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CC - Item 4A - Report on the Acquisition of the Glendon Hotel and the Subsequent Operating AgreementROSEMEAD COMMUNITY DEVELOPMENT COMMISSION STAFF REPORT TO: THE HONORABLE CHAIRMAN AND COMMISSION MEMBERS FROM: JEFF ALLRED, EXECUTIVE DIRECTOR (~tq DATE: MARCH 9, 2010 SUBJECT: REPORT ON THE ACQUISITION OF THE GLENDON HOTEL AND THE SUBSEQUENT OPERATING AGREEMENT In accordance with a request made at the February 23, 2010 joint meeting of the City Council and Community Development Commission, a report has been prepared by staff on the acquisition of the Glendon Hotel property by the Community Development Commission on July 2, 2008. The report also contains information relative to the management agreement with Rosemead Inn Hotel Partners, LLC that became effective on October 14, 2008. Recommendation It is recommended that the Commission receive and file the report. Attachment ITEM NO. A Q APPROVED FOR CITY COUNCIL AGENDA: MAYOR: MARGARET CLARK MAYOR PRO TEM: GARY TAYLOR COUNCIL MEMBERS: SANDRA ARMENTA POLLY LOW STEVEN LY To: From Date: f~ itch ~ Poscmc ad 8838 E. VALLEY BOULEVARD • P.O. BOX 399 ROSEMEAD, CALIFORNIA 91770 TELEPHONE (626) 569-2100 FAX (626) 307-9218 Memorandum Jeff Allred, City Manager Stan Wong, Community Development Director February 25, 2010 Subject: The Glendon Hotel Acquisition and Operating Agreement SUMMARY As requested at the February 23, 2010 City Council meeting, this is a report on the acquisition of the Glendon Hotel (8832 Glendon Way) and subsequent actions. On July 2, 2008, the Rosemead Community Development Commission acquired the Glendon Hotel (formerly known as the Rosemead Inn) located at 8832 Glendon Way for $4.4 million using non-restricted tax increment dollars to fund the transaction. The hotel was appraised for $4.5 million on September 20, 2007 (see Attachment "A"). The purchase of the Glendon Hotel was originally part of an overall larger redevelopment project (the Glendon Way Project). Immediately following the purchase of the property, proposals were solicited from reputable companies specializing in hotel operations thereby continuing the operation of the hotel while a long term development plan for the site was finalized. The Commission selected Rosemead Inn Hotel Partners, LLC as the operator for the hotel. Recommendation It is recommended that the Commission initiate a Request for Proposal (RFP) process for the disposition of this property. Such recommendation will be presented to the Commission at its March 9, 2010 meeting. ANALYSIS On August 26, 2008, the Rosemead Community Development Commission selected Rosemead Inn Hotel Partners, LLC as the operator for the Commission owned Glendon Hotel (see Attachment °B"). According to a staff report presented to the Commission on October 14, 2008 (see Attachment "C") the operating agreement was to include the following provisions: Two year operating term (with an optional extension if mutually agreed upon by both the Commission and the Rosemead Inn Hotel Partners, LLC); Glendon Hotel Acquisition & Operating February 25, 2010 Page 2 ➢ The Commission may terminate the Agreement without just cause and without penalty at any time upon giving at least sixty (60) days notice to the Operator; ➢ The Commission will contribute $100,000 towards the renovation of the hotel; ➢ The Operator must complete the renovation and open the hotel for business no later than ninety (90) days from the day the agreement is executed; ➢ The Operator agrees to compensate the City 60% of any excess profits not less than $6,000 per month during the first year of operation and 60% of any excess profits not less than $10,000 per month during the second year of operation. It should be noted that does not include any transient occupancy tax (TOT) which is estimated to be an additional $50,000 per year. In reviewing the executed operating agreement (see Attachment "D"), it appears that one of the provisions listed above (Commission contribution for renovations) was not implemented according to the agreement and one of the provisions (Commission compensation) was not included into the agreement as presented to the Commission. Commission Contribution According to the operating agreement, the Commission committed to contribute $100,000 towards payment of the costs and expenses of the renovation with the condition that $50,000 would be paid within seven days following the execution of the operating agreement, and $50,000 would be paid upon issuance of necessary building permits and approvals for the renovation by the City. In addition, within fifteen (15) days following the completion of the renovations, the Operator agreed to provide to the Commission a detailed accounting showing the expenditures for which the Commission's contribution was used, together with supporting invoices, bills or other evidences of payment, and the unexpended balance, if any. In reviewing the documentation as related to this item, a wire transfer in the full amount of $100,000 was completed on November 7, 2008 (see Attachment "E"). However, there is no approved renovation plan on file, no permits were issued and there is no detailed record of accounting showing the expenditures for which the Commission's contribution for the hotel renovation was used. After further investigation, the Operator is also lacking a business license and certificate of occupancy. A letter was sent to the Operator on January 25, 2010 and again on February 18, 2010 requesting that they obtain the necessary permits and licenses to operate a hotel business. The Operator met with the Planning Division on February 23, 2009 and has begun the process of obtaining a business license and certificate of occupancy. Commission Compensation The operating agreement requires that by the fifteenth (15th) day of each month, the Operator is to provide the Commission with a written income and expense report for the preceding month that shows a summary of all funds and revenues received and a Glendon Hotel Acquisition & Operating February 25, 2010 Page 3 summary of all operating expenses incurred. Within fifteen (15) days of receiving this report, the Operator is required to pay 60% of the revenues received in excess of expenses to the Commission with the remaining 40% retained by the Operator. There is no mention of a minimum monthly payment of $6,000 during the first year of operation or $10,000 during the second year of operation owed to the Commission regardless of performance as originally stated in the October 14, 2008 staff report. In reviewing the files the Operator has only provided a monthly report for the first two months of operation (February and March of 2009). These two reports were included in a staff report presented to the Commission on April 28, 2009 in which the Commission approved the proposed operating budget submitted by the Rosemead Inn Hotel Partners LLC (see Attachment "F"). It should also be noted that the TOT for the first four quarters of the hotel operation was only $16,867.67 (3`d Quarter 2009 - $2,159, 4th Quarter 2009 - $4,333.90, 1" Quarter 2010 - $6,217.07, and 2"d Quarter 2010 - $4,157.70) which is significantly below the projected $50,000 per year that was mentioned in the October 14, 2008 staff report. The Operator has been contacted numerous times (January 13th, January 19th, January 20th, January 28th, February 1St, and February 17th) in regards to providing a detailed accounting showing the expenditures for which the Commission's $100,000 contribution was used, together with supporting invoices, bills or other evidences of payment, and the unexpended balance, if any; and the monthly financial statement from April 2009 to the present. To date, the Operator has submitted a number of invoices in regards to the renovations but indicated there could still be additional bills. The City is waiting to receive formal communication that all information related to the renovation has been submitted to the City. The City is still waiting on the monthly financial reports. The Operator has indicated that they are currently being compiled. Once all of the requested information is received and reviewed, an update of the hotel performance will be provided. In the meantime, please let me know if you have any questions regarding this matter. f; Prepared by: r -ca &Kn- Michelle G. Ramirez Economic Development Administrator Attachment A - Real Estate Appraisal Attachment B - August 26, 2008 CDC Staff Report & Minutes Attachment C - October 14, 2008 CDC Staff Report & Minutes Attachment D - Operating Agreement Attachment E - Wire Transfer Request and Warrant Register Attachment F - April 28, 2009 CDC Staff Report & Minutes ATTACHMENT A r . 5 SUBJECT Rosemead Inn 8832 Glendon Way, Rosemead, California 91770 Part of Lot 3, Block 7, Rosemead Tract TO Mr. Brian T. Saeki Assistant City Manager City of Rosemead 8838 East Valley Boulevard Rosemead, California 91770 DATE OF VALUE September 20, 2007 DATE OF REPORT September 20, 2007 LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR EMAIL: lawrencedbrown@msn.com LAWRENCE D. BROWN REAL ESTATE APPRAISER 686 SOUTH ARROYO PARKWAY, #5 PASADENA, CALIFORNIA 91105 September 20, 2007 Mr. Brian T. Saeki Assistant City Manager City of Rosemead 8838 East Valley Boulevard Rosemead, California 91770 Re: Rosemead Inn Motel, 8832 Glendon Way, Rosemead Dear Mr. Saeki: TELEPHONE (626) 440-1991 At your request I submit herewith an appraisal report in which I have expressed my opinion of market value for the above-referenced property. My opinion is based on a personal inspection of the subject property and consideration of the economic and market factors which influence value. Based on my experience, knowledge and investigation, I have formed an opinion that the subject property has a market value of $4,500,000 on September 20, 2007. The factual and other pertinent data which are the bases of my opinion are outlined in the accompanying report or maintained in my files and available at your request. Respectfully submitted, Lawrence D. Brown LDB:dmh CERTIFICATION I hereby certify that this appraisal and report were made with the following conditions and principles- I have no present or contemplated future financial or other interest in the subject property or properties. 2. My employment and compensation for making this appraisal and preparation of the report are not contingent on the opinions expressed or the values reported. I have personally inspected the subject property or properties. 4. To the best of my knowledge and belief the statements of fact.contained in this report, which are the bases of my analysis, conclusions and opinions, are true and correct, subject to the limiting conditions herein set forth. LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR LIMITING CONDITIONS This report, which includes factual data, conclusions and opinions of value, is subject to the following limiting conditions: The date of value to which the opinions expressed in this report apply is set forth in the letter of transmittal. 2. No survey of the property was made and data relative to dimensions and areas were taken from sources deemed reliable. Except as may be noted in this report, it is assumed that the improvements, if any, are located entirely within the boundaries of the subject property and do not encroach onto the subject property. 3. No opinion is rendered concerning the title of the subject property. Data concerning ownership and legal description were obtained from sources deemed reliable. It is assumed that title is good, marketable and free and clear of all liens and encumbrances, except those specifically described in the report. 4. No opinion is expressed as to matters which are legal in- nature or as to other matters which would require specialized investigation or knowledge beyond that ordinarily employed by real estate appraisers. This is true notwithstanding the fact that such matters may be discussed in the report. 5. Maps, plats and other exhibits used in this report are for illustration only and to aid the reader in visualizing the matters discussed in narrative. They are no to be used or considered as surveys or relied upon for any purpose other than illustration. 6. Portions of the information contained in this report have been furnished by others and are believed to be accurate, however, no responsibility is assumed for their accuracy. L. 7. Distribution of the total valuation in this report between land and improvements applies only under the existing utilization. The separate valuations for land and improvements are not to be used in conjunction with any other appraisal and are invalid if so used. 8. Neither all nor any part.of the contents of this.report shall be conveyed to the public through advertising, public relations, news, sales or other media without the.express written consent of the author. Except as otherwise noted in this report, the subject cited is assumed to be free of unstable conditions, flood hazard and toxic contamination. LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR QUALIFICATIONS OF LAWRENCE D. BROWN Appraisal Experience: Independent fee appraiser with the firms of Howard S. Martin & Associates and Martin & Brown, 1963 to 1974. Self-employed, independent fee appraiser from January, 1975 to present. General Education: California State University at Los Angeles Major: Business Administration Real Estate Education: University of California Trends and Factors Influencing Real Estate Real Estate Practice Real Estate Finance Real Estate Law Commercial and Investment Properties Tools of Real Estate Research Awarded Certificate in Real Estate by the University of California, February 1, 1967 Appraisal Education: American Institute of Real Estate Appraisers Basic Principles, Methods and Procedures Urban Properties Techniques of Capitalization Condemnation Appraising Residential Appraising Society of Real Estate Appraisers Residential Appraisal Seminar Advanced Appraisal Techniques Narrative Report Seminar Professional Affiliations: Affiliate Member, Appraisal Institute Area of Appraisal Experience: California Counties Contra Costa Orange Imperial Riverside Kern San Bernardino Los Angeles San Diego Mono Santa Barbara Santa Clara Tulare Ventura. LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR QUALIFICATIONS OF LAWRENCE D. BROWN (Continued) Types of Property Appraised: Residential, Commercial, Industrial, Resort, Special Purpose and Investment. Teachinq Experience: Awarded California Community College Credential Number 51197. Instructor in Real Estate Appraisal at Pasadena City College. Appraisal Clients: Cities (partial list) Alhambra, Arcadia, Baldwin Park, Bell, Commerce; Covina, Duarte, El Monte, Huntington Park, Irwindale, La Verne, Los Angeles, Lynwood, Monrovia, Montebello, Monterey Park, Norwalk, Paramount, Pico Rivera, San Clemente, San Dimas, San Gabriel, San Marino, Sierra Madre, South El Monte, South Pasadena, Temple City, Torrance, West Covina, Walnut, Whittier Other Public Agencies (partial list) Covina Unified School District County of Los Angeles La Puente Union High School District Regents of the University of California San Marino Unified School District Westside Union High School Private (representative sample) Bank of America California Canadian Bank First City Bank Lloyds Bank Security Pacific National Bank Safeco Insurance Company Title Insurance Company Exxon Corporation Union Oil Company Shell Oil Company Continental Can Company Day & Night Manufacturing Company Laborers and Hodcarriers Union Mammoth Mountain Ski Area Marine Firemen's Union LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR QUALIFICAITONS OF LAWRENCE D. BROWN (Continued) Appraisal Clients: Private (representative sample) (Continued) Sears Roebuck & Company Whamo Manufacturing Company Ambassador College Roman Catholic Bishop of San Diego Southern California Conference of Baptist Churches Southern California Conference, Presbyterian Church Court Experience: Qualified as expert witness in Superior Courts of several California counties. Qualified as expert witness in United States District Courts of Los Angeles and Santa Ana, California, and in Chicago, Illinois. LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR. PURPOSE OF THE APPRAISAL The purpose of this appraisal is to estimate current market value for an unencumbered, fee interest in a 53-room motel property which the Rosemead Redevelopment Agency may wish to acquire as part of a site for a commercial redevelopment project. This acquisition will -be accomplished only by negotiation and there is no treat of condemnation. HIGHEST AND BEST USE The subject site is zoned M-D, a general commercial designation with a specific plan overlay. The land is now developed to its highest and best use with a modem and adequately maintained, 53-unit motel. LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR MARKET VALUE DEFINITION As it is used in this report, the term "Market Value" is defined as follows: The price at which the property is likely to sell in the open marketplace assuming it is adequately exposed for sale during a reasonable period of time; that the seller and all potential buyers are fully informed as to the conditions which affect the property and the uses for which it has potential; and that neither the seller or prospective buyers are operating under any compulsion or duress. VALUATION APPROACHES There are three, commonly accepted methods used to estimate the value of urban real property. These are the replacement cost, income capitalization and. direct market approaches. Cost Approach The cost approach is often referred to as the summation approach because its application involves separate value estimates for land and improvements. Land value is estimated by considering the subject site to be without improvements and comparing it to recent sales of vacant and under-improved parcels having similar locational, physical and use potential characteristics. Improvement value is determined by estimating probable replacement cost for the structural and yard improvements and deducting from that estimate allowances for accrued depreciation from all sources. The two estimates are then added together to provide an indication of total market value. Income ADDroach The income capitalization assumes that there is a direct relationship between the value of a property and its ability to produce net income to the owner, considered as an investor. The application of this approach requires either three or four steps depending on whether the income (or potential income) is gross or net. The first step is to estimate a scheduled annual income and adjust that estimate by a reasonable allowance for vacancy and credit losses. The result is effective gross or net income. The second step is to estimate fixed and operating expenses which are the obligation of the ownership. Those expenses are deducted from effective gross income to arrive at effective net income. If the lease or rental agreement is "net" and expenses are the tenant's obligation, this second step is eliminated excepting a reasonable allowance for investment management expense. The third step is to estimate the overall capitalization rate, or rate of return required to attract both equity and borrowed capital to the investment. The appropriate rate may be obtained from the market by calculating rates on sales of comparable, income producing properties. As an alternative, the rate may be estimated by the "band of investment" wherein individual interest rates for equity investment and loan money are added together to form a composite rate. The final step is simple mathematical process of dividing effective net income by the overall rate to provide an indication of market value. For this reason, the interest rate is converted to a decimal. LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR VALUATION APPROACHES (Continued) Market Approach the market or direct sales approach is based on the theory of substitution. It assumes that the value of a property is indicated by the price at which comparable ones having similar locational, physical and use potential characteristics have recently sold in the open marketplace between knowledgeable buyers and sellers. It is the most widely used of the three appraisal methods and, where there is sufficient supporting data, it is generally considered to be the most reliable. LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR Y~1pv u ' QO A 4~ e, ~d' am ea 6 e.eW =O . %2.- Mlw_ Id l ^ WA z n A' V G n N tits L~ n ? FirY Xarbo• Morin REDONDO BEACH A-rate" cove PALOS YEROES ESTATES w loos eiwl core to J O hhr v.av M. Lewd. Ne? r NO PALOS VERGE hxLj laay~hWye , .4 a, PED~b 'k ~ N Ha.Ecr ~ 7;;" ...SEAL BEACH White Pt--,, Pt. Fermin LOCATION MAP SUBJECT SITE DESCRIPTION: Owner: Property Address: Mailing Address: Location: Legal Description: Site Dimensions and Area: R C & I Group, Inc. 8832 Glendon Way, Rosemead, CA 91770-1806 8832 Glendon Way, Rosemead, CA 91770-1806 Southwest corner Glendon Way and Ivar Avenue. Part of Lot 7, Block 3, Rosemead Tract. A slightly irregular rectangle with 184.09 feet on Glendon Way and 202.5 feet on Ivar Avenue. The west property line dimension is 220 feet and the irregular south one is 184.09 feet. 39,028 square feet (per County Assessor). Topography: The land is essentially flat and level at street grade. There is a very slight fall to the south and the site appears to drain to the southeast corner. Zonin : C3-D. Access: Glendon Way is a local street with a 60-foot wide right-of-way. The asphalt paved street section has one traffic lane in each direction, parallel parking lanes and concrete curb, gutter and sidewalk. Ivar Avenue is a local street with a 52-foot wide right-of-way. The street improvements are virtually identical to those on Glendon Way. At the point where Ivar Avenue makes its T-inWr- section with Glendon Way there is a stop sign Utilities: All required public utilities services and sanitary sewer are installed in the adjacent public rights-of- way and connected to the subject improvements. Assessor's Index: 5390-18-31 Assessed Values: 2005: Land: $1,102,640 Imps.: $1,959,391 Property Taxes: 2005-06: $38,492.06 Easements: None apparent. LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR SUBJECT SITE DESCRIPTION: (Continued) Vesting: The present owners acquired title by a Grant Deed recorded in February of 1992 at an apparent Price of $2,770,000. There have been no changes in title since that date. LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR ;10 O A I1p n rq --I g: ID 0 0 N I N J J I I / Z ~ ~ 4,4 CA CD 4 1 r+/ ~i I ,y' I s ~ ~ a LA i t l~so3~~gO ~yi a~i o a a (D U OYs~ o v M !Ll2i1C up ~ o + ~ r 0 0 r 0 1~ = O o Z y fn N ~ I U, mm Q ( CO 0 II ;Ac, =1, 6/010 M I W TV Y>. c~ z 0 Z 2 rv a) w 0 IVAR - - - AVE. ~ w A - tts~ ~o v C z c . P n = 7 r- - PLAT MAP SUBJECT PROPERTY Scale Reduced SUBJECT IMPROVEMENTS DESCRIPTION The subject site is improved with a 53-unit motel complex in a single building, and miscellaneous yard improvements. Motel: This three-story, modern style structure is rectangular in shape and extends north-south through the approximate center of the site. It was constructed in 1984 and has an enclosed area of 20,520 square feet. It is positioned about 80 feet south of Glendon Way and extends to the south property line. Construction is Class D and details include concrete slab foundation, wood frame and stucco walls with anodized metal frame sash, and flat composition roof. Second and third floor rooms have small balconies with painted steel railings. At the north end there is a two-story lobby with large windows on the north and east sides. The motel rooms are accessible from center corridors on each floor and part of the second floor hallway is a balcony overlooking the lobby. There is a three-stop elevator and an enclosed stairway, both at the north end of the building. Interior finish is average quality and typical throughout. Lobby has marble tile floor, service counter, small breakfast room with pantry area and half-bathroom, and elaborate drop ceiling fixture. Halls are carpeted with recessed lighting. At the rear of the ground floor there is a section of fixed windows and a metal and glass commercial entry door providing access to a fence enclosed concrete patio with a small free-form swimming pool. Individual rooms have carpet, painted or papered plasterboard walls, sprayed acoustic ceilings, and full bathrooms with tub and shower. Heating and cooling is by a combination of wall-mounted units and the lobby has central heat and air conditioning. Yard Improvements: There are two driveway entrances from Ivar Avenue and one from Glendon Way. Driveways and park- ing areas are concrete paved and extend along the east and west sides of the building. There are a LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR SUBJECT IMPROVEMENTS DESCRIPTION (Cont'd) Yard Improvements: total of 56 parking spaces. Attractive and well- maintained landscaping extends along both street frontages and there is both handicap parking and short-term registration parking north of the building. The building entrance has an awning and a wall- mounted marquis sign. There is a large pole- mounted sign at the street intersection. Quality and Condition: The building is above average quality, generally well maintained and in about average condition for its age. The only significant item of deferred maintenance noted is a need for exterior painting. Lot Coverage: Computed on the enclosed building area of 20,520 square feet, lot coverage is 52.5%. Room Rates: All rates are constant throughout the week. For One person in a room with a king size bed, cable TV and YiFi, it is $50 per night. For an extra person it is $52 per night. The same rate applies for rooms with two full sized beds. The weekly rate ranges from $250 to $280, depending on demand. Inspection and Interview: I completed a detailed inspection of the subject Improvements on September 13, 2007. The manager, Jack, was present at that time and provided access to two of the motel rooms. The photographs which appear in this report were taken on that date. LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR SUBJECT PROPERTY LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR SUBJECT PROPERTY S _ LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR SUBJECT PROPERTY '..aWRENCE D. BROWN REAL E •.TE APPRAISER AND COUNSELOR VALUATION In arriving at my conclusion of value for the subject property I relied entirely on the market or direct sales comparison approach. Because income generated by a hotel or motel is, to a large extent, attributable to the operation of a business, the income approach does not work for valuing the real estate only. The exception is on those larger properties which are sometimes leased to a hotel management company. Rosemead Inn is not of this type. A replacement cost approach might be used but as serious limitations for two reasons. First, it is difficult to find sales of large commercial parcels purchased for land value only. Second, although Rosemead Inn is a relatively modern facility, it is 23 years old and subject to both functional obsolesce and physical deterioration. It would be quite difficult to accurately estimate accrued depreciation from all sources. A depreciation estimate is an important part of the cost approach. To apply the market approach I investigated and analyzed seven sales of motel properties throughout Greater Los Angeles. Details concerning these transactions are summarized in the Market Data section of this report. Each sale summary includes one or more photographs and a plat map identifying the sale property location. The seven sales occurred during the past year. Five of them are located in the central and west San Gabriel Valley, reasonably close to the subject. The two remaining ones are at somewhat remote locations in Whittier and Gardena but, in each instance, the sale property has strong physical comparability to the subject. In analyzing the sales and comparing them to the subject, I used three units of comparison. These are selling price per square foot of land area (including improvements), price per square foot of enclosed building area (including the contribution of land), and selling price per room. Adjustments were made to the unit prices in each sale to account for differences between it and the subject. Variable site factors which were considered and adjusted for include overall location, access, size and shape, site prominence and character of surrounding development. Improvements were compared on the basis of their size, age, quality of construction, condition, overall amenities and lot coverage (density of development). Modest adjustment was made to the older sales to account for some price and value appreciation in a rising market. While all of the sales have some comparability to the subject, some are clearly more similar and therefore more helpful. Those which I considered to be the most reliable indicators of value are Nos. 1, 5 and 6. These properties range in size from 47 rooms to 52 rooms compared to 53 at the subject. Site sizes range from 35,910 square feet to 45,683 square feet compared to 39,028 square feet in the subject. Building areas vary from 11,910 square feet to 19,133 square feet and construction LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR VALUATION (Continued) dates ranged from 1963 to 1991. The subject was built in 1984 and is slightly larger at 20,520 square feet. Unit prices in the seven sales range from $73.70 to $131.80 per square foot of land area, $108.25 to $269.55 per square foot of building area and $62,500 to $91,500 per room. After weighing the available market data and making adjustments for variables, my conclusion of value for the subject is $4,500,000. The corresponding unit value estimates are approximately $115 per square foot for the 39,028 square foot site, $220 per square foot for the 20,520 square foot building and $85,000 per room for 53 rooms. LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR MARKET DATA SALE 1 LOCATION ADDRESS: LEGAL DESCRIPTION SITE DIMENSIONS AND AREA: TOPOGRAPHY: ZONING: ASSESSOR'S INDEX: SELLER: BUYER: DATE OF SALE: RECORDING: CONSIDERATION: TERMS: VERIFICATION North side of Garvey Avenue North, commencing 171 feet east of Yaleton Avenue (west of Sunset Avenue). 1443 West Garvey Avenue North, West Covina. Part of Lot 4, Orchard Tract. A slightly irregular rectangle with 111.81 feet on Garvey Avenue to an average depth of 371.49 feet. 41,536 square feet. Flat and level at street grade. SC (Service Commercial). 8458-23-22. Walnut & Garvey LLC. BNSB LLC (Bhakta). 09-01-06 DOCUMENT: 06-1957655 DTT: $4,510 PRICE: $4,100,000 UNIT PRICE: $ 98.70/s.f. - land $233.85/ s.f.- bldg. $1,400,000 cash, $2,700,000 first trust deed financing by Ka Wah Bank. Mr. Bhakta. DESCRIPTION: This site is improved with Walnut Inn Motel, a 47-unit complex which was constructed in 1963 and consists of four buildings with a combined area of 17,533 square feet. The two south buildings are close to Garvey Avenue North, extend along the side property lines, and are separated by an asphalt paved driveway with parking. Construction is Class D and includes concrete slab foundations, wood frame and stucco walls with anodized metal frame sash, and flat composition roofs with composition shingle mansard parapets. Access to second floor rooms is by balconies- LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR MARKET DATA (Continued) SALE 1 DESCRIPTION: with connecting stairways. At the approximate center of the.site there is a one-story office building with three motel rooms and a one bedroom owner's apartment. It is similar construction but has a composition shingle gable roof. At the north end of the site adjacent to the east property line there is a fourth motel building. It is 2-story and similar in construction to the two front ones, except for composition shingle roof and sash is not anodized. There is a pole mounted sign adjacent to the street which is visible from westbound traffic on the Interstate 10. Although readily visible, this property is difficult to find from a freeway intersection. The improvements are undergoing remodeling, most of which appears to be cosmetic. Overall condition is slightly below average. Lot coverage is 42%. The motel manager advised that room rates are $66 per night for one king size bed and one or two people. Bathrooms have tubs and showers, and there is cable TV, telephones and air con- ditioning. Management does not typically rent on a weekly basis. LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR SALE 1: LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR _ OD m I Ln •D n III 00, I-~ D r A 0 m o H I ~ 1 ' to ~ _ ZI 4 W m 03 133 :U I O N 1 t I ,U O c0 N W ~ k' YALETON 1 Aml •ti`r J 6dtB. er.si u AVE. O D Z u aq vy sr..n y G < ► dy rn L M O 6ZG 4 v ^~a 4 YALE TON u n no o P /Als3 AVE. o i a~ ON, O~ K AV-47 z , =O n V 21 U -fir' !So MO.ID . w HOLLOW -n AVE. i N a p ~ ° roes. sn 0 ~O J ~ S(JAI a t e I /%S I 7 ~ I imp ° 4 Nos 2 J cy , e M 6'. 4AVEI H~ x 3 v 2 11 II.~I 0 2 141 MARKET DATA SALE 2 LOCATION: East side of El Mercado Avenue commencing 70 feet north of Harding Avenue (visible from Atlantic Boulevard). ADDRESS: 438 El Mercado Avenue, Monterey Park. LEGAL DESCRIPTION: All of Lot 53 and part of Lot 54, Tract 7287. SITE DIMENSIONS Rectangular with 70 feet of street frontage to a uniform AND AREA: depth of 130 feet. 9,100 square feet. TOPOGRAPHY: The west 100 feet of the land is flat and level at street grade. The easterly remainder slopes down to about 12 feet below street grade. ZONING: ASSESSOR'S INDEX: SELLER: BUYER: DATE OF SALE: RECORDING: CONSIDERATION: TERMS: VERIFICATION: OP (Office/Professional). 5257-2-47. Manuhu Family Trust. Simsih, Magdalena L. 09-08-06 DOCUMENT: 06-2005835 PRICE: $1,200,000 DTT: $1,320 UNIT PRICE: $ 131.80/s.f. - land $251.70/ s.f.- bldg. $400,000 cash, $800,000 first trust deed financing by seller. Ms. Simsih. DESCRIPTION: This site is improved with a one and one-half story, 14-unit motel complex constructed in 1949 and containing 4,768 square feet of enclosed area. Construction is Class D and includes a combination of concrete slab and perimeter foundations, wood frame and stucco walls, and flat composition roof. The building is L-shaped and extends along the north and east property lines. The west portion is single story and has white anodized sash. The east portion includes four rooms below street grade together with a small office, one bedroom manager's apartment and two rooms on the ground level. LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR MARKET DATA (Continued) SALE 2 DESCRIPTION: Extending along the south property line there is a seven space asphalt paved parking lot with room for two additional spaces in front of the office. Street parking in the immediate area appears to be adequate. Individual rooms have queen beds, bathrooms with either tub and shower or stall shower only, room heat and air conditioning units, telephones and cable TV. Although not on a major street, Milla Motel is easily visible from Atlantic Boulevard and has a roof-mounted sign at the front. It is old, somewhat obsolete and not particularly well maintained. Lot coverage is about 52% which is unusually high for a motel. Management advised that rates are $55 per night for one or two persons in a queen room, and $350 per week. LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR SALE 2: LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR Lrl ^ F 1 • ~ 1 - L - : , Y NEWMAFtI( AVE . -4 :-4 -4 171 N~ 77 7yyd D p u S :4 Irt~v .u e ` • Z z Z I w _ ! I a I 1 ~ T U ~ (Nj1 W I I cy I . 1 i I ' G I # N a 7 1 1~ • a y a m !W 1~ O ' ~ 1 1 I i. 0 . I W A of 1 CD I to h ~a V - W n n z 1-~ z { O I a' 1 I> AI ? > 0 0 m n- n - ~ i t U $ ` 1-4 - z Z9 7. p I t ern 6-1 I W i. to 37~ 01 '0 W Q/ , I !n DA 1 J Neap OJ IIV I W I 1 ~ h. Y U I~ I~ 1 1 a P pp t N q . ~ I I I I L, ,`L I I 05 I 0% 'Il QD - - , ic) O. 74 0 G) r- tin, fe" to A a a A ?rs - rn V t M ~ ♦ O ° ' 4 ♦ y.-I r r° ] w e i 1 12 HARDING rA,l it a : AVE. t if ' MARKET DATA SALE 3 LOCATION: South side of Dalewood Street west Merced Avenue. ADDRESS: 14624 Dalewood Street, Baldwin Park. LEGAL DESCRIPTION: Fractional section. SITE DIMENSIONS An irregular rectangle with about 260 feet on Dalewood AND AREA_ Street, 242.14 feet on the south line and average sideline dimensions of 224.53 feet. 54,446 square feet (per County Assessor). TOPOGRAPHY: Flat and level at street grade. ZONING: CM (Commercial Manufacturing). ASSESSOR'S INDEX: 8463-1-14 & 15. SELLER: Patel, Pravil L. BUYER: Huang, Wen-Jen DATE OF SALE: 10-11-06 RECORDING: DOCUMENT: 06-2257735 DTT: $5,060 CONSIDERATION: - PRICE: $4,600,000 UNIT PRICE: $ 84.50/s.f. - land $108.25/ s.f.- bldg. TERMS: $2,000,000 cash, $2,600,000 first trust deed financing by Eastern International Bank. VERIFICATION: Mr. Huang DESCRIPTION: This site is improved with Regency Inn Suites, a 72-unit motel complex constructed in 1967 and containing 42,650 square feet. There are two to Dalewood Street is a steel frame chalet type structure with buildings. The smaller, front one, adjacent extensive glass and a "cal shake" roof. It has a lobby, office, storage and two restrooms. The motel building is about 30 feet south of the office and Is a four-story structure of Class C construction. It has LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR MARKET DATA (Continued) SALE 3 DESCRIPTION: concrete slab foundation, reinforced concrete block walls with used brick trim on the front elevation, non-anodized metal frame sash, and flat composition roof. All rooms have patios or balconies with painted steel railings. The arrangement is center hall with rooms opening on both sides. There is a 4-stoup elevator at the north end of the building. On the east side of the motel building there is a large fence enclosed patio area with an average sized swimming pool and partially covered barbecue area with adjacent outdoor eating facility. Surrounding the motel building and recreation area there are asphalt paved parking lots with a total of 64 parking spaces. There is not sufficient parking to provide one space for each motel room. The improvements are slightly above average quality con- struction, adequately maintained and in at least average condition for their age. Lot coverage is 78%. Although high for this type of motel operation, the fact that the units are in a 4-story building distorts the density of development. Management advised that current rates are $55 per night for one or two people and a king bed, $66. per night for two full beds and $68 per night for two queen beds. These rates apply to Sunday through Thursday nights. For weekends, the rates are $60, $70, an $72, respectively. Only rooms with one bed are rented on a weekly basis and the rate is $330 per week. There are a few Jacuzzi suites which .rer3t ror $85 per night during the week and $100 on the weekend. Notably, the unit price computed on building area is un- usually low. This reflects the fact that the average room size (including all common areas) is 590 square feet. According to management, the complex was originally designed to provide suites. There is apparently little demand for larger rooms in this neighborhood. LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR SALE 3: LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR 00 cr) w N ,CD $P 0 J ~J O A mA Y nY S Z O n P N ~ 0 MARKET DATA SALE 4 LOCATION: Northeast corner Valley Boulevard and Campbell Avenue ADDRESS: 1749 West Valley Boulevard, Alhambra. LEGAL DESCRIPTION: Lots 19 and 20, Block 9, Ramona Tract. SITE DIMENSIONS A slightly irregular rectangle with 160.3 feet on Valley AREA: Boulevard, 160.98 feet on Campbell Avenue and 160 abutting a 20-foot wide public alley on the north property line. 24,965 square feet. TOPOGRAPHY ZONING: ASSESSOR'S INDEX: SELLER: BUYER: DATE OF SALE: RECORDING: CONSIDERATION: TERMS: VERIFICATION Flat and level but about three feet above the grade of Valley Boulevard. CPD (Commercial Planned Development). 5350-31-22. Lanai Development, Inc. Hsu, Jun Fan & Hsiao C. 10-31-06 DOCUMENT: 06-2413705 PRICE: $1,830,000 DTT: $2,013 UNIT PRICE: $ 73.70/s.f. - land $269.55/ s.f.- bldg. $830,000 cash, $1,000,000 first trust deed financing by Eastern International Bank. Recorded documents. DESCRIPTION: This site is improved with Lanai Motel, a 20unit, one and two story complex which was constructed in 1957 and contains 6,789 square feet of enclosed area. It is a single story, Class C structure surrounding a courtyard. There is a small second floor area at the north end containing two motel rooms. Construction details include concrete slab foundation, concrete block walls, metal frame sash, and composition gravel roof. LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR MARKET DATA (Continued) SALE 4 DESCRIPTION: There are a total of 20 parking spaces in asphalt paved lots, east and west of the building, and north of the building, accessible by the public alley. There is a small area of excess land at the northeast site corner. The building fronts on Valley Boulevard and has a center entrance with a small office and a one bedroom manager's apartment. There is a small pool with adjacent concrete deck. The improvements are old, obsolete and while construction is about average, overall condition is only fair. Lot coverage is 27%. Management advised that room rates are $55 per night for one or two persons in either a queen or king bed room. bathrooms have tub and shower, and heat, air conditioning, telephones and cable TV are provided. Weekly rentals are $300. LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR SALE 4: LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR 8 A m W .n vg ~ lu D N K u O Z ' a D 0 .w N 0 p s W o - L I s CAMPBELL AVE. . o /Wr/% r 44M d7 ~ m w /00 ©1 D F /sce3 /51 Sd - Jd I/ m - SO ® O~ - ~ cp w O 1 4 ~ Tj o Q a a o~ ~ O o 0 o A d La N $o N o~ SO 4W to U) O co O i0 s MARENGO AV E. a ~NOs F 03 x IN AV L, /N.77 4 MARKET DATA SALE 5 LOCATION: South side of Whittier Boulevard west of Hadley Street, extending south to Hadley Street. ADDRESS: 11530 Whittier Boulevard, Whittier. LEGAL DESCRIPTION: Lots 5 through 8 and Lots 40 and 41, Tract 10411. SITE DIMENSIONS Two parcels. The portion fronting on Whittier Boulevard AND AREA, has 200 feet of street frontage to a depth of 120 feet and contains 24,000 square feet. The south parcel is separated from the north one by a 20-foot wide public alley and has 110 feet on Hadley Street. It contains 11,910 square feet. Combined area is 35,910 square feet. TOPOGRAPHY: Essentially flat and level at grade with both streets. There is a slight downslope to the south. ZONING: C-3 (General Commercial). ASSESSOR'S INDEX: 8171-27-10, 11 & 18. SELLER: Chang 2002 Family Trust. BUYER: Desai, Dhavalkumar and Ami DATE OF SALE: 02-01-07 RECORDING: DOCUMENT: 07-880967 DTT: $4,730 CONSIDERATION: PRICE: $4,300,000 UNIT PRICE: $ 119.75/s.f. - land $202.05/ s.f.- bldg. TERMS: $2,160,000 cash, $2,140,000 first trust deed financing by Nara Bank. VERIFICATION: CB Richard Ellis. DESCRIPTION: This site is improved with Guesthouse Inn and Suites, a 49-room motel complex which was constructed in 1991 and is mixed Class C/D construction. It is located entirely on the Whittier Boulevard frontage parcel and is Spanish style with courtyard parking. The entire complex is 2-story and con- struction details include a combination of concrete block and frame and stucco walls, anodized metal frame sash, LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR MARKET DATA (Continued) SALE 5 DESCRIPTION: concrete slab foundation and flat composition roof with Mission tile mansard parapets. Sash is white anodized metal frame throughout. This motel was formerly known as "Ramana Hotel" and has been extensively remodeled since the date of sale. In addition to the immediately adjacent parking, there are additional spaces across the alley on the parcel fronting on Hadley-Street. There are a total of 49 parking spaces or one per room. Enclosed area is 21,281 square feet and in addition to the 49 rooms, there is an office and storage room. The improve- ments were reported to be in above average condition on the date of sale but, as a result of the remodeling, they are now in very good condition. Lot coverage is about 59%. There is no pool. There is a pole mounted sign adjacent to the street which is visible from westbound traffic on the Interstate 10. Although readily visible, this property is difficult to find from a freeway intersection. Advertised rates are $54 per night for two people in a king bed, $59 for two people in a room with two queen beds, and $59 to $69 for suites. These rates apply Sunday through Thursday and weekend rates are $5 to $10 higher. The weekly rate is $299 for either a room with. one king bed or two queen beds. LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR SALE 5: LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR (D n i D1 O tD v eo D r m -t D z O FMT-H R ro AV E. Cn so V - SEE DR. / a 8 20 rro rrS Q v r m z GRET NA AV E. MARKET DATA SALE 6 LOCATION ADDRESS: LEGAL DESCRIPTION: SITE DIMENSIONS AND AREA: TOPOGRAPHY: ZONING: ASSESSOR'S INDEX: SELLER: BUYER: DATE OF SALE: RECORDING: East side of Vermont Avenue commencing 50 feet south of 140th Street. 14032 South Vermont Avenue, Gardena. Lots A through D, Parcel Map recorded in Book 154, Pages 52 and 53. Rectangular with 220 feet of frontage on Vermont Avenue to a uniform depth of 270.65 feet. 45,683 square feet. Flat and level at grade with both streets. C-2. 6119-14-24. Doshi, Mahesh H. and Pallavi Shatrujeet, Inc. 02-05-07 DOCUMENT: 07-954712 DTT: $4,812.50 CONSIDERATION: PRICE: $4,375,000 UNIT PRICE: $ 95.75/s.f. - land $228.65/ s.f.- bldg. TERMS: $1,182,000 cash, $2,893,000 first trust deed financing by Nara Bank, $300,000 second trust deed financing by seller. VERIFICATION: CB Richard Ellis. DESCRIPTION: This site is improved with Sea Rock Inn, a 19,133 square foot, 52-room motel complex constructed in 1984. It consists of two buildings. The larger, motel building commences at Vermont Avenue and the south property line and extends first north and then west along the north line. The smaller one is joined to the larger one by a drive- way canopy and has a lobby and office on the ground floor with a two bedroom owner's/manager's apartment on the second floor. LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR MARKET DATA (Continued) SALE 6 DESCRIPTION: The 52 rooms are equally divided between ground floor and second floor rooms. Construction details include concrete slab foundation, wood frame and textured stucco walls, and flat composition roof with Mission the mansard parapets. The motel entrance is between the two buildings and provides access to a 44-space asphalt paved parking lot. There is additional land north of the lobby/office which is now a lawn area with shrubbery and trees. It could provide additional parking. Individual rooms have one king bed or two queen beds, full bathrooms with tub and shower, telephones, wall- mounted heat and air conditioning units, and cable TV. The owner's apartment has a living room, kitchen, two bedrooms and one bathroom. The improvements are average quality construction but not particularly well maintained and overall condition is only fair to average. Landscaping is unusually nice. East of the lobby/office there is a pool with adjacent concrete deck surrounded by painted steel fence. Lot coverage is 42%. The manager (Terry) has advised that rates are $57 per night for two persons in one king bed, $63 per night for two persons in a room with two queen beds, $285 per week for rooms with one bed and $335 per week for rooms with two beds. All rooms have small refrigerators and microwaves. No breakfast is served but there is coffee in the lobby. LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR SALE 6: LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR a - o a ~ N m VERMONT cn ~y VERMONT T..3S., R. 13 W. AVE.M ' x101 0 1 " ~tib 4 2 I I p A~ e ti ati oral N ~ \ I Doty h~ O N ti t ,~If : X41 ) a0 m Op O IT1 n H I S A ( l r 4 M i a h h QA ' ~4 li , n n r A ♦ n n I a, s Co f i a o v • ~ I ~ Itix~ v n m > /e ~ rIZ } - - les rAvr 57) 35 ss e 7 so _ _ s~ ~ I I o o W 4b ~ -i Cn D 20 Rr179 /Kolas" V. AI NSWORTH O 0 O ~ T M N O M N u O s a z o ~ AV E. T.3 S., R.14W. I-~ D -1 :A m 0 Li Z p - ~7 A • I•T1 , •r C13 I. P _ W N w,D Cn ~ I ~D N An 0 so O o di d ~ y e N . MARKET DATA SALE 7 LOCATION: North side of Garvey Avenue commencing 266 feet east of Cogswell Road and extending north and west to the east side of Cogswell Road. ADDRESS: .12031 Garvey Avenue, El Monte. LEGAL DESCRIPTION: Part of Lot 4, Tract 10537. SITE DIMENSIONS L-shaped with 63.58 feet on Garvey Avenue and 46.8 AND AREA: feet on Cogswell Road. 27,830 square feet (per County Assessor). TOPOGRAPHY: ZONING: ASSESSOR'S INDEX: SELLER: BUYER- DATE OF SALE: RECORDING: CONSIDERATION: TERMS: VERIFICATION Flat and level at street grade. C-3. 8565-19-12. Martin, Linda Patel, Priti N. 05-18-07 DOCUMENT: 07-1313557 DTT.- $2,750 PRICE: $2,500,000 UNIT PRICE: $ 89.85/s.f. - land $190.55/ s.f.- bldg. $750,000 cash, $1,750,000 first trust deed financing by Nara Bank. CB Richard Ellis. DESCRIPTION: This site is improved with Econo Inn Motel, a 40-unit complex constructed.in 1958 and containing 13,120 square feet of enclosed area. It commences on the Garvey Avenue frontage extending along the east property. line and making a right angle turn to the west along the north line. It is 2- story and construction details include concrete slab found- ation, wood frame and stucco walls, metal frame sash and composition shingle gable roof. At the front of the building there is a lobby and one bedroom manager's apartment. Immediately north of the lobby there is a small swimming LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR MARKET DATA (Continued) SALE 7 DESCRIPTION: pool with adjacent concrete deck enclosed with chain link fence. At present there are 23 parking spaces but there is sufficient area between Garvey Avenue and the front of the building to add four more spaces and probably enough land for four additional ones close to Cogswell Road. Regardless, there is not sufficient parking for one space to go with each room. The buyer is in the process of completing a renovation project and only the south half of the building is presently in operation: The 20 rooms to the north are being gutted. and will have new windows, interior finish, plumbing fixtures and heat and air conditioning units. When that phase of the remodeling is completed, he intends to remodel the remaining rooms. The improvements are old, somewhat obsolete and in no better than fair condition on the date of sale. Lot coverage is 47%. The manager advised that room rents are $45 to $50 per night for one or two people with a queen sized bed, no kitchens, regular TV (no cable) and shower only. 'LAWRENCE D. BROWN REAL ESTATE APPRAISER AND COUNSELOR I - a 4 P b 0 N2 O -4 a v r - s- l ATTACHMENT B • E w1 f S O ~ q ~rY1R a if f' E ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION STAFF REPORT TO: THE HONORABLE CHAIRMAN AND COMMISSIONERS FROM: OLIVER CHI, EXECUTIVE DIRECTOR 64SI ' DATE: AUGUST 26, 2008 SUBJECT: ROSEMEAD INN HOTEL OPERATIONS SUMMARY On July 2, 2008, the Rosemead Community Development Commission acquired the Rosemead Inn located at 8832 Glendon Way. As the Commission may recall, the purchase of this site is part of an overall larger redevelopment project known as the Glendon Way Project. Over the past several months, staff has been working with Primestor Development (owner of the Levitz site) and Jacobsen Family Holdings on a conceptual overall development plan for the Glendon Way Project. Regarding the Rosemead Inn Hotel, the Commission has the option to renovate/upgrade the property and contract with a firm to continue with the current operation. This would create an additional flow of cash for the City while the long term development plans for the site are finalized. Staff has solicited proposals from reputable company's specializing in hotel operations and received responses from Grand Inn, Inc. and Rosemead Inn Hotel Partners, LLC. Staff Recommendation Staff recommends that the Community Development Commission select Rosemead Inn Hotel Partners, LLC, as the operator for the hotel and direct staff to negotiate a finalized operating agreement for consideration. ANALYSIS Staff solicited proposals from several hotel operators for the purpose of renovating/upgrading and managing the Rosemead Inn. The City received a response from two management service companies in the hotel industry: ■ Rosemead Inn Hotel Partners, LLC ■ Grand Inn, Inc. APPROVED FOR CITY COUNCIL AGENDA: Community Development Commission August 26, 2008 Page 2 of 3 Rosemead Inn Hotel Partners, LLC Rosemead Inn Hotel Partners, LLC acquires and develops multi-tenant commercial real estate properties throughout the Western United States and New York City. The Company's acquisition focus is on office, hotel/hospitality, retail and multifamily property types. The proposal that they submitted includes the following provisions: ■ A two year lease agreement • $305,225 in renovations/upgrades to the property with $100,000 being paid for by the CDC. • A lease payment to the City of 50% of the monthly net profits (see Attachment A). o The payment schedule would begin after the renovations have been completed which is expected to take approximately three (3) months. ■ Rosemead Inn Hotel Partners, LLC, would pay all expenses related to daily operations, which include wages, repair, utilities, etc. In addition, they will provide both property and general liability insurance. Grand Inn, Inc. Grand Inn, Inc. currently owns and operates the Win All E-Z Inn in El Monte, Valley Hotel in Rosemead, and Grand Inn in Fullerton. The proposal that they submitted includes the following provisions: • A two-year lease agreement with a three-month cancellation clause by either party. • $200,000 in renovations/upgrades to the property with no CDC contribution. ■ A lease payment to the City of $5,000 per month in the first year of operations and $10,000 per month in the second year of operations. o The payment schedule would begin after the renovations have been completed which is expected to take approximately six (6) months. • Grand Inn, Inc, would pay all expenses related to daily operations, which include wages, repair, utilities, etc. In addition, they will provide both property and general liability insurance. It should be noted that regardless of which operator is selected, the City would also receive additional revenue through the Transient Occupancy Tax (TOT). The TOT constitutes a 10% tax on the rent charged to each transient occupant (less than 31 days occupancy). • • Community Development Commission August 26, 2008 Page 3 of 3 PUBLIC NOTICE PROCESS This item has been noticed through the regular agenda notification process. Prepared by: Michelle G. Ramirez Economic Development Administrator Submitted by: Brian Saeki Assistant Executive Director Attachment A - Rosemead Inn Hotel Partners Income Matrix Attachment B - Rosemead Inn Hotel Partners, LLC Proposal Attachment C - Grand Inn, Inc. Proposal 9 °(D ol 03 Im O C p h r C) r 10 r CD U ° ti W) N m N H C C Q d O V C ~ ti r ~ r- r U O _ LO t- LO ti M ui ti N G w p 6R M r M N 69 fn 64 d Z m M M M o d V tT L LO Z C t` LO - 19 _a ` r r- N IT U L ~O_ J J O d9 69 to dl C co CD co c~o Q 'C x a G , 6 6 6 o C a~ o co o E W M ttl = E C % t0 C C Q G O m EA fA EA to m10 m o O o O 0 o O O O H M co to v O - GO N CO ~t co to co 00 ` (7 L C O 69 efl of sk E O 0 N r-_ r- m co ~ O O y O O O O ~ ttoo to EA 1!i fA m~ O T d~ m~ C 0 r. r_ a r_ C a C a C = C 0 0 r 0 w 0 O ° LJO O O ~ • • HOTEL- POSEMEHAD Rosemead Inn Hotel Partners LLC. (working name) PROPOSAL TO THE CITY OF ROSEMEAD Rosemead Inn Remodel, Repositioning, and Operation 8832 Glendon Way Rosemead, California 91770 SUBMITTED BY: Rosemead Inn Hotel Partners LLC. (Worldng name) 16388 E. COLIMA ROAD, SUITE 206 HACIENDA HEIGHTS, CALIFORNIA 91745 PHONE: 626-336-0100 FAX: 626-336-0030 August 13th, 2008 • Table of Contents I. Introduction U. Remodel and Repositioning Concept III. Design Concept N. Operational Proposal 1. Proposal 2. Finance Plan 3. Operational Income Projections 4. Overview of Hotel Market V. Development/Operation Team A. Mohamed Seirafi / M. K. Jana Enterprises 1. Resume 2. Developmental & Operational Experience B. David Ly / Cementum Inc. 1. Resume • 2. Developmental & Operational Experience • INTRODUCTION The Rosemead Inn Hotel Partners LLC. would like to propose to the City of Rosemead the Remodel, Repositioning, and Operation partnership of the existing Rosemead Inn located at 8832 Glendon Way in the City of Rosemead. The Remodeling, Repositioning, and Operation (RRO) is to compliment the diverse business's of the City of Rosemead and surrounding communities by bringing jobs, recognition, and additional income streams. It is also to compete and recapture business and lost revenue from the competing surrounding hotels in adjacent communities. The City is currently in need of a destination orientated freeway accessible hotel to serve the City and surrounding communities. This is particularly we in the northern part of Rosemead along the Interstate 10 corridor as the other destination hotels are in the Southern part of the City. Large amounts of business and room revenue is escaping the City at a pace that needs to be stopped by competing hotels such as the Lincoln Plaza Hotel in Monterey Park and the Hilton San Gabriel. As these hotels are much larger and an amenities package that dominates the Rosemead Inn, we believe that we can recapture business by having the first fairly priced boutique hotel in the San Gabriel Valley. There is a huge opportunity to capture a lion's share of the market due to the location of the Rosemead Inn adjacent to the freeway due to the fact it is the only freeway adjacent hotel along the interstate between Los Angeles and West Covina. The opportunity also presents itself to recapture Asian Tourism which is a large contributor to the local business. With the increase in Pacific Rim tourists due to the declining value of the dollar, loosening of travel restrictions, and continued development and immigration in the local area a destination orientated hotel is greatly needed in the area and the City. In the following sections we will introduce to you the Redevelopment and Repositioning concept we have as well as an introduction to the fastest growing segment of the hotel/hospitality industry, The Boutique Hotel. These hotels which are generally smaller in size, extremely focused on customer service, and have a design element which makes then unique are dominating an industry which have generally been controlled by larger mass produced giants with no attention to detail or to customer service. These hotels generally have greater occupancy statistics and room rates will definitely benefit the City as well as the surrounding community as well. 3 • • REMODEL & REPOSITIONING CONCEPT I Current The existing building is an early 1980's built 53 room hotel/motel originally operated as a Roadway Inn which was then converted to the non flagged independent Rosemead Inn. The Roadway Inn concept as well as the Rosemead Inn concept is/was a discounted lodging alternative, in fact the existing facility has not seen any sort of capital improvement since it's opening over twenty years ago. The property is currently in poor condition and is in desperate need of a complete renovation and repositioning. The last operator of the hotel liquidated all interior furnishings and left the interior in a depilated state. The assembled team of highly experienced professionals propose the complete interior and exterior renovation of the facility to extend its useful life and income generating abilities. The Subsequent re-branding shall then drive occupancy, revenue, and recognition to the hotel and to the City. Future INTIMATE PERSONALIZED STYLISH are what the Hotel Rosemead is to be! Consider stepping into a familiar lobby with a friendly greeting, a scent of fresh flowers, artwork from local artists, comfortable furniture, an easy going soundtrack playing in the background, and a concierge service to help you with every request. This is the destination hotel everyone will go to, this is the hotel everyone will talk about, this is Hotel Rosemead! Step into a deluxe room with resort furnishings, fresh linens, newly laid carpet, and all the comforts of home. Lets not forget to mention your complementary water and snacks. Your bathroom will be adorned with freshly laundered towels, bathmats, soaps and shampoos. As you wake in the morning and head out the breakfast bar don't forget to get your fresh coffee and a head start for your day ahead. We are here to cater to today's traveler, a more sophisticated and discerning traveler. More and more of the leading hotels of the world are adjusting their ways to accommodate these requests which only means Hotel Rosemead will be on the forefront of hospitality. We are a relationship based operation, we align our self with industries that share our vision of service and aesthetic to serve our core customer. We want our guests to feel connected to feel comfortable in today's fast paced world. Welcome to `•'ROSEM.EAD HOTEL POSE-MEAD HOTEL ROSEMEAD T HOTEL POSF=MF=AD • • Design Concept HOTEL POSEMEAD • 0 OPERATIONAL PROPOSAL PROPOSAL Rosemead Inn Hotel Partners LLC. (RIHP LLC.) (working name) and Rosemead Community Development Commission (RCDC) Rosemead Inn Hotel Partners LLC. (RIHP LLC.) proposes a two-year renewable contract period with the Rosemead Community Development Commission (RCDC) to Renovate, Rebrand, and Operate the shuttered Rosemead Inn located at 8832 Glendon in the city of Rosemead. The Renovation, Rebranding, and Operation of the Hotel will. bring about numerous positive contributions to the City of Rosemead and the surrounding community including: 1. Numerous Jobs Created II. Additional City Income through Bed Tax III. Renovation of a Blighted Shuttered Dilapidated Building - Reduced Crime IV. Occupancy will help Local Businesses - Increased Cash Flow throughout the city V. Positive Attention brought to the City Using the marketing plan included in this package and the combined strengths of the partners RIHP LLC. shall thoroughly remodel, re-brand, and operate the facility using a split of the net income as fee for the services rendered. Property: Ownership: Operator. Operational Term: Income Split: Ownership (RCDC) Contribution: RIHP LLC. Contribution: Renovation Time: Income Distribution: Shuttered Rosemead Inn 8832 Glendon, Rosemead CA. Rosemead Community Development Commission Rosemead Inn Hotel Partners LLC. (working name) Minimum of Two (2) years from opening - renewable 50/50 of the net income $100,000 (renovation & initial operating budget) Renovation (interior 8 exterior), Marketing, Management Approximately 90 days from contract execution- Quarterly (four (4) times per calendar year) As shown in the Income Matrix in this package to obtain the City's return on investment (ROI) of $100,000 an average of 60% occupancy at $50 a room in needed. Current Southern California Hotel occupancy is in the 70% + range at a price point higher than $50 per night (see Hotel Market Overview). Income & Return Scenario _ fox W •L E cn E O V TO H i • 0 0 0 0 0 0 0 0 0 0 0 0 t0 m t?' 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E w m 00 in c o 9 0 a y OC n N M UI F- 3 J ~ .Nw N M Uhf H J • 0 Initial Capital Investment Exterior Description Budget Length Width Landscape $ 2,000.00 150 100 Power Wash and Paint $ 15,000.00 Sinage $ 81000.00 Patch/Repair/Mist/ $ 3,500.00 Pool/new deck $ 5,500.00 Parking Lot $ - Front door focus pt. $ 2,000.00 Misc. $ 5,000.00 Remove/trash Canopy $ 580.00 Relocate entrance $ 3,000.00 Patio / Pool Furniture $ 1,200.00 Subtotal 45 780.00 Interior Description Budget LOBBY Furninshing $ 3,000.00 Focus pt. lighting $ 1,500.00 Paint and theme for reception are $ 4,000.00 Misc. $ 1,500.00 Elevator $ 700.00 Sound/speaker $ 800.00 Subtotal 11,500-00 length width Hallway 150 5 Carpet $ - Paint $ 4,500.00 Lighting $ 2,400.00 Subtotal 6 900.00 Rooms unit 53 Sand and paint Doors $ 75.00 $ 3,975.00 Paint $ 320.00 $ 16,960.00 Carpeting $ 600.00 200 sq.ft $ 31,800.00 • • Restroo m Light and exhaust fans $ 175.00 $ 9,275.00 Faucets $ 200.00 $ 10,600.00 A/C service $ 50.00 $ 2,650.00 Refinish Curtains $ 80.00 $ 4,240.00 Sand popcorn ceiling. $ 50.00 $ 2,650.00 Subtotal: $ 1,550.00 Furnishing subtotal Operations T.Vs $ 100.00 Liens/towels $ 200.00 Pillows $ 300.00 Lamps $ 100.00 Desk $ 150.00 Bed Frame (250 single, 400 dou $ 375.00 Mattress (500 s, 800 double) $ 625.00 Drawers $ 150.00 Nightstands $ 80.00 Rug $ 100.00 Duvet/comforter 300s, 500 d $ 450.00 Mirror $ 40.00 Decor / Misc. $ 145.00 Uniforms $ 1,000.00 Robe for Rooms $ 800.00 Slippers $ 400.00 POS System / Computer $ 1,250.00 Cameras $ 1,500.00 Bell Cart $ 250.00 Hotel misc, shampoo, etc. $ 1,500.00 Name Tags $ 500.00 Wifi Service $ 1,500.00 Marketing Website $ 1,000.00 $ 82,150.00 $ 5,300.00 $ 10,600.00 $ 15,900.00 $ 5,300.00 $ 7,950.00 $ 19,875.00 $ 33,125.00 $ 7,950.00 $ 4,240.00 $ 5,300.00 $ 23,650.00 $ 2,120.00 $ 7,685.00 $ 149,195.00 Sub • Ext. $ 45,780.00 Lobby $ 11,500.00 Hallway $ 6,900.00 Rooms $ 82,150.00 Furnishing $ 149,195.00 Operations & marketing $ 9,700.00 Grand total $ 305,225.00 • E Expense Budget Operations Monthly Utilites/cable/wifi $ 2,000.00 Employees 2 housekeeping $ 3,840.00 2 desk/engineer $ 3,200.00 1 manger $ 5,440.00 1 night manger $ 2,720.00 1 marketing mgr $ 4,166.67 Landscaping $ 150.00 Pool $ 100.00 Liability Insurance $ 11500.00 Misc. / Elevator Service $ 100.00 Trash $ 600.00 Linen Contract $ 500.00 Website $ 1,000.00 Placement on Travel Web Sites Misc. Upkeep $ 1,500.00 Inventory $ 5,300.00 Marketing / Entertainment $ 2,500.00 Misc. Lost $ 1,200.00 Property Tax $ 4,033.00 City Bed Tax 0 Yearly $ 24,400.00 $ 46,848.00 $ 39,040.00 $ 66,368.00 $ 33,184.00 $ 50,833.33 $ 1,830.00 $ 1,220.00 $ 18,300.00 $ 1,220.00 $ 7,320.00 $ 6,100.00 $ 12,200.00 $ 18,300.00 $ 64,660.00 $ 30, 500.00 $ 14, 640.00 $ 48,400.00 $ 39,849.67 $ 485,363.33 1 • • c m E to 7 2 ti N ~ ~ h leg I 3_ ' ~ i 1 7^ ° qi N i d 'Q 17 di ; .0 6" °n d n n vnj A 'r e N N ~I p Sin - N ~ g N N♦ -j ~ n~ n 6 d n T q o I ~ i eil gn.+geo-.-igNry-I 7ri n - n-0- 9.7 u i N ^ T ti 9~ ~ ~i r n~ n a d o N n .ri I• ^ •M n e a= e ry: 4i fl ^I i .I ;^n..gio-. er.tq 1t! 7i 7' i^ '1 9 T T n 7 N n _I I -1 es T 4 R T 1 IF 4 0 T = ~Cl".1A74f0lC~R S~"ary' s8asare - ° $st 8 a2810 t; 8: 8g 8Aaal i~R>laa~$$=SBa>~° ~8' Cj ,araass:ia~ ~~gs?:g:^:s~~=aa I a RI S8~°$A8SR8.~7' i^R8CR~8A8,-.>°9°S ~S 7Ci ~ ~RBgBC~iR~3~S~' 'B>'~° _~A~88S8F ^ ^ w _r s o n R m n N o g o o w e ~1".' a ~8^{if~.'.>81~.9~~ !6 e$9.~~~~Rcl°d8S$^ r Vie! n i s to 2 9 2:r 6s~a 31 a aas~sa~~aaas~~~ I n. o Naery nonf- ^n.= a o 7 q O O /1 O e 0 e ry 0 e e e N ry n ^ 4 n e T= 9 f 9 9 z i 'T N 'I IL t _ ~q le O p 0 Q O p O e . M N n^ p - '-t ' I 1 I F '71 1? T. -7 to .°ri N ~ o.°-'o pnry - 4^ f ° nog4 ~ f Y N O N ryry .I ` 85teaSRR~gaR:,j ,asas~~~sx:.og! ~ X.'9'2.^..22882'2' 8= ^Q sraaos~s~tna~o~s~ s~ss~a~R-a~ao. IssaR xa_~sa~ as~sw~a-aa~_ =aaaas8r#:s>f°~^ ~~~8sa'~~zesr nosasa°s~sgsRS~ o~~~sszta°es^~a~a ^s~t°nS~arsaRa_ax n n e o s e f o f o n T o q 'Apgi I I c~$I 7apsj n F U5y i ttUJJ 000_ 7 0 9 DEVELOPMENT / OPERATIONAL TEAM Mohamed Seirafi / MK JANA Enterprises M.K. JANA is a privately owned commercial real estate investment and development company; the Company was founded in 1980's by Mohamed Seirafr and members of the Seirafi family. The Seirafi family has been involved in the acquisition, development and ownership of commercial real estate properties for over 20 years. Currently the Company owns a commercial real estate property portfolio with an estimated market value exceeding $30 million and properties in development exceeding $100 million. Mohamed Seirafi DBA MK JANA Enterprises has been in the commercial real estate industry for over 40 years. Starting off with Seirex "holding & operating company" for a chain of gasoline and service stations the company has made land acquisitions, developments, and sales for these stations. The number of these stations grew to over 30 until the last one was finally liquidated in early 2006. The Company acquires and develops multi-tenant commercial real estate properties throughout the Westem United States and New York City. The Company's acquisitions . focus is on office, hotel/hospitality, retail and multifamily property types. One of the Company's greatest strengths is its ability to make a quick decision on an investment opportunity; this is possible because the Company is privately owned and its family controlled is able to act much more quickly than can a typical public company. Generally, the Company tends to acquire commercial real estate properties for a lonb a term holding period, thereby providing the Company with a stable revenue stream and equity for additional projects. Selectively, the Company disposes of properties when those assets are not deemed to be consistent with its long-term ownership goals. With the acquisition of other development parcels over the years the company has now started a new era of building and purchasing commercial income properties. These developments and investments now included office, medical office, retail, multi-family, hospitality, custom estate communities, and senior housing. With over 400 multi-family units owned and/or under construction and various other retail developments also underway Mohamed Seirafr / MK JANA Enterprises is continuing to grow and build it's portfolio of privately owned quality investment real estate. The Company is headquartered in Hacienda Heights, California (15 minutes from downtown Los Angeles). It is staffed by a team of industry professionals with substantial expertise in commercial real estate acquisitions, development, finance, investment banking, and asset management. • 0 PROPERTY PLAZA DEL ESTE LOCATION 16388 E COLIMA RD., HACIENDA HEIGHTS, CA TYPE OF PROJECT 19,500 S.F. OFFICE/RETAIL BUILDING COMPLETION DATE DEVELOPED 2004 SUMMARY Located in the San Gabriel Valley, Plaza del Este was designed and built to reflect the Southern California look and image of the Spanish Mission type architecture. Plaza del Este serves the community by providing professional retail space to business owners and their clientele in a destination orientated development. Built in 2004/2005 of structural steel, concrete block, and wood framing, the building meets and exceeds standard building codes thus providing a efficient and safe working environment. n U PROPERTY RIVERSIDE HOTEL \J LOCATION LA SIERRA & INDIANA, RIVERSIDE, CA TYPE OF PROJECT UPPER MID SCALE HOTEL COMPLETION DATE COMMENCEMENT START 10 2009 SUMMARY Located along the Riverside/ Corona border the 80 room hotel will serve the underrepresented local communities. Along with underground parking, environmentally friendly construction, and the latest in hospitality technology. The Riverside Hotel will be a leader in the local Southern California Hotel market. • PROPERTY VALINDA PLAZA i LOCATION NWC VALINDA & MAPLEGROVE, LA PUENTE, CA TYPE OF PROJECT 6,000 S.F. RETAIL/ OFFICE BUILDING COMPLETION DATE LA COUNTY APPROVED CONSTRUCTION 2008 SUMMARY Scheduled to commence construction the summer of 2008, Valinda Plaza is a 6,000 S.F. retail development. Currently a spec. project it is already pre-leasing to the local community and businesses due to its location serving large residential areas of La Puente and West Covina. • • PROPERTY ROSEWOOD APARTMENT HOMES LOCATION 5150 W EUGIE, PHOENIX, AZ TYPE OF PROJECT 152 UNIT/ 95,000 S.F. MULTIFAMILY COMPLETION DATE PURCHASED 2004 SUMMARY Representing one of the few purchased non developed properties, Rosewood Apartments was acquired from national developer Piceme from their core property portfolio. Representing the comer stone for the Southwest, Rosewood will enable the companVs expansion throughout the sunbelt states. 0 • PROPERTY LA HABRA HEIGHTS EXECUTIVE ESTATES LOCATION HACIENDA BLVD & SKYLINE DR., LA HABRA HEIGHTS, CA TYPE OF PROJECT 36 ACRE SUBDIVISION INTO 20+ EXECUTIVE HOME LOTS COMPLETION DATE CURRENTLY MAPPING & SUBDIVIDING SUMMARY Originally purchased as a single home estate parcel the La Habra Heights Estate property is currently undergoing parcel mapping and subdivision for twenty+ estate lots. V • • PROPERTY GRAND DAMASCUS HOTEL LOCATION DAMASCUS, SYRIA TYPE OF PROJECT URBAN INFILL MIXED USE RESORT DESTINATION COMPLETION DATE 2012-CURRENTLY IN DESIGN DEVELOPMENT SUMMARY Currently in the Design/Architecture stage the Grand Damascus Hotel is a 300 room mixed use Resort Hotel. Encompassing a full city block in the Thomas Gate neighborhood, situated just outside the walled old city of Damascus in the heart of the historical district. The resort will have multiple restaurants, retail shopping, travel services, a sky deck and beach club as well as a roof top bar. As the middle east continues at a 100+ annual traveler increase from European and Asian tourist. Projects and amenities of this kind are in high demand. • PROPERTY LA SIERRA VILLAGE • LOCATION LA SIERRA & INDIANA, RIVERSIDE, CA TYPE OF PROJECT 10 ACRE 260 UNIT SENIOR APARTMENTS & 30,000 S.F. RETAIL MIXED USE COMPLETION DATE CONSTRUCTION COMMENCEMENT 20 2009 SUMMARY Currently awaiting final approvals La Sierra Village is a 10 acre mixed used project located immediately off the 91 freeway in Riverside, Califomia. This high end project is to include a 260 unit senior apartment component along with 25,000 S.F. of grand floor retail spread across 6 buildings. In keeping pace with environmental responsibilities La Sierra Village will be built, maintained, and operated with green materials and technology. Amenities include the adjacent Riverside Metro link Station, Kaiser Hospital and Tyler Mall located nearby as well as, retail, grocery store and hotel. •tm o i e ~ . R2l17 mix J,~ ;C 00~ D ~~ppa m r't~L`~al AA ~ ~ iA:'.~ OAlltlllM f OQP[1 i■ - L Lu OEM= 0.a. ~ • • Qualifications / Team DAVID LY / CEMENTUM INC. David Ly is president of Cementum Incorporated, a leading, local, minority owned construction company that specializes in high end developments such as restaurants, condos, retail centers and multi family units. David is also one of the founders of Cementum's parent company JWL Associates which creates new and innovative architectural designs. Throughout his upbringing David Ly was surrounded by development projects that allowed him to develop his natural creative inclinations along with his business sense. Further traveling around the globe allowed him to explore and be inspired by key architectural landmarks throughout Europe and Asia. Consequently, after obtaining his Business Management degree, he dedicated himself wholeheartedly to the business industry with a strong affiliation to the untapped construction trade allowing him to expand in his two greatest talents. While working for Gold EDA International Property, LLC, David Ly involved himself in the renovation of the Hong Kong Plaza of over 200,000 square feet effectively managing to increase the market places' value by over $25 million. David stayed on to manage all of the Hong Kong Plaza throughout LA County for 5 years. Throughout this time he effectively managed over 100 employees. He honed his customer service skills with his clients, making sure to maintain high quality standards that would keep a steady clientele coming back to renew their good experience at the Hong Kong Marketplaces. He was able to perfect his managing systems by keeping strict inventory and giving steady maintenance to his property. N. With a passionate drive for leading the construction industry into a new level, he founded Cementum Inc. in order to create a one - stop company in which a client can nurture and expand their vision thereby making their dreams become a reality. David is currently expanding his construction vision towards higher environmental consciousness integration into his construction development projects while maintaining the clients' necessities in high priority. He makes this all happen from his strategically placed headquarters situated on Hacienda Blvd in Hacienda Heights. 0 • Cementum is a privately owned construction company founded by David Ly in order to put his two greatest talents to use - his creative design and keen business sense. Based in Hacienda Heights, CA, the company itself is a customer - focused, team - centered and process - managed with the main goal of providing intelligent solutions to its clients in a timely and cost effective manner. The company provides excellent service by having the project managers and superintendents communicate constantly to discuss and continually improve the level of quality and speed. The Company started out by engaging in restaurant tenant improvements with first-time owners who were unfamiliar with the construction process. With a bit of patience and step by step guidance on Cementum's behalf, these clients were able to witness their business dream turn into reality in a matter of a few months in a comfortable and trusting environment. These same clients in turn have expanded their business and with their acquired knowledge turn to Cementum once again in order to focus more on design and quality to produce trendier, higher end establishments. In order to provide the finest project possible Cementum works with distinguished architecture firms such as award winning Akaar Studios with the first opening of Seoul Bros in Pasadena, Nottoscale in the innovative Clear Optometry store in San Mateo, and the prestigious Valerio Architects firm with the trendy Amanda's Restaurant located in Berkeley. These architecture frets, among others complement the quality work that Cementum delivers to their clients, while rapidly continuing their clients' business expansion or development. JVWL Associates LLC is local, privately owned architectural and engineering design company engaging in a variety of development projects including but not limited to retail, residential, multi-family homes, condos, restaurants and marketplace plazas. The company is lead by experienced engineers and architects that have over 25 years of experience in complex and high end developments both for private and public works. Their numerous young employees offer their fresh, new talent that is nurtured and guided by their superiors resulting in functional but modern designs. Their offices are located in Hacienda Heights on Hacienda Blvd. • • PROPERTY Amanda's Restaurant LOCATION Berkeley, CA TYPE OF PROJECT Tenant Improvement of Historical Landmark COMPLETION DATE July 2008 COLLABORATORS Valerio Architects 0 • PROPERTY Clear Optometry LOCATION San Mateo, CA TYPE OF PROJECT TI to combo space of Optometrist Office and Yogurt Shop COMPLETION DATE May 2008 COLLABORATORS Nottoscale 9 • PROPERTY Seoul Bros Korean Grill LOCATION Pasadena, CA TYPE OF PROJECT Tenant Improvement to Korean Grill Restaurant COMPLETION DATE January 2008 COLLABORATORS Akaar Studios • LOCATION Rowland Heights PROPERTY Hong Kong Plaza TYPE OF PROJECT New Construction • LOCATION Monterey Park N. U PROPERTY Hong Kong Plaza LOCATION West Covina TYPE OF PROJECT New Construction 989 , 1 987 0 Y m r J . j LO c~ r- Gf M ti F20 eCO ago 40 r-~ O1 Q , N M L e 0 C B K 1011 I I I 1013 1015 965 1017` 1019 i,- 957 1021 \ . i t 955 1025 Qd P7 C) i c r y I m w 01 Urn 939 0 to to (D C) 0) 935 1! _L 1111L111 Glendora Avenue Vine St HONG KONG PLAZA OF WEST COVINA 935-1029 S. Glendora Ave. West Covina, CA 91790 • • PROPERTY Mentor Condominiums LOCATION Pasadena, CA TYPE OF PROJECT New Construction condos • MANAGEMENT PROPOSAL for ROSEMEAD INN 8832 GLENDON WAY CITY OF ROSEMEAD, CALIFORNIA • GRAND INN, INC. 8711 VALLEY BLVD ROSEMEAD, CA 91770 E GRAND INN, INC. 8711 VALLEY BLVD ROSEMEAD, CA 91770 Date: August 1, 2008 City of Rosemead Rosemead, California Re: Hotel Management Proposal To Whom It May Concern: • Grand Inn, Inc. is pleased to submit this request for your review. We look forward to your cooperative efforts to build our management and landlord relationship. Our proposal requests the opportunity to manage Rosemead Inn located at 8832 Glendon Way, City of Rosemead, State of California. For the last ten years, our management team has successfully managed quite a few hotels in Southern California. Thank you for your interest in Grand Inn, Inc. We envision building upon our collaborative success by managing Rosemead Inn with you. Sincerely, Roy Ying President 2 0 0 ROSEM AD INN MANAGEMENT PROPOSAL I. Primary Service Grand Inn, Inc. is a full management service company for the hotel industry. We combine our extensive experience and knowledge gained through experience in hotel management. We proudly own and operate the following Southern California motels, Win All E-Z Inn in E1 Monte, Valley Hotel in Rosemead and Grand Inn in Fullerton. II. Company Background We possess a reputation of excellence within the hotel industry. We have gained the reputation by being true to our mission statement of providing quality products and service to our guests through attention to detail, integrity, pride and intensity in all aspects of operation. We put a lot of focus, energy and effort into the shaping of our properties and have thus maintenance their continued success. We are so confident in our ability to deliver results that we are willing to structure according to agreements and to demonstrate the results we produce. III. Description of our team Our President, Roy Ying, has over 10 years of experience and has trained by the Howard Johnson franchise program. In 2007, he received the best member of the year award from Southern California Hotel and Motel Association. 3 0 9 Our team is an extensively experienced group. Our senior managers carry over 10 years experience, while our junior staffs have more than 2 years experience. We have maintained substantial relationships with third parties such as travel agencies, insurance companies, hotel supply companies, maintenance and repair companies. IV. Issues and Problems We have inspected Rosemead Inn, and find the property need a lot of renovations in order to resume normal business operations. This includes painting of the building, replacing sign, repairing electrical equipments, lighting system changing, fixing air conditioners, replacing fire extinguishers, replacing security system and changing hallway carpets. Not only do we have exterior repair, but also we will provide each room with furniture, television, lighting, carpet, remodeled bathroom. The estimated renovations and maintenance is around $200,000 (detail see Exhibit 1). V. Illegal business and Long term lease Under California Law, we reserve the rights to refuse any person who is doing illegal business, such as prostitution, narcotics, gang activity, etc. on the property. In order to avoid any lawsuit with tenants during the term of agreement, we will not accept any long term stays. Our main concern is to keep the property clean, quiet and safe. 4 VI. Mutual benefits We hereby propose to manage Rosemead Inn for the City of Rosemead: regardless of profit or loss, we will pay the City $5,000 per month in the first year; $10,000 per month in the second year and $15,000 per month then after. We will pay all expenses related to daily operation, which includes wages, repair, utilities, etc. We will also provide both property and general liability insurance. For our mutual benefits, we will incur the initial capital expenses in the amount of $200,000. It will take six months to renovate. Payment schedule will begin after the six month renovation. VII. Termination As long as Rosemead Inn continues to operate as a motel, we will have the priority to be the managing company of the property providing that we maintain solid payment schedule. Three months advance notice to terminate the agreement is required from either party. 5 0 EXHIBIT 1 The estimated of each room is $2500.00. The detail is as followings: Carpet: Furniture: Television: Supplies: Bath Tub: Lights: Room Painting: $500.00 x 53 = $26,500.00 $700.00 x 53 = $37,100.00 $200.00 x 53 = $10,600.00 $200.00 x 53 = $10,600.00 $300.00 x 53 = $15,900.00 $100.00 x 53 = $ 5,300.00 $500.00 x 53 = $26,500.00 11 Total: Replace 25 Air Conditioners Exterior Remodeling $132,500.00 $ 12,500.00 $ 55,000.00 Grand Total: $200,000.00 6 a- t~ ? L 7 Oq r • O t~ aJ b0 O 0 0 4.4 .4 ca ti+f ~ ~ ►G+ O t cc o ~ x o 0 ~w0 a V inn ZS a~ Ct .m- tR Yi 13 " SZ C y 7 a~ L t-4 IiE) W N j z- <i z• of u; v~ • O cu 19 :G O .-r v u u O 8 0 F-" rl O _ ca ~ O Cl) u 3 c O , cn O FZL4 ~ Q a U zs ~ Dn Zs Ct m S+ z r. W ~n fi C ~ 4 ITEM NO. :3Ac Minutes of the Regular COMMUNITY DEVELOPMENT COMMISSION MEETING August 26, 2008 Chairman Tran called the regular meeting of the Rosemead Community Development Commission to order at 6:03 p.m. in the City Hall Council Chambers, 8838 E. Valley Boulevard, Rosemead, California. FLAG SALUTE: Vice-Chairman Nunez INVOCATION: Commissioner Clark ROLL CALL OF OFFICERS PRESENT: Commissioner's Clark, Low, Taylor, Vice-Chairman Nunez, Chairman Tran, OFFICIALS PRESENT: Executive Director Chi, Agency Attomey Richman, Assistant City Manager Saeki, Assistant City Manager Hawkesworth, Director of Finance Brisco, Director of Parks and Recreation Montgomery-Scott, and Commission Secretary Molleda. 1. PUBLIC COMMENTS FROM THE AUDIENCE- None 2. PUBLIC HEARINGS A. Public Hearing on the Expenditure of Commission Funds for the FY 2008.2009 Capital Improvement Plan Pursuant to Health & Safety Code Sections 33679 and 33445 Redevelopment Law (Health and Safety Code Section 33445) requires that, if redevelopment funds are to be used to pay for improvements which will be publicly owned, both within and outside of the project area, the City Council and the Community Development Commission must make three findings: a) that the proposed improvements are of benefit to the Project Areas or the immediate neighborhood in which the projects are located; b) that there are no other reasonable means of financing the proposed projects available to the community; c) that the projects will assist in the elimination of blighting conditions in the Project Areas and are consistent with the adopted Implementation Plan. For the FY 2008-2009 Capital Improvement Plan, there are two projects that require the use of Commission funds. 1. The Rosemead Parks Trail Project was considered and approved by the dity Council as a part of the recently adopted budget. The Project will beautify the park by adding landscaping, adding a new walking[Jogging trail around the park's perimeter, and adding new exercise and fitness equipment adjacent to the new trail. 2. The Sewer Plan Project was also considered and approved by the City Council as a part of the recently adopted budget. The Project will conduct an overall analysis and needs assessment of the City's sewer system infrastructure. The plan will also allow staff to develop needed capital improvements projects over the next 5 and 10 years. • • Construction of the Rosemead Park Trails is expected to occur between September 2008 and November 2008. The Sewer System Master Plan is expected to be completed by April 2009. Recommendation: That the Community Development Commission adopt Resolution No. 2008-23 making the appropriate findings under Health and Safety Code Section 33445 and the Council consent to the proposed Commission expenditures. Mayor Tran opened Public Hearing at 6:05 p.m.; there being no speakers the public hearing was closed at 6:05 p.m. Commissioner Clark made a motion, seconded by Commissioner Taylor to bifurcate this issue and vote separately on Item 1 and 2. Vote resulted in: Yes: Clark, Taylor No: Low, Nunez, Tran Abstain: None Absent: None Vice-Chairman Nunez made a motion, seconded by Commissioner Low to approve the staff recommendation. Vote resulted in: Yes: Low, Nunez, Tran No: Clark, Taylor Abstain: None Absent: None 3. CONSENT CALENDAR B. Resolution No. 2008-22 Claims and Demands Recommendation: Adopt Resolution No. 2008-22 for payment of Commission expenditures in the amount of $54,817.64 demands Nos. 11026 through 11030. C. Resolution No. 2008-24 Claims and Demands Recommendation: Adopt Resolution No. 2008-24 for payment of Commission expenditures in the amount of $41,047.58 demands Nos. 9910 through 9927 and 11031. D. Resolution No. 2008-25 Claims and Demands Recommendation: Adopt Resolution No. 2008-25 for payment of Commission expenditures in the amount of $248,976.21 demands No. 8252. Rosemead Community Development Commission Minutes of August 26, 2008 Page 2 of 7 • • E. Resolution No. 2008-26 Claims and Demands Recommendation: Adopt Resolution No. 2008-26 for payment of Commission expenditures in the amount of $35,825.77 demands Nos. 9928 through 9932 and 11032 through 11033. Vice-Chairman Nunez made a motion, seconded by Commissioner Low to approve the consent calendar, except for items A and F. Vote resulted in: Yes: Low, Nunez, Taylor, Tran No: Clark Abstain: None Absent: None A. Minutes July 8, 2008 - Joint Regular Meeting July 22, 2008 - Regular Meeting Commissioner Low made a motion, seconded by Vice-Chairman Nunez to approve Item 3A. Vote resulted in: Yes: Low, Nunez, Tran No: Clark, Taylor Abstain: None Absent: None F. Update on Status of Development Site at the Southwest Corner of Rosemead Boulevard and Glendon Way On January 8, 2008, the Rosemead Community Development Commission (CDC) approved an Exclusive Negotiating Agreement (ENA) with Jacobsen Family Holdings, LLC for the development of five parcels aggregating approximately 8.5 acres on the southwest corner of Rosemead Boulevard and Glendon Way. This ENA was amended on May 13, 2008 to exclude the property owner (Primestor Development) of 8920 Glendon Way as they were and continue to be in negotiations for a nationally known retailer interested in locating at that site. At that time, the amended ENA was also extended for ninety (90) calendar days to allow Jacobsen Family Holdings the time to adjust their site pan, acquisition strategy, and proforma accordingly. Since then, the City has been working with Primestor and Jacobsen to design an appropriate site plan and develop a financing and acquisition strategy that would be acceptable to the City, Primestor, Jacobsen, and the proposed retailers. Because of the overall complexity of the project, it has taken longer than initially expected therefore exceeding the 90 day extension provided by the Commission to Jacobsen. Rosemead Community Development Commission Minutes of August 26, 2008 Page 3 (?f 7 9 • Recommendation: That the Community Development Commission extend the Exclusive Negotiating Agreement between the Rosemead Community Development Commission and Jacobsen Family Holdings for an additional ninety (90) calendar days, subject to one (1) additional 90 calendar day extension to finalize the site plan and the financing and acquisition strategies. Mayor Tran announced that a letter was submitted by Richards/Watson/Gershon who represent SAC Self Storage Corp. and U-Haul Co. to have it read during the Community Development Commission Meeting. Mayor Tran stated the letter would be incorporated into the minutes for tonight's meeting (Attached). Commissioner Taylor made a motion, seconded by Commissioner Clark to read the mentioned letter into the minutes. Vote resulted in: Yes: Clark, Taylor No: Low, Nufiez, Tran Abstain: None Absent: None Commissioner Low made a motion, seconded by Vice-Chairman Nufiez to approve Item 3F. Vote resulted in: Yes: Low, Nunez, Tran No: Clark, Taylor Abstain: None Absent: None 3. MATTERS FROM THE CHAIRMAN & 4. MATTERS FROM THE EXECUTIVE DIRECTOR & STAFF A. Rosemead Inn Hotel Operations On July 2, 2008, the Rosemead Community Development Commission acquired the Rosemead Inn located at 8832 Glendon Way. As the Commission may recall, the purchase of this site is part of an overall larger redevelopment project known as the Glendon Way Project. Over the past several months, staff has been working with Primestor Development (owner of the Levitz site) and Jacobson Family Holdings on a conceptual overall development plan for the Glendon Way Project. Regarding the Rosemead Inn Hotel, the Commission has the option to renovate/upgrade the property and contract with a firm to continue with the current operation. This would create an additional flow of cash for the City while the long term development plans for the site are finalized. Staff has solicited proposals from reputable company's specializing in hotel operations and received responses from Grand Inn, Inc. and Rosemead Inn Hotel Partners, LLC. Rosemead Community Development Commission Minutes of August 26. 2008 Puke 4 of 7 • • Recommendation: That the Community Development Commission select Rosemead Inn Hotel Partners, LLC, as the operator for the hotel and direct staff to negotiate a finalized operating agreement for consideration. Commissioner Low made a motion, seconded by Vice-Chairman Nufiez to select Rosemead Inn Hotel Partners, LLC, as the operator for the hotel and have staff negotiate a proposed agreement and have it be brought back to Council. Vote resulted in: Yes: Low, Nunez, Tran No: Clark, Taylor Abstain: None Absent: None B. Development Impact Fee Justification Study In 1987, the California Legislature adopted Assembly Bill 1600, or the Mitigation Fee Act, that established a uniform process for formulating, adopting, imposing, collecting, accounting for, and protesting developer impact fees. Impact fees are charges assessed by local governments against new development projects that attempt to recover the cost incurred by government in providing the public facilities required to serve the new development. Impact fees are only used to fund facilities, such as roads, schools, and parks, that are directly associated with the new development. They may be used to pay the proportionate share of the cost of public facilities that benefit the new development; however, impact fees cannot be used to correct existing deficiencies in pubic facilities. Given that the City is in the process of updating its General Plan, proposals were solicited for a Development Impact Fee Study in the interest of establishing a development impact fee program for streets and transportation, general government, law enforcement, libraries, parks, wastewater treatment, and public art in the City of Rosemead. In completion such a study, all projects and needs must be identified and a methodology developed with a nexus justifying the fees that are established in compliance with AB 1600. Recommendation: That the Community Development Commission authorize the City Manager to enter into a professional services agreement with Willdan Financial Services to provide a Development Impact Fee Study for the City of Rosemead, in accordance with the requirements of the Mitigation Fee Act (California Government Code Sections 66000 to 66025) in the amount of $50,860. Vice-Chairman Nunez made a motion, seconded by Commissioner Low to authorize the City Manager to enter into a professional service agreement with Willdan Financial Services in the amount of $50,860. Vote resulted in: Yes: Clark, Low, Nufiez, Taylor, Tran No: None Abstain: None Rosemead Community Development Commission Minutes of August 26, 2008 Page 5 of 7 Absent: None Mayor Tran announced that this item would be discussed during the City Council meeting in conjunction with Item 5C of that meeting. C. Rosemead Park Trail Enhancement Project - Award of Contract At its July 22nd meeting, the City Council selected a trail design for the Rosemead Park Trail Project and authorized staff to advertise and solicit bids for the completion of a fitness trail and recreational enhancements at Rosemead Park. This project will include the addition of a jogging trail, recreational equipment, and a tai-chi exercise pad. On August 20, 2008, bids were received and reviewed for the project. Recommendation: That the Community Development Commission award a contract to the lowest responsive bidder, The Nazerian Group, and authorize the Chairman and the City Clerk to execute the contract. Mayor Tran recessed the meeting to Closed Session at 6:43 p.m. 5. CLOSED SESSION CONFERENCE WITH REAL PROPERTY NEGOTIATORS (GOVERNMENT CODE SECTION 54956.8) Property 8828 Glendon Way 8832 Glendon Way 8920 Glendon Way 3520 Ivar Avenue 3527 Ivar Avenue Negotiating Parties - Agency Property Owner M. Garcia R C & I Group City of Rosemead Thang Q. & Kathy T. Pham Fifteen SAC Self Storage Corp. Executive Director Assistant Executive Directors Under Negotiation - Price and terms of payment The Commission reconvened back from Closed Session at 7:01 p.m. Mayor Tran announced that on the matter of the Community Development Commission Closed Session the following action had been taken and noted that Commissioner Taylor had not been present during the closed session discussion: Vice-Chairman Nunez made a motion, seconded by Council Member Low to direct staff to enter into negotiations with a property owner. Vote resulted in: Yes: Clark, Low, Nufiez, Tran No: None Abstain: None Absent: Taylor Rosemead Community Development Commission Minutes of August 26, 2008 Page 6 of 7 • 110 Mayor Recessed the Community Development Commission meeting at 7:03 p.m. Mayor Reconvene the Community Development Commission meeting at 7:53 p.m. to discuss the Rosemead Park Trail Enhancement Proiect (Item 4C) concurrently with the City Council meeting. Chuck Lyons - submitted pictures to City Council for their consideration in regards to the park trail design. Barbara Murphy - stated she wanted to make clarifications to comments made by Council Member Clark and stated she did not fool anyone when she had residents sign a communication in favor of the Rosemead Park Trail Project. Vice-Chairman Nunez made a motion, seconded by Council Member Low to award a contract to the lowest responsive bidder, The Nazerian Group, and authorize the Chairman and the City Clerk to execute the contract. Vote resulted in: Yes: Low, Nunez, Tran No: Clark, Taylor Abstain: None Absent: None 6. ADJOURNMENT The meeting adjourned at 8:01 pm. The next Community Development Commission meeting will take place on September 9, 2008 at 6:00 pm. John Tran Chairman ATTEST: Gloria Molleda Commission Secretary Rosemead Community Development Commission Minutes of August 26, 2008 Page 7 of 7 • - • 1;411 RICHARDS WATSON I GERSHON %5re ATTORNEYS AT LAW -A PROFESSIONAL CORPORATION 355 South Grand Avenue, 4oth Floor, Los Angeles, Califomia goo),i-3toi Telephone 213.626.8484 Facsimile 213.626.oo78 RICHARD RICHARDS August 26, 2008 (1916- 988) GLENN R. WA ON (RETIRED) VIA POF/ENTAIL \ HARRY L. GERSHON (19 2 2-2 0071 STEVEN L DORSEY Rosemead Community Development Commission WILLIAM L STRAUgAUSZ 52 IAITCMELL Rosemead City Hall GREGORY W W. ST STCPANICICN ROCHELLE BROWNE WILLIAM 9. RUDELL 8838 East Valley Boulevard QUINN M. BARROW CAROL W. LYNCH Rosemead, California 91770 OREGORYM. KUN CRT THOMAS M. ,IMSO ROBERT C. CE000N STEVEN A. N Re: CDC Agenda for August 26, 2008 KEVIN G G. . EN C.NMIS ROBIN O. HARRIS MICHAEL 15TRADA IAURENCE S. WIEN C (1) Item 3-F and (2) Item 4-A STEVEN R. ORR R B. nLDEN KIM SA AER 0. SOME ML°" KAYSYSER O. Dear Chair and Members of the Rosemead Community Development Commission: PETER M. TNOR50 JAMES L MARKMAN ' CRAIG A. STEELE T. PETEV PIERCE We represent Fifteen SAC Self Storage Corp. and U-Haul Co. of California TERENCE O. BOLA USA BOND (collectively "U -Haul") owners and operators of real property located at 3527 lvar JANET E. COlE50N R JIM G. GRAYSON Avenue, and longstanding property owners and business owners in the City of JIM . GRAYSO ROY A. CLARKE WILLIAM P. CURLLY III Rosemead. We submit this letter on their behalf and request that the letter be read MIC NAEL F. YOSNIRA REGINA DANNER PAUL eUTInER lgaez aAURLA into the record at the Public Comments portion of the CDC meeting of August 26, TERCSA HOLLOWAY 2008, and copies of this letter to be included in the record forItem 3-F (Update on BRUCE W. GALLOWAY o IANA K. CHUANG PATRICK K. 808KO Status of Development Site at the Southwest Corner of Rosemead Boulevard and BILLY o. DUNSMORE AMY GREY50N Glendon Way) and Item 4-A, (Rosemead Inn Hotel Operations). ' DEBORAH R. HARMAN D. CRAIG POX ALEXANDER ANNE SUSAN E. RU SN As interested property owners within the footprint of the so-called Glendon Way DAVID M. SNOW W LOLLY AL E14RICLUEZ Project Area, we have the following concerns regarding the recommendations before KIRSTEM R R. BOWMAN G.IN DER KHALSA OINETTA L GIOVINCO the CDC Commission: TRISHA ORTIL CANDICE X. Lee DAVID O. ALDERS ON MELISSA M. CROSTHWAITE 1. Recital D of the May 14, 2008 ENA with Jacobsen Family Holdings, LLC MANIC CLA E. MARROQUIN ,~IM:ERPrrnUSs provides: "Developer understands that the Commission has not yet undertaken the STEVEN L FLOWER CHRISTOPHER J. DIAL Owner Participation Process for the Project and that Developer shall provide within MATTHEW E. COHEN DEBBIE Y. CAO 90 days of the execution of this agreement a more defined Project for the site to the r Eo"NEY WARD roussal Commission may undertake its owner participation process as required by' its °IRNr L s. °°"I"CY aanEY WNITNEYG. MCDONALD Redevelopment Plan and California Redevelopment Law." The initial 90-day period VERONSICAERITA R. Hot,, HOLN ESS S. GUNDERSON OB COUNSEL expired on August 12, 2008, but U-Haut has not been provided any information, far MARK L W ER SAYRE WEAVER less any "more defined Project," that would allow U-Haullto respond meaningfully AVg NORMAN JIM R. KARP AX with an Owner Participation proposal for development of any or all of the 4.5 BAN FRANCISCO OFFICE proposed project site. TELEPHONE 415-421.a4a4 ORANGE COUNTY OFFICE TELEPHONE 714.990.0901 2. The recommendation to "extend" the Jacobsen ENA for an additional 90 days due to the "overall complexity of the project" is problematic. The amended Jacobsen ENA was executed on May 14, 2008, with a 90-day extension. This period RICHARDS WATSON GERSHON• ATTORNEYS AT LAW -A PROFESSIONAL COI PORATiON Rosemead Community Development Commission August 26, 2008 Page 2 expired on August 12, 2008. Therefore, there is at present no ENA in effect with Jacobsen and the recommendation to "extend" a non-existent ENA is inappropriate. 3. In addition, Agenda Item 3-F states that a.90-day "extension" is required "due to the overall complexity of the project." Yet, despite written requests to be provided with all information involving the Glendon Way project, U-Haul has been provided with no information about the project, and no information has been made available to explain the "overall complexity" or the need for additional extensions. 4. Moreover, on April 30, 2008, we requested email notice of the complete agenda packets for all agenda items pertaining to the U-Haul property and/or the Glendon Way Project, pursuant to Government Code § 54954. 1, which are required to be mailed "at the time the agenda is posted pursuant to Section 54954.2 and 54956 or upon distribution to all, or a majority of all, of the members of a legislative body, whichever occurs first." Yet, we have never received any agenda packets in advance of any meeting since our request, though many have included the Glendon Way project. And today, we received an email enclosing the agenda for today's meeting, long after it was presumably posted, allowing us minimal time to meaningfully respond and precluding us from appearing personally. 5. U-Haul is also concerned, and perplexed, that the CDC is considering "extending" the expired Jacobsen ENA for the reduced-size 4.5 project area, and yet at the same meeting, is proposing to engage a hotel operator to operate the Rosemead Inn property adjacent to U-Haul's property. If the Rosemead Inn property is effectively excluded from the project site, an "extension" of the expired Jacobsen ENA is nonsensical. Of greater concern, it appears that as more parcels are being eliminated from the proposed project (first the Levitz property and now the Rosemead Inn property), the CDC's focus is narrowly targeted at U-Haul's property. 6. As one of the owners of one of the remaining privately owned properties within the footprint of the proposed project referenced in the Jacobsen ENA, and a long time property owner in the City at this location, U-Haul is troubled by the CDC's continued failure to provide the affected property owners with a meaningful opportunity for owner participation in the redevelopment of the Glendon Way area. Owners have the right to know enough about what project is proposed for development in this area to state whether they might wish to develop that project, or to provide a plan for an alternate project which they believe can compete with the proposed project. However, no description of a proposed project has ever been provided to owners prior to the CDC entering into a series of ENAs for this area. None of the RICHARDS WATSON GERSHON~ ATTORNEYS AT LAW -A PROFESSIONAL CORPORATION Rosemead Community Development Commission August 26, 2008 Page 3 ENAs have resulted in a clear project description, and yet the Agency continues to extend these ENAs, modify the scope of the proposed site, reinstate expired ENAs, consult in closed session about acquiring the U-Haul property, and in effect tie up the area to the benefit of outside developer(s), and to the potential detriment of property owners who wish to retain and otherwise redevelop their property. Accordingly, U-Haul requests that the CDC not extend or reinstate the Jacobsen ENA at this time, that a clear and detailed description of the proposed project for the Glendon Way area be developed, and that owners be given an opportunity to respond to an owner participation solicitation that complies with the Agency's Owner Participation Rules. That includes a detailed description of the proposed project so that the owners can respond meaningfully, including by proposing alternate projects and showing the CDC why the alternate projects will more successfully achieve the CDC's redevelopment goals for the area than the proposed project. isideration of the foregoing. Cc: Fifteen Self Storage Corp U-Haul Co. of California 0 0 Page 1 of 1 Gloria Molleda From: Saskia T. Asarnura ]sasamura@rwglaw.com] Sent: Tuesday, August 26, 2008 3:36 PM To: Gloria Molleda Cc: Ericka Hernandez Subject: Letter for today's CDC meeting Attachments: U-Haul- 8_26_08 letter to CDC (with STA_s signature).PDF Dear Ms. Molleda, This morning, I received the CDC agenda for tonite's meeting from Ms. Hernandez. Enclosed please find a letter that addresses two of the agenda items. We request that the letter be read to the CDC Board during the Public Comments section of the CDC meeting, and that copies of the letter be included with the packets for the Agenda Items.3-F and 4-A. Kindly confirm receipt and compliance with the above request. We will also fax a copy in case of technical issues with email. Thank you, Saskia Asamura Richards, Watson & Gershon 355 South Grand Avenue, 40th Floor Los Angeles, CA 90071 NOTICE: This communication may contain privileged or other confidential information. If you are not the intended recipient of this communication, or an employee or agent responsible for delivering this communication to the intended recipient, please advise the sender by reply email and immediately delete the message and any attachments without copying or disclosing the contents. Thank you. 9/4/2008 ATTACHMENT C a F s O a. Q~Q ""vRAMD • ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION STAFF REPORT TO: THE HONORABLE CHAIRMAN AND COMMISSIONERS FROM: OLIVER CHI, EXECUTIVE DIRECTOR &fZ4f--9r-'J DATE: OCTOBER 14, 2008 SUBJECT: ROSEMEAD INN HOTEL OPERATING AGREEMENT SUMMARY On August 26, 2008, the Rosemead Community Development Commission selected Rosemead Inn Hotel Partners, LLC as the operator for the Commission owned Rosemead Inn Hotel. Attached to this report is the draft operating agreement (Attachment A) between the Commission and the Rosemead Inn Hotel Partners, LLC and includes the following deal points: Two year operating term (with an optional extension if mutually agreed upon by both the Commission and the Rosemead Inn Hotel Partners, LLC); . ➢ The Commission may terminate the Agreement without just cause and without penalty at any time upon giving at least sixty (60) days notice to the Operator; ➢ The Commission will contribute $100,000 towards the renovation of the hotel; ➢ The Operator must complete the renovation and open the hotel for business no later than ninety (90) days from the day the agreement is executed; D The Operator agrees to compensate the City 60% of any excess profits not less than $6,000 per month during the first year of operation and 60% of any excess profits not less than $10,000 per month during the second year of operation. It should be noted that does not include any transient occupancy tax (TOT) which is estimated to be an additional $50,000 per year. Staff Recommendation Staff recommends that the Community Development Commission authorize the Executive Director to enter into an operating agreement with the Rosemead Inn Hotel Partners, LLC to operate the Rosemead Inn Hotel. ITEM NO. APPROVED FOR CRY COUNCIL AGENDA: 0 ' A~s 0 • Community Development Commission October 14, 2008 Page 2 of 2 PUBLIC NOTICE PROCESS This item has been noticed through the regular agenda notification process. Submitt d b Bria aeki Assistant City Manager Attachment A - Rosemead Inn Hotel Operating Agreement • • MANAGEMENT AGREEMENT FOR THE OPERATION OF HOTEL ROSEMEAD This- MANAGEMENT AGREEMENT FOR THE OPERATION OF HOTEL ROSEMEAD (the "Agreement") is entered into as of October 14, 2008 by and between the ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION, a California rcdcvclopmcnt agency (the "Commission'), and ROSEMEAD INN HOTEL PARTNERS, LLC, a California limited liability company (the "Operator'), who agree as set forth in this Agreement. The Commission and the Operator are sometimes referred to in this Agreement, individually, as a "Party", and collectively as the "Parties". 1. Recitals. This Agreement is made with reference to the following- facts and circumstances: (a) The Commission is the owner of certain hotel facilities and related improvements, including appurtenant parking areas, currently known as the Rosemead Inn (collectively, the "Facilities'), and which Facilities are located at 8832 Glendon Way in the City of Rosemead, California. The Facilities are not currently in operation. (h) The Commission desires to engage the services of the Operator for the purpose of renovating, equipping, rebranding and operating the Facilities on and subject to the terms and conditions of this Agreement. (c) The Operator represents that it is well qualified through its experience to renovate, equip, rebrand, and operate the Facilities and is willing to do so on and subject to the terms and conditions of this Agreement. 2. Appointment of The Operator, Acceptance. The Commission hereby appoints the Operator, as an independent contractor, for the purpose of renovating, equipping, rebranding and operating the Facilities in accordance with the terms and conditions of this Agreement. The Operator represents that it has inspected the Facilities and is familiar with them and the Operator hereby accepts its appointment by the Commission, as an independent contractor, for the purpose of renovating, equipping, rebranding and operating the Facilities in accordance with the terms and conditions of this Agreement.. 3. Term: Extension. The term of this Agreement (the "Term") commences on the Commencement Date (as defined in Section 4(c) below) and, unless extended or sooner terminated as provided herein, expires on the second anniversary of the Commencement Date. The Term of this Agreement is subject to extension for such additional period of time and on the same or such other terms and conditions as may be mutually agreed upon by the Commission and the Operator, each in its sole discretion. (a) Termination Option. This Agreement may be terminated without just cause and without penalty at any time at the option of the Commission upon the giving of not less than sixty (60) days prior written notice of termination. LA N48t4-432"179 r3 4. Renovation of Facilities. Following the execution of this Agreement by the Parties, the Operator agrees to renovate and equip the Facilities for operation as a three star-class hotel, and agrees to open the Facilities to the public, in accordance with the following: (a) Scope of Renovation. The Operator agrees to perform ail renovation work and to provide and install all fixtures, equipment, furnishings and supplies necessary for the operation of the Facilities as a three star class hotel, including, without limitation, performing the renovation work and providing and installing the fixtures, equipment, furnishings and supplies as set forth on Exhibit A attached to this Agreement (collectively, the "Renovation"). The Renovation is to be performed by duly licensed and reputable contractors experienced in performing work of the nature involved in the Renovation and is to be performed in a professional and workmanlike manner, using new and used materials of good quality, and in compliance with all applicable laws, ordinances, building permits, rules and regulations. Without limiting the foregoing, the Operator acknowledges that prevailing wages must be paid in connection with the Renovation and the Operator agrees to comply with all applicable provisions of the California Labor Code in that regard, including, but not limited to, sections 1720 et seq. and 1770 et seq. (b) Approval of Plans. Prior to the commencement of the Renovation, the Operator will provide to the Commission, for approval, plans and specifications for the Renovation in such detail as the Commission may reasonably require. Approval of the plans and specifications by the Commission will not be unreasonably withheld. The Operator agrees to perform the Renovation in accordance with the plans and specifications as so approved, except to the extent changes to the plans and specifications are required in order to obtain necessary building permits and approvals. (c) Completion of Renovation: Rebranding. The Operator agrees to perform and to complete the Renovation, and to open the Facilities for business to the public, by no later than ninety (90) days from contract execution subject only to delays due to Force Majeure Events as .described in Section 20 (such date, as so extended, being the "Commencement Date"). P Costs of Renovation. Except for the Commission's Contribution (as defined in Section 4(e) below), all costs and expenses of the Renovation, including, without limitation, architectural and engineering fees, insurance costs, permit fees, and costs of labor, materials, fixtures, equipment, furnishings and supplies, shall be solely borne by the Operator and the Commission shall have no liability whatever in connection therewith. In performing the Renovation, the Operator agrees that it will expend not less than the amounts set forth on Exhibit A for each of the items of work, fixtures, equipment, furnishing and supplies set forth on Exhibit A; provided that, notwithstanding the foregoing, if the Operator is able to perform an item of work or obtain items of fixtures, equipment, furnishings or supplies for less than the corresponding amounts set for on Exhibit A, then the Operator shall be entitled to expend such savings on other A 1A #4814-4325-0179 v3 ? • items set for on Exhibit A. The operator agrees that it will keep accurate and complete books and records reflecting all amounts expended in connection with the Renovation, including the Commission's Contribution. (e) Commission Contribution. The Commission agrees to contribute the amount of One Hundred Thousand Dollars (S 100,000) towards payment of the costs and expenses of the Renovation (the "Commission's Contribution"), and except as provided below in this Section, the Commission's Contribution shall only be used for such purpose. The Commission's Contribution shall be disbursed to the Operator as follows: Fifty Thousand Dollars ($50,000) within seven (7) days following the execution of this Agreement by the Parties; and, Fifty Thousand Dollars ($50,000) upon the issuance by the City of Rosemead of necessary building permits and approvals for the Renovation. Within fifteen (15) days following the completion of the Renovation, the Operator agrees to provide to the Commission a detailed accounting showing the expenditures. for which the Commission's Contribution was used, together with supporting invoices, bills or other evidences of payment, and the unexpended balance, if any, of the Commission's Contribution. Upon request by the Commission, the Operator will permit duly authorized representatives of the Commission to review and inspect the Operator's books and records required to be maintained under Section 4(d). If there is an unexpended balance of the Commission's Contribution, such balance is to be deposited into the Operating Account (as defined in Section 8(a), below) and used toward the payment of the expenses of managing and operating the Facilities. 5. Rebrandinl;. The Facilities are to be opened to the public and operated under the name "Hotel Rosemead", and the Operator agrees to take all such actions as may be necessary to enable the Facilities to be opened and operated under that name. The Parties acknowledge that proper signage for the Facilities is critical in order to take advantage of the location of the Facilities and their income generation potential. Subject to applicable laws, ordinances, rules and regulations, the Commission agrees to use its good faith efforts to assist the Operator in securing freeway signage for the Facilities facing Interstate 10 and parking lot signage on the adjacent Levitz's property. 6. Qperational•Duties. During the Term of this Agreement, the Operator agrees to undertake and perform to the-best of its abilities the day to day operation and management of the Facilities as a three star - class hotel and for the purpose of maximizing the public's use of the Facilities and the profits received by the Commission and the Operator therefrom. The Operator agrees to operate and manage the Facilities in an efficient, cost-effective and professional manner and in accordance with procedures and practices followed by other three star -class hotel the Operators in Los Angeles County, California and the terms of this Agreement. Without limiting the foregoing, the Operator's duties in this regard will include, without limitation: (a) Management. Administrative services, including, without limitation, operational management and oversight, human resources management (including, without limitation, employee supervision, hiring, discharge and discipline), and the provision of necessary and appropriate security services. LA #4314-432" 179 v3 0 • (b) Maintenance. Maintenance and repair (including the making of necessary replacements) of the Facilities in a first-class, clean and safe condition acceptable to the Commission, in its reasonable discretion, at all times. (c) Services and Utilities. Arranging for the provision of all services and utilities necessary for the efficient operation and maintenance of the Facilities and the comfort and convenience of guests, including, without limitation, water, electricity, gas, telephone, internet access, cable or satellite television, laundry facilities, pool cleaning, window cleaning and rubbish removal. (d) , Taxes. The timely filing of all applicable tax returns and reports, including, without limitation, income, franchise, sales tax and transient occupancy tax returns and reports, and the timely payment and remittance of all taxes which are due and owing. (e) Accounting. Accounting and bookkeeping services, including, without limitation, payroll, accounts receivable and accounts payable services and the preparation of financial statements, revenue forecasts and budgets as required by this-Agreement. (f) Marketing. The promotion and marketing to the public of the Facilities as a convenient and desirable lodging location and for the purpose of attempting to insure the financial and operating success of the Facilities. 7. ORerating Budget. Except as otherwise provided in this Agreement, the Operator will not be required to expend its own funds in performing its duties under this Agreement. Rather, all expenses of operating and managing the Facilities are intended to be paid for from the revenues generated from the operation of the Facilities. Within sixty (60) days following the execution of this Agreement by the parties, the Operator will provide to the Commission for the Commission's approval a reasonably detailed proposed operating budget (the "Proposed Operating Budget") for the Facilities. The Proposed Operating Budget will show projected revenues and expenses on a monthly basis, together with proposed room rates, for the first year of the Term. Upon approval by the Commission, which approval will not be unreasonably withheld, the Proposed Operating Budget will constitute the "Approved Operating Budget" for the first year of the Term. Thereafter, not less than thirty (30) days prior to the end of each succeeding year of the Term, the Operator will provide the Commission for the Commission's approval a Proposed Operating Budget for the next ensuring year of the Term showing projected revenues and expenses on a monthly basis, together with proposed room rates, for such year. Upon approval by the Commission, which approval will not be unreasonably withheld, such Proposed Operating Budget will constitute the Approved Operating Budget for such next ensuing year of the Term. 8. Receipts and Disbursements. The Operator's receipt and disbursement of funds and revenues relating to the Facilities will be in accordance with the following: LA #4814-4325-0179 v3 • • (a) Operating Account. All funds and revenues collected or received in connection with or attributable to the operation of the Facilities are to be promptly deposited into a separate bank account established and maintained with a bank mutually acceptable to the Parties and whose deposits are insured by the Federal Deposit Insurance Corporation (the "Operating Account'). All funds in the Operating Account are the property of the Commission and are held in trust and managed for the Commission by the Operator. No payments from the Operating Account are to be made unless made in accordance with this Agreement. (b) Disbursements. The Operator is only authorized to disburse the funds and revenues deposited in the Operating Account for the payment of the expenses of managing and operating the Facilities as provided in this Agreement and in accordance with the Approved Operating Budget, and for no other purpose. (c) Accountings. On or before the fifteenth (15th) day of each month, the Operator agrees to provide the Commission with a written income and expense report for the immediately preceding month that shows a summary of all funds and revenues received and a summary of all operating expenses incurred. The report shall also include a comparison of actual revenues and expenses to date with the Approved Operating Budget, and shall be accompanied by a reconciliation between the bank account and the check register. After review of this information, the Commission may request, and the Operator shall promptly provide, reasonable additional reports which detail previous transactions. (d) Shortfalls. If at any time the amounts on deposit in the Operating Account are insufficient to cover the expenses of operating the Facilities, the Operator shall advance its own funds to pay for such deficiency. The Operator shall also notify the Commission of the existence and amount of the deficiency and shall promptly provide any and all financial and accounting information reasonably requested by the Commission to document the deficiency. In addition, the Parties shall promptly meet and confer regarding the reason(s) for the deficiency and the expected duration thereof. Any amounts advanced by the Operator under this Section 8(d} will be treated as expenses of operating and managing the Facilities and will be reimbursable to the Operator from excess revenues, if any, in the Operating Account prior to the payment of the Commission Share and the Operator Share pursuant to Section 11. 9. Books and Records. The Operator agrees to keep accurate and complete books and records of account of all receipts and disbursements respecting the operating and management of the Facilities in accordance with generally accepted accounting principles. These books and records are to show all income and expenditures, accounts payable, accounts receivable, payroll expense, available cash, and other assets and liabilities pertaining to the Facilities. These books and records are to be kept throughout the Term of this Agreement and for a period of 2 years following its expiration or termination. The Commission may, at any time during the Operator's normal business hours and either in person or through a representative, inspect all records and supporting and related documentation kept by the Operator relating to the management and operation LA #4814-4325-0179 v3 5 of the Facilities, including, without limitation, checks, bills, vouchers, statements, cash receipts, bank account records, and correspondence. The Commission may, at its own expense, have an audit made of all account books and records connected with the management and operation of the Facilities. 10. Meeting. Representatives of the Commission and the Operator shall meet once in each calendar quarter and at such other times as may be reasonably necessary for the purpose of reviewing the monthly financial reports submitted by the Operator, reviewing the Operator's performance under this Agreement, and discussing any other matters relating to the operation of the Facilities. 11. Management Fee. If the operation of the Facilities results in the actual receipt of revenues during a given calendar quarter (or portion thereof, if any, at the beginning or end of the Term of this Agreement) in excess of expenses incurred for that calendar quarter (or portion thereof), the Operator will provide the Commission with a report detailing such excess (which report may be a part of the report provided for in Section 8(c) above). Within fifteen (15) days following receipt of such report, and unless the Commission in good faith questions the accuracy of such report, the Operator shall pay sixty percent (601/6) of the amount of such excess to the Commission (the "Commission Share") and forty percent (401/6) of the amount of such excess to the Operator (the "Operator Share") by means of disbursements from the Operating Account. The Operator acknowledges and agrees that payment to the Operator of the Operator Share, if any, constitutes, and will be accepted by the Operator as, the sole and total compensation to the Operator for its services under this Agreement. 12. Independent Contractor; Operator Employees. The Commission and the Operator acknowledge and agree that this Agreement establishes and constitutes only a management agreement between the Parties, that the Parties are not joint venturers or partners, and that the Operator is not and is not to be deemed to be an employee of the Commission. The Operator shall at all times be an independent contractor. The Operator shall hire, discharge, supervise and pay all personnel necessary for the management and operation of the Facilities and all such personnel shall be the servants or employees of the Operator and not of the Commission. Except to the extent provided for in the Approved Operating Budget, the Operator shall pay from its own funds without reimbursement from the Commission all salaries, wages and fringe benefits and all local, state and federal taxes (including, without limitation, Social Security taxes, unemployment insurance and withholding taxes) applicable to such servants and employees. The Operator shall have sole responsibility for the preparation and filing of all tax and other returns required under applicable-federal, state or local laws, regulations and ordinances governing employment and for otherwise complying with the applicable requirements of such laws, regulations and ordinances. 13. Compliance With Law.- Covenant Against Liens. The Operator will keep and maintain all licenses and permits necessary for the operation and management of the Facilities and the performance of its duties under this Agreement and will operate and manage the Facilities in compliance with all applicable laws, ordinances, rules and LA #4814-432"M v3 6 regulations, including, without limitation, health and safety laws and the Americans with Disabilities Act. The Operator shall at all times keep the Facilities and the Commission's title thereto free and clear of all liens and claims, including for labor or materials supplied or claimed to have been supplied to the Facilities in connection with the Renovation or later work. In the event of the filing of any such lien, the Operator shall give the Commission prompt notice thereof and shall secure in a prompt and diligent manner (and in any event within ten (1.0) days after becoming aware of the filing of any lien) the release of the same by bonding or other appropriate means. If the Operator shall desire to contest any claim of lien, it shall furnish the Commission, at the Commission's election, adequate security of the value or in the amount of the claim, plus estimated costs, or a bond of a responsible corporate surety in such amount conditioned on the discharge of the lien, and shall thereafter prosecute such contest with due diligence and in good faith. If a final judgment establishing the validity or existence of a lien for any amount is entered, the Operator shall pay and satisfy the same. 14. Insurance. As a part of the expenses provided for in the Approved Operating Budget, the Operator will keep and maintain the following types of insurance: (a) A policy of comprehensive general liability insurance respecting the Facilities in the amount of not less than $5,000,000 per occurrence insuring against claims of bodily injury, death and property damage, and a policy of all-risk extended coverage insurance covering all risks of physical loss or damage to the Facilities, with liability limits of not less than ninety percent (90%) of the replacement cost of the same and including coverage for fire, sprinkler damage, vandalism and malicious mischief . The Commission will be named as an additional insured on each such policy. Each such policy shall be written by an insurer admitted in the State of California and reasonably acceptable to the Commission and shall contain a waiver of subrogation provision and other terms and provision reasonably acceptable to the Commission. (b) A policy of worker's compensation insurance as required by law. (c) A fidelity bond in the principal sum of $1,000,000, and otherwise in form and substance and written by a surety reasonably satisfactory to the Commission, to protect the Commission against the misapplication of funds by the Operator and its employees, agents and servants. (d) Such other types of insurance as the Commission may reasonably require. 15. General Indemnity. The Operator agrees to indemnify, protect, defend (by counsel reasonably satisfactory to the Commission) and bold the Commission and its officials, officers, agents and employees (the "Indemnified Parties") harmless from and against all claims, losses, liabilities, damages, actions, judgment, costs and expenses (including reasonable attorneys' fees and expenses) arising out of (a) the negligence or willful misconduct of the Operator, its officers, agents, contractors, servants and employees in or about the Facilities or in managing and operating the Facilities, or (b) the 1A 1748144325-0179 v3 • • default by the Operator in the performance of its obligations under this Agreement. This provisions of this Section shall survive the expiration or termination of this Agreement. 16. Hazardous Materials; Hazardous Materials Indemnity., (a) No Representations. The Commission makes no representations or warranties of any kind or nature respecting the presence or absence of any Hazardous Materials (as defined in Section 16(b) below) in, on, under or about the Facilities, and in performing the Renovation, the Operator accepts the Facilities in their "AS-IS, WITH ALL FAULTS" condition and assumes all responsibility and obligation for any required remediation or abatement of Hazardous Materials required as a result of the Renovation. In performing the Renovation and its other obligations under this Agreement, the Operator agrees that it will not use, store on the Facilities, or bring or release onto the Facilities, any Hazardous Materials, except is strict accordance with all applicable laws, ordinances, ruics and regulations. (b) Hazardous Material Indemnity. Without limiting the . Operator's obligations of indemnity under Section 15, the Operator agrees to indemnify, protect, defend (by counsel reasonably satisfactory to the Commission) and hold harmless the Indemnified Parties from and against any and all claims, actions, damages, losses, liabilities, judgments, costs and expenses (including reasonable attorneys' fees and costs), and including, without limitation, all foreseeable and unforeseeable consequential damages, which the Indemnified Parties, or any of them, may suffer or incur directly or indirectly arising out of or connected with (a) the use, generation, storage, disposal, release or threatened release of Hazardous Materials in, on, under or about the Facilities due to the acts or omissions of the Operator, its employees, servants, contractors or agents, (b) any required or necessary repair, cleanup or detoxification and the preparation of any closure or other required plans, whether such action is required or necessary prior to or following the Commencement Date of the term of this Lease, to the full extent that such action is attributable, directly or indirectly, to the presence, use, generation, storage, disposal, release or threatened release of Hazardous Materials in, on, under or about the Facilities due to the acts or omissions of the Operator, its employees, servants, contractors or agents. As used herein, "Hazardous Materials" means (1) any flammable explosives, radioactive materials, asbestos, PCB's, hazardous wastes, toxic substances or related materials, including, without limitation, all substances, wastes, pollutants and contaminants now or hereafter included within such (or any similar) tern under any federal, state or local statute, ordinance, code, rule or regulation now existing or hereafter enacted or amended. The provisions of this Section shall survive the expiration or termination of this Agreement. 17. Termination. Without limiting the right of the Commission to terminate this Agreement pursuant to Section 3(a), this Agreement may be terminated as follows: (a) For ause. If either Party to this Agreement defaults in the performance of it obligations under this Agreement, the other Party may give written notice of such default to the defaulting party. If the defaulting Party fails to cure such default within five (5) days following receipt of such notice in the case of a monetary default, or fails to IA N4814-4323-0179 v3 0 • cure such default within a reasonable time (not to exceed thirty (30) days) after receipt of such notice in the case of a non-monetary default, then the non-defaulting Party, may terminate this Agreement upon the giving of written notice of termination. The non- defaulting Party's right to terminate this Agreement as provided in this Section 17(a) shall be in addition to any other right or remedies available to the non-defaulting Party. (b) Without Cause. The Commission shall have the right to terminate this Agreement at any time and without cause or penalty if. (i) the Commission Share (as defined in Section I1 above, on an annualized basis, does not equal or exceed six Thousand Dollars ($6,000) per month during the first year of the Term of this Agreement or Ten Thousand Dollars (S 10,000) per month during the second year of the Term of this Agreement, or (ii) the Board of the Commission finds and determines that the purposes for which the Commission was formed are more appropriately furthered by utilization of the Facilities, or the property on which the Facilities are located, for a purpose other than that contemplated by this Agreement, or (iii) there is a deficiency in the Operating Account as provided in Section 8(d). Termination pursuant to clause (i) or (ii) of this Section 17(b) shall be effective upon the giving of not less than thirty (30) days prior written notice by the Commission to the Operator, and termination pursuant to clause (iii) of this Section 17(b) shall be effective on the date specified in a written notice of termination given by the Commission to the Operator. If this Agreement is terminated pursuant to this Section 17(b), the Parties shall cooperate with one another in promptly shutting down the operation of the Facilities, in transferring to the Commission the records, or copies thereof, relating to the operation and management of the Facilities, in settling any financial obligations between the Parties, and in otherwise winding up the business which was being conducted at the Facilities. 18. Notices. All notices, requests, demands and other communications required or permitted to be given under the terms of this Agreement by one Party to the other shall be in writing addressed to the recipient Party's Notice Address set forth below and shall be deemed to have been duly given or made (a) if delivered personally (including by commercial courier or delivery service) to the Party's Notice Address, then as of the date delivered (or if delivery is refused, on presentation), or (b) if mailed by certified mail to the Party's Notice Address, postage prepaid and return receipt requested, then at the time received at the Party's Notice Address as evidenced by the return receipt, or (c) if mailed by first class mail to the Party's Notice address, postage prepaid, then on the third (3rd) business day following deposit in the United States Mail. Any Party may change its Notice Address by a notice given in the foregoing form and manner. The Notice Addresses of the Parties are: LA #4814-4323-0 179 v; 0 • If to the Commission: Rosemead Community Development Commission 8838 East Valley Boulevard Roscmcad, California 91770 Attention: Executive Director With copy to: Joseph M. Montes, Esq. Burke, Williams & Sorensen, LLP 444 South Flower Street, Suite 2400 Los Angeles, California 90071 If to the Operator: Rosemead Inn Hotel Partners LLC 16388 East Colima Road, Suitc 206 Hacienda Heights, California 91745 Attention: Ahmed Sri. Seirafi 19. Commission Representative. The Commission's representative with respect to this Agreement is the City Manager of the City of Rosemead or his authorized designee (the "Commission Representative"). Whcncvcr this Agreement requires the consent of the Commission to a matter, the Commission Representative is authorized to give such consent and the Operator shall be entitled to rely thereon. The Commission may by written notice given to the Operator at any time designate another City or Commission official or officials as the Commission Representative(s). 20. Forcc Maieure. Any prevention, delay or stoppage due to strike, lockouts, labor disputes, acts of God, inability to obtain labor or materials or reasonable substitutes therefor, failure of power, governmental restrictions, judicial orders, riots, insurrection, enemy or hostile governmental action, civil commotion, terrorism, fire or other casualty, and other reason of a similar or dissimilar nature beyond the reasonable control of the Party obligated to_ perform, shall excuse the performance by such Party for a period equal to any such prevention, delay or stoppage and the period for the performance of any act shall be extended for the period of the delay. The provisions of this Section shall not, however, operate to extend the Term. Delays or failure to perform resulting from lack or insufficiency of funds shall not be deemed delays, beyond the reasonable control of a Party. 21. Other Terms. (a) This Agreement is to be governed by and construed in accordance with the -internal laws of the State of California, without rcgard to principles of conflicts of laws. (b) No term or provision of this Agreement may be amended, altered, modified or waived orally or by a course of conduct, but only by an instrument in writing signed by a duly authorized officer or representative of the Party against which enforcement of such amendment, alteration, modification or waiver is sought. Any amendment, alteration, modification or waiver shall be for such period and subject to such conditions as shall be LA #48144325-0179 v3 10 specified in the written instrument effecting the same. Any waiver shall be effective only in the specific instance and for the specific purpose for which given. (c) The section headings in this Agreement are for convenience of reference only and are not to be referred to in construing or interpreting this Agreement. The recitals to this Agreement, and all exhibits referred to in this Agreement, are a part of this Agreement. (d) The invalidity or unenforceability of any term or provision of this Agreement shall not affect the validity or enforceability of any other term or provision of this Agreement all of which shall remain in full force and effect. (e) This Agreement may be executed in counterparts, each of which is an original but all of which together constitute but one and the same instrument. Any signature page of this Agreement may be detached from any counterpart and re-attached to any other counterpart of this Agreement which is identical in form hereto but having attached to it one or more additional signature pages. (f) The Operator understands and agrees that this Agreement and all information provided to or obtained by the Commission under it may be or become subject to public inspection and/or reproduction as public records. The Parties have caused this Agreement to be duly executed by their respective duly authorized officers or agents as of the date first set forth above. ROSEMEAD COMMUNITY ROSEMEAD INN HOTEL PARTNERS DEVELOPMENT COMMISSION, LLC, a California redevelopment agency a California limited liability company By By Print Name Its Executive Director ATTEST: Commission Secretary Print Name & Title LA #48144325-0179 v3 11 APPROVED AS TO FORM: Joseph M. Montes, Commission Counsel L I LA 04 5 1 4-43 25-0 179 r3 12 J EXHIBIT "A" Exterior • WORK, FIXTURES, EQUPMENT, FURNISHINGS AND SUPPLIES AND RELATED COSTS FORMING A PART OF THE RENOVATION Landscape Power Wash and Paint Sinage Patch/Repair/Mist/ Pool/new deck Parking Lot Front door focus pt. Misc. Remove/trash Canopy Relocate entrance Patio / Pool Furniture Description Budget Length $ 2,000.00 150 $ 15,000.00 $ 8,000.00 $ 3,500.00 $ 5,500.00 $ 2,000.00 $ 5,000.00 $ 580.00 $ 3,000.00 $ 1,200.00 Subtotal 45 780.00 Interior Description Budget LOBBY Furnlnshing $ 3,000.00 Focus pt. lighting $ 1,500.00 Paint and theme for reception art $ 4,000.00 Misc. $ 1,500.00 Elevator $ 700.00 Sound/speaker $ 800.00 Subtotal 11 500.00 Haltway- Carpet $ - Paint $ 4,500.00 Lighting $ 2,400.00 Subtotal 6,900.00 length 150 Width width 100 Rooms unit 53 Sand and paint Doors $ 75.00 $ 3,975.00 Paint $ 320.00 $ 16,960.00 Carpeting $ 600.00 200 sq.ft $ 31,800.00 N. A-1 Restroom Light and exhaust fans $ 175.00 Faucets $ 200.00 A/C service $ 50.00 Refinish Curtains $ 80.00 Sand popcorn ceiling. $ 50.00 Subtotal. $ 1,550.00 Furnishing subtotal Operations Marketing T.Vs 1 $ Llens/towels $ 200.00 Pillows $ 300.00 Lamps $ 100.00 Desk $ 150.00 Bed Frame (250 single, 400 dou $ 375.00 Mattress (500 s, 800 double) $ 625.00 Drawers $ 150.00 Nightstands $ 80.00 Rug $ 100.00 Duvet/comforter 300s, 500 d $ 450.00 Mi rror $ 40.00 Decor/ Misc. $ 145.00 Uniforms $ 1,000.00 Robe for Rooms $ 800.00 Slippers $ 400.00 POS System / Computer $ 1,250.00 Cameras $ 1,500.00 Bell Cart $ 250.00 Hotel misc,.shampoo, etc. $ 1,500.00 Name Tags $ 500.00 Wifi Service $ 1,500.00 Website I $ 1,000.00 0 $ 9,275.00 $ 10,600.00 $ 2,650.00 $ 4,240.00 $ 2,650.00 $ 82,150.00 1 $ $ 10,600.00 $ 15,900.00 $ 5,300.00 $ 7,950.00 $ 19,875.00 $ 33,125.00 $ 7,950.00 $ 4,240.00 $ 5,300.00 $ 23,850.00 $ 2,120.00 $ 7,685.00 V A-2 Lobby Hallway Rooms Furnishing Operations & marketing $ 11,500.00 $ 6,900.00 $ 82,150.00 $ 149,195.00 $ 9,700.00 A-3 • Minutes of the Community Development Commission Meeting October 14, 2008 Chairman Tran called the regular meeting of the Rosemead Community Development Commission to order at 6:05 p.m. in the City Hall Chamber, 8838 E. Valley Blvd, Rosemead, California 91770. FLAG SALUTE: Commissioner Taylor INVOCATION: Chairman Tran ROLL CALL OF OFFICERS PRESENT: Chairman Tran, Vice-Chairman Nunez, Commissioner Low, Commissioner Taylor, Commissioner Clark OFFICIALS PRESENT: Executive Director Chi, Agency Attorney Montes, Assistant City Manager Saeki, Assistant City Manager Hawkesworth, Director of Finance Brisco, Public Affairs Manager Flores, Director of Parks and Recreation Montgomery-Scott, Economic Development Administrator Ramirez, and Commission Secretary Molleda. 1. PUBLIC COMMENTS FROM THE AUDIENCE - None 2. CONSENT CALENDAR A. Minutes September 9, 2008 - Regular Meeting September 23, 2008 - Regular Meeting Minutes were differed to the next Community Development Commission meeting. B. Resolution No. 2008-29 Claims and Demands Recommendation: Adopt Resolution No. 2008-29 for payment of Commission expenditures in the amount of $1,695,357,25 demands Nos. 9941 through 9948 and 11042 through 11044. Commissioner Low made a motion, seconded by Vice-Chairman Nunez, to approve Resolution No. 2008-29. Vote resulted in: Yes: Clark, Low, Nunez, Taylor, Tran No: None Abstain: None Absent: None Rosemead Community Development Commission ITEM NO. 9q~4- Minutes of October 14. 2008 Page I of 3 0 0 3. MATTERS FROM THE CHAIRMAN & COMMISSIONERS - None 4. MATTERS FROM THE EXECUTIVE DIRECTOR & STAFF A. Rosemead Inn Hotel Operating Agreement On August 26, 2008, the Rosemead Community Development Commission selected Rosemead Inn Hotel Partners, LLC as the operator for the Commission owned Rosemead Inn Hotel. The following are the deal points to the draft operating agreement between the Commission and the Rosemead Inn Hotel Partners, LLC: • Two year operating term; • The Commission may terminate the Agreement without just cause and without penalty at any time upon giving at least sixty (60) days notice to the Operator; • The Commission will contribute $100,000 towards the renovation of the hotel; • The Operator must complete the renovation and open the hotel for business no later than ninety (90) days from the day the agreement is executed; • The Operator agrees to compensate the City 60% of any excess profits not less than $6000 per month during the first year of operation and 600/0 of any excess profits not less than $10,000 per month during the second year of operation. It should be noted that does not include any transient occupancy tax (TOT) which is estimated to be an additional $50,000 per year. Recommendation: That the Community Development Commission authorize the Executive Director to enter into an operating agreement wit the Rosemead Inn Hotel Partners, LLC to operate the Rosemead Inn Hotel. Juan Nufiez - expressed concern that the city lost money during the transaction of the purchasing ' of the hotel. Vice-Chairman Nunez made a motion, seconded by Commissioner Low, to approve staff' recommendation. Vote resulted in: Yes: Low, Nunez, Tran No: Clark, Taylor Abstain: None Absent: None Rosemead Community Development Commission Minutes of October 14. 2008 Page 2 of 3 0 • 5. CLOSED SESSION CONFERENCE WITH REAL PROPERTY NEGOTIATORS (GOVERNMENT CODE SECTION 54956.8) Property 8828 Glendon Way 8832 Glendon Way 8920 Glendon Way 3520 Ivar Avenue 3527 Ivar Avenue Property Owner M. Garcia RC&IGroup City of Rosemead Thang Q. & Kathy T. Pham Fifteen SAC Self Storage Corp. Negotiating Parties - Agency Executive Director Assistant City Managers Under Negotiation - Price and terms of payment The Rosemead Community Development Commission recessed to closed session at 6:19 pm. and reconvened back at 6:58 pm. Vice-Chairman Nunez made a motion, seconded by Commissioner Low, to continue the negotiations with property owners. Vote resulted in: Yes: Low, Nunez, Tran No: Clark, Taylor Abstain: None Absent: None 6. ADJOURNMENT The Community Development Commission meeting adjourned at 8:30 pm. The next Community Development Commission meeting will take place on October 28, 2008 at 6:00 pm. ATTEST: Gloria Molleda, City Clerk John Tran Mayor Rosemead Community Development Commission Minutes of October 14, 2008 Page 3 of 3 ATTACHMENT D MANAGEMENT AGREEMENT FOR THE OPERATION OF HOTEL ROSEMEAD This MANAGEMENT AGREEMENT FOR THE OPERATION OF HOTEL ROSEMEAD (the "Agreement") is entered into as of October 14, 2008 by and between the ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION, a California redevelopment agency (the "Commission'%. and ROSEMEAD INN HOTEL PARTNERS, LLC, a California limited liability company (the "Operator'), who agree as set forth in this Agreement. The Commission and the Operator are sometimes referred to in this Agreement, individually, as a "Party", and collectively as the "Parties". 1. Recitals. This Agreement is made with reference to the following facts and circumstances: (a) The Commission is the owner of certain hotel facilities and related improvements, including appurtenant parking areas, currently known as the Rosemead Inn (collectively, the "Facilities'), and which Facilities are located at 8832 Glendon Way in the City of Rosemead, California. The Facilities are not currently in operation. (b) The Commission desires to engage the services of the Operator for the purpose of renovating, equipping, rebranding and operating the Facilities on and subject to the terms and conditions of this Agreement. (c) The Operator represents that it is well qualified through its experience to renovate, equip, rebrand, and operate the Facilities and is willing to do so on and subject to the terms and conditions of this Agreement. 2. Appointment of The Operator, Acceptance. The Commission hereby appoints the Operator, as an independent contractor, for the purpose of renovating, equipping, rebranding and operating the Facilities in accordance with the terms and conditions of this Agreement. The Operator represents that it has inspected the Facilities and is familiar with them and the Operator hereby accepts its appointment by the Commission, as an independent contractor, for the purpose of renovating, equipping, rebranding and operating the Facilities in accordance with the terms and conditions of this Agreement. 3. Term, Extension. The term of this Agreement (the "Term') commences on the Commencement Date (as defined in Section 4(c) below) and, unless extended or sooner terminated as provided herein, expires on the second anniversary of the Commencement Date. The Term of this Agreement is subject to extension for such additional period of time and on the same or such other terms and conditions as may be mutually agreed upon by the Commission and the Operator, each in its sole discretion. (a) Termination Option. This Agreement may be terminated without just cause and without penalty at any time at the option of the Commission upon the giving of not less than sixty (60) days prior written notice of termination. LA #48144325-0179 v3 y 4. Renovation of Facilities. Following the execution of this Agreement by the Parties, the Operator agrees to renovate and equip the Facilities for operation as a three star-class hotel, and agrees to open the Facilities to the public, in accordance with the following: (a) Scope of Renovation. The Operator agrees to perform all renovation work and to provide and install all fixtures, equipment, furnishings and supplies necessary for the operation of the Facilities as a three star class hotel, including, without limitation, performing the renovation work and providing and installing the fixtures, equipment, furnishings and supplies as set forth on Exhibit A attached to this Agreement (collectively, the "Renovation"). The Renovation is to be performed by duly licensed and reputable contractors experienced in performing work of the nature involved in the Renovation and is to be performed in a professional and workmanlike manner, using new and used materials of good quality, and in compliance with all applicable laws, ordinances, building permits, rules and regulations. Without limiting the foregoing, the Operator acknowledges that prevailing wages must be paid in connection with the Renovation and the Operator agrees to comply with all applicable provisions of the California Labor Code in that regard, including, but not limited to, sections 1720 et seq. and 1770 et seq. (b) Approval of Plans. Prior to the commencement of the Renovation, the Operator will provide to the Commission, for approval, plans and specifications for the Renovation in such detail as the Commission may reasonably require. Approval of the plans and specifications by the Commission will not be unreasonably withheld. The Operator agrees to perform the Renovation in accordance with the plans and specifications as so approved, except to the extent changes to the plans and specifications are required in order to obtain necessary building permits and approvals. (c) Completion of Renovation; Rebranding. The Operator agrees to perform and to complete the Renovation, and to open the Facilities for business to the public, by no later than ninety (90) days from contract execution subject only to delays due to Force Majeure Events as described in Section 20 (such date, as so extended, being. the "Commencement Date'l (d) Costs of Renovation. Except for the Commission's Contribution (as i" defined in Section 4(e) below), all costs and expenses of the Renovation, including, without limitatio architectural and engineering fees, insurance costs, permit fees, and costs o a or, materials, fixtures, equipment, furnishings and supplies, shall be solely .chi~if ~d borne by the Operator and the Commission shall have no liability whatever in connection y Or U1 f~~ therewith. In performing the Renovation, the Operator agrees that it will expend not less l than the amounts set forth on Exhibit A for each of the items of work, fixtures, WQ a f l66 equipment, finishing and supplies set forth on Exhibit A; provided that, notwithstanding the foregoing, if the Operator is able to perform an item of work or obtain items of fixtures, equipment, furnishings or supplies for less than the corresponding amounts set for on Exhibit A, then the Operator shall be entitled to expend such savings on other LA #4814-4325-0179 v3 11 items set for on Exhibit A. The Operator agrees that it will keep accurate and complete books and records reflecting all amounts expended in connection with the Renovation, including the Commission's Contribution. (e) Commission Contribution. The Commission agrees to contribute the amount of One Hundred Thousand Dollars ($100,000) towards payment of the costs and expenses of the Renovation (the "Commission's Contribution"), and except as provided below in this Section, the Commission's Contribution shall only be used for such purpose. The Commission's Contribution shall be disbursed to the Operator as follows: Fifty Thousand Dollars ($50,000) within seven (7) days following the execution of this Agreement by the Parties; and, Fifty Thousand Dollars ($50,000) upon the issuance by the City of Rosemead of necessary building permits and approvals for the Renovation. Within fifteen (15) days following the completion of the Renovation, the Operator agrees to provide to the Commission a detailed accounting showing the expenditures for which the Commission's Contribution was used, together with supporting invoices, bills or other evidences of payment, and the unexpended balance, if any, of the Commission's Contribution. Upon request by the Commission, the Operator will permit duly authorized representatives of the Commission to review and inspect the Operator's books and records required to be maintained under Section 4(d). If there is an unexpended balance of the Commission's Contribution, such balance is to be deposited into the Operating Account (as defined in Section 8(a), below) and used toward the payment of the expenses of managing and operating the Facilities. 5. Rebranding. The Facilities are to be opened to the public and operated under the name "Hotel Rosemead", and the Operator agrees to take all such actions as may be necessary to enable the Facilities to be opened and operated under that name. The Parties acknowledge that proper signage for the Facilities is critical in order to take advantage of the location of the Facilities and their income generation potential. Subject to applicable laws, ordinances, rules and regulations, the Commission agrees to use its good faith efforts to assist the Operator in securing freeway signage for the Facilities facing Interstate 10 and parking lot signage on the adjacent Levitz's property. 6. Operational Duties. During the Term of this Agreement, the Operator agrees to undertake and perform to the best of its abilities the day to day operation and management of the Facilities as a three star - class hotel and for the purpose of maximizing the public's use of the Facilities and the profits received by the Commission and the Operator therefrom. The Operator agrees to operate and manage the Facilities in an efficient, cost-effective and professional manner and in accordance with procedures and practices followed by other three star -class hotel the Operators in Los Angeles County, California and the terms of this Agreement. Without limiting the foregoing, the Operator's duties in this regard will include, without limitation: (a) Management. Administrative services, including, without limitation, operational management and oversight, human resources management (including, without limitation, employee supervision, hiring, discharge and discipline), and the provision of necessary and appropriate security services. LA #4834-4325-0179 v3 (b) Maintenance. Maintenance and repair (including the making of necessary replacements) of the Facilities in a first-class, clean and safe condition acceptable to the Commission, in its reasonable discretion, at all times. (c) Services and Utilities. Arranging for the provision of all services and utilities necessary for the efficient operation and maintenance of the Facilities and the comfort and convenience of guests, including, without limitation, water, electricity, gas, telephone, internet access, cable or satellite television, laundry facilities, pool cleaning, window cleaning and rubbish removal. (d) Taxes. The timely filing of all applicable tax returns and reports, including, without limitation, income, franchise, sales tax and transient occupancy tax returns and reports, and the timely payment and remittance of all taxes which are due and owing. (e) Accounting. Accounting and bookkeeping services, including, without limitation, payroll, accounts receivable and accounts payable services and the preparation of financial statements, revenue forecasts and budgets as required by this Agreement. (f) Marketing. The promotion and marketing to the public of the Facilities as a convenient and desirable lodging location and for the purpose of attempting to insure the financial and operating success of the Facilities. 7. Operating Budget. Except as otherwise provided in this Agreement, the Operator will not be required to expend its own funds in performing its duties under this Agreement. Rather, all expenses of operating and managing the Facilities are intended to be paid for from the revenues generated from the operation of the Facilities. Within sixty (60) days following the execution of this Agreement by the parties, the Operator will provide to the Commission for the Commission's approval a reasonably detailed proposed operating budget (the "Proposed Operating Budget") for the Facilities. The Proposed Operating Budget will show projected revenues and expenses on a monthly basis, together with proposed room rates, for the first year of the Tenn. Upon approval by the Commission, which approval will not be unreasonably withheld, the Proposed Operating Budget will constitute the "Approved Operating Budget" for the first year of the Term. Thereafter, not less than thirty (30) days prior to the end of each succeeding year of the Term, the Operator will provide the Commission for the Commission's approval a Proposed Operating Budget for the next ensuring year of the Term showing projected revenues and expenses on a monthly basis, together with proposed room rates, for such year. Upon approval by the Commission, which approval will not be unreasonably withheld, such Proposed Operating Budget will constitute the Approved Operating Budget for such next ensuing year of the Term. 8. Receipts and Disbursements. The Operator's receipt and disbursement of funds and revenues relating to the Facilities will be in accordance with the following: LA #48144325-0179 v3 4 (a) Operating Account. All funds and revenues collected or received in connection with or attributable to the operation of the Facilities are to be promptly deposited into a separate bank account established and maintained with a bank mutually acceptable to the Parties and whose deposits are insured by the Federal Deposit Insurance Corporation (the "Operating Account'. All funds in the Operating Account are the property of the Commission and are held in trust and managed for the Commission by the Operator. No payments from the Operating Account are to be made unless made in accordance with this Agreement. (b) Disbursements. The Operator is only authorized to disburse the funds and revenues deposited in the Operating Account for the payment of the expenses of managing and operating the Facilities as provided in this Agreement and in accordance with the Approved Operating Budget, and for no other purpose. (c) Accountings. On or before the fifteenth (15th) day of each month, the Operator agrees to provide the Commission with a written income and expense report for the immediately preceding month that shows a summary of all funds and revenues received and a summary of all operating expenses incurred. The report shall also include a comparison of actual revenues and expenses to date with the Approved Operating Budget, and shall be accompanied by a reconciliation between the bank account and the check register. After review of this information, the Commission may request, and the Operator shall promptly provide, reasonable additional reports which detail previous transactions. (d) Shortfalls. If at any time the amounts on deposit in the Operating Account are insufficient to cover the expenses of operating the Facilities, the Operator shall advance its own funds to pay for such deficiency. The Operator shall also notify the Commission of the existence and amount of the deficiency and shall promptly provide any and all financial and accounting information reasonably requested by the Commission to document the deficiency. In addition, the Parties shall promptly meet and confer regarding the reason(s) for the deficiency and the expected duration thereof. Any amounts advanced by the Operator under this Section 8(d) will be treated as expenses of operating and managing the Facilities and will be reimbursable to the Operator from excess revenues, if any, in the Operating Account prior to the payment of the Commission Share and the Operator Share pursuant to Section 11. 9. Books and Records. The Operator agrees to keep accurate and complete books and records of account of all receipts and disbursements respecting the operating and management of the Facilities in accordance with generally accepted accounting principles. These books and records are to show all income and expenditures, accounts payable, accounts receivable, payroll expense, available cash, and other assets and liabilities pertaining to the Facilities. These books and records are to be kept throughout the Term of this Agreement and for a period of 2 years following its expiration or termination. The Commission may, at any time during the Operator's normal business hours and either in person or through a representative, inspect all records and supporting and related documentation kept by the Operator relating to the management and operation LA #4814-4325-0179 v3 of the Facilities, including, without limitation, checks, bills, vouchers, statements, cash receipts, bank account records, and correspondence. The Commission may, at its own expense, have an audit made of all account books and records connected with the management and operation of the Facilities. 10. Meetings. Representatives of the Commission and the Operator shall meet once in each calendar quarter and at such other times as may be reasonably necessary for the purpose of reviewing the monthly financial reports submitted by the Operator, reviewing the Operator's performance under this Agreement, and discussing any other matters relating to the operation of the Facilities. 11. Management Fee. If the operation of the Facilities results in the actual receipt of revenues during a given calendar quarter (or portion thereof, if any, at the beginning or end of the Term of this Agreement) in excess of expenses incurred for that calendar quarter (or portion thereof), the Operator will provide the Commission with a report detailing such excess (which report may be a part of the report provided for in Section 8(c) above). Within fifteen (15) days following receipt of such report, and unless the Commission in good faith questions the accuracy of such report, the Operator shall pay sixty percent (60%) of the amount of such excess to the Commission (the "Commission Share') and forty percent (40%) of the amount of such excess to the Operator (the "Operator Share") by means of disbursements from the Operating Account. The Operator acknowledges and agrees that payment to the Operator of the Operator Share, if any, constitutes, and will be accepted by the Operator as, the sole and total compensation to the Operator for its services under this Agreement. 12. Independent Contractor. Operator Employees. The Commission and the Operator acknowledge and agree that this Agreement establishes and constitutes only a management agreement between the Parties, that the Parties are not joint venturers or partners, and that the Operator is not and is not to be deemed to be an employee of the Commission. The Operator shall at all times be an independent contractor. The Operator shall hire, discharge, supervise and pay all personnel necessary for the management and operation of the Facilities and all such personnel shall be the servants or employees of the Operator and not of the Commission. Except to the extent provided for in the Approved Operating Budget, the Operator shall pay from its own fiords without reimbursement from the Commission all salaries, wages and fringe benefits and all local, state and federal taxes (including, without limitation, Social Security taxes, unemployment insurance and withholding taxes) applicable to such servants and employees. The Operator shall have sole responsibility for the preparation and filing of all tax and other returns required under applicable federal, state or local laws, regulations and ordinances governing employment and for otherwise complying with the applicable requirements of such laws, regulations and ordinances. 13. Compliance With Law, Covenant Against Liens. The Operator will keep and maintain all licenses and permits necessary for the operation and management of the Facilities and the performance of its duties under this Agreement and will operate and manage the Facilities in compliance with all applicable laws, ordinances, rules and LA #4814-4325-0179 v3 regulations, including, without limitation, health and safety laws and the Americans with Disabilities Act. The Operator shall at all times keep the Facilities and the Commission's title thereto free and clear of all liens and claims, including for labor or materials supplied or claimed to have been supplied to the Facilities in connection with the Renovation or later work. In the event of the filing of any such lien, the Operator shall give the Commission prompt notice thereof and shall secure in a prompt and diligent manner (and in any event within ten (10) days after becoming aware of the filing of any lien) the release of the same by bonding or other appropriate means. If the Operator shall desire to contest any claim of lien, it shall furnish the Commission, at the Commission's election, adequate security of the value or in the amount of the claim, plus estimated costs, or a bond of a responsible corporate surety in such amount conditioned on the discharge of the lien, and shall thereafter prosecute such contest with due diligence and in good faith. If a final judgment establishing the validity or existence of a lien for any amount is entered, the Operator shall pay and satisfy the same. 14. Insurance. As a part of the expenses provided for in the Approved Operating Budget, the Operator will keep and maintain the following types of insurance: (a) A policy of comprehensive general liability insurance respecting the Facilities in the amount of not less than $5,000,000 per occurrence insuring against claims of bodily injury, death and property damage, and a policy of all-risk extended coverage insurance covering all risks of physical loss or damage to the Facilities, with liability limits of not less than ninety percent (90%) of the replacement cost of the same and including coverage for fire, sprinkler damage, vandalism and malicious mischief . The Commission will be named as an additional insured on each such policy. Each such policy shall be written by an insurer admitted in the State of California and reasonably acceptable to the Commission and shall contain a waiver of subrogation provision and other terms and provision reasonably acceptable to the Commission. (b) A policy of worker's compensation insurance as required by law. (c) A fidelity bond in the principal sum of $1,000,000, and otherwise in form and substance and written by a surety reasonably satisfactory to the Commission, to protect the Commission against the misapplication of funds by the Operator and its employees, agents and servants. (d) Such other types of insurance as the Commission may reasonably require. 15. General Indemnity. The Operator agrees to indemnify, protect, defend (by counsel reasonably satisfactory to the Commission) and hold the Commission and its officials, officers, agents and employees (the "Indemnified Parties") harmless from and against all claims, losses, liabilities, damages, actions, judgment, costs and expenses (including reasonable attorneys' fees and expenses) arising out of (a) the negligence or willful misconduct of the Operator, its officers, agents, contractors, servants and employees in or about the Facilities or in managing and operating the Facilities, or (b) the LA 114 8 1 4-432 5-01 79 v3 default by the Operator in the performance of its obligations under this Agreement. This provisions of this Section shall survive the expiration or termination of this Agreement. 16. Hazardous Materials, Hazardous Materials Indemnity. (a) No Representations. The Commission makes no representations or warranties of any kind or nature respecting the presence or absence of any Hazardous Materials (as defined in Section I6(b) below) in, on, under or about the Facilities, and in performing the Renovation, the Operator accepts the Facilities in their "AS-IS, WITH ALL FAULTS" condition and assumes all responsibility and obligation for any required remediation or abatement of Hazardous Materials required as a result of the Renovation. In perforning the Renovation and its other obligations under this Agreement, the Operator agrees that it will not use, store on the Facilities, or bring or release onto the Facilities, any Hazardous Materials, except is strict accordance with all applicable laws, ordinances, rules and regulations. (b) Hazardous Material Indemnity. Without limiting the Operator's obligations of indemnity under Section 15, the Operator agrees to indemnify, protect, defend (by counsel reasonably satisfactory to the Commission) and hold harmless the Indemnified Parties from and against any and all claims, actions, damages, losses, liabilities, judgments, costs and expenses (including reasonable attorneys' fees and costs), and including, without limitation, all foreseeable and unforeseeable consequential damages, which the Indemnified Parties, or any of them, may suffer or incur directly or indirectly arising out of or connected with (a) the use, generation, storage, disposal, release or threatened release of Hazardous Materials in, on, under or about the Facilities due to the acts or omissions of the Operator, its employees, servants, contractors or agents, (b) any required or necessary repair, cleanup or detoxification and the preparation of any closure or other required plans, whether such action is required or necessary prior to or following the Commencement Date of the term of this Lease, to the full extent that such action is attributable, directly or indirectly, to the presence, use, generation, storage, disposal, release or threatened release of Hazardous Materials in, on, under or about the Facilities due to the acts or omissions of the Operator, its employees, servants, contractors or agents. As used herein, "Hazardous Materials" means (1) any flammable explosives, radioactive materials, asbestos, PCB's, hazardous wastes, toxic substances or related materials, including, without limitation, all substances, wastes, pollutants and contaminants now or hereafter included within such (or any similar) term under any federal, state or local statute, ordinance, code, rule or regulation now existing or hereafter enacted or amended. The provisions of this Section shall survive the expiration or termination of this Agreement. 17. Termination. Without limiting the right of the Commission to terminate this Agreement pursuant to Section 3(a), this Agreement may be terminated as follows: (a) For Cause. If either Party to this Agreement defaults in the performance of it obligations under this Agreement, the other Party may give written notice of such default to the defaulting party. If the defaulting Party fails to cure such default within five (5) days following receipt of such notice in the case of a monetary default, or fails to LA #48144325-0179 v3 cure such default within a reasonable time (not to exceed thirty (30) days) after receipt of such notice in the case of a non-monetary default, then the non-defaulting Party may terminate this Agreement upon the giving of written notice of termination. The non- defaulting Party's right to terminate this Agreement as provided in this Section 17(a) shall be in addition to any other right or remedies available to the non-defaulting Party. (b) Without Cause. The Commission shall have the right to terminate this Agreement at any time and without cause or penalty if. (i) the Commission Share (as defined in Section 11 above, on an annualized basis, does not equal or exceed six Thousand Dollars ($6,000) per month during the first year of the Term of this Agreement or Ten Thousand Dollars ($10,000) per month during the second year of the Term of this Agreement, or (ii) the Board of the Commission finds and determines that the purposes for which the Commission was formed are more appropriately furthered by utilization of the Facilities, or the property on which the Facilities are located, for a purpose other than that contemplated by this Agreement, or (iii) there is a deficiency in the Operating Account as provided in Section 8(d). Termination pursuant to clause (i) or (ii) of this Section 17(b) shall be effective upon the giving of not less than thirty (30) days prior written notice by the Commission to the Operator, and tenninaton pursuant to clause (iii) of this Section 17(b) shall be effective on the date specified in a written notice of termination given by the Commission to the Operator. If this Agreement is terminated pursuant to this Section 17(b) the Parties shall cooperate with one another in promptly shutting down the operation of the Facilities, in transferring to the Commission the records, or copies thereof, relating to the operation and management of the Facilities,-in settling any financial obligations between the Parties, and in otherwise winding up the business which was being conducted at the Facilities. 18. Notices. All notices, requests, demands and other communications required or permitted to be given under the terms of this Agreement by one Party to the other shall be in writing addressed to the recipient Party's Notice Address set forth below and shall be deemed to have been duly given or made (a) if delivered personally (including by commercial courier or delivery service) to the Party's Notice Address, then as of the date delivered (or if delivery is refused, on presentation), or (b) if mailed by certified mail to the Party's Notice Address, postage prepaid and return receipt requested, then at the time received at the Party's Notice Address as evidenced by the return receipt, or (c) if mailed by first class mail to the Party's Notice address, postage prepaid, then on the third (3rd) business day following deposit in the United States Mail. Any Party may change its Notice Address by a notice given in the foregoing form and manner. The Notice Addresses of the Parties are: LA #4814.4325-0179 v3 If to the Commission: Rosemead Community Development Commission 8838 East Valley Boulevard Rosemead, California 91770 Attention: Executive Director With copy to: Joseph M. Montes, Esq. Burke, Williams & Sorensen, LLP 444 South Flower Street, Suite 2400 Los Angeles, California 90071 If to the Operator: Rosemead Inn Hotel Partners LLC 16388 East Colima Road, Suite 206 Hacienda Heights, California 91745 Attention: Ahmed M. Seirafi 19. Commission Representative. The Commission's representative with respect to this Agreement is the City Manager of the City of Rosemead or his authorized designee (the "Commission Representative"). Whenever this Agreement requires the consent of the Commission to a matter, the Commission Representative is authorized to give such consent and the Operator shall be entitled to rely thereon. The Commission may by written notice given to the Operator at any time designate another City or Commission official or officials as the Commission Representative(s). 20. Force Majeure. Any prevention, delay or stoppage due to strike, lockouts, labor disputes, acts of God, inability to obtain labor or materials or reasonable substitutes therefor, failure of power, governmental restrictions, judicial orders, riots, insurrection, enemy or hostile governmental action, civil commotion, terrorism, fire or other casualty, and other reason of a similar or dissimilar nature beyond the reasonable control of the Party obligated to perform, shall excuse the performance by such Party for a period equal to any such prevention, delay or stoppage and the period for the performance of any act shall be extended for the period of the delay. The provisions of this Section shall not, however, operate to extend the Term. Delays or failure to perform resulting from lack or insufficiency of funds shall not be deemed delays beyond the reasonable control of a Party. 21. Other Terms (a) This Agreement is to be governed by and construed in accordance with the internal laws of the State of California, without regard to principles of conflicts of laws. (b) No term or provision of this Agreement may be amended, altered, modified or waived orally or by a course of conduct, but only by an instrument in writing signed by a duly authorized officer or representative of the Party against which enforcement of such amendment, alteration, modification or waiver is sought. Any amendment, alteration, modification or waiver shall be for such period and subject to such conditions as shall be LA #481"325-0179 v3 10 specified in the written instrument effecting the same. Any waiver shall be effective only in the specific instance and for the specific purpose for which given. (c) The section headings in this Agreement are for convenience of reference only and are not to be referred to in construing or interpreting this Agreement. The recitals to this Agreement, and all exhibits referred to in this Agreement, are a part of this Agreement. (d) The invalidity or unenforceability of any term or provision of this Agreement shall not affect the validity or enforceability of any other term or provision of this Agreement all of which shall remain in full force and effect. (e) This Agreement may be executed in counterparts, each of which is an original but all of which together constitute but one and the same instrument. Any signature page of this Agreement may be detached from any counterpart and re-attached to any other counterpart of this Agreement which is identical in form hereto but having attached to it one or more additional signature pages. (f) The Operator understands and agrees that this Agreement and all information provided to or obtained by the Commission under it may be or become subject to public inspection and/or reproduction as public records. The Parties have caused this Agreement to be duly executed by their respective duly authorized officers or agents as of the date first set forth above. ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION, a California redevelopment agency By d Boer Chi Print Name Its Executive Director ATTEST: J Commission Secretary ROSEMEAD INN HOTEL PARTNERS LLC, a California limited liability company By INenr-9 k~riRwl M Bqr- Print Name & Title LA #4814-4325-0179 v3 I I APPROVED AS TO FORM: S, seph M_ Mtunsel Commission LA #481443254179 v3 12 EXHIBIT "A" Exterior WORK, FIXTURES, EQUPMENT, FURNISHINGS AND SUPPLIES AND RELATED COSTS FORMING A PART OF THE RENOVATION Description Budget Length Width Landscape Power Wash and Paint Sinage Patch/Repair/Mist/ Pool/new deck Parking Lot Front door focus pt. Misc. Remove/trash Canopy Relocate entrance Patio / Pool Furniture $ 2,000.00 150 $ 15,000.00 $ 8,000.00 $ 3,500.00 $ 5,500.00 $ 2,000.00 $ 5,000.00 $ 580.00 $ 3,000.00 $ 1,200.00 100 Subtotal 45 780.00 Interior Description Budget LOBBY Furninshing $ 3,000.00 Focus pt. lighting $ 1,500.00 Paint and theme for reception ar( $ 4,000.00 Misc. $ 1,500.00 Elevator $ 700.00 Sound/speaker $ 800.00 Subtotal 11 500.00 Hallway Carpet Paint Lighting length width 150 4,500.00 2,400.00 Subtotal $ 6,900.00 Rooms unit 53 Sand and paint Doors $ 75.00 $ 3,975.00 Paint $ 320.00 $ 16,960.00 Carpeting $ 600.00 200 sq.ft $ 31,600.00 A-1 Restroom Light and exhaust fans Faucets A/C service Refinish Curtains Sand popcorn ceiling. $ 175.00 $ 9,275.00 $ 200.00 $ 10,600.00 $ 50.00 $ 2,650.00 $ 80.00 $ 4,240.00 $ 50.00 $ 2,650.00 Subtotal: $ 1,550.00 Furnishing T.Vs . Liens/towels $ 200.00 Pillows $ 300.00 Lamps $ 100.00 Desk $ 150.00 Bed Frame (250 single, 400 dou $ 375.00 Mattress (500 s, 800 double) $ 625.00 Drawers $ 150.00 Nightstands $ 80.00 Rug $ 100.00 Duvet/comforter 300s, 500 d $ 450.00 Mirror $ 40.00 Decor / Misc. $ 145.00 subtotal $ 2,815.00 Operations Uniforms $ 1,000.00 Robe for Rooms $ 800.00 Slippers $ 400.00 POS System / Computer $ 1,250.00 Cameras $ 1,500.00 Bell Cart $ 250.00 Hotel misc, shampoo, etc. $ 1,500.00 Name Tags $ 500.00 Wifi Service $ 1,500.00 Marketing Website $ 1,000.00 $ 5,300.00 $ 10,600.00 $ 15,900.00 $ 5,300.00 $ 7,950.00 $ 19,875.00 $ 33,125.00 $ 7,950.00 $ 4,240.00 $ 5,300.00 $ 23,850.00 $ 2,120.00 $ 7,685.00 $ 149,195.00 A-2 Ext. $ 45,780.00 Lobby $ 11,500.00 Hallway $ 6,900.00 Rooms $ 82,150.00 Furnishing $ 149,195.00 Operations & marketing $ 9,700.00 Grand total $ 305,225.00 A-3 ATTACHMENT E 1118612088 11:13 626-312-P'-41 $y K OF TI-E wEST 684 BANK &WEST ~ e WIRE TRANSFER REQUEST SEND WIRE IN (Chi One7: n U.S. Dollars Foreign Currency AMOUNT: $100,000.00 CURRENCY T'(PE (if Foreign): (Branch Must Complete the Following for Foreign Currency VYlre) rat= n,i ~ [[~(~0l11 Dom=srlc WIRS RD A ❑ FORE1.'DN Wit! Brancht[380L Celt Center 2iStri-aD eat Code FX Rate U.S, S Equivelent T "i-ollia IN eppacabla) Quoted By ohbstet or Trader Name) 'DRIGINATOR INFORMATION 0r1g1natodA=unt Name ROSEMEAD COMMUNITY C18C4n° Mautngs ❑ UMA ❑ GeriaN I-edger (GL) Acount Htnn,,.6S9-059244 GL 239855 ICCCCC) Address (StreedCkyrSteteMp ~C~u~niry, N otter than U.S.) 8838 E. VALL?Y BLVD. ROSEMEAD, CA 91770 ADDIT104AL 15417 MMATM REQUIRED IF BKP CUSTOMER (Branch Must CibtainNen7y ID as IRdleatsd) TIN or AIFen ID tZurnber Type of D Pre3en*d SerW Mdurnbor of ID Docuffwm Btm or country of Issue P€tWEN-1 INSTRUCT)ONS SENEDCtARY BANI`JBENEFIC App INFOItt`. ArroN Benenclary Bank Hama, CITIBANK N.A. ALA Mrumber 322271724 ) B-etiary Bank Adtlrese (Sbeatr-ft lStatefZP: Cauntrr IF ctn-r Ihm U.S 17801 COLIMA ROAD, CITY OF INDUSTRY, CA 91748 Berenelery Name ROSEMEAD INN HOTEL PARTNERS, LLC ' 9enandary Account Number 202990586 aenetici" Addr= f5tmeMA)AlStatdIIF.. Caur" If oew than LLS..I 16388 E. COLIMA RD. SUITE 206, HACIENDA HEIGHTS CA 9174 hAeseageAnlorntat~lvcuo*+s to Banesdery TIN or Deter Iderllrytny Number INTERMEDIARY BANK INFORMAnON if Applicable) Inhmn`dk4ry Bank Name ABA Number 4ttorrnediery Bank Addrea ( . County Fosur than U.S.) Berteftary Bank A=ourt Nm+ber -Bsneflc mrjl comPleta Intemagonal Sank A=Dunt Number (IBAN) is required for wires sent to Europe. An InMnillietelmiseing IM may rtianit 'F6 win rojed or return with additional ekarg es assoned by the racelvltg bank iNlres stmt iA MaxIco repulrs an It-dlpit CLARE as the bans4daro account number. NDOm Intermediary and beneficiary barilts m>sy assessa foe %dh the result that the peys9lbWefidwT may receive an amount that is less then the face value of the wire. The undersigned certifies on behalf of orlgl r them, a above Information is true and cone snd further agrees to be bound by the terms and conditions set forth on the t)Yra TransFe(1L' r of which is hereby acknowledged. 11107/2008 Send Date: nab)es 519natvre: Today's Date: 11 /06 /2008 NJ Signature Verified 1 BANK USE DNLY PreperedlAccapted Dr. (Print Mauve) ~ I , / f" l'I'-ry Appro ad By: (Print Name) -Second Apprwmr. {when eppllc.hts) Preparo01 Illy-. (~{Pnaturt) APp-ve6 isy: (Signature) NCrreS r Fax to (888) 777-3316 - No Later Than 2:00 P-M. (Pacific Time,) o3o-tM3Ca6 (xrY. I toe) COMMUNITY DEVELOPMENT COMMISSION ROSEMEAD RESOLUTION NO: 2008-35 . 2008-2009 OMMUNITY DEVELOPMENT COMMISSSII IN THE A RESOLUTION OF THE ROSEMEAD C OF $323,895.28 ALLOWING CERTAIN CLAIMS ANDTHEMA HS 11053. SUM INCLUDES WIRE 1MEAD NOVEMBER 120081052 ROUG DEMANDS NO. 9955 THROUGH TRANSFER PROCESSED O THE ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF ROSEMEAD DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS' ACCURACY SECTION 1. THAT THE AS TO EXECUTIVE DIRECTOR HEREBY C FUNDS OR PAYMENT THEREOF. OF THE FOLLOWING DEMANDS AND THE AVAILABILITY O OENRC EXECUTIVE DIRECTOR D THIS 18th DAY OF NOVEMBER, 2008. , APPROVED AND ADOPTE PASSED JOHN TRAM CHAIRMAN, RO EMEA ,OMMUNITY COMMISSION DEVELOPMENT ATTEST: GLORIA MOLLEDA COMMISSION SECRETARY APPROVED AS TO FORM: JOE MONTES AGENCY ATTORNEY ITEM NO-r- ROSEMEAD REDEVESMENT AGENCY 0 PRE-ISSUE CHECK REGISTER 11112/08 DATE ~,VEND:OR NAME AMOUNT CK; 10129108 PUBLIC EMPLOYEES RETIREMENT SYS. 6,713.93 9955 10/29/08 PUBLIC EMPLOYEES RETIREMENT SYS. 6,713.93 9956 10/30/08 L.A COUNTY LIBRARY 14,125.31 9957 10/30/08 LA COUNTY FIRE 34,869.50 9958 10/30/08 L.A. COUNTY FLOOS CONTROL 8,661.41 9959 10/30/08 L.A COUNTY SANITATION DISTRICT 8,935.17 9960 10/30/08 UPPER SAN GABRIEL VALLEY MWD 2,682.78 9961 10/30/08 L.A COUNTY SCHOOLS 2,045.07 9962 10/30108 GARVEY SCHOOL DISTRICT 19,759.42 9963 10/30/08 ROSEMEAD SCOOL DISTRICT 18,193.66 9964 10/30/08 ALHAMBRA SCHOOL DISTRICT 39,489.14 9965 10/30/08 EL MONTE UNION HS DISTRICT 30,010.46 9966 10/30/08 MONTEBELLO UNIFIED SCHOOL DISTRICT 2,857.88 9967 10130/08 PASADENA CITY COLLEGE 6,991.05 9968 10/30108 L.A CITY COMMUNITY COLLEGE DISTRICT 8,858.71 9969 10/30/08 JAN SAAVEDRA VOID 9970 10/30/08 SOUTHERN CALIFORNIA EDISON 201.18 9971 10/30/08 CALIFORNIA AMERICAN WATER 32:19 9972 11/06/08 SOUTHERN CALIFORNIA GAS 9.53 9973 11/06/08 PRINCIPAL LIFE 613.57 9974 11/10/08 UNION BANK OF CALIFORNIA 375.96 9975 11/10/08 PUBLIC EMPLOYEES RETIREMENT SYS. 6,713.93 9976 Page 1 Total: $218,853.78 op SEMcAD COMMUNITY DEVELOPIfT COMi...SSION 11/12/08 15:58 I RM704URI REGISTER 06-35 11/12/08 PAGE: 1 USR: cpi VOU. DESCRIPTON ACCOUNT CHARGED • AMOUNT AMOUNT AT,HAMBRA HIGH SCHOOL DIST 16078 07-08 RCDC PASS THROUGH 33-4210-03051-FUND33 39489.14 PRE PAID 9965 39489.14 CAL-AM WATER COMPANY C/O 16086 UTILITY SERVICE 45-4215-06125-P44745 32.19'• PRE PAID 9972 32.19 EL MONTE UNION H.S.D. 16079 07-08 RCDC PASS THROUGH 33-4210-03051-FUND33 2296.77 16079 07-08 RCDC PASS THROUGH 37-4210-03051-FUND37 27711.69 PRE PAID 9966 30010.46 GARVEY SCHOOL DISTRICT 16016 07-08 RCDC PASS THROUGH 33-4210-03051-FUND33 19759.42 PRE PAID 9963 19759.42 HINDERLITER DE LLAMAS 16068 PROP TAX ANALYSIS/04-08 45-4210-06410-FUND45 3500.00 CHECK NO. 11052 3500.00 LA CITY COMM COLLEGE DIST 16082 07-08 RCDC PASS THROUGH 33-4210-03051-FUND33 8858.71 PRE PAID 9969 8858.71 LA CNTY FIRE-FORESTRY 16071 07-08 RCDC PASS THROUGH 37-4210-03051-FUND37 32674.89 16071 07-08 RCDC PASS THROUGH 33-4210-03051-FUND33 2194.61 PRE PAID 9958 34869.50 LA COUNTY FLOOD CONTROL 16072 07-08 RCDC PASS THROUGH 37-4210-03051-FUND37 3201.06 16.072 07-08 RCDC PASS THROUGH 33-4210-03051-FUND33 5460.35 PRE PAID 9959 8661.41 LA COUNTY LIBRARY 16070 07-08 RCDC PASS THROUGH 33-4210-03051-FUND33 8903.06 16070 07-08 RCDC PASS THROUGH 37-4210-03051-FUND37 5222.25 PRE PAID 9957 14125.31 LA COUNTY SANITATION 16073 07-08 RCDC PASS THROUGH 33-4210-03051-FUND33 5632.96 16073 07-08 RCDC PASS THROUGH 37-4210-03051-FUND37 3302.21 PRE PAID 9960 8935.17 MANAGEMENT PARTNERS, INC. 16069 PROF SVC/BUS LIC ANALYSIS 45-4210-04415-FUND45 1541.50 r w EMEAD COMMUNITY DEVELOPRW COMIeiSSION 11/12/08 15:58 PAGE; 2 RM704UR1 W REGISTER # 08-35 11/12/08 USER- cpi VOU. DESCRIPTON ACCOUNT CHARGED AMOUNT AMOUNT MANAGEMENT PARTNERS, INC. MONTEBELLO U.S.D. 16080 07-08 RCDC PASS THROUGH OFFICE OF SUPERINTENDENT 16075 07-08 RCDC PASS THROUGH 16075 07-08 RCDC PASS THROUGH PASADENA COMMUNITY CCOLLEGE 16081 07-08 RCDC PASS THROUGH 16081 07-08 RCDC PASS THROUGH PRINCIPAL FINANCIAL GROUP 16088 LIFE,L-T,S-T ,AD&D/NOV 08 16088 LIFE,L-T,S-T,AD&D/NOV 08 PUBLIC EMPLOYEES' RETIREMENT SYS' 16083 RETIRE ANNTY/10-19-2008 16083 RETIRE ANNTY/10-19-2008 16084 RETIRE ANNTY/10-05-2008 16084 RETIRE ANNTY/10-05-2008 16090 RETIRE ANNTY/11-02-2008 16090 RETIRE ANNTY/11-02-2008 ROSEMEAD SCHOOL DISTRICT 16077 07-08 RCDC PASS THROUGH 16077 07-08 RCDC PASS THROUGH SO CAL GAS CO 16087 UTILITY SERVICE SO. CALIF. EDISON CO 16085 UTILITY SERVICE CHECK NO. 11053 33-4210-03051-•FUND33 PRE PAID 9967 33-4210-03051-FUND33 37-4210-03051-FUND37 PRE PAID 9962 37-4210-03051-FUND37 33-4210-03051-FUND33 PRE PAID 9968 45-4210-04110-FUND45 35-4210-04110-FUND35 PRE PAID 9974 35-4210-04120-FUND35 45-4210-04120-FUND45 PRE PAID 9955 45-4210-04120-FOND45 35-4210-04120-FUND35 PRE PAID 9956 35-4210-04122--7 D35 45-4210-04120-FUND45 PRE PAID 9976 33-4210-03051-FUND33 37-4210-03051-FUND37 PRE PAID 9964 45-4215-06115-P44745 PRE PAID 9973 45-4215-06120-P44745 PRE PAID 9971 1541.50 2857.88 2857.88 1289.00 756.07 2045.07 6454.98 536.07 6991.05 396.84 216.73 613.57 2620.04 4093.89 6713.93 4093.89 2620.04 6713.93 2620.04 4093.89 671?. 93 1395.08 16798.58 18193.66 9.53 9.53 201.18 201.18 dpSEh,cA►D COMMUNITY DEVELOPAfT COM~..SSION 11/12/08 15:58 PAGE: 3 RM704URI WARI LANT REGISTER # 08-35 11/12/08 US cpi EHE VOU. -DESCRIPTON ACCOUNT CHARGED AMOUNT AMOUNT UNION BANK OF CALIFORNIA 16089 RETIRE ANNTY/11-02-2008 35-4210-04120-FUND35 146.71 16089 RETIRE ANNTY/11-02-2008 45-4210-04120-FUND45 229.25 PRE PAID 9975 375.96 UPPER S.G.V. MUNCI PAL WATER DIST 16074 07-09 RCDC PASS THROUGH 33-4210-03051-FUND33 1668.05 16074 07-08 RCDC PASS THROUGH 37-4210-03051-FUND37 1014.73 PRE PAID 9961 2682.78 UMM TOTAL 223,895.28 i I 11/12/08 15:58 RM704UR2 RECAP BY FUND RCDC PROJ AREA 1-DEBT SVC RRA 20% LOW-MOD HOUSING RCDC PRJ AREA 2 DEBT SVC RRA 1993A CAPITAL PROJECT WARRANT SUMMARY BY QD PRE-PAID 33 35 37 45 TOTAL RCDC - WIRE TRANSFER - ROSEMEAD INN -45 TOTAL 100,343.10 8,223.56 97,136.46 13,150.66 •218,853.78 ioo;oo9.00 318,853:78 GRAND TOTAL PAGE: 4 11/12/08 USER: cpi WRITTEN 5,041.50 5,041.50 223,895.28 323,895.28 ATTACHMENT F ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION STAFF REPORT TO: THE HONORABLE CHAIRMAN AND COMMISSIONERS FROM: JEFF STEWART, INTERIM EXECUTIVE DIRECTOR . DATE: APRIL 28, 2009 SUBJECT: APPROVAL OF A PROPOSED OPERATING BUDGET FOR THE GLENDON HOTEL SUMMARY On July 2, 2008, the Rosemead Community Development Commission acquired the Rosemead Inn located at 8832 Glendon Way. As the Commission may recall, the purchase of this site is part of an overall larger redevelopment project (the Glendon Way Project). Immediately following the purchase of the property, staff solicited proposals from reputable company's specializing in hotel operations and received responses from Grand Inn, Inc. and Rosemead Inn Hotel Partners, LLC. On August 28, 2008 the Commission approved a contract with the Rosemead Inn Hotel Partners, LLC, as the operator for the hotel. Since then, the hotel has been completely renovated and began operating in late January 2009. The operating agreement with the Rosemead Inn Hotel Partners requires that a proposed operating budget be submitted to the Commission for consideration within 60 days from the execution of the agreement. This document was submitted to the City in late March 2009. Since then, staff has been reviewing the document and is comfortable with the monthly expenses proposed by the Operator. The operating budget and revenue estimates are attached for the Commission's review (Attachment A). In addition to this documentation, the Operator is also required to submit monthly financial statements recapping all revenue activity for the previous month. Financial statements for February and March 2009 are also attached to this report for the Commission's use (Attachment B). The operator has informed the City that they have recently finalized their room reservation software and will be able to provide the monthly reports in greater detail in the coming months. Based upon the information given to the City for February and March 2009, the hotel is operating at approximately a 20% occupancy rate. However, the Operator is optimistic that occupancy will improve as they continue to aggressively market the hotel. ITEM NO, r~ APPROVED FOR CRY COIMCII AGENDA: - Community Development Commission Apn128, 2009 Page 2 of 2 Staff Recommendation Staff recommends that the Community Development Commission approve the proposed operating budget submitted by the Rosemead Inn Hotel Partners, LLC. PUBLIC NOTICE PROCESS This item has been noticed through the regular agenda notification process. Subm' ed by: Br Saeki Assistant City Manager Attachment A - Proposed Operating Budget Attachment B - Monthly Financial Statements The Glendon Hotel PROPOSED EXPENSE BUDGET Operations Utilites Phone Electricity Gas Water Cable Internet Scent Air Employees 2 Housekeeping 2 Desk/Engineer 1 Manager 1 Night Manager 1 Marketing Mgr. Supplies _ Office Cleaning Food/Beverage Landscaping Pool Liability Insurance Misc. I Elevator Service Trash Linen Contract Website Placement on Travel Web Sites Marketing 1 Entertainment Misc. Maintance Other Misc. Expenses Property Tax City Bed Tax Cltv Minimum Due Monthly Yearly $ 280.00 $ 3,360.00 $ 2,100.00 $ 25,200.00 $ 550.00 $ 6,600.00 $ 550.00 $ 6,600.00 $ 290.00 $ 3,480.00 $ 190.00 $ 2,280.00 $ 100.00 $ 1,200.00 $ 3,840.00 $ 46,080.00 $ 3,200.00 $ 38,400.00 $ 5,440.00 $ 65,280.00 $ 2,100.00 $ 25,200.00 $ 2,100.00 $ 25,200.00 $ 150.00 $ 1,800.00 $ 175.00 $ 2,100.00 $ 600.00 $ 7,200.00 $ 350.00 $ 4,200.00 $ 150.00 $ 1,800.00 $ 500.00 $ 6,000.00 $ 200.00 $ 2,400.00 $ 300.00 $ 3,600.00 $ 500.00 $ 6,000.00 $ 150.00 $ 1,800.00 $ 1,500.00 $ 18,000.00 $ 200.00 $ 2,400.00 $ 1,000.00 $ 12,000.00 TBD TBD $ 6,000.00 ATTACHMENT A oe °0 Oo °o, °op 12 °o °o °o °o 0000 o o ' g C30 o °o pp e g $ $ c; cs 6 LL f O O M A O Cl S U. O S I d C LL r O A f D O co P 40 N rA LL Ep E OhPfN •-r~ OPf . i R mC4cr) a ~NNN r- n CO 1AOANN cNi 'N MMN O N o t4i0P (q N N N N N N N N N N N N F c t 88O N O m E a O OOON O a C E a m O O 0 N 0 y C a E f D O So O G a o c q U p 0 bS 0 U 8$$ co co $ co O S 8 S ttt DDD U C V U P, ~r- NMN pmppp 2 6 7, O cn 04 N ~I7 fOm n C O 'f co {~to tAp c 'O r ro O NN m (V M 'C N N N Y N Z~ no NN N N N H f0 N ~ o N N N N ~ g~s~ s m , aooo o ~ m sgss s m o00 _ :3 LL OO N - N o p b LL OOO~Oq O W Cl PI W) A O LL C-4wcO00O7 m m WI) O aaN Om LL 1C7 O n CO N Nrr cc 0 W) 00 W P P NNN tp to a Ne+l~ N N N N w w N N N N N N w w O C = HHH ' p g y C -C p p o $ OO V 00 0 O C b S S N S % V C v 000 41 O O O C E w L a Y 7 o ~Ho 10 r m o a O i E Q 0 v7O~ A N 7 0 n A a 3 U n8S q 01 QI m n CO E ~ nOOOO U d? f? f? C Y m I NN 1' » NP Pf N Of N C l1 Z. A_ _m n C O NN N r ~ ~ N N NNN N ~ NNN O N C O n 0 O A C O O oo o0 m : o °o o o°°, °o 0 0 00 00. 00 $ OO, 0 0 j LL fp 1 OA~N n n n N N 07 o LL O OO n MPIy n t O CO O N n N m U. P tD mN Wt0 O P m m N n n n m N ll Vn Q! V NNN IZ N wNN N NNN N N N O M T LIP E a ; a MopN w O D. Cy 7 Nci ul) O CL 9 p p OOO M $O ~ EE n p p ; OSO N V C N N N N U YPi M r U N M M p O c V U M N N T 8 SSS o~ Qa t, r W ~ ~ ,L U, l0 21. r =a O SSSo Ir 000 aoog cr O 1 i m O 000 C LL ~OO~O.Omm N N N N u mAmw w w w N k c 6 6 °mA°mrn N N N N goo LL Am N co w w E v c 8 e I 8 g °o m 000 0 0 o 000 o o o u A °o o° °o 0 V 0 ' ; U S 0 U o00 Ln In in poo H g' C C C 1 N N N U N w it g m E P40 h M m E 0 Am m~ -r.- ri n - M p g Amm~ rte.- f9 n ik a Amm o f 0 W V IL T U U- T V U. U U- a R w Aaoo W a u 0 Amm m a s o nm m rev -0 a m is w 7A: v m v 0 ac$ ° :3~ ° 'u c g to 0 f.~1 0 V Q Q U e L g C $ d1 e c E m Ilt n o g E h e o 0 0 a 0 3 ` o r C N , a NM 4M 0 f ['7 V I F NC7 M ~ ~ f. Brian Saeki From: Ahmed M. Seirafi (ams@cross-meddian.com] Sent: Thursday, April 23, 2009 2:40 PM To: Brian Saeki Subject: Snapshot - Glendon Hotel Attachments: Monthly Snapshot.xls Hi Brian, attached are the numbers from the last two months...... we just got the room reservation software running correctly so the numbers are the best of my calculations. Please let me know of you have any questions. AS AHMED M. SEIRAFI Cross Meridian Goup of Companies 16388 E. Colima Rd., Suite 206 Hacienda Heights, CA 91745 626.336.0100 t 626.336.0030 f ams(cDcross-meridian. com a 4'. ATTACHMENT B The Glendon Hotel Feb-09 Total Gross Sates $ 8,032.00 Expenses $ 20,170.25 Occupancy 13% Mar-09 Total Gross Sales $13,565.00 Expenses $19,297.00 Occupancy 20.80°x6 Average room rates are around $40 a night due to the fact that most of our business has been only tour groups since we just opened up and are still marketing to a larger market. Minutes of the REGULAR COMMUNITY DEVELOPMENT COMMISSION MEETING April 28, 2009 The regular meeting of the Rosemead Community Development Commission was called to order by Chairwoman Clark at 6:00 p.m. in the Rosemead City Hall Chamber located at 8838 East Valley Boulevard, Rosemead, California. FLAG SALUTE: Commissioner Armenta INVOCATION: Commissioner Low ROLL CALL OF OFFICERS PRESENT: Chairman Margaret Clark, Vice-Chairman Gary Taylor, Commissioner Sandra Armenta, Commissioner Polly Low and Commissioner Steven Ly. OFFICIALS PRESENT: Interim Executive Director Stewart, Agency Attorney Murphy, Assistant City Manager Saeki, Assistant City Manager Hawkesworth, Director of Finance Brisco, Economic Development Administrator Ramirez, and Commission Secretary Molleda. 1. PUBLIC COMMENTS FROM THE AUDIENCE None 2. CONSENT CALENDAR A. Minutes April 14, 2009 - Regular Meeting B. Resolution No. 2009-11 Claims and Demands Recommendation: Adopt Resolution No. 2009-11 for payment of Commission expenditures in the amount of $673,132.03 demands Nos. 10037 through 10038 and 11096 through 11102. Commissioner Low made a motion, seconded by Commissioner Ly to approve Consent Calendar items A and B. Vote resulted in: Yes: Armenta, Clark, Low, Ly, Taylor No: None Abstain: None Absent: None Rosemead Community Development Commission Meeting Minutes of April 48, 2009 ITEM NO Page 1 of 6 C. Authorized Signers on Bank Accounts The Rosemead Community Development Commission (RCDC) requires several different bank accounts to efficiently operate its financial matters. Authorized signers on the RCDC's bank accounts include all RCDC Commissioners, the Executive Director, Assistant City Managers and the City Clerk. When new people replace incumbents, bank signature cards must be completed. Recommendation: That the Community Development Commission authorize the Chairwoman, Vice-Chairman, Commission Members, Executive Director, Assistant City Managers and City Clerk as signers on the various RCDC bank accounts. Juan Nunez - asked in regards to the signers, if there could be a flair in spending more than what they have too. Chairwoman Clark - explained that any expenditure above a certain amount must be approved by the Commission. Commissioner Armenta made a motion, seconded by Commissioner Ly, to approve signers on the various RCDC bank accounts. Vote resulted in: Yes: Armenta, Clark, Low, Ly, Taylor No: None Abstain: None Absent: None 3. MATTERS FROM THE EXECUTIVE DIRECTOR & STAFF A. Rosemead Community Development Commission (RCDC) Note Payable to the Low & Moderate Income Housing Fund On October 1, 2008, the Governor signed budget trailer bill AB 1389 that includes a $350 million Education Revenue Augmentation Fund (ERAF) shift from redevelopment agencies to the State. The payments to the State are due by May 10, 2009 and Rosemead's Share of the Shift is $297,178. As with past ERAF contributions, an agency can borrow up to 50% of the contribution from tis current year deposit into the Low and Moderate Income Housing Fund (LMIHF) and repay the fund over 10 years. Staff is requesting Commission approval to borrow $148,000 (50% of the total ERAF contribution) from the LMIHF. Recommendation: That the Community Development Commission: Approve Resolution No. CDC 2009-12 authorizing a loan from the LMIHF secured by a Promissory Note with terms. 2. Direct the Commission Chairwoman to execute the Promissory Note. Rosemead Community Development Commission Meeting Minutes of April 48, 2009 Page 2 of 6 Juan Nurlez - stated that the governor is asking for money from cities, does that mean we will get an I.O.U. from the State? Chairwoman Clark - clarified that they are not paying the agency back, the agency is paying back the low/moderate income housing fund with out interest; cities have no control over what the state takes, unfortunately Proposition 1A passed and the State can only borrow twice in ten years from cities and pay it back with interest. The redevelopment funds did not get included in that proposition. The promissory note is from the city's own agency. interim Executive Director Stewart - stated that this allowed the agency to borrow money from the low moderate housing fund to pay back the State. Vice-Chairman Taylor- asked about the language in the promissory note. He stated that some of the language sounded unclear when referring to the borrowed amount of $148,589 dollars with out interest; however, the following paragraph stated that the accrued interest should be payable in annual installments of zero dollars beginning on May 9, 2010 and ending on May 9, 2019. Mr. Taylor asked staff to explain. Assistant City Manager Hawkesworth - stated the language of that paragraph may be stricken out. Vice-Chairman Taylor - stated it was confusing and asked that paragraphs 2 and 4 be stricken out. Chairwoman Clark - agreed with Mr. Taylor and asked why the promissory note stated zero if there was no interest being paid. Vice-Chairman Taylor - also inquired about the claims and demands, item 6, a payment to the Rosemead Housing Development Corp. Low and Moderate of 2006 to 2007 and 2007 to 2008 is a $500,000 payment, and asked staff what it was covering? Assistant City Manager Hawkesworth - explained the Housing Development Corporation has an operating agreement of the two senior complexes with the Community Development Commission; the commission contributes $250,000 annually to the housing and it was discovered that those transfers had not been made for the past two years and staff went back and made the transfers. Agency Attorney Murphy- recommended that paragraphs 2 and 4 be stricken from the promissory note but asked that a due date be included; paragraph 3 should state the due date of May 9, 2019. Commissioner Armenta made a motion, seconded by Commissioner Low, to approve Resolution No. CDC 2009-12 with the discussed corrections. Vote resulted in: Yes: Armenta, Clark, Low, Ly, Taylor No: None Abstain: None Absent: None Rosemead Community Development Commission Meeting Minutes of April 48, 2009 Page 3 of 6 B. Approval of a Proposed Operating Budget for the Glendon Hotel On July 2, 2008, the Rosemead Community Development Commission acquired the Rosemead Inn located at 8832 Glendon Way. As the Commission may recall, the purchase of this site is part of an overall larger redevelopment project (the Glendon Way Project). Immediately following the purchase of the property, staff solicited proposals from reputable company's specializing in hotel operations and received responses from Grand Inn, Inc. and Rosemead Inn Hotel Partners, LLC. On August 28, 2008 the Commission approved a contract with the Rosemead Inn Hotel Partners, LLC, as the operator for the hotel. Since then, the hotel has been completely renovated and began operating in late January 2009. The operating agreement with the Rosemead Inn Hotel Partners requires that a proposed operating budget be submitted to the Commission for consideration within 60 days from the execution of the agreement. This document was submitted to the City in late March 2009. Since then, staff has been reviewing the document and is comfortable with the monthly expenses proposed by the Operator. The operating budget and revenue estimates are attached for the Commission's review. In addition to this documentation, the Operator is also required to submit monthly financial statements recapping all revenue activity for the previous month. Financial statements for February and March 2009 are also attached to this report for the Commission's use. The operator has informed the City that they have recently finalized their room reservation software and will be able to provide the monthly reports in greater detail in the coming months. Based upon the information given to the City for February and March 2009, the hotel is operating at approximately a 20% occupancy rate. However, the Operator is optimistic that occupancy will improve as they continue to aggressively market the hotel. Recommendation: That the Community Development Commission approve the proposed operating budget submitted by the Rosemead Inn Hotel Partners, LLC. Juan Nunez - expressed concern regarding the Rosemead Inn Hotel and stated it was only operating on a 20 percent occupancy rate and felt the city is loosing 80 percent of money, asked how the city would make up the money. Vice-Chairman Taylor - explained the city was not loosing 80 percent of the money being made; it receives a $6,000 monthly payment from the hotel. Added that the hotel operator was the one loosing money not the city. Interim Executive Director Stewart- explained that the city is guaranteed a minimum payment of $6,000 under the terms of the agreement. Vice-Chairman Taylor- asked if the city was obligated to pay any portion of the operating cost. Assistant City Manager Saeki - stated no, if the operator would have made more profit, it would have been shared with the Commission. Rosemead Community Development Commission Meeting Minutes of April 48, 2009 Page 4of6 Vice-Chairman Taylor- stated that the transit and occupancy tax were not going to be paid by the operator of the hotel. Asked how property taxes were going to be paid. Interim Executive Director Stewart - stated that the property owner will be paying the property taxes. Economic Development Administrator Ramirez - stated the County is reviewing the documents because the City had to report that the hotel in now being operated by an operator. Vice-Chairman Taylor - asked if the occupier of the property be obligated to pay the property taxes. Interim Executive Director Stewart - explained that the agreement states that the operator will pay for the taxes; the assessor will indicated that the operator will have to pay because he is the operator. Vice-Chairman Taylor - expressed concern that there will be approximately $50,000 or $4,000 a month someone is going to need to come up with. Mr. Nunez asked if the city owned the hotel property. Vice-Chairman Taylor - stated that as far as the agency, the city as a public agency, we do own it. Property tax can be levied. Mr. Nunez asked who will be blamed for the taxes. Interim Executive Director Stewart - reiterated that contractually the operator is responsible for the taxes; the agency will not be left responsible to pay the taxes. The assessor will assets the property tax to the operator, they will not assets it back to the agency. Mr. Nunez asked if the operator cannot pay, can he terminate the contract and if the contract is terminated there would not be any taxes. Interim Executive Director Stewart - stated that the hotel has only been open a few months and it was too early to tell. IV. Assistant City Manager Saeki - stated that there is language in the contract where it allows both parties to terminate the contract. Mr. Saeki reiterated that contractually the operator would pay for the levied taxes and clarified that property tax and bed tax are two different taxes. Commissioner Armenta - inquired if there was any relation between the previous owner and the operator do to the similarity of the name of the hotel, Rosemead Inn. Assistant City Manager Saeki - stated there was no relation between the previous owner of the hotel and the new operator. Rosemead Community Development Commission Meeting Minutes of April 48, 2009 Page 5 of 6 Commissioner Ly made a motion, seconded by Commissioner Low, to approve the Proposed Operating Budget for the Glendon Hotel. Vote resulted in: Yes: Armenta, Clark, Low, Ly No: None Abstain: Taylor Absent: None Chairwoman Clark - clarified she had voted against the purchase of the hotel, but is voting yes on the operating budget because the hotel needs to operate. Vice-Chairman Taylor- abstain because there might be a $5,000 dollar a month expense coming up, plus the $6,000 dollars that the operator pays totaling $11,000; stated he hopes that the Hotel succeeds. 4. MATTERS FROM THE CHAIRMAN & COMMISSIONERS None 5. ADJOURNMENT The meeting adjourned at 6:30 p.m. The next Community Development Commission meeting will take place on May 12, 2009 at 6:00 p.m. Margaret Clark ATTEST: Chair Gloria Molleda Commission Secretary Rosemead Community Development Commission Meeting Minutes of April 48. 2009 Page 6 of 6