or the property of
any agent or employee of CONSULTANT# regardless of the passive or
active negligence of AGENCY, ex--ept where such liability, damages,
costs, losses, claims or expenses are; caused by the sole
negligence or willful misconduct of AGENCY or any of its agents or
employees including negligent omissions or commissions of AGENCY,
its agents or employees, in connection with; the general
supervision or direction of the work to be performed hereunder.
9. WORKERS' COMPENSATION
CONSULTANT shall comply with all of the provisions of the
Workers' Compensation Insurance Safety Acts of the State of
California, the applicable provisions of Division 4 and 5 of the
California Labor Code and all amendments thereto; and all similar
state or federal acts or laws applicable; and shall indemnify,
defend and holdharmless AGENCY :iron and against all claims,
demand, payments, suits, action:a, proceedings and segments of
every nature and description, including attorney's fees and costs
presented, brought or recovered against AGENCY of, or on account
of, any liability under any of said acts which may be incurred by
reason of any work to be performed by CONSULTANT under this
Agreement.
10. INSURANCE
In addition to the Worker's Compensation Insurance and
CONSULTANT'S covenant to indemnify AGENCY, CONSULTANT shall obtain v
and furnish to AGENCY the following insurance policies covering
the PROJECT.
5.
V
General Liability Insurance. A policy of general public
liability insurance, including motor vehicle coverage. Said
policy shall indemnify CONSULTANT, its officers, agents and
employees, while acting within :.he scope of their duties, against
any and all claims of arising oit of or in connection with the
PROJECT, and shall provide coverage in not less that the following
amount: combined single limit bodily injury or party damage of
$1,000,000.00 per occurrence. Said policy shall specifically
provide that any other insurance coverage which may be applicable
to the project shall be deemed excess coverage and that
CONSULTANT'S insurance shall be primary. Certificates of
Insurance for said policies shall be approved in writing by the
AGENCY attorney prior to the commencement of any work hereunder.
All Certificates of Insurance (and the policies of insurance of
endorsements thereof) shall provide that no such Certificates and
policies shall not be canceled or modified without thirty (30)
days prior written notice to AGENCY.
11. INDEPENDENT CONTRACTOR
CONSULTANT is, and shall be, acting at all times in the
performance of this Agreement as an independent contractor.
CONSULTANT shall secure at its expense, and be responsible for any
and all payments of all taxes, social security, state disability
insurance compensation, unemployment compensation and other
payroll deductions for CONSULTANT and its officer, agents and
employees and all business licenses, if any, in connection with
services to be performed hereunder.
6.
12. TERMINATION OF AGREEMENT
All work required hereunde: shall be performed in a good and
workmanlike manner. This Agreement may be terminated by either
party on thirty (30) days written notice to the other. The
effective date of cancellation being the 30th day of said written
notice. Consultant shall be entitled to the compensation earned
by it prior to the date of termination, computed pro rata up to
and including the date of termination. Any termination of this
Agreement by Agency shall be male in writing though the Deputy
Director of Redevelopment, noti-.e of which shall be delivered to
CONSULTANT as provided in Section 16 herein.
13. ASSIGNMENT AND SUBCONTRACTING
This Agreement is a personal service contract and the
supervisory work hereunder shall not be delegated by CONSULTANT to
any other person or entity without the consent of AGENCY.
14. COPYRIGHTS/PATENTS
CONSULTANT shall not apply for a patent or copyright on any
item or material produced as a result of this Agreement as set
forth in 41 CFR 1-9.1.
15. AGENCY EMPLOYEES AND OFFICIALS
CONSULTANT shall employ no AGENCY official nor any regular
AGENCY employee in the work performed pursuant to this Agreement.
In accordance with California Government Code Sections 1090 at
seq., but subject to the exceptions therein set forth, no AGENCY
official or employee shall be financially interested in nor derive
any financial benefit, either directly or indirectly, from this
Agreement.
7.
0
16. NOTICES
Any notices or special instructions required to be given in
writing under this Agreement shill be given either by personal
delivery to CONSULTANT'S agent (as designated in Section 1
hereinabove) or to AGENCY Depute Director of Redevelopment, as the
situation shall warrant, or by enclosing the same in a sealed
envelope, postage prepared, and depositing the same in the United
States Postal Services, addressed as follows:
NO FURTHER TEXT ON THIS PAGE
8.
TO CITY
Douglas La Belle
Dep. Director of Redevelopment
City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
TO CONSULTANT
Calvin E. Hollis
Keyser Marston Associates, Inc.
550 S. Hill Street, Suite 980
Los Angeles, CA 90013-2410
17. ENTIRETY
The foregoing, and exhibit "A" attached hereto, set forth the
entire Agreement between the parties.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by and through their authorized officers
the day, month and year first above written.
V.�-�� � , 0
1,
Name Title Chairperson
AA
Name Title
ATTEST: APPROVED AS TO FORM:
Agency Clerk 9I�S1Y� 7./6- A ency Counsel
REVIE D AND APPROVED:
C ie Executive O ce
IRITIATED AND APPROVED:
rector 'ORedevelopmen
9.
49
E)-iIBIT A
SCOPE OF SERVICES
When and as directed by Agency. Consultant shall perform
consulting services for the project areas to include, but not be
limited to the following:
1. Consult, assist and advise the Agency with respect to
marketing , financial and disposition problems, including the
financial testing of ia..nd use and development concepts proposed by
potential developers.
2. Participate in foraal and informal discussions and
presentations with potential developers and community officials.
3. Undertake limited evaluation of existing economic
feasibility studies and reuse appraisals.
4. Undertake the refinement and expansion of marketing
strategy and tactics to meet new conditions as they develop.
5. Advise Agency when necessary in the preparation of
background information for presentation to developers and key
tenants of Agency developers.
b. Preparation of reuse reports as required by State law.
METHOD OF PERFORMANCE.
Consultant shall nerforn the various services described herein
only as and when requested by the Agency and within a time
schedule as mutually agreed up:n by the parties to the Agreement.
41,W a 9.
•
CITY OF HUNTINGTON BEACH CA 85-66
viaCOUNCIL - ADMINISTRATOR COMMUNICATION
H444TIW.TON BL<H
To -Honorable Mayor and From Charles W. Thompson,
City Council Members City Administrator
Subject KEYSER MARTSON ASSOCIATES, INC. Date August 14, 1985
ECONOMIC ANALYSIS: MAIN -PIER
MIXED USE PROJECT
Attached for the City Council/Redevelopment Agency's review Is the final Economic
Analysis prepared by Keyser Marston Associates, Inc., for the Main -Pier Dispcsition and
Development Agreement.
The consultant's task was to analyze and determine whether the proposed ground lease
terms and level of Agency assistance contained in the proposed DDA is warranted on the
basis of the expected project economics, including the impacts of the conditions required
by the Agency. The report depicts the estimated costs and revenues generated by the
proposed projects, and predicts an estimated return on total investment being provided to
the developer.
The report concludes that based upon the economic terms included in the DDA, the
proposed Agency assistance reflects fair and reasonable compensation to the developer
considering the Agency conditions on the scope and quality of the development, and the
requirement to incur extraordinary development costs that would not typically be incurred
with similar projects. .
Staff will be prepared, and a representative of Keyser Marston will be available, for the .
Public Hearing on Monday, August 19, 1985, to review in greater detail, the major prints of
this report with the Agency.
Respectfully submitted,
es IV. son,
City Administrator
CW T/,Nl A:lp
Attachment
1226h
1
CITY OF HUNTINGTON BEACH
2000 MAIN STREET
OFFICE OF THE CITY CLERK
August 8, 1985
Calvin E. Hollis
Keyser Marston Associates, Im:.
550 S. Hill St. 4980
Los Angeles, CA 90013-2410
CALIFORNIA 92648
On July 1, 1985, the Redevelopment Agency of the City of Huntington
Beach approved a consultant agreement with your firm for economic
consultant services.
Enclosed is a duly executed copy of said agreement together with
a copy of the Certificate of Insurance which you submitted.
Alicia M. Wentworth
City Clerk
APR-1: CB : b t
Enclosure
CC: Douglas La Belle, Deputy City Adninistrator/Redevelopment
Robert Sedlak, Finance Cept.
(Telephone: 714-636-52771
, REQUEST FO[:../REDEVELOPMENT Aj;ENCY ACTION
RII 85-24
Date June 7. 1985
Submitted to: Honorable Chairman and Redevelopment Agency Members C,tiS� Z
n /
•W
Submitted by: Charles W. Thompson, Chief Executive Officer 44&0
Prepared by: Douglas N. LaBelle, Deputy City Administrator/Red elopme
Subject: CONTRACT FOR CONSULTANT SERVICES - KEYSER ARS
ASSOCIATES, INC.
Consistent with Council Policy? X Yes I ] New Policy or Exception
Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments:
STATEMENT OF ISSUE -
To assist the Redevelopment Agency in analyzing the business aspects and financial
feasibility of projects with developers in redevclopment project areas, it's
recommended that the Agency secure the services of Keyser Marston Associates, Inc.
The attached contract is submitted for the Agency's consideration.
RECOMMENDATION -
Approve and authorize the City Clerk to execute the attached contract between the
Redevelopment Agency of the City of IIuntington Beach and Keyser Marston
Associates, Inc. to provide ongoing economic consultant services with maximum
compensation not to exceed $50,000.
AP. ALYSIS-
While the Agency has retained Katz Hollis. to assess the Agency's financial position, it
is desirable to procure the services of a firm to independently assess financial
Information submitted by developers. Keyser Marston would review pro forma$ as
submitted by developers and conduct an i<<dependent analysis on the viability of costs
and revenues to assist in determining if financial assistance for a specific project is
warranted. Costs would be incurred on a project -by -project basis and are estimated to
not exceed $3,000 per project. The Keysc-r Marston firm has provided similar services
to a large number of redevelopment agency's in the Southern California area. This
broad experience has provided them with in-depth knowledge of the costs of proposed
development, the various types of revenues to be derived, and the ability to analyze,
Independently. the actual return on a specific project to its sponsor. The Keyser
Marston firm can also suggest a variety of techniques for providing financial assistance
through which the Redevelopment Agency may benefit from the profit to be derived
from development in future years.
The Redevelopment Agency staff has requested proposals from consultant firms that
provide economic analysis of developer information. As a result of this investigation.
the attached contract with Keyser Marston Associates, Inc. is recommended for
approval.
Plo/1/85
RIi 85-24
June 7,1985
Page Two
FUNDING SOURCE:
Redevelopment Agency budget.
ALTERNATIVES:
Do not approve the attached contract. This will pre-empt procurring assistance of the
Keyser Marston firm at this time.
ATTACHMENTS:
Contract between the Redevelopment Agency and Keyser Marston
CWT/DLB/SVKdp
0857h
-
•
-
ISSUE DATE (LAMlDOfY`n
qS()r
7/2/85
PRODUCER
Tt IS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS
RTIFICATE DOES NOT EI�fO.
HOLDER. THIS CTH
i�
E)TEND OR ALTER COVERAGE AFFORDED BYCERrIFXATf
POLICIES MOW.
WHITNEY & BAIRD
350 SANSOMF 5T.
COMPANIES AFFORDING COVERAGE
SAN FRANCISCO, CA 94104
TEL: 781-1965
,
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National American
WSURED �;,T:;,;�
/ 2AW
OOM
Maryland Casualty
Keyser Marston Associates, Inc.
LCOMEfTTERR C
55 Pacific Avenue gall
San Francisco,Ca. 94111
LETTER
� E:TTERD
� Ea" E
JUL 3 01965
THIS IS TO CERTIFY THAT POLICIES OF INSURANCE LISTED BELOW HAVE IEEN ISSUED TOTHE INSURED NAMED ABOVE t- RIODINDICATED_
NOTWTTHSTANDING ANY REQUIREMENT. TEAM OR CONDITION OF ANY CONTRACT OTl OTHER DOCUMENT MITH RESPECT TO WHICH THIS CERTIFICATE MAY
BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IN SU&,ECT TO ALL THE TERMS, EXCLUSIONS, AND CONOI,
TIONS OF SUCH POLICIES.
DO
JS
TYPE OF INSURANCE
POLICY NUMBER
POLL-f EFFECM
DATE PIHD YY)
POLICY E7sDiGTM
DATE p ta"
LIABILITY L1MtTS IN THOUSANDS
EACH
P
AGGREGATE
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$
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$1, 000
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WEXT M"UCTORS
209014193
1/1/85
conti nous
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until
X
PERso m ri M -
cancelled
PERsONAL INJURY
$1, 000
AUTOMOBRB LIABILITY
t�Axr
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AW1UT0
C418380274
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ALL 0^8 AUTM r AP f
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$ (EACH Nn
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AND
tols> ASE-Pma Uwn
EMPLOYERS' uABltmr
$ PUASEVZH EMPLM1M
OTHER
DESCRIPTION OF OPERATIONSILOCATIONSNEHICLESM.PECLAL ITEMS - The City of Huntington Beach, its officers, agents and employees, while acting within the
scope of their duties shall be indemnified by above mentioned coverages. Any other insurance
["LITHM12r
qgj Ili. f N1 IN
r
City of Huntington Beach SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE Ex.
2000 Main St. PIRAT13b DATE THEREOF, THE ISSUING COMPANY WILL )[llRRANCIF X1QX
MAR FIITTE DAYS WN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE
Huntington Beach,Ca. 92648
Attn: Agency Attorney RFVRESENT of -
A�lp -oft
A
JI=
V1PJ_-NZ1y it Um
1110 SAME ST.
SAN K-AINaSCO. CA 94104
TEU 791� I W
Keyser Marston AssociatesvInc,
55 Pacific Avenue Hall
San Francisco.Ca. 94121
-1 E .00iVY1
w:iyJt•���-'.1V,,}J�1'+i^pj;. Z 7/2/85
TiAS Cz:Fr'FoCATE IS *SU_-D . t�x MATTER OF 1t.FQ',V-4T:Ci CNLY AND CONFERS
NO A&G?11.:, U-30N THE Crn11KZA-r HOLDEM TA13 CEPiT:F-CATE DCEt NOT AMEND,
WENU riOt ALTER T)II: COVLVACE AFFORULD SY TeE FOLICtES BELOW.
COMPAMES AFFORDNGA COVERAGE
CONWA-Y
- A Hatioul Amrlcm-
COMPANY
LEvIEFA Mryland Casualty
COMPAtlY
LETT LA C
COMPAN
LETIER D
C01. PANY
LET EA
7-
Tt." TI: C-7"' 7•0 v n -!-I=r IT INSURANCE LISTED BELOW HAVZ OrEh n TO THE 114ti if ?;A-*.*.1.:tj t'CP. T�JE f 0,-i::Y F E 11:0D iNDiCATED.
",.;r-. T.W. 7. v:? .1 P. 7 MAY j,* C_-AT!,F_'f'A E
L06'- ..It
T..NiS &! � S;:0-, W4-Z'I.-i&
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d.: T, ".TY 94 TmOLISANOS
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209014193
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TC6 22533310
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DES.- P 71 Or --,I AT-- ', LVC &T-0 CHICLE! SPECIAL ITEMS
The City of thintington Beach. Its officers,
agents and eMloyees, while acting within the
scope of their duties shall be Inde=1fled by above mentioned coverages. Any other fnsurance
e==1C0V&ra;e..aM_Iu= S S
City of Huntington Beach
2000 Vain St.
Huntington Deach.Ca- 92643
Attn: Agency Attorney
SHOULD ANY OF THE AEIOV.' VE:SCn10ED POLICIES Irs CANCELLED BEFORE THE EX-
PIRAT"N DATE Tiii'amr, THE ISSU;:.G COWPANY WILL ENDEAVOR TO
MAIL " —DAYS Whil IfN NOTICE TO Tk'E CM-NrICATE HOLDER NAMED TO THE
LE'rr. BUT FAIUM 70 76L)UL ::UCH NOTICE `~HALL IMPOSE NO ODLIG�ATION OR UABftJTY
OF A?IY KIND UPON THE COMPANY. ITS AGENTS On REPRESENTATIVES.
AUTHJ IiZED REPRESCUfA FIVE
'Ail
m
ECONOMIC ANALYSIS
DISPOSITION AND DEVELOPMENT AGREEMENT
MAIN —PIER MIXED USE PROJECT
Pte aced tor
HUNTINGTON BEACH REDEVELOPMENT AGENCY
Prpept"v d by
KEYSER MARSTON ASSOCIATES, INC.
AUGUST, 1985
f
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EI: t-IIC ANALYSIS
DISPOSITION Atilt DEVO-OPM NT AGFfIt£NT
MAIN —PIER MIS USE PR07E1;T
HWIrGTCN BEAG4, CALIFORNIA
Prepared for
MITINGTON BEACN FI�L.OPNENT AGENCY
2000 Main Street
Huntington Beach, California
BY
KEYSER MAR5rCN AS90CIATES, INC_
550 South Hi_l Street, Suite 980
Los Angeles:, California 90013
and
55 Pacific Avenue Mail
San Francisco, California 94111
and
7690 E1 Camino Real, Suite 202
Carlsbad, California 92000
August, 1%5
rr
40 Keyse MantonAssociatesInc.
Richard L Botti 550 South Hill Street.Suite 980
Calvin E. Hollis. II Los Angele,,California 90013
211 b22-F495
SAN DIEGO619194-14;r+fi
Heinz A. Schilling
4AO
Say FRANCISCO415::3tW-30>o
Timothy C. Kelly
A. Jerry Keyser
hfichael Marston
Kate Earle Funk
Robert J.Wetmore
1W I`1iAlMi t'112, 1985
Mr. Doug LaBelle
Deputy City Administrator/Redevelopment
Huntington Beach Redevelopment Agency
2000 Hain Street
Huntington Beach, California 92648
Dear Mr. LaBelle:
In accordance with your request, Keyser Marston Associates, Inc. is pleased to
submit this economic analysis of the proposed Disposition and Development Agree-
ment for the Walnut -Main hotel/retail complex and the Pier Side Retail complex
to be located in downtown Huntington Beach.
The purpose of our analysis was to determine whether the proposed ground lease
terms and level of Agency assistance contained in the proposed DDA is warranted
on the basis of the expected project eccnomics, including the impacts of the ex-
traordinary restrictions required by the Agency. The following report details
the development restrictions required by the Agency that impact the project
economics, the estimated costs and revenues generated by the proposed projects,
and the estimated return on total investment being provided to the developer.
On the basis of our analysis of the economic terms included in the DDA, it is
our opinion that the proposed Agency assistance reflects fair and reasonable
compensation to the developer considering the Agency restrictions on the scope
and quality of the development, and the requirement to incur extraordinary
w„ development costs that would not typically be incurred with similar projects.
Our conclusion, however, is based on strict adherence to development restric-
tions and conditions contained in the report, and in the event the Agency
restrictions or requirereents are changed significantly, or construction is not
commenced on both projects within twelve months of the signing of the DDA, the
findings of our analysis are subject to reevaluation.
wr
40
Real F_state FWdtw-eloFrrlent & E+al uation Services
40
%0 we appreciate this opportunity to a:csist you, and will be happy to answer any
questions you may have.
Yours very truly,
KEYSER MARSTON ASSOCIATES, ZNC.
Richard L. Botti 4/4
Val
Kathleen H. Head
RLB/KHH:ep
-4)
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40
419
060
4w
KcvserlfiarstonAssodateslnc.
to
10
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TABLE' OF CONTENTS
COVER LETTER
page
I. SUMMARY OF SALIENT FACTORS AND COgDITIONS............ 1
II. NATURE OF THE ASSIGNMENT...... ....................... 7
III. DESCRIPTION OF EXISTING ENVIRONS ..................... 9
IV. DESCRIPTION OF THE SITE AND PIOPOSED DEVELOPMENT..... 10
qs, V. DEVELOPMENT ECONOMICS ................................ 13
VI. CONCLUSIONS .......................................... 26
ub
VII. CERTIFICATION ........................................ 27
W
09
W
I. SL"O.RY OF SALIENT FACTORS AND CONDITIONS
Assignment
To analyze the economic terms contained in the ornnosed Dis-
position and Development Agreement (DDA) between the developer
and the Huntington Beach Redevelopment Agency for the Walnut -
Main hotel site, and the Pier Side Retail Site, and conclude
whether or not these economic terms represent fair and ap-
propriate consideration given the required scope of develop-
ment and the restrictions contained in the proposed Disposi-
Wr tion and Development Agreement.
ro'ect
pescription
The scope of the proposed development encompasses two projects
qO that will be built concurrently. The total development, in-
cludes the following major components.
Hotel/Retail Comp ex
.40 1. A first quality hotel containing 300 rooms.
2. 15,000 squarer feet of retail shop space fronting Main
Street.
3. Parking for 310 cars to serve the needs of the hotel.
4. A public plaza along Main street of 5,000 square feet.
Pier Side Retail
ak 1. A minimum of 50,000 square feet of rentable area on an
elevated structure to be built by the developer.
W
Land Area
Or
2. A minimum of 25,000 square feet of restaurant space lo-
cated on the expanded Huntington Beach Pier.
3. 500 on site parking spaces for use of retail/restaurant
customers.
The Walnut -Main site to be purchased by the developer consists
1
+r
' I �
i � r
"WALNUT -MAIN PORTION"
r111w.v1 w1..Iwwwl..Iww+wwrrrll"wrllww '�• � .'".�}�
f;
"NORTHEAST ,', ni f 3 �� 'y r' • , 1s+
{ -� 1 ' ':;<.:•:`:..:.,. �: PORTION" , all ,,.
F, :. "REMAINING PORTION"
RETAR'
1 i 1 I.p FLMAW HOUL ,
l' r
" 1
�, CITY
;>< •, '::: NOT
::•:{r.; :_. ' n •, PARCEL
WC ctu11r.
MaK+'.:, R�17►I1411 ' 1 i r� l a� • 1 1 1
RlLitSIII.Mr!... - y W +� A4rip
i
"ADJACENT AREA"
ffi �YaCn {Jl 1.
(Is not a part of the Site)
�:�rw�b...�+1,1t k+�•�+{t�:}Ri''�fi��`,S.`.;��i:J?;�:•'+2'.Yl,.': tirrsw: � e 1�� ���, I�I� I' I � t I� I � �� � ! Il
�rrirrr���1"I4'!+r{41'Il�r�'rY��wr II�
"PIER SIDE PORTION".-
• MAIN • F 1tK KWt: V
HUNTINGTON BEACH/ CALIFORNIA
I1RITWGION PACFICA DEVEl0P1.4lENT OHaP
t=LLWWm V I PLAN
—, r. 04 &1. r, r. ". -
,ho
of 1.65 acres, and the Pier Side Retail site to be leased from
the Agency consists of approximately 4.0 acres.
Location
The hotel/retail development parcel is located between Main
'w and Third Streets, and between Pacific Coast Highway and Wal-
nut Sreets. The Pier Side Retail is located on the ocean side
of Pacific Coast Highway between Hain Street and Lake. The
site plan on the facing page illustrates the location and con-
figuration of the proposed development.
Zoning
The hotel/retail site is currently zoned within the Downtown
Specific Plan District 3 classification. This district allows
mixed use developnent. The allowable uses which can be in-
40 cluded in a mixed use project on the subject site are office,
visitor serving commercial and hotel. The Pier Side Retail
site is currently zoned within the Downtown Specific Plan Dis-
trict 10. This district allows commercial development. The
allowable development for the Pier Side Retail site must be
visitor and pier related uses.
Mr Present
Use
The vast majority of the hotel/retail development parcel is
currently developed with small underutilized retail
40 establishments, and a minor amount of residential use. A res-
taurant and major lifeguard station is currently located on
the Pier Side Retail site. It is assumed that the improvements
on the hotel/retail parcel and the Pier Side Retail site will
be demolished upon conveyance of the fee interest or leasehold
interest to the developer. It is further assumed that the
,b, developer will be responsible for the costs required to
reconstruct the lifeguard station at another location.
Development
Restrictions
The DDA specifies the minimum size and quality level of each
of the projects. These standards are summarized in the
development restrictions that follow. These restrictions as-
sume that the construction begins within 12 months of the
signing of the DDA. If construction is not started as
indicated, the minimum dollar standards required for the
w,
2
10
� V
qO
proposed development will need to be modified.
Hotel / Retail Project Standards
1. The hotel must contain at least 300 rooms and at least one
major first quality restaurant.
2. The hotel must be of high quality standards, conforming to
the following guidelines:
a. The furnishings, fixtures and equipment expenditures,
exclusive of electronic equipment, phones and cash
registers must equal at least $16,000 per guest room.
b. The cost of furnishing the actual guest rooms must to-
tal at least S5,000 per guest room.
C. The guest rooms must be at least 15 feet wide from the
center line. The guest rooms must have a total area
of at least 420 square feet per room.
d. The gross building area must be at least 205,000
,y square feet for the 300•room hotel. In the event the
number of roans is increased from 300 rooms, the total
gross building area per room must average 685 square
feet including the lobby, the restaurant and coffee
shop space, and other common areas.
3. A hotel franchise and operator must be identified and ap-
proved by the Redevelopment Agency before the construction
begins.
4. A minimum of 15,000 square feet of retail space must be
provided adjacent to the hotel complex.
w
5. A 20,000 square foot plaza must be provided in conjunction
with the hotel/retail development, and 5,000 square feet
of this space must be a public plaza along Hain Street.
6. 330 parking sFaces must be provided by the developer to
W serve the hotel/retail complex.
Pier Side Retail Fro'ect
1. The Pier Side Retail complex must contain a minimum of
No
%, 3
w �.W �0
75,000 square feet of retail space to a maximum of 100,000
"0 square feet. 25,000 square feet of this space must be lo-
cated in restaurant space on the pier addition to be built
by the developer.
2. The Pier SidF Retail space must be of high quality similar
in nature to the developer's retail project in Long Beach.
The structures must cost at least $75 per square foot to
construct, exclusive of land. The tenant improvements
costs must to at least $25 per square foot of building
area.
3. 500 parking spaces must be provided on site to meet the
W needs of the retail complex. Additionally the developer
must pay to replace 300 beach parking spaces that will be
eliminated as a result of this project. This requirement
is being met ty a $100,000 annual payment to the City of
Huntington Beach.
4. The developer must contribute $2.5 million to the costs of
expanding the Huntington Beach Pier.
5. The lifeguard station and office space that will be
eliminated as a result of this project must be replaced at
w the developer's expense.
General Conditions
1. Construction cn the project must commence within 12 months
"r of the signing of the DDA. In the event that construction
has not begun within this period, the conclusion with
respect to the appropriateness of the economic terms of
the DDA are subject to reevaluation.
2. The developer must construct a pedestrian bridge spanning
Pacific Coast Highway, connecting Main Street to the Hun-
tington Beach Pier.
3. The developer is responsible for all on -and off- site im-
provements required by the development. These improve-
ments include sidewalks, street lighting, curbs, gutters,
street improvements, undergrounding of utilities, improv-
ing water delivery systems, and surface and structured
parking improvements. The City and or Agency will make
available up to $1.35 million to meet the costs of improv-
ing the water delivery system and undergrounding utilities.
+r►
to 4
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Obligations
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tab
4. The developer is responsible for providing landscaping
that meets the established Huntington Beach city ordinance
for the project setback areas and the public right of ways.
5. The developer is responsible for all tenant relocation
costs and the City or Agency will make available up to
$1.0 million to offset these costs.
1. The Agency rill acquire those parcels within the walnut -
Main site which the developer is unable to acquire, for
subsequent resale to the developer. The developer is to
pay for all casts associated with acquisition of any par-
cels by the Agency.
2. The Agency will rebate 1002 of the transient occupancy
taxes generated by the Walnut -Hain site during the first
10 years of hotel operation.
3. The Agency will rebate 77% of the tax increment revenues
generated by the Walnut -Main project during the 10 years
following construction. In the event that the developer's
return on total investment is not higher than 17.0%, in the
10th year, the rebate will continue until the 15th year.
4. The Agency will rebate 77% of the tax increment revenues
generated by the Pier Side Retail. project during the 10
years following construction. In the event the developer
has not achieved a 15.0% return on total investment in the
loth year, the rebate will continue through the 15th year.
5. The Agency will enter into a ground lease with the
developer containing the following terms:
Period
Construction
Yrs 1-3
Yrs 4-6
Minimum Ground
Lease
$286,000
$286,000
Greater of
$300,000 or
$4 per sq.ft.
total GBA
Percentage X
VS. gross income
121.
122
• %? 5
W �r
hininum Ground Percentage
+w Period Leasp vs. gross income
After Yr. 6 Minimum ground 15�
lease increased
%0 annually by
752 CPI
Date of
Analysis
w
The property was last inspected on July 29, 19$5. The date of
this analysis is August 1, 1985.
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11 NAIUE OF hE ASSIGNMENT
A. Purpose
The Redevelopment Agency of the City of Huntington Beach, in carrying
out the Redevelopment Plan for the pnwntown Huntington Beach, Hain
Street area has embarked on a multi- phased development program. The
major objectives of this program are to revitalize the retail uses
along Hain Street and to add uses that will increase the diversity and
environmental quality of tfe area. This will enhance the image and
economic strength of Moth Hain Street and the existing Huntington
Beach Pier.
NEW In meeting these objective:, the Agency is in the process of initiating
several major projects in the downtown. These include a major
residential/retail project along Main Street, a major first quality
hotel and a specialty retail center which includes expansion of the
Huntington Beach Pier. The purpose of this report is to analyze the
1*0 disposition terms related to two of these projects: the 300 room first
quality hotel, and the specialty retail center.
B. Approach
40 A review of the economic/disposition terms contained in the proposed
Disposition and Development Agreement was undertaken in order to deter-
mine the impacts of these terms on the economic feasibility of each of
the projects. The expected costs and revenues of each of the projects,
including the extraordinary costs required by the Agency, were analyzed
in conjunction with the Estimated Agency assistance in order to deter-
., mine whether the restrictions and assistance proposed in the DDA were
reasonable considering the risks associated with each project.
This analysis assumes that the Agency is interested in establishing dis-
position terms that will result in near term development meeting the
Agency's standards established for the projects, i.e. the DDA will not
w. allow land speculation or development quality of average or below
average.
In addition the basic assunptions behind this analysis are as follows:
1. The developer will adhere to the schedule of performance included as
w Attachment 5 of the DDA.
2. Both parties are well informed and well advised and each acting pru-
dently in what he/she considers is his/her own best interest.
3. The property will be assembled and cleared in a reasonable time so
w
7
lot
as to preclude a major change in market conditions.
M
4. Financing, if any, is on terms generally available in the community
for the use proposed at the date the property is ready for
construction. No tax exempt financing is assumed.
5. The seller is a public agency having definite controls over the
development. Due tc the complexity of the overall plan of
development, the develcper nust contend with a series of regulations
and controls which are not comton in the conventional real estate
market. The Agency must maintain a continuing surveillance with
respect to the ability of the developer to perform within the
prescribed conditions.
6. The DDA can •impose extraordinary development restrictions and/or
requirements. Accordingly, the anticipated return must reflect the
advantages created by the project as well as the requirements and
limitations on land uses to be imposed on the developer by the
public agency.
7. The property, when asseabled, is free and clear of all encumbrances,
special assessments and liens.
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III DEMUPTION OF EXISTING ENVIROrtS
The subject sites are located in downtown Huntington Beach, which histori-
cally served as the civic and commercial center for what was then a small,
somewhat isolated coastal coir.munity. In thP'late 1960's and early 1970's
as coastal Orange County was in a period of rapid urbanization, Huntington
Beach was one of the fastest growing cities in the nation. However, the
bulk of the growth occurred on the large tracts of available vacant land
widely dispersed throughout the inland portions of the City.
Recent commercial and residential growth has been oriented inland not only
W as a reflection of the availability of land, but also of the impact that
the freeway systems have had on land use patterns. As rapid growth oc-
curred throughout Huntington Beach during this period, the downtown area
experienced little commercial activity, and downtown Huntington Beach
declined in relative importance as a major commecial center. Moreover, the
existing facilities are, even with its coastal enviroment, of insufficient
w size or uniqueness to create the regional impact necessary to successfully
compete in Orange County.
The downtown area has the rajor advantage of a coastal location offering
excellent ocean views and beaches in one of the most diverse and desirable
areas in the nation. However, given the lack of strong commercial activity
w, in the downtown and the emergence of other commercial centers, development
of the size and scope being proposed clearly represents a pioneering
venture, and is not without significant risk. The inherent risks are
mitigated to a certain extent by the lack of available competitive coastal
locations for new retail and hctel development. However, with the possible
exception of restaurants, there is not an established market base for these
new uses. As such, the new uses must create their own market, and be of
such a quality level as tc establish a base of support from the Orange
County region as a whole.
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IV DESCRIPTION OF THE SITE AND PROMEEO DEVELOPMENT
A. Description of the Subject Froperty
1. Ownership
The sites included in the hotel/retail parcel are currently owned
by a number of private entities, including the developer.
Additionally, the City of Huntington Beach owns approximately 2/3
of an acre of land which is adjacent to the development parcel and
could be made available for up to 3 years to meet the parking needs
of the hotel/retail project. At the present time, the developer is
in the process of acquiring the remaining privately owned sites
that are a part of the development parcel. It is the assumption of
this analysis, that the the Huntington Beach Redevelopment Agency
will assist, where necessary, in the acquisition of the remaining
portion of the site, but that the developer will be responsible for
payment of the full acquisition costs.
The Pier Side Retail site consists of beach property that is owned
by the City of Huntington Beach. It is assumed the Agency will
lease the property from the City for subsequent release to the
developer on the basis of a long term ground lease.
2. Legal Description
No legal description of the property was furnished to us.
Therefore, we are assuming that the hotel/retail site consists of
1.65 acres, and that the Pier Side Retail site consists of 4.0 acres.
%0 3. Soil
No soil bearing tests have been furnished for the subject site. No
soil problems are known to exist on either the hotel/retail site or
the Pier Side Retail site. However, a contingency allowance has
,r been provided in the financial analysis to account for the uncer-
tainty inherent in building a deck for the retail structure on the
ocean side of Pacific Coast Highway.
4. Utilities
It is assumed that all public utilities are available to the site in
capacities adequate for the proposed uses on the sites, with the ex-
ception of water delivery facilities for the Pier Side Retail site.
The Agency will provide a maximum of $1 million to construct the
necessary water delivery facility. The developer must also under-
ground the utilities that are required for each of the projects.
Wi
The Agency will provide funding to a maximum of $350,000 to cover
'ai the costs of undergrounding utilities.
5. Zoning
The hotel/retail parcel is located in the Downtown Specific Plan
District 3. This district allows for mixed use development which
" can include office, hotel, visitor serving retail and residential
uses. The Pier Side Retail parcel is located in Downtown Specific
Plan District 10. This district allows pier related retail uses.
B. Description of Improvements
r.+
The proposed hotel/retail complex in conjunction with the Pier Side
Retail complex, represents a large scale effort to revitalize the
oceanfront section of downtown Huntington Beach into a major oceanfront
serving commercial center.
In an attempt to ensure that the objectives of the Agency are met with
the construction of these two projects, the DDA requires that each of
the uses contain a minimum size and quality standard and that each of
the projects are built in one phase. The minimum sizes of each of the
uses are summarized in the development restrictions included in this
report. However, at the present time there is a degree of uncertainty
regarding the size of the pier side retail component of the overall
project. Therefore, for the purposes of this analysis of the project
economics, the Pier Side Retail components will be evaluated on the
basis of the minimum size allowed by the DDA of 75,000 square feet,
including 25,000 square feet of restaurant space on the pier. The total
proposed development of the two projects consists of the following uses:
Hotel( Retail Complex
1. A 300 room first quality hotel with at least one first quality
restaurant.
�r 2. 15,000 square feet of retail space adjacent to the hotel and front-
ing on Main Street.
3. 330 parking spaces to meet the needs of the hotel and retail space.
4. 20,000 square feet of open space, of which at least 5,000 square
1+ feet must be a public plaza along Main Street.
Pier Side Retail Complex
1. A minimum of 75,000 square feet of gross building area of which a
minimum of 25,000 square feet must be restaurant space located on
OAO
W 11
the Huntington Beach Pier, with the remaining space to be built on a
deck above ground, adjacent to the Pier.
2. 500 parking spaces located below the retail deck structure.
IV
40
rx
4W
fti
'10 12
4410 �W/
fbi
DLVEL0Ft1Rfr EC NDMICS
An analysis of the development economics of the proposed hotel/retail and
Pier Side Retail complexes was performed to determine if the economic terms
of the disposition agreement provido a ret+,rn on total investment that is
adequate to compensate the developer for the risk inherent in developing
the projects of the magnitude proposed. To determine the developer's
return on total investment, the expected development costs including land
and construction costs were determined in conjunction with the extraordi-
nary costs required by the A-3ency. These extraordinary or unusual costs
include the requirement that the developer fund a portion of the restora-
tion of the Huntington Beach Pier, the construction of a pedestrian bridge
spanning Pacific Coast Highway, the construction of a public plaza along
Bain Street, the replacement of a major lifeguard station, and the require-
ment to pay for a portion of the costs of replacing the existing beach
parking.
The warranted return to the developer in each of the projects is a function
of the projected net operating revenue generated by the project, including
assistance by the Agency, and present and anticipated money market
conditions. These factors are considered in conjunction with the level of
risk involved in each of the projects to determine if the developer returns
are sufficient to warrant undertaking the project. The developer return is
measured using an Internal Rate of Return (IRR) as the basic measure. The
IRR is a measure based upon the present value of future revenues. Based
upon current money market conditions, current inflation assumptions and the
assessment of project risk, the appropriate IRR for the specialty retail
project is 15 to 15.5%, with a 17 to 17.5% return required for the
hotel/retail project.
w
The following subsection outlines the expected costs and revenues to be
generated by the proposed hotel/retail and Pier Side Retail complexes in -
eluding the extraordinary costs required by the Agency, and presents the
expected developer return on this total investment required in the project.
%d A. HOTEL / RETAIL COMPLEX
1. Agency Assistance to Project
Recognizing the fact that the construction of a major first quality
hotel in downtown Huntington Beach represents a pioneering venture
rr that carries a high degree of inherent risk, the Agency has agreed
to provide financial assistance to the development. This assis
tance is in the form of a rebate of property taxes and transient
occupancy taxes generated by the hotel/retail complex. The terms
of the rebate are as follows:
+W L 3
V
Q
TABLE 1
ESTIMATED DEVELOPMENT COSTS
HUNTINGTON BEACH MIXED USE PROJECT - HOTEL/RETAIL COMPONENT
HUNTINGTON BEACH, CALIFORNIA
LAND
72,000
SF
DIRECT
ON -SITES
10,000
SF
OFF -SITES
ALLOWANCE
BUILDING SHELL
HOTEL
300
ROOMS
RETAIL
15,000
SF
BRIDGE
ALLOWANCE
TENANT IMPROVEMENTS
FFE
300
ROOMS
RETAIL
15,000
SF
PARKINS
SURFACE
0
SPACES
STRUCTURED
330
SPACES
SUBTERRANEAN
0
SPACES
TOTAL DIRECT COSTS
INDIRECT
ARCH,EN6,PERMITS i FEES
155.00 /SF
410.03 JSF
S50,000 /ROOM
14S.00 JSF
$17,500 (ROOM
110.00 JSF
$2.00 /SF
$7,500 /SF
$9,100 JSF
SHELL
5.00I
DIRECT
COST LESS FFE'S
FFE DESIGN
9.001
DIRECT
COST FFE'S
INTEREST DURING CONSTRUCTION
FINANCING FEES
0.03
POINTS
LEGAL/CLOSING
0.501
DIRECT
COST
LEASING COMMISSIONS (RETAIL)
15.002
RETAIL
GEI
WORKING CAPITAL
ALLOWANCE
?REOPENING EXPENSES
ALLOWANCE
FRANCHISE FEES
ALLOWANCE
TAXES/INSURANCE
I.00I
DIRECT
COST
DEVELOPMENT MANAGEMENT
2.00i
DIRECT
COST
CONTINGENCY
5.00I
DIRECT
COST
TOTAL INDIRECT COSTS
TOTAL DEVELOPMENT COSTS
(LESS) TAX INCREMENT REBATE 77.00I TAX INCREMENT
NET DEVELOPMENT COSTS
OR SAY
$3,960,000
5100,000
50,000
15,000,000
615,000
75,000
5,250,000
150,000
0
2,475,000
0
$23,775,000
$926,000
420,000
3,009,000
963,000
119,000
51,000
500,000
250,000
50,000
233,000
476,000
1,189,000
$8,191,000
$35,926,000
292,000
35,634,000
$35,630,000
rr+
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a. The Agency will rebate 1002 of the transient occupancy tax gen-
erated by the development over the first 10 years of hotel
operation.
b. The Agency will rebate 77: of the property tax increment
revenues generated by the hotel/retail project over the first
10 years of operation.
c. In the event that the developer has not received an overall IRR
of 17.0% return on total investment by the end of the loth year
of operation, the property tax increment rebate will continue
for another 5 years.
2. Development Costs
Table 1, on the facing page presents the projected development costs
for the 300 room hotel and 15,000 square foot retail area proposed
for the Hain -Walnut site. These costs are based in part on recent
+� construction of similar uses in the Southern California are, and in
part on the basis of interviews with developers who are currently in
the process of constructing similar uses in various locations
throughout Los Angeles and Grange Counties. As illustrated in Table
1, the net development costs are estimated at $35.63 million. The
major assumptions used to determine this development costs estimate
+� are as follows:
a. Land acquisition costs are estimated at $55 per square foot of
land area. It is assumed that 72,000 square feet of land will
be required for the hotel and retail project.
V b. Direct construction costs are broken down as follows:
i. Shell costs for the hotel are estimated at $50,000 per
room. This cost level is representative of the minimum
costs required to build a hotel to the Agency mandated
quality standards.
ii. Furnishings, fixtures and equipment costs are estimated at
$17,500 per unit including electronic equipment, of which
$5,000 per room is allocated for furnishing the guest
rooms. These costs are reflective of the quality level
required for this type of hotel.
iii.. The retail shell costs are estimated at $45 per square
foot. This level of cost is indicative of typical retail
construction costs with an additional allowance to reflect
the exterior upgrades required by the Agency.
rr IL
W iv. Retail tenant improvement costs are estimated at $10 per
square foot. This level of tenant improvements is con-
sidered sufficient to attract the small users who will be
attracted to the 15,000 square feet of retail space.
v. The direct construction costs for the 330 required parking
spaces is $7,500 per space. This cost per space includes
the pro rata cost of the land area required for the
garage, plus the direct costs attributable to constructing
structured parking.
vi. On sites expenditures are estimated at $10 per square
+� foot. This estimate includes the cost of constructing the
5,000 square foot public plaza.
vii. One half of the estimated expenditures attributable to
constructing the pedestrian bridge across Pacific Coast
Highway are assigned to the hotel/retail complex. The pro
'w rata share of the direct construction cost is estimated at
$75,000.
C. Indirect construction costs are broken as follows:
i. Architecture, engineering, permits and fees expen-
'� dituresare broken down into categories. The basic A & E
fees which are attributable to the hotel and retail are
estimated at 5Z of direct costs, less the direct
furniture, fixtures and equipment fees which are estimated
at 92. This reflects the increased design costs required
for the interior portion of the hotel.
ii. Interest during construction is calculated on the
basis of construction financing at 12.5X interest on 100"
of the development costs including land acquisition. It
was assumed that the project would be under construction
for 16 months, and the average loan balance outstanding
would be 60%. Interest costs during construction were es-
timated at slightly more than $3 million. Financing fees
at 3% of the total loan are estimated at $963,000.
iii. Typically, a hotel development requires an infusion of
w cash during tte later stages of the development process
and during the initial opening period, to cover preopening
expenses, working capital requirements, and franchise
fees. These costs are delineated in the form of an
allowance, which for a hotel of this size and quality
level is estimated at $500,000 for working capital,
to
%1 15
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$250,000 for preopening expenses, and $50.000 for fran-
chise fees.
iv. The balance of the indirect costs are found in
legallclosing costs, taxes/insurance, development manage-
ment and a contingency allowance. These costs are es-
timated at approximately $2 million.
d. As shown in Table 1 , land acquisition costs are estimated at
S3.96 million, direct construction costs are estimated at
S23.775 million, and indirect costs are estimated at S9.19
million, for total development costs of approximately S35.93
million. These total development costs are then reduced by
$292,000 to reflect the property tax increment rebate during
construction, for net hotel/retail complex development costs
of $35.63 million.
3. Revenue Projection
In arriving at the anticipated project revenues, Keyser Marston
Associates, Inc. reviewed the performance of recently constructed
beach hotels in Southern California, as well as the expected perfor-
mance of major hotels it proximity to the ocean which are currently
under costruction or proposed for near term construction. It should
be noted however that O ese projections are made without the benefit
of a detailed market study. On the basis of this research, KMA has
estimated the revenue stream expected for the hotel/retail complex,
as follows:
a. Hotel
• i. Hotel room rates and occupancy levels will be at the
following levels during the stabilization period.
Year Room Fate' Occupancy
1 s 8O.CO 60%
2 S 91.00 65%
3 $102.CO 70%
4 SULU 722
ii. After stabilization the room rates will continue to esca-
late annually at 6%. Occupancy will stabilize at 72% of
capacity.
'Inflated dollars
mha arrawb" ralrialW
40
M
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iii. Room sales represent 62AZ of gross sales. Food and
V beverage sales represent 35% of gross sales, and miscel-
laneous revenues including telephone represent the remain-
ing 3 X of gross sales.
V
iv. Parking revenues, net of expenses, are estimated at $200
per space.
v. Departmental expenses are estimated at 30t of gross sales
and undistributed expenses are estimated at 27% of gross
sales.
vi. Management incentive fees are estimated at 10% of gross
operating profit.
b. Retail
i. Retail rental rates are estimated at $2.00 per square foot
per month. It is assumed that the 15,000 square feet of
space will be leased for an average of 3 year terms. The
absorption of the space is expected to take place over the
first two years of operation, with 70% average occupancy
for the first year, 90% average occupancy for the second
year, and full occupancy from the third year forward.
ii. The allowance for vacancy and collection is 5%.
iii. Retail rental rates escalate at 100% of the CPI compounded
every 3 years.
iv. Costs associated with the management of the retail space
are estimated at 52 of gross effective income. Costs as-
sociated with reserves for capital improvements are es-
timated at 3.10 per square foot of building area.
C. Agency Assistance
i. The Agency will provide the developer with a rebate of
1002 of the transient occupancy tax for the first ten
years of hotel operation. The transient occupancy tax is
equal to 6% of estimated room sales.
w ii. The Agency will provide the developer with 77: of the tax
increment generated by the project during the first ten
years of operation. ' The taxable value of the development
was assumed to be 1002 of the development costs including
land acquisition. This taxable value was assumed to in-
crease by 2% annually. The tax rate is assumed to be
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declining from 1.055% in the year of construction to 1.055
in the loth year of project operation. These tax rates
were based on a tax increment projection prepared by Katz,
Hollis, Coren and Associates.
iii. In the event the developer's Internal Rate of Return (IRR)
on total investment does not reach 17.02 by the loth year
'w of operation, the tax increment rebate continues for the
next 5 years. For the purposes of calculating the
developer's return on total investment, the value of the
additional 5 years of rebate is discounted back to its
value in the loth year of operation.
4. Conclusion Hotel/Retail
Table 2 on the facing page presents a 10 year cash flow projection
for the hotel/retail complex on the basis of the preceding
assumptions. Additionally, this estimate of cash flow assumes that
the hotel/retail complex sold in the loth year of operation on the
w basis of the llth year income capitalized at 10%. This capitaliza-
tion rate reflects both the risk and innovativeness of this project,
in conjunction with the environmental quality of the subject site.
The estimated sales proceeds are reduced by the cost of sale, which
is estimated at 3% of sales proceeds. The sales value is increased
by the sale of hotel receivables, which represents the $500,000 of
working capital infused into the project during the initial stages
of operation. The sales value is also increased by the value of the
future Agency rebate of tax increment revenues in the loth year.
The resulting gross sales proceeds in the loth year are estimated at
approximately $63.9 million.
w
As can be seen in Table 2 , annual net income from the hotel/retail
complex ranges from $2.96 million in the first year of operation to
$7.16 million in the tenth year of operation including the Agency
rebate of transient occupancy tax revenues and property tax incre-
ment revenues. Based ufon the cash flow presented in Table 2 , which
makes the assumption that the tax increment rebate continues for 15
years, and total development costs of $35.63 million, the project
generates a 16.93x IRR cn the total investment.
on the basis of the current assumptions regarding costs and income
to be generated by the proposed hotel/retail complex, including the
to provision of the Agency rebate of 10 years of transient occupancy
tax revenues and 15 years of property tax increment revenues, the
developer receives a return on total investment that is somewhat low
for a project of this magnitude and level of risk. Therefore, on
the basis of the expected development economics for the proposed
hotel/retail complex, the disposition agreement between the Agency
to
r, 18
u
V
TABLE 3
ESTIMATED DEVELOPMENT COSTS
HUNTINGTON BEACH MIXED USE PROJECT - RETAIL COMPONENT
HUNTINGTON BEACH, CALIFORNIA
DIRECT COSTS
OFF -SITES
ALLOWANCE
$50,000
ON -SITES
0 SF
:0.00
/SF
0
DECK
STRUCTURE
90,000 SF
:25.00
/SF
2,250,000
IMPROVEMENTS
40,000 SF
115.00
/SF
600,000
SHELL
RESTAURANT
40,000 SF
1100.00
/SF
41000,000
RETAIL
35,000 SF
160.00
/SF
2,100,000
TENANT IMP (RETAIL SHOPS)
35,000 SF
120.00
/SF
700,000
PARXING
150,000 SF
S2.00
/SF
300,000
BEACH LANDSCAPING
ALLOWANCE
50,000
BRIDGE
ALLOWANCE
75,000
TOTAL DIRECT COSTS
$10,125,000
INDIRECT
ARCH,ENG,PERNITS 9 FEES
MCI DIRECT
COSTS
5506,000
INTEREST DURING CONSTRUCTION
1,152,000
FINANCING FEES/CLOSING COSTS
0.03 POINTS
425,000
LEGAL/ACCOUNTING
0.501 DIRECT
COSTS
51,000
LEASING FEES
25.001 GEI
549,000
ADVERTISING/PROMOTION
25,000
TAXES/INSURANCE
1.00% DIRECT
COSTS
101,000
DEVELOPMENT MANAGEMENT
2.00% DIRECT
COSTS
203,000
CONTINGENCY
5.002 DIRECT
COSTS
506,000
TOTAL INDIRECT COSTS
$3,518,000
TOTAL DEVELOPMENT COSTS
$13,643,000
(LESS) TAX INCREMENT REVENUE
77.001 TAX INCREMENT
171,369
PLUS PIER RESTORATION
ALLOWANCE
2,500,000
PLUS LIFEGUARD STATION RELOCATION
ALLOWANCE
11250,000
PLUS GROUND LEASE PAYMENT
ALLOWANCE
296,000
$17,507,131
OR SAY
117,510,000
(19)
V
and the developer does not represent a gift of public funds to the
to developer. Further it is important to note, that the expected
developer return at 16.931Z is at the low end of the range of accept-
able returns. Therefore, even if the economics of the project im-
prove over the current projections, it is possible that the Agency
assistance would still be warranted.
w B. PIER SIDE RETAIL COMPLEX
1. Agency Assistance to Development
The Agency has required that the developer incur extraordinary
development costs in the form of a contribution to the restoration
of the Huntington Beach Pier, the construction of a pedestrian
bridge spanning Pacific Coast Highway, and the replacement of the
major lifeguard station that will be eliminated as a result of the
Pier Side Retail development. Given the economic impact these ex-
traordinary costs will have on the development economics, the
proposed DDA indicates that the Agency will rebate the property tax
increment generated by the Pier Side Retail complex. The terms of
the rebate are as follows:
1. The Agency will rebate 77X of the property tax increment gen-
erated by the Pier Side Retail project over the first 10 years.
2. In the event that the developer has not received an overall
15.0% return on investment by the end of the loth year of
operation, the property tax increment rebate will continue for
another 5 years.
wr
2. Pevelopment Costs
Table 3 on the facing page presents the estimated development costs
for the 75,000 square foot Pier Side Retail complex. This analysis
is on the assumption that the developer ground leases the land from
the Agency, with periodic rental escalations. The construction
costs are based on cost estimates collected from other beach
to oriented specialty centers constructed in Southern California
recently. As illustrated in Table 3, the net development costs are
estimated at $17.51 million. The major assumptions used to deter-
mine this development cost estimate are as follows:
a. The ground lease paynent during construction is $286,000.
b. Direct construction costs are as follows:
i. It is assumed that the 90,000 square foot deck structure
which will support the retail center can be constructed
W
W 19
W % .)
for approximately 125.00 per square foot. It is further
w assumed that the portion of the deck that is used for
retail shops will have additional surface treatment at a
cost of $15 per square foot.
ii. Shell costs for the 40,000 square feet of restaurant
space, which includes all the direct costs for construct-
ing the exterior walls, and the costs of providing the in-
terior for the structure, are estimated at $I00 per square
foot of building area.
iii. The shell costs for constructing the 35,000 square feet of
retail space are estimated at $60 per square foot. This
level of cost is indicative of typical retail construction
costs plus an additional allowance to reflect the exterior
upgrades required ty the Agency.
iv. Tenant improvement costs are estimated at $20 per square
foot of building area. This high degree of tenant im-
%0 provements is in response to the market conditions, and
the type of tenant that the project is attempting to
attract." The aggregate total of the costs required to
construct and imprcve the deck structure, and the shell
and tenant improvement costs of the restaurant and retail
shop space equate to a direct cost of nearly $130 per
square foot of gross building area.
v. The 500 required parking spaces are assumed to be provided
in a 150,000 square foot surface parking lot. The direct
costs to construct this parking lot are estimated at $2
per square foot.
v
vi. Off -site improvements which are not reimbursed by the
Agency are given an allowance of $50,000. Additionally,
an allowance of $50,000 is provided to provide landscaping
v on the beach around the perimeter of the Pier Side Retail
complex.
vii. One half of the estimated expenditures attributable to
constructing the pedestrian bridge across Pacific Coast
highway are assigned to the Pier Side Retail complex. The
pro rata share of direct costs are estimated at $75,000.
C. Indirect costs are.delineated as follows:
i. Architecture, engineering, permits and fees expenditures
%0
20
v
are estimated at 5% of direct costs.
rr
ii. Interest costs during construction are calculated on the
basis of construction financing at 12.5% interest on 100%
of the total development costs. it was assumed that the
project would be under construction for a period of one
year. However, it is necessary to build the d,?.k struc-
ture before any of the retail uses can begin construction.
Therefore, the interest costs must reflect the additional
holding costs incurred as a result of this structure. It
was assumed that the average loan balance outstanding
would be 65% rather than a more typical 50 to 60%, to
reflect these additional holding costs., The estimated in -
VW terest cost during construction is $1,152,000. The
financing fees, at 3 points, are estimated to be $425,000.
iii. Advertising and promotion expenses that will not be
covered by the retail tenants are estimated at 525,000.
Leasing commissions are estimated at 25% of the gross ef-
'0 fective income. These estimates are based on the assump-
tion that the retail leases average a five year term.
iv. The balance of the indirect costs are legal and closing
costs; taxes and insurance during construction; develop-
ment management; and a contingency allowance. These
remaining costs total approximately $860,000.
d. The cost proforma contains the following extraordinary costs:
i. The developer's share of the pier restoration costs are
$2.5 million.
w
ii. The estimated costs to replace the lifeguard station are
$1.25 million.
e. Ground lease payaents during construction are $296,000,
direct constructioi costs are estimated at $10.125 million,
indirect construction costs are estimated at $3.510 million,
and extraordinary .;osts are estimated at $3.75 million. when
these costs are d?creased by the property tax increment rebate
during constructio:i, the net development costs are estimated
at $17.51 million.
3. Revenue Projection
KHA reviewed the sales volumes and rental rates achieved by
waterfront specialty centers in a number of locations in Southern
California, to be used as the foundation for the rental revenue
17A
w
21
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projections used in this analysis. On the basis of this field
research, and the following assumptions, a 10 year cash flow projec-
tion was prepared.
a.
b.
Restaurant Income
i. Restaurant tenants rental rates were estimated at S30 per
square foot per year or 7.25 Z of gross sales, whichever
is greater. It was assumed that upon stabilization, the
restaurants would be generating average sales volumes of
$400 per square foot. The average occupancy and percent
of sales volumes of $400 per square foot is presented as
follows:
Year Occupancy 1400 Sales Volumes
1 801 75%
2 100% 100%
ii. After stabilization, sales volumes are expected to in-
crease annually by the CPI.
iii. It is expected that 1/3 of the space will have to be
leased to nee+ tenants by the tenth year. The releasing
expenses are estimated at 25% of the gross effective
income. The refiting costs are estimated at $4 per
square foot escalated by 100% of the CPI compounded over
10 years.
Retail Shop Income
i. Retail shops tanant rental rates were estimated at $28.50
per square foot per year, or 1OX of gross sales, whichever
is greater. It was assumed that upon stabilization the
shops would be generating sales volumes of $235 per square
foot of building area. The average occupancy and percent
of sales volumes of $285 per square foot is presented
below:
Percent of Stabilized
Year occupancy $235 Sales Volumes
1 701 60%
2 100* 75z
3 100% 901
4 100% 1001
ii. After stabilization sales volumes are expected to increase
annually by 100% of the CPI.
rr 22
w/ �.j �10I
%0 iii. It is expected that 1/3 of the space will have to be
leased to new tenants by the third, the fifth, and the
tenth year of operation. The releasing expense is es-
timated at 25,%b' of gross effective income. The refitting
costs are estimated at $4 per square foot escalated by
1002 of the CPI.
+w+
C. Expenses
w
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i. Management expenses are estimated at 6% of gross effective
income. Reserves for capital expenses are provided, with
an allowance of S.10 per square foot of building area.
ii. Advertising and promotion that is not paid for by the
tenants is estimated at :25,000 per year. These costs are
assumed to increase at 100% of the CPI annually.
iii. The developer gust pay the city $100,000 per year to as-
sist in the replacement of 300 beach parking spaces which
will be eliminated by this development. It was assumed
that the maj3rity of the usage of the 500 parking spaces
provided as a Dart of this development would be generated
by patrons of the center who would be provided with free
validated parking. However, it was also assumed that the
transient parking revenues generated by beach goers will-
ing to pay a p•emium to park in close proximity to the
beach will cover this $100,000 payment.
iv. The developer must pay the City a ground lease for the use
of the land. The terms of the ground lease are as follows:
Period
Construction
Yrs 1-3
Yrs 4-6
After Year 6
d. Agency Assistance
Minimum Ground Ground Lease
Lease vs. As % of Income
$286,000
$286,000 12%
Greater of 12%
$300,000 or
to per sq.ft. GBA
Minimum lease 15%
increase annually
by 75% CPI
w
2
TAKE 4
10 TFAI USN FOR
mxflKrON IrACM Nitro ME I102(Cr
MOMURION RTACH.MIMMIA
LEAS[ REVENGE!
1tsTAUIM
IEl11 Imm
tAIIING
gloss 1M[OIE
(LESS) VACANCY 6 III KII
gloss TrrEam iMCO+f
off NFINS (1TENSr3
NANA6FNEN1
RESf1VT5
AOVEII1SINS INV t1o1 ION
W111i LEASE
91"1 LASE
10TAL OITRIT1Ng E nfN5f5
INCOME %[FOIE Kit S[ITICE
PLUS TAR iN MI11 MITI
NET INCOK worE 0(Ii sT19i[E
SALES flourOs
ILI$$) Cost OF SALE
PLUS n Ill INCIEKWI IFIATE
Sloss SALES IIoCrIm
CONSIMION YEAR 1 YEAR 2
YEAR 3 YEAR 4 YEAR S YEAR 6 YEAR 7 YEAR 1 TE11 9 YEAR 10 YEAI 11
960.000 1.214.400 1.301.374 11311379 11464,473 1.557.341 1,645,412 1,744,211 1.141.261 1,706,627 2.077,313
691,250 1,015,455 1.41S.4SS I,000,935 1,259,321 1,161,36] 1,411,973 1,19},171 1.sot, In 1,466,194 1,7U.371
100,000 106400 112,364 119.102 126.241 111.023 141,152 150.30 159,385 168.941 119 m
E,751,250 l,33S,1SS 2,g1,191 2,501,615 21850,042 2,147,321 3,207,307 3,394,445 I,S}8,112 3,]41,769 4,042439
1 111,191 115.942 119.126 IU,190 135,615 153,023 162,204 171,9U IS8,641 193.168
1,7$1,251 2,224,U2 2,315,249 2,382.490 lJIMS2 2,7I1,142 2,149,214 3,232.241 3,426.176 3,1/3.121 3,149,651
10511}i
WOW
131.911
142,94t
162,131
162,711
102,957
193.134
205,571
1}0,988
230,}79
11500
7.500
1.500
11500
7,500
1.500
11500
7,500
1.500
7,S00
1.500
25,000
26.S00
7I,090
2t.77S
31,S62
32.456
35.461
37,593
39,64;
421237
44.771
IMAM
100,000
1o0.o00
117.102
126,210
133.12)
141,02
1S0,363
159,313
161,111
179,01S
266,000
2U.000
MAD
300,000
326,851
407.0%
459,068
486,612
515.109
475.123
!79,563
521,riS
553,462
560,505
599,32i
454,ri6
144,514
f26,141
176,401
t?1,111
115,596
[II 11,19I
t,274,253
1,i10,901
1.754,744
1,181,163
1.058,156
11911,291
2.222,444
213561243
2,141.065
2,217.S32
2,007,>S3
171175S
175.091
171,01
I11,957
185.473
119.074
112,746
196,478
200,285
204,174
1,106,011
t,143,rit
1,913,2I3
1,965,120
2.244,37t
l.IS6.372
2,415,110
l,SS2,711
2,i91,350
2,501.706
2.401.753
2},55S,ttf
/I6,65}
7J1.R12
29,446,506
KI USN FLU IEFORE KII SERVICE (17,510,000) 1,406.011 1,81S,ri1 [,933,23S 1.16S,120 l,244,.In 2,1U.172 2.121.196 2.552.716 2498,350 31,111.223
tofu COMSIMC11011 COST 17,510.000
IOIAL tANI VutE 0
IOIAL MOMENT C05I 17,511.000
111 oN TOIAL IMVESIMENT 15.01
to
i. The Agency will provide the developer with a rebate of 77%
of the tax increment generated by the project during the
first 10 years of operation. The taxable value of the
development was assumed to be 100% of the development
costs, plus the value of the possessory interest in the
land under the pier and the retail deck structure. The
total value of the possessory interest was estimated at
�r $7.5 million. The taxable value of the development was as-
sumed to increase by 2% annually. The tax rate ranges
from 1.055% to 1.055 in the tenth year of project
operation.
ii. If the developer's return on total investment has not
W reached 15.02 in the tenth year of operation, the tax
increment rebate continues for the next five years. For
the purposes of calculating the developer's return on to-
tal investment, the value of the additional 5 years of tax
increment rebate is discounted back to its value in the
tenth year of operation.
to
4. Cash Flow Projection
on the basis of the assumpticns outlined above, a 10 year cash flow
has been prepared, and is presented in Table 4. This projected cash
flow assumes that the Pier Side Retail project is sold in the tenth
year of operation on the basis of eleventh year income capitalized
at 9.51. This capitalization rate factors in the strength of res-
taurant and retail space with an oceanfront location. Additionally,
the sales value of the project is increased by the value of the fu-
ture property tax increment rebate in the tenth year, for a gross
sales value of approximately $28.5 million.
Table 4 indicates that tie net income before debt service including
the Agency assistance ranges from $1.4 million in the first year of
operation to $2.7 millioi in the tenth year. This can be explained
largely by the fact that the retail shop space typically requires
three to four years to reach the stabilized sales volumes, and the
effects of inflation of the sales volumes after stabilization. On
the basis of the cash flow projected in Table 4 , assuming the tax
increment rebate continues for I5 years, and that total development
costs equal $17.51 million, the project generates a 15.02 IRR on to-
tal investment.
On the basis of the cu•rent assumptions regarding project costs and
revenues, including an Agency rebate of 15 years of property tax
increment, the developer receives a return on total investment that
is within the range of acceptable returns for this type of project.
However, it is our understanding that the developer may build the
fto
VW# 24
w
project to a larger scale than required by the disposition
,r agreement. On the bai-is of constructing 50,000 square feet of res-
taurant spate, and 50,000 square feet of shop space, and assuming
the property tax increment is rebated for 15 years, the project
yields and IRR on total investment of 15.2t. This level of return
is also within the range of acceptable returns for this type of
project but does not exceed the maximum level set fort„ in this
r+ report. (A detailed pro forma of costs and revenues are presented
in Appendix A).
The above findings indicate that in the event the developer builds
to the minimum standards required in the DDA or to the higher level
currently being proposes, the project will require 15 years of
+✓ rebate of tax increment revenues. In the event that the project is
built to a level higher than 100,000 square feet, it is likely that
the property tax rebate would not have to be provided for as long of
a period.
wd
Cli
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25
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V I . CL14CLLJSICNS
W
The preceding report analyzed the economics of the proposed walnut -Hain
hotel/retail complex, and the Fier Side Retail complex within the context of
the extraordinary restrictions Flaced on the quality and scope of develop-
ment required by the Huntingtcn Beach Redevelopment Agency. This analysis
also considered the impacts of the assistance provided by the Agency in the
form of a rebate of 77% of the property tax increment for up to 15 years,
and 100% of the transient occupancy tax from the hotel for a period of 10
years.
Based on the terms container in the proposed Disposition and Development
w+ Agreement, the development restrictions included in Section I of this
analysis, and the expected performance of each of the projects, it is our
opinion that the terms contained in the DDA are fair and reasonable given
the risk of the proposed project, including the additional Agency require-
ments and quality standards. However, it should be noted, that in the event
the scope of development , or the restrictions imposed by the Agency are
w significantly changed, or if construction on both projects is not underway
within twelve months of the signing of the DDA, the findings of this
analysis are subject to reevaluation.
V
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25
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to
60
L"M
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v
V I I CERTIFICATIGt4
We hereby certify that neither Veyser Marston Associates, Inc., nor any of
its officers have any present or prospective interest in the properties
being analyzed; that our employment is not contingent in any way upon the
value reported; that we havt- personally inspected the property and the
enviroment; that the statements made and the information contained in this
economic analysis are true, to the best of our knowledge and belief.
Respectfully submitted,
Parston Ass iates, Inc.
RcarL. Botti
Kathleen H. Head
r. 7
to �k.) �10
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Y/
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A 11 P E M D I X A
100,000 SQUARE FEET RETAIL SPACE
WITH 670 PARKING SPACES
w
40 �lj �l
[ABLE A-1
w ESTIMATED DEVELOPMENT COSTS
HUNTINGTON BEACH MIXED USE PROJECT - RETAIL COMPONEN-
HUNTINGTON BEACH, CALIFORNIA
%# DIRECT COSTS
OFF -SITES
ALLOWANCE
$50,000
OH -SITES
0 SF
$0.00
/SF
0
DECK
STRUCTURE
120,000 SF
$25.00
/SF
3,000,000
IMPROVEMENTS
45,000 SF
SIS.00
/SF
675,000
SHELL
RESTAURANT
50,000 SF
1100.00
/SF
51000,000
RETAIL
50,000 SF
$60.00
/SF
31000,000
00
TENANT IMP (RETAIL SHOPS)
50,000 SF
$20.00
/SF
11000,000
PARKING
SURFACE PARKING
150,000 SF
$2.00
/SF
300,000
STRUCTURED PARKING
50,000 SF
$20.00
/SF
1,000,000
BEACH LANDSCAPING
ALLOWANCE
50,000
BRIDGE
ALLOWANCE
75,000
TOTAL DIRECT COSTS
114,150,000
INDIRECT
to
ARCH,ENG,PERMITS i FEES
5.002 DIRECT
COSTS
8703,000
INTEREST DURING CONSTRUCTION
1,610400
FINANCING FEES/CLOSING COSTS
0.03 POIHIS
594,000
LEGAVACCOUNTING
0.501 DIRECT
COSTS
71,C00
LEASING FEES
25.001 GEI
731,000
ADVERTISING/PROMOTION
25,000
�+
TAXES/INSURANCE
1.00% DIRECT
COSTS
142,000
DEVELOPMENT MANAGEMENT
2.001 DIRECT
COSTS
283,000
CONTINGENCY
5.001 DIRECT
COSTS
708,000
TOTAL INDIRECT COSTS
$4,872.000
TOTAL DEVELOPMENT COSTS
SI9,022,000
(LESS) TAX INCREMENT REVENUE
77.00% TAX INCREMENT
21S,S94
PLUS PIER RESTORATION
ALLOWANCE
2,500,000
PLUS LIFEGUARD STATION RELOCATION
ALLOWANCE
1,250,000
PLUS GROUND LEASE PAYMENT
ALLOWANCE
286,000
122,842,406
OR SAY
122,840,000
V
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TABLE A-2
,Ao ESTIMATED NET INCOME
HUNTINGTON BEACH MIXED USE PROJECT - RETAIL COMPOMEHT
HUNTINGTON BEACH, CALIFORNIA
INCOME
RESTAURANT
50,000
SF
$30.00 /SF
$1,500,000
RETAIL SHOPS
50,000
SF
$28.50 /SF
1,425,000
PARKING
ALLOWANCE
100,000
GROSS INCOME
13,025,000
+w+ (LESS) VACANCY i COLLECTION
5.00:
GROS:i
INCCM_
146,250
GROSS EFFECTIVE INCOME
12,878,750
OPERATING EXPENSES
MANAGEMENT
6.001
GROSS
EFFECTIVE INCOME
$172,725
RESERVES
ALLOWANCE
10,000
ADVERTISING AND PROMOTION
ALLOWANCE
25,000
PARKING LEASE
ALLOWANCE
100,000
GROUND LEASE
ALLOWANCE
286,000
TOTAL EXPENSES
1573,725
NET OPERATING INCOME
12,295,025
OR SAY
12,285,000
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0
CONSULTANT AGREEMENT BETNEEN THE REDEVELOPMENT AGENCY
OF THE CITY OF HUNTINGTON BEACH AND KEYSER MARSTON
ASSOCIATES, INC. FOR ECONOMIC CONSULTANT SERVICES
THIS AGREEMENT, made and entered into this 5 day
of . 19_, by and between the Redevelopment
Agency of t e C ty of Huntington Heath, hereinafter referred to as
"AGENCY," and KEYSER MARSTON ASSOCIATES, INC. a California
corporation, hereinafter referred to as "CONSULTANT."
WHEREAS, AGENCY desires to engage the services of an economic
consultant to assess the financial feasibility of certain private
developments within AGENCY'S project areas and to determine the
need for AGENCY financial incentives to such developments, and
CONSULTANT has been selected to perform said services,
NOW, THEREFORE, it is agreed by AGENCY and CONSULTANT as
follows:
1. WORK STATEMENT
CONSULTANT shall provide all services as described in the
Scope of Services (hereinafter referred to as Exhibit "AN),
which is incorporated in this Agreement by this reference.
Said services shall sometimes hereinafter be referred to as
"PROJECT."
CONSULTANT hereby designates CALVIN E. HOLLIS, who shall
represent it and be its sole contact and agent in all
consultations with AGENCY during the performance of this
Agreement.
2. AGENCY STAFF ASSISTANCE
AGENCY shall assign a staff coordinator to work directly
with CONSULTANT in the prosecution of this Agreement.
3. TIME OF PERFORMANCE
Time is of the essence
of the CONSULTANT are to
of this Agreement. The services
be on a continuing basis as
I.
authorized by the AGENCY staff. The time for performance of
tasks identified in the Scope of Services are generally to be
as in the Method and Time of Performance identified in Exhibit
"A." This schedule may be amended to benefit the PROJECT if
mutually agreed by the AGENCY and CONSULTANT.
4. COMPENSATION
In consideration of the performance of the services
described in Section 1 above, AGENCY agrees to pay CONSULTANT
and CONSULTANT agrees to accept compensation on an hourly
basis according to the following fee schedule which will
remain in effect through December 31, 1985. This contract is
limited to payment of these charges up to Fifty Thousand
Dollars ($50,000.00) including both hourly charges and
directly related expenses:
A. Jerry Keyser and
Michael Marston
Senior Principal
Principal
Senior Associate
Associate
Senior Analyst
Analyst
Technical Start
Administrative Staff
120.00 per hour
115.00 per hour
105.00 per hour
50.00 per hour
67.50 per hour
55.00 per hour
50.00 per hour
38.50 per hour
33.00 per hour
Directly related job expenses not included in the above
rates are: Delivery, electronic data processing, graphics
and printing. Directly related job expenses will be billed at
110% of cost.
*Rates for individuals in these categories will be
increased by 50% for time! spent in court testimony if
requested by AGENCY.
2.
5. EXTRA WORK
In the event of authorization, in writing by the AGENCY,
of changes from the work described in Exhibit "A," or for
other written permission authorizing additional work not
contemplated herein, additional compensation shall be allowed
for such Extra Work, so long as the prior written approval of
AGENCY is obtained.
6. METHOD OF PAYMENT
A. The CONSULTANT shall submit monthly
requisitions to Agency for services performed by Consultants'
staff and a list of incurred expenses for the past calendar
month. Each invoice will:
1) Reference this Agreement;
2) Describe the services performed;
3) Show the total amount of the payment due;
4) Include a certification by a principal member
of the CONSULTANT'S firm that the work has
been performed in accordance with the
provisions of the Agreement.
Upon approval of the services performed and the requisition,
Agency shall, within thirty (30) days of invoice date, pay
Consultant in accordance with such requisition up to the agreed
upon maximum.
If the Agency does not approve an invoice, Agency shall notify
Consultant in writing of the reasons for non approval, within
seven (7) calendar days of receipt of the invoice, and further
work shall be suspended until the parties agree that past
performance by Consultant is in, or has been brought into
compliance, or until this Agreement is terminated pursuant to
Section 12 hereof.
D. Any billing for extra work or additional services
authorized by the AGENCY shall be invoiced separately to the
AGENCY. Such invoice shall contain all of the information
required under paragraph 6C, an3 in addition shall list the Yours
pending and hourly rate charges for subcontractor time. Such
invoices shall be approved by LGENCY if the work performed is in
3.
accordance with the extre, work or additional services
requested, and if AGENCY is satisfied that the statement of
hours worked and costs increased is accurate. Such approval
shall not be unreasonably withheld. Any dispute between the
parties concerning payment of such an invoice shall be treated
as separate and apart from the ongoing performance of the
remainder of the Agreement.
7. DISPOSITION OF PLANS, ESTIMATES AND OTHER DOCUMENTS
CONSULTANT agrees that all materials prepared hereunder,
including all original drawings, designs, reports, both
field and office notes, calculations, maps and other
documents, shall be turned over to AGENCY upon termination of
this Agreement or upon PROJECT completion, whichever shall
occur first. In the event this Agreement is terminated, said
materials may be used by AGE14CY in the completion of PROJECT
or as it otherwise sees fit. Title to said materials shall
pass to the AGENCY upon payment of fees determined to be
earned by CONSULTANT, CONSULTANT shall be entitled to obtain
copies of all data prepared hereunder.
8. INDEMNIFICATION, DEFENSE, HOLD HARMLESS
CONSULTANT hereby agree: to defend, indemnify and told
harmless AGENCY, its officers, agents and employees, from and
against any and all liability, damages, costs, losses, claims
and expenses, however caused, resulting directly or indirectly
from or connected with CONSULTANT'S performance of this
Agreement {including, but not limited to such liability,
costs, damage, lose, claim, or expense arising from the death
or injury to an agent or employee of CONSULTANT,
subcontractor, if any, City of Huntington Beach, or AGENCY,or
damage to the property of CONSULTANT, subcontractor, if any,
or AGENCY, or the property of any agent or employee of
CONSULTANT, regardless of the passive or active negligence of
AGENCY, except where such liability, damages, costs, losses,
claims or expenses are; caused by the sole negligence or
willful misconduct of AGENCY or any of its agents or employees
including negligent omissions or commissions of AGENCY,
4.
its agents or employees, in connection with; the general
supervision or direction of the work to be performed hereunder.
9. WORKERS' COMPENSATION
CONSULTANT shall comply with all of the provisions of the
Workers' Compensation Insurance Safety Acts of the State of
California, the applicable provisions of Division A and 5 of
the California Labor Code and all amendments thereto; and all
similar state or federal acts or laws applicable; and shall
indemnify, defend and hold harmless AGENCY from and against
all claims, demand, payments, suits, actions, proceedings and
segments of every nature and description, including attorney's
fees and costs presented, brought or recovered against AGENCY
of, or on account of, any liability under any of said acts
which may be incurred by reason of any work to be performed by
CONSULTANT under this Agreement.
10. INSURANCE
In addition to the Workers' Compensation Insurance and
CONSULTANT'S covenant to indemnify AGENCY, CONSULTANT shall
obtain and furnish to AGENCY the following insurance policies
covering the PROJECT;
General Liability _Insurance. A policy of general public
liability insurance, including motor vehicle coverage. Said
policy shall indemnify CONSULTANT, its officers, agents and
employees, while acting within the scope of their duties ,
against any and all claims o; arising out of or in connection
with the PROJECT, and shall provide coverage in not less that
the following amount: combined single limit bodily injury or
party damage of $1,000,000.00 per occurrence. Said policy
shall specifically provide that any other insurance coverage
which may be applicable to the PROJECT shall be deemed excess
coverage and that CONSULTANT'S insurance shall be primary.
Certificates of Insurance for said policies shall be approved
in writing by the AGENCY attorney prior to the commencement of
any work hereunder. All Certificates of Insurance (and the
policies of insurance or endorsements thereof) shall provide
5.
that no such Certificates and policies shall not be canceled
or modified without thirty (:30) days' prior written notice to
AGENCY.
11. INDEPENDENT CONTRACTOR
CONSULTANT is, and shall. be, acting at all times in the
performance of this Agreement as an independent contractor.
CONSULTANT shall secure at its expense, and be responsible for
any and all payments of all taxes, social security, state
disability insurance compensation, unemployment compensation
and other payroll deductions for CONSULTANT and its officer,
agents and employees and all business licenses, if any, in
connection with services to be performed hereunder.
12. TERMINATION OF AGREEMENT
All work required hereunder shall be performed in a good
and workmanlike manner. This. Agreement may be terminated by
either party on thirty (30) days written notice to the other.
The effective date of cancellation being the 30th day of said
written notice. Consultant. shall be entitled to the
compensation earned by it prior to the date of termination,
computed pro rata up to and including the date of
termination. Any termination of this Agreement by Agency
shall be made in writing through the Deputy Director of
Redevelopment, notice of which shall be delivered to
CONSULTANT as provided in Section 16 herein.
13. ASSIGNMENT AND SUBCONTRACTING
This Agreement is a personal service contract and the
supervisory work hereunder shall not be delegated by
CONSULTANT to any other person or entity without the consent
Of AGENCY.
6.
14. COPYRIGHTS/PATENTS
CONSULTANT shall not apply for a patent or copyright on
any item or material produced as a result of this Agreement as
set forth in 41 CFR 1-9.1.
15. AGENCY EMPLOYEES AND OFFICIALS
CONSULTANT shall employ no AGENCY official nor any
regular AGENCY employee in the work performed pursuant to this
Agreement. In accordance with California Government Code
Sections 1090 at seq., but sjbject to the exceptions therein
set forth, no AGENCY official or employee shall be financially
interested in nor derive any financial benefit, either
directly or indirectly, from this Agreement.
16. NOTICES
Any notices or special instructions required to be given
in writing under this Agreement shall be given either by
personal delivery to CONSULTANT'S agent (as designated in
Section 1 hereinabove) or to AGENCY Deputy Director of
Redevelopmente as the situation shall warrant, or by enclosing
the same in a sealed envelope, postage prepared, and
despositing the same in the United States Postal Services,
addressed as follows:
7.
TO CITY:
Douglas LaBelle
Dep. Director of Redevelopment
City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
17 ENTIRETY
TO CONSULTANT:
Calvin E. Hollis
Keyser Marston Associates, Inc.
550 S. Hill Street, Suite 980
Los Angeles, CA 90013-2410
The foregoing, and exhibit "A" attached hereto, set forth
the entire Agreement between the parties.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by and through their authorized officers
the day, month and year first above written.
ANT:
MARSTON ASSOC., INC. L _, -
NameATitle
ATTEST:
Agency Clerk
REVIEWED AND APPROVED:
ags: w, l s
Chief Executive Offic r
REDEVELOPMENT AGENCY OF THE
CITY OF HUNTINGTON BEACH
�,..•, VIP ; _ �..
APPROVED AS TO FORM:
ITIAT D AND APPR4
Deputy Director of
Redevelopment
8.
EKBIBIT A
SCOPE OF SERVICES
When and as directed by Agency; Consultant shall perform
consulting services for the project areas to include, but not be
limited to the following:
1. Consult, assist and advise the Agency with respect to
marketing , financial and disposition problems, including the
financial testing of land use and development concepts proposed by
potential developers.
2. Participate in formal and informal discussions and
presentations with potential developers and community officials:
3: Undertake limited evaluation of existing economic
feasibility studies and reuse appraisals.'
46' Undertake the refinement and expansion of marketing
strategy and tactics to meet new conditions as they develop.
5. Advise Agency when necessary in the preparation of
background information for presentation to developers and key
tenants of Agency developers.
6: Preparation of reuse reports as required by State law.
METHOD OF PERFORMANCE
Consultant shall perform the various services described herein
only as and when requested by the Agency and within a time
schedule as mutually agreed upon by the parties to the Agreement:
9.