HomeMy WebLinkAboutSEDWAY GROUP - 2001-03-05 CITY OF HUNTINGTON BEACH
2000 MAIN STREET CALIFORNIA 92648
OFFICE OF THE CITY CLERK
COWIlE BROCKWAY
CITYCLERK
LETTER OF TRANSNTITTAI,OF ITEiiT APPRON F,D BY TITF.CITY COUNCIL/
RFDEVF.I.0P11F.NT AGENCY OF THE CITY OF IIUN'TINGTOY REACII
DATE: March 12, 2001
TO: Sedway Croup ATTENTION,: Carol A. Fredholm
Name
355 South Grand Avenue, Suite 1200 DEPARTNIENT-
Street
Los Angeles, CA 90071-1549 REGARDING: Professional Services
City,Stan,Zip
Contract - Economic Advisor Services
See Attached Action Agenda Item F-4 Date of Approval 03-05-01
Enclosed For Your Records Is An Executed Copy Of The Above Referenced Agenda Item.
Remarks:
Connie Brockway
City ClerVAgency Clerk
Attachments: Action Agenda Page x Agreement x Bonds Insurance x
RCA Deed Other
CC: D. Biggs Econ. Dev. x x x
I erne Department RCA Agreement Insurance other
C. Runzel Econ. Dev. x x x
Nam Department RCA A`reenxnt Insurance Other
Name Depart rant RCA Agreement Insurance Other
Name Department RCA Agreement Insurance Other
C. Mendoza x x x
Risk Management Dept Insurance
i
(Tetephone:7 t4.536.5227)
Council/Agency Meeting Held: 43 05--01
Deferred/Continued to:
Ap roved 0 Conditionally Approved ❑ Denied 9tp• Clerk' ignature
ouncl Meeting Date: March 5, 2001 Department ID Num er. ED-Qi=08=.
CITY OF HUNTINGTON BEACH r"
REQUEST FOR COUNCIUAGENCY ACTION -�
SUBMITTED TO: HONORABLE MAYOR/AGENCY CHAIRMAN AND CITY COUNCIL
MEMBERSIREDEVELOPMENT AGENCY MEMBERS
SUBMITTED BY: RAY SILVER, City AdministratorlExecutive Directoro Lj rm
PREPARED BY: DAVID C. BIGGS, Economic Development Director'
SUBJECT: Approve Economic Consultant Agreements with Keyser Marston
and Associates, the Sedway Group, and the Rosenow, Spevacek
Group
Statement of Issue,Funding Source,Recommended Action,Alternative Actlon(s),Analysis,Environmental Status,Attachment(s)
Statement of Issue: The Department of Economic Development is requesting approval of
three professional services contracts for economic advisory services.
Funding Source: The $225,000 Is budgeted in Economic Development Department,
Administrative Economic Analysis Account 30580101.69325.
City_Council Recommended Action:
1. Approve and authorize the Mayor and the City Clerk to execute the contract between
the City of Huntington Beach and Keyser Marston and Associates (Attachment 'I) for an
amount not to exceed $75,000 per year.
Redevelopment Agency Recommended Action:
9. Approve and authorize the Chairman and the Agency Clerk to execute each of the two
attached contracts between the Redevelopment Agency and the following firms: the Sedway
Group (Attachment 2), and the Rosenow, Spevacek Group (Attachment 3) for an amount not
to exceed $75,000 per year.
Alternative Actions :
1. Do not appove one or more of these contracts.
Analysis:
In October 2000, the Department of Economic Development solicited requests for
qualifications and proposals from eight professional economic firms to provide a full
spectrum of professional services including real estate, redevelopment, and economic J
L.
REQITEST FOR COUNCIUAGENC�4CTION -
MEETING DATE: March 5, 2001 DEPARTMENT ID NUMBER: ED-01-08
development work. Economic advisory services are chiefly required for major commercial
and housing projects but are also needed from time to time depending on the Agency's need
to investigate a particular financial issue. Three firms were selected to providing
consultations in their various areas of expertise: Keyser Marston and Associates, the Sedway
Group, and the Rosenow, Spevacek Group. On January 9, 2001, the Economic
Development Committee was briefed on the selection and need for these consultants. Each
contract is for three years of service for an amount not to exceed $75,000 per year.
Appropriations for these professional services are approved through the annual budgetary
process. Each consultant has met the City's insurance requirements.
Professional services economic analysis may include:
• Advice in the negotiation (or renegotiations)of DDA's
• Determination of the level of financial assistance that is warranted for commercial and
residential projects
• Advice on the structure and financing techniques of Agency and developer obligations
• Review and verification of developer pro-formas
• Determination of the reuse value of project sites and preparation of summary reports
pursuant to Sec. 33433 of the California Health and Safety Code
• Comparative analysis of proposed projects in relation to the regional and national
markets.
• Advice in the structure of development proposal solicitations and review of proposals
submitted
• Advice on the market trends, product type and pricing of proposed market rate housing
and on the affordability of Agency subsidized housing for low and very-low income
households.
As these tasks require advanced economic expertise beyond current staffing levels, staff is
recommending the the Redevelopment Agency approve these contracts for professional
economic advisory services.
Environmental Status: Not applicable.
Attachment(s):
it Clerk's
:Page Num • � • . .
Professional Services Agreement between the City of Huntington
Beach and Keyser Marston and Associates
Z Professional Services Agreement between the Redevelopment
Agency and the Sedway Group
3 Professional Services Agreement between the Redevelopment
Agency and the Rosenow, S evacek Group
RCA Author: Runzel
ED0108 •2• 02/26101 11:19 AM
Professional Services Agreement between the Redevelopment
Agency and the Sedway Group
PROFESSIONAL SERVICES CONTRACT BETWEEN
THE REDEVELOPMENT AGENCY OF
THE CITY OF HUNTINGTON BEACH AND
SEDWAY GROUP
FOR
ECONOMIC ADVISOR SERVICES
Table of Contents
1 Scope of Services.....................................................................................................1
2 Designated Contacts.................................................................................................1
3 Time of Performance...............................................................................................2
4 Compensation..........................................................................................................2
5 Extra Work...............................................................................................................2
6 Method of Payment..................................................................................................2
7 Disposition of Plans, Estimates and Other Documents...........................................4
8 Hold Harmless .........................................................................................................4
9 Workers'Compensation Insurance............................................................................5
10 General Liability Insurance......................................................................................6
11 Professional Liability Insurance..............................................................................6
12 Certificates of Insurance..........................................................................................7
13 Independent Contractor............................................................................................8
I4Termination of Agreement.......................................................................................8
15 Assignment and Subcontracting...............................................................................9
16 Copyrights/Patents....................................................................................................9
17 City Employees and Officials..................................................................................9
18 Notices.....................................................................................................................9
19 Modification.............................................................................................................10
20 Captions...................................................................................................................10
21 Section Headings .....................................................................................................10
22 Interpretation of Agreement.....................................................................................10
23 Duplicate Original....................................................................................................11
24 Immigration..............................................................................................................11
25 Legal Senfices Subcontracting. ...............................................................................11
26 Attorney's Fees.........................................................................................................12
27 Entirety.....................................................................................................................12
PROFESSIONAL SERVICES CONTRACT BETWEEN
THE REDEVELOPMENT AGENCY OF
THE CITY OF HUNTINGTON BEACH AND
SEDWAY GROUP
FOR
ECONOMIC ADVISOR SERVICES
THIS Agreement is made and entered into this 5th day of March
42001,by and between the Redevelopment Agency of the City of Huntington Beach, a corporate
body,public and politic,hereinafter referred to as "AGENCY,'and SEDWAY GROUP,a
California corporation,hereinafter referred to as "CONSULTANT."
WHEREAS,AGENCY desires to engage the services of a consultant to provide
economic advisor services; and
Pursuant to documentation on file in the office of the City Clerk,the provisions of
the Huntington Beach Municipal Code, Chapter 3.03,relating to procurement of professional
service contracts have been complied with; and
CONSULTANT has been selected to perform said services,
NOW,THEREFORE, it is agreed by AGENCY and CONSULTANT as follows:
1. SCOPE OF SERVICES
CONSULTANT shall provide all services as described in the Request for
Proposal("RFP") and CONSULTANT's proposal dated October 20,2000(both of which are
hereinafter collectively referred to as Exhibit"A") which are attached hereto and incorporated
into this Agreement by this reference. These services shall sometimes hereinafter be referred to
as the"PROJECT."
2. DESIGNATED CONTACTS
AGENCY shall assign a staff coordinator to work directly with CONSULTANT
in the performance of this Agreement.
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3. TIME OF PERFORMANCE
Time is of the essence of this Agreement. The services of CONSULTANT are to
commence as soon as practicable after the execution of this Agreement and all tasks specified in
Section 1 shall be completed no later than three(3)years from the date of this Agreement. These
times may be extended with the written permission of AGENCY. The time for performance of
the tasks identified in Section I are generally to be shown in the Scope of Services on the Work
Program/Project Schedule. This schedule maybe amended to benefit the PROJECT if mutually
agreed by AGENCY and CONSULTANT.
4. COMPENSATION
In consideration of the performance of the services described herein,AGENCY
agrees to pay CONSULTANT on a time and materials basis at the rates identified on Exhibit
"A,"a fee not to exceed Seventy-five Thousand Dollars($75,000.00).
5. EXTRA WORK
In the event AGENCY requires additional services not included in Section 1,or
changes in the scope of services described in Section 1, CONSULTANT will undertake such
work only after receiving%written authorization from AGENCY. Additional compensation for
such extra work shall be allowed only if the prior written approval of AGENCY is obtained.
6. METHOD OF PAYMENT
A. CONSULTANT shall be entitled to progress payments toward the fixed
fee set forth herein in accordance with the progress and payment schedules set forth in Section 1.
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B. Delivery of work product: A copy of every memorandum, letter,report,
calculation and other documentation prepared by CONSULTANT shall be submitted to
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
AGENCY shall be deemed accepted.
C. CONSULTANT shall submit to AGENCY an invoice for each progress
payment due. Such invoice shall:
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 CONSULTANT's
firm that the work has been performed in accordance with the
provisions of this Agreement; and
S) For all payments include an estimate of the percentage of work
completed.
Upon submission of any such invoice, if AGENCY is satisfied that
CONSULTANT 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 withheld. If 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 the schedule of performance set forth in Section 1 shall be suspended
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V
until the parties agree that past performance by CONSULTANT is in,or has been brought into
compliance, or until this Agreement is terminated as provided herein.
D. Any billings for extra work or additional services authorized by AGENCY
shall be invoiced separately to AGENCY. Such invoice shall contain all of the information
required above, and in addition shall list the hours expended and hourly rate charged for such
.time. Such invoices shall be approved by AGENCY if the work performed is in accordance with
the extra work or additional services requested, and if AGENCY is satisfied that the statement of
hours worked and costs incurred 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 this 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 notices, calculations, maps, memoranda,
letters 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 the
PROJECT or as it otherwise sees fit. Title to said materials shall pass to AGENCY upon
payment of fees determined to be earned by CONSULTANT to the point of termination or
completion of the PROJECT,whichever is applicable. CONSULTANT shall be entitled to
retain copies of all data prepared hereunder.
8. HOL D HARMLESS
CONSULTANT shall protect,defend, indemnify and save hold harmless
AGENCY, its officers,officials, employees, and agents from and against any and all liability, loss,
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damage,expenses,costs(including without limitation,costs and fees of litigation of every nature)
arising out of or in connection with CONSULTANT's negligence or willful misconduct or its
failure to comply with any of its obligations contained in this Agreement by CONSULTANT,its
officers, agents or employees except to the extent such loss or damage which was caused by the
negligence or willful misconduct of AGENCY. AGENCY shall be reimbursed by
CONSULTANT for all costs and attorney's fees incurred by AGENCY in enforcing this
obligation.
9. WORKERS' COMPENSATION INSURANCE
Pursuant to California Labor Code Section 1861,CONSULTANT acknowledges
awareness of Section 3700 et seq. of said Code,which requires every employer to be insured
against liability for workers' compensation; CONSULTANT covenants that it will comply with
such provisions prior to commencing performance of the work hereunder; and shall indemnify,
defend and hold harmless AGENCY from and against all claims,demands,payments,suit,
actions,proceedings, and judgments of every nature and description, including attorney's fees
and costs presented,brought or recovered against the 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
CONSULTANT under this Agreement.
CONSULTANT shall maintain workers' compensation insurance in an amount of
not less than One Hundred Thousand Dollars(S100,000)bodily injury by accident,each
occurrence, One Hundred Thousand Dollars(5100,000)bodily injury by disease,each employee,
Two Hundred Fifty Thousand Dollars (5250,000)bodily injury by disease,policy limit.
CONSULTANT shall require all subcontractors to provide such workers'
compensation insurance for all of the subcontractors' employees. CONSULTANT shall furnish
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to AGENCY a certificate of waiver of subrogation under the terms of the workers' compensation
insurance and CONSULTANT shall similarly require all subcontractors to%vaive subrogation.
10. GENERAL LIABILITY INSURANCE
In addition to the workers' compensation insurance and CONSULTANT's
covenant to indemnify AGENCY,CONSULTANT shall obtain and furnish to AGENCY, a
policy of general public liability insurance, including motor vehicle coverage covering the
PROJECT. The policy shall indemnify CONSULTANT, its officers, agents and employees,
while acting within the scope of their duties,against any and all claims 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 S 1,000,000 per
occurrence. If coverage is provided under a form that includes a designated general aggregate
limit,the aggregate limit must be no less than $1,000,000 for this PROJECT. The policy shall
name AGENCY,its agents, its officers,employees and volunteers as Additional Insureds, and
shall specifically provide that any other insurance coverage which may be applicable to the
PROJECT shall be deemed excess coverage and that CONSULTANTF s insurance shall be
primary.
Under no circumstances shall the above-mentioned insurance contain a self-
insured retention,or a"deductible"or any other similar form of limitation on the required
coverage.
It. PROFESSIONAL LIABILITY INSURANCE
CONSULTANT shall furnish a professional liability insurance policy covering
the work performed by it hereunder. Said policy shall provide coverage for CONSULTANT's
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professional liability in an amount not less than S1,000,000 per occurrence and in the aggregate.
A claims-made policy shall be acceptable if the policy further provides that:
A. The policy retroactive date coincides with or precedes the initiation of the
scope of work (including subsequent policies purchased as renewals or
replacements).
B. CONSULTANT will make every effort to maintain similar insurance
during the required extended period of coverage following project
completion, including the requirement of adding all additional insureds.
C. if insurance is terminated for any reason, CONSULTANT agrees to
purchase an extended reporting provision of at least two (2)years to report
claims arising from work performed in connection with this Agreement.
D. The reporting of circumstances or incidents that might give rise to future
claims.
12. CERTIFICATES OF INSURANCE
Prior to commencing performance of the work hereunder,CONSULTANT shall
furnish to AGENCY certificates of insurance subject to approval of the City Attorney evidencing
the foregoing insurance coverages as required by this Agreement;the certificates shall:
A. provide the name and policy number of each carrier and policy;
B. state that the policy is currently in force; and
C. promise that such policies shall not be suspended,voided or canceled by
either party, reduced in coverage or in limits except after thirty(30)days'
prior written notice;however,tcn(10)days' prior written notice in the
event of cancellation for nonp3vment of premium.
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CONSULTANT 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 insurance coverages shall not derogate
from the provisions for indemnification of AGENCY by CONSULTANT under the 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. CONSULTANT shall pay, in a prompt and timely manner,the
premiums on all insurance hereinabove required.
13. INDEPENDENT CONTRACTOR
CONSULTANT is, and shall be, acting at all times in the performance of this
Agreement as an independent contractor herein and not as an employee of the AGENCY.
CONSULTANT shall secure at its expense,and be responsible for any and all payment of all
taxes, social security,state disability insurance compensation,unemployment compensation and .
other payroll deductions for CONSULTANT and its officers, agents and employees and all
business licenses, if any, in connection with the services to be performed hereunder.
14. TERMINATION OF AGREEMENT
All work required hereunder shall be performed in a good and workmanlike
manner. AGENCY may terminate CONSULTANT's services hereunder at any time with or
without cause,and whether or not PROJECT is fully complete. Any termination of this
Agreement by AGENCY shall be made in writing,notice of which shall be delivered to
CONSULTANT as provided herein. In the event of termination, all finished and unfinished
documents,exhibits,report,and evidence shall,at the option of the AGENCY,become its
property and shall be delivered to it by CONSULTANT.
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15. ASSIGNMENT AND SUBCONTRACTING
This Agreement is a personal service contract and the supervisory work hereunder
shall not be delegated by CONSULTANT to any otter person or entity without the express
written consent of AGENCY.
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. AGENCY EMPLOYEES AND OFFICIALS
CONSULTANT shall employ no AGENCY official nor 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 the applicable
provisions of the California Government Code.
18. NOTICES
Any notice 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's Director of Economic Development as the situation
shall warrant, or by enclosing the same in a sealed envelope,postage prepaid, and depositing the
same in the United States Postal Service,addressed as follows:
TO AGENCY: TO CONSULTANT:
Redevelopment Agency of the Ms. Carol A. Fredholm
City of Huntington Beach Sedway Group
Director of Economic Development 355 South Grand Ave., Suite 1200
2000 Main Street Los Angeles,CA 90071-1549
Huntington Beach,CA 92648
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19. MODIFICATION
No waiver or modification of any language in this Agreement shall be valid
unless in writing and duly executed by both parties.
20. CAPTIONS
Captions of the sections of this Agreement are for convenience and reference
only, and the words contained therein shall in no way be held to explain,modify,amplify or aid
in the interpretation,construction or meaning of the provisions of this Agreement
21. SECTION IIEADINGS
The titles,captions, section,paragraph,subject headings and descriptive phrases
at the beginning of the various sections in this Agreement are merely descriptive and are
included solely for convenience of reference only and are not representative of maters included
or excluded from such provisions, and do not interpret,define, limit or describe, or construe the
intent of the parties or affect the construction or interpretation of any provision of this
Agreement.
22. INTERPRETATION OF THIS AGREEMENT
The language of all parts of this Agreement shall in all cases be construed as a
whole, according to its fair meaning,and not strictly for or against any of the parties. If any
provision of this Agreement is held by an arbitrator or court of competent jurisdiction to be
unenforceable,void,illegal or invalid,such holding shall not affect the remaining covenants and
provisions of this Agreement. No covenant or provision shall be deemed dependent upon any
other unless so expressly provided here. As used in this Agreement,the masculine or neuter
gender and singular or plural number shall be deemed to include the other whenever the context
so indicates or requires. Nothing contained herein shall be construed so as to require the
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commission of any act contrary to law,and wherever there is any conflict between any provision
contained herein and any present or future statute, la«•,ordinance or regulation contrary to which
the parties have no right to contract,then the latter shall prevail, and the provision of this
Agreement which is hereby affected shall be curtailed and limited only to the extent necessary to
bring it within the requirements of the law.
23. DUPLICATE ORIGINAL
The original of this Agreement and one or more copies hereto have been prepared
and signed in counterparts as duplicate originals, each of which so executed shall, irrespective of
the date of its execution and delivery,be deemed an original. Each of the parties hereto shall
retain an originally signed copy hereof. Each duplicate original shall be deemed an original
instrument as against any party who has signed it.
24. IMMIGRATION
CONSULTANT shall be responsible for full compliance with the immigration
and naturalization laws of the United States and shall, in particular,comply with the provisions
of the Unitetl States Cotle regarding employment verification.
25. LEGAL SERVICES SUBCONTRACTING PROHIBITED
CONSULTANT and AGENCY agree that AGENCY 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. CONSULTANT understands that
pursuant to Huntington Beach City Charter Section 309,the City Attorney/Agency General
Counsel is the exclusive legal counsel for AGENCY; and AGENCY shall not be liable for
payment of any legal services expenses incurred by CONSULTANT.
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�i
26. ATTORNEY'S FEES
In the event suit is brought by either party to enforce the terms and provisions of
this Agreement or to secure the performance hereof,each party shall bear its own attorney's fees.
27. EN71RETY
The Agreement contains the entire agreement between the parties respecting the
subject matter of this Agreement and supercedes all prior understanding and agreements whether
oral or in writing. The foregoing sets 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 offices the day,month and year first above written.
CONSULTANT REDEVELOPMENT AGENCY OF THE
SEDWAY GROUP,a CITY OF HUNTINGTON BEACH, a
California c oration corporate body, public and politic, /-
By: TH�'1 ,oat WL
'��� -�• F"'� Chaff an
Pr nt namc��
ITS: (circle one)Chairman[Presi ntNicc Presid t
ATTEST: `
rD a�AA
7L
Agency Cleric �- -
By:
APPROVED AS TO FORM: -
pri name
ITS: (circle one)Seerer ief Fi ancial Office Asst. n
Secretary—Treasurer _ �►C __ 7�ys�/°f
�Tgency General Counsel ��
.�oI?l
REVIEWED AND APPROVED: INITJiYTEDAND APPROV D:
Execu 1ve Director 4Dircctor of Economic Develop erlt
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V L,
EXHIBIT A
SEDWAY GROUP
Real Estate and Urban Economics
PROPOSAL TO
PROVIDE ECONOMIC
ADVISORY
SERVICES
Prepared by:
SEDWAY GROUP
FOR THE
REDEVELOPMENT AGENCY OF THE CITY OF
HUNTINGTON BEACH
OCTOBER 2000
SEDWAY GROUP
Real Estate and urban Economics
I. STATEMENT OF QUALIFICATIONS
INTRODUCTION
This proposal summarizes the experience of Sedway Group and its qualifications to provide economic
consulting services to the City of Iuntington Beach.This submission describes our firm's approach to
the various kinds of consulting assignments. Sedway Group has over 20 years of experience in
providing economic consulting services to many of the most successful public-sponsored development
and redevelopment projects in California.
GENERAL SEDWAY GROUP QUALIFICATIONS
Sedway Group is well qualified to assist the City of lluntirgton Beach Redevelopment Agency in this
matter. Founded in 1978, Sedway Group is a nationally recognized full-service real estate and urban
economics consulting firm with offices in Los Angeles and San Francisco. In November 1999,
Sedway Group became a subsidiary of CB Richard Ellis, a full-service international real estate
services firm. Although the Sedway Group name will remain, this association provides the firm with
access to in-depth research and other resources unrivaled among real estate consulting firms that
enhance our ability to provide quality client services.
Sedway Group has extensive experience with public sector clients and broad expertise in the services
described in the RFQ.The firm offers various consulting services to several public sector clients on an
as needed basis. We are on the bench of consultants for: Los Angeles County Metropolitan
Transportation Authority,Los Angeles Community Redevelopment Agency,Los Angeles Community
Development Commission,Los Angeles County Housing Authority,and Los Angeles County Beaches
and Harbors, as well as for the City of Huntington Beach. The enclosed list identifies other public
entities for whom we have conducted assignments. We provide our clients with market assessments,
financial projections, and economic analyses based upon our extensive experience with all facets of
real estate and its place in the economy. '
EXPERTISE, SKILLS,AND CAPABILTIE$
The strength of Sedway Group's practice is derived from the firm's strong complement of seasoned
professionals, each with specialized real estate industry knowledge and experience. The firm's
professional staff has substantial experience as valuation, market, and financial analysts, as well as in
economic development, real estate investment and development, and asset management. Sedway
Group draws upon an established knowledge base yet is innovative in formulating new solutions to
constantly evolving real estate challenges. Our multidisciplinary approach to solving complex real
estate challenges generates cutting-edge solutions that maximize investor and community returns on
real estate assets. Our capabilities are further augmented by many quality colleagues at CB Richard
Ellis.
Seduray Group offers expertise in all major land uses (residential, retail, office, research and
development, industrial, hotel, and mixed use), and t.11ie firm is a recognized national leader in
specialized areas such as entertainment retail, transit-oriented development, public/private
1
� v
SEDWAY GROUP
Real Estate and Urban Economics
transactions, redevelopment, and economic revitalization. Our services include the following major
real estate consulting areas:
Afarket Research and Analysis - Market supply and demand projections, highest and best use
studies,tenant mix studies,product and pricing recommendations,development strategies.
Financial Analysis - Pro forma projections, due diligence, financial modeling, financial and
development feasibility studies,land residual analysis,transaction structuring.
Real Estate Strategy and Asset ltlanagement - Asset evaluation and positioning, acquisition
and disposition strategies, strategic business plans, portfolio review, negotiation support,
RFP/RFQ preparation and developer selection.
Economic and Fiscal Impact- Economic analyses, fiscal impact analyses,economic multiplier
studies.
Xegodafien and Public Private Partnerships -Analysis and structuring for public and private
sector clients.
Economic Development and Redevelopment - Community based economic development,
neighborhood and commercial'revitalization, business attraction and retention, economic base
and target industry analyses,public/private ventures,military base reuse. .
Valuation Services - Narrative appraisals for financing, valuations for strategic business
planning,appraisal review,appraisal process management.
Litigation Support and Expert Winess Testimony - Case research and analysis,expert witness
testimony.
CLIEN-r BASE
Sedway Group's broad skill base has enabled the firm to develop a national clientele comprising a
wide array of private and public sector clients,including investors,advisors,and financial institutions;
local, county, regional, state, and federal gove'rnmerts; corporations; developers; law firms;
foundations and universities.Representative clients in each of these categories include the following:
Local and County Governments - Columbia, SC; Denver, CO; Huntington Beach; Los
Angeles; Oakland; Phoenix, AZ; Portland, OR; Sacramento; San Diego; San Francisco; San
Jose;Santa Barbara; St. Louis,MO; Spokane,%VA.
Other Governmental Agencies - National Park Service, Bay Area Rapid Transit District;
California Department of Justice;Federal Deposit Ir:surance Corporation; Golden Gate National
Parks Association; Los Angeles Metropolitan Transit Authority; Santa Clara Valley
Transportation Authority; Stapleton Development Corporation, Denver, CO; U.S. Department
of Housing and Urban Development; U.S. Department of Labor; U.S. General Services
Administration.
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Developers - Bohannon Development Company, Burnham Pacific Properties, Inc.; Catellus
Development; LCOR; Forest City Development; Kaufman & Broad; The Koll Company;
Lincoln Property Company; Millennium Partners; Sobrato Development; William Wilson and
Associates.
Foundations and Educational Institutions - DaNies Medical Center,James Irvine Foundation,
Stanford University,University of California at San Francisco, University of California at Santa
Barbara, University of California Regents; San Francisco State University; California
Polytechnic University,San Luis Obispo,University of California Berkeley.
Investors, Advisors, and Financial Institutions - Washington Mutual, AEW Capital
Management; ANIB Institutional Realty Advisors, Inc.; Bank of America; Citibank;
Construction Lending Corporation; Embarcadero Center, Equitable Real Estate Investment
Management; Estate of James Campbell; GE Capital Investment Advisors; Hearthstone
Advisors; Jones Lang Wootton; Metropolitan Life Insurance; Pacific Bank; RREEF Funds;
Tiger Real Estate Partners.
Corporations - Cisco Systems, Apple Computers, Inc.; Fireman's Fund Corp.; Ford Motor
Land Development;IIewlett•Packard Company; Lucasfilm; Pacific Gas and EIectric Co.; Santa
Cruz Seaside Company; Siemens; Silicon Graphics; Sony; Squaw Valley Associates; Sun
Microsystems;Tandem Computers.
La)P Firms - Bianchi, Engel, Keegin & Talkington; Brobeck, Phleger & Harrison; Coblentz,
Patch, Duffy&Bass; Ellman Burke Hoffman &Johnson; Hale and Dorr; Hoge, Fenton, Jores
& Appel; Howard Rice Nemerovski Canady Falk & Rabkin; Latham & Watkins; McCutchen,
Doyle, Brown & Enersen; Morrison & Foerster; Orrick, Herrington & Sutcliffe; Pillsbury
Madison&Sutro;Sidley&Austin; Steefel,Levitt&Weiss;Weil,Gotshal&Manges.
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Real Estate and Urban Economics
II. SUMMARY OF RELEVANT ASSIGNMENTS
Sedway Group's successful completion of similar assignments over more than 20 years is the best
documentation of the firm's ability and resources to provide the services sought by the Agency. The
firm is qualified to provide all the services requested in the RFQ and is willing to provide further
services not indicated in the RFQ,should the need arise.
Following,by the categories outlined in your RFQ,are summaries of Sedway Group's approach to the
type of assignments identified in the RFQ that are especially relevant to the anticipated scope of
services.Specific Sedway Group qualifications are described for the following types of projects:
A. RFPIRFQ Preparation and Developer Solicitation
B. Developer Evaluation and Selection
C. Developer Negotiations
D. Pro Forma Analysis
E. Gap Analysis
F. Housing Market Study(product characteristics,pricing,etc.)
G. Reuse Value Determination
H. Comparative(Market)Analysis of Projects
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SEDWAY GROUP
Real Estate and Vrban Economics
A. RFP PREPARATION AND DEVELOPER SOLICITATION
Services
RFP Preparation. Sedway Group is highly experienced in preparing successful RFPs for both public
and private-sector entities. This process is sometimes handled almost exclusively by Sedway Group
with review and comments from the client; or,alternatively,the client can do most of the preparation
with review and comments coming from Sedway Group.There is a wide range of production options
that will greatly affect the budget. We have developed RFPs extending through the whole spectrum
(e.g., black and white text with no pictures to a high-duality artistically produced brochure with
numerous photos and graphics).
Working in collaboration with the Agency, the initial step would be to create a general RFP outline.
Sedway Group can assist the Agency in determining what its requirements are and provide input based
on our real estate experience. We can also focus on content, text flow, and use of language. The
purpose of this task is to ensure that the Agency clearly communicates its minimum requirements and
identifies the information it is seeking from potential tenants and developers, including conceptual
proposal, qualifications and experience, financial capacity, and acceptance of minimum business
terms.
Developer Solicitation. Sedway Group has been involved with developer selections for all types of
developments. In some cases, a client desires a very focused effort directed to a limited number of
potential developers. In other cases, clients desire to cast a wide net soliciting qualifications from
many developers.We can work with the Agency to determine the appropriate strategy.
Sedway Group can generate a mailing list for the targeted distribution of the RFP.The mailing list can
be compiled from a variety of sources, including media publications, industry contacts, Sed-Amy
Group's databases,the Agency's contacts,and other research.
Developer Interface. Between the issuance of the RFP and the receipt of proposals, there is likely to
be substantial interface with potentially interested developers. This can take the form of questions
from interested parties and/or a scheduled informational presentation on-site. This interface can be
handled by the Agency personnel or Sedway Group (or a combination), depending on the time
constraints faced by the Agency. ,
Staffing
Senior Managing Director Tom Jirovsky and Managing Director Carol Fredholm would be responsible
for RFP Preparation and Developer Solicitation. They would be supported by Carolyn Hull, William
Chun and others as appropriate.
Examples of Representative Assignments
The Presidia Trust/Strategic Afarketing and Leasing. The Presidio of San Francisco, a former
military post dating back to 1776,is now a unique addition to our country's National Park system.
Sedway Group assisted the Presidio Trust with its m2rketing and leasing strategy for the 23-acre
Letterman Complex site, which will be redeveloped to include an approximate 900,000-square-
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Real Estate and Urban Economics
foot new campus for Lucas Digital Arts.The site is the largest ground lease the Presidio Trust will
be offering for new construction. Sedway Group prepared targeted national mailing lists, strategic
marketing materials,and a 30-page,professionally designed Request for Qualifications.The firm's
marketing effort resulted in high-quality submittals from 10 experienced and well-financed real
estate developers.From this list, Sedway Group assisted the Trust with the selection of a short list
and preparation of a Request for Proposal.
• The Presidio Trust/,'Llaster Developer Evaluations L Sedway Group helped the Presidio Trust of
San Francisco evaluate responses to a Request for Qualifications (RFQ) issued in fall of 1998 to
ground lease and develop The Letterman Complex,a 23-acre site within the Presidio,a 1,480-acre
national park in San Francisco. Sedway Group reviewed and evaluated the qualifications of the
master-lease teams based on the criteria outlined in the RFQ. Sedway Group's evaluation process
included a review of each submission and financial information. Additionally, Sedway Group
called financial and public sector references for each master-tenant team. The primary focus of
this phase of the evaluation was to identify teams with the required experience and financial
capacity to complete a project compatible with the Presidio Trust's goals. Sedway Group is
currently assisting the Presidio Trust with the Request for Proposals(RFP)phase of the developer
selection process. In this phase, issues such as development program, design, specific
sustainability plans,and financial terms are the primary focus of the review process.
• California State University—San Bernardino. Sedway Group was retained by the University to
coordinate an RFQ leading to an RFP process for the selection of a developer for a new on-
campus student housing project. 'Sedway Group drafted both the RFQ and RFP,provided scoring
matrices for the University, and assisted in the developer selection process. Sedway Group was
also a part of the team negotiating a final agreement with the selected developer.
• California State Polytechnic Ponrona University:The University had a 60-acre parcel adjacent to
the main campus that was not needed for core academic purposes. The University desired the
development of a University-oriented business park on the site. Sedway Group was retained by
the University to coordinate an RFQ leading to an RFP process for the selection of a developer
that would ground lease the land and develop the business park. Sedway Group draftcd both the
RFQ and RFP, provided scoring matrices for the University, and assisted in the developer
selection process. Sedway Group was also a part of Lhe team negotiating a final agreement with
the selected developer.
• College of the Canyons,Santa ClaritalDeveloper Selection. Sedway Group prepared and issued a
developer solicitation for a ground lease development opportunity of a ten-acre surplus site owned
by the College in this rapidly growing north Los Angeles county suburb. Sedway Group
recommended a "short list" of three highly qualified developers, evaluated their final proposals,
and advised and participated in the negotiation of the ground lease with the selected developer.
• Redondo Beach City School DistriaNurplus Sites. Sedway Group staff negotiated complex
development approvals for two surplus school sites.n.e agreement included an abandonment of a
right-of-way,a land swap,and a commitment to bond financing by the city.Uses approved for the
sites included a senior congregate care facility,senior apartments,commercial retail development,
and a neighborhood park. We prepared the RFQ, REP, and marketing materials in conjunction
with Redevelopment Agency officials and also evaluated development proposals, recommended
developers,and structured ground leases for all uses.
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SEDWAY GROUP
Real Estate and Urban Economics
• Richmond Redevelopment Agenc}l0ot Center. Sedway Group developed a strategy and plan for
the marketing and disposition of four Agency-owned parcels in Richmond's City Center. We
analyzed various disposition strategies including long-term ground lease, direct sales, and joint
public/private venture and developed an RFP that included promotional data, development
objectives, submission requirements, and selection criteria. The plan resulted in the development
of a BRIDGE affordable housing project.
• Ross Valley Sanitary DistricMarin CounV. Sedway Group participated in conceptualizing five
alternative mixed-use land patterns for a I0-acre site.As part of this work,we conducted a highest
and best use study, marketability analysis, and an appraisal of the site; analyzed potential ground
leasing of the commercial portion of the site; concluded the highest and best use to be office and
townhome mixed-use development; and conducted a full appraisal as such. In addition, we
prepared the RFQ and RFP and marketed the site for sale or]ease.
• San Francisco State University (SM91Student dousing Developer Selection — pillage at
Centennial Square. Sedway Group assisted SFSU Residential Development with the selection of
a development team qualified to develop and manage a 750 bed new student apartment unit on
campus.As part of this process, Sedway Group prepared a brief residential market analysis, wrote
the Request for Qualifications (RFQ), and developed a marketing strategy. Sedway Group
_ _evaluated all of the qualification packages, including reference calls,and recommended a short list
of qualified teams.Currently,we are in the process of writing the Request for Proposals(RFP)and
will be involved in the upcoming interviews,final selection,and negotiation process.
• Sulphur Springs School DistrialSanta L7arita Canyon Springs Shopping Center. Sedway Group
has for a period of years been serving the Sulphur Springs School District in connection with the
ground lease of a retail site on Soledad Canyon Road in Santa Clarita. Sedway Group has been
involved in the entitlements,RFP process,developer selection and ground lease negotiation for a
shopping center of approximately 100,000 square feet anchored by a supennarket and a drug store.
The process has been highly protracted due to financial difficulties that caused the abandonment of
the project by the initial lessee, and negotiations are now underway for a replacement project. In
this project, perhaps more than most, Sedway Group has been intimately involved with the
financing of the center, dealing directly with a wide range of lenders and equity sources. In the
course of reconstructing the transaction in light of the difficult financing market,Sedway Group is
specifically examining separately the supportable land values associated with the grocery anchor
tenant,the drug anchor tenant,and the shop and pad spaces.
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Real Estate and Urban Economics
B. DEVELOPER EVALUATION'AND SELECTION
Services
In evaluating developer proposals, it is important to establish clear evaluation criteria. In addition,
proposers should be asked for common sets of information by which their creditworthiness, mission,
experience, and revenue implications can be evaluated. Tlie purpose of this task would be to identify
and document those evaluation criteria for incorporation into all solicitation materials. In order to
facilitate subsequent review of proposals, it is especially important to establish both minimum and
prioritized criteria. A weighted evaluation system would be formulated prior to submission of
developer proposals to ensure an objective evaluation process.
Sedway Group can review and evaluate all responses to the RFP.The first stage in the review process
would be to evaluate the proposals based on their responsiveness to the Agency's minimum
requirements, outlined in the RFP itself. Responses that satisfy these minimum requirements would
enter the second stage of the review process. During this more in-depth stage, Sedway Group can
evaluate financial statements, contact references,review relevant experience, and assess the revenue-
generation potential of the concept proposals. A matrix and short report summarizing the qualified
responses can be prepared.
An.evaluation matrix and short report can be developed to help the Agency select a handful of
respondents(the"short list')to interview and, if desired, invite to submit more detailed development
proposals,The summary matrix would highlight the Agency's major evaluation criteria, including
conceptual proposal, qualifications and experience, financial capacity, and minimum business terms.
A scoring system can be implemented to provide a quantitative evaluation measure. A short report
would outline the major strengths and weaknesses of each respondent, summarize the quantitative and
qualitative assessment of each respondent, and make a recommendation for the short list, or optimal
development team. If desired, Sedway Group can also o_chestrate development team interviews to
facilitate the developer selection process.
Stalling
Senior Managing Director Tom]irovsky and Managing Director Carol Fredholm would be responsible
for Developer Evaluation and Selection with support by hurt Fuchs, Carolyn Hull, William Chun and
others as appropriate.
Examples of Representative Assignments
• College of the Canyons,Santa Clarita/Develaper Selection. Scdway Group prepared and issued a
developer solicitation for a ground lease development opportunity of a ten-acre surplus site owned
by the College in this rapidly growing north Los Angeles county suburb. Sedway Group
recommended a "short list" of three highly qualified developers, evaluated their final proposals,
and will subsequently advise and participate in the negotiation of the ground lease with the
selected developer.
• The Presidio Trus0i faster Developer Evaluations 11. Sedway Group is currently assisting the
Presidio Trust of San Francisco select a developer to lease and rehabilitate the historic public
health service hospital complex, a 36-acre site that contains more than 400,000 square feet of
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SEDWAY GROUP
Real Estate and Urban Economics
diverse commercial and residential space.The Presidio Trust was established in 1996 to preserve
the 1,480-acre park and ensure that it iS financially self-sufficient by 2013. Toward that end, the
Presidio Trust plans to lease more than three million square feet of new and historic building space
and 1,600 housing units. Sed% ay Group is currently helping the Presidio Trust prepare a targeted
national mailing list for the site and a professionally designed Request for Qualifications (RFQ),
based largely on a previous RFQ that Sedway Group developed for the park's Letterman Complex
site. Sedway Group will also be helping the Presidio Trust throughout the developer selection
process, including during the submittal evaluation, developer interview, and final negotiation
phases.
• California State Polytechnic Pomona Univershty.The University had a 60-acre parcel adjacent to
the main campus that was not needed for core academic purposes. The University desired the
development of a University-oriented business park on the site. Sedway Group was retained by
the University to coordinate an RFQ leading to an RFP process for the selection of a developer
that would ground lease the land and develop the business park. Sedway Group drafted both the
RFQ and RFP, provided scoring matrices for the University, and assisted in the developer
selection process. Sedway Group was also a part of Cie team negotiating a final agreement with
the selected developer.
• Santa Clara Valley Transportation Authority/Ohlone Chynoweth Station Area Development
Sedway Group assisted the Santa Clara Valley Transportation Authority with attracting affordable
" "housing development to surplus transit district property adjacent to the existing Ohlone-
Chynoweth light rail transit station.We provided economic assistance to site planners developing
conceptual site plans for the property and managed the Agency's developer solicitation process
through the development, issuance, and evaluation of a Request for Proposals. Upon developer
selection,we provided technical support to the negotiations process.
• Sulphur Springs ScIsool District/Santa Clarita Canyon Springs Shopping Center. Sedway Group
has for a period of years been serving the Sulphur Springs School District in connection with the
ground lease of a retail site on Soledad Canyon Road in Santa Clarita. Sedway Group has been
involved in the entitlements,RFP process, developer selection and ground lease negotiation for a
shopping center of approximately 100,000 square feet anchored by a supermarket and a drug store.
The process has been highly protracted due to financial difficulties that caused the abandonment of
the project by the initial lessee, and negotiations are now underway for a replacement project. In
this project, perhaps more than most, Sedway Group has been intimately involved with the
financing of the center, dealing directly with a wide range of lenders and equity sources. In the
course of reconstructing the transaction in light of the difficult financing market, Sedway Group is
specifically examining separately the supportable land values associated with the grocery anchor
tenant,the drug anchor tenant,and the shop and pad spaces.
• Berkeley'Alhany Y31CA/Central Branch Expansion. When a 30,000-square-foot parcel adjacent
to the Central Branch of the Berkeley YMCA was foreclosed on by the Bank of America, the
YMCA saw a once-in-a-lifetime opportunity to expand. Sedway Group advised on negotiation of
the acquisition from the bank's REO department, assisted the YMCA in defining its long-term
facility needs, and aided in soliciting and selecting a developer. This effort included preparing a
Request for Proposal,evaluating four developer proposals,and negotiating the transaction with the
selected developer.This transaction was very complex in that it included a sale of land, a sale of
air rights, and a joint design and development agreement between the parties. Scdway Group
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SEOWAY GROLIP
Real Estate and Urban Economics
managed the project through the city approvals and environmental review processes and served as
the YMCA's continuing liaison with the'developer.
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SEDWAY GROUP
Real Estate and Urban Economics
C. DEVELOPER NEGOTIATIONS
Services
Sedway Group can provide ongoing consultation to the Agency to assist with developer negotiation,
including supplemental financial analysis, solicitation of additional materials, supplemental market
analysis, advice with Developer and Disposition Agreements, and other activities as requested by the
Agency.The role of Sedway Group in developer negotiations can take many forms, depending on the
needs of the Agency. Sedway Group can act as a support function to the City and your legal counsel,
or we can take the lead on behalf of the Agency. Sedway Group can attend all negotiation meetings
with the Agency representatives, including your legal counsel, in order to implement the Agency's
objectives. In addition, Sedway Group can work with the agency's legal counsel to draft appropriate
development agreement documentation.
As negotiations proceed, it is likely that key elements in negotiation terms will be discussed and
possibly modified. Sedway Group can actively participate in these discussions and can be responsible
for financial modeling to assess the financial impact of such changes. Most importantly, Sedway
Group can work closely as part of the negotiating team to assure that economic and non-economic
terms are fully explored and negotiated to protect the interest of the Agency.Throughout this process,
Sedway Group representatives can continue to modify the financial analysis, which would depict any
changes and establish the sensitivity of the government returns to different scenarios under different
development agreement terms.
Staffing
Senior Managing Director Tom Jirovsky and Managing Director Carol Fredholm would be responsbile
for these services,with support by Carolyn Hull,William Chun,and others as appropriate.
Examples of Representative Assignments
• Los Angeles County Department of Beaches and HarborslVestar Entertainment Retail Project.
Vestar, a major Southern California retail developer was selected by the Department to develop a
new entertainment-anchored "lifestyle retail center"on one of two "catalytic sites" in Marina del
Rey, a 400 plus acre master planned development on property owned by Los Angeles County.
Sedway Group is advising the Department on the structuring and negotiation of the terms of the
long term participating ground lease with Vestar. In addition to the ground lease, Sedway will
advise the Department assess the desirability and feasibility of providing tax exempt financing of
parking for the project.
• Los Angeles County Department of Beaches and tdarbors/Playa Lista Area A Negotiations.
Playa Capital, the master developer of Playa Vista,one of the largest master planned communities
in Southern California has requested that the Department of Beaches & Harbors grant them the
right to acquire an easement,and construct a subterranean water channel which would allow Playa
Capital to create an interior lake, converting its Area A into a water-oriented community -- thus
enhancing the value of the development project. Sed-way Group is advising the Department on
how to define the nature and amount of that enhanced value; and to subsequently negotiate the
compensation for the Department's granting of the casement.
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SEDWAY GROUP
Real Estate and Urban Economics
Los Angeles County Department of Beaches and Ilarbors/Aliscellaneous Consulting. Sedway
Group was retained to advise the Los Angeles County Department of Beaches and harbors on
various economic issues related to real property within its jurisdiction. Sedway Group is advising
the Department on the renewal and restructuring of ground leases,the market feasibility of various
development proposals, asset management strategies and policies, and appraisal review and
evaluation.We are also providing assistance in complex financial negotiations with private sector
investors. Specific project involvement includes the Playa Vista project and a range of apartment,
catalytic entertainment-retail projects,and marina properties located in Marina del Rey.
• Berkeley Albany YMCA/Central Branch Expansion. When a 30,000-square-foot parcel adjacent
to the Central Branch of the Berkeley YMCA was foreclosed on by the Bank of America, the
YMCA saw a once-in-a-lifetime opportunity to expand. Sedway Group advised on negotiation of
the acquisition from the bank's REO department, assisted the YMCA in defining its long-term
facility needs, and aided in soliciting and selecting a developer. This effort included preparing a
Request for Proposal,evaluating four developer proposals,and negotiating the transaction with the
selected developer.'Ibis transaction was very complex in that it included a sale of land, a sale of
air rights, and a joint design and development agreement between the parties. Sedway Group
managed the project through the city approvals and environmental review processes and served as
the YMCA's continuing liaison with the developer.
• Pacifte Harvest SeafoodsliVegotiation Strategy.Sed%%-jy Group advised a small industrial building
- 'owner preparing for negotiations with a real estate developer. The developer, a builder of
apartment communities,was interested in acquiring the building and site for redevelopment as part
of a larger assemblage within the Midtown area of San lose.Midtown was once a major industrial
area with a cluster of food-processing uses; subsequent decline of industrial uses has since led to
the creation of a specific plan for the neighborhood.The specific plan calls for a mix of transit-
oriented residential and office uses that take advantage of the Diridon CalTrain Station, a focal
point of the neighborhood. While Midtown is not within a redevelopment area, several private
developers have begun assembling parcels within the area to take advantage of the higher density
and new uses allowed under the specific plan.
• Sacramento dousing and-Redevelopment AgencylNegotiation Support and Developer
Evaluation. Sedway Group assisted the Sacramento housing and Redevelopment Agency in
evaluating three alternative hotel development proposals for various sites in downtown
Sacramento. We analyzed each developer's proposal in terms of level of subsidy requested from
the Agency,consistency with the Agency's objectives,and the reasonableness of construction cost
and financial projections in the pro formas. however,after we recommended a developer and site
to the Agency,the development program shifted from hotel to an office,retail and cinema project
due to the emergence of another viable hotel site downtown.We ultimately assisted in the negotia-
tions between the Sacramento housing and Redevelopment Agency and Lankford and Taylor, a
Sacramento developer.Sedway Group provided financial analysis and negotiation support relative
to the proposed 250,000-square-foot office building,which included a movie theater and a ground-
floor-retail component.We analyzed the financial feasibility of each project component separately
to determine the appropriate level of Redevelopment Agency assistance required to make the
project feasible. By analyzing the project separately, we determined that as proposed by the
developer,the Agency would have subsidized a substantial portion of the office component,which
was not the Agency's intent.
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Real Estate and urban Economics
• Weiner, E&Macy's San Rafael Building Negotiation. Sedway Group assisted in complex
negotiation between the building owner,'Macy's,and tl.e San Rafael Redevelopment Agency.The
negotiation resulted in the sale of the 52,000-square-foot retail building and the adjacent parking
lot to the Redevelopment Agency. The analysis was complicated by the fact that Macy's had
violated the terms of the lease by vacating the building without an acceptable replacement,
although Macy's lease term continued until 2007.Additionally,the building and adjacent parking
lot were under separate ownership. Sedway's role included valuations of(1) the retail building
with Macy's lease; (2) the retail building without Macy's lease; (3) the parking lot; and (4) the
retail building and parking lot.The negotiation resulted in a favorable settlement for the client and
allowed the Redevelopment Agency to proceed with the redevelopment of the very important
downtown retail site.
• University of California at San Francisco/Biotechnoloo Lease and Sales Analysis. For
purposes of UCSF's lease negotiations with the owner/landlord,Sedway Group performed a rental
rate and valuation analysis of existing hospital and biomedical research facilities. Our analysis
included an extensive survey of major biomedical research firms and real estate brokers
specializing in biomedical research leases and sales throughout the Bay Area, which survey
compiled information on construction or improvement costs for the different components of
biomedical research facilities,lease terms for biomedical facility leases,and sales data on research
facility sales. Following the survey, we performed a valuation and rental rate analysis of the
_ facilities subject to negotiation.
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SEDWAY GROUP
Real Estate and Urban Econornics
D. PRO FOR,IIA ANALYSIS
Services
Based on the results of the market review,Sedway Group can create a computer-based financial model
to test the financial return of development projects or evaluate developer submittals. A multiyear
financial analysis can be developed that incorporates anticipated development costs, financing costs,
and income and operating projections. Incorporating the Agency's minimum financial objectives and
estimated developer equity,we can calculate return measures(e.g.,cash on cash return,internal rate of
return, net present value). This type of analysis can facilitate the Agency's decisions by comparing
revenue-generating potential for a variety of development schemes.The results from this analysis can
be used to determine if the Agency wants to proceed with the developer solicitation process, choose a
particular development proposal, or whether additional consideration should be given to a project
given the magnitude of financial gap.
Staffing
Pro Forma Analysis would be supervised by Senior Managing Director Tom Jirovsky,with support by
Carol Fredholm,Kurt Fuchs,William Chun or others a appropriate.
Examples of Representative Assignments
0 City of 11untington Beach/Golden West College Site. Sedway Group performed a proforma
analysis to assess the big-box, retail development potential of an approximately 11.5-acre site on
the campus of Golden West College in Huntington Beach. The analysis was used by the City of
Huntington Beach to determine whether a big-box retail project might be financially feasible and
generate sufficient revenues to justify replacing an existing swap meet on the site and developing
replacement parking for the college.
• Bay Area Rapid Transit DistriaTil -Cerrito Plazza Financial Feasibility Evaluation. For a
proposed 184-unit apartment project in El Cerrito,Sedway Group reviewed three development pro
formas to determine reasonableness of the assumptions and overall financial feasibility.The three
scenarios included a 100 percent affordable, a 40 percent affordable, and a 20 percent affordable
apartment project financed with varying levels of tax credit funding. The due diligence analysis
included a survey of local rental rates, estimation of high-density construction costs, and
calculation of the:"feasibility gap"between several different scenarios.
• Pacific Theaters/Cinerama Dome. Sedway Group developed a market repositioning and
feasibility strategy for the family that owns the ailing Cinerama Dome, a once-flourishing
landmark movie house in Hollywood. The single-screen theater was suffering financially, the
victim of a market trend toward large, multi-screen theater complexes. Sedway Group analyzed
the feasibility of converting the historic theater into a broader entertainment and retail center that
included ten additional movie screens and structured parking.The family later negotiated with the
Community Redevelopment Agency of Los Angeles for redevelopment assistance to implement
Sedway Group's repositioning strategy.
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SEDWAY GROUP
Real Estate and Urban Economics
City of BelmontIfultifamily 11ousing For the City of Belmont, Sedway Group performed a pro
forma analysis of IS different affordable and market rate multifamily housing development
alternatives, for purposes of analyzing the potential impact of density bonuses on estimated city
subsidy requirements. Different combinations of affordable and market rate units were evaluated
utilizing various density assumptions under non-profit and for-profit developer scenarios, for
purposes of identifying the scenarios that provided optimal affordability and minimal subsidies.
California Redevelopment Association/Pro Forma Financial Projection Workshop. Sedway
Group recently introduced an intensive three-day workshop in which students from public
agencies are exposed in depth to pro forma financial analysis for at least three kinds of develop-
ments that regularly occur in redevelopment areas: offize,residential and retail developments.For
each type of development,up to three lectures are provided indicating the basic logic and approach
for that particular project type as well as pitfalls and data sources.The core of the course is a set of
computer models for which output is distributed as part of the detailed workbook. In addition,the
students form teams,and each team has a workroom complete with a computer and printer so they
can manipulate the computer models.At the end of three days of intensive instruction, homework
and independent team modeling, the students prepare their own pro formas and have acquired the
opportunity to get hands-on experience with pro forma financial modeling.
Scott llospitalit}/llotel and Tin:e-Share Financial Analysis. As a subconsultant to Scott
Hospitality, Sedway Group prepared a financial pro forma evaluating the feasibility of a hotel and
'time-share project planned in Seaside, California. The pro forma was ultimately used by the
Seaside Redevelopment Agency in its determination of cost-sharing responsibilities and subsidies
required to make the project feasible.
• City of Capitola/Rispht dlansion Financial Analysis. Sedway Group assisted the City of Capitola
by reviewing a local development team=s proposaI to purchase the Rispin Mansion site from the
City and develop a 30-room inn. As part of this assignment, Sedway Group prepared a
development pro forma, incorporating our research on development costs,market room rates, and
operating costs, under several development scenarios. Additionally, we conducted a review of the
development teams financial strength and references.
Cities of Emeryville and Oakland/San Pablo Avenue Corridor lifarket Assessment and
Implementation Plan. Sedway Group prepared a market and economic revitalization plan for the
San Pablo Avenue Corridor in the cities of Oakland and Emeryville.The area consists of a mixture
of retail, neighborhood commercial, and residential properties. A number of the buildings along
the corridor are vacant or under-utilized. We prepared a market analysis including assessment of
key parcels with rehabilitation potential. For these properties, we prepared illustrative pro forma
analyses to determine the viability of redevelopment. The report included 12 implementation
strategies both for the overall area and for specific key properties.
• Baner Financial Interests/Lakepoint Towers.Sedway Group analyzed the financial feasibility of
a proposed residential project consisting of for-sale condominium and apartment rental units,
located near Lake Merritt in Oakland. Sedway Group=s analysis determined the most viable
housing types and unit mix given local market conditions. Estimated project costs and revenues
were incorporated into a pro forma model to determine the site=s residual land value.(11493)
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Real Estate and Urban Economics
E. GAP ANALYSIS
Services
Sedway Group has assisted both private developers and cities with evaluating development projects
which has encompassed reviewing assumptions, assessing the financial feasibility of a project,
identifying the benefits and risks, and determining the"gap" (i.e., subsidy required to make a project
financially feasible).
Sedway Group can perform an independent review of the development cost and revenue assumptions
for commercial and residential projects or for all and uses.This review can be based oil published data,
such as The Marshall Valuation Service and Means Square Foot Costs, discussions with brokers, and
the extensive experience of Sedway Group staff. Sedway Group can prepare independent project pro
formas for submitted proposals based on a detailed review of developer pro formas and project
descriptions. Sedway Group maintains a proprietary cash flow model which will be modified as
necessary to adequately reflect the differences among the development programs. We can then
develop a matrix comparing required Agency assistance, completed project value, property tax
increment, and sales tax generation.We can also include an explanation of the impact of any areas in
which we have deviated from the development team's assumptions. Sedway Group can document all
findings in a report to assist the Agency in their redevelopment projects.
Staffing l�
Senior Managing Director Tom Jirovsky would be responsible for these services with support from
Kurt Fuchs,William Chun,and others as appropriate.
Examples of Representative Assignments
City of Huntington Beach✓CLU Retail Gap Analysis and DDA Negotiation. Sedway Group
assisted the City and Agency in evaluating the CIM Group's request for financial assistance for
their proposed 140,000 square,feet of retail project located at Main Street and the Pacific Coast
Highway in downtown Huntington Beach. The purpose of the analysis was to determine the
validity of CIM's request for subsidy, and provide support to the City and their legal counsel in
the negotiation of the disposition and development agreement (DDA) under California
Redevelopment law.As a result of Sedway Group's analysis the"gap"was defined approximately
25 percent less than originally sought by the developer. In addition, we recommended alternative
financing mechanisms for the public components of the project (i.e., parking garage and
streetscape) to lower the development costs. Finally, we estimated the fiscal revenue to be
generated by the project and compared this figure with the level of city subsidy previously
calculated.
• Bay Area Rapid Transit District/El Cerrito Plata Financial Feasibility Evaluation. For a
proposed 184-unit apartment project in El Cerrito,Sedway Group reviewed three development pro
formas to determine reasonableness of the assumptions and overall financial feasibility.The three
scenarios included a 100 percent affordable, a 40 percent affordable, and a 20 percent affordable
apartment project financed with varying levels of tax credit funding. The due diligence analysis
included a survey of local rental rates, estimation of high-density construction costs, and
calculation of the"feasibility gap"between several different scenarios.
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Real Estate and Urban Economics
• Cupertino Redevelopment Analysis. Sedway Group analyzed the impact of removing Apple,
Hewlett-Packard and Tandem properties from a redevelopment project area on the amount of tax
increment revenues and tax allocation bonds that would be avail-able to the City of Cupertino.As
part of that study, we also identified other possible sources of public financing that could be
utilized to fill in the gap in tax increment lost to the Redevelopment Agency.
• Golden Gate National Parks AssociationlTort Baker Hotel Analysis. Sedway Group assisted the
Golden Gate National Parks Association in analyzing the market and financial feasibility of
redeveloping the historic Fort Baker Army Base in southern Marin County. Sedway Group
analyzed two redevelopment alternatives: a 300-room full-service hotellconference center geared
toward a high-end corporate and tourist market niche, and a more modest 250-room
hotel/conference center with fewer amenities and lower room rates. Sedway Group contacted
numerous hotel/conference center developers and operators to ascertain the market potential of the
development concepts given the site?s unique secluded setting,historic structures,and world-class
vistas of the Golden Gate Bridge, San Francisco Bay, and San Francisco. Based on our market
findings, Sedway Group analyzed the project?s financial feasibility in light of significant
renovation costs and the substantial amount of infrastructure required to provide adequate utilities
and access to the site. Sedway Group calculated the amount of subsidy required to make the :
project financially feasible and recommended strategies to finance this gap.
• - Sacramento Redevelopment Agency/Entertainment Retail Proposal Evaluation. Sedway Group
assisted the Sacramento Redevelopment Agency in its negotiations with a developer proposing to
develop a 175,000-square-foot entertainment retail center along the K Street Mall in do%mto%,.M
Sacramento.The assignment included a detailed review of the developer's financial pro forma and
preparation of independent pro formas based on Sedway Group's experience and research into
industry standards to determine the financial feasibility gap.The proposed development consisted
of a 1I0,000-square-foot movie theater, to be occupied by AMC, and 65,000 square feet of
restaurants and entertainment retail. Our analysis was instrumental in the Redevelopment
Agency's renegotiation of the development proposal. In our estimation, the initial proposal was
not fnancable and the subsidy required was greater than the Agency was able to provide.
• City of St. LouLvEconomic Development Strategic Plan. Sedway Group prepared an overall
economic development strategic plan for the City of St. Louis with a focus on immediately
implementable programs and initiatives. Included in this study were recommendations for
attracting and developing businesses, revitalizing the downto%%m area, providing desirable urban
residential environments, and maintaining and enhanckig transportation and other infrastructure.
In particular, the firm identified two major sites for immediate industrial development,providing
estimates of gap financing to support development. The strategic plan also included a three-year
capitalization plan for a small business revolving loan fund and identification of recommended
mechanisms to support industrial land assembly. CUED played an integral role in this project,
providing assistance in the formulation of the revolving loan fund and a"best practiccs"effort in
an earlier market and economic base analysis that preceded development of the strategic plan,
prepared by a consulting team led by Sedway Group.
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SEDWAY GROUP
Real Estate and Urban Economics
F. HOUSING MARKET STUDY
Services
Sedway Group has extensive market research experience in both market rate and affordable housing
products.Sedway Group can provide information on housing market conditions,assess the options for
a range of housing product types, and prepare a financial analysis of residential development. Our
analyses can include recommendations for product type, pricing levels, demand, and financing
options.
We can research current demand in the market for various housing products to provide information on
housing product mix, pricing, and anticipated absorption. Research can include a summary of the
competition as well as planned and proposed projects.Further,Sedway Group can analyze market area
demographic data,including population,income,and employment projections.
Sedway Group has considerable experience with a variety of types of affordable housing as well as
state and federal funding programs. As part of this work, we can research the likely acceptability of
t'iese housing types and the impact on the marketing of higher-end product. We can review other
residential developments with mixed-income components and derive lessons from these experiences.
Additionally,Sedway Group can research financing sources wmilable that would improve the financial
returns to the Agency while maintaining housing affordability.
Staffing
Senior Managing Director Tom Jirovsky and Managing Director Carol Fredholm would be responsible
for these services,with support by Directors Darcy Kotun and Kurt Fuchs.
Examples of Representative Assignments
• Alameda County Department of housing and Community DevelopmendAffordable Rental
Housing Study. For each city-in Alameda County, Sedway Group conducted a rental housing
affordability study. The analysis included an overview of rental affordability problems, a
demographic profile of each community, and a summary of the need for affordable housing at
various income categories.
• AMB Institutional Realty Advisors/Ca1PERS For a mid- to high-end single-family residential
community under development in San Jose near the Cupertino border,Sedway Group performed a
due diligence analysis focusing on the state of the local economy, anticipated demographic trends,
the value of surrounding homes, the pace of area sales, and likely project competition. Our
conclusions indicated the project was well-priced for its location and that the local housing market
out-performed the regional housing market.
• AMB Properties and Midland Mortgage Investment CorpAlerba Buena Commons. Sed%%ay
Group performed a market study of a proposed 257-unit residential development in San
Francisco's Yerba Buena Redevelopment Project Area.The project consisted of studio apartments
that would be affordable to lower income working residents. Sedway Group's research indicated
that there was a housing gap between residential hotels(SROs)and market-rate studio apartments,
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Real Estate and Urban Economics
as there were relatively few subsidized units in the area for those earning well under 80 percent of
median income.
• ARCS Affordable Housing/East Bgybridge Apartments. Sedway Group assessed the market
potential for rental apartment units at East Baybridge in Emeryville, California. ARCS is the
lender, with Catellus Development Corporation as the developer.These apartments will comprise
60 percent market-rate units and 40 percent below-market-rate units. Sedway Group forecasted
rental housing demand and demographic trends for the market area, surveyed competitive com-
parable projects, identified future competitive developments, recommended optimal achievable
rental rates for the market-rate units, and projected target market groups and absorption for the
overall development.We found strong market demand for both market-rate and below-market-rate
units within the apartment development.
Baner Financial Interest.Aakepoint Towers. Sedway Group analyzed the financial feasibility of
a proposed residential project consisting of for-sale condominium and apartment rental units
located near Lake Merritt in Oakland. The most liable housing types and unit mix were
determined given local market conditions. Estimated project costs and revenues were incorporated
into a pro forma model to determine the site's residual land value.
• Bay Area Rapid Transit District/Daly City and El Cerrito. Sedway Group analyzed the physical
and market conditions and local land use policies for high-density residential development on land
" 'adjacent to suburban BART stations in Daly City and El Cerrito. The viability of residential uses
was also compared with alternative uses. The viability of residential uses was coupled with
alternative uses, such as office and other commercial uses. The study findings indicated strong
market support for new apartment projects near these transit stations. Further, the study indicated
that sorely needed housing can be added in a manner that minimizes traffic and air quality impacts
while supporting transit ridership. A land planner on the team prepared station-area concept
studies. In addition, the study included a summary of non-traditional financing mechanism
available to solve specific financing needs related to implementing the recommended development
strategies,such as parking and apartment construction.
City of Belmon0fuldfandly kousing. For the City of Belmont, Sedway Group performed a pro
forma analysis of 18 different affordable and market rate multifamily housing development
alternatives, for purposes of analyzing the potential impact of density bonuses on estimated city
subsidy requirements. Different combinations of affordable and market rate units were evaluated
utilizing various density assumptions under non-profit and for-profit developer scenarios, for
purposes of identifying the scenarios that provided optimal affordability and minimal subsidies.
• BRIDGE Housing Corporation/Coggins Square Apartments. Sedway Group conducted a market
study of the proposed 86-unit affordable family rental housing development near the Pleasant Hill
BART station in unincorporated Contra Costa County, California. To assess the competitive
position of this housing development, Sedway Group surveyed market rate and below-market rate
apartment developments, determined general housing demand, reviewed BRIDGE Housing's
projected rents, and forecasted a reasonable lease-up rate for both the market rate and below-
market rate apartment units.
• California Housing Finance Agency/Britton Street Family Housing Sedway Group conducted a
market study of Housing Conservation and Development Corporation's(1ICDC)proposed 92-unit
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Real Estate and Urban Economics
affordable family rental housing project in the Visitacion Valley neighborhood of San Francisco's
Excelsior District. California Housing Finance Agency (CIIFA) required the study for
underwriting purposes. To assess the competitive position of this housing development, Sedway
Group surveyed market rate and below-market rate apartment developments, determined general
housing demand,reviewed I;ICDC's projected rents, and forecasted a reasonable lease-up rate for
both the market rate and below-market rate apartment units.(27997)
California Housing Finance AgencylCreekside Aparu7ents. Sedway Group conducted a market
study of the proposed 16-unit affordable family rental housing development in Albany,California,
to be developed by Resources for Community Development (RCD). California Housing Finance
Agency(CHFA)required the study for underwriting purposes.To assess the competitive position
of this housing development, Sedway Group surveyed market rate and below-market rate
apartment developments, determined general housing demand, reviewed RCD's projected rents,
and forecasted a reasonable lease-up rate for both the market rate and below-market rate apartment
units.
California Housing Finance Agem7lNtone Pine hleadow. Sedway Group conducted a market
study of a proposed 72-unit affordable family rental housing development in Tracy, California,to
be developed by Eden Housing. California Housing Finance Agency (CIIFA) required the study
for underwriting purposes. To assess the competitive position of this housing development,
Sedway Group surveyed market rate and below-market rate apartment developments, determined
keneral housing demand, reviewed Eden Housing's projected rents, and forecasted a reasonable
lease-up rate for both the market rate and below-market rate apartment units.
California Housing Finance Agency/Los Positas. Sedway Group conducted a market study of the
proposed 72-unit affordable family rental housing development in Livermore, California, to be
developed by Eden Housing. California Housing Finance Agency (CIIFA) required the study for
underwriting purposes. To assess the competitive position of this housing development, Sedway
Group surveyed market rate and below-market rate apartment developments, determined general
housing demand, reviewed Eden Housing's projected rents, and forecasted a reasonable lease-up
rate for both the market rate and below-market rate apartment units.(25497)
Catellus Development CorporationAi fission Bay Phase L Sedway Group conducted a market due
diligence analysis of the Phase I development program for Mission Bay,a planned new infill com-
munity within San Francisco in a former industrial area.The completed development was planned
to contain more than 8,000 housing units. The first p%ase of this development was planned to
include 541 units of market rate housing — a combination of townhomes, walk-up flats, and
stacked fiats in elevator-access buildings. Sedway Group examined these plans,including prelimi-
nary schematic designs, and determined recommended pricing and forecast rates of absorption.
These pricing and absorption forecasts were compared with those prepared by the developer.
Cities of Mill Valley, Sausalito, Larkspur, Vallejo, Hercules, Emersryille, Napa, San Pablo,
Belmont, Hollister, and San Bruno; Towns of San Anselmo, Fairfax, and Corte Madera; and
Contra Costa County: Sedway Group prepared the Housing Elements of General Plans in
compliance with California Government Code Section 65580. For each city, town, or county,
Sedway Group updated the housing needs by income category and special needs groups,prepared
a survey of housing conditions, and assessed the municipalities' socio-economic conditions. Each
housing element includes the following components: review of citizen participation in preparing
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SEDWAY GROUP
Real Estate and Urban Economics
the element, consistency with the General Plan, general demographic and employment trends,
housing and neighborhood characteristics, residential development constraints, housing needs,
termination of federal housing subsidies, status and emluation of the municipalities' existing
housing programs, and implementation. The implementation section includes detailed housing
production goals,housing policies,timeframes for programs,and funding sources.The majority of
housing elements prepared by Sedway Group have been evaluated as "in compliance" with State
law by HCD.
• Daon Corporation/Sonoma Highlands. Sedway Group developed a strategy to assist Daon in
complying with the City of Petaluma's affordable housing requirements. We analyzed the
financial feasibility of alternative configurations of low-and moderate-income housing for a 300-
unit residential development.
• Ecumenical Association for HousingA, farin. Sedw-ay Group studied the impact of affordable
housing developments on historic market rate residential price trends in Marin County.
Emerald Fund/104S Mission Street Apartments Sedway Group completed a due diligence
market assessment for a proposed 258-unit rental apartment development in San Francisco's South
of Market area.The project comprised 80 percent market rate units and 20 percent affordable units
targeted to households earning between 35 and 40 percent of median income. Overall,the project
will be relatively affordable, with-small unit sizes and favorable HUD-provided financing. Also
` included were 20 units of ground-level loft office space and two levels of parking.The assignment
included a competitive market analysis of the existing and planned market rate developments in
the area. General housing demand was determined based on forecasted growth in households and
employment. We recommended rents, by unit type, and forecasted reasonable lease-up rates for
the market rate units.
• Equitable Real Estate Investment Management, InclDue Diligence for San Jose Affordable
Housing Development. Sedway Group provided due diligence analysis of a 72-unit affordable
housing project in San Jose,California.The project will be constructed and managed by the Santa
Clara County Housing Authority.The due diligence report included an assessment of regional and
local economic indicators, neighborhood stability and quality, market demand, site analysis,
borrower/developer capacity,quality of management entity,potential workout or recovery options,
and the projcct's financial characteristics.
• Los Angeles County Housing Authority7Morwalk Senior Housing Project. Sedway Group was
asked to analyze a Kaufman&Broad proposal for a senior housing project in the City of Norwalk.
The primary issue involved a determination of the maximum number of affordable housing units
the project could support based on the subsidies the developer was requesting. As a result of
Sedway Group's analysis, the !lousing Authority was able to successfully negotiate with the
developer for additional affordable units in the project.(53198)
• Ocean flew School Distric0luntington Beach. Sedw-ay Group provided school site disposition
consulting services to Ocean View School District. As part of this work, we developed requests
for proposals that included promotional data, development objectives, submission requirements,
and selection criteria,which resulted in the development of an affordable housing project built by
BRIDGE(lousing,Inc.
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Real Estate and Urban Economics
• City of Mill Valley/llousing Study. Sedway Group analyzed alternative government programs and
recommendations for satisfying subsidized housing requirements in a major condominium
development.
• African American Cultural Center/Stevens & Associates Sedway Group performed a financial
feasibility study for a proposed mixed-use African American Cultural Center(AACC)in San Jose.
The project was planned to include 125 low-income senior housing units, community meeting
rooms, auditorium facilities, and office and retail space. Various funding sources were explored
for the project, including 1iUD Section I08, Community Loan Funds, City of San Jose Housing
Department,and Federal and local grants.A combination of funding sources was recommended to
the committee to finance the project. The scope of services included meetings with the AACC
Committee to refine the development plan based on viable economic uses. A survey of other low-
income senior housing projects was also conducted in order to determine achievable income and
expense figures.
22
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SEDWAY GROUP
Real Estate and Urban Economics
G. REUSE VALUE DETERMINATION
Services
The purpose of the reuse appraisal is to determine the reuse value of project sites,considering potential
development costs and future income of the proposed project. The reuse value will represent the
approximate fee that should be paid by the third-party developers for the opportunity to acquire fully
assembled and entitled development sites from the Agency. Our work may be used to assist the
Agency in negotiating final financial terms with developers. Sedway Group can prepare a report that
summarizes our analyses and findings pursuant to Sectior. 33433 of the California Health and Safety
Code.The scope of work for a reuse .aluation would involve such steps as:
Site and Proposed Development Analysis. The site would be visited and any relevant materials
pertaining to the proposed development will be analyzed and considered as part of the appraisal
process.
Market Analysis. Sedway Group will research the local market to determine appropriate operating
assumptions for the project site.
Development Cost Analysis. If available,Sedway Group would review the developer's cost estimates
for the proposed project and check-them for reasonableness. In the event that no developer cost
estimates are available,Sedway Group would estimate development costs for the proposed project.
Financial Analysis to Determine Reuse Value. Operating assumptions and development cost
estimates would be employed in a pro forma analysis to determine residual land value('reuse value").
Report Completion. Relevant analyses and findings will be packaged in the form of a self-contained
reuse appraisal report that meets the requirements of Section 33433 of the State of California Health
and Safety Code.
Staffing
Senior Managing Directors Tom Jirovsky and Roy Schneiderman would be responsible for these
services with support by Carol Fredholm,William Chun,and others as appropriate.
Examples of Representative Assignments
• Santa Clara Redevelopment Abencyllfotel Site. Sedu'ay Group provided economic analysis and
transaction negotiations support for the Redevelopment Agency with respect to the disposition of a
four-acre parcel earmarked for hotel use. The project included a 280-room hotel oriented to the
nearby Santa Clara Convention Center. Disposition vas by means of a long-term ground lease.
The final work product was a reuse appraisal prepared in accordance with Section 33433 of the
California health and Safety Code.
• Santa Clara Redevelopment AgencylYerba Buena Parcel. Sedway Group is providing ongoing
research and analytical support to the Santa Clara Redevelopment Agency with respect to the
Yerba Buena property on Great America Parkway. The Agency is negotiating with The Irvine
Company for the ground lease of the property for office development. Sedway Group assisted in
23
SEDWAY GROUP
Real Estate and Urban Economics
the analysis and structuring of the 75-year ground lease for this 42-acre property that is slated to
be developed as 910,000 square feet of office and research and development space. The
assignment will culminate in the preparation of a 33433 valuation report for the Agency.
City of Foster City's Redevelopment Ageney/5farlin Cove Stropping Center. To fulfill the
valuation requirements of Section 33433 of the California Health and Safety Code,Sedway Group
prepared an analytical report and constructed a financial model that valued the redevelopment
potential of a struggling 12-acre shopping center as residential and retail uses. The model and
report were used by the City of Foster City's Redevelopment Agency to determine the estimated
value of the property based upon its highest and best use.
Goldfarb and Lipmandouth Lake Tahoe Redevelopment Agency Park Avenue Project. The
South Lake Tahoe Redevelopment Agency Park Avenue project includes two hotels (encompas-
sing almost 700 rooms), 16,000 square feet of retail space, a gondola connecting to the Heavenly
Ski Resort, and substantial public improvements including a transit hub and ice rink. The project
took almost 10 years to negotiate and obtain entitlements. Sedway Group provided the State-
required Section 33433 valuation analysis in support of the disposition of the property.
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SEDWAY GROUP
Real Estate and Urban Economics
11. CO.NIPARATIVE(MARKET) ANALYSIS OF PROJECTS
Services
Comprehensive market analysis is a cornerstone of Sedway Group's consulting practice. Based on an
analysis of market conditions and trends, expertise in development practices, financing practices and
conditions, and other relevant parameters, we can develop a list of potentially appropriate uses for a
given parcel, evaluate the feasibility of a proposed project, or identify appropriate product
characteristics. Typically, this involves assisting public clients in identifying current and future real
estate market potential. Our expertise includes defining the relevant market arcs and analyzing supply
and demand characteristics, absorption, market feasibility studies, development and/or joint
development strategics, product positioning and phasing recommendations, due diligence, and
reuse/redevelopment assessments. Highest and best use analysis combines our market expertise with
property-level research to determine physically and politically feasible uses.
Market analysis and highest and best use analysis are facilitated through our comprehensive
familiarity with land use markets in Southern California and throughout the state and by accessing the
resources of our extensive real estate library,CB Richard Ellis' vast databases, and published sources
and information available on the Internet. Sedway Group has received national recognition through
such real estate trade associations as the Urban Land Institute for its strategic,to-the-point analysis of
key market conditions and opportunities.
Staffing "
Managing Director Carol Fredholm would be responsible for these services with support by Carolyn
Hull,William Chun,and others as appropriate.
Examples of Representative Assignments
• City ofDowney/iliaster Plan for NASA Property:The City of Downey retained Sedway Group to
conduct a market and planning study in order to develop an optimal reuse plan and strategy for the
160-acre NASA property. The market potential was evaluated for a wide range of land uses,
including industrial, office, biotechnology, retail (including entertainment and sub-regional),
hotelllodging, studio/sound stage, stadium/arena, amusement/theme park, and museum. Sedway
Group assembled a multidisciplinary team to address the issues associated with this key property.
Sedway Group was the prime consultant and conducted a highest and best use market assessment,
developed the land program, and recommended a development and disposition strategy. Interra
assessed the feasibility of reusing the existing structures, and SWA Group conducted the physical
site assessment, developed planning and design concepts, and created the recommended land use
plan and illustrative plan.
• City of La Quinta/iilarket Analysis and Competitive Position within the Coachella Valh7. The
market potential of numerous land uses was evaluated to determine development opportunities
within the Coachella Valley and the City of La Quinta over a five-year time horizon. Based upon
an assessment of the city=s market position,potential capture of regional demand was projected.
The analysis was designed primarily to serve as a framework to support the implementation of a
comprehensive economic development strategy for the city in its business expansion efforts. The
25
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SEDWAV GROUP
Real Estate and Urban Economics
land uses examined included retail (regional, sub-regional, entertainment and neighborhood),
commercial recreation, lodging and resort, golf course, office, industrial, and live-work loft
housing.
• ChevronlChevron Petroleum Technical Center. Chevron wished to dispose of the 60-acre
southern California corporate headquarten in La Habra as they consolidated operations in northern
California. Sedway Group evaluated the potential fcr reuse of the property by a single user or
multiple users, as well as the prospect of introducing new development. Land uses examined
included industrial, research and development, office, retail, hotel, and residential (single-family
and multi-family). The results of the study were used to develop a marketing strategy and to assist
in negotiating with the City for entitlements.
• City of El Afonte Community Redevelopment ASencylDowntown Redevelopment Potentiate
Sedway Group assisted the City of El Monte in identifying the economic potential of the 272-acre
Downtown El Monte Redevelopment Project Area, focusing on evaluating opportunities for
redevelopment of a number of specific sites.The study encompassed the determination of highest
and best use for various sites, financial evaluation of alternative development scenarios, and
recommendations regarding the prioritization of development sites and potential development
programs. The work product was used as a marketing tool, targeted to developers to spur
economic development.
• Terrell Watt/South Livermore i'alley. Sedway Group performed a comparative analysis of eight
development scenarios of a 578-acre parcel located in Subarea 7 in the South Livermore Valley
Specific Plan.The purpose of the analysis was to assist city staff in determining the residual land
value resulting from each of the eight development alt=atives (ranging from 17 to 304 lots),and
the impact that the imposition of agricultural mitigation fees could have on the resulting value.
Sedway Group developed a detailed discounted cash flow model for each of the development
scenarios to calculate the residual land value.
• A31B Corporate Real Estate Advisors,Inc. and FYG Santa Clara 11fuliVamily Alarket Analysis.
Sedway Group conducted a market analysis pertinent to a 65-acre parcel owned by FhiC in Santa
Clara, California. At the time of analysis, the site Ams improved with a number of buildings,
including a large testing facility.Our market overview was to provide a background analysis of the
overall market for multifamily uses on the site pertinent to ABM's determination of a reuse
development strategy for the site. Accordingly, we assessed historical multifamily household
growth, vacancy levels, median rent levels, absorption rates, employment growth,jobs/housing
balance,land prices,and high-density premiums over lower-density product.
• Antioch School Distric0lighest and Best Use Study. Sedway Group conducted an analysis of
retail, residential, and office markets in east Contra Costa County. The retail market assessment
included an analysis of taxable retail sales in Antioch,retail sales leakage, projections of supply
and demand,and determination of market support for targeted retail niches.The residential market
analysis included a detailed survey of residential projects in the planning pipeline or under con-
struction, and provided an assessment of projected market support for multifamily residential
developments. The study highlighted the advantages of long-tern ground leases versus sale. A
preliminary valuation was conducted for multifamily apartments, senior apartments, and retail
Uses.
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SEDWAY GROUP
Real Estate and Urban Economics
• Cities of Emeryville and OaklandJSan Pablo Avenue Corridor 111arket Assessment and
Implementation Plan. Sedway Group prepared a market and economic revitalization plan for the
San Pablo Avenue Corridor in the cities of Oakland and Emeryville.The area consists of a mixture
of retail, neighborhood commercial, and residential properties. A number of the buildings along
the corridor are vacant or under-utilized. We prepared a market analysis including assessment of
key parcels with rehabilitation potential. For these properties, we prepared illustrative pro forma
analyses to determine the viability of redevelopment. The report included 12 implementation
strategies both for the overall area and for specific key properties.
• Emerald Fun&7045 13tisslon Street Apartments Sedway Group completed a due diligence
market assessment for a proposed 258-unit rental apartment development in San Francisco's
South of Market area. The project comprised 80 percent market rate units and 20 percent
affordable units targeted to households earning between 35 and 40 percent of median income.
Overall, the project will be relatively affordable, with small unit sizes and favorable InM-
provided financing.Also included were 20 units of ground-level loft office space and two levels of
parking. The assignment included a competitive r Lirket analysis of the existing and planned
market rate developments in the area. General housing demand was determined based on
forecasted growth in households and employment. We recommended rents, by unit type, and
forecasted reasonable lease-up rates for the market rate units.
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Real Estate and Urban Economics
VII. FEE SCHEDULE
Sedway Group will be available on an as-needed basis to provide the variety of economic advisory
serf7ces to the City of Huntington Beach described within this proposal. Based on our past experience
in working with the City, we estimate a fee of approximately $75,000 per year, with a 5% annual
increase. The actual fee would be based on the work tasks requested by the City and the associated
hours required for completion of a project multiplied by our hourly fees. Our fee schedule is shown
below. We arc prepared to commit the personnel resources necessary to provide the services needed
by the City.
SEWAY GROUP
PUBLIC SECTOR PROFESSIONAL FEE SCHEDULE
Effective through December 31,2000
Professional Fees* Per Hour
Executive Managing Directors $225
Senior Managing Directors $1904200
Managing Directors $1754190
Directors $150-$160
Senior Consultants $120-$130
Consultants $90-$100
Analysts $80-$100
Administrative $55-$80
*These rates represent a 10 to 25 percent discount from our private-
sector professional rates. Professional rates effective through
December 31,2000.
54
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October 9, 2000
«name»
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((City))
Re: Economic Advisor Services
Dear«name»:
The Redevelopment Agency of the City of Huntington Beach is soliciting qualifications and rate
schedules from firms providing a full spectrum of economic advisor services including real
estate, redevelopment, and economic development. The Agency maintains one project area
that is comprised of five project areas that were merged and one additional project area
currently being created. Economic advisory services are chiefly required for major commercial
and housing projects but are also needed from time to time depending on the Agency's need to
investigate a particular financial issue. Listed below are some of the projects being
contemplated for future economic analysis work.
1. The Ocean Grand Resort and Its residential component - The Agency
entered Into Owner Participation Agreement to redevelop the Ocean Grand
Resort and a residential project being developed by the Robert Mayer
Corporation. While the resort will be under construction soon, financial matters
on some aspects of the resort are still pending. Also, the residential component
of this project may be changing, as well as its financial and economic
characteristics.
2. Thirty-One Acre Site - A thirty-one acre vacant site on Pacific Coast Highway
between First and Huntington Streets is planned for a major mixed-use project to
include approximately ten acres of commercial zoned land along the Highway
and the balance of the site in attached housing. It may also include construction
of a major new street. New plans are anticipated to be submitted by owner and
developer of the property. It is anticipated that the Agency will be involved in
some sort of financing package.
3. Affordable Housing Projects-The Agency is also pursuing the achievement of
its affordable housing obligations. The Agency sponsors the acquisition and
rehabilitation of existing multifamily housing and is working with non-profit
company))
October 10, 2000
Page 2
housing developers to provide for-sale housing to low income buyers and senior
apartment projects for very low-income elderly. Future activities will focus on the
provision of rental housing for low and very-low income households.
4. New Southeast Area Redevelopment Project Area — The Agency is in the
midst of forming a new project area in the Southeast part of the City. This
encompasses 266 acres of industrial zoned land in the midst of wetlands,
adjacent Pacific Coast Highway. The area also includes contaminated land that
must be clean up. Several projects are anticipated to be proposed within the next
two years.
5. Other Projects - In addition to the major activities described above, the Agency
has several smaller scale redevelopment projects in various phases from
conceptual to pending construction.
Your proposal should include the following:
• Statement of Qualifications for the firm.
• Resumes of the firm's principals and staff to be assigned to work with Agency staff.
• List of current and past clients.
• At least three references that may be contacted for whom you have performed services
similar to those solicited herein
• The hourly rates for all firm members, overhead and other charges.
• An estimate of the funds necessary to procure the firm's services for one year.
Anticipated services to be provided to the Agency staff are the following:
• Advice in the negotiation (or renegotiations)of DDA's
• Determination of the level of financial assistance that is warranted for commercial and
residential projects
• Advice on the structure and financing techniques of Agency and developer obligations
• Review and verification of developer pro-formas
• Determination of the reuse value of project sites and preparation of summary reports
pursuant to Sec. 33433 of the California Health a-id Safety Code
• Comparative analysis of proposed projects in relation to the regional and national markets.
GAGUV-AD?J1N1ST%EC0h RFP.D0C
«company»
October 10, 2000
Page 3
• Advice in the structure of development proposal solicitations and review of proposals
submitted
• Advice on the market trends, product type and pricing of proposed market rate housing and
on the affordability of Agency subsidized housing for low and very-low income households.
Please submit the following documents for review by the Redevelopment Agency:
• Statement of Qualifications for the firm
• Resumes of the firm's principals and staff
• List of current and past clients
• At least three references that may be contacted for whom you have performed services
similar to those solicited herein
• The hourly rates for all firm members, overhead and other charges
Please submit an estimate of the appropriation of funds necessary to procure the firm's services
for one year.
Two copies of your proposals for services are due on October 23, 2000. They are to be
delivered to:
Gustavo A. Dur6n, Housing and Redevelopment Manager
Economic Development Department
2000 Main Street; Fifth Floor
Huntington Beach, California 92648
No submittals will be accepted after the deadline. The Agency reserves the right to request
amendments to submittals as part of the review process and the right to reject any and all
submittals. All firms submitting do so at their own risk and are solely responsible for all costs
Involved in the preparation of the submittal, attendance at interviews or other meetings and any
other expenses that may be incurred in facilitating the Agency's thorough review of the
submittals.
Should you have any questions, please feel to contact me at(714)374-1529.
Sincerely,
Gustavo A. Durfin
Housing and Redevelopment Manager
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INTER-DEPARTMENT COMMUNICATION
Economic Development Department
To: Connie Brockway, City Clerk
From: Gus Duran, Redevelopment and Housing Manager
Subject: Professional Services Contracts, Chapter 3.03
Date: February 21, 2001
This memo is to confirm that the Department of Economic Development complied with
the Professional Services solictation requirements of Chapter 3.03,Huntington Beach
Municipal Code. The request for qualifications and proposals for economic analysis
services were sent to the list of firms (attached) in October 2000. Three firms responded
to the RFQIRFP. City Council will be considering agreements with these firms at their
March S,2001 meeting.
3
ECONOMIST REQUEST FOR QUALIFICATIONS
Shant Agajanian, Principal Jim Rabe/Kathe Head, Principal
Agajanian and Associates Keyser Marston Associates, Inc.
120 Newport Center Drive Suite 248 500 S Grand Ave Suite 1480
Newport Beach, CA 92660 Los Angeles, CA 90017
Tel. (714)640-0664 Tel. (213)622-8095
Fax (714)640-0668 Fax (213)622-5204
David A.Wilcox, Senior Vice President Frank Spevacek
Economics Research Associates Rosenow Spevacek Group, (RSG)
10990 Wilshire Blvd Suite 1600 540 N Golden Circle Suite 305
Los Angeles, CA 90024 Santa Ana, CA 92705
Tel. (310)477-9585 Tel. (714) 5414585
Fax (310)478-1950 Fax (714) B35-1748
Stephen Copenhaver Carol Fredholm
GRC &Associates Sedway Group
1340 S Valley Vista Drive Suite 120 Wells Fargo Center
Diamond Bar, CA 91765 355 S. Grand Avenue Suite 3295
Phone (909)396-7714 Los Angeles, CA 90071
Fax (909)396-7913 (213)613-1800
(213)2174904
Lawrence J. Arceniaux,Jr. President
Katz Hollis HdL Coren & Cone
865 S Figueroa Suite 1300 2220 E.Alosta Avenue, Suite 205
Los Angeles, CA 90017-2543 Glendora, CA. 91740
Tel. (213)629-3065 Tel. 818.963.9044
Fax (213)623-9105 Fax 818.335.8975
G:%GUSIADP.f't4lSMONSUITANTS-DOC