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HomeMy WebLinkAboutBonanni Development Company - 2022-06-21 664 2000 Main Street, v Huntington Beach, CA 92648 � City of Huntington Beach 'p2aVL_,i� 6_ o- / 01 ` f -7�2Sa/�/-A$SN7, File #: 22-470 MEETING DATE: 6/21/2022 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Sean Joyce, Interim City Manager VIA: Ursula Luna-Reynosa, Director of Community Development PREPARED BY: Steve Holtz, Deputy Director of Community Development Subiect: Approve and authorize execution of an Agreement for Sale of Surplus Real Property by and between the City of Huntington Beach and Bonanni Development Company for the sale of City -owned property located near Holly Lane and Main Street (APN 159-281-04) Statement of Issue: On May 5, 2022, the City Council declared a 2,846 square foot City-owned parcel located near Holly Lane and Main Street (APN 159-281-04) (the "Property") to be "excess surplus land" pursuant to the California Surplus Land Act (Government Code 54221(f)(1)(B). The City Council is now asked to consider selling the Property to the adjacent property owner, Bonanni Development Company (the "Buyer"). Financial Impact: The appraised fair market value of the property is $16,875. If the sale of this property is approved and the transaction closes escrow, this revenue will be deposited to the General Fund. Recommended Action: Authorize the Mayor and City Clerk to execute an "Agreement for Sale of Surplus Real Property by and Between the City of Huntington Beach and Bonanni Development Company IV" (the "Agreement") and all other related documents to convey ownership of the Property to the Buyer. Alternative Action(s): Do not approve the recommended action. Analysis: The Property is of varying width between approximately 10 feet and 14 feet and is approximately 280 feet long for a total area of approximately 2,846 square feet. The parcel is bounded by private property to the north and south. See Attachment 1 for a site map. City of Huntington Beach Page 1 of 3 Printed on 6/16/2022 power LegistarT" 665 File #: 22-470 MEETING DATE: 6/21/2022 The Property was acquired by the City in 1964 to allow Standard Oil Company to lay an oil pipeline and is encumbered with a utility easement to the benefit of Standard Oil or its successors. The Buyer owns both adjacent parcels, has assembled the surrounding land for a development project, and has expressed interest in purchasing the Property from the City. An appraisal dated March 4, 2022 established the fair market value of the Property at $16,875, and this is the price the adjacent owner has offered the City for the property. On May 5, 2022, the City Council declared the property to be "exempt surplus land," pursuant to the California Surplus Land Act, and received a letter from the State Department of Housing and Community Development ("HCD") dated May 11, 2022 (attached) agreeing with the City's determination. The exemption specifically enables the City Council to sell the Property to an adjacent owner of contiguous land. The City has no use for the Property, and the Buyer is interested in purchasing the Property; therefore, staff recommends approval of the sale at fair market value. Environmental Status The City Council will hold a public hearing at their regular meeting of June 21, 2022 to consider a General Plan Amendment (GPA), Zoning Text Amendment (ZTA), Tentative Tract Map (TTA), and Conditional Use Permit (CUP) to allow for the development of thirty-five (35) residential dwelling units (the "Proposed Project"). Multiple parcels, including the Property, (collectively, the "Site") are subject to the proposed land use changes. The Site is located within the Holly-Seacliff Specific Plan. Pursuant to the California Environmental Quality Act (CEQA) the City certified Program EIR No. 89- 001 for the Holly-Seacliff Specific Plan in 1990, which evaluated environmental impacts associated with development approved as part of the Holly-Seacliff Specific Plan. The Holly-Seacliff Specific Plan identified the Site as a Commercial (C) land use and the Holly-Seacliff Specific Plan EIR evaluated environmental impacts associated with up to 117,612 square feet of commercial uses on the Site. The Holly-Seacliff Specific Plan EIR provides the environmental setting and analysis to serve as the first-tier CEQA document for the Proposed Project. Although the Holly-Seacliff Specific Plan considered the impacts of commercial development on the Site, a residential use (such as the Proposed Project) would result in a less intense project than what was evaluated under the Holly-Seacliff Specific Plan EIR, and therefore would not result in new significant impacts or an increase in the severity of a previously identified impact in the Holly-Seacliff Specific Plan EIR. The Proposed Project will be required to comply with City standards and existing mitigation measures outlined in the Holly-Seacliff Specific Plan EIR. An addendum to the EIR was prepared that covers the discretionary approvals and permits necessary for implementation of the Proposed Project, including the disposition of the Property to the Buyer, along with the requisite mitigation measures and concludes that the Proposed Project would not result in an action that requires further evaluation pursuant to CEQA. Strategic Plan Goal: Economic Development & Housing Attachment(s): 1. Site map City of Huntington Beach Page 2 of 3 Printed on 6/16/2022 power Legistar- 666 File #: 22-470 MEETING DATE: 6/21/2022 2. Appraisal Report 3. May 11, 2022 Letter from HCD 4. Agreement for Sale of Surplus Real Property by and between the City of Huntington Beach and Bonanni Development Company City of Huntington Beach Page 3 of 3 Printed on 6/16/2022 power LegistarTI ATTACHMENT # 1 d r y . . Garfie d'X e/ -Nil • r ' R 1 .' - •. � f s i xoA, i 54' . �, rrt�t y oC # Pd 11+ �� w err Ct MAIN-GARF IL { ATTACHMENT #2 CBRE VALUATION & ADVISORY SERVICES 4 7 , A'P ISAL REPORT 2 , 846 SQUARE FOOT REMNANT PARCEL LOT 33 BLOCK A GARFIELD STREET HUNTINGTON BEACH , CALIFORNIA 92646 CBRE FILE NO . 22 - 251 PS- 01 38 - 1 CLIENT : BONANNI DEVELOPMENT CBRE 669 VALUATION &ADVISORY SERVICES CBRE 4301 La Jolla Village Dr.Ste.3000 San Diego,CA 92122 T (858)546-4300 F (858)546-3985 www.cbre.com Date of Report: March 4, 2022 Chris Segesman BONANNI DEVELOPMENT 5500 Bolsa Avenue, Suite 120 Huntington Beach, California 92649 RE: Appraisal of: 2,846 Square Foot Remnant Parcel Lot 33 Block A Garfield Street Huntington Beach, Orange County, California CBRE, Inc. File No. 22-251 PS-0138-1 Dear Mr. Segesman: At your request and authorization, CBRE, Inc. has prepared an appraisal of the market value of the above property. Our analysis is presented in the following Appraisal Report. The subject is a 2,846 square foot (0.065-acre) remnant parcel of vacant land located west of Main Street, east of Holly Lane, and south of Garfield Avenue, in the city of Huntington Beach, within Orange County, California. Remarkable to this parcel is its long, narrow, rectangular shape that significantly impacts this property's development potential. Further hindering the subject's development potential are several easements, the most restrictive of which is a subterranean pipeline easement in favor of Standard Oil that restricts any subsurface disturbance or above ground development. The property is zoned for commercial office and retail uses (SP-9, Section IV-6) and is within the Holly-Seacliff Specific Plan. The subject is presently owned by the City of Huntington Beach. The Client, Bonanni Development, is entering into negotiations with the City of Huntington Beach to acquire this remnant parcel as part of an assemblage with four adjacent parcels for a proposed multifamily residential development. The Client also is seeking approval from the City for a rezone of the subject and adjoining parcels from Commercial to Multifamily Residential (MF), which carries a density of 15 dwelling units per acre. Ultimately, with density bonuses, the Client plans to build 35 townhome units once the subject and adjoining parcels are assembled and rezoned. It is an extraordinary assumption of this appraisal that this rezone will be allowed. The subject ultimately will serve as an interior site drive isle and will provide access to the development from both Holly Lane and Main Street. The subject is more fully described, both legally and physically within the attached report. ©2022 CBRE, Inc. 669 670 Chris Segesman March 4, 2022 Page 2 Based on the analysis contained in the following report, the market value of the subject is concluded as follows: MARKET VALUE CONCLUSION Appraisal Premise Interest Appraised Date of Value Value Conclusion Land Value Fee Simple Estate, as March 2, 2022 $16,875 encumbered Compiled by CBRE The report, in its entirety, including all assumptions and limiting conditions, is an integral part of, and inseparable from, this letter. The following appraisal sets forth the most pertinent data gathered, the techniques employed, and the reasoning leading to the opinion of value. The analyses, opinions and conclusions were developed based on, and this report has been prepared in conformance with, the guidelines and recommendations set forth in the Uniform Standards of Professional Appraisal Practice (USPAP 2020-21), and the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. The intended use and user of our report are specifically identified in our report as agreed upon in our contract for services and/or reliance language found in the report. As a condition to being granted the status of an intended user, any intended user who has not entered into a written agreement with CBRE in connection with its use of our report agrees to be bound by the terms and conditions of the agreement between CBRE and the client who ordered the report. No other use or user of the report is permitted by any other party for any other purpose. Dissemination of this report by any party to any non-intended users does not extend reliance to any such party, and CBRE will not be responsible for any unauthorized use of or reliance upon the report, its conclusions or contents (or any portion thereof). It has been a pleasure to assist you in this assignment. If you have any questions concerning the analysis, or if CBRE can be of further service, please contact us. Respectfully submitted, CBRE - VALUATION & ADVISORY SERVICES Steve Calandra, MAI Jennifer Simmonson, CGA Director Appraiser California Certification No. 027877 California Certification No. 3006659 Expiration Date: November 16, 2022 Expiration Date: July 23, 2023 Phone: (949) 725-8408 Phone: (858) 404-7218 Email: steve.calandra@cbre.com Email: jennifer.simmonson@cbre.com ©2022 CBRE, Inc. CBRE 670 671 Certification Certification We certify to the best of our knowledge and belief: 1. The statements of fact contained in this report are true and correct. 2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are our personal, impartial and unbiased professional analyses, opinions, and conclusions. 3. We have no present or prospective interest in or bias with respect to the property that is the subject of this report and have no personal interest in or bias with respect to the parties involved with this assignment. 4. Our engagement in this assignment was not contingent upon developing or reporting predetermined results. 5. Our compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. 6. Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice (2020-21), as well as the requirements of the State of California. 7. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. 8. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. 9. As of the date of this report, Steve Calandra, MAI has completed the continuing education program for Designated Members of the Appraisal Institute. 10.As of the date of this report, Jennifer Simmonson has completed the Standards and Ethics Education Requirements for Candidates of the Appraisal Institute. 11.Jennifer Simmonson has made a personal inspection of the property that is the subject of this report. Steve Calandra, MAI has not made a personal inspection of the subject property. 12. No one provided significant real property appraisal assistance to the persons signing this report. 13.Valuation & Advisory Services operates as an independent economic entity within CBRE, Inc. Although employees of other CBRE, Inc. divisions may be contacted as a part of our routine market research investigations, absolute client confidentiality and privacy were maintained at all times with regard to this assignment without conflict of interest. 14.Jennifer Simmonson and Steve Calandra, MAI have not provided any services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding agreement to perform this assignment. Steve Calandra, MAI Je+tinifer Simmonson California Certification No. 027877 California Certification No. 3006659 ©2022 CBRE,Inc. CBRE 672 Subject Photographs Subject Photographs p .E u s q �k M a { W � f ©2022 CBRE, Inc. CBRO SW W NW N 210 240 270 1300 330 0 31 rWx� 02 Mar 2022, 12:32.24 Looking West Across the Subject from Sidewalk on Main Street Near Bus Stop NE E SE S 30 60 90 120 150 180 i : ' p i All o 3 02 Mar 2022, 12:35:49 Lookin East Across Subject from Holl Lane N NE E SE ,xl (l t 1 f 'J `'N6'" ' `� '---,s• c .iii(t �i �. �'»,� ���.� q ..ems ��_ - ow r " ` ���� 'L � �,�,,+«. '•� o2 Mar ztazz,i2:ara7 y Looking Northwest Across APN #159-281-05 Street View: Main Street, Looking NE, Near Subject's Towards Subject in Background Eastern Boundary SE S SW W y, t20 'SJ 8(1 2] 84� 2]9 300 y i I 1 1 I I I I I r r W, .a SW View Along Main Street, Subject at Right View to South on Holly Lane, Subject at Left, Out of Frame NE E SE S I I I I f i I , , • 'i,i, I ! 1 11 t s , fi Y a Looking North on Holly Lane, Subject at Right Near Bollards and Fencing at Subject's Western Boundary Structure o � 675 Executive Summary Executive Summary Property Name 2,846 Square Foot Remnant Parcel Location Lot 33 Block A Garfield Street Huntington Beach, Orange County, CA 92646 Parcel Number(s) 159-281-04 Client Bonanni Development Highest and Best Use As If Vacant Assemblage with adjacent parcels for future multifamily residential development Property Rights Appraised Fee Simple Estate,as encumbered Date of Inspection March 2,2022 Estimated Exposure Time 6- 12 Months Estimated Marketing Time 6 - 12 Months Primary Land Area 0.07 AC 2,846 SF Zoning SP 9-Section IV-6 (Commercial)As Currently Zoned / MF Re-Zone in Process Buyer Profile Developer VALUATION Total Per SF Land Value $16,875 $5.93 CONCLUDED MARKET VALUE Appraisal Premise Interest Appraised Date of Value Value Land Value Fee Simple Estate,as March 2,2022 $16,875 encumbered Compiled by CBRE STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS (SWOT) Strengths/ Opportunities • The subject is located in the coastal community of Huntington Beach, within Orange County, California Weaknesses/ Threats • The subject's long narrow shape severely limits the property's development potential • A detrimental easement encumbers the property and precludes subsurface disturbance or above ground development ©2022 CBRE, Inc. CBRE 676 Executive Summary EXTRAORDINARY ASSUMPTIONS An extraordinary assumption is defined as "an assignment-specific assumption as of the effective date regarding uncertain information used in an analysis which, if found to be false, could alter the appraiser's opinions or conclusions." • An oil pipeline is located underneath the subject parcel and is the basis for the pipeline easement which precludes subsurface disturbance and above-ground development. CBRE was not provided with an environmental site assessment report for review. It is an extraordinary assumption of this assignment that neither the subject nor the adjacent parcels owned by the Client suffer from any form of environmental contamination. • It is an extraordinary assumption of this assignment that the subject and the adjacent parcels owned by the Client receive "MF" multifamily residential rezoning approval. This is reasonable given: Multifamily residential development of the subject and its adjacent parcels would be more harmonious with the existing adjacent properties, which are apartment buildings and condominiums. Further, conversion of older commercial sites into residential sites within the submarket was noted during the appraiser's research. The use of these extraordinary assumptions may have affected assignment results. HYPOTHETICAL CONDITIONS A hypothetical condition is defined as "a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results but is used for the purposes of analysis." 2 • None noted OWNERSHIP AND PROPERTY HISTORY OWNERSHIP SUMMARY Item Current Current Ownership Owner: City of Huntington Beach Sale in Last 3 Years?: No Legal Reference: Please see Title Report in Addends County/Locality Name: Orange Pending Sale Negotiation Negotiations Pending Yes Buyer: Bonanni Development Contract Price: TBD Contract Date: No contract as of yet Arm's Length: Yes Current Listing Currently Listed For Sale: No Compiled by CBRE 1 The Appraisal Foundation, USPAP, 2020-2027 (Effective January 7, 2020 through December 37, 2022) 2 The Appraisal Foundation, USPAP, 2020-2027 (Effective January 7, 2020 through December 37, 2022) ©2022 CBRE, Inc. vi CBRE 677 Executive Summary CBRE is unaware of any arm's length ownership transfers of the property within three years of the date of appraisal. Further, the property is not reportedly being offered for sale on the open market as of the current date; however, Bonanni Development has entered into negotiations with the City of Huntington Beach to purchase the subject as part of its multifamily residential development plans of the parcels immediately adjacent to the subject. The purpose of this appraisal is to estimate the market value of the subject for use in these negotiations. EXPOSURE/MARKETING TIME Current appraisal guidelines require an estimate of a reasonable time period in which the subject could be brought to market and sold. This reasonable time frame can either be examined historically or prospectively. In a historical analysis, this is referred to as exposure time. Exposure time always precedes the date of value, with the underlying premise being the time a property would have been on the market prior to the date of value, such that it would sell at its appraised value as of the date of value. On a prospective basis, the term marketing time is most often used. The exposure/marketing time is a function of price, time, and use. It is not an isolated estimate of time alone. In consideration of these factors, we have analyzed the following: • exposure periods for comparable sales used in this appraisal; • CoStar market data of multifamily residential land sales in the neighborhood The following table presents the information derived from these sources. EXPOSURE/MARKETING TIME DATA Exposure/Mktg. (Months) Investment Type Range Average Comparable Sales Data 1.0 - 20.0 9.0 CBRE Exposure Time Estimate 6 - 12 Months CBRE Marketing Period Estimate 6 - 12 Months Various Sources Compiled by CBRE ©2022 CBRE,Inc. Vii CBRE 678 Table of Contents Table of Contents Certification ......................................................................................................................... i SubjectPhotographs............................................................................................................ ii ExecutiveSummary ..............................................................................................................v Table of Contents "' Scopeof Work..................................................................................................................... 1 AreaAnalysis ......................................................................................................................5 NeighborhoodAnalysis ....................................................................................................... 7 SiteAnalysis...................................................................................................................... 12 Zoning ..............................................................................................................................20 Tax and Assessment Data..................................................................................................21 MarketAnalysis.................................................................................................................22 Highestand Best Use ........................................................................................................31 LandValue........................................................................................................................33 Conclusion........................................................................................................................41 Assumptions and Limiting Conditions ................................................................................42 ADDENDA Land Sale Data Sheets Legal Description _ Client Contract Information Qualifications ©2022 CBRE, Inc. Viii CBRIE 679 Scope of Work Scope of Work This Appraisal Report is intended to comply with the reporting requirements set forth under Standards Rule 2 of USPAP. The scope of the assignment relates to the extent and manner in which research is conducted, data is gathered, and analysis is applied. INTENDED USE OF REPORT This appraisal is to be used for internal decision-making purposes related to potential acquisition and no other use is permitted. CLIENT The client is Bonanni Development. INTENDED USER OF REPORT This appraisal is to be used by Bonanni Development. No other user(s) may rely on our report unless as specifically indicated in this report. Intended users are those who an appraiser intends will use the appraisal or review report. In other words, appraisers acknowledge at the outset of the assignment that they are developing their expert opinions for the use of the intended users they identify. Although the client provides information about the parties who may be intended users, ultimately it is the appraiser who decides who they are. This is an important point to be clear about: The client does not tell the appraiser who the intended users will be. Rather, the client tells the appraiser who the client needs the report to be speaking to, and given that information, the appraiser identifies the intended user or users. It is important to identify intended users because an appraiser's primary responsibility regarding the use of the report's opinions and conclusions is to those users. Intended users are those parties to whom an appraiser is responsible for communicating the findings in a clear and understandable manner. They are the audience. s PURPOSE OF THE APPRAISAL The purpose of this appraisal is to estimate the market value of the subject property. DEFINITION OF VALUE The current economic definition of market value agreed upon by agencies that regulate federal financial institutions in the U.S. (and used herein) is as follows: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this 3 Appraisal Institute, The Appraisal of Real Estate, 15'h ed. (Chicago:Appraisal Institute, 2020), 40. ©2022 CBRE, Inc. 1 CBRJ5 s$o Scope of Work definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: 1. buyer and seller are typically motivated; 2. both parties are well informed or well advised, and acting in what they consider their own best interests; 3. a reasonable time is allowed for exposure in the open market; 4. payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and 5. the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. a INTEREST APPRAISED The value estimated represents Fee Simple Estate, as encumbered, as defined below: Fee Simple Estate - Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power and escheat.s Extent to Which the Property is Identified The property is identified through the following sources: • postal address • assessor's records • legal description • GIS Data • appraisal inspection Extent to Which the Property is Inspected On March 2, 2022, Jennifer Simmonson inspected the subject property. Surrounding land uses were observed as well. Type and Extent of the Data Researched CBRE reviewed the following: • applicable tax data • zoning requirements • flood zone status • demographics • comparable data • Title Report • As-Proposed architectural site plan • As-Is "Existing Conditions Plan" 4 Interagency Appraisal and Evaluation Guidelines; December 10, 2010, Federal Register, Volume 75 Number 237, Page 77472. 5 Appraisal Institute, The Dictionary of Real Estate Appraisal, 61h ed. (Chicago: Appraisal Institute, 2015), 90. ©2022 CBRE, Inc. 2 CBRJE 681 Scope of Work Type and Extent of Analysis Applied CBRE, Inc. analyzed the data gathered through the use of appropriate and accepted appraisal methodology to arrive at a probable value indication via each applicable approach to value. For vacant land, the sales comparison approach has been employed for this assignment. Data Resources Utilized in the Analysis DATA SOURCES Item: Source(s): Site Data Size Assessor's parcel map Condition of Title Report Order No.: 09206932-920-CMM-CM8,dated April 26, 2018 at 7:30 Existing Conditions Plan "Third City Submittal" Dated September 8,2021.Waden &Associates, Proposed Site Plan, MFR WHA. architectural firm, dated September 16, 2021 Compiled by CBRE APPRAISAL METHODOLOGY In appraisal practice, an approach to value is included or omitted based on its applicability to the property type being valued and the quality and quantity of information available. Depending on a specific appraisal assignment, any of the following four methods may be used to determine the market value of the fee simple interest of land: • Sales Comparison Approach; • Income Capitalization Procedures; • Allocation; and • Extraction. The following summaries of each method are paraphrased from the text. The first is the sales comparison approach. This is a process of analyzing sales of similar, recently sold parcels in order to derive an indication of the most probable sales price (or value) of the property being appraised. The reliability of this approach is dependent upon (a) the availability of comparable sales data, (b) the verification of the sales data regarding size, price, terms of sale, etc., (c) the degree of comparability or extent of adjustment necessary for differences between the subject and the comparables, and (d) the absence of nontypical conditions affecting the sales price. This is the primary and most reliable method used to value land (if adequate data exists). The income capitalization procedures include three methods: land residual technique, ground rent capitalization, and Subdivision Development Analysis. A discussion of each of these three techniques is presented in the following paragraphs. The land residual method may be used to estimate land value when sales data on similar parcels of vacant land are lacking. This technique is based on the principle of balance and the related concept of contribution, which are concerned with equilibrium among the agents of production--i.e. labor, capital, coordination, and land. The land 3 CBRJE ©2022 CBRE,Inc. 682 Scope of Work residual technique can be used to estimate land value when: 1) building value is known or can be accurately estimated, 2) stabilized, annual net operating income to the property is known or estimable, and 3) both building and land capitalization rates can be extracted from the market. Building value can be estimated for new or proposed buildings that represent the highest and best use of the property and have not yet incurred physical deterioration or functional obsolescence. The subdivision development method is used to value land when subdivision and development represent the highest and best use of the appraised parcel. In this method, an appraiser determines the number and size of lots that can be created from the appraised land physically, legally, and economically. The value of the underlying land is then estimated through a discounted cash flow analysis with revenues based on the achievable sale price of the finished product and expenses based on all costs required to complete and sell the finished product. The ground rent capitalization procedure is predicated upon the assumption that ground rents can be capitalized at an appropriate rate to indicate the market value of a site. Ground rent is paid for the right to use and occupy the land according to the terms of the ground lease; it corresponds to the value of the landowner's interest in the land. Market-derived capitalization rates are used to convert ground rent into market value. This procedure is useful when an analysis of comparable sales of leased land indicates a range of rents and reasonable support for capitalization rates can be obtained. The allocation method is typically used when sales are so rare that the value cannot be estimated by direct comparison. This method is based on the principle of balance and the related concept of contribution, which affirm that there is a normal or typical ratio of land value to property value for specific categories of real estate in specific locations. This ratio is generally more reliable when the subject property includes relatively new improvements. The allocation method does not produce conclusive value indications, but it can be used to establish land value when the number of vacant land sales is inadequate. The extraction method is a variant of the allocation method in which land value is extracted from the sale price of an improved property by deducting the contribution of the improvements, which is estimated from their depreciated costs. The remaining value represents the value of the land. Value indications derived in this way are generally unpersuasive because the assessment ratios may be unreliable, and the extraction method does not reflect market considerations. For the purposes of this analysis, we have utilized the sales comparison approach as this methodology is employed for residential sites that are unentitled but feasible development. The other methodologies are used primarily when comparable land sales data is non-existent. Therefore, these approaches have not been used. 4©2022 CBRE, Inc. CBRJE 683 Area Analysis Area Analysis OranW Comityt - Fullerton t�,'a}CC,7tla Torrance Anaheim L68 Villa Park ; Rolling Hills Estates long Beach C7range" 6 Santa Ana ts� i^t.r tort Irvine Ear-�Cf1 La— Forest rr i It�iiSSio-1 Viejo �c Laguna Satl C emente The subject is located in Orange County. Key information about the area is provided in the following tables. POPULATION The area has a population of 3,195,159 and a AREA POPULATION BY AGE median age of 38, with the largest population 500,000 400,000 group in the 30-39 age range and the smallest 300,000 population in 80+ age range. 200,000 100,000 0 Source:E, 0-9 10-19 20-29 30-39 40-49 50-59 60-69 70-79 80+ Population has increased by 184,927 since POPULATION BY YEAR 2010, reflecting an annual increase of 0.5%. 3,000,000 Population is projected to increase by an 2,500,000 2,000,000 additional 80,748 by 2026, reflecting 0.5% 1,500,000 annual population growth. 1,000,000 500,000 son 0 Source,Lsri 2010 2021 2026 Source:ESRI,downloaded on Mar,1 2022 ©2022 CBRE, Inc. 5 CBRJE 684 Area Analysis INCOME The area features an average household MEDIAN INCOME BY YEAR income of $130,171 and a median household $120,000 income of $97,972. Over the next five years, $100,000 median household income is expected to $60,000 increase by 10.3%, or $2,018 per annum. $40,000 $20,000 $0 Source:Esri 2021 2026 EDUCATION A total of 42.7% of individuals over the age of POPULATION BY DEGREE 24 have a college degree, with 27.4% holding a bachelor's degree and 15.3% holding a n Bachelor's Degree graduate degree. ■Graduate Degree ■Other EMPLOYMENT Health Care/Social Assistance Manufacturing i Prof/Scientific/Tech Services Retail Trade Educational Services Construction Accommodation/Food Services Finance/Insurance Other Services(excl Publ Adm) Admin/Support/Waste Mgmt Srvcs Source:Esrl 0% 2% 4 0 69E 8% 10% 12W 14% The area includes a total of 1,601,474 employees and has N/A unemployment rate. The top three industries within the area are Health Care/Social Assistance, Manufacturing and Prof/Scientific/Tech Services, which represent a combined total of 35% of the population. Source:ESRI,downloaded on Mar,1 2022;BLS.g-dated Jan,0 1900 In summary, the area is forecasted to experience an increase in population and an increase in household income. 6 CBRJE ©2022 CBRE, Inc. Huntington Beach-NeighlwrLood?liap PREPARED BY:CBRE Vahmtt..&Advisory � w WarnerAve- a5tr •s a �- a a 1 s Slater Ave, cos r �. owl, . 11 VA 1 it o44 CI a J Talbert Ave f *P:• i a tri • Ellis Ave y 4 i- �`c „..�. • �r f,- Garfield Ave Huntington - Beach , a ».yJv�.s�pabwe..y++—r»...-- indianapoiis Ave Atlanta Ave, n. Victoria St- 4 Hamilton ' r � e . BANNING ,. 21•��"�.^a RANCH' oa a .maPcw sf • - • • —• • •• • • •• • • • • :-• • • • o � 666 Neighborhood Analysis LAND USE Land uses within the subject neighborhood consist of a mixture of residential and commercial development. The immediate area surrounding the subject consists primarily of residential uses with much of the development being built during the 1960s and 1970s. East of the subject are condominiums and west and south of the subject are multifamily residential properties. NEIGHBORHOOD LAND USE Present Land Use% Single Unit Residential: 35% Industrial: 15% Multi-Housing: 25% Agricultural: 0% Commercial: 20% Other: 5% Commercial Land Use Patterns Primary Commercial Thoroughfares: Garfield Avenue, Beach Blvd (39), Yorktown Avenue, Main Street, Goldenwest Street Major Commercial Developments: Seacliff Village Shopping Center, Pacific City, and Beach Promenade Source: CBRE GROWTH PATTERNS The subject neighborhood is fully-built-out, with new developments consisting of in-fill projects. The trend has been transitioning lower-density residential projects into higher-density multifamily residential, as permitted by the city of Huntington Beach. ACCESS The San Diego Freeway (405) is approximately three miles northeast of the subject and is the primary neighborhood freeway, connecting Huntington Beach with Los Angeles to the north and San Diego County to the south. Beach Boulevard (39) is a north-south neighborhood arterial that begins in the south at Pacific Coast Highway in Huntington Beach and terminates in the north at E. Whittier Boulevard in the city of La Habra. DEMOGRAPHICS Selected neighborhood demographics in 1-, 3- and 5-mile radius from the subject are shown in the following table: ©2022 CBRE,Inc. 8 CBRJE 687 Neighborhood Analysis SELECTED NEIGHBORHOOD DEMOGRAPHICS Lot 33 Block A Garfield Street 1 Mile Radius 3 Mile Radius 5 Mile Radius California Orange County Huntington Beach,CA 92646 Population 2026 Total Population 25,624 167,651 356,728 40,507,842 3,275,907 2021 Total Population 25,198 165,874 350,899 39,476,705 3,195,159 2010 Total Population 24,151 162,500 341,379 37,253,956 3,010,232 2000 Total Population 22,213 162,132 340,221 33,871,648 30,982 Annual Growth 2021 -2026 0.34% 0.27% 0.33% 0.52% 0.50% Annual Growth 2070-2021 0.39% 0.19% 0.25% 0.53% 0.54% Annual Growth 2000-2010 0.84% 0.02% 0.03% 0.96% N/A Households 2026 Total Households 10,313 63,017 126,241 13,615,954 1,073,115 2021 Total Households 10,181 62,549 124,716 13,283,432 1,047,779 2010 Total Households 9,861 61,759 122,479 12,577,498 992,781 2000 Total Households 8,837 60,907 121,589 11,502,870 935,270 Annual Growth 2021 -2026 0.26% 0.15% 0.24% 0.50% 0.48% Annual Growth 2010-2027 0.29% 0.12% 0.16% 0.50% 0.49% Annual Growth 2000-2010 1.10% 0.14% 0.07% 0.90% 0.60% Income 2021 Median Household Income $90,733 $102,495 $95,505 $80,044 $97,972 2021 Average Household Income $124,531 $134,177 $125,333 $113,468 $130,171 2021 Per Capita Income $50,51 1 $50,569 $44,562 $38,272 $42,721 2021 Pop 25+ College Graduates 7,730 54,713 107,840 9,536,591 941,863 Age 25+ Percent College Graduates- 41.6% 44.5% 42.0% 35.6% 42.7/o° 2021 Source: ESRI CONCLUSION The subject is located within the city of Huntington beach within western, coastal Orange County. During the past ten years, between 2010 and 2021, the growth rate within a three-mile radius of the subject was positive, but below that of Los Angeles County and the state of California. This is partially attributable to the lack of available land for growth and development as the city of Huntington Beach is fully built out. To this, the forecasted growth rate for this neighborhood is expected to remain below that of California and the county during the next five years. Median household income and average household income within a three-mile radius of the subject is above the average and median household income levels of both California and Orange County, reflecting its more desirable coastal location within the County. The overall outlook for the subject neighborhood is positive. ©2022 CBRE,Inc. CBRE 688 Site Analysis PLAT MAP T. 5 .5., R.11W. GA/4FlEL L7 A YENCJE T. t zoo• ! v_ .01 r` N loomm11.1� • j' ea CD �o N ©2022 CBRE, Inc. 1° CBRJE 689 Site Analysis FLOOD PLAIN MAP National Flood Hazard Layer FIRMette FEmA Legend W—,Bf.!Fiona 5PEaAt Haab INK;F E.Coke_'_ PUARDAREAS W Si annual dra+vx aooa Wm average old Anwar Coerce ilooD naran_Mees - OTHER AREAS OF See hoes FLOOD HAZARD OTHER AREAS AN.M_—F—­ OEME AL STRUCTURES....... AREA OF MIh11MAl.F�LOOD HAZARD zo'v X C_S.— it A—Chance H GTONG CH 065034 AEI B­_OTHER rrDare Barak FEATLMES OIWW-F­ IID Dual DM AvsNaM MAP PANELS TM P10-1 mEdGM wtWftm*_w Th.Wommum aMwn complka Wtn K..' auent from me WIMgDMG FML FE TRa map - NA eau eM FIRM­w .............. 1:6,OW __P" b. Baseman:0 Zw SM 1 ODO I'SM 2,000 LWS Ntiw Map:Orvoi.Wry Data reh­h"Octbe,2020 2022 CBRE, Inc. CBRJE 690 Site Analysis Site Analysis The following chart summarizes the salient characteristics of the subject site. SITE SUMMARY AND ANALYSIS Physical Description Site Area 0.07 Acres 2,846 Sq. Ft. Primary Road Frontage Main Street 14 Feet Secondary Road Frontage Holly Lane 10 Feet Shape Narrow, Rectangular Topography Generally Level Parcel Number(s) 159-281-04 Zoning District SP 9 - Section IV-6 (Commercial)As Curre Flood Map Panel No. & Date 06059CO262J 3-Dec-09 Flood Zone Zone X (Shaded) Adjacent Land Uses Multifamily residential &condominiums Earthquake Zone The subject is not located within an Alquist-Priolo identified earthquake fault zone. Comparative Analysis Rating Visibility Typical Functional Utility Poor Traffic Volume Good Adequacy of Utilities Assumed adequate given surrounding land uses Landscaping N/A Drainage Assumed adequate Utilities Availabilit�t Water City of Huntington Beach Sewer City of Huntington Beach Natural Gas So Cal Gas Electricity So Cal Edison Telephone Various Providers Mass Transit OCTA Other Yes No Unknown Detrimental Easements x Encroachments x Deed Restrictions x Reciprocal Parking Rights x Various sources compiled by CBRE ©2022 CBRE, Inc. 12 CBRJE 691 Site Analysis LOCATION The subject is west of Main Street, east of Holly Lane, and south of Garfield Avenue. LAND AREA The land area size was obtained via public record, which generally aligns with the parcel map. The site is considered too small in size for any potential (standalone) multifamily residential development based on MF zoning development standards, for which the Client has a rezoning application in process. Similarly, the size is considered too small for a commercial development within the subject neighborhood. SHAPE AND FRONTAGE The site is characterized by its long, narrow rectangular shape measuring ±10' x 285'. While it has frontage along adjoining streets on either side (Holly Ave to the west and Main Street to the East), the subject would have limited to no utility as a stand alone site. INGRESS/EGRESS Presently the subject may only be accessed by traversing one of its neighboring parcels to its north or south. Though the subject abuts two streets, Main Street and Holly Lane, there is no direct access to the site at present. The eastern portion of the subject would require a curb cut in the sidewalk. On the western portion of the subject, a fence, two bollards, and a power pole prevent vehicular ingress and egress. Excepting removal of the bollards and electrical/telephone pole on the western portion of the subject, or a curb cut along the eastern portion, access to the subject site would require an access easement across one of the neighboring parcels to the north or south. TOPOGRAPHY AND DRAINAGE The site is generally level and at street grade. The topography of the site is not seen as an impediment to the development of the property. During our inspection of the site, we observed no drainage problems and assume that none exist. SOILS A soils analysis for the site has not been provided for the preparation of this appraisal. In the absence of a soils report, it is a specific assumption that the site has adequate soils to support the highest and best use. EASEMENTS AND ENCROACHMENTS The subject is encumbered by various easements including: • a water main easement for irrigation purposes 13 CBRJE ©2022 CBRE,Inc. 692 Site Analysis • pole lines and incidental purposes • public utilities, and • pipeline easements in favor of Standard Oil These easements are detailed in the following excerpt from the Client-provided title report: SCHEDULE B A. Property taxes,which are a hen not yet due and payable, including any assessments collected with taxes to be levied for the fiscal year 2018-2019. B. Any hens or other assessments, bonds, or special district liens including without limitation, Community Facility Districts,that arise by reason of any local,City,Municipal or County Project or Special District C. The hen of supplemental or escaped assessments of property taxes, if any, made pursuant to the provisions of Chapter 3.5 (commencing with Section 75) or Part 2, Chapter 3, Articles 3 and 4, respectively,of the Revenue and Taxation Code of the State of California as a result of the transfer of title to the vestee named in Schedule A or as a result of changes in ownership or new construction occurring prior to Date of Policy. 1. Water rights,claims or title to water,whether or not disclosed by the public records. 2. Easement(s)for the purpose(s)shown below and rights incidental thereto, as delineated on or as offered tot dedication on the map of said tract Purpose: water mains tot irrigation purposes,pole lines and incidental purposes Affects: the rear 4 feet of said land 3. Easement(s)for the purpose(s)shown below and rights incidental thereto,as granted in a document: Granted to: Standard Oil Company,a Corporation Purpose: pubes utilities Recording Date: April 29, 1930 Recording No: in Book 377, Page 303 of Official Records Affects: Ldrt 33 in Block"A" 4. Easement(s)for the purpose(s)shown below and rights incidental thereto,as granted in a document: Granted to: Standard Oil Company of California,a Corporation Purpose: pipe line Recording Date: April 10, 1935 Recording No: in Book 746. Page 151 of Official Records Affects: Lot 33 in Block"A' 5_ Matters contained in that certain document Entitled: Development Agreement Dated: Not set out Executed by: City of Huntington Beach,Pacific Coast Homes and Garfield Partners Recording Dates November 14, 1990 Recording No: as Instrument No.90-599766 of Official Records Reference is hereby made to said document tot full particulars. SCHEDULE B (Continued) 6. Easement(s)for the purpose(s)shown below and rights incidental thereto as reserved in a document; Purpose: private alleys Affects: said land more particularly described therein 14 CBRJE ©2022 CBRE, Inc. 693 Site Analysis These easements significantly impact the development potential of the site and are considered to negatively affect the marketability of the subject on its own as a standalone parcel without assemblage. It is recommended that the client/reader obtain a current title policy outlining all easements and encroachments on the property, if any, prior to making a business decision. COVENANTS, CONDITIONS AND RESTRICTIONS There are no known covenants, conditions or restrictions impacting the site that are considered to affect the marketability or highest and best use. It is recommended that the client/reader obtain a copy of the current covenants, conditions and restrictions, if any, prior to making a business decision. UTILITIES AND SERVICES The site includes all municipal services, including police, fire and refuse garbage collection. All utilities can be made available to the site in adequate quality and quantity to service the highest and best use. The appraiser observed an electrical pole on the subject's western portion, though electrical and telephone/cable is not "to site." ENVIRONMENTAL ISSUES CBRE was not provided an Environmental Site Assessment (ESA), a tour of the site did not reveal any obvious issues regarding environmental contamination above the surface or adverse conditions. However, an underground oil pipeline is known to traverse the subject, which is cause for potential environmental concerns. The appraiser is not qualified to detect the existence of potentially hazardous material or underground storage tanks which may be present on or near the site. The existence of hazardous materials or underground storage tanks may affect the value of the property. For this appraisal, CBRE, Inc. has specifically assumed that the property is not affected by any hazardous materials that may be present on or near the property. ADJACENT PROPERTIES The adjacent land uses are summarized as follows: North: Commercia/Light Industrial Business (De Guelle Glass Co., glass and mirror shop) South: Unimproved vacant lot used for vehicle parking East: Condominium development (residential) West: Multifamily residential The Client recently acquired the adjacent land immediately to the north and south of the subject. CONCLUSION The site is not well suited for independent development. Access, size, and shape all negatively impact the subject's use potential. Additionally, current zoning standards do not support 15 CBRJE ©2022 CBRE, Inc. ssa Site Analysis development of the subject based on setback, minimum lot size, and frontage/width requirements. Additionally, detrimental easements preclude any subsurface disturbance or above-ground development. These detrimental site attributes significantly and negatively impact the marketability of the subject. Due to these limiting site characteristics, the highest and best use of the subject is assemblage with adjacent parcels, time and circumstances warranting. ©2022 CBRE, Inc. 'b CBRJE 695 Zoning ZONING MAP: SPECIFIC PLAN 9 DESIGNATION - HOLLY-SEACLIFF SPECIFIC PLAN A A, A, y A A sd A A A. A. Zoning:SP9 tlllti ` s & SP9 t " Zone Type SP i C Desmption Speck Plan Designatron d me AA r. m �! k — A i 4 } A Y A & 4 41 A t_ t h .A ti b � 1 # A A ©2022 CBRE, Inc. 17 CBRJE 696 Zoning ZONING MAP: SPECIFIC PLAN 9 — SECTION IV-6-C COMMERCIAL Agm ARM GarHeltl Avtnat i 22 AC a RMM ISAC 153 DU 1V-3_ RM — 8 AC 9 AC 120 DU lay Avanve IV MD 53 AC 475 DU d S � Yprktawn v�Qnu! y J 9 2022 CBRE, Inc. '8 CBRJE 697 Zoning ZONING CHART: HOLLY-SEACLIFF SPECIFIC PLAN LAND USE TABLE TABLE 1 HOLLY-SEACLIFF SPECIFIC PLAN LAND USE TABLE i EANDUSE-CATEGORY GROSS. •TOTAL -11A UM AVERAGE DEV. ACRES. UNITS Gv S GROSS STANDS, OE fTl DAfSITY; {PAGE} 1 1-1 RESIDENTIAL-LOW DENSITY 1 6 15 4 2.5 III-10 1-2 RESIDENTIAL-LOW DENSITY 1 26 90 4 3.6 111-10 1-3 RESIDENTIAL-LOW DENSITY 1 16 55 4 3.4 111.10 1.4 OPEN SPACE 16 111.32 SUBTOTAL 64 160 II 11-1 RESIDENTIAL-LOW DENSITY 3 62• 310 7 4.1 111-16 11-2 RESIDENTIAL-MEDIUM DENSITY 40 415 15 11.0 111.20 11-3 RESIDENTIAL-MEDIUM DENSITY 34• 390 15 13.0 111-20 11-4 RESIDENTIAL-MEDIUM-HIGH DENSITY 9 170 25 16.6 111-23 11-5 RESIDENTIAL-MEDIUM-HIGH DENSITY 4 75 25 18.8 III-23 11-6 RESIDENTIAL-MEDIUM-HIGH DENSITY 4 75 25 18.B III-23 II-7 RESIDENTIAL-MEDIUM-HIGH DENSITY 8 100 25 18.6 111.23 11-8 INDUSTRIAL 32 111.31 SUBTOTAL 191 1,535 111 111-1 RESIDENTIAL-MEDIUM DENSITY 19 285 15 15.0 111-20 tll-2 RESIDENTIAL-LOW DENSITY 2 105 397 7 3.8 111-13 111-3/4 RESIDENTIAL-LOW DENSITY 3 21 88 5 5 IIF16 111-5/7 RESIDENTIAL-LOW DENSITY 3 26•• 119 5 5 111-16 111-6 COMMERCIAL 11 III-31 111-8 OPEN SPACE 16 lit-32 SUBTOTAL 198 887 IV IV-1 RESIDENTIAL-MEDIUM DENSITY 16 156 15 9.7 111-20 IV-2 RESIDENTIAL-MEDIUM DENSITY 6 120 15 16.0 111-20 IV-3 INDUSTRIAL 9 111-31 tV-4 MIXED DEVELOPMENT 53 185 25 14.4 111.25 tV-S INDUSTRIAL 22 111.31 - IV-8 COMMERCIAL 4 111-31 SUBTOTAL 112 440 TOTAL 565 3,022 • Includes 4-acre Neighborhood Park. •• Includes 5-acre Neighborhood Park. 19 CBRE ©2022 CBRE, Inc. �r 696 Zoning Zoning The following chart summarizes the subject's zoning requirements, as the subject is currently zoned. Note that an application for re-zone to MF (multifamily residential) is in process. ZONING SUMMARY Current Zoning SP 9 - Section IV-6 (Commercial) As Currently Zoned / MF Re-Zone in Process Legally Conforming No - See Comments Uses Permitted Various commercial uses, including retail and office; existing oil and gas production facilities or consolidation of existing facilites permitted, subi. to CUP Zoning Change Not likely Category Zoning Requirement Minimum Lot Size 10,000 Sq. Ft. Minimum Lot Width 100 Feet Maximum Height 50 Feet Minimum Setbacks Front Yard 10 Feet Street Side Yard 0 Feet Interior Side Yard 10 Feet Rear Yard 0 Feet Maximum FAR/Density 1.50 : 1 Subject's Actual FAR 0.00 : 1 Parking Requirements Varies by use type Subject's Actual Parking None Source: Planning&Zoning Dept. ANALYSIS AND CONCLUSION Even though the subject does not contain any improvements, it is still considered legally non- conforming due to not meeting the minimum lot size requirement. As noted previously, it is an extraordinary assumption of this assignment that the city of Huntington Beach would approve a rezone of the subject to Multifamily (MF). Multifamily residential development of the subject and its adjacent parcels would be more harmonious with the existing adjacent properties, which are apartment buildings and condominiums. Further, conversion of older commercial sites into residential sites within the submarket was noted during the appraiser's research. ©2022 CBRE, Inc. 20 CBRJE 699 Tax and Assessment Data Tax and Assessment Data STATE OF CALIFORNIA PROPERTY TAX SUMMARY In California, privately held real property is typically assessed at 100% of full cash value (which is interpreted to mean market value of the fee simple estate) as determined by the County Assessor. Generally, a reassessment occurs only when a property is sold (or transferred) or when new construction occurs (as differentiated from replacing existing construction). In the case of long- term ground leases, the general rule is that a reassessment is made at the time of assigning or terminating a lease where the remaining term is more than 35 years. For reassessment purposes, the lease term includes all options to extend. Assessments for properties that were acquired before the tax year 1975-1976 were stabilized as of the tax year 1975-1976. Property taxes are limited by state law to 1% of the assessed value plus voter-approved obligations and special assessments. If no sale (or transfer) occurs or no new building takes place, assessments may not increase by more than 2% annually. The following table summarizes the actual and pro forma assessment values. SUBJECT TAX OBLIGATION The subject is owned wholly by the City of Huntington Beach. Therefore, the Orange County Assessor's Office and Treasurer-Tax Collector do not assess nor tax the subject property as it is a municipal property. However, if the subject sold for the value estimate in this report, a reassessment at that value would most likely occur, with tax increases limited to two percent annually thereafter until the property is sold again. 21 CBRJE ©2022 CBRE, Inc. 700 Market Analysis Market Analysis As noted, the subject site is zoned for commercial uses; however, the client intends to assemble the site with the adjacent parcels and redevelop to a multifamily project. It is an extraordinary assumption that this use will be approved by the City of Huntington Beach. The subject is in the Orange County market and the Huntington Beach/Seal Beach submarket. As the subject is being valued based on a multifamily residential rezone basis, the following market analysis provides information relative to the subject's multifamily market and submarket. This market analysis forms a basis for assessing market area boundaries, supply and demand factors, and indications of financial feasibility. The primary data source utilized for this analysis is CoStar. METROPOLITAN ORANGE COUNTY - CA APARTMENT MARKET OVERVIEW Recent Performance The following table summarizes historical and projected performance for the overall metropolitan Orange County - CA apartment market, as reported by CoStar. ORANGE COUNTY-CA APARTMENT MARKET Inventory Completions Occupied Stock Asking Rent Asking Rent Net Absorption Transaction Year Ending Occupancy Price Per Area (Units) (Units) (Units) ($/Unit/Mo.) Change (Units) (Units) 2016 228,564 2,076 219,697 96.1% $1,893 3.91% 2,768 $304,586 2017 233,235 4,671 222,570 95.4% $1,952 3.16% 2,871 $270,487 2018 237,278 4,043 225,600 95.1% $2,003 2.57% 3,031 $341,535 2019 242,152 4,874 229,211 94.7% $2,069 3.31% 3,612 $252,405 --------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Q 12020 242,784 600 229,304 94.4% $2,053 -0.76% 64 $298,614 Q22020 242,802 50 229,470 94.5% $2,043 -0,48% 199 $288,407 Q32020 242,688 -114 232,031 95.6% $2,070 1,32% 2,563 $244,511 Q42020 243,353 665 233,116 95.8% $2,092 1.03% 1,082 $327,339 -----------------------------------------------------------------------------------------------------------------------------------------------------------------------.... 2020 243,353 1,201 233,116 95.8% $2,092 1.10% 3,908 $327,339 Q 12021 244,592 1,239 235,438 96.3% $2,135 2.09% 2,323 $358,932 Q22021 244,613 21 238,132 97.4% $2,272 6.40% 2,699 $342,865 Q32021 244,976 363 239,827 97.9% $2,443 7.53% 1,699 $399,991 Q42021 245,764 788 240,536 97.9% $2,456 0.52% 712 $429,807 --------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 2021 245,764 2,411 240,536 97.9% $2,456 17.41% 7,433 $429,807 2022 248,883 3,119 243,114 97.7% $2,636 7.35% 2,578 $0 2023 252,448 3,565 245,472 97.2% $2,786 5.66% 2,357 $0 2024 254,130 1,682 247,117 97.2% $2,907 4.38% 1,646 $0 2025 257,157 3,027 249,643 97.1% $3,008 3.46% 2,526 $0 2026 260,758 3,601 252,303 96.8% $3,092 2.80% 2,660 $0 Future Projected Data according to Costar Source:Costar,4th Quarter 2021 The Orange County - CA apartment market consists of approximately 245,764 units of apartment space. The following observations are noted from the table above: • As of 4th Quarter 2021, there were approximately 240,536 units of occupied apartment space, resulting in an occupancy rate of 97.9% for the metro area. This reflects no change from the previous quarter's occupancy of 97.9%, and an increase from an occupancy rate of 95.8% from last year. 22 CBRJE ©2022 CBRE, Inc. 701 Market Analysis • The area experienced positive 7,433 units of net absorption for the current quarter. This indicates an improvement from the previous quarter's positive 712 units of net absorption, and an improvement from the positive 3,908 units of net absorption from last year. • The area had completions of positive 2,411 units for the current quarter, which indicates an increase from the previous quarter's completions of positive 788 units, and indicates an improvement from completions of positive 1,201 units from last year. • The area achieved average asking rent of $2,456 per unit, which indicates no change from the previous quarter's asking rent of $2,456 per unit, and an increase from the asking rent of $2,092 per unit from last year. Historical Inventory— Market HISTORICAL INVENTORY:ORANGE COUNTY-CA APARTMENT MARKET 265,ow 250 25a 26dD.fk G 257.157 255,k4t: 232448 254,130 246 883 250,OW 245,764 245,000 244152 243.353 240OW 237,279 235,IXX} 233,235 228,564 230,DW 225,D XS 220,000 215,000 210," 2016 2017 MIS 2014 2020 2021 2022 2023 2024 2825 202b 'Future Projected Data according to CoStar Source:CoStar,4th Quarter 2021 Inventory is projected to be 245,764 units at the end of the current year, which represents an increase from the previous year's inventory of 243,353 units. Inventory for next year is projected to be 248,883 units, reflecting an increase from the current year. 23 CBRJE ©2022 CBRE, Inc. 702 Market Analysis Historical Occupancy - Market HISTORICAL OCCUPANCY:ORANGE COUNTY-CA APARTMENT MARKET 979% 9&o% 97:7% 975% 97.2% 97.2St 973% 97.0% 968% 9634 96.1% 96.0% 951% 95 4% 955% 95.1% 95,0% 94,7% 945% 94.0% 93 5% 93.0% 2016 2017 202C 2C2.1 W22 -23 2,124 =z 2G26 'Puture Projected Data according to CDStar Source.CoStar,4th Quarter 2021 At the end of the current year, the occupancy rate is projected to be 97.9%, which reflects an increase from the 95.8% occupancy rate at the end of last year. Occupancy for next year is projected to be 97.7%, reflecting a small decrease from the current year. Historical Net Absorption - Market HISTORICAL NET ABSORPTION:ORANGE COUNTY-CA APARTMENT MARKET BOX 7,433 lox 6,t 5,D00 3,9D& 4 tit 3,612 2$� 3,031 3,000 2•75S 2,578 2,357 2,52b 2,660 2,000 1,b46 1,09G D 2016 2017 2019 2D19 2D20 5,2' 2027, :,._3 2R24 2225 �:;2b Future Projected Data according to CoSter Sources CoStar,4th Quarter 2021 At the end of the current year, the area is projected to experience positive 7,433 units of net absorption, which indicates an improvement from the positive 3,908 units of net absorption for the previous year. The area is projected to experience positive 2,578 units of net absorption as of the end of next year, which indicates a decline from the current year. 24 CBRJE ©2022 CBRE, Inc. 703 Market Analysis Historical Completions - Market HISTORICAL COMPLETIONS:ORANGE COUNTY-CA APARTMENT MARKET 4.974 S'Dw 4,671 4,043 3,119 -4,427 a,-Cc 4,00;1 3,601 3,SW 3,r 2,411. _. 2,500 2,076S30 2,O 1,66"t I'soo 1,241 1,0W Sao 2'16 M17 2ou 2D19 2020 2ti21 2022 =3 2024 2025 21,26 Future Projected Data according to CoStar Sources Costar,4th Quarter 2421 The area is projected to achieve completions of positive 2,411 units for the current year, which indicates an improvement from the previous year's completions of positive 1,201 units. The area is projected to experience completions of positive 3,119 units as of the end of next year, which indicates an improvement from the current year. Historical Asking Rent - Market HISTORICAL ASKING RENT:ORANGE COUNTY-CA APARTMENT MARKET $3,500 666 S3,092 53.tk7t) 52,736 5'2 4S5 52,500 13, Sl,&43 51,952 S2,w, 4b9 52 092 S2,OMS S1,W I I51,0M S500 2316 2017 2018 2014 2020 2021 2022 2023 2:2. 2075 2026 Future Projected Data according to CoStar Source:CoStar,4th Quarter 2021 The area is projected to achieve average asking rent of $2,456 per unit at the end of the current year, which indicates an increase from the previous year's asking rent of $2,092 per unit. The area is projected to achieve asking rent of $2,636 per unit by the end of next year, indicating an increase from the current year. 25 CBRJE ©2022 CBRE, Inc. 704 Market Analysis SUBMARKET SNAPSHOT: HUNTINGTON BEACH/SEAL BEACH The following table summarizes the supply of apartment units for each submarket within the Orange County - CA market as of 4th Quarter 2021 . ORANGE COUNTY- CA APARTMENT SUBMARKET SNAPSHOT Submarket Inventory(Units) Completions* Asking Rent($/Unit/Mo.) Occupancy (Units) Anaheim 36,061 55 $1,995 98.0% Central OC East of 1-5 9,552 451 $2,261 94.7% Central OC West of 1-5 40,345 188 $2,069 98.6% Costa Mesa 16,740 0 $2,372 97.6% Huntington Beach/Seal Beach 15,776 0 $2,470 98.5% Irvine 41,321 291 $3,101 97.7% Newport Beach 9,185 0 $3,286 99.1% North County 37,892 1,225 $2,101 97.4% South County 28,951 201 $2,732 97.7% Tustin 9,936 0 $2,300 98.8% `Completions include trailing 4 quarters Source:Costar,4th Quarter Note that the subject submarket 4" most expensive submarket in the County, with Newport Beach, Irvine, and South County being 1't 2nd and 3rd respectively. Huntington Beach/Seal Beach Submarket Important characteristics of the Huntington Beach/Seal Beach apartment market are summarized below: HUNTINGTON BEACH/SEAL BEACH APARTMENT SUBMARKET Inventory Completions Occupied Stock Asking Rent Asking Rent Net Absorption Transaction Year Ending Units Occupancy Price Per Area (Units) (Units)) (Units)) ($/Unit/Mo.) Change (Units) (Units) 2016 14,372 0 13,771 95.8% $1,986 2.68% 44 $337,273 2017 14,750 378 14,044 95.2% $2,015 1.42% 272 $330,981 2018 15,776 1,026 14,849 94.1% $2,059 2.21% 804 $371,087 2019 15,776 0 15,135 95.9% $2,137 3.78% 286 $342,857 Q1 2020 15,776 0 15,116 95.8% $2,137 0,01% -18 $231,875 Q22020 15,776 0 15,134 95.9% $2,139 0.09% 18 $381,842 Q32020 15,776 0 15,253 96.7% $2,162 1.05% 119 $285,714 Q42020 15,776 0 15,307 97.0% $2,162 0.01% 54 $312,788 -------------------------------------------------------------------------------------------------------------------------------------------- ------------------------------- 2020 15,776 0 15,307 97.0% $2,162 1.17% 173 $312,788 Q1 2021 15,776 0 15,331 97.2% $2,207 2.08% 24 $387,500 Q22021 15,776 0 15,466 98.0% $2,309 4.61% 136 $353,902 Q32021 15,776 0 15,536 98.5% $2,440 5.68% 70 $321,543 Q42021 15,776 0 15,535 98.5% $2,470 1.21% -1 $402,788 --------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 2021 15,776 0 15,535 98.5% $2,470 14.21% 229 $402,788 2022 15,773 -3 15,503 98.3% $2,654 7.48% -32 $0 2023 15,932 159 15,583 97.8% $2,805 5.67% 78 $0 2024 15,950 18 15,582 97.7% $2,929 4.44% -2 $0 2025 15,992 42 15,611 97.6% $3,032 3.51% 30 $0 2026 16,042 50 15,618 97.4% $3,119 2.85% 7 $0 'Future Projected Data according to Costar Source:Costar,4th Quarter 2021 26 CBRJE ©2022 CBRE,Inc. 705 Market Analysis Importantly, as will later be used as basis for market conditions adjustments, note that asking rent increased 14.25% between 2020 and 2021, and between 2020 and 2022 the total increase is forecasted by Costar at 24.19% The Huntington Beach/Seal Beach apartment submarket consists of approximately 15,776 units of apartment space. The current submarket inventory represents approximately 6.4% of the overall market inventory. The following observations were noted from the table above: • As of 4th Quarter 2021, there were approximately 15,535 units of occupied apartment space, resulting in an occupancy rate of 98.5% for the submarket. This reflects no change from the previous quarter's occupancy of 98.5%, and an increase from an occupancy rate of 97.0% from last year. The submarket occupancy is above the 97.9% market occupancy. • The submarket experienced positive 229 units of net absorption for the current quarter. This indicates an improvement from the previous quarter's negative 1 units of net absorption, and an improvement from the positive 173 units of net absorption from a year ago. Overall, the submarket has experienced positive 229 units of net absorption for the current year-to- date period. The submarket's current net absorption of positive 229 units is below the overall market net absorption of positive 7,433 units. • The submarket had zero completions for the current quarter, which indicates no change from the previous quarter's zero completions, and no change from the zero completions from last year. • The submarket achieved average asking rent of $2,470 per unit, which indicates no change from the previous quarter's asking rent of $2,470 per unit, and an increase from the asking rent of $2,162 per unit from last year. The submarket's current asking rent of $2,470 per unit compares favorably with the overall market asking rent of $2,456 per unit. ©2022 CBRE, Inc. 27 CBRJE 706 Market Analysis Historical Inventory - Submarket HISTORICAL INVENTORY:HUNTINGTON BEACH/SEAL BEACH APARTMENT MARKET 2Gad ! t z 3h 'future Projected Data according to Ca Star Source CoStor,4th Quarter 2021 Submarket Inventory is projected to be 15,776 units at the end of the current year, which represents no change from the previous year's submarket inventory of 15,776 units. Inventory for next year is projected to be 15,773 units, reflecting a decrease from the current year. Historical Occupancy - Submarket HISTORICAL OCCUPANCY:HUNTINGTON BEACH/SEAL BEACH APARTMENT MARKET WAIN 9i�_ 95.9s j SIM s5-tea I � 1a 2026 2017 201S 2M 2020 2021 2022 2423 2024 2025 2025 ( Msrk�4 —fk—St�me<'Ke4 'future Projected Data accorang to Co Star Source.CoStar,41h Quarter 2021 Submarket occupancy is projected to be 98.5% at the end of the current year, which represents an increase from the previous year's submarket occupancy of 97.0%. Submarket occupancy for next year is projected to be 98.3%, reflecting a small decrease from the current year. ©2022 CBRE, Inc. 28 CBRJE 707 Market Analysis Historical Net Absorption - Submarket HISTORICAL NET ABSORPTION:HUNTINGTON BEACH/SEAL BEACH APARTMENT MARKET ' 7,433 fi we 4=ice 3,612 3'908 d 3,Wc 2,871 3,031 e Z53E 2,357 2.526 2,000ff�-fr S ai,a 1,646 2016 2017 2DIS 2019 2020 2023. 2023 Market -4-sUtrrr}ash `Future Projected Data according to CoStar Source.CoStar,4th Quarter 2021 Net absorption in the submarket is projected to be positive 229 units at the end of the current year, reflecting an improvement from the previous year's net absorption of positive 173 units. Net absorption for next year is projected to be negative 32 units, indicating a decline from the current year. Historical Completions - Submarket HISTORICAL COMPLETIONS:HUNTINGTON BEACH/SEAL BEACH APARTMENT MARKET 4,874 =--- 4,671 4,043 E 3,965 3,601 � } t i 3.1i9 3,027 i a ` et -- 2Mfi 2017 2W 2019 2020 2M 'h , ,.1 3 2M4 203 202fi `FvWm Projected Data according to CoStar Source CoStar,4th Quarter 2021 The submarket is projected to achieve zero completions at the end of the current year, which is unchanged from the previous year's zero completions. The submarket is projecting completions of negative 3 units for next year, which indicates a decline from the current year. 29 CBRE ©2022 CBRE,Inc. 708 Market Analysis Historical Asking Rent - Submarket HISTORICAL ASKING RENT:HUNTINGTON BEACH/SEAL BEACH APARTMENT MARKET 53,C32 53.11.4 I 7 $1.9� 52.069 52..137 $2,162. $2,015 S1.5m sscct _ 2.1,1 2^.77 ?a zing 2020 2022 232.2 IM3 2@24. =5 2:'2, •Future Projected Data accordng to CoStar Source:CoStar,4th Quarter 2021 The submarket is projected to achieve average asking of $2,470 per unit at the end of the current year, which represents an increase from the previous year's asking rent of $2,162 per unit. The submarket is projected to achieve average asking rent of $2,654 per unit, reflecting an increase from the current year. CONCLUSION Like trends reported and observed across Orange County and the State of California, the subject's multifamily submarket is performing well, with asking rents forecasted to increase significantly through 2026. The overall outlook for the subject's multifamily market and submarket is positive. 30 C B RJE ©2022 CBRE, Inc. 709 Highest and Best Use Highest and Best Use In appraisal practice, the concept of highest and best use represents the premise upon which value is based. The four criteria the highest and best use must meet are: • legally permissible; • physically possible; • financially feasible; and • maximally productive. The highest and best use analysis of the subject is discussed below. AS VACANT Legal Permissibility The legally permissible uses were discussed in the Site Analysis and Zoning Sections. Importantly, as previously noted, it is an extraordinary assumption of this appraisal that the subject may be rezoned as multifamily residential by the City of Huntington Beach. Physical Possibility Due to a pressurized underground oil pipeline that precludes subsurface disturbance or above- ground development, the subject site would not support any physically possible or legally probable development as a standalone development site. However, the subject has historically been used and could continue to be used for surface parking and/or as an access road for adjacent developments on parcels not encumbered by detrimental easements. Financial Feasibility Potential uses of the site include a surface parking lot and or access road. The determination of financial feasibility is dependent primarily on the relationship of supply and demand for the legally probable land uses versus the cost to create the uses. With respect to the legal uses for the subject site, the local commercial/retail and multifamily market is generally stabilized. Development of new commercial/retail and multifamily properties has occurred in the recent past and continues to this day. Further, within the subject market, there are multiple proposed projects for these property types. Since development of the subject is not physically or legally possible, assemblage with the subject's adjacent parcels to the north and/or south is the subject's highest and best use. Assemblage is financially feasible and maximally productive. Maximum Productivity - Conclusion The final test of highest and best use of the site as if vacant is that the use be maximally productive, yielding the highest return to the land. Based on the information presented above and upon information contained in the market and neighborhood analysis, we conclude that the highest and best use of the subject as if vacant is ©2022 CBRE, Inc. 31 CBRJE 710 Highest and Best Use assemblage with the subject's adjacent parcels to the north and south, as part of a multifamily residential development. Our analysis of the subject and its respective market characteristics indicate the most likely buyer, as if vacant, would be a developer. Notably, given that assemblage is the highest and best use, the potential buyer-pool of the subject is exceptionally limited. 32 CBRJE ©2022 CBRE, Inc. 711 Land Value Land Value The following land valuation employs the sales comparison approach. The land is valued as multifamily residential land (MF) based on the Client's planned application for a rezone of the subject and its adjoining parcels. The limiting characteristics of the subject, including its narrow rectangular shape and detrimental easements are later considered with below-the-line adjustments made. First, though, the appropriate unit of comparison is analyzed and established. UNIT OF COMPARISON CBRE performed a correlation coefficient analysis to determine which unit of comparison would provide the most meaningful analysis relative to the subject as multifamily residential development land. The following chart summarizes the analysis, based on the four comparables used herein: CORRELATION COEFFICIENT - UNIT OF COMPARISON Unit of Compairison Correlation Coefficient Price per Square Foot ($/SF) 0.985 Price per Potential Unit ($/Unit) 0.496 Strongest Unit of Comparison: $/SF Compiled by CBRE As indicated above, price per square foot provides the most significant and meaningful unit of comparison when analyzing the subject property as multifamily residential land and is given dominant consideration. SELECTION OF COMPARABLE SALES The sales utilized represent the best data available for comparison with the subject and were selected from the Huntington Beach, Costa Mesa, and Long Beach neighborhoods. These sales were chosen based upon level of entitlements (e.g. having none), density by right, and size. Two other multifamily residential land sales in Huntington Beach were considered but ultimately excluded for having densities above 100 dwelling units per acre. Other sales uncovered on Pacific Coast Highway were considered too dissimilar to the subject given the superior coastal proximity of these sites. The following map and table summarize the comparable data used in the valuation of the subject site. A detailed description of each transaction is included in the addenda. 33 C B RJE 0 2022 CBRE, Inc. 712 Land Value Multifamily Land Comparables PREPARED BY-.CBRE valuation Advmry 12,106 SF Remnant Parcel H;t l Q Lot 33 Block A Garfield Street Huntington Beach,CA 92646 g 1 Multifamily Residential 212-Acre Site Garden 8371-8461 Talbert Avenue Grove Huntington Beach,CA,92646 Westminster 0 Affordable Housing Site Santa Any 18431 Beach Boulevard Huntington Beach,CA 92648 ID 777 W 19th St 777 West 19th Street Costa Mesa,CA 92627 r0ul'l& T, 0 053-Acre Site V t+i., 3580 E Pacific Coast Highway Long Beach,CA 908o4 H u n to t a n B c h SN,4 s, 3 Costa Mesa I 55 Newport Beach , SUMMARY OF COMPARABLE LAND SALES Transaction Sale Size Size Density Allowable Price Price Per No. Property Location Type Date Proposed Use Price' (Acres) (SF) (UPA) Units Per SF Bldg Unit 1 8371-8461 Talbert Avenue Under Mar-22 34-MFR Units $6,538,880 2.12 92,434 15.55 33 $70.74 $198,148 Huntington Beach,CA 92646 Contract 2 18431 Beach Boulevard Sale Jan-20 24 units $3,000,000 0.79 34,412 30.38 24 $87.18 $125,000 (N/O Main Street) Huntington Beach,CA 92648 3 777 West 19th Street Sale Dec-19 35 units $3,575,000 0.73 31,694 48.10 35 $112.80 $102,143 Costa Mesa,CA 92627 4 3580 E.Pacific Coast Highway Sale Dec-19 77-MFR Units $2,500,000 0.53 23,087 54.72 29 $108.29 $86,207 Long Beach,CA 90804 Average 1.04 45,407 37.19 30 $94.75 $127,874 Minimum 0.53 23,087 15.55 24 $70.74 $86,207 Maximun 2.12 92,434 54.72 35 $112.80 $198,148 Subject Lot 33 Block A Garfield Street, --- --- Assemblage with --- 0.07 2,846 15.31 1 --- --- Huntington Beach,California adjacent parcels for future multifamily residential development 'Adjusted sale price for cash equivalency and/or development costs(where applicable) Compiled by CBRE Location Adjustments The following supplemental data was collected in order to provide support for our location adjustments: 34 C B RJE ©2022 CBRE, Inc. 713 Land Value LAND SALES LOCATION ADJUSTMENT ANALYSIS Comparable Number Subject 1 2 3 4 Address Lot 33 Block A 8371-8461 18431 Beach 777 West 19th 3580 E.Pacific Garfield Street Talbert Avenue Boulevard Street Coast Highway Radius for Demographic Analysis 3 Mile Radius 3 Mile Radius 3 Mile Radius 3 Mile Radius 3 Mile Radius 2021 Households 62,549 73,200 52,605 60,337 109,467 2021 Average Household Income $134,177 $128,625 $138,118 $136,176 $94,366 AHI Relative to Subject --- -4.1% 2.9% 1.5% -29.7% 2021 Median Value of Owner Occupied Housing Units $828,491 $803,507 $841,856 $894,724 $714,105 2021 %Renter Occupied Housing Units 38.8% 38.3% 37.1% 49.9% 60.8% 2021 %College/Graduate Degree Age 25+ 44.5% 43.3% 45.6% 47.7% 37.8% 2021 Median Age 42.6 42.8 43.1 38.2 34.9 Indicated Qualitative Adjustment --- Similar Similar Similar Inferior Concluded Quantitative Adjustment --- 0% 0% 0% 5% Compiled by CBRE The indicated adjustments will be used in the following discussions. DISCUSSION/ANALYSIS OF LAND SALES Land Sale One This comparable represents the pending sale of 2.12-gross acres of multifamily residential land in Huntington Beach. The property is currently improved with three units in fair condition that are occupied by three tenants on month-to-month leases and will be delivered vacant to the pending buyer. The listing agent marketed the property as RM development land, with up to 15 units per acre, assuming a re-zone from R-L 2-4 Units (7 units per acre by right). The marketing material and Costar report the site size as 2.429 acres, but the parcel map and public record report 2.12- acres, which is used in this analysis. A capital adjustment of $38,880, estimated by the appraiser, is made for demolition of the three residential units. The listing agent indicates that multiple offers have been received at or above asking. Using the asking price of $6,500,000, the pending purchase price equates to $69.90 per square foot of site area, or $195,792 per unit by right (assuming RM re-zone granted at 15 units per acre, say 33 units with affordable density bonus). Land Sale Two This was the sale of 0.79-acres of land on Beach Boulevard. Twenty-four units can be constructed on site. The site is uniquely situated along a major commercial thoroughfare in Huntington Beach, within the Beach and Edinger Corridors Specific Plan Area that was established to support and promote investment along the City's primary commercial corridors. It was reported that the buyer plans on building affordable housing on site. Information about specific number of units that will be built is not available at this time. No sale conditions were reported. The property is within walking distance to numerous dining, retail, and entertainment amenities. 35 CBRE ©2022 CBRE,Inc. 714 Land Value Land Sale Three This is December 2019 sale of a site that is currently improved with an office building located on West 19th Street in Costa Mesa. The property is situated in an opportunity zone with a residential zoning overlay. The existing income of the office building yields a cap rate of 4,85% cap rate. The buyer plans to operate the office property, while undergoing entitlements for a mixed-use development that would include a small commercial ground floor component and 35 residential units. The entitlement process for the redevelopment is estimated to take 10 months. The buyer fulfilled a1031 exchange to purchase the property. Land Sale Four The buyer is a developer, owner, and operator of affordable multi-family properties. The property is located at the southwest corner of Pacific Coast Highway and Loma Avenue in Long Beach with amenities located nearby. The property is part of the new Long Beach Land Use and General Plan which allows up to five levels of construction on this site. The upper floor should have ocean views. The property is improved with a 10,000-square foot, 2-story office building. The 10 tenants are on month-to-month leases. According to the Long Beach zoning ordinance, the maximum density allowed on this site is based on the R-4N zone at 1 DU/975 SF or 44.7 DU/Acre. For this site, it equates to 23 units. However, with the Land Use Element (NSC-M) the density is 54 dua so the 'by-right' would have been 29 units. The city's zoning vs land use element was confusing at the time of escrow because the city was in the process of approving the updated land use element while the property was in escrow. The city approved it shortly before the sales closed. The land use element supersedes the zoning. Ultimately, the buyer is proposing 77 units for their affordable project. No entitlements were in place at the time of the sale. SUMMARY OF ADJUSTMENTS Based on our comparative analysis, the following chart summarizes the adjustments warranted to each comparable. 36 CBRJE ©2022 CBRE, Inc. 75 Land Value LAND SALES ADJUSTMENT GRID Comparable Number 1 2 3 4 Subject Transaction Type Under Contract Sale Sale Sale Transaction Date Mar-22 Jan-20 Dec-19 Dec-19 Interest Transferred Fee Fee Fee Fee Simple/Freehold Simple/Freehold Simple/Freehold Simple/Freehold Proposed Use 34-MFR Units 24 units 35 units 77-MFR Units Adjusted Sale Price' $6,538,880 $3,000,000 $3,575,000 $2,500,000 Size(Acres) 2.12 0.79 0.73 0.53 Size(SF) 92,434 34,412 31,694 23,087 Price($ PSF) $70.74 $87.18 $112.80 $108.29 Property Rights Conveyed 0% 0% 0% 0% Financing Terms 1 0% 0% 0% 0% Conditions of Sale 0% 0% 0% 0% Market Conditions(Time) 0.0% 13.0% 13.0% 13.0% ...reflects: the improved market the improved market the improved market conditions since the conditions since the conditions since the date of sale date of sale date of sale Price($ PSF) $70.74 $98.51 $127.46 $122.37 Size 0% 0% 0% 0% Shape(below-line adj) 0% 0% 0% 0% ...due to: the superior shape of the superior shape of the superior shape of the superior shape of comparable relative comparable relative comparable relative comparable relative to subj. to subj. to subi. to subj. Corner 0% 0% 0% 0% Frontage 0% 0% 0% 0% Topography 0% 0% 0% 0% Location 0% 0% 0% 5% ...due to: inferior inferior demographics demographics Zoning/Density 0% -10% -20% -20% ...because of. Density of 15.55 Density of 30.38 Density of 48.1 Density of 54.72 Utilities 0% 0% 0% 0% Highest&Best Use 0% 0% 0% 0% (below-line adj) ...due to: pipeline easement pipeline easement pipeline easement pipeline easement Total Other Adjustments 0% -10% -20% -15% Value Indication tor Subject ($/SF) $70.74 $88.66 $101.97 $104.01 Absolute Adjustment 0% 23% 33% 38% 1 Adjusted sale price for cash equivalency and/or development costs(where applicable) Compiled by CBRE Based on the preceding analysis, Comparable 1 js most representative of the subject site and warranted greatest consideration because of its location, recency of pending transaction, similar potential MF zoning, and density. As such, a price per square foot of land indication towards the top of the range was most appropriate for the subject given its overall similarity to Comparable 1, which consequently requires the fewest adjustments. 37 CBRIE ©2022 CBRE,Inc. 716 Land Value Discussion of Significant Adjustments MARKET CONDITIONS As documented in the Market Analysis, multifamily rental rates have been and are increasing significantly in Southern California. Based on asking rental rates as reported by Costar, large upward adjustments are warranted to comparables 3 and 4, which transacted in December 2019. Because multifamily land does not always appreciate equal to improved multifamily properties due the length of development cycles, the upward market conditions were tempered somewhat an adjustment of 6.0% per year was applied in our analysis. SHAPE(BELOW-THE-LINE DEDUCTION) A sizeable downward adjustment is warranted for the subject's long, narrow rectangular shape, which precludes any type of development. As a basis of our adjustment, we consider four sales with irregular shape and/or poor access and compared their purchase price with market averages at time of the respective transactions. IRREGULARLY SHAPED / POOR ACCESS SALES Considered for Shape Adjustment Sale No. 1 2 3 4 Address 19130 Figueroa 2811 E. Grant 1474 E. Franklin 19101 S. Broadway City Gardena Wilmington Pomona Carson Parcel Size 96,268 118,701 50,014 116,305 Sale Date 12/29/2009 12/4/2013 4/17/2009 7/1/2013 Sale Price $750,000 $1,714,298 $515,000 $1,356,000 $/SF $7.79 $14.44 $10.30 $11.66 Market Average ($/SF) $26.35 $22.84 $19.84 $27.14 SP as%of Market 30% 63% 52% 43% Adjustment 70% 37% 48% 57% Compiled by CBRE As can be noted, they reflect discounts ranging from 37% to 70%. We have applied a 70% discount below-the-line to account for the development-impacting shape factor of the subject. DETRIMENTAL PIPELINE EASEMENT(BELOW-THE-LINE ADJUSTMENT) As noted, several easements impact the subject site, the most restrictive of which is an underground pressurized oil pipeline that runs the length of the property. A below the line adjustment is made for the associated detrimental pipeline easement that precludes subsurface disturbance and above-ground development. Easements are typically valued as a percentage of the underlying fee value of the land. The percentage is related to the perceived "bundle" of rights acquired, or the rights acquired from the property owner. In other words, the valuation, or in this case, the discount, is based upon what the property owner has lost, not what the grantee of the easement has gained. This bundle of rights acquired involves 1) the owner's loss of the use of the easement area during the 38 CBRE ©2022 CBRE, Inc. 717 Land Value construction period, 2) the limits on normal use of the area after project construction is completed and 3) the potential for future disruptions if maintenance or modifications are required. From our appraisal experience involving other projects with various types of easements, easement valuations typically are in the range of 25% of fee for minor impacts to 100% of fee for acquisition of nearly all the land rights, such as permanent road easements or levee/flood control easements. The matrix below is from an easement appraisal article (Easement Valuation) authored by Donald Sherman, SR/WA, published in the May/June 2006 Right-of-Way Magazine of the International Right-of-Way Association. It is included only for reference; the appraiser has pondered the rights being acquired in valuing the proposed utility easement. Easement Valuation Matrix .Severe impact on surface use Overhead electric flowage easements, 9d96-it)0% .Conveyance of future uses railroad right of way,irrigation canals, exclusive access easements Major impact on surface use Overhead electric,pipelines,drainage 75%-8A% .Conveyance of future uses easements,railroad right of way,flowage easements 51%-74% •Some impact on surface use Pipelines,scenic easements Conveyance of ingresslegress rights .Balanced use by both owner and Water or sewer lines,cable lines, easement holder telecommunications 26%-{9% .Location along a property line Water or sewer line,cable fines location across non usable land area Subsurface or air rights with Air rights,water or sewer line 11%-25% minimal effect on use and utility Location with a setback 0%-10% •Nominal effect on use and utility Small subsurface easement The matrix supports indicates a discount range of between 75% and 89% for pipeline easements. Though the grantor will not be allowed to develop the encumbered area, it still may be used as an access road/driveway and/or parking; therefore we have discounted the full fee simple value by 75% due to the presence of the easements on the subject site. 39 C B RE ©2022 CBRE, Inc. 718 Land Value CONCLUSION The following table presents the valuation conclusion: CONCLUDED LAND VALUE $ PSF Subject SF Total $75.00 x 2,846 = $213,450 $85.00 x 2,846 = $241,910 Indicated Value: $225,000 (Rounded$PSF) $79.06 Discount for Shape: -70% Indicated Value: $67,500 (Rounded$ PSF) $23.72 Discount for Detrimental Pipeline Easement: -75% Concluded As-Is Value: $16,875 (Rounded $ PSF) $5.93 Compiled by CBRE Prior to adjustments, the four comparables range from $70.74 per square foot to $112.80 per square foot, with an average of $94.75 per square foot. Following adjustments for market conditions, location, and density, these same comparables range between $70.74 per square foot and $104.01 per square foot, with an average of $91 .35 per square foot. We have reconciled between the low end and the average of the adjusted range because of the emphasis placed on both Comparable 1 and Comparable 2, with the former receiving most consideration. We conclude to a value range of $75.00 to $85.00 per square foot reconciling to $225,000 . The subject's concluded value is well bracketed by the comparables, both before and after adjustments, on a price per square foot basis. Following the below-the-line deduction for the subject's shape and detrimental pipeline easement, the concluded value equates to $16,875 or $5.93 per square foot of land. 9 2022 CBRE, Inc. 40 CBRJE 719 Conclusion Conclusion In the sales comparison approach, the subject is compared to similar properties that have been sold recently or for which listing prices or offers are known. The sales used in this analysis are considered comparable to the subject, and required adjustments are based on reasonable and well-supported rationale. In addition, market participants are currently analyzing purchase prices on other properties as they relate to available substitutes in the market. Adjustments were made for the factors that affect value, with special consideration given to parcel shape and existing easements. Based on the foregoing, the market value of the subject has been concluded as follows: MARKET VALUE CONCLUSION Appraisal Premise Interest Appraised Date of Value Value Conclusion Land Value Fee Simple Estate, as March 2, 2022 $16,875 encumbered Compiled by CBRE 41 CBRJE ©2022 CBRE, Inc. 720 Assumptions and Limiting Conditions Assumptions and Limiting Conditions 1. CBRE, Inc. through its appraiser (collectively, "CBRE") has inspected through reasonable observation the subject property. However, it is not possible or reasonably practicable to personally inspect conditions beneath the soil and the entire interior and exterior of the improvements on the subject property. Therefore, no representation is made as to such matters. 2. The report, including its conclusions and any portion of such report (the "Report"), is as of the date set forth in the letter of transmittal and based upon the information, market, economic, and property conditions and projected levels of operation existing as of such date. The dollar amount of any conclusion as to value in the Report is based upon the purchasing power of the U.S. Dollar on such date. The Report is subject to change as a result of fluctuations in any of the foregoing. CBRE has no obligation to revise the Report to reflect any such fluctuations or other events or conditions which occur subsequent to such date. 3. Unless otherwise expressly noted in the Report, CBRE has assumed that: (i) Title to the subject property is clear and marketable and that there are no recorded or unrecorded matters or exceptions to title that would adversely affect marketability or value. CBRE has not examined title records (including without limitation liens, encumbrances, easements, deed restrictions, and other conditions that may affect the title or use of the subject property) and makes no representations regarding title or its limitations on the use of the subject property. Insurance against financial loss that may arise out of defects in title should be sought from a qualified title insurance company. (ii) Existing improvements on the subject property conform to applicable local, state, and federal building codes and ordinances, are structurally sound and seismically safe, and have been built and repaired in a workmanlike manner according to standard practices; all building systems (mechanical/electrical, HVAC, elevator, plumbing, etc.) are in good working order with no major deferred maintenance or repair required; and the roof and exterior are in good condition and free from intrusion by the elements. CBRE has not retained independent structural, mechanical, electrical, or civil engineers in connection with this appraisal and, therefore, makes no representations relative to the condition of improvements. CBRE appraisers are not engineers and are not qualified to judge matters of an engineering nature, and furthermore structural problems or building system problems may not be visible. It is expressly assumed that any purchaser would, as a precondition to closing a sale, obtain a satisfactory engineering report relative to the structural integrity of the property and the integrity of building systems. (iii) Any proposed improvements, on or off-site, as well as any alterations or repairs considered will be completed in a workmanlike manner according to standard practices. (iv) Hazardous materials are not present on the subject property. CBRE is not qualified to detect such substances. The presence of substances such as asbestos, urea formaldehyde foam insulation, contaminated groundwater, mold,or other potentially hazardous materials may affect the value of the property. (v) No mineral deposit or subsurface rights of value exist with respect to the subject property, whether gas, liquid, or solid, and no air or development rights of value may be transferred. CBRE has not considered any rights associated with extraction or exploration of any resources, unless otherwise expressly noted in the Report. (vi) There are no contemplated public initiatives, governmental development controls, rent controls, or changes in the present zoning ordinances or regulations governing use, density, or shape that would significantly affect the value of the subject property. (vii) All required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state, nor national government or private entity or organization have been or can be readily obtained or renewed for any use on which the Report is based. (viii)The subject property is managed and operated in a prudent and competent manner, neither inefficiently or super-efficiently. (ix) The subject property and its use, management, and operation are in full compliance with all applicable federal, state, and local regulations, laws, and restrictions, including without limitation environmental laws, seismic hazards, flight patterns, decibel levels/noise envelopes, fire hazards, hillside ordinances, density, allowable uses, building codes, permits, and licenses. (x) The subject property is in full compliance with the Americans with Disabilities Act (ADA). CBRE is not qualified to assess the subject property's compliance with the ADA, notwithstanding any discussion of possible readily achievable barrier removal construction items in the Report. 42 CBRJE ©2022 CBRE,Inc. 721 Assumptions and Limiting Conditions (xi) All information regarding the areas and dimensions of the subject property furnished to CBRE are correct, and no encroachments exist. CBRE has neither undertaken any survey of the boundaries of the subject property nor reviewed or confirmed the accuracy of any legal description of the subject property. Unless otherwise expressly noted in the Report, no issues regarding the foregoing were brought to CBRE's attention, and CBRE has no knowledge of any such facts affecting the subject property. If any information inconsistent with any of the foregoing assumptions is discovered, such information could have a substantial negative impact on the Report. Accordingly, if any such information is subsequently made known to CBRE, CBRE reserves the right to amend the Report, which may include the conclusions of the Report. CBRE assumes no responsibility for any conditions regarding the foregoing, or for any expertise or knowledge required to discover them. Any user of the Report is urged to retain an expert in the applicable field(s) for information regarding such conditions. 4. CBRE has assumed that all documents, data and information furnished by or behalf of the client, property owner, or owner's representative are accurate and correct, unless otherwise expressly noted in the Report. Such data and information include, without limitation, numerical street addresses, lot and block numbers, Assessor's Parcel Numbers, land dimensions, square footage area of the land, dimensions of the improvements, gross building areas, net rentable areas, usable areas, unit count, room count, rent schedules, income data, historical operating expenses, budgets, and related data. Any error in any of the above could have a substantial impact on the Report. Accordingly, if any such errors are subsequently made known to CBRE, CBRE reserves the right to amend the Report, which may include the conclusions of the Report. The client and intended user should carefully review all assumptions, data, relevant calculations, and conclusions of the Report and should immediately notify CBRE of any questions or errors within 30 days after the date of delivery of the Report. 5. CBRE assumes no responsibility (including any obligation to procure the same) for any documents, data or information not provided to CBRE, including without limitation any termite inspection, survey or occupancy permit. 6. All furnishings, equipment and business operations have been disregarded with only real property being considered in the Report, except as otherwise expressly stated and typically considered part of real property. 7. Any cash flows included in the analysis are forecasts of estimated future operating characteristics based upon the information and assumptions contained within the Report. Any projections of income, expenses and economic conditions utilized in the Report, including such cash flows, should be considered as only estimates of the expectations of future income and expenses as of the date of the Report and not predictions of the future. Actual results are affected by a number of factors outside the control of CBRE, including without limitation fluctuating economic, market, and property conditions. Actual results may ultimately differ from these projections, and CBRE does not warrant any such projections. 8. The Report contains professional opinions and is expressly not intended to serve as any warranty, assurance or guarantee of any particular value of the subject property. Other appraisers may reach different conclusions as to the value of the subject property. Furthermore, market value is highly related to exposure time, promotion effort, terms, motivation, and conclusions surrounding the offering of the subject property. The Report is for the sole purpose of providing the intended user with CBRE's independent professional opinion of the value of the subject property as of the date of the Report. Accordingly, CBRE shall not be liable for any losses that arise from any investment or lending decisions based upon the Report that the client, intended user, or any buyer, seller, investor, or lending institution may undertake related to the subject property, and CBRE has not been compensated to assume any of these risks. Nothing contained in the Report shall be construed as any direct or indirect recommendation of CBRE to buy, sell, hold, or finance the subject property. 9. No opinion is expressed on matters which may require legal expertise or specialized investigation or knowledge beyond that customarily employed by real estate appraisers. Any user of the Report is advised to retain experts in areas that fall outside the scope of the real estate appraisal profession for such matters. 10. CBRE assumes no responsibility for any costs or consequences arising due to the need, or the lack of need, for flood hazard insurance. An agent for the Federal Flood Insurance Program should be contacted to determine the actual need for Flood Hazard Insurance. 11. Acceptance or use of the Report constitutes full acceptance of these Assumptions and Limiting Conditions and any special assumptions set forth in the Report. It is the responsibility of the user of the Report to read in full, comprehend and thus become aware of all such assumptions and limiting conditions. CBRE assumes no responsibility for any situation arising out of the user's failure to become familiar with and understand the some. 12. The Report applies to the property as a whole only, and any pro ration or division of the title into fractional interests will invalidate such conclusions, unless the Report expressly assumes such pro ration or division of interests. 43 C BR;E©2022 CBRE,Inc. 722 Assumptions and Limiting Conditions 13. The allocations of the total value estimate in the Report between land and improvements apply only to the existing use of the subject property. The allocations of values for each of the land and improvements are not intended to be used with any other property or appraisal and are not valid for any such use. 14. The maps, plats, sketches, graphs, photographs, and exhibits included in this Report are for illustration purposes only and shall be utilized only to assist in visualizing matters discussed in the Report. No such items shall be removed, reproduced, or used apart from the Report. 15. The Report shall not be duplicated or provided to any unintended users in whole or in part without the written consent of CBRE, which consent CBRE may withhold in its sole discretion. Exempt from this restriction is duplication for the internal use of the intended user and its attorneys, accountants, or advisors for the sole benefit of the intended user. Also exempt from this restriction is transmission of the Report pursuant to any requirement of any court, governmental authority, or regulatory agency having jurisdiction over the intended user, provided that the Report and its contents shall not be published, in whole or in part, in any public document without the written consent of CBRE, which consent CBRE may withhold in its sole discretion. Finally, the Report shall not be made available to the public or otherwise used in any offering of the property or any security, as defined by applicable law. Any unintended user who may possess the Report is advised that it shall not rely upon the Report or its conclusions and that it should rely on its own appraisers, advisors and other consultants for any decision in connection with the subject property. CBRE shall have no liability or responsibility to any such unintended user. 44 C B R;E ©2022 CBRE, Inc. 723 Addenda ADDENDA ©2022 CBRE,Inc. 723 724 Addenda Addendum A LAND SALE DATA SHEETS ©2022 CBRE, Inc. 724 Under Residential Property Name Multifamily Residential 2.12-Acre Site Address 8371-8461 Talbert Avenue Huntington Beach,CA 92646 County Orange Govt./Tax ID Multiple Land Area Net 2.122 ac/92,434 sf Land Area Gross 2.122 ac/92,434 sf Site Development Status Finished Utilities All to site Maximum FAR N/A Min Land Bldg Ratio N/A Shape Rectangular Topography Generally Level Flood Zone Class Zone X(Unshaded) Flood Panel No./Date 06059CO253J/Dec 2009 Zoning RL 2-4 Multi Family now(7 DU/AC),assume rezone to RM(15 DU/AC) Entitlement Status None Q ail Type Under Contract Primary Verification LA: Scott Owens, OM, LandVision Interest Transferred Fee Simple Transaction Date 03/01/2022 Condition of Sale None Recording Date N/A Recorded Buyer N/A Sale Price $6,500,000 Buyer Type N/A Financing Market Rate Financing Recorded Seller Gordon&Mary Langston Cash Equivalent $6,500,000 Marketing Time 20 Month(s) Capital Adjustment $38,880 Listing Broker Sperry Commercial: Scoff Owens- Adjusted Price $6,538,880 949.705.5067 Doc# NOT YET RECORDED Adjusted Price/ac and $3,081,470/$70.74 /sf Adjusted Price/FAR N/A Adjusted Price/Unit $198,148 Comments m This comparable represents the pending sale of 2.12-gross acres of multifamily residential land in Huntington Beach. The property is currently improved with three units in fair condition that are occupied by three tenants on month-to-month leases and will be delivered vacant to the pending buyer. The listing agent marketed the property as RM development land,with up to 15 units per acre,assuming a re-zone from R-L 2-4 Units (7 units per acre by right). The marketing material and Costar report the site size as 2.429 acres, but the parcel map and public record report 2.12-acres,which is used in this analysis. A capital adjustment of$38,880,estimated by the appraiser,is made for demolition of the three residential units.The listing agent indicates that multiple offers have been received at or above asking. Using the asking price of$6,500,000,the pending purchase price equates to$69.90 per square foot of site area,or$195,792 per unit by right(assuming RM re-zone granted at 15 units per acre,say 33 units with affordable density bonus). 725 CBRE Sale Land - Multi Unit Residential No. 2� Property Name Affordable Housing Site :; Address 18431 Beach Boulevard (N/O Main Street) Illi, Huntington Beach,CA 92648 County Orange � 4 Govt./Tax ID 159-031-18 Land Area Net 0.790 ac/34,412 sf Land Area Gross 0.790 ac/34,412 sf Site Development Status Semi-Finished Utilities To Site Maximum FAR 0.32 Min Land Bldg Ratio 3.16:1 Shape LShaped Topography Level,At Street Grade Flood Zone Class Zone X(Unshaded) Flood Panel No./Date 065034 -06059CO253J/Dec 2009 Zoning RMH,SP-14 Entitlement Status Other(See Comments) Transaction Details Type Sale Primary Verification Tierra Develop Advisor's,Ana Mendoza Interest Transferred Fee Simple Transaction Date 01/29/2020 Condition of Sale None Recording Date N/A Recorded Buyer Beach Housing Partners LP Sale Price $3,000,000 Buyer Type Developer Financing Cash to Seller Recorded Seller Five Points Plaza LLC Cash Equivalent $3,000,000 Marketing Time N/A Capital Adjustment $0 Listing Broker N/A Adjusted Price $3,000,000 Doc# 38041 Adjusted Price/cc and $3,797,468/$87.18 /sf Adjusted Price/FAR $275.23 Adjusted Price/Unit $125,000 Comments This was the sale of 0.79-acres of land on Beach Boulevard. Twenty-four units can be constructed on site.The site is uniquely situated along a major commercial thoroughfare in Huntington Beach,within the Beach and Edinger Corridors Specific Plan Area that was established to support and promote investment along the City's primary commercial corridors. It was reported that the buyer plans on building affordable housing on site. Information about specific number of units that will be built is not available at this time. No sale conditions were reported.The property is within walking distance to numerous dining,retail,and entertainment amenities. 726 CBRCC G Multi Unit i • • • • • Property Name 777 W 19th St Address 777 West 19th Street _ Costa Mesa,CA 92627 �� County Orange ' Govt./Tax ID 424-201-03 Land Area Net 0.728 ac/31,694 sf Land Area Gross 0.728 ac/31,694 sf Site Development Status Finished ` Utilities All to site Maximum FAR N/A Min Land Bldg Ratio N/A Shape Rectangular Topography Level,At Street Grade Flood Zone Class Zone X(Unshaded) Flood Panel No./Date N/A Zoning C1 Entitlement Status None Type Sale Primary Verification Broker&Costar Interest Transferred Fee Simple Transaction Date 12/31/2019 Condition of Sale 1031 Exchange Recording Date N/A Recorded Buyer Lambert Properties, LLC Sale Price $3,575,000 Buyer Type N/A Financing All Cash Recorded Seller 19th St, LLC Cash Equivalent $3,575,000 Marketing Time 11 Month(s) Capital Adjustment $0 Listing Broker Maso Ito-Avison Young Adjusted Price $3,575,000 Doc# 0551984 Adjusted Price/ac and $4,913,414/$112.80 /sf Adjusted Price/FAR N/A Adjusted Price/Unit $102,143 Comments This is December 2019 sale of a site that is currently improved with an office building located on West 19th Street in Costa Mesa.The property is situated in an opportunity zone with a residential zoning overlay.The existing income of the office building yields a cap rate of 4.85%cap rate. The buyer plans to operate the office property,while undergoing entitlements for a mixed-use development that would include a small commercial ground floor component and 35 residential units.The entitlement process for the redevelopment is estimated to take 10 months.The buyer fulfilled a1031 exchange to purchase the property. 727 CBRE !Sale Land - Multi Unit Residential No. 4 Property Name 053-Acre Site Address 3580 E. Pacific Coast Highway Long Beach,CA 90804 County Los Angeles Govt./Tax ID 7259-003-038 —. Land Area Net 0.530 ac/23,087 sf Land Area Gross 0.530 ac/23,087 sf Site Development Status N/A Utilities To the site Maximum FAR N/A Min Land Bldg Ratio N/A Shape Rectangular Topography Level,At Street Grade Flood Zone Class N/A Flood Panel No./Date N/A Zoning CO (Office Commercial) Entitlement Status N/A Type Sale Primary Verification Buyer,Tish Kelly 562-346-3234 Interest Transferred Fee Simple Transaction Date 12/20/2019 Condition of Sale Arm's Length Recording Date N/A Recorded Buyer Excelerate Housing Group Sale Price $2,500,000 Buyer Type Developer Financing Cash to Seller Recorded Seller Santo&Antonietta Laferrara Cash Equivalent $2,500,000 Marketing Time 21 Month(s) Capital Adjustment $0 Listing Broker Lee&Associates Guy LaFerrara 949-790- Adjusted Price $2,500,000 3115 Doc# 19-1425290 Adjusted Price/ac and $4,716,981 /$108.29 /sf Adjusted Price/FAR N/A Adjusted Price/Unit $86,207 _ >� Wes. Comments The buyer is a developer, owner, and operator of affordable multi-family properties.The property is located at the southwest corner of Pacific Coast Highway and Loma Avenue in Long Beach with amenities located nearby.The property is part of the new Long Beach Land Use and General Plan which allows up to five levels of construction on this site.The upper floor should have ocean views.The property is improved with a 10,000-square foot,2-story office building.The 10 tenants are on month-to-month leases.According to the Long Beach zoning ordinance,the maximum density allowed on this site is based on the R-4N zone at 1 DU/975 SF or 44.7 DU/Acre. For this site,it equates to 23 units. However, with the Land Use Element(NSC-M)the density is 54 dua so the 'by-right'would have been 29 units.The city's zoning vs land use element was confusing at the time of escrow because the city was in the process of approving the updated land use element while the property was in escrow. The city approved it shortly before the sales closed.The land use element supersedes the zoning. Ultimately,the buyer is proposing 77 units for their affordable project. No entitlements were in place at the time of the sale. 728 CBRCC C 729 Addenda Addendurn B LEGAL DESCRIPTION ©2022 CBRE, Inc. 729 730 re Commonwealth Land Title Insurance Company P Y GUARANTEE NO.: CA-SFXFC-IMP-81G28-1-18-09206932 CLTA GUARANTEE FACE PAGE SUBJECT TO THE EXCLUSIONS FROM COVERAGE, AND THE GUARANTEE CONDITIONS ATTACHED HERETO AND MADE A PART OF THIS GUARANTEE, COMMONWEALTH LAND TITLE INSURANCE COMPANY a corporation, herein called the Company GUARANTEES the Assured named in Schedule A of this Guarantee against loss or damage not exceeding the Amount of Liability stated in Schedule A sustained by the Assured by reason of any incorrectness in the Assurances set forth in Schedule A. Commonwealth Land Title Insurance Company Countersigned: ,,, , BY R3n40tart nesdent SEAL )W: atest Authorized Officer or Agent `'��.,,, ,,,•��° ed Wch30 G s*lle six. CLTA Guarantee Face Page(06-05-14) Page 1 ©California Land Title Association.All rights reserved. The use of this Form is restricted to CLTA subscribers in good standing as of the date of use.All other uses are prohibited. Reprinted under license or express permission from the California Land Title Association. 730 731 Order No. 09206932-920-CMM-CM8 Guarantee No. CA-SFXFC-IMP-81G28-1-18-09206932 GUARANTEE EXCLUSIONS AND CONDITIONS (06-05-14) EXCLUSIONS FROM COVERAGE Except as expressly provided by the assurances in Schedule A,the Company assumes no liability for loss or damage by reason of the following: (a) Defects, liens,encumbrances,adverse claims or other matters affecting the title to any property beyond the lines of the Land. (b) Defects, liens, encumbrances, adverse claims or other matters, whether or not shown by the Public Records (1) that are created, suffered, assumed or agreed to by one or more of the Assureds;or(2)that result in no loss to the Assured. (c) Defects,liens,encumbrances,adverse claims or other matters not shown by the Public Records. (d) The identity of any party shown or referred to in any of the schedules of this Guarantee. (e) The validity,legal effect or priority of any matter shown or referred to in any of the schedules of this Guarantee. (f) (1)Taxes or assessments of any taxing authority that levies taxes or assessments on real property; or, (2) proceedings by a public agency which may result in taxes or assessments, or notices of such proceedings, whether or not the matters excluded under (1) or (2) are shown by the records of the taxing authority or by the Public Records. (g) (1) Unpatented mining claims; (2) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (3)water rights, claims or title to water,whether or not the matters excluded under(1), (2)or(3)are shown by the Public Records. GUARANTEE CONDITIONS (b) If the Company elects to exercise its options as stated in 1. Definition of Terms. Paragraph 4(a) the Company shall have the right to select counsel of its The following terms when used in the Guarantee mean: choice(subject to the right of the Assured to object for reasonable cause) (a) the "Assured": the party or parties named as the Assured in to represent the Assured and shall not be liable for and will not pay the Schedule A,or on a supplemental writing executed by the Company. fees of any other counsel, nor will the Company pay any fees, costs or (b) "Land": the Land described or referred to in Schedule A, and expenses incurred by an Assured in the defense of those causes of action improvements affixed thereto which by law constitute real property. The which allege matters not covered by this Guarantee. term "Land" does not include any property beyond the lines of the area (c) Whenever the Company shall have brought an action or described or referred to in Schedule A, nor any right,title, interest, estate interposed a defense as permitted by the provisions of this Guarantee,the or easement in abutting streets, roads, avenues, alleys, lanes, ways or Company may pursue any litigation to final determination by a court of waterways. competent jurisdiction and expressly reserves the right, in its sole (c) "Mortgage": mortgage, deed of trust, trust deed, or other discretion,to appeal from an adverse judgment or order. security instrument. (d) In all cases where this Guarantee permits the Company to (d) "Public Records": those records established under California prosecute or provide for the defense of any action or proceeding, the statutes at Date of Guarantee for the purpose of imparting constructive Assured shall secure to the Company the right to so prosecute or provide notice of matters relating to real property to purchasers for value and for the defense of any action or proceeding, and all appeals therein, and without knowledge. permit the Company to use, at its option,the name of the Assured for this (e) "Date of Guarantee": the Date of Guarantee set forth in purpose. Whenever requested by the Company, the Assured, at the Schedule A. Company's expense, shall give the Company all reasonable aid in any (f) "Amount of Liability": the Amount of Liability as stated in action or proceeding,securing evidence,obtaining witnesses, prosecuting Schedule A. or defending the action or lawful act which in the opinion of the Company 2. Notice of Claim to be Given by Assured. may be necessary or desirable to establish the correctness of the The Assured shall notify the Company promptly in writing in case assurances set forth in Schedule A or to prevent or reduce loss or knowledge shall come to the Assured of any assertion of facts,or claim of damage to the Assured. If the Company is prejudiced by the failure of the title or interest that is contrary to the assurances set forth in Schedule A Assured to furnish the required cooperation,the Company's obligations to and that might cause loss or damage for which the Company may be the Assured under the Guarantee shall terminate. liable under this Guarantee. If prompt notice shall not be given to the 5. Proof of Loss or Damage. Company, then all liability of the Company shall terminate with regard to (a) In the event the Company is unable to determine the amount of the matter or matters for which prompt notice is required; provided, loss or damage,the Company may, at its option, require as a condition of however, that failure to notify the Company shall in no case prejudice the payment that the Assured furnish a signed proof of loss.The proof of loss rights of the Assured under this Guarantee unless the Company shall be must describe the defect, lien, encumbrance, or other matter that prejudiced by the failure and then only to the extent of the prejudice. constitutes the basis of loss or damage and shall state, to the extent 3. No Duty to Defend or Prosecute. possible,the basis of calculating the amount of the loss or damage. The Company shall have no duty to defend or prosecute any action (b) In addition, the Assured may reasonably be required to submit or proceeding to which the Assured is a party, notwithstanding the nature to examination under oath by any authorized representative of the of any allegation in such action or proceeding. Company and shall produce for examination, inspection and copying, at 4. Company's Option to Defend or Prosecute Actions; Duty of such reasonable times and places as may be designated by any Assured to Cooperate. authorized representative of the Company, all records, books, ledgers, Even though the Company has no duty to defend or prosecute as set checks, correspondence and memoranda, whether bearing a date before forth in Paragraph 3 above: or after Date of Guarantee, which reasonably pertain to the loss or (a) The Company shall have the right, at its sole option and cost,to damage. Further, if requested by any authorized representative of the institute and prosecute any action or proceeding, interpose a defense, as Company, the Assured shall grant its permission, in writing, for any limited in Paragraph 4(b), or to do any other act which in its opinion may authorized representative of the Company to examine, inspect and copy be necessary or desirable to establish the correctness of the assurances all records, books, ledgers, checks, correspondence and memoranda in set forth in Schedule A or to prevent or reduce loss or damage to the the custody or control of a third party,which reasonably pertain to the loss Assured. The Company may take any appropriate action under the terms or damage. All information designated as confidential by the Assured of this Guarantee,whether or not it shall be liable hereunder,and shall not provided to the Company pursuant to this paragraph shall not be thereby concede liability or waive any provision of this Guarantee. If the disclosed to others unless, in the reasonable judgment of the Company, it Company shall exercise its rights under this paragraph, it shall do so is necessary in the administration of the claim. Failure of the Assured to diligently. submit for examination under oath, produce other reasonably requested CLTA Guarantee Exclusions and Conditions(06-05-14) Page 2 ©California Land Title Association.All rights reserved. The use of this Form is restricted to CLTA subscribers in good standing as of the date of use.All other uses are prohibited. Reprinted under license or express permission from the California Land Title Association. 731 732 Order No. 09206932-920-CMM-CM8 Guarantee No. CA-SFXFC-IMP-81G28-1-18-09206932 information or grant permission to secure reasonably necessary property in respect to the claim had this Guarantee not been issued. If information from third parties as required in the above paragraph, unless requested by the Company,the Assured shall transfer to the Company all prohibited by law or governmental regulation, shall terminate any liability rights and remedies against any person or property necessary in order to of the Company under this Guarantee to the Assured for that claim. perfect this right of subrogation.The Assured shall permit the Company to 6. Options to Pay or Otherwise Settle Claims: Termination of sue, compromise or settle in the name of the Assured and to use the Liability. name of the Assured in any transaction or litigation involving these rights In case of a claim under this Guarantee,the Company shall have the or remedies. following additional options: If a payment on account of a claim does not fully cover the loss of (a) To pay or tender payment of the Amount of Liability together the Assured the Company shall be subrogated to all rights and remedies with any costs, attorneys' fees, and expenses incurred by the Assured of the Assured after the Assured shall have recovered its principal, that were authorized by the Company up to the time of payment or tender interest,and costs of collection. of payment and that the Company is obligated to pay. 11. Arbitration. (b) To pay or otherwise settle with the Assured any claim assured Either the Company or the Assured may demand that the claim or against under this Guarantee. In addition, the Company will pay any controversy shall be submitted to arbitration pursuant to the Title costs, attorneys'fees, and expenses incurred by the Assured that were Insurance Arbitration Rules of the American Land Title Association authorized by the Company up to the time of payment or tender of ("Rules"). Except as provided in the Rules, there shall be no joinder or payment and that that the Company is obligated to pay;or consolidation with claims or controversies of other persons. Arbitrable (c) To pay or otherwise settle with other parties for the loss or matters may include, but are not limited to, any controversy or claim damage provided for under this Guarantee, together with any costs, between the Company and the Assured arising out of or relating to this attorneys' fees, and expenses incurred by the Assured that were Guarantee, any service of the Company in connection with its issuance or authorized by the Company up to the time of payment and that the the breach of a Guarantee provision, or to any other controversy or claim Company is obligated to pay. arising out of the transaction giving rise to this Guarantee. All arbitrable Upon the exercise by the Company of either of the options provided matters when the amount of liability is $2,000,000 or less shall be for in 6 (a), (b) or (c) of this paragraph the Company's obligations to the arbitrated at the option of either the Company or the Assured. All Assured under this Guarantee for the claimed loss or damage, other than arbitrable matters when the amount of liability is in excess of$2,000,000 the payments required to be made, shall terminate, including any duty to shall be arbitrated only when agreed to by both the Company and the continue any and all litigation initiated by the Company pursuant to Assured.Arbitration pursuant to this Guarantee and under the Rules shall Paragraph 4. be binding upon the parties. Judgment upon the award rendered by the 7. Limitation of Liability. Arbitrator(s)may be entered in any court of competent jurisdiction. (a) This Guarantee is a contract of Indemnity against actual 12. Liability Limited to This Guarantee;Guarantee Entire Contract. monetary loss or damage sustained or incurred by the Assured claimant (a) This Guarantee together with all endorsements, if any, attached who has suffered loss or damage by reason of reliance upon the hereto by the Company is the entire Guarantee and contract between the assurances set forth in Schedule A and only to the extent herein Assured and the Company. In interpreting any provision of this described, and subject to the Exclusions From Coverage of this Guarantee,this Guarantee shall be construed as a whole. Guarantee. (b) Any claim of loss or damage, whether or not based on (b) If the Company, or the Assured under the direction of the negligence, or any action asserting such claim, shall be restricted to this Company at the Company's expense, removes the alleged defect, lien or, Guarantee. encumbrance or cures any other matter assured against by this (c) No amendment of or endorsement to this Guarantee can be Guarantee in a reasonably diligent manner by any method, including made except by a writing endorsed hereon or attached hereto signed by litigation and the completion of any appeals therefrom, it shall have fully either the President, a Vice President, the Secretary, an Assistant performed its obligations with respect to that matter and shall not be liable Secretary,or validating officer or authorized signatory of the Company. for any loss or damage caused thereby. 13. Severability (c) In the event of any litigation by the Company or with the In the event any provision of this Guarantee, in whole or in part, is Company's consent, the Company shall have no liability for loss or held invalid or unenforceable under applicable law, the Guarantee shall damage until there has been a final determination by a court of competent be deemed not to include that provision or such part held to be invalid,but jurisdiction,and disposition of all appeals therefrom. all other provisions shall remain in full force and effect. (d) The Company shall not be liable for loss or damage to the 14. Choice of Law;Forum Assured for liability voluntarily assumed by the Assured in settling any (a) Choice of Law: The Assured acknowledges the Company has claim or suit without the prior written consent of the Company. underwritten the risks covered by this Guarantee and determined the 8. Reduction of Liability or Termination of Liability. premium charged therefor in reliance upon the law affecting interests in All payments under this Guarantee, except payments made for real property and applicable to the interpretation, rights, remedies, or costs, attorneys'fees and expenses pursuant to Paragraph 4 shall reduce enforcement of Guaranties of the jurisdiction where the Land is located. the Amount of Liability under this Guarantee pro tanto. Therefore, the court or an arbitrator shall apply the law of the 9. Payment of Loss. jurisdiction where the Land is located to determine the validity of claims (a) No payment shall be made without producing this Guarantee for that are adverse to the Assured and to interpret and enforce the terms of endorsement of the payment unless the Guarantee has been lost or this Guarantee. In neither case shall the court or arbitrator apply its destroyed, in which case proof of loss or destruction shall be furnished to conflicts of law principles to determine the applicable law. the satisfaction of the Company. (b) Choice of Forum: Any litigation or other proceeding brought by (b) When liability and the extent of loss or damage has been the Assured against the Company must be filed only in a state or federal definitely fixed in accordance with these Conditions, the loss or damage court within the United States of America or its territories having shall be payable within thirty(30)days thereafter. appropriate jurisdiction. 10. Subrogation Upon Payment or Settlement. 15. Notices,Where Sent. Whenever the Company shall have settled and paid a claim under All notices required to be given the Company and any statement in this Guarantee, all right of subrogation shall vest in the Company writing required to be furnished the Company shall include the number of unaffected by any act of the Assured. this Guarantee and shall be addressed to the Company at The Company shall be subrogated to and be entitled to all rights and Commonwealth Land Title Insurance Company, Attn:Claims Department, remedies which the Assured would have had against any person or P.O. Box 45023,Jacksonville, FL 32232-5023. CLTA Guarantee Exclusions and Conditions(06-05-14) Page 3 ©California Land Title Association.All rights reserved. The use of this Form is restricted to CLTA subscribers in good standing as of the date of use.All other uses are prohibited. Reprinted under license or express permission from the California Land Title Association. 732 733 Order No.: 09206932-920-CMM-CM8 Guarantee No.: CA-SFXFC-IMP-81G28-1-18-09206932 CONDITION OF TITLE GUARANTEE SCHEDULE A (V2) Order No.: 09206932-920-CMM-CM8 Guarantee No.: CA-SFXFC-IMP-81G28-1-18-09206932 Amount of Liability: $5,000.00 Date of Guarantee: April 26, 2018 at 7:30 A.M. Fee: $600.00 1. Name of Assured: City of Huntington Beach 2. The estate or interest in the Land which is covered by this Guarantee is: A FEE 3. The Land referred to in this Guarantee is described as follows: See Exhibit A attached hereto and made a part hereof. 4. ASSURANCES: According to the Public Records as of the Date of Guarantee, a. Title to the estate or interest in the Land is vested in: City of Huntington Beach, a municipal corporation b. Title to the estate or interest is subject to defects, liens or encumbrances shown in Schedule B which are not necessarily shown in the order of their priority. 81 G28 CLTA Guarantee Form No. 28(06-05-14) Page 4 Condition of Title Guarantee ©California Land Title Association.All rights reserved. The use of this Form is restricted to CLTA subscribers in good standing as of the date of use.All other uses are prohibited. Reprinted under license or express permission from the California Land Title Association. 733 734 Order No. 09206932-920-CMM-CM8 Policy No. CA-SFXFC-IMP-81G28-1-18-09206932 EXHIBIT A LEGAL DESCRIPTION All that certain real property situated in the County of Orange, State of California, described as follows: LOT 33 IN BLOCK A OF THE GARFIELD STREET ADDITION TO HUNTINGTON BEACH, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 7, PAGES 27 AND 28 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA. APN: 159-281-04 81 G28 CLTA Guarantee Form No. 28(06-05-14) Page 5 Condition of Title Guarantee ©California Land Title Association.All rights reserved. The use of this Form is restricted to CLTA subscribers in good standing as of the date of use.All other uses are prohibited. Reprinted under license or express permission from the California Land Title Association. 734 735 Order No. 09206932-920-CMM-CM8 Policy No. CA-SFXFC-IMP-81G28-1-18-09206932 SCHEDULE B A. Property taxes, which are a lien not yet due and payable, including any assessments collected with taxes to be levied for the fiscal year 2018-2019. B. Any liens or other assessments, bonds, or special district liens including without limitation, Community Facility Districts, that arise by reason of any local, City, Municipal or County Project or Special District. C. The lien of supplemental or escaped assessments of property taxes, if any, made pursuant to the provisions of Chapter 3.5 (commencing with Section 75) or Part 2, Chapter 3, Articles 3 and 4, respectively, of the Revenue and Taxation Code of the State of California as a result of the transfer of title to the vestee named in Schedule A or as a result of changes in ownership or new construction occurring prior to Date of Policy. 1. Water rights, claims or title to water, whether or not disclosed by the public records. 2. Easement(s) for the purpose(s) shown below and rights incidental thereto, as delineated on or as offered for dedication on the map of said tract Purpose: water mains for irrigation purposes, pole lines and incidental purposes Affects: the rear 4 feet of said land 3. Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a document: Granted to: Standard Oil Company, a Corporation Purpose: public utilities Recording Date: April 29, 1930 Recording No: in Book 377, Page 303 of Official Records Affects: Lot 33 in Block "A" 4. Easement(s)for the purpose(s) shown below and rights incidental thereto, as granted in a document: Granted to: Standard Oil Company of California, a Corporation Purpose: pipe line Recording Date: April 10, 1935 Recording No: in Book 746, Page 151 of Official Records Affects: Lot 33 in Block "A" 5. Matters contained in that certain document Entitled: Development Agreement Dated: Not set out Executed by: City of Huntington Beach, Pacific Coast Homes and Garfield Partners Recording Date: November 14, 1990 Recording No: as Instrument No. 90-599766 of Official Records Reference is hereby made to said document for full particulars. 81 G28 CLTA Guarantee Form No. 28(06-05-14) Page 6 Condition of Title Guarantee ©California Land Title Association.All rights reserved. The use of this Form is restricted to CLTA subscribers in good standing as of the date of use.All other uses are prohibited. Reprinted under license or express permission from the California Land Title Association. 735 736 Order No. 09206932-920-CMM-CM8 Policy No. CA-SFXFC-IMP-81G28-1-18-09206932 SCHEDULE B (Continued) 6. Easement(s) for the purpose(s) shown below and rights incidental thereto as reserved in a document; Purpose: private alleys Affects: said land more particularly described therein 81 G28 CLTA Guarantee Form No. 28 (06-05-14) Page 7 Condition of Title Guarantee ©California Land Title Association.All rights reserved. The use of this Form is restricted to CLTA subscribers in good standing as of the date of use.All other uses are prohibited. Reprinted under license or express permission from the California Land Title Association. 736 737 C a § ,T/dgiiY rus jo"rsl AV70 s Ln It ti yy b i A N l �wCWI� 0 v wcwi sx Q 4 H I � 2 H w u) N r'7Or 1 h ti NM4y�o Z: y� o �do tut Q u-o-r Ws RZ d` j y �. •„�� t 2Vb iAN i s wry s a a 3/W3AV •auv-K c.1 � � m 6b a This map/plat is being furnished as an aid In locat ng the,herein described Land n rela on to ad o nmg streets,natural boundaries and other land,and is not a survey of the land depicted.Except to the extent a policy of title ins urance.is:expressiy modified by endorsement,IFany, the Company does not Insure.dimensions,distances,location of easements,acreage or other matters shown thereon. Order.09206932 Page 1 of 5 Requested By:Kevin McGhee ,Printedi,5/19/2018 8:08 AM Doc:159-28 MAP ASSESSOR 737 738 Addenda Addendum C CLIENT PROVIDED DOCUMENTS ©2022 CBRE, Inc. 738 ----- ------- — -- - - - --------- SITE PLAN SUMMARY 25.25 VISIBILITY - PROPOSED MINIMUM BALCONY SETBACK 5 RIGHT-OF-WAY /�15'REDUIREDMINIMUMTRONTYARD' J See Sheet CS2 for more information TRIANGLE PER 230.88 C (PER HSSP III.D.4.g,5'MINIMUM REOD EASFMFNT PER i SP 'n AT DWELLING PER HSSP III D.4.g 'FRONT YARD'AT EAVES BALCONIES x" - - --- Total Sile Area: 2.128 Acres Gross - — o — AVENUE O° T 1.80 Acft Net �1 ° v - Total Units: 35 Dwelling Units ` _.-_._.,._—.�—.w�,.�__,.,,,__� � -,�,. _..,� 2-Bedroom Units 11 Units(31.4%) ® Unit 2A 11 Units 3B 3-Bedroom Units 24 Units(68.6%) 3B I i �> Unit 3A 16 Units Unit 3B 8 Units* #7 #5 / *4 Units are accessible 2A 3A i i 25x25 IISIBILIN See Sheet CS2 for AffordableUnhCalculations ® TYPE G -TYPE'E' / ( ) "A TRIANGLE PER 230 88/ f 01 t. �� Density. 3A 2A - i ,_( #4 EXISTING BUS STOP Allowed:(per RM Zoning) 15 du/gross ac MINK ur B3ILcwc rTBacK - - - Allowed with Bonus: 16.5 du/grass ac PROUCEE ° 23-0 #6 2A TYPED' ' (10%bonus for 15%affordable) I. S DRNE AISLE " _ -' TYPE P � Provided: 16.59 du/gross ac` 3A 3B 2A 2A i, PROPOSED M-NIMUM BUILDING SETBACK b REnuwE I MINIMUM o *See Sheet CS2 for Rounding "EXTERIOR BIDE YARD AT 4 ' - ® 3A 3A // Parldna, ' DWEWNGe PER HSSP IIID4.g '° 15 REQUIRED MINIMUM'FRONT YARD ' x �,^ AT DWELLING PER HSSP III.D.4.g Required*: 70 Spaces 2-Bed=2 Space/Unit PROPOSED MINIMUM BALCONY s IP r. �, I 4 m v' SETBACK(PER HSSP IIID.4.g.5 3 Bed=2 Space/Unit MINIMUM REDD'FRONT YARD AT Guest—None Required EAVES BALCONIES *(HBMC 230.14.D,By-Right Reduction) b afl - ." T• A3 ® T IXISTINc OOTA BUS STOP I, ,vy Provided: 82 Spaces 3A 3A 2A EASEMENT LINE Garage: 70 Spaces H --- 66 #3 '>' �" Open(off-street): 12 Spaces l :t - Required Accessible =1 Space PROPOSED MINIMUM BALCON' �` � � �g .�� � C � � >so- �� � Unassigned Open(12 x 5%) r SET BACK TER HSSP I:;.D.4.g 1. f EVA ACCESS B'MINIMUM'EXTERIOP SIDE e' r L' Open Space(HSSP III.D.4.i): M YA�IU AT BALCONe 3A �. ` "��_ Common Open Space Required: 71,700 S.F. F- - 2y.p 3A ------..per 15'RIGHT OF WAY Common Open Space Provided: 12,083 S.F. LA.1 DRIVE AISLE LLIL j EASEMENT PER HSSP II-14 CL: 3A fMINIMUM BUILDING SETBACK % Private Open Space Required: 2,625 S.F. ® 1 3A .t % PROVIDED Private Space Provided. 0 S.F.P 'vats Open S ac #2 i / �� _y Patios 7,900 S.F S.F. TYPE'B' _ � Q� Decks 3,320 S.F. CD #j 3A ' / \�J� Roof Decks 5,760 S.F. >' P\ / Site Coverage(HSSP III.D.4.e) b 3A 1 r �; -J/ �' Vim' �� Maximum Allowed: 50.0% I D 1 3A Provided Site Coverage: 35.3% o'REcuiae0 MINIMUM � / (27,723 S.F.Total Coverage/78,438 S.F.Net Site) ERERIOR SIDE YARD AT ZA y F p/� v J DW w ENGs PER HSSP II D 4 0 f 9 �'� / Setbacks(HSSP III.D.4.f,g,h): 2A /: Front Yard(to dwelling) 15 feet 'EPROPOSED MINIMUM BUILDIN Front Yard(to eave/fireplace/balcony) 5 feet SETBACK I Interior Side Yard(to dwelling) 5 feet Street Side Yard(to dwelling) 10 feet Street Side Yard(to eave/fireplace/arch feature) 8 feet Budding Separation(3-Story Buildings) 20 feet i Legend s ' 71, MINIMUM BUILDING SETBACK ® Adaptable UnR Per C8C 1102A.3(4 Units total) .� 15 MINIMUM 'FROM YARD AT \y DV,FI uNG PER HSSP III.D.4.9 + Existing Oil Well Locations,To Be Capped,3 Locations Affordable Unit Locations(5 Units total) I 25M25'VISIBILITY TRIANGLE PER 230-98.0 N HB TRI ARCHITECTURAL SITE PLAN A1.10 L 0 H M L N 1 - GARFIELD AVENUE AND MAIN STREET SCHEMATIC DESIGN CITY SUBMITTAL A^' ^ k<°­WT1 .1 HUNTINGTON BEACH,CA 2020083.01 1 09-16-2021 —•�. w C"ELD AVENUE O • , N 6 � � M.I W4 -Z - _ _ ___ _ _ _- / .� .1ltYMl(L 71 T AOC'K / �y % - I LOT 7 LOT 5 LOT 4LOT 3LOT 2INl • // �/ , GARFIELD STREET ADDI ON ---- --- ---- ----_. --- LOT 3 -f / / LEGEND: I � 6XI6TING BUILDING I I TO I HUNTINGTON BEACH I oG� —.— DmIING wGwte rr<B,NL ' L(�8 J LOT 9 ( I ZJ / LOT 10 snN N ING / 6s�" I I Y ga,.�.DIwvI�N M.M. 07/27-28 / //•j' //.::r� t I gBI.G wr.taE � LOT 11 t tw ' _EASEMENT NOTES: 1 1 I •' ' .m�xmi��w maI m i ?¢, ' O , I I EXISTING CONDITIONS PLAN N B w 6 m HB TRI c-1 �SSEN BONANNI �SOCewTES DEVELOPMENT GARFIELD AVENUE AND MAIN STREET THIRD CITY SUBMITTAL m HUNTINGTON BEACH, CA 2026-94&00219-8-2021 741 Addenda Addendum D CLIENT CONTRACT INFORMATION ©2022 CBRE, Inc. 741 VALUATION • ' Proposal and Contract for Services CBRE, Inc. 3501 Jamboree Road, Ste 100 Newport Beach,CA 92660 <r.�Ft�.ct?ro.usho biotic January 1 1, 2022 Steve Calandra,MAI Director Chris Segesman Bonanni Development 5500 Bolsa Avenue, Suite 120 Huntington Beach, CA 92649 Phone: (714) 892-0123 Email: Chris@bonannidevelopment.com RE: Assignment Agreement—Appraisal of City of Huntington Beach Owned Land identified as Lot 33 in Block A of the Garfield Street addition to Huntington Beach (APN 159-281-04) Huntington Beach, CA Dear Mr. Segesman: We are pleased to submit this proposal and our Terms and Conditions for this assignment. PROPOSAL SPECIFICATION1 S Property: APN 159-281-04 — Strip of land that is ±25' wide by ±275' long located south of Garfield Avenue between Holly Street and Main Street, in Huntington Beach, CA. The property is encumbered with various easements including a water main fir irrigation purposes, pole lines and incidental purposes and public utilities and pipeline easements in favor of Standard Oil. Purpose: To estimate the Market Value of the above referenced real estate. Premise: As Is Rights Appraised: Fee simple as encumbered Intended Use: Internal Decision-Making purposes related to potential acquisition. Intended User: The Intended User is Bonanni Development ("Client"), and such other parties and entities (if any) expressly recognized by CBRE as "Intended Users" (as further defined herein). Reliance: Reliance on any reports produced by CBRE under this Agreement is extended solely to parties and entities expressly acknowledged in a signed writing by CBRE as Intended Users of the respective reports, provided that any conditions to such acknowledgement required by CBRE or hereunder have been satisfied. Parties or entities other than Intended Users who obtain a copy of the report or any portion thereof (including Client if it is not named as an Intended User), whether as a result of its direct dissemination or by any other means, may not rely upon any opinions or conclusions contained 742 VALUATION &ADVISORY BONANNI DEVELOPMEN AssignmentAgreement Pag of • January1 in the report or such portions thereof, and CBRE will not be responsible for any unpermitted use of the report, its conclusions or contents or have any liability in connection therewith. Inspection: CBRE will conduct a physical inspection of the subject property, and its surrounding environs on the effective date of appraisal. Valuation Approaches: All applicable approaches applied. Report Type: Standard Appraisal Report Appraisal Standards: USPAP Appraisal Fee: $7,500 Any consultation work completed outside of the scope of this assignment will be billed at our standard hourly rates as noted below: (A) Current non-litigation in-office rates: Directors (MAI) $500.00/hour Senior Analyst $250.00-$350.00/hour Analyst $175.00-$250.00/hour Researcher $150.00/hour Administrative $125.00/hour (B) All reports for which testimony is required must be disclosed prior to report authorization. (C) Current rates for conferences, trial/deposition preparation and appearances: Directors (MAI) $550.00/hour Senior Analyst $300.00-$350.00/hour Analyst $250.00-$300.00/hour Researcher $200.00/hour Administrative $175.00/hour (D) All fees for reports, conferences, depositions and trial must be paid prior to appearance at trial Expenses: Fee includes all associated expenses Retainer $3,750 Payment Terms: We will invoice you for the assignment balance at the completion of a draft report. Delivery Instructions: CBRE encourages our clients to join in our environmental sustainability efforts by accepting an electronic copy of the report. An Adobe PDF file via email will be delivered to chris@bonannidevelopment.com 44h',41(.C�a I'2.VSJ`YCiC1Qftp ft CBRE 743 VALUATION &ADVISORY BONANNI DEVELOPMEN Assignment Agreement Pag of • January1 Delivery Schedule: Preliminary Value: Not Required Draft Report: 6 Weeks from start date Final Report: Upon request Start Date: Upon receipt of the signed engagement letter and the requested retainer. Acceptance Date: These specifications are subject to modification if this proposal is not accepted within 5 business days from the date of this letter. Market Volatility: The outbreak of the Novel Coronavirus (COVID-19), declared by the World Health Organization as a global pandemic on the 11th March 2020, is causing heightened uncertainty in both local and global market conditions. Our valuation is based on the information available to us at the date of valuation. You acknowledge that our reports may include clauses highlighting heightened uncertainty if appropriate, and we recommend our valuation is kept under frequent review. Both governments and companies are initiating travel restrictions, quarantine and additional safety measures in response to the COVID-19 pandemic. If, at any point, our ability to deliver the services under this LOE are restricted due to the pandemic, we will inform you within a reasonable timeframe and work with you on how to proceed. Whilst we will endeavor to meet the required timeframe for delivery, you acknowledge any Government or company-imposed restrictions due to the virus may impede our ability to meet the timeframe and/or deliverables of this engagement, and delays may follow. Any delays or inability to deliver on this basis would not constitute a failure to meet the terms of this engagement. When executed and delivered by all parties, this letter, together with the Terms and Conditions and the Specific Property Data Request attached hereto and incorporated herein, will serve as the Agreement for appraisal services by and between CBRE and Client. Each person signing below represents that it is authorized to enter into this Agreement and to bind the respective parties hereto. We appreciate this opportunity to be of service to you on this assignment. If you have additional questions, please contact us. Sincerely, CBRE, Inc. Valuation & Advisory Services Steve Calandra, MAI Director As Agent for CBRE, Inc. T 949.599.5751 Steve.Calandra@cbre.com ww%y.6re.vsh`o vQtior; CBRE 744 VALUATIONADVISORY SERVICES BONANNI DEVELOPMEN AssignmentAgreement Pag 4 of • January1 AGREED AND ACCEPTED FOR BONANNI DEVELOPMENT ("CLIENT"): January 11,2022 Signature Date Chris Segesman Partner Name Title 714-892-0123 chris@bonannidevelopment.com Phone Number E-Mail Address vv"w.cbre.us/v�,uclllon CBRE 745 VALUATION ADVISORY• BONANNI DEVELOPMEN Assignment Agreement Page ••e of TER-W3 AiND C',0NDITIONS 1. The Terms and Conditions herein are part of an agreement for appraisal services(the"Agreement") between CBRE, Inc. (the"Appraiser") and the client signing this Agreement, and for whom the appraisal services will be performed (the "Client"), and shall be deemed a part of such Agreement as though set forth in full therein. The Agreement shall be governed by the laws of the state where the appraisal office is located for the Appraiser executing this Agreement. 2. Client shall be responsible for the payment of all fees stipulated in the Agreement. Payment of the appraisal fee and preparation of an appraisal report (the "Appraisal Report, or the "report") are not contingent upon any predetermined value or on an action or event resulting from the analyses, opinions, conclusions, or use of the Appraisal Report. Final payment is due as provided in the Proposal Specifications Section of this Agreement. If a draft report is requested, the fee is considered earned upon delivery of the draft report. It is understood that the Client may cancel this assignment in writing at any time prior to delivery of the completed report. In such event,the Client is obligated only for the hourly rate of the time expended and expenses incurred (including travel expenses to and from the job site),with a minimum charge of$1,500. Additional copies of the Appraisal Reports are available at a cost of$250 per original color copy and $100 per photocopy(black and white), plus shipping fees of$30 per report. 3. If Appraiser is subpoenaed or ordered to give testimony, produce documents or information, or otherwise required or requested by Client or a third party to participate in meetings, phone calls, conferences, litigation or other legal proceedings (including preparation for such proceedings) because of, connected with or in any way pertaining to this engagement, the Appraisal Report, the Appraiser's expertise, or the Property, Client shall pay Appraiser's additional costs and expenses, including but not limited to Appraiser's attorneys'fees, and additional time incurred by Appraiser based on Appraiser's then-prevailing hourly rates and related fees. Such charges include and pertain to, but are not limited to,time spent in preparing for and providing court room testimony, depositions, travel time, mileage and related travel expenses, waiting time, document review and production, and preparation time (excluding preparation of the Appraisal Report), meeting participation, and Appraiser's other related commitment of time and expertise. Hourly charges and other fees for such participation will be provided upon request. In the event Client requests additional appraisal services beyond the scope and purpose stated in the Agreement, Client agrees to pay additional fees for such services and to reimburse related expenses, whether or not the completed report has been delivered to Client at the time of such request. 4. Appraiser shall have the right to terminate this Agreement at any time for cause effective immediately upon written notice to Client on the occurrence of fraud or the willful misconduct of Client, its employees or agents, or without cause upon 5 days written notice. 5. In the event Client fails to make payments when due then,from the date due until paid,the amount due and payable shall bear interest at the maximum rate permitted in the state where the office is located for the Appraiser executing the Agreement. In the event either party institutes legal action against the other to enforce its rights under this Agreement,the prevailing party shall be entitled to recover its reasonable attorney's fees and expenses. Each party waives the right to a trial by jury in any action arising under this Agreement. b. Appraiser assumes there are no major or significant items or issues affecting the Property that would require the expertise of a professional building contractor, engineer, or environmental consultant for Appraiser to prepare a valid report. Client acknowledges that such additional expertise is not covered in the Appraisal fee and agrees that, if such additional expertise is required, it shall be provided by others at the discretion and direction of the Client, and solely at Client's additional cost and expense. 7. In the event of any dispute between Client and Appraiser relating to this Agreement, or Appraiser's or Client's performance hereunder, Appraiser and Client agree that such dispute shall be resolved by means of binding arbitration in accordance with the commercial arbitration rules of the American Arbitration Association, and judgment upon the award rendered by an arbitrator may be entered in any court of competent jurisdiction. Depositions may be taken and other discovery obtained during such arbitration proceedings to the same extent as authorized in civil judicial proceedings in the state where the office of the Appraiser executing this Agreement is located. The arbitrator shall be limited to awarding compensatory damages and shall have no authority to award punitive, exemplary or similar damages. The prevailing party in the arbitration proceeding shall be entitled to recover its expenses from the losing party, including costs of the arbitration proceeding, and reasonable attorney's fees. Client acknowledges that Appraiser is being retained hereunder as an independent contractor to perform the services described herein and nothing in this Agreement shall be deemed to create any other relationship between 746 ADVISORYVALUATION & BONANNI DEVELOPMEN Assignment Agreement Pag 6 of • January 11, 2022 Client and Appraiser. This engagement shall be deemed concluded and the services hereunder completed upon delivery to Client of the Appraisal Report discussed herein. 8. All statements of fact in the report which are used as the basis of the Appraiser's analyses,opinions,and conclusions will be true and correct to Appraiser's actual knowledge and belief. Appraiser does not make any representation or warranty, express or implied, as to the accuracy or completeness of the information or the condition of the Property furnished to Appraiser by Client or others. TO THE FULLEST EXTENT PERMITTED BY LAW, APPRAISER DISCLAIMS ANY GUARANTEE OR WARRANTY AS TO THE OPINIONS AND CONCLUSIONS PRESENTED ORALLY OR IN ANY APPRAISAL REPORT, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF FITNESS FOR ANY PARTICULAR PURPOSE EVEN IF KNOWN TO APPRAISER. Furthermore,the conclusions and any permitted reliance on and use of the Appraisal Report shall be subject to the assumptions, limitations, and qualifying statements contained in the report. 9. Appraiser shall have no responsibility for legal matters,including zoning,or questions of survey or title,soil or subsoil conditions, engineering, or other similar technical matters. The report will not constitute a survey of the Property analyzed. 10. Client shall provide Appraiser with such materials with respect to the assignment as are requested by Appraiser and in the possession or under the control of Client. Client shall provide Appraiser with sufficient access to the Property to be analyzed, and hereby grants permission for entry unless discussed in advance to the contrary. 11. The data gathered in the course of the assignment(except data furnished by Client)and the report prepared pursuant to the Agreement are,and will remain,the property of Appraiser. With respect to data provided by Client,Appraiser shall not violate the confidential nature of the Appraiser-Client relationship by improperly disclosing any proprietary information furnished to Appraiser. Notwithstanding the foregoing,Appraiser is authorized by Client to disclose all or any portion of the report and related data as may be required by statute, government regulation, legal process, or judicial decree, including to appropriate representatives of the Appraisal Institute if such disclosure is required to enable Appraiser to comply with the Bylaws and Regulations of such Institute as now or hereafter in effect. 12. Unless specifically noted, in preparing the Appraisal Report the Appraiser will not be considering the possible existence of asbestos,PCB transformers,or other toxic,hazardous,or contaminated substances and/or underground storage tanks(collectively,"Hazardous Material)on or affecting the Property,or the cost of encapsulation or removal thereof. Further, Client represents that there is no major or significant deferred maintenance of the Property that would require the expertise of a professional cost estimator or contractor. If such repairs are needed,the estimates are to be prepared by others, at Client's discretion and direction, and are not covered as part of the Appraisal fee. 13. In the event Client intends to use the Appraisal Report in connection with a fax matter, Client acknowledges that Appraiser provides no warranty, representation or prediction as to the outcome of such tax matter. Client understands and acknowledges that any relevant taxing authority(whether the Internal Revenue Service or any other federal, state or local taxing authority) may disagree with or reject the Appraisal Report or otherwise disagree with Client's tax position, and further understands and acknowledges that the taxing authority may seek to collect additional taxes, interest, penalties or fees from Client beyond what may be suggested by the Appraisal Report. Client agrees that Appraiser shall have no responsibility or liability to Client or any other party for any such taxes, interest, penalties or fees and that Client will not seek damages or other compensation from Appraiser relating to any such taxes, interest, penalties or fees imposed on Client, or for any attorneys' fees, costs or other expenses relating to Client's tax matters. 14. Appraiser shall have no liability with respect to any loss, damage, claim or expense incurred by or asserted against Client arising out of, based upon or resulting from Client's failure to provide accurate or complete information or documentation pertaining to an assignment ordered under or in connection with this Agreement, including Client's failure,or the failure of any of Client's agents,to provide a complete copy of the Appraisal Report to any third party. 15. LIMITATION OF LIABILITY. EXCEPT TO THE EXTENT ARISING FROM SECTION 16 BELOW, OR SECTION 17 IF APPLICABLE, IN NO EVENT SHALL EITHER PARTY OR ANY OF ITS AFFILIATE, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, OR CONTRACTORS BE LIABLE TO THE OTHER, WHETHER BASED IN CONTRACT, WARRANTY, INDEMNITY, NEGLIGENCE, STRICT LIABILITY OR OTHER TORT OR OTHERWISE, FOR ANY SPECIAL, CONSEQUENTIAL, PUNITIVE, INCIDENTAL OR INDIRECT DAMAGES, AND AGGREGATE DAMAGES IN CONNECTION WITH THIS AGREEMENT FOR EITHER PARTY (EXCLUDING THE OBLIGATION TO PAY THE FEES REQUIRED HEREUNDER) SHALL NOT EXCEED THE GREATER OF THE TOTAL FEES PAYABLE TO APPRAISER UNDER THIS AGREEMENT OR TEN THOUSAND DOLLARS ($10,000). THIS LIABILITY LIMITATION SHALL NOT APPLY IN THE EVENT OF A FINAL FINDING BY AN ARBITRATOR OR A COURT OF COMPETENT JURISDICTION THAT SUCH LIABILITY IS THE RESULT OF A PARTY'S FRAUD OR WILLFUL MISCONDUCT. 747 VALUATION &ADVISORY BONANNI DEVELOPMEN Assignment Agreement Pag of • 16. Client shall not disseminate, distribute, make available or otherwise provide any Appraisal Report prepared hereunder to any third party (including without limitation, incorporating or referencing the Appraisal Report , in whole or in part, in any offering or other material intended for review by other parties) except to (i) any third party expressly acknowledged in a signed writing by Appraiser as an "Intended User" of the Appraisal Report provided that either Appraiser has received an acceptable release from such third party with respect to such Appraisal Report or Client provides acceptable indemnity protections to Appraiser against any claims resulting from the distribution of the Appraisal Report to such third party,(ii)any third party service provider(including rating agencies and auditors) using the Appraisal Report in the course of providing services for the sole benefit of an Intended User, or (iii) as required by statute, government regulation, legal process, or judicial decree. In the event Appraiser consents, in writing, to Client incorporating or referencing the Appraisal Report in any offering or other materials intended for review by other parties,Client shall not distribute,file,or otherwise make such materials available to any such parties unless and until Client has provided Appraiser with complete copies of such materials and Appraiser has approved all such materials in writing. Client shall not modify any such materials once approved by Appraiser. In the absence of satisfying the conditions of this paragraph with respect to a party who is not designated as an Intended User, in no event shall the receipt of an Appraisal Report by such party extend any right to the party to use and rely on such report, and Appraiser shall have no liability for such unauthorized use and reliance on any Appraisal Report. In the event Client breaches the provisions of this paragraph, Client shall indemnify, defend and hold Appraiser, and its affiliates and their officers, directors,employees, contractors, agents and other representatives (Appraiser and each of the foregoing an "Indemnified Party"and collectively the"Indemnified Parties"),fully harmless from and against all losses, liabilities,damages and expenses(collectively,"Damages") claimed against,sustained or incurred by any Indemnified Party arising out of or in connection with such breach, regardless of any negligence on the part of any Indemnified Party in preparing the Appraisal Report. 17. Furthermore, Client shall indemnify, defend and hold each of the Indemnified Parties harmless from and against any Damages in connection with (i) any transaction contemplated by this Agreement or in connection with the appraisal or the engagement of or performance of services by any Indemnified Party hereunder, (ii) any Damages claimed by any user or recipient of the Appraisal Report,whether or not an Intended User, (iii) any actual or alleged untrue statement of a material fact, or the actual or alleged failure to state a material fact necessary to make a statement not misleading in light of the circumstances under which it was made with respect to all information furnished to any Indemnified Party or made available to a prospective party to a transaction, or (iv) an actual or alleged violation of applicable law by an Intended User(including,without limitation,securities laws)or the negligent or intentional acts or omissions of an Intended User(including the failure to perform any duty imposed by law);and will reimburse each Indemnified Party for all reasonable fees and expenses (including fees and expenses of counsel) (collectively, "Expenses") as incurred in connection with investigating, preparing, pursuing or defending any threatened or pending claim,action,proceeding or investigation (collectively, "Proceedings")arising therefrom,and regardless of whether such Indemnified Party is a formal party to such Proceeding. Client agrees not to enter into any waiver, release or settlement of any Proceeding (whether or not any Indemnified Party is a formal party to such Proceeding) without the prior written consent of Appraiser (which consent will not be unreasonably withheld or delayed) unless such waiver, release or settlement includes an unconditional release of each Indemnified Party from all liability arising out of such Proceeding. 18. Time Period for Legal Action. Unless the time period is shorter under applicable law, except in connection with paragraphs 16 and 17 above,Appraiser and Client agree that any legal action or lawsuit by one party against the other party or its affiliates,officers,directors,employees,contractors,agents,or other representatives,whether based in contract, warranty, indemnity, negligence, strict liability or other tort or otherwise, relating to (a) this Agreement or the Appraisal Report, (b) any services or appraisals under this Agreement or (c) any acts or conduct relating to such services or appraisals, shall be filed within two (2) years from the date of delivery to Client of the Appraisal Report to which the claims or causes of action in the legal action or lawsuit relate. The time period stated in this section shall not be extended by any incapacity of a party or any delay in the discovery or accrual of the underlying claims, causes of action or damages. 748 Assignment Agreement Page i of • January / ,)r1-'E(,, 1F1C. FIRO PERTY - REQUEST In order to complete this assignment under the terms outlined, CBRE, Inc., Valuation & Advisory Services, will require the following specific information for the property: 1. PLEASE NOTIFY US IMMEDIATELY IF ANY OTHER CBRE SERVICE LINE (INCLUDING CAPSTONE) IS INVOLVED IN THE BROKERAGE, FINANCING, INVESTMENT OR MANAGEMENT OF THIS ASSET. 2. Current title report and title holder name 3. Legal description 4. Survey and/or plat map 5. Site plan for the existing development 6. Building plans and specifications, including square footage for all buildings and units 7. Any previous market/demand studies or appraisals 8. Name and telephone number of property contact for physical inspection and additional information needed during the appraisal process 9. Any other information that might be helpful in valuing this property If any of the requested data and information is not made available to the Appraiser following written request to Client, CBRE, Inc., reserves the right to reasonably extend the delivery date by the amount of time it takes to receive the requested information or make other arrangements. Please have the requested information delivered to the following: Steve Calandra, MAI Director Steve.Calandra@cbre.com CBRE, Inc. Valuation & Advisory Services 3501 Jamboree Road, Ste 100 Newport Beach, CA 92660 wwve.cbre.us/vcluation CBRE 749 V v 750 JAR z A' A VALUATION & ADVISORY SERVICES Bank information to be provided in wire transaction or ACH transfer: Wells Forgo 420 Montgomery Street San Francisco, CA 94104 '011k Contact: Mich e 1 i e Ricar T e (3 10) 6 0 6- A 7'y'7, Account Dcme: CBRE, Inc. \Vualion Wire Receipts 4 DA i 21 -000-248 Account Nunrber: 4 121 -248561 PAYMENT BY CHECK Please make check payable to: CBRE, Inc. - Valuation & Advisory Services Attn: Bank of America Lockbox Services P.O. Box 281620, Location Code 4187 Atlanta, GA 30384-1620 REFERENCE Please reference our Invoice number, Property name (if applicable) and address of the asset(s) being valued in your payment transaction. If multiple properties, reference a deal identifier. Notice of your payment transaction to VAS-PacSWNewAssign@cbre.com will ensure prompt and accurate processing. *NOTE: Credit cards are not an accepted form of payment RETAINER PAYMENT Select a payment option above. ➢ If an invoice number has not been provided, reference "RETAINER 41251 PS" and the property name/address in your transaction: (Example: RETAINER 41251 PSJ 23 Main Street, Los Angeles, CA). T CBRE 750 751 Addenda Addendum F QUALIFICATIONS ©2022 CBRE, Inc. 751 STEVE 1 1 . R 1 MAI CBRE Director- Valuation and Advisory Services Steve Calandra serves as a Director of Valuation and Advisory Services in Hawaii and Southern California. In this role, he directs valuation and consulting engagements related to a wide variety of property types in the State of Hawaii and Southern California market, agricultural assignments throughout the southwest. Mr. Calandra has a broad range of experience in the valuation and analysis of STEVE CALANDRA,MAI asset types including agricultural properties, development and transitional land, subdivisions, office, industrial, single and multi-family, hotels, self-storage, C:808.723.9793 ground leased sites and going-concern valuations of complex assets. Mr. C:949.599.5751 Steve.Colondm(cDcbre.com Calandra's expertise includes valuation of fee simple, leased fee and leasehold interests, feasibility studies, highest and best use studies, rental surveys, 1003 Bishop Street,Suite 1800 conservation easements, re use and redevelopment projects, partial takings, Honolulu,HI96813 eminent domain and condemnation, acquisition/disposition, foreclosure related 3501 Jamboree Road Suite 100 valuations, trust accounts, estate, gift and Internal Revenue Service related tax Newport Beach,CA 92660 valuations. SELECT CLIENTS — raliran� EXPERIENCE fr�an,olErena Steve Calandra has been involved in commercial real estate valuations since Citp o'Raecho Santa 1996. Prior to joining CBRE, he was the Managing Director for JLL Valuation and — �`dln�yurito Advisory Services and held various positions with Integra Realty Resources, °t'of B°°°" including Senior Managing Director of the Orange County and Inland Empire Citp of Heme'Clty of Ontrn — City of Sae Bsinardino office. Mr. Calandra has become a trusted advisor to his clients providing 1�Beochesand Hardais appraisal and consulting services to lenders, pension funds, REITs, law firms, CIOV5Jnfied'11oolDisldr, CPA's, government agencies, school districts, and builders in all phases of E'esna Unfied Shoal development, helping them to achieve their current goals and plan for the future. — dherced UF:fiad S�hooi Disrrla Brea Oliodu S�h,oi DSrrici SPECIALTIES Fontana Unified School Dishici snutha�nCalifaninEdlson Agricultural Properties Subdivision and Masterplans us Pastalse-occ Special Use Properties Eminent Domain/Condemnation Hnnim rnnbeachotk usD Highest and Best Use Case Studies Luxury Residences 'Ieshire&u,=nd.=,i, lP EDUCATION AND DESIGNATIONS BrvaCa„e 1P Bachelor of Arts, English Literature and Creative Writing; California State — Ba,halterne,,e, University, Fresno DowPmg.uoror C Keelei Hesc J�erdon MAI designation of the Appraisal Institute _ LeihC,rn,.t"atkinc Ea, Offiret )el!eH !'Yu, Certified General Real Estate Appraiser, State of California #AG027877 Fushun Stern Eisier LfP Certified General Real Estate Appraiser, State of Hawaii #1031 Fikhur;' I �rn�e;!,Sha ,B Pittmm� S�eemm�n,Law,itle�,�,H'mCs 1'deisennan D He+irun 752 STEVE 1 1 . F 1 1 CBRE Director- V• • • • • Advisory Services SELECT CLIENTS CONT. APPRAISAL INSTITUTE COURSES Course 1 10,Appraisal Principles PETS Course 120,Appraisal Procedures Cia;AraiGM1anoBsar Course 310, Basic Income Capitalization hide Jr'7J Ie,F, Course 320, General Applications LUS0 i ,12 'jP 711 Af Course 410, Standards of Professional Practice, Part A F 9:-1 T10 Course 420, Standards of Professional Practice, Part B Course 510,Advanced Income Capitalization IS Course 520, Highest and Best Use JF;o�pao raa; Course 530,Adv. Sales Comparison & Cost Approaches f,E;;sonk Course 540, Report Writing and Valuation Analysis Course 550,Advanced Applications - . u Appraising Convenience Stores Eminent Domain & Condemnation BBC�J B�a�; Small Hotel/Motel Valuations Beo_i Busl,�ess y��,, Argus Enterprise Parts 1 & 2 Laws & Regulations for California Appraisers Laws & Regulations for Nevada Appraisers - Bun,_):vl ra, Introduction to Green Buildings: Principles & Concepts - Brnl Bcmk Case Studies in Appraising Green Commercial Buildings - Cimi ,�F,m,­Baol Appraising Automobile Dealerships FHA Appraising—Principles and Procedures EcsrV,�es B < Subdivision Valuation — Honmi&a^'n — Lo;oils Bach Fo`ir'�>i 6an�, REFERENCES Faro�ai Con_-I I jT,Back Thomas Pastore,ASA, CFA Ken Brown,ARA r, ar 6an�, Chief Executive Officer Appraisal Manager Sanli Pastore & Hill Fresno-Madera Farm Credit Fvelis Fn�nc 1990 S. Bundy Dr., Ste 800 4635 W Spruce Ave, Los Angeles, CA 90025 Fresno, CA 93722 310-571-3400 559-277-7000 tpastore@sphvalue.com kenneth.brown@fmfarmcredit.com Justin Stout, MAI Mark H. Persico,AICP Review Appraiser COO and Senior Vice President Banner Bank Kosmont Companies 110 S Ferrall St Office: (424) 297-1070 Spokane,WA 99202 mpersico@kosmont.com Office: (509) 241-0167 Justin.Stout@bannerbank.com Additional references are available upon request 753 NJ WRr A Business, Consumer Services & Housing Agency BUREAU OF REAL, ESTATE APPRAISERS REAL ESTATE APPRAISER. LICENSE E Steven R. Calandra f ) i P has successfully met the requirements for a license as a residential and commercial real estate appraiser in the I State of California and is, therefore, entitled to use the title: "Certified General Real Estate Appraiser" j This license has been Issued in accordance with the provisions of the Real Estate Appraisers" Licensing and Certification Law. , BREA APPRAISER IDENTIFICATION NUMBER: AG 027877 ' Effective Date: November 17, 2020 Date Expires: November 16, 2022 ' a { I Loretta Dillon, Deputy Bureau Chief, BREA3954776 i PF s VWr r Jenn Simmonson Appraiser Experience Jenn Simmonson is third-generation Southern California real estate appraiser. She has over ten years of commercial real estate appraisal experience, with specialty experience including multifamily, land, agribusiness, natural resources, industrial, hospitality, and seniors housing AW properties throughout the West Coast and Hawaii. Additional experience includes litigation support and U.S. Federal Land Acquisition assignments. Clients served include a broad base of lenders, local and national investment firms, development and operating companies, commercial and investment banks, insurance companies, estate attorneys, and REITs. Prior to joining CBRE, Jennifer spent eight years as owner of a successful consulting business. She N i9 has a solid management, accounting, and marketing foundation. ' Jennifer has held multiple leadership rolls within the community. She has served on the board of the USC Trojan Club of San Diego(2014-2016). She is Past Co-President of the USC Alumni Club of San Diego(2012-2014)and has served on the following non-profit boards: Friends of Homeless Veterans (2008-2012) and San Diego Coastal Rotary Club (2007-2012). She was the Founder •praiser and Past President of San Diego Surf Ladies, Southern California's first all-women's surf club CA CGREA No. 11•. • (2004-2006). . • 248 •1:1 jennifer.simmonson@cbre.comProfessional Affiliations / Accreditations 4301 La Jolla Village Drive, • Appraisal Institute—Candidate for Designation Suite 111 San Diego, _ Education • University of Southern California, B.A. International Relations — Graduated with Departmental Honors Thematic Option Undergraduate Honors Program Business courses completed Professional Education 350+ hours of appraisal education, including: Appraisal Institute: 2020-21 USPAP - 2021; General Appraiser Sales Comparison Approach — 2019; General Appraiser Market Analysis Highest& Best Use—2018; IRS Valuation Symposium - Valuation of Donated Real Estate, Including Conservation Easements and Other IRS Valuation Assignments— 2018; General Appraiser Report Writing and Case Studies — 2018; General Appraiser Income Approach/Part 2 -2018; General Appraiser Income Approach/Part 1 — 2018; Solving Land Valuation Puzzles Seminar — 2018; Online Business Practices and Ethics — 2017; Uniform Appraisal Standards for Federal Land Acquisitions: Practical Applications—2017;General Appraiser Site Valuation & Cost Approach — 2017; 4-Hour Federal and California Statutory and Regulatory Laws—2016 755 CBRE Jenn Simmonson A• • . Professional Education � s - (continued) o McKissock: Real Estate Appraisal Courses, 2016-2019: General Appraiser Sales Comparison Approach — 2019; 2016-2017 15-Hour National Uniform Standards of Professional Appraisal Practice—2017; Supervisor-Trainee Course for California—2016 American Society of Farm Managers & Rural Appraisers: Real Estate Appraisal Courses, 2018- 2019: The Nuts and Bolts of California's Water Supply System — 2019; CA Chapter Spring Ag Tour—2018; CA Chapter 2018 Outlook Conference - 2018 Anthony Schools —A Kaplan Professional Company: Math & Regulations for Appraisers— 2005; National 15 Hour USPAP Course with Exam -2004; Residential RE Appraisal — 2004; Legal Appraiser Considerations in Appraisal—2004 CA CGREA • 3006659 • 248 .1:1 • 4301 La Jolla Village Drive, Suite •11 Son Diego, CA 91111 756 � u s + � . • • + • / lffii ! } rti 1 r 4T t� THIS DOCUMENT CONTAINS A TRUE WATERMARK-HOLD UP TO LIGHT TO SEE"CHAIN LINK" ATTACHMENT #3 758 STATE OF CALIFORNIA-BUSINESS CONSUMER SERVICES AND HOUSING AGENCY AVIN N W OM, Governor DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT DIVISION OF HOUSING POLICY DEVELOPMENT 2020 W. El Camino Avenue,Suite 500 Sacramento,CA 95833 (916)263-2911 /FAX(916)263-7453 www.hcd.ca.gov May 11, 2022 Ursula Luna-Reynosa, Director Community Development City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Dear Ursula Luna-Reynosa: RE: HCD's Review of the City of Huntington Beach Resolution No. 2022-14 Declaring Assessor Parcel Number 15928104 as "Exempt Surplus Land." Thank you for notifying the California Department of Housing and Community Development (HCD) of the City of Huntington Beach's (City) determination of Assessor Parcel Number 15928104 (Property) as "exempt surplus land." HCD reviewed Resolution No. 2022-14, Staff Report No.22-291, and other documentation you provided (collectively, the "Report"), and considered the City's claim that the Property qualifies as "exempt surplus land" under Government Code section 54221, subdivision (f)(1)(B). According to the Report, the Property is approximately 3,374 square feet in area. The City desires to sell the Property to an owner of contiguous land. Furthermore, the Report provides that the Property is not contiguous to land owned by a state or local agency that is used for open-space or low- and moderate-income housing purposes. Based on this information, HCD concludes that the Property qualifies as "exempt surplus land" under Government Code section 54221, subdivision (f)(1)(B). The City is permitted to proceed with the sale of the Property as described in the Report. If you have any questions or need additional technical assistance, please contact Public Lands at Publiclands(a)-hcd.ca.gov. Sincerely, (;.4.zl�� Jillian Burgos Public Lands Manager Housing Policy Development 758 ATTACHMENT #4 AGREEMENT FOR SALE OF SURPLUS REAL PROPERTY BY AND BETWEEN THE CITY OF HUNTINGTON BEACH AND BONANNI DEVELOPMENT COMPANY IV This Sale Agreement("Agreement") is made and entered into on the 64,0 day of June, 2022, by and between the City of Huntington Beach, a California municipal corporation("City") and Bonanni Development Company IV ("Buyer") collectively the"Parties." WHEREAS, the City owns that certain real property located in the City of Huntington Beach, Orange County, California, generally located at Lot 33, of Block A of Garfield Street (APN 159-281-04), which pursuant to Huntington Beach Municipal Code Chapter 3.06 has been determined to be surplus property and available for disposal; and The City Council authorized the disposal of the surplus real property o uLLt V!2022. NOW THEREFORE, in consideration of the foregoing recitals and for other good and valuable consideration, the Parties agree as follows: 1. PROPERTY 1.1 Property. City agrees to sell and convey to Buyer, and Buyer agrees to purchase from City,the real property (Property), hereinafter described, subject to the terms and conditions set forth in this Agreement. The real property that is the subject of this offer consists of approximately 2,846 square feet located in the City of Huntington Beach, County of Orange, State of California and legally described in the attached Exhibit A. 2. PURCHASE PRICE 2.1 Purchase Price. The total purchase price to be paid by Buyer to City for Property shall be Sixteen Thousand Eight Hundred Seventy Five 00/100 Dollars ($16,875). 2.2 Buyer agrees that no escrow company will be used in this transaction, and further agrees to assume any risk or liability associated with failure to use an escrow company during this transaction. 2.3 Payment of the Purchase Price. The Purchase Price for the Property shall be payable by Buyer as follows: Buyer shall deposit or cause to be deposited with City Treasurer, in cash or by a certified or bank cashier's check made payable to City of Huntington Beach or a confirmed wire transfer of funds,the Purchase Price which includes all closing costs, pro-rations and charges payable pursuant to this Agreement. All recording and title insurance costs to be paid by Buyer. Upon receipt of funds the City will provide an executed Grant Deed to Buyer. 3. CONDITIONS OF SALE 3.1 Buyer's Costs. On or before July 7, 2022, Buyer shall pay all applicable costs associated with transfer, recording fees, documentary transfer taxes, policies of title insurance, and any other costs connected with the closing of this transaction. 1 22-11196/284592 3.2 Documents. Buyer and City agree to execute and deliver all further documents and instruments reasonably required by this Purchase and Sale Agreement. City shall deliver or cause to be delivered to Buyer at the closing an original ink signed Grant Deed, duly executed and in recordable form, conveying fee title to the Property to Buyer. 3.3 Conditions of Title. It shall be a condition to the Close of Sale and a covenant of City that title to the Property shall be conveyed to Buyer by City by the Grant Deed, with no warranties or covenants as to Conditions of Title ("Approved Condition of Title"): 3.4 Conditions to City's Obligation. For the benefit of City, the Close of Sale shall be conditioned upon the occurrence and/or satisfaction of each of the following conditions (or City's waiver thereof, it being agreed that City may waive any or all of such conditions): (a) Buyer's Obligations. Buyer shall have timely performed all of the obligations required by the terms of this Agreement to be performed by Buyer, and (b) Buyer's Representations. All representations and warranties made by Buyer to City in this Agreement shall be true and correct as of the Close of Sale. (c) Deposits by Buyer. Buyer shall deposit, or cause to be deposited with the City, the funds which are to be applied toward the payment of the Purchase Price in the amounts and at the times if designated herein(as reduced or increased by the pro-rations, debits and credits hereinafter provided). 3.6. Costs and Expenses. The cost and expense, if any, of the Title Policy attributable to CLTA coverage shall be paid by Buyer. Buyer shall pay all documentary transfer taxes, if any, payable in connection with the recordation of the Grant Deed. The amount of such transfer taxes shall not be posted on the Grant Deed, but shall be supplied by separate affidavit. 4. CITY'S REPRESENTATIONS, WARRANTIES, AND DISCLOSURES. In addition to any express agreements of City contained herein, the following constitute representations and warranties of City to Buyer, of this Agreement: 4.1 Reliability of Information. City obtained the information contained in this Agreement from sources deemed reliable; however, City makes no guarantees as to the accuracy of the information provided. 4.2 Authority of State. City is a government entity, duly organized and validly existing under the laws of the State of California. City has full power and authority to own, sell, and convey the Property to Buyer and to enter into and perform its obligations pursuant to this Agreement. 4.3 Taxes. City is exempt from property taxes and assessments and none are or will be owing at close of sale. 2 22-11196/284592 4.4 Disclosures. Buyer acknowledges that Buyer is purchasing the Property solely in reliance on Buyer's own investigations. No representations or warranties of any kind whatsoever, expressed or implied, have been made by City, City's agents, or employees, including in any investigations, studies or. Buyer further acknowledges and warrants that as of the close of sale Buyer will be aware of all zoning regulations, other governmental requirements, site and physical conditions (including the presence of hazardous materials or other adverse environmental conditions), and other matters affecting the use and condition of the Property including any investigations, studies, and documents. Buyer agrees to purchase the Property in the condition that it is in at close of sale, subject, however,to Buyer's right to terminate should the Property be damaged or destroyed by causes other than causes attributable to Buyer's entry on the Property and inspections ordered by Buyer prior to close of sale. Buyer shall be responsible at Buyer's sole expense for any or all remediation required to make Property usable for Buyer's intended purpose. 4.5 As-Is Purchase. Buyer specifically acknowledges and agrees that City will sell and Buyer will purchase the Property on an "as-is with all faults" basis, and that having been given the opportunity to inspect the Property and review information and documentation affecting the Property, Buyer is not relying on any representations or warranties of any kind whatsoever, express or implied, from City or its agents as to any matters concerning the Property, including without limitation: (i.)the quality, nature, adequacy, and physical condition of the Property including soils, geology, and any groundwater; (ii.)the existence, quality, nature, adequacy, and physical condition of utilities serving the Property; d(iii.) the development potential of the Property and the Property's use, merchantability, fitness, suitability, value, or adequacy of the Property for any particular purpose; (iv.)the zoning or other legal status of the Property or any other public or private restrictions on use of the Property; (v.) the compliance of the Property or its operation with any applicable codes, laws, regulations, statutes, ordinances, covenants, conditions. and restrictions of any governmental or quasi-governmental entity or of any other person or entity; (vi.)the presence of hazardous materials on, under, or about the Property or the adjoining or neighboring property; (vii.)the condition of title to the Property; and (viii.)the economics of the operation of the Property. 4.6 Absence of Fraud and Misleading Statements. To the best of City's knowledge, no statement of City in this Agreement or in any document, certificate, or schedule furnished or to be furnished to Buyer pursuant hereto or in connection with the transaction contemplated hereby contains any untrue statement of material fact. 5. BUYER'S REPRESENTATIONS AND WARRANTIES. In addition to any express agreements of Buyer contained herein,the following constitute representations and warranties of Buyer to City; of this Agreement: 5.1 Representations Regarding Buyer's Authority. (a) Buyer has the legal power, right and authority to enter into this Agreement and the instruments referenced herein, and to consummate the transactions contemplated hereby. 3 22-11196/284592 (b) The individuals executing this Agreement and the instruments referenced herein on behalf of Buyer have the legal power, right, and actual authority to bind Buyer to the terms and conditions hereof and thereof. (c) This Agreement is, and all other instruments, documents and agreements required to be executed and delivered by Buyer in connection with this Agreement are and shall be, duly authorized, executed and delivered by Buyer and shall be valid, legally binding obligations of and enforceable against Buyer in accordance with their terms. (d) All requisite action (corporate,trust, partnership or otherwise) has been taken by Buyer in connection with the entering into this Agreement, the instruments referenced herein, and the consummation of the transactions contemplated hereby. No consent of any partner, shareholder, creditor, investor, judicial or administrative body, authority other party is required. (e) Neither the execution and delivery of this Agreement and documents referenced herein, nor the incurrence of the obligations set forth herein, nor the consummation of the transactions herein contemplated, nor compliance with the tem Is of this Agreement and the documents referenced herein conflict with or result in the material breach of any terms, conditions or provisions of, or constitute a default under, any bond, note, or other evidence of indebtedness or any contract, indenture, mortgage, Deed of trust, loan, partnership agreement, lease or other agreements or instruments to which Buyer is a party or affecting the Property. 5.2 General Representation. No representation, warranty or statement of Buyer in this Agreement or in any document, certificate or schedule furnished or to be furnished to City pursuant hereto contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary to make the statements or facts contained therein not misleading. Buyer's representations and warranties made in this Agreement shall be continuing and shall be true and correct as of the date of the close of sale with the same force and effect as if remade by Buyer in a separate certificate at that time. The truth and accuracy of Buyer's representations and warranties made herein shall constitute a condition for the benefit of City to the close of sale (as elsewhere provided herein) and shall not merge into the close of sale or the recordation of the Grant in the Official Records, and shall survive the close of sale. 6. DUE DILIGENCE. 6.1 Buyer's Investigation of Property Condition. Real property often contains defects and conditions which are not readily apparent and which may affect the value or desirability of the Property. Therefore, it is the affirmative duty of Buyer to exercise reasonable care to discover those facts which are unknown to Buyer or within the diligent attention and observation of Buyer. Buyer agrees to provide to City, at no cost, upon request of City, complete copies of all inspection reports obtained by Buyer concerning the Property. 4 22-11196/284592 6.2 Buyer's Acceptance of Property Condition. Buyer's acceptance of the condition of the Property is a contingency of this Agreement; accordingly, Buyer shall have the right to conduct inspections, investigations, tests, surveys, and other studies at Buyer's expense. Buyer is strongly advised to exercise these rights and select professionals with appropriate qualifications to conduct inspections of the entire Property. If Buyer does not exercise these rights, Buyer is acting against the advice of City. 6.3 Scope of Buyer's Investigations. Buyer agrees and warrants, or by the failure to do so shall have waived any rights to do so hereunder, that at close of sale Buyer shall have investigated the condition mld suitability of all aspects of the Property and all matters affecting the value or desirability of the Property, including but not limited to the following: 6.3.1 Condition of systems and components. Foundation, plumbing, siding, electrical, heating, mechanical, roof, air conditioning, built-in appliances, security, and any other structural or nonstructural systems and components, and the energy efficiency of the Property. 6.3.2 Size and age of improvements. Room count, room dimensions, square footage in improvement, lot size, and age of the improvements. 6.3.3 Lines and boundaries. Property lines and boundaries. 6.3.4 Waste disposal. Type, size, adequacy, and condition of sewer and/or septic systems and components. 6.3.5 Governmental requirements and limitations. Availability of required governmental pemIits, inspections, certificates, or other determinations affecting the Property, including historical significance. Any limitations, restrictions, zoning, building size requirements, or other requirements effecting the current or future use or development of the Property. 6.3.6 Rent and occupancy controls. Any restrictions that may limit the amount of rent that can legally be charged and the maximum number of persons who can lawfully occupy the Property. 6.3.7 Water and utilities; well systems and components. Availability, adequacy, and condition of public or private systems. 6.3.8 Environmental hazards. The presence of asbestos, formaldehyde, radon, methane, other gases, lead based paint, other lead contamination, fuel or chemical storage tanks, waste disposal sites, electromagnetic fields, and other substances, materials, products, or conditions. 6.3.9 Geological conditions. Geologic/seismic conditions, soil stability/suitability, and drainage. 6.3.10 Neighborhood, area, subdivision requirements. Neighborhood or area conditions including schools; proximity and adequacy of law enforcement; 5 22-11196/284592 proximity to commercial, industrial, or agricultural activities; crime statistics; fire protection; other governmental services; existing and proposed transportation; construction and development which may affect noise, view or traffic; airport noise; and noise or odor from any source, wild or domestic. 6.3.11 Matters of record. Covenants, conditions, and restrictions; Deed restrictions; easements; and other title encumbrances of record. 6.3.12 Other matters. Any and all other matters such as availability of suitable public infrastructure, assessment, other special service districts, and soil or other conditions on the Property, not herein listed, which are or may be pertinent to Buyer's purpose for acquiring the Property. 7. INDEMNIFICATION. Buyer shall defend, indemnify, and hold the City harmless from and against any and all claims, liabilities, obligations, losses, damages, costs, and expenses, including, but not limited to, attorney's fees, court costs, and litigation expenses that City may incur or sustain by reason of or in connection with any misrepresentation made by the Buyer pursuant to this Agreement. 8. MINERAL RESERVATIONS. City shall retain all mineral rights in the Property, and the Grant Deed shall contain the following language: "EXCEPTING therefrom all oil, gas and other hydrocarbon substances and minerals lying below a depth of 500 feet from the surface of said land, but without the right of surface entry at any time upon said land or within the top 500 feet thereof, for the purpose of exploiting, developing, producing, removing and marketing said substances." 9. PRIOR AGREEMENTS. This Agreement, in effect as of the Date of Agreement, supersedes any and all prior agreements (if any) between City and Buyer regarding purchase and sale of the Property. 10. NOTICES. Any notice, tender, delivery, or other communication pursuant to this Agreement shall be in writing and shall be deemed to be properly given if delivered, mailed or sent by wire or other telegraphic communication in the manner provided in this Agreement, to the following persons: If to City: If to Buyer: City of Huntington Beach Bonanni Development Company IV Attn: Steve Holtz Attn: Ed Bonanni 2000 Main Street, 51h Floor 5500 Bolsa Avenue, Ste 120 Huntington Beach, CA 92647 Huntington Beach, CA 92649 11. CALCULATION OF TIME. Under this Agreement, when the day upon which performance would otherwise be required or permitted is a Saturday, Sunday or holiday, then the time for performance shall be extended to the next day which is not a Saturday, Sunday or 6 22-11196/284592 holiday. The term "holiday" shall mean all and only those State holidays specified in Sections 6700 and 7701 of the California Government Code. 12. TIME OF ESSENCE. Time is of the essence of this Agreement and each and every provision hereof. 13. ENTIRE AGREEMENT. This Agreement shall constitute the entire understanding and agreement of the Parties hereto regarding the purchase and sale of the Property and all prior agreements, understandings, representations or negotiations are hereby superseded, terminated and canceled in their entirety, and are of no further force or effect. 14. AMENDMENTS. This Agreement may not be modified or amended except in writing by the Parties. 15. APPLICABLE LAW. The Parties hereto acknowledge that this Agreement has been negotiated and entered into in the State of California. The Parties hereto expressly agree that this Agreement shall in all respects be governed by the laws of the State of California. 16. SEVERABILITY. Nothing contained herein shall be construed as to require the commission of any act contrary to law, and wherever there is any conflict between any provision contained herein and any present statute, law, ordinance or regulation as to which the Parties have no legal right to contract, the latter shall prevail, but the affected provisions of this Agreement shall be limited only to the extent necessary to bring them within the requirements of such law. 17. SEPARATE COUNTERPARTS. This Agreement may be executed in separate counterparts, each of which when so executed shall be deemed to be an original. Such counterparts shall, together, constitute and be one and the same instrument. 18. EXHIBITS. The following Exhibits are attached to this Agreement and incorporated by reference herein: Exhibit A: Map of Property Exhibit B: Legal Description Exhibit C: Plat Vacation of Public Right of Way 19. SURVIVAL. All terms and conditions in this Agreement, which represent continuing obligations and duties of the Parties, that have not been satisfied prior to close of sale shall survive close of sale and transfer of title to Buyer and shall continue to be binding on the respective obligated party in accordance with their terms. All representations and warranties and statements made by the respective parties contained herein or made in writing pursuant to this Agreement are intended to be, and shall remain,true and correct as of the close of sale, shall be deemed to be material, and, together with all conditions, covenants and indemnities made by the respective parties contained herein or made in writing pursuant to this Agreement(except as otherwise expressly limited or expanded by the terms of this Agreement), shall survive the 7 22-11196/284592 execution and delivery of this Agreement and the close of sale, or, to the extent the context requires, beyond any termination of this Agreement. 20. LEGAL FEES. In the event suit is brought by either party to construe, interpret and/or enforce the terms and/or provisions of this Agreement or to secure the perfom 1 ance hereof, each party shall bear its own attorney's fees, such that the prevailing party shall not be entitled to recover its attorney's fees from the non-prevailing party. 21. ASSIGNMENT. Buyer may not assign,transfer or convey its rights or obligations under this Agreement without the prior written consent of City, and then only if Buyer's assignee assumes in writing all of Buyer's obligations hereunder; provided, however, Buyer shall in no event be released from its obligations herein lder by reason of such assignment. 22. BROKERAGE COMMISSIONS. Buyer represents to City that there has been no broker, real estate agent, finder or similar entity engaged in connection with this Agreement or the sale of the Property from the City to Buyer, if consummated as contemplated hereby. Buyer agrees that should any claim be made for brokerage commissions or finder's fees by any broker, agent, finder or similar entity, by, through or on account of any acts of Buyer or its agent, employees or representatives, Buyer will indemnify, defend and hold City free and harmless from and against any and all loss, liability, cost, damage and expense (including attorneys' fees and court costs) in connection therewith. Buyer agrees to pay, at its sole cost and expense, when due, any and all brokerage commissions incurred by Buyer heretofore or hereafter incurred prior to close of sale. 23. MISCELLANEOUS. 23.1. Captions. Any captions to, or headings of, the paragraphs or subparagraphs of this Agreement are solely for the convenience of the parties hereto, are not a part of this Agreement, and shall not be used for the interpretation or determination of the validity of this Agreement or any provision hereof. 23.2. No Obligations to Third Parties. Except as otherwise expressly provided herein, the execution and delivery of this Agreement shall not be deemed to confer any rights upon, nor obligate any of the parties hereto,to any person or entity other than the parties hereto. 23.3. Exhibits and Schedules. The Exhibits and Schedules attached hereto are hereby incorporated herein by this reference. 23.4. Waiver. The waiver or failure to enforce any provision of this Agreement shall not operate as a waiver of any future breach of any such provision or any other provision hereof. 23.5. Fees and Other Expenses. Except as otherwise provided herein, each of the parties shall pay its own fees and expenses in connection with this Agreement. 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. 8 22-11196/284592 BUYER: CITY OF HUNTINGTON BEACH, a BONANNI DEVELOPMENT COMPANY IV municipal corporation of the State of California By: ' Czn Q Mayor print name ITS: (circle one) Chairman/President/Vice President City Clerk AND INITIATED AND APPROVED: By: BOXT print name Director of Community Development ITS: (circle one) Secretary/ ief Financial Of Asst. Secretary—Treasurer REVIEWED AND APPROVED: City Manager APPROVED AS TO FORM: City Attorney kW COUNTERPART 9 22-11196/284592 BUYER: CITY OF HUNTINGTON BEACH, a BONANNI DEVELOPMENT COMPANY IV municipal corporation of the State of California By: Mayor print name AOL" ITS: (circle one) Chairman/President/Vice President City Clerk &A31 AND INITIATED AND APPROVED: By: print name Director of Community Development ITS: (circle one) Secretary/Chief Financial Officer/ Asst. Secretary—Treasurer REVIEWED AND APPROVED: S"W-- City Manager APPROVED AS TO RM: 55 City Attorney kW COUNTERPART 9 22-11196/284592 Exhibit A Legal Description LOT 33 (ALLEY), IN BLOCK "A" OF THE GARFIELD STREET ADDITION TO HUNTINGTON BEACH, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON THE MAP FILED IN BOOK 7, PAGES 27 AND 28 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. APN 159-281-04 ' .• City of Huntington Beach 2000 Main Street ♦ Huntington Beach, CA 92648 (714) 536-5227 ♦ www.huntingtonbeachca.gov Ee•i�.1909,a• � Office of the City Clerk Robin Estanislau, City Clerk July 14, 2022 Bonanni Development Company IV Attn: Ed Bonanni 5500 Bolsa Avenue, Suite 120 Huntington Beach, CA 92649 Dear Mr. Bonanni: Enclosed is a fully executed copy of the Agreement for Sale of Surplus Real Property By and Between the City of Huntington Beach and Bonanni Development Company IV approved by City Council on June 21, 2022. Sincerely, Robin Estanislau, CMC City Clerk RE:ds Enclosure Sister Cities: Anjo, Japan ♦ Waitakere, New Zealand