CDC - Item 4B - Exclusive Negotiation Agreement (ENA) for the sale of the Glendon Way HotelROSEMEAD COMMUNITY
DEVELOPMENT COMMISSION
STAFF REPORT
TO: THE HONORABLE CHAIRMAN AND COMMISSION MEMBERS
FROM: JEFF ALLRED, EXECUTIVE DIRECTOR
DATE: MAY 25, 2010
SUBJECT: EXCLUSIVE NEGOTIATION AGREEMENT (ENA) FOR THE SALE OF
THE GLENDON HOTEL
SUMMARY
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.
Immediately following the purchase of the property, proposals were solicited from
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.
The purchase of the Glendon Hotel was originally part of an overall larger
redevelopment project (the Glendon Way Project). However, the Commission is no
longer working on a conceptual development plan for the Glendon Way Project and the
property is no longer needed for the purposes for which it was acquired. At its March 9,
2010 meeting, the Commission authorized staff to advertise and solicit bids from
qualified entities for the purchase of the Glendon Hotel property through a Request for
Proposal (RFP) process. There were a total of seven (7) proposals submitted with a
variety of offers ranging from purchasing the site to leasing/managing the current
operation. Each proposal includes continuation of a hotel use.
Staff Recommendation
It is recommended that the Community Development Commission approve an Exclusive
Negotiating Agreement (ENA) with Qiao Garden Group Real Estate Company, Ltd. for
the development of a Purchase and Sale Agreement (see Attachment A).
ANALYSIS
The Glendon Hotel site is an operational 53-room motel (22,507 sq. ft.) on a property
consisting of approximately 39,030 square feet. Since acquiring the property, the hotel
has operated at a loss. The Commission has not received any monthly lease payments
and the City has only received $16,867.67 in Transient Occupancy Tax (TOT).
ITEM NO. L-I g
APPROVED FOR CITY COUNCIL AGENDA:
Community Development Commission
May 25, 2010
Page 2 of 2
The original proposed development for which the Commission acquired the property is
no longer viable and the property is now considered surplus. R. P. Laurain &
Associates conducted an appraisal of the property and determined its current value to
be $2.5 million (see Attachment B).
The Commission recently authorized staff to advertise and solicit bids from qualified
entities for the purchase of the Glendon Hotel property through a Request for Proposal
(RFP) process. There were a total of seven (7) proposals submitted with a variety of
offers from purchasing the site to leasing/managing the current operation. After careful
review and evaluation of each proposal, it is being recommended that the Commission
select Qiao Garden Group Real Estate Company proposal for purchase of the site at
$4.4 million (see Attachment C). The terms of the sale would include a $2.5 million
down payment and execution of promissory note in the amount of $1,900,000 to be paid
evenly over six years at 0% interest. In addition, the Qiao Garden Group Real Estate
Company has indicated its intent to invest approximately $1.98 million in hotel
renovations and upgrades to turn the current hotel into an upscale facility.
FISCAL ANALYSIS
The sale of the property would generate onetime revenues of $4.4 million for the
Commission. In addition, future property tax increment revenues will accrue to the
Commission and TOT revenues will be realized by the City.
PUBLIC NOTICE PROCESS
This item has been noticed according to the California Health and Safety Code Section
33490.
Prepared by:
Michelle G. Ramirez
Economic Development Administrator
Submitted by:
Stan Wong
Community Development Director
Attachment A: Exclusive Negotiation Agreement
Attachment B: Appraisal
Attachment C: Qiao Garden Group Real Estate Company, Ltd. Proposal
EXCLUSIVE NEGOTIATION AGREEMENT
This EXCLUSIVE NEGOTIATION AGREEMENT ("Agreement") is made as of this
25`h day of May 2010, by and between the COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF ROSEMEAD, a public body, corporate and politic (the "Commission"), and
QIAO GARDEN GROUP REAL ESTATE COMPANY, LTD (the "Purchaser"), on the terms,
and subject to the conditions, set forth below. The Commission and the Purchaser are sometimes
referred to herein collectively as the "Parties," and either individually as a "Party."
RECITALS
A. The Commission desires to retain an experienced and qualified Purchaser who has
the potential and financial capacity to purchase the Glendon Hotel located at 8832 Glendon Way,
Rosemead, California 90703 (see Exhibit A) for the existing land use of a hotel.
B. This Site lies within Redevelopment Project Area No. 2 ("Project Area"), and is
subject to the Project Area's governing redevelopment plans. The Site is composed of one (1)
parcel aggregating approximately 39,030 square feet (see Exhibit B).
C. Purchaser desires to determine the feasibility and terms by which it could acquire
the Site and develop a hotel (the "Project") and to negotiate with the Commission the potential
terms of a Purchase and Sales Agreement (the "PSA").
D. The Parties desire to enter into this Agreement to exclusively negotiate mutually
acceptable terms and conditions for purchasing, developing and operating the Project upon the
Site in the manner proposed by the Purchaser and specifically, to determine if mutually
acceptable terms and conditions can be agreed upon for the PSA, which would specify the rights,
obligations and method of participation of the Parties with respect to development.
ENA - Jacobsen Family Holdings, LLC 1 03/10/2009
AGREEMENT
Exclusive Good Faith Negotiations.
The Parties agree that, during the Negotiation Period (as defined in Section 3 below), and
so long as the Purchaser timely meets its obligations under this Agreement, they shall negotiate
exclusively and in good faith regarding the proposed purchase, development and operation of the
Project upon the Site, and the terms of the PSA. Good faith negotiations shall include, without
limitation, attending scheduled meetings, directing consultants to cooperate with the other Party
to the extent reasonably practicable and necessary to negotiations, providing information
reasonably available and necessary to negotiations, and promptly reviewing and returning any
comments on correspondence, reports, documents, or agreements received from the other Party.
2. Development Concept/Scope.
The negotiations hereunder are based on a development concept that will include the
components described in Recital C. above.
3. Negotiation Period.
a. Initial Negotiation Period. The term of this Agreement shall be for a period of
ninety (90) calendar days from the date the Agreement is approved by the Commission, subject
to extension or termination as provided below (the "Negotiation Period").
b. Extension of Negotiation Period. If Purchaser has made substantial progress
toward development of the project, as reasonably determined by the Commission in its sole
discretion, the Commission may extend this Agreement for another ninety (90) calendar days
("Extension Period").
C. ENA Schedule of Performance. The ENA Schedule of Performance, attached
hereto as Exhibit C and incorporated into this agreement by reference, may be considered by the
Commission as one means to determine whether the Purchaser is making necessary and
satisfactory progress toward the development project.
4. Negotiation of the PSA.
During the Negotiation Period, the Commission and the Purchaser shall negotiate
diligently and in good faith to prepare and enter into the PSA. Both of the parties shall exercise
best efforts to complete discussions relating to the final terms and conditions of the PSA and
such other matters, as may be mutually acceptable to the parties for the purchase and
development of the Site, prior to the expiration of the Negotiation Period.
It is contemplated that the PSA will include, at a minimum, the following particulars:
a. Property. The Site will consist of approximately 39,030 square feet bordered
by Ivar Avenue on the east, a vacant 23,500 square foot parcel (8828 Glendon Way, Rosemead)
on the west. Glendon Way on the north, and a U-Haul Business (3527 Ivar Avenue, Rosemead)
on the south.
b. Use. The Purchaser shall, at its sole cost and expense, promptly after it has
acquired possession to the Property and received entitlement for the Project, renovate and
ENA - Qiao Garden Group Real Estate Co. Ltd 2 05125/2010
rehabilitate the existing hotel. The development shall utilize a high quality of architectural
design and materials.
C. Schedule of Performance. The PSA shall include a Schedule of Performance
which among other milestone dates, will require the completion of construction of the project no
later than twelve (12) months, from the date that all necessary project entitlements are granted by
the City of Rosemead ("City"), subject to delays due to force majeure.
d. Approvals. The PSA shall provide that the Purchaser will obtain from the City
any specific plan and/or zone changes that may be necessary for the Project while the
Commission will work with the City to obtain any necessary General Plan changes.
e. Indemnification. The PSA will include provisions for the defense and
indemnification of the Commission and City by Purchaser for claims arising out of any
agreements it enters into with the Purchaser including any claims relating to the payment of
prevailing wages for the Project. Purchaser will not be required to indemnify the Commission or
City for the Commission's negligent or intentional acts or omissions.
f. No Third Party Beneficiaries. The PSA is drafted for the sole benefit of the Parties
and their successors in interest. No other person shall have any right of action based upon any
provision of the PSA.
g. Governing Law. The laws of the State of California shall govern
interpretation and enforcement of the PSA. Any action, suit or proceeding related to, or arising
from the PSA shall be filed in the appropriate court having jurisdiction in the County of Los
Angeles.
5. Deposit. No later than ten days following Commission approval of this Agreement, and
prior to execution of this Agreement by Commission, Purchaser shall deposit with Commission
the amount of $100,000 (the "Deposit").
a. Use of Deposit. The Commission shall be under no duty to place the Deposit in
an interest bearing account. However, if the Deposit is placed in an interest bearing account,
interest earned thereon shall be added to the Deposit for the account of the Purchaser.
b. Disposition of Deposit If Parties Enter Into a PSA. If the parties enter into a PSA
prior to the end of the Negotiation Period, then the Commission shall apply the Deposit towards
Purchaser's monetary obligations under the PSA.
C. Disposition of Deposit If Parties Do Not Enter Into a PSA. If the parties do not
enter into a PSA because the Purchaser determine not to go forward with acquisition and
development of the Site then the Deposit will be forfeited to the Commission and no portion of
the Deposit will be refunded to Purchaser. If the parties do not enter into a PSA because the
Commission determines not to go forward with acquisition and development of the Site then the
Commission shall refund the entire portion of the Deposit to Purchaser.
6. Commission Responsibilities.
a. The Commission agrees that it will work with the City of Rosemead and the
Purchaser to analyze and amend, as necessary, existing zoning, including the preparation and
processing of a CEQA Compliance Document for the Project, the PSA and the Project
entitlements.
ENA - Qiao Garden Group Real Estate Co. Ltd 3 0525!2010
b. The Commission agrees that the Purchaser may modify the description of the
Project at any time; provided however, that substantial modifications of the Project shall:
i. be subject to the acceptance and approval of the Commission which
approval shall not be unreasonably withheld, conditioned or delayed;
ii. depending on the nature of such a modification, a suitable modification of
the CEQA Compliance Document or other elements of the Project Study as modified, may also
be indicated.
The Commission may request that the Purchaser consider modifications to the description
of the Project from time-to-time. Each such modification shall be subject to the reasonable
approval of the Purchaser.
7. Purchaser Tasks. During the Negotiation Period Purchaser shall undertake such tests,
investigations, surveys inquiries and due diligence as Purchaser shall deem necessary or
appropriate in order to determine if the Site is suitable and appropriate for the construction and
operation of the development contemplated by this Agreement. Purchaser shall pay, at no
expense to Commission, all costs of performing the Purchaser Tasks.
8. Riaht of Access. Commission shall provide Purchaser access to the Site for the
purposes of conducting surveys, collecting soil samples and performing other studies necessary
for determining the suitability of the Site for the development contemplated by this Agreement.
Purchaser shall indemnify, defend and hold the Commission, its employees, officers, agents and
representatives harmless against any claim for damages to person or property arising from any
activity of Purchaser, its employees, officers, agents, representatives, contractors, subcontractors
or consultants on the Site. Commission shall indemnify, defend and hold the Purchaser, its
employees, officers, agents and representatives harmless against any claim for damages to person
or property arising from any activity of Commission, its employees, officers, agents,
representatives, contractors, subcontractors or consultants on the Site.
9. Access to Reports and Studies.
a. Commission shall provide Purchaser with all documents and information in
Commission's possession, if any, regarding the environmental and soils conditions of the Site
and the availability and capacity of utility services to the Site.
b. Provided that disclosure will not compromise the exemption, if any, of the
documents from public inspection under the California Public Records Act, Commission shall
provide Purchaser access to all studies, reports and analyses secured in performance of the
Commission Tasks.
C. Provided that disclosure will not compromise the exemption, if any, of the
documents from public inspection under the California Public Records Act, Purchaser shall
provide Commission access to all studies, reports and analyses secured in performance of the
Purchaser Tasks.
d. Except as may be otherwise required by the California Public Records Act, the
Commission agrees that during the Negotiation Period it will not disclose to third parties any
information that Purchaser identifies as a "trade secret" provided, however, that Commission
shall not be liable to Purchaser for any damages arising from an inadvertent, negligent or willful
breach of this confidentiality.
ENA - Qiao Garden Group Real Estate Co. Ltd 4 05125/2010
10. Chanize in Ownership or Control of Purchaser. Purchaser understands Commission
is entering into this ENA based on the prior experience and qualifications of Purchaser.
Therefore, Purchaser shall not assign, sell or otherwise transfer any or all of its rights under this
ENA to any party not owner, in the majority, or controlled by Qiao Garden Group Real Estate
Company, Ltd., without the prior written approval of Commission, at its sole discretion.
11. No Obli!ation by Commission to enter in PSA or other related Agreements. This
Agreement does not constitute a disposition of property or exercise of control over property by
the Commission or City. It is merely an agreement to enter into a period of exclusive
negotiations according to the terms hereof, reserving final discretion by the Commission and
City as to any PSA and all proceeding and decision in connection therewith. By its execution of
this Agreement, Commission is not committing itself to or agreeing: (a) to enter into a PSA with
Purchaser, (b) to acquire land from third parties, (c) to dispose of land to the Purchaser, (d) to
effect any changes to City zoning ordinances or the City General Plan or (e) to undertake any
other acts or activities requiring the subsequent independent exercise of discretion by the
Commission, the City or any agency or department thereof. Purchaser understands and
acknowledges that any PSA resulting from the negotiations hereunder shall become effective
only after and only if such PSA has been considered and approved by the Commission Board and
the City Council of the City at a public hearing called for such purpose.
12. Commission Not Responsible for costs. Except as set forth herein or in the PSA,
Commission shall not be liable for any costs associated with the planning and development of
the Project Site under this ENA.
13. PSA to Supersede this ENA. This ENA will be superseded by the PSA executed by
Purchaser and approved by Commission and city in the manner required by law, and executed by
Commission.
14. Limitation on Liability. Neither Party would have agreed to any part of this ENA if it
were to be liable to the other Party for any amount of monetary damages. Accordingly, both
Parties acknowledge and agree each Party's exclusive right and remedy upon any breach or
default of the other party to negotiate in good faith, as set forth in this ENA, is to terminate this
ENA or seek specific performance of this ENA, as applicable. The prevailing Party in any action
brought pursuant to this subsection A shall also be entitled to an award of actually incurred and
reasonable attorney's fees and costs.
15. Indemnity. Purchaser agrees to and hereby does defend, hold harmless and indemnify
Commission, Citv and each of their elected or appointed officials, officers, agents and employees
(the "Indemnified Parties") from third-party claims for damages arising from Purchaser's acts or
omissions; provided, that the obligation to defend does not apply to actions arising, solely from
the Indemnified Parties' acts or omissions; and provided, further, that the obligation to indemnify
and hold harmless applies only to the extent damages are the result of Purchaser's, or Purchaser's
agents or employees, negligent acts or omissions or willful misconduct.
16. Non-Discrimination. The Purchaser shall not discriminate against nor segregate any
person, or group of persons on account of race, color, creed, religion, sex, marital status,
handicap, national origin, sexual orientation, or ancestry in undertaking its obligations under this
Agreement.
ENA - Qiao Garden Group Real Estate Co. Ltd 5 05/25/2010
17. Environmental Requirements. Certain state and local environmental requirements
(including, without limitations, the CEQA of 1970, Public Resources Code Section 21000 et
seq.) may be applicable to the Site. Pursuant to such requirements, certain environmental
documents may be required to be prepared for the Site. The Purchaser agrees to cooperate with
the Commission in obtaining information to determine the environmental impact of the Site.
18. Notice. Any notices pursuant to this Agreement shall be in writing and sent (i) by
Federal Express (or other established express delivery service which maintains delivery records),
(ii) by hand delivery, or (iii) by certified or registered mail, postage prepaid, return receipt
requested, to the following addresses:
TO COMMISSION: Rosemead Community Development Commission
Attn: Jeff Allred, Executive Director
8838 E. Valley Boulevard
Rosemead, California 91770
Email: jallredncityofrosemead.org
Telephone: (626) 569-2106
Facsimile: (626) 307-9218
TO PURCHASER: Qiao Garden Group Real Estate Company, Ltd.
Attn: Helen Wang
1406 Palm Avenue, Suite D
San Gabriel, California 91776
Email: hwcommercialrealtor(ayahoo.com
Telephone: (626).289-6660
Facsimile: (626) 289-7612
19. Entire Agreement; Time is of the Essence. This Agreement (including all exhibits
attached hereto) constitutes the entire understanding and agreement of the parties integrates all of
the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations
or previous agreements between the parties of their predecessors in interest with respect to all or
any part of the subject matter hereof. This Agreement may be executed in one or more
counterparts, each of which shall be an original, and all of which together shall constitute a
single instrument. Time is of the essence in this Agreement.
20. Governing Law. This Agreement shall be construed in accordance with the laws of the
State of California.
21. Implementation of Agreement. The Commission shall maintain authority to
implement this Agreement through the Commission's Executive Director (or his duly authorized
representative). Specifically, the Executive Director shall have the authority to issue
interpretations for the administration of the Agreement so long as such actions do not materially
or substantially change the uses or development permitted on the Site, or add to the costs
incurred or to be incurred by the Commission as specified herein. The granting of extension
periods to perform or amendments to this Agreement shall only be permitted if approved by the
Commission.
ENA - Qiao Garden Group Real Estate Co. Ltd 6 05252010
In witness whereof the parties have had their duly authorized officers execute this Agreement
this 25 h day of May 2010.
PLJRCHASER:
QIAO GARDEN GROUP REAL ESTATE CO. LTD
By:
COMMISSION:
ROSEMEAD COMMUNITY
DEVELOPMENT COMMISSION,
a public body corporate and politic
By:
Gary Taylor, Chairman
APPROVED AS TO FORM
Joseph M. Montes
Burke. Williams & Sorensen. L,LP
Commission General Counsel
ATTEST:
By:
Gloria Molleda, Commission Secretary
Lian Yue Song, President and CEO
ENA - Qiao Garden Group Real Estate Co. Ltd 7 05/152010
EXHIBIT A
ARIAL PHOTO OF PROPOSED SITE
ENA - Qiao Garden Group Real Estate Co. Ltd g 05/25/2010
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Copyright O 2006 All Rights Reserved. The information contained herein is the proprietary property of the
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EXHIBIT B
PARCEL MAP
ENA - Qiao Garden Group Real Estate Co. Ltd 9 05/252010
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EXHIBIT C
SCHEDULE OF PERFORMANCE
Within ninety (90) calendar days of execution of the ENA
1. Commission shall provide Purchaser with all documents and information in
Commission's possession, if any, regarding the environmental and soils conditions of the
Site and the availability and capacity of utility services to the Site Purchaser.
2. Purchaser shall provide to the Commission a more detailed description of the Project.
3. Purchaser to provide Commission proof of funds for down payment of property.
4. Purchaser to prepare preliminary profonna.
5. Purchaser to prepare preliminary site plan.
6. Purchaser to Identify Development Team.
ENA - Qiao Garden Group Real Estate Co. Ltd 10 05/252010
ATTACHMENT B
GLENDON HOTEL
8832 GLENDON WAY
ROSEMEAD, CALIFORNIA
R. P. L A U R A I N
& A S S O C I A T E S
INCORPORATED
APPRAISAL REPORT
GLENDON HOTEL
8832 GLENDON WAY
ROSEMEAD, CALIFORNIA
Effective Date
of
Market Value Study
February 25, 2010
Prepared for
CITY OF ROSEMEAD
8838 East Valley Boulevard
Rosemead, California 91770
Prepared by
R. P. LAURAIN & ASSOCIATES, INC.
3353 Linden Avenue, Suite 200
Long Beach, California 90807
Date of Report
March 9, 2010
R . P . L A U R A I N
z A Q Q r% l A T C Q
APPRAISERS - ANALYSTS
R
P.
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R A
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AS
S O CI
INCORPORATED
AT
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S
March 9, 2010
Michelle Ramirez
Economic Development Manager
City of Rosemead
8838 East Valley Boulevard
Rosemead, California 91770
Subject: Glendon Hotel
8832 Glendon Way
Rosemead, California
Dear Ms. Ramirez:
3353 LINDEN AVENUE, SUITE 200
LONG BEACH, CA 90807-4503
TELEPHONE (562) 426-0477
FACSIMILE (562) 968-2927
In accordance with your request and authorization, we have personally
inspected and completed an appraisal study of the above-referenced prop-
erty. The appraisal study included (1) an inspection of the subject property,
(2) a review of market data (hotel sales, rental data, etc.) in the immediate and
general subject market area, and (3) a valuation analysis.
The subject property is located at the southwest corner of Glendon Way and
Ivar Avenue, in the City of Rosemead. The subject property is located in the
C3D (medium commercial, design overlay) zone of the City of Rosemead. The
site has a corner location on two secondary streets, and contains 39,028
square feet of land area. Site prominence and exposure are rated below
average; vehicular and pedestrian access are rated average.
The site is improved with a three-story hotel building, containing 23,544 square
feet, built in 1984, in overall average condition. The building contains a total of
53 guest rooms; 15 of the guest rooms contain a single King-sized bed, 36
contain two Queen-sized beds, one is currently undergoing renovation, and
one was formerly utilized as an office, and is currently being converted to a
guest room. Note that one of the guest rooms is currently occupied by the
hotel operator. Other on-site improvements include a pool, not currently being
utilized, in fair condition, a concrete parking lot containing 61 parking spaces,
concrete walkways, fencing, irrigated grass, shrubbery, and tree landscaping,
etc. Refer to the accompanying report for a complete description of the
subject property.
APPRAISERS ANALYSTS
Michelle Ramirez
Economic Development Manager
City of Rosemead
March 9, 2010
Page 2
It should be noted that the subject hotel property has been appraised inclusive
of the hotel furniture, fixture, and equipment items, as is typical with hotel sale
properties. Refer to the "Fixtures and Equipment" portion of the Subject
Property Description Section for a list of said furniture, fixtures, and equipment.
The purpose of this appraisal report is to express an estimate of the market
value of the unencumbered fee simple interest of the subject property. After
considering the various factors which influence the value of the subject
property, the fair market value, as of February 25, 2010, is:
TWO MILLION FIVE HUNDRED THOUSAND DOLLARS
$2,500,000.
The foregoing value is subject to (1) the assumptions and limiting conditions
set forth in the Preface Section, and (2) the valuation study in the Valuation
Analysis Section. No portion of this appraisal report shall be amended or
deleted.
This report has been prepared in accordance with the Uniform Standards of
Professional Appraisal Practice, per Standard Rule 2-2(b) for a summary
appraisal report. This appraisal report is submitted in triplicate; we have
retained a file copy. If you require any additional information from our file, it
would be appreciated if you would contact the undersigned at your
convenience.
Very truly yours,
R. P. LA & ASSOCIATES, INC.
Id P. aural , ASA, RPA Benjamin V. Balos, Associate Appraiser
Certified General Real Estate Appraiser Certified General Real Estate Appraiser
California Certification No. AG 007689 California Certification No. AG 040853
RPL:BVB:II
R. P. I -A U R .A I N
& A S S O C I A T E S
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TABLE OF CONTENTS
Title Page
Letter of Transmittal
Table of Contents
PREFACE
Location Map
Date of Value
Purpose of the Appraisal
Intent and User of Appraisal
Property Rights Appraised
Appraisers' Certification
Scope of the Appraisal
Assumptions and Limiting Conditions
Terms and Definitions
SUBJECT PROPERTY DESCRIPTION
Apparent Vestee
Property Address
Legal Description
Plat Map
Site Description
Plot Plan Drawing
Building Improvements
Other Improvements
Fixtures and Equipment
Assessment Data
Ownership History
Owner Notification
Neighborhood Environment
VALUATION ANALYSIS
Highest and Best Use Analysis
Valuation Methods
Sales Comparison Approach
Income Capitalization Approach
R . P. LAURA IN
& A S S O C I A T E S
APPRAISERS- ANALYSTS
TABLE OF CONTENTS (Continued)
VALUATION ANALYSIS (Continued)
Reconciliation
Final Estimate of Value
Marketing Exposure
MARKET DATA
Summary of Hotel Sale Properties
Hotel Sale Properties Data and Photographs
Market Data Map
ADDENDA
Additional Photographs
Management Agreement
Qualifications of Appraisers
R . P . L A U R A I N
4. A J J V V l A l L J
APPRAISERS ANALYSTS
DATE OF VALUE
The date of value (effective date) employed in this report, and all opinions and
computations expressed herein, are based on February 25, 2010. Said date
being generally concurrent with the inspection of the subject property, and the
valuation analysis process.
PURPOSE OF THE APPRAISAL
The purpose of this appraisal report is to express an estimate of market value,
in fee simple, for the subject property, absent any liens, leases, or other
encumbrances, as of the date of value set forth above. The definition of
market value is set forth in the following portion of this section following the
heading "Terms and Definitions."
Further, it is the purpose of this appraisal report to describe the subject prop-
erty, and to render an opinion of the highest and best use based on (1) the
character of existing and potential development of the property appraised,
(2) the requirements of local governmental authorities affecting the subject
property, (3) the reasonable demand in the open market for properties similar
to the property appraised, and (4) the location of the subject property con-
sidered with respect to other existing and competitive districts within the
immediate and general subject market area.
Further, it is the purpose of this appraisal report to provide an outline of certain
factual and inferential information which was compiled and analyzed in the
process of completing this appraisal study.
PROPERTY RIGHTS APPRAISED
The property rights appraised herein are those of the unencumbered fee
simple interest. Fee simple is defined as, "An absolute fee; a fee without
limitations to any particular class of heirs, or restrictions, but subject to the
limitations of eminent domain, escheat, police power, and taxation. An inherit-
able estate."
R . P . LAURA IN
& A S S O C I A T E S
APPRAISERS • ANALYSTS
1-1
INTENDED USER OF APPRAISAL
The intended user of this appraisal report will be the City of Rosemead, and
specific representatives thereof.
INTENDED USE OF APPRAISAL
It is understood that this appraisal will be utilized by the City of Rosemead as a
basis of fair market value of the subject property, for budgetary purposes.
R . P . L A U R A I N
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APPRAISERS - ANALYSTS
1-2
CERTIFICATION
The undersigned hereby certify that:
We have personally inspected the subject property; we have no
present or contemplated future interest in the real estate which is the
subject of this appraisal report. Also, we have no personal interest or
bias with respect to the subject matter of this appraisal report, or the
parties involved in this assignment.
Our engagement in this assignment and the amount of compensation
are not contingent upon the reporting or development of pre-
determined values or direction in value that favors the cause of the
client, the amount of the value opinion, the attainment of predetermined
or stipulated results, or the occurrence of a subsequent event directly
related to the intended use of this appraisal. Also, to the best of our
knowledge and belief the statements of fact contained in this appraisal
report, upon which the analyses, opinions, and conclusions expressed
herein are based, are true and correct.
This appraisal report sets forth all of the assumptions and limiting
conditions (imposed by the terms of this assignment or by the under-
signed), affecting our personal, impartial, and unbiased professional
analyses, opinions, and conclusions.
The analyses, opinions, and conclusions, were developed, and this
report has been prepared, in conformity with the Uniform Standards of
Professional Appraisal Practice, under Standard Rule 2-2(b) for a
summary appraisal report. As of this date, we have completed certain
requirements of the Continuing Education Program, as applicable to
the undersigned, of the State of California, Appraisal Institute, and/or
the American Society of Appraisers; note that duly authorized repre-
sentatives of said organizations have the right to review this report. No
one purer than the uridersigngd prepared the analyses, conclusions,
R6nald P. Laurain, ASA,eSRPA
Certified General Real Estate Appraiser
California Certification No. AG 007689
Renewal Date May 26, 201 1
Benjamin V. Balos, Associate Appraiser
Certified General Real Estate Appraiser
California Certification No. AG 040853
Renewal Date August 3, 2010
Date: March 9, 2010
R . P . LAURA IN
APPRAISERS - ANALYSTS
1-3
SCOPE OF THE APPRAISAL
The appraisers, in connection with the following appraisal study, have:
1. Been retained, and have accepted the assignment, to make
an objective analysis and valuation study of the subject prop-
erty and to report, without bias, the estimate of fair market
value. The subject property is described in the Subject
Property Description Section of this report.
2. Toured the general area by automobile to become
acquainted with the extent, condition, and quality of nearby
developments, sales and offerings in the area, density and
type of development, topographical features, economic con-
ditions, trends toward change, etc.
3. Walked around the subject property, and some of the nearby
neighborhood, to become acquainted with the current
particular attributes, or shortcomings, of the subject property.
4. Completed an inspection of the subject property for the
purpose of becoming familiar with certain physical charac-
teristics.
5. Made a visual observation concerning public streets, access,
drainage, and topography of the subject property.
6. Obtained information regarding public utilities and sanitary
sewer available at the subject property.
7. Made, or obtained from other qualified sources, calculations
on the area of land contained within the subject property.
Have obtained a plat drawing indicating the subject property,
and have checked such plat drawing for accuracy and fair
representation.
8. Taken photographs of the subject property, together with
photographs of the immediate environs.
9. Made, or caused to be made, a search of public records for
factual information regarding recent sales of the subject
property.
R . P . LAURA IN
a A n P i A T C C
APPRAISERS - ANALYSTS
1-4
SCOPE OF THE APPRAISAL (Continued)
10. Reviewed current maps, zoning ordinances, and other
material for additional background information pertaining to
the subject property, and sale properties.
11. Attempted to visualize the subject property as it would be
viewed by a willing and informed buyer, as well as a willing
and informed seller.
12. Interviewed various persons, in both public and private life,
for factual and inferential information helpful in this appraisal
study.
13. Formed an opinion of the highest and best use applicable to
the subject property appraised herein.
14. Made, or caused to be made, a search for recent sales of
comparable properties. Have viewed and obtained certain
other information pertaining to each sale property contained
in this report.
15. Formed an estimate of market value of the subject property,
as of the date of value expressed herein, by application of the
Sales Comparison Approach and Income Capitalization
Approach; the Cost-Summation Approach was not con-
sidered applicable in the subject case.
16. Prepared and delivered three copies of this appraisal report
in accordance with the Uniform Standards of Professional
Appraisal Practice, and in summation of all the activities out-
lined above.
R . P . L A U R A I N
& A S S O C I A T E S
APPRAISERS • ANALYSTS
1-5
ASSUMPTIONS AND LIMITING CONDITIONS
This appraisal is made with the following understanding as set forth in items
No. 1 through 18, inclusive:
1. That this summary appraisal report has been prepared in lieu
of a self-contained appraisal report. This report is intended to
comply with reporting requirements set forth in the Uniform
Standards of Professional Appraisal Practice, under Standard
Rule 2-2(b), for a summary appraisal report. This report
incorporates, by reference, the data and valuation analysis
contained in our office files and data base. Information con-
tained in this summary report is specific to the needs of the
client; no responsibility is assumed for the unauthorized use
of this report. This summary report does not constitute a self-
contained appraisal report, and should not be construed as
such.
2. That title to the subject property is assumed to be good and
merchantable. Liens and encumbrances, if any, have not
been deducted from the final estimate of value. The vesting
was obtained from Los Angeles County Records, and has
been relied upon as being accurate. The subject property
has been appraised as though under responsible ownership.
The legal description is assumed accurate.
3. That the appraisers assume there are no hidden or unappar-
ent conditions of the subject property, subsoil, structures, or
other improvements, if any, which would render them more
or less valuable, unless otherwise stated. Further, the
appraisers assume no responsibility for such conditions or
for the engineering which might be required to discover such
conditions. That mechanical and electrical systems and
equipment, if any, except as otherwise may be noted in this
report, are assumed to be in good working order. The prop-
erty appraised is assumed to meet all governmental codes,
requirements, and restrictions, unless otherwise stated.
4. That no soils report of the subject property was provided to
the appraisers; therefore information, if any, provided by
other qualified sources pertaining to these matters is believed
accurate, but no liability is assumed for such matters. Further,
information, estimates and opinions furnished by others and
R . P . L A U R A I N
APPRAISERS`- ANALYSTS V
1-6
ASSUMPTIONS AND LIMITING CONDITIONS (Continued)
11. That the appraisers have conducted a visual inspection of the
subject property and the market data properties. Should
subsequent information be provided relative to changes or
differences in (1) the quality of title, (2) physical condition or
characteristics of the property, and/or (3) governmental
restrictions and regulations, which would increase or
decrease the value of the subject property, the appraisers
reserve the right to amend the final estimate of value.
12. That the appraisers, by reason of this appraisal, are not
required to give testimony in court or at any governmental or
quasi-governmental hearing with reference to the property
appraised, unless contractual arrangements have been previ-
ously made therefor.
13. That drawings, plats, maps, and other exhibits contained in
this report are for illustration purposes only and are not
necessarily prepared to standard engineering or architectural
scale.
14. That this report is effective only when considered in its entire
form, as delivered to the client. No portion of this report will
be considered binding if taken out of context.
15. That possession of this report, or a copy thereof, does not
carry with it the right of publication, nor shall the contents of
this report be copied or conveyed to the public through
advertising, public relations, sales, news, or other media,
without the written consent and approval of the appraisers,
particularly with regard to the valuation of the property
appraised and the identity of the appraisers, or the firm with
which they are connected, or any reference to the Appraisal
Institute, or the American Society of Appraisers, or designa-
tions conferred by said organizations.
16. That the subject hotel furniture, fixtures, and equipment have
been included in the subject valuation study, as is typical with
hotel sale properties.
17. That the form, format, and phraseology utilized in this report,
except the Certification, and Terms and Definitions, shall not
be provided to, copied, or used by, any other real estate
R. P. L A U R A IN
& A S S O C I A T E S
APPRAISERS • ANALYSTS
1-8
ASSUMPTIONS AND LIMITING CONDITIONS (Continued)
appraiser, real estate economist, real estate broker, real
estate salesperson, property manager, valuation consultant,
investment counselor, or others, without the written consent
and approval of Ronald P. Laurain.
18. That this appraisal study is considered completely confiden-
tial and will not be disclosed or discussed, in whole or in part,
with anyone other than the client, or persons designated by
the client.
R . P . LAURA IN
APPRAISERS`- ANALYSTS u
1-9
TERMS AND DEFINITIONS
Certain technical terms have been used in the following report which are
defined, herein, for the benefit of those who may not be fully familiar with said
terms.
MARKET VALUE (or Fair Market Value):
Market value is sometimes referred to as Fair Market Value; the latter is a legal
term, and a common synonym of Market Value. Market value as defined in
Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of
1989 (FIRREA) is defined as follows:
"The most probable price which a property should bring in a
competitive and open market under all conditions requisite to a
fair sale, the buyer and seller each acting prudently and knowl-
edgeably, and assuming the price is not affected by undue
stimulus. Implicit in this definition is the consummation of a sale
as of a specified date and the passing of title from seller to buyer
under conditions whereby:
1. Buyer and seller are typically motivated;
2. Both parties are well informed or well advised, and acting in
what they consider their own best interests;
3. A reasonable time is allowed for exposure in the open
market;
4. Payment is made in terms of cash in U.S. dollars or in terms
of financial arrangements comparable thereto; and
5. The price represents the normal consideration for the prop-
erty sold unaffected by special or creative financing or sales
concessions granted by anyone associated with the sale."
SALES COMPARISON APPROACH:
One of the three accepted methods of estimating Market Value. This
approach consists of the investigation of recent sales of similar properties to
determine the price at which said properties sold. The information so
gathered is judged and considered by the appraiser as to its comparability to
the subject properties. Recent comparable sales are the basis for the Sales
Comparison Approach.
R. P. LAURA IN
APPRAISERS - ANALYSTS
1-10
TERMS AND DEFINITIONS (Continued)
COST-SUMMATION APPROACH:
Another accepted method of estimating Market Value. This approach consists
of estimating the new construction cost of the building and yard improvements
and making allowances for appropriate amount of depreciation. The
depreciated reconstruction value of the improvements is then added to the
Land Value estimate gained from the Sales Comparison Approach. The sum
of these two figures is the value indicated by the Cost-Summation Approach.
INCOME CAPITALIZATION APPROACH:
The Income Capitalization Approach consists of capitalizing the net income of
the property under study. The capitalization method studies the income
stream, allows for (1) vacancy and credit loss, (2) fixed expenses, (3) operating
expenses, and (4) reserves for replacement, and estimates the amount of
money which would be paid by a prudent investor to obtain the net income.
The capitalization rate is usually commensurate with the risk, and is adjusted
for future depreciation or appreciation in value.
DEPRECIATION:
Used in this appraisal to indicate a lessening in value from any one or more of
several causes. Depreciation is not based on age alone, but can result from a
combination of age, condition or repair, functional utility, neighborhood
influences, or any of several outside economic causes. Depreciation applies
only to improvements. The amount of depreciation is a matter for the
judgment of the appraiser.
HIGHEST AND BEST USE:
Used in this appraisal to describe that private use which will (1) yield the
greatest net return on the investment, (2) be permitted or have the reasonable
probability of being permitted under applicable laws and ordinances, and
(3) be appropriate and feasible under a reasonable planning, zoning, and land
use concept.
R . P . L A U R A I N
& A S S O C I A T E S
APPRAISERS - ANALYSTS
1-11
SUBJECT PROPERTY
APPARENT VESTEE: Community Redevelopment Commission
of the City of Rosemead
PROPERTY ADDRESS: 8832 Glendon Way
Rosemead, California
LEGAL DESCRIPTION: Portion of Lot 3, Block 7, Rosemead Tract No.
2277, per map recorded in Book 21, Pages
114 through 115 of Maps, in the office of the
County Recorder, County of Los Angeles,
California.
R . P . L A U R A I N
APPRAISERS - ANALYSTS
2-1
View looking southwesterly at the subject property from the
intersection of Glendon Way and Ivar Avenue. See additional
photographs in the Addenda Section.
SITE DESCRIPTION
LOCATION:
LAND SHAPE:
DIMENSIONS:
LAND AREA:
TOPOGRAPHY:
Southwest corner of Glendon Way and Ivar
Avenue, in the City of Rosemead.
Generally rectangular land configuration.
Various dimensions; refer to the highlighted
portion of the plat map on the following page.
39,028 square feet.
Effectively level.
DRAINAGE: Appears to be adequate; no depressions or
low areas were noted within the boundaries of
the subject property which would cause a
water ponding condition during the rainy
season.
SOIL STABILITY: Appears to be adequate based upon the
subject development and other developments
in the immediate area. A soils report, how-
ever, was not provided for review.
SOIL CONTAMINATION:
ACCESS:
RIGHT-OF-WAY WIDTH:
STREET SURFACING:
CURB AND GUTTER:
STREET LIGHTS:
None known or observed, however, a soils
study has not been provided for review. The
subject property has been appraised as
though free of soil contaminants.
The subject property has 184.09 feet of front-
age on Glendon Way, and 202.5 feet on Ivar
Avenue.
Glendon Way: 60 feet.
Ivar Avenue: 52-60 feet.
Asphalt paved traffic lanes.
Concrete curb and gutter along each side of
each street.
Mounted on ornamental standards.
R . P . LAURA IN
& A S S O C I A T E S
APPRAISERS - ANALYSTS
2-2
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R. P. L A U R A I N
K A J J V V l A J L
APPRAISERS - ANALYSTS
SITE DESCRIPTION (Continued)
PUBLIC UTILITIES: Water, gas, electric power, and telephone are
available at the site.
SANITARY SEWER: Available at the site.
ENCROACHMENTS: None apparent.
EASEMENTS: A title report was not provided for review. It is
assumed that easements, if existing, do not
have a measurable impact on the existing or
future highest and best use of the subject
property. It is further assumed there are no
"cross-lot" or "blanket" easements.
ILLEGAL USES: None observed.
PRESENT USE: Glendon Hotel, containing 53 guest rooms.
ZONING: The subject property is located within the C3D
zone of the City of Rosemead. The C3 zone is
a "medium commercial" zone designation; the
suffix of the letter D stands for "design overlay
district." Any property located in the design
overlay district requires a design review
application prior to any changes made to the
exterior of the property.
Uses permitted in the C3 zone include various
retail uses, restaurants, professional offices,
banks, hardware stores, department stores,
etc. Development standards in the C3 zone
include a maximum building height of 75 feet
and a front yard setback of 50 feet from the
center line of the street. Hotels and motels
are permitted in the C3 zone, subsequent to
obtaining a Conditional Use Permit (CUP), and
subject to additional development restrictions,
including a minimum lot size of 40,000 square
feet, a minimum lot width of 100 feet, and a
maximum lot coverage of 40%. The parking
requirement is based on the use and gross
R. P. L A U R A IN
APPRAISERS - ANALYSTS
2-3
GLENDON WAY
W
m
z
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R. P. LAURA IN
& A S S O C I A T E S
APPRAISERS - ANALYSTS
SITE DESCRIPTION (Continued)
ZONING: (Continued) floor area (GFA) of the building. Hotels
require one parking space for every guest
room.
The subject property represents a pre-
existing, legal nonconforming use with
respect to minimum lot size.
HIGHEST AND BEST USE: The reader is referred to the first portion of
the Valuation Analysis Section for a detailed
discussion regarding the highest and best use
of the subject property.
BUILDING IMPROVEMENTS
MAIN BUILDING
NO. OF STORIES:
BUILDING SIZE:
YEAR BUILT:
CONSTRUCTION QUALITY:
FOUNDATION:
EXTERIOR WALLS:
ROOF:
Three stories.
23,544 square feet.
Originally constructed in 1984.
Average quality Class D construction.
Perimeter concrete foundation.
Wood frame and stucco.
Rolled asphalt roofing, tarred at joints.
FLOORS: Concrete slab and plywood floors with carpet-
ing and ceramic the floor coverings; granite
tiles in lobby area.
INTERIOR WALLS: Painted drywall interior walls; wood paneled
walls at hotel lobby and reception area.
CEILINGS: Painted drywall and sprayed acoustic ceilings.
R . P . L A U R A I N
& ASSOCIATES
APPRAISERS . ANALYSTS
2-4
BUILDING IMPROVEMENTS (Continued)
MAIN BUILDING (Continued)
DOORS: Plate glass set in anodized frame hotel entry
door; double flush solid core entry doors to
each guest room; double flush hollow core
interior doors; plate glass set in anodized
frame sliding doors.
WINDOWS: Aluminum frame sliding windows and plate
glass set in anodized frame windows.
ELECTRICAL: Conventional electrical system; 800 amps,
120/240 volt.
HEATING AND COOLING: Each guest room contains a built-in portable
air conditioning unit.
PLUMBING: Each guest room contains a full bathroom
(sink, toilet, and shower over tub); one full
ADA bathroom located adjacent to breakfast
area. Newer commercial grade 100 gallon
water heater and older 100 gallon "backup"
water heater; fire sprinkler system throughout
building.
GUEST ROOMS: The building contains a total of 53 guest
rooms; 15 of the guest rooms contain a single
King-sized bed, 36 contain two Queen-sized
beds, one is currently undergoing renovation,
and one was formerly utilized as an office, and
is currently being converted to a guest room.
Note that one of the guest rooms is currently
occupied by the hotel operator.
Note that the guest rooms located on the
second and third levels include a small
balcony containing 25± square feet.
DINING AREA: Dining room and breakfast area adjacent to
hotel lobby; ceramic tile flooring and Formica
and granite countertops. Small kitchen
adjacent to breakfast area. Kitchen features
R . P . L A U R AI N
& ASSOCIATES
APPRAISERS . ANALYSTS
2-5
BUILDING IMPROVEMENTS (Continued)
MAIN BUILDING (Continued)
DINING AREA: (Continued) include wood cabinets, Formica countertops
and backsplash, ceramic tile flooring, and a
double kitchen sink. Kitchen appliances
include a slide-in oven and range, hood and
vent fan, and a refrigerator.
CONDITION:
Overall condition is rated average.
OTHER IMPROVEMENTS
POOL: Concrete pool containing 460± square feet,
not currently being utilized; fair condition.
PAVING: Concrete parking lot and walkways.
FENCING: Concrete block fencing; wrought iron fencing
and gating.
MARKED PARKING: 58 automobile parking spaces and 3 handicap
parking spaces; 61 total spaces.
OTHER: Concrete curbing; irrigated grass, shrubbery,
and tree landscaping.
FIXTURES AND EQUIPMENT
COMMENT: The guest rooms contain numerous pieces of
furniture, including beds, night stands, tables,
chairs, mirrors, TVs, lamps, telephones,
curtains, etc. Other equipment pertinent to
the hotel operation includes washing
machines, drying machines, office furniture
and equipment, a phone system, a fire alarm
system, and an outdoor building sign.
All of the foregoing furniture, fixtures, and
equipment are included in the subject valua-
tion study, as is typical with hotel sale prop-
erties.
R . P . L A U RA IN
& ASSOCIATES
APPRAISERS - ANALYSTS
2-6
ASSESSMENT DATA
ASSESSOR'S PARCEL NO.:
ASSESSED VALUATIONS:
TAX CODE AREA:
TAX YEAR:
REAL ESTATE TAXES
SPECIAL ASSESSMENTS:
OWNERSHIP HISTORY
5390-018-904
Land: $1,460,881.
Improvements: $1,509,578.
12830
2009-2010.
Not published by the Los Angeles County
Assessor.*
None known.
* Real estate taxes will be adjusted in the event the
subject property is sold to a private party or
private corporation. The adjusted real estate tax
burden will be 1.23742% of the sale price, per
Proposition 13. The maximum annual tax
increase is 2%.
COMMENT: A title report was not provided for review. Per
Los Angeles County Assessor's records, the
subject property was acquired by the current
owner on deed recorded July 2, 2008, as
Document No. 1178557. The indicated pur-
chase price was $4,400,000; the sale of the
subject property has been considered in the
valuation analysis herein.
Subsequent to purchasing the subject hotel
property, the property owner entered into an
agreement with Ahmed Seirafi to manage and
operate the hotel. One part of the agreement
indicated that the property owner would pro-
vide $100,000 to renovate the subject build-
ing. Refer to the last pages of the Manage-
ment Agreement, in the Addenda Section, for
a list of the renovations completed at the
R . P . LAURA IN
& A S S O C I A T E S
APPRAISERS • ANALYSTS
2-7
NEIGHBORHOOD ENVIRONMENT (Continued)
COMMENT: (Continued) subject property. Per the Management
Agreement, the hotel operator (Mr. Seirafi) is
to pay 60% of the net revenue (income
received less expenses) to the property
owner, and the remaining 40% is retained as
compensation for operating and managing
the hotel.
OWNER NOTIFICATION
COMMENT: The hotel operator, Ahmed Seirafi, was con-
tacted by the client (property owner), and an
appraisal inspection was scheduled for
February 25, 2010; the inspection of the sub-
ject property was conducted on said date, in
the presence of the hotel operator, Mr. Seirafi,
and property owner's representative, Michelle
Ramirez.
NEIGHBORHOOD ENVIRONMENT
LOCATION: The subject property is located within the
central portion of the City of Rosemead.
Neighboring and adjoining communities
include San Gabriel, Temple City, El Monte,
South El Monte, Montebello, South San
Gabriel, Monterey Park, and Alhambra.
Primary north-south thoroughfares in the area
include San Gabriel Boulevard, Walnut Grove
Avenue, Rosemead Boulevard, and Temple
City Boulevard. East-west thoroughfares
include Valley Boulevard, Hellman Avenue,
and Garvey Avenue.
The San Bernardino (10) Freeway is located
immediately south of the subject property, the
Pomona (60) Freeway is located approxi-
mately three miles south of the subject prop-
erty, the San Gabriel River (605) Freeway is
located approximately four miles east of the
subject property, and the Long Beach (710)
R. P . LAURA IN
.x APPRAISERS`- ANALYSTS u
2-8
NEIGHBORHOOD ENVIRONMENT (Continued)
LOCATION: (Continued) Freeway is located approximately five miles
west of the subject property. Said freeways
are part of the freeway network serving the
greater Southern California region.
LAND USES: The general subject area is characterized by
commercial and industrial developments on
primary streets such as Garvey Avenue, San
Gabriel Boulevard, and Rosemead Boulevard.
Secondary streets in the immediate subject
neighborhood are developed primarily with
single family and low density multiple family
residential uses, as well as some industrial
developments.
The immediate subject neighborhood is
developed with a mixture of commercial
developments and multiple family residential
developments.
BUILT-UP: The general subject area is approximately
90% built-up, including off-street parking lots,
public and quasi-public facilities, and parks.
OCCUPANCY: The various types of developments in the area
which exist are generally allocated as follows:
Single family residential:
90+% owners
10+% tenants
Multiple family residential:
10+% owners
90+% tenants
Commercial:
40+% owners
60+% tenants
Small industrial:
60+% owners
40+% tenants
Large industrial:
10+% owners
90+% tenants
PRICE RANGE: Single family residential properties in the
subject market area are within a general
range of $350,000 to $550,000; larger homes
R . P . LA U R A I N
APPRAISERS`- ANALYSTS `
2-9
NEIGHBORHOOD ENVIRONMENT (Continued)
PRICE RANGE: (Continued) range in value in excess of $700,000. Multiple
family residential properties are within a much
broader range; smaller complexes such as
duplexes and triplexes generally range from
$500,000 to exceeding $800,000; larger
multiple family residential properties range in
value in excess of $1,000,000.
TREND: Real estate values, in general, were declining
between 1991 and 1995. The value trend,
however, generally stabilized during 1996 and
1997. Beginning in 1998, there was evidence
of increased real estate market activity. There
was an upward surge in price levels and
activity in the latter part of 2003, through 2006.
Residential real estate values began a sharp
decline in the mid portion of 2007, which
decline continued through the mid portion of
2009, due primarily to the subprime credit and
housing crisis, and a lack of available
financing. It should be noted, however, that
residential market conditions generally sta-
bilized in the mid portion of 2009.
Real estate trends affecting commercial and
industrial properties within the immediate and
general subject market area experienced an
upward value trend from 2003 through the
mid portion of 2007 after which property
values generally stabilized. In the first portion
of 2008, however, commercial and industrial
markets also began to experience decreases
in price levels and development activity, which
decreases accelerated in the latter portion of
2008, and have continued through the present
time. There has been a dramatic slowdown in
the commercial and industrial market, due
primarily to the general uncertainty of future
economic conditions and lack of available
financing.
R . P LAURA IN
APPRAISERS • ANALYSTS
2-10
NEIGHBORHOOD ENVIRONMENT (Continued)
TREND: (Continued) The development trend was also rather static
during the early to mid 1990s due to the lack
of demand, and difficulty in obtaining con-
struction financing. The upward trend of
development activity has generally paralleled
the real estate market price levels and sales
activity. Due to (1) the continued decline of
market conditions, (2) general uncertainty of
the future of the real estate market, and (3)
lack of available financing, many vacant land
parcels that were purchased for development
are still in the "entitlement and planning"
phase. Per conversations with various
brokers and developers, most owners of
large land parcels are hesitant to begin con-
struction until the economic recession comes
to an end and the real estate market begins to
stabilize.
AGE RANGE: The age range of all types of improved prop-
erties is rather broad. There are a number of
developments which were constructed
between the late 1940s through the late
1990s. The overall effective age of improved
properties ranges from approximately 10 to
40 years.
PROPERTY MAINTENANCE: Property maintenance in the immediate and
general neighborhood, evidenced by an on-
going maintenance program, ranges from fair
to good.
PUBLIC/PRIVATE FACILITIES: The availability and adequacy of public facili-
ties, transportation, schools, industrial areas,
commercial facilities, recreational oppor-
tunities, and residential housing are rated
average. Police and fire protection is pro-
vided by the City of Rosemead under
contractual arrangements with the County of
Los Angeles.
See Valuation Analysis in the following section.
R . P . L A U R A I N
APPRAISERS • ANALYSTS
2-11
VALUATION ANALYSIS
The purpose of the subject valuation study is the estimation of market value of
the subject property, as of the date of value set forth herein. Prior to the appli-
cation of the appraisal process, it is necessary to consider and analyze the
highest and best use of the subject property.
HIGHEST AND BEST USE ANALYSIS:
Highest and best use is defined in The Appraisal of Real Estate, by the
Appraisal Institute, 11th Edition, Page 297, as:
"The reasonably probable and legal use of vacant land or an
improved property, which is physically possible, appropriately
supported, financially feasible, and that results in the highest
value."
In the process of forming an opinion of highest and best use, consideration
must be given to various environmental and political factors such as zoning
restrictions, probability of zone change, private deed restrictions, location,
land size and configuration, topography, and the character/quality of land uses
in the immediate and general subject market area.
There are four basic criteria utilized in the highest and best use analysis of a
property as if vacant, as well as presently improved. The four criteria are
summarized as follows:
1. Physically possible.
2. Legally permissible.
3. Financially feasible.
4. Maximally productive.
The foregoing are typically considered sequentially; for example, a specific
use may prove to be maximally productive, however, if it is not legally
permissible, or physically possible, the productivity is irrelevant.
The subject property has a generally rectangular land configuration and effec-
tively level topography. The site has a corner location on two secondary
streets, and contains 39,028 square feet of land area. Site prominence and
exposure are rated below average; vehicular and pedestrian access are rated
average.
R . P . LAURA IN
& ASSOCIATES
APPRAISERS • ANALYSTS
3-1
VALUATION ANALYSIS (Continued)
HIGHEST AND BEST USE ANALYSIS: (Continued)
All public utilities including water, gas, electric power, and telephone, as well
as sanitary sewer, are available to the site. The physical characteristics of the
subject parcel are considered adequate to accommodate legally permissible
uses.
The subject property is located in the C3D (medium commercial, design
overlay) zone of the City of Rosemead. The C3 zone permits various retail
uses, restaurants, professional offices, banks, hardware stores, department
stores, etc. Hotels and motels are permitted, subsequent to obtaining a
Conditional Use Permit (CUP), and subject to additional development restric-
tions, including a minimum lot size of 40,000 square feet; the subject property
represents a pre-existing, legal nonconforming use with respect to minimum
lot size.
Land uses in the immediate subject neighborhood include a mixture of
commercial developments and multiple family residential developments.
Based upon tenant and owner/user demand at other developments within the
immediate subject market area, and considering the location of the subject
property, commercial development of the subject site, if vacant, would be
financially and economically feasible.
The site is improved with a three-story hotel building, containing 23,544 square
feet, built in 1984, in overall average condition. The building contains a total of
53 guest rooms; 15 of the guest rooms contain a single King-sized bed, 36
contain two Queen-sized beds, one is currently undergoing renovation, and
one was formerly utilized as an office, and is currently being converted to a
guest room. Note that one of the guest rooms is currently occupied by the
hotel operator.
The subject hotel property has been appraised inclusive of the hotel furniture,
fixture, and equipment items, as is typical with hotel sale properties. Refer to
the "Fixtures and Equipment" portion of the Subject Property Description
Section for a list of said furniture, fixtures, and equipment.
Based on an analysis of the various hotel sale properties employed herein,
and after considering the physical characteristics of the subject property (land
and improvements), as well as those uses which are legally permissible and
financially feasible, the maximally productive use, and therefore the highest
and best use of the subject property, as presently improved, is continued
utilization of the existing hotel building and appurtenant improvements until
R. P . LAURA IN
0. A C C I ! 1 A T C C
APPRAISERS - ANALYSTS
3-2
VALUATION ANALYSIS (Continued)
HIGHEST AND BEST USE ANALYSIS: (Continued)
such time as they become physically or functionally obsolete and no alter-
native uses are economically feasible. The subject property, as presently
improved, has been appraised accordingly.
VALUATION METHODS:
There are three conventional methods (approaches) which can be used to
estimate value. They are the Sales Comparison Approach, Cost-Summation
Approach, and Income Capitalization Approach. The reader is referred to the
Preface Section following the heading, "Terms and Definitions," for a brief
description of the various approaches to value.
The Sales Comparison Approach and Income Capitalization Approach have
been applied in the subject case. The Cost-Summation Approach is without
meaningful application due to the age of the subject improvements, which
makes difficult an accurate estimate of depreciation.
SALES COMPARISON APPROACH:
The Sales Comparison Approach takes into account properties which have
sold in the open market. This approach, whether applied to vacant or
improved property, is based on the Principle of Substitution which states, "The
maximum value of a property tends to be set by the cost of acquiring an
equally desirable substitute property, assuming no costly delay is encoun-
tered in making the substitution." Thus, the Sales Comparison Approach
attempts to equate the subject property with sale properties by analyzing and
weighing the various elements of comparability.
The Sales Comparison Approach has been applied to the subject property for
the purpose of estimating the value of the subject property as presently
improved with the existing hotel development. The reader is referred to the
Market Data Section for detailed information pertaining to each sale property
considered helpful as an indicator of value. Refer also to the Market Data
Map, in the Market Data Section, for the location of the respective sale prop-
erties.
R . P . L A U R A I N
& ASSOCIATES
APPRAISERS • ANALYSTS
3-3
VALUATION ANALYSIS (Continued)
SALES COMPARISON APPROACH: (Continued)
The reader is referred to the summary of Hotel Sale Properties on the follow-
ing page. The properties consist of sales of comparable hotels within the
greater subject market area, which were considered helpful when estimating
the value of the subject property as presently improved. The sales are set
forth in chronological order and took place between July, 2008, and January,
2010; note that Data 1 represents the sale of the subject property, in July,
2008.
It should be noted that Data 6 previously sold in October, 2006, for $6,109,000;
the current sale of Data 6 (December, 2009 for $3,625,000) represents a
decline of 41%. In addition, Data 7 previously sold in August, 2005, for
$5,500,000; the current sale of Data 7 (January, 2010 for $3,450,000) repre-
sents a decline of 37%.
Financing and Cash Equivalency Adjustments:
Sale properties are adjusted for financing arrangements involved in trans-
actions which are not market-typical. A cash equivalency adjustment is
generally made in those cases where the cash down payment is generally
less than 20% of the purchase price and the financing is other than conven-
tional. The less-than-typical cash down payment, combined with other than
conventional financing (such as seller financing), could influence a higher
purchase price.
All of the sale properties, with the exception of Data 4 and 5, involved cash
payments of 17% or more with conventional financing. A cash equivalency
adjustment, therefore, is not warranted for any of those sale properties. Data 4
involved a cash down payment of 16% with a first trust deed note of
$2,000,000 with a conventional lender, and a second trust deed note of
$1,850,000 with the seller. Robert Feist, the listing broker, stated that he wasn't
able to provide the actual terms on said loans, but that the second trust need
note was at a "very favorable" interest rate and the buyer "saved $500,000 in
interest payments over a five-year period." Due to the forgoing, a cash
equivalency of negative 10% has been applied to the sale price of Data 4, due
to the superior financing terms. Data 5 involved 7.5% cash down and three
loans totaling $5,224,000 with conventional lenders. A cash equivalency of
negative 7% has been applied to the sale price of Data 5, due to the less-than-
typical down payment.
R . P . L A U R A I N
APPRAISERS • ANALYSTS
3-4
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R . P . L A U R A I N
Ll. A J J V V l A l L J
APPRAISERS- ANALYSTS
VALUATION ANALYSIS (Continued)
SALES COMPARISON APPROACH: (Continued)
Market Conditions:
Consideration of the market conditions (date of sale) is appropriate when
certain sale properties occur during a rising or declining market. The con-
sideration for market conditions is based upon observation of the real estate
market dating back more than 15 years.
Moody's/REAL commercial property index (CPPI) is a periodic same-property
round-trip investment price change index of the U.S. commercial investment
property market, based on data from MIT Center for Real Estate industry
partner Real Capital Analytics, Inc (RCA). The commercial property index is
based on the RCA database, which attempts to collect, on a timely basis, price
information for every commercial property transaction in the U.S. over
$2,500,000 in value. This represents one of the most extensive and intensively
documented national databases of commercial property prices ever devel-
oped in the U.S.
As of January, 2010, the national index was down 41.3% below the peak, which
was reached in October, 2007. The following graph, produced by Moody's,
represents the national property index for all commercial property types
(apartment, industrial, office, and retail), beginning in the first quarter of 2001
through the fourth quarter of 2009. It can be noted that the index reached its
peak in the latter portion of 2007, after which property values began a sharp
decline through the latter portion of 2009.
R . P . L A U R A IN
& ASSOCIATES
APPRAISERS - ANALYSTS
3-5
VALUATION ANALYSIS (Continued)
SALES COMPARISON APPROACH: (Continued)
Market Conditions: (Continued)
As stated, the forgoing national index represents all commercial property
types. An extensive interview was conducted with Robert J. Feist, Vice
President of Atlas Hospitality Group, a brokerage firm that specializes in the
sale of hotels located in California. Robert Feist was the broker in three of the
hotel sales utilized herein (Data 2, 4, and 5). Mr. Feist also provided additional
information on occupancy rates, expense ratios, current market trends, etc.
Robert Feist can be reached at (949) 622-3400 ex. 406 or emailed at
robert@atlashospitality.com.
Per discussions with Robert Feist, and various market studies conducted by
Atlas Hospitality Group and Smith Travel Research (STR), the hospitality
market reached its peak at the end of 2007. The market began a slight
decrease in 2008, which increased significantly in the latter portion of 2008,
and continued through the end of 2009. The hospitality market is expected to
continue to decrease through 2010, though not as severely as 2009; many
predict a "bottoming out" at some point in 2010, or the beginning of 2011.
As the economic recession became a reality, the hospitality market was
impacted severely. Both business and leisure travel slowed down
significantly. Hotel operators were forced to lower room rates significantly, in
order to attract clients; even with the lower room rates, occupancy levels have
still decreased.
The Atlas 2009 Year End Hotel Survey showed that the number of California
hotel sales dropped 52% from 2008, and 73% from 2007. The study indicated
that the median price per room declined 30% from 2008, and 38% from 2007.
In addition to the foregoing, the current lending and credit crisis were also
considered in the subject analysis. Per interviews with hotel brokers and
operators, difficulty in obtaining financing is a major factor in hotel sales not
consummating. It appears that financing and liquidity are in the process of
being restored to certain markets, however, uncertainty regarding the general
economy has remained, and financial and lending institutions continue to
require an inordinately large equity prior to committing funds. The difficulty in
obtaining financing has drastically slowed the sale of hotel properties and
there remains uncertainty regarding the financing of hotel sale properties.
R . P . L A U R A I N
& A S S O C I A T E S
APPRAISERS • ANALYSTS
3-6
VALUATION ANALYSIS (Continued)
SALES COMPARISON APPROACH: (Continued)
Market Conditions: (Continued)
The market conditions adjustment schedule takes into consideration all of the
foregoing, however, due to the lack of sales activity, there is insufficient market
data to precisely measure the downward trend in the immediate and general
subject market area. The market conditions adjustment, therefore, is con-
sidered to be general in nature. Based on the foregoing, adjustments have
been made to the hotel sale properties in this report based on the following
market conditions schedule:
January-June, 2008: - 6.0% per year, or - 0.5% per month
July-December, 2008: - 24.0% per year, or - 2.0% per month
January-December, 2009: - 30.0% per year, or - 2.5% per month
January-February, 2010: - 12.0% per year, or - 1.0% per month
Elements of Comparability:
After viewing all of the hotel sale properties, an analysis was made of the
various elements of comparability. Some of those elements include, but are
not limited to, the following:
Location. Average room size.
Site prominence and exposure. On-site parking ratio.
Land/building area ratio. Pool/amenities.
Number of guest rooms. Franchise.
Building age and condition.
The various elements of comparability were not assigned equal weight in
making an analysis of each sale property. The location, building age and con-
dition, and pool/amenities available were considered the most important
factors in the subject case.
After all of the elements of comparability between the subject property and the
hotel sale properties were considered, two factors developed from the market
data sales were utilized as the primary units of analysis. They are the overall
purchase price per square foot of building area, and overall purchase price
per room. The overall purchase price per square foot of land area was also
considered as a secondary check.
R. P. L A U R A IN
OC JA J J V k- 1 .Y 1 G J
APPRAISERS • ANALYSTS
3-7
VALUATION ANALYSIS (Continued)
SALES COMPARISON APPROACH: (Continued)
Elements of Comparability: (Continued)
The land/building area ratio was also considered in the analysis of the various
sale properties when compared to the subject property. The subject property
has a land/building area ratio of 1.66:1; the sale properties have land/building
area ratios ranging from 0.64:1 to 2.02:1.
In addition to the location, building size, and building age and condition, etc.,
the land/building area ratio is important when analyzing the overall purchase
price per square foot of land area, and building area. It can be noted in the
summary of Hotel Sale Properties that the greater the ratio from 1.00:1, the
larger the differential between the purchase price per square foot of land, and
purchase price per square foot of building, all other elements of comparability
being generally the same.
Sales Comparison Analysis:
The reader is referred to the Market Analysis Comparison Grid on the follow-
ing page. The adjusted unit rates, at the mid portion of the grid, represent the
unit rates adjusted for conditions of sale, terms of sale (financing), and market
conditions. It should be noted that the recording data of each sale property
has been utilized herein. Data 3 recorded April 2, 2009, however, the property
went into escrow in September, 2008. Due to the forgoing, a negative 10%
adjustment has been applied to Data 3, due to the superior conditions of sale.
The market conditions were adjusted based on the preceding market con-
ditions schedule. The elements of comparability have been considered on a
qualitative basis due to the lack of direct market evidence regarding quanti-
tative adjustments in the subject market.
Following are comments regarding the hotel sale properties, including a
discussion of the superior and inferior elements of comparability as compared
to the subject property.
Data 1
8832 Glendon Way, Rosemead (subject property)
Data 1 represents the sale of the subject property, in July, 2008.
The site contains 39,028 square feet of land area, and is
improved with a hotel building containing 53 guest rooms, 23,544
square feet, built in 1984, in below average condition (at time of
sale). The purchase price was $4,400,000, all cash. The deed
recorded July 2, 2008, as Document No. 1178557.
R . P . L A U RA IN
& ASSOCIATES
APPRAISERS - ANALYSTS
3-8
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VALUATION ANALYSIS (Continued)
SALES COMPARISON APPROACH: (Continued)
Sales Comparison Analysis: (Continued)
The market conditions adjusted unit rate is $108.39 per square
foot of building area and $48,151 per room. Inasmuch as Data 1
represents the sale of the subject property, all elements of com-
parability are generally similar, except for building condition,
which is considered slightly inferior, inasmuch as the subject
building was renovated subsequent to the sale of the subject
property.
Data 2
1560 Monterey Pass Road, Monterey Park "Com-On Inn"
The site contains 22,366 square feet of land area, and is
improved with a hotel building containing 54 guest rooms, 20,815
square feet, built in 1984, in average-good condition. The
purchase price was $4,750,000, and included 37% cash down
with conventional financing. The deed recorded October 7, 2008,
as Document No. 1792883.
The market conditions adjusted unit rate is $146.05 per square
foot of building area and $56,296 per room. The sale property is
considered superior to the subject property with respect to site
prominence, building condition, and pool/amenities. The sale
property is judged inferior with respect to land/building area ratio,
average room size, and on-site parking ratio; all other elements of
comparability are generally similar. Note that the superior
elements of comparability outweigh the inferior elements of com-
parability; the sale property is considered superior to the subject
property with respect to overall comparability.
Data 3
2141 South Harbor Boulevard, Anaheim "Ramada Limited Suites"
The site contains 30,000 square feet of land area, and is
improved with a hotel building containing 94 guest rooms, 47,014
square feet, built in 1962, in average-good condition. The
purchase price was $9,000,000, and included 50% cash down
with conventional financing. The deed recorded April 2, 2009, as
Document No. 157826.
R. P . LAURA IN
n n n r r e
APPRAISERS - ANALYSTS
3-9
VALUATION ANALYSIS (Continued)
SALES COMPARISON APPROACH: (Continued)
Sales Comparison Analysis: (Continued)
The unit rates adjusted for market conditions and conditions of
sale are $130.17 per square foot of building area and $65,106 per
room. The sale property is considered superior to the subject
property with respect to location, site prominence, building con-
dition, average room size, and franchise. The sale property is
considered inferior with respect to land/building area ratio,
number of rooms, year built, and on-site parking ratio; all other
elements of comparability are generally similar. Note that the
superior elements of comparability outweigh the inferior ele-
ments of comparability; the sale property is considered superior
to the subject property with respect to overall comparability.
Data 4
9125 Recreation Circle, Fountain Valley "Day's Inn & Suites"
The site contains 37,941 square feet of land area, and is
improved with a hotel building containing 69 guest rooms, 26,730
square feet, built in 1984, in average-good condition. The
purchase price was $4,600,000, and included 16% cash down
with conventional and seller financing. The deed recorded
October 1, 2009, as Document No. 521763.
The unit rates adjusted for market conditions and financing are
$142.83 per square foot of building area and $55,333 per room.
The sale property is considered superior to the subject property
with respect to site prominence, building condition,
pool/amenities, and franchise. The sale property is judged
inferior with respect to average room size and on-site parking
ratio; all other elements of comparability are generally similar.
Note that the superior elements of comparability outweigh the
inferior elements of comparability; the sale property is con-
sidered superior to the subject property with respect to overall
comparability.
Data 5
1818 East Holt Boulevard, Ontario "Red Roof Inn"
The site contains 83,635 square feet of land area, and is
improved with a hotel building containing 108 guest rooms,
50,876 square feet, built in 1984, in average condition. The
R . P . LAURA IN
& A S S O C I A T E S
APPRAISERS . ANALYSTS
3-10
VALUATION ANALYSIS (Continued)
SALES COMPARISON APPROACH: (Continued)
Sales Comparison Analysis: (Continued)
purchase price was $5,650,000, and included 7.5% cash down
with conventional financing. The deed recorded October 8, 2009,
as Document No. 444248.
The unit rates adjusted for market conditions and financing are
$95.50 per square foot of building area and $44,991 per room.
The sale property is considered superior to the subject property
with respect to site prominence, pool/amenities, and franchise.
The sale property is considered inferior regarding location and
number of guest rooms; all other elements of comparability are
generally similar. Note that the inferior elements of comparability
slightly outweigh the superior elements of comparability; the sale
property is considered slightly inferior to the subject property
with respect to overall comparability.
Data 6
1655 East 4th Street, Ontario "Econo Lodge"
The site contains 62,568 square feet of land area, and is
improved with a hotel building containing 80 guest rooms, 38,145
square feet, built in 1981, in average condition. The purchase
price was $3,625,000, and included 17% cash down with conven-
tional financing. The deed recorded December 30, 2009, as
Document No. 577540.
The market conditions adjusted unit rate is $93.13 per square
foot of building area and $44,406 per room. The sale property is
considered superior to the subject property with respect to site
prominence, pool/amenities, and franchise. The sale property is
considered inferior regarding location and number of guest
rooms; all other elements of comparability are generally similar.
Note that the inferior elements of comparability slightly outweigh
the superior elements of comparability; the sale property is
considered slightly inferior to the subject property with respect to
overall comparability.
Data 7
916 South Beach Boulevard, Anaheim "Shadow Park Inn & Suites"
The site contains 48,461 square feet of land area, and is
improved with a hotel building containing 81 guest rooms, 24,000
R . P L A U R A I N
. A C / l T A T C C
APPRAISERS • ANALYSTS
3-11
VALUATION ANALYSIS (Continued)
SALES COMPARISON APPROACH: (Continued)
Sales Comparison Analysis: (Continued)
square feet, built in 1971, in below average condition. The
purchase price was $3,450,000, and included 37% cash down
with conventional financing. The deed recorded January 14,
2010, as Document No. 21732.
The market conditions adjusted unit rate is $142.31 per square
foot of building area and $42,167 per room. The sale property is
considered superior to the subject property with respect to site
prominence, land/building area ratio, and pool/amenities. The
sale property is considered inferior with respect to location,
number of guest rooms, year built, building condition, and
average room size; all other elements of comparability are
generally similar. Note that the inferior elements of comparability
outweigh the superior elements of comparability; the sale prop-
erty is considered inferior to the subject property with respect to
overall comparability.
By way of review and comparison, the subject property has a generally
rectangular land configuration and effectively level topography. The site has a
corner location on two secondary streets, and contains 39,028 square feet of
land area. Site prominence, exposure are rated below average; vehicular and
pedestrian access are rated average.
The site is improved with a three-story hotel building, containing 23,544 square
feet, built in 1984, in overall average condition. The building contains a total of
53 guest rooms; 15 of the guest rooms contain a single King-sized bed, 36
contain two Queen-sized beds, one is currently undergoing renovation, and
one was formerly utilized as an office, and is currently being converted to a
guest room. Note that one of the guest rooms is currently occupied by the
hotel operator.
Based on the foregoing, the market conditions adjusted unit rates applicable
to the sale properties range from $42,167 to $65,106 per room. As stated, due
to the lack of direct market evidence, qualitative adjustments were applied to
the individual sale properties for the various elements of comparability. An
array was developed summarizing the overall comparability and adjusted unit
rate per room for the various sale properties, as follows:
R . P . LAURA IN
a. . n n ~ r r n
APPRAISERS . ANALYSTS
3-12
VALUATION ANALYSIS (Continued)
SALES COMPARISON APPROACH: (Continued)
Sales Comparison Analysis: (Continued)
Overall Adjusted
Data Comparability Rate/room
3 superior $65,106
2 superior $56,296
4 superior $55,333
Subject $46,000
1 slightly inferior $48,151
5 slightly inferior $44,991
6 slightly inferior $44,406
7 inferior $42,167
Note that Data 1 represents the sale of the subject property, in July, 2008
(market conditions adjusted rate per room); the sale is considered slightly
inferior inasmuch as the subject building was renovated subsequent to the
sale of the subject property. As stated, the purchase price per square foot of
building area and purchase price per room have been utilized herein. The rate
per square foot of building area is considered to be toward the mid portion of
the market conditions adjusted range of $93.13 to $146.05 per square foot,
taking into consideration the land/building area ratio of the subject property
and respective sale properties. The rate per square foot of land area was
considered as a secondary check. Based on the foregoing, the unit rates
considered applicable to the subject property are as follows:
23,544 SF x $107.50 = $2,530,980.
53 rooms x $48,000 = $2,544,000.
Adjusted: $2,540,000.
See Income Capitalization Approach beginning on the following page.
R. P. L A U R A I N
w APPRAISERS`- ANALYSTS 4
3-13
VALUATION ANALYSIS (Continued)
INCOME CAPITALIZATION APPROACH:
The Income Capitalization Approach is based on the capitalization of net
income generated, or capable of being generated, by the subject property.
The net operating income is the product of the estimated gross rental income,
less various expense charges. It should be noted that no income, expense, or
vacancy information was provided to the appraisers.
The capitalization rate employed in this study has been developed by an
analysis of those sale properties, wherein the net income was available to
determine the overall capitalization rate.
Gross Income:
The gross income has been estimated after conducting a review of overall
average daily rates at reasonably similar hotels in the greater subject market
area. The subject daily "rack" rate, or advertised rate, is $59.99 per night, both
for the rooms containing a single bed, as well as those containing two beds;
an additional bed tax of 10% is also charged to the client. Per discussions with
hotel operators and brokers, the daily rate often varies based on seasons,
weekdays, weekends, as well as the type of client. Further, the daily "rack"
rate, or advertised rate, does not take into account various discounts, specials,
corporate rates, extended stays, etc. Per said discussions with hotel
operators and brokers, the average daily rate is typically 10 to 20% lower than
the advertised rate, or "rack" rate. Based on the foregoing, and considering
the current economic uncertainty, an overall average daily rate of $50.00 per
guest room has been applied to the subject property.
Vacancy and Credit Loss:
Per interviews with hotel operators and brokers, the occupancy rate depends
largely on the location of the hotel, the hotel rates, the type of client frequent-
ing the hotel, etc; hotels in the greater subject market area generally have
overall occupancy rates of 50% to 70%.
Based on the foregoing, an overall annual vacancy and credit loss factor of
40% has been applied in the subject case, reflecting an overall annual
occupancy rate of 60%.
R . P . L A U RA IN
& ASSOCIATES
APPRAISERS- ANALYSTS
3-14
VALUATION ANALYSIS (Continued)
INCOME CAPITALIZATION APPROACH: (Continued)
Operating Expenses:
The expense schedule employed in the subject study has been based on (1) a
review of income and expense information at certain of the hotel sale prop-
erties utilized herein, (2) interviews conducted with various hotel operators
and on-site managers, and (3) certain "industry standards," and published
sources. As stated, current or historical expense information for the subject
hotel property was not provided to the appraisers.
Per discussions with hotel operators and brokers, expenses for hotel prop-
erties range from approximately 45% to exceeding 60% of the effective gross
annual income. Expenses pertinent to the operation of hotels include both
real estate items (taxes, insurance, maintenance and repair, etc.), as well as
business related expenses (laundry and house cleaning, cable and telephone
service, office expenses, employee salaries, etc.).
The overall annual operating expenses utilized herein equate to approximately
57% of the effective gross annual income, and are considered commensurate
with other hotel properties in the greater subject market area.
Income and Expense Schedule:
The income and expense schedule applicable to the subject hotel property is
as follows:
Income:
Potential gross monthly income:
Daily "rack" rate: $59.99
Discounts/specials: - 9.99
Average daily rate: $50.00
53 rooms Q $50.00 = $2,650.
Potential gross annual income:
$2,650 x 365 days =
Vacancy and credit loss (40%):
$967,250.
-386,900.
Effective potential gross annual income: (carried forward) $580,350.
R . P . LAURA IN
& A S S 0 C I A T E S
APPRAISERS - ANALYSTS
3-15
VALUATION ANALYSIS (Continued)
INCOME CAPITALIZATION APPROACH: (Continued)
Income and Expense Schedule: (Continued)
Effective potential gross annual income: (carried forward) $580,350.
Operating expenses:
Fixed Expenses:
Real estate taxes:
$30,900.
Business license:
400.
Insurance:
19,200.
Variable Expenses:
Management:
24,000.
Accounting:
4,200.
Legal/professional:
2,400.
Cable/TV:
7,200.
Telephone:
4,800.
Gas and electricity:
54,000.
Water and trash:
36,000.
Laundry, cleaning, supplies:
30,000.
Grounds/gardener:
4,800.
Maintenance/repair:
30,000.
Office expenses:
3,000.
Credit card service:
4,800.
Employee salaries:
72,000.
Pest control:
900.
Advertising:
3,000.
Miscellaneous:
1,200.
Total expenses:
-332,800.
Net operating income:
$247,550.
Capitalization of Net Operating Income:
As stated, the capitalization rate employed in this study has been developed
by an analysis of those sale properties, wherein the net income was available
to determine the overall capitalization rate (Data 2, 4, 5, 6, 7); said rates range
from 7.4% to 11.0%.
In view of (1) the location of the subject property, (2) the condition of the
subject improvements, as compared to those sale properties wherein a
capitalization rate was derived, (3) the date of sale, i.e. economic and financial
R . P . L A U RA IN
& ASSOCIATES
APPRAISERS - ANALYSTS
3-16
VALUATION ANALYSIS (Continued)
INCOME CAPITALIZATION APPROACH: (Continued)
Capitalization of Net Operating Income: (Continued)
conditions prevailing during the consummation of the various sale properties,
as compared to the current market conditions, and (4) current demand
regarding yield rates, the overall capitalization rate considered applicable to
the subject property is 10.0%, as follows:
Capitalization of net operating income
$247,550 capitalized at 10.0% = $2,475,500.
Adjusted: $2,475,000.
See Reconciliation beginning on the following page.
R . P . L A U R A I N
APPRAISERS - ANALYSTS
3-17
VALUATION ANALYSIS (Continued)
RECONCILIATION:
Value indicated by Sales Comparison Approach: $2,540,000.
Value indicated by Cost-Summation Approach: Not applicable
Value indicated by Income Capitalization Approach: $2,475,000.
This summary appraisal report contains some of the information compiled and
considered in forming the final estimate of value. It should be noted that the
reconciliation is not an averaging process. It involves an analysis of data upon
which the various approaches were developed.
The Sales Comparison Approach, as the title implies, studies the phenomena
of the real estate market. This approach was applied to the subject property
with the use of certain hotel sale properties in the greater subject market area
which were investigated and analyzed. Based on the data obtained for the
application of this approach, the analysis process, and inasmuch as the
subject property is an investment-type property which would generally be
acquired for its income producing capabilities, the Sales Comparison
Approach has been assigned weight similar to that of the Income Capitaliza-
tion Approach.
The Cost-Summation Approach, as previously stated, has not been employed
in this study due to the age of the subject building, which makes difficult an
accurate estimate of depreciation.
The Income Capitalization Approach consists of the capitalization of net
income capable of being produced by an investment-type property. The value
in the open market is directly related to the ability of the property to generate
net income. Based on the extent of data obtained for the application of this
approach and the analysis process, the Income Capitalization Approach has
been assigned weight similar to that of the Sales Comparison Approach.
FINAL ESTIMATE OF VALUE:
Based on the foregoing analysis, the fair market value of the subject property,
as of February 25, 2010, is $2,500,000.
R . P . L A U RA IN
& A S S O C I A T E S
APPRAISERS - ANALYSTS
3-18
VALUATION ANALYSIS (Continued)
MARKETING EXPOSURE:
The marketing time of a property is a direct function of supply and demand
within a particular market segment. Generally, a higher demand results in a
more limited marketing period. During the course of market research for the
subject appraisal study, interviews were conducted with parties involved in the
transactions employed in the Sales Comparison Approach. Based on those
interviews, as well interviews with real estate brokers familiar with the subject
market area, the marketing time estimated for the subject property, assuming
an aggressive and comprehensive marketing program, is approximately 6 to
12 months.
R . P . L A U R A I N
& ASSOCIATES
APPRAISERS - ANALYSTS
3-19
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R. P. LAURAIN
ar. APPRAISERS - ANALYSTS .a
4-1
MARKET DATA #1
8832 Glendon Way, Rosemead
(Subject Property)
GRANTOR:
RC & I, Group, Inc.
LAND SIZE:
39,028 sq.ft.
GRANTEE:
Com. Dev. Commission of
BUILDING SIZE:
23,544 sq.ft.
the City of Rosemead
SALE DATE:
July 2, 2008
NO. OF ROOMS:
53
DOC. NO.:
1178557
CONDITION:
Below average
SALE PRICE:
$4,400,000
YEAR BUILT:
1984
TERMS:
All cash
PARKING:
61 spaces
APN:
5390-018-904
L/B RATIO:
1.66:1
VALUE INDICATIONS:
$112.74 per SF land.
$186.88 per SF bldg.
$83,019 per room
R . P . L A U R A I N
& A S S O C I A T E S
APPRAISERS - ANALYSTS
4-2
MARKET DATA #2
1560 Monterey Pass Road, Monterey Park
"Corn-On Inn"
GRANTOR:
GRANTEE:
SALE DATE:
DOC. NO.:
SALE PRICE:
TERMS:
APN:
Lin Family Trust
Patel 2005 Family Trust
October 7, 2008
1792883
$4,750,000
$3,010,000 conventional
5252-004-068
LAND SIZE:
BUILDING SIZE:
NO. OF ROOMS:
CONDITION:
YEAR BUILT:
PARKING:
L/B RATIO:
22,366 sq.ft.
20,815 sq.ft.
54
Average-good
1984
40±spaces
1.07:1
VALUE INDICATIONS: $212.38 per SF land.
$228.20 per SF bldg.
$87,963 per room
R . P . L A U R A I N
APPRAISERS- ANALYSTS
4-3
MARKET DATA #3
2141 South Harbor Boulevard, Anaheim
"Ramada Limited Suites"
GRANTOR: Global Inn, LLC
GRANTEE:
SALE DATE:
DOC. NO.:
SALE PRICE:
TERMS:
APN:
Golden Bridge International
Investment, Inc.
April 2, 2009
157826
$9,000,000
$4,500,000 conventional
137-124-10
LAND SIZE:
BUILDING SIZE:
NO. OF ROOMS:
CONDITION:
YEAR BUILT:
PARKING:
L/B RATIO:
VALUE INDICATIONS: $300.00 per SF land.
$191.43 per SF bldg.
$95,745 per room
R P . L A U R A I N
30,000 sq.ft.
47,014 sq.ft.
94
Average-good
1962
50± spaces
0.64:1
APPRAISERS y ANALYSTS u
4-4
GRANTOR:
Triplesons Investment
LAND SIZE:
37,941 sq.ft.
GRANTEE:
EKBK, Inc.
BUILDING SIZE:
26,730 sq.ft.
SALE DATE:
October 1, 2009
NO. OF ROOMS:
69
DOC. NO.:
521763
CONDITION:
Average-good
SALE PRICE:
$4,600,000
YEAR BUILT:
1984
TERMS:
$2,000,000 conventional;
PARKING:
52t spaces
$1,850,000 seller
APN:
143-301-34
L/B RATIO:
1.42:1
VALUE INDICATIONS:
$121.24 per SF land.
$172.09 per SF bldg.
$66,667 per room
R . P . L A U R A I N
& ASSOCIATES
APPRAISERS - ANALYSTS
4-5
MARKET DATA #4
9125 Recreation Circle, Fountain Valley
"Day's Inn & Suites"
MARKET DATA #5
1818 East Holt Boulevard, Ontario
"Red Roof Inn"
GRANTOR:
GRANTEE:
SALE DATE:
DOC. NO.:
SALE PRICE:
TERMS:
APN:
RR Ontario, LP
Kabir Ontario, LLC
October 8, 2009
444248
$5,650,000
$5,224,000 conventional
01 10-101-03
LAND SIZE:
83,635 sq.ft.
BUILDING SIZE:
50,876 sq.ft.
NO. OF ROOMS:
108
CONDITION:
Average
YEAR BUILT:
1984
PARKING:
100= spaces
L/ B RATIO:
1.64:1
VALUE INDICATIONS: $ 67.56 per SF land.
$111.05 per SF bldg.
$52,315 per room
R. P . LAURA IN
& A S S O C I A T E S
APPRAISERS • ANALYSTS
4-6
MARKET DATA #6
1655 East 4th Street, Ontario
"Econo Lodge"
GRANTOR:
GRANTEE:
SALE DATE:
DOC. NO.:
SALE PRICE:
TERMS:
APN:
D& J Investment, Inc.
Sol Hospitality, LLC
December 30, 2009
577540
$3,625,000
$3,000,000 conventiona
0108-551-12;
0110-183-01,02
LAND SIZE:
62,568 sq.ft.
BUILDING SIZE:
38,145 sq.ft.
NO. OF ROOMS:
80
CONDITION:
Average
YEAR BUILT:
1981
PARKING:
75± spaces
L/B RATIO:
1.64:1
VALUE INDICATIONS: $ 57.94 per SF land.
$ 95.03 per SF bldg.
$45,313 per room
R . P . L A U R A I N
Ci. A J J V V l A l Li J
APPRAISERS - ANALYSTS
4-7
MARKET DATA #7
916 South Beach Boulevard, Anaheim
"Shadow Park Inn & Suites"
GRANTOR:
GRANTEE:
SALE DATE:
DOC. NO.:
SALE PRICE:
TERMS:
APN:
Kuo Family Trust
Hsiao Hui &
Jia Yuh Shen
January 14, 2010
21732
$3,450,000
$2,177,500 conventional
126-261-17
LAND SIZE:
BUILDING SIZE:
NO. OF ROOMS:
CONDITION:
YEAR BUILT:
PARKING:
UB RATIO:
48,461 sq.ft.
24,000 sq.ft.
81
Below average
1971
72t spaces
2.02:1
VALUE INDICATIONS: $ 71.19 per SF land.
$143.75 per SF bldg.
$42,593 per room
R . P . LAURA IN
a n o a v v m i c a
APPRAISERS - ANALYSTS
4-8
See Photo No. 1 on first page of Subject Property Description Section.
PHOTO NO. 2: View looking southwesterly at subject building.
R P . L A U R A I N
o_ . n n n n~. r r n
APPRAISERS . ANALYSTS
5-1
PHOTO NO. 1: View looking northwesterly at subject property
from Ivar Avenue.
PHOTO NO. 3: View looking southeasterly at subject building.
P . L A U R A I N
. n n ~ n• r c c
APPRAISERS • ANALYSTS
5-2
PHOTO NO. 4: View looking southeasterly at subject pool area
(not currently being utilized).
R . P . L A U R A I N
& A S S O C I A T E S
APPRAISERS - ANALYSTS
5-3
PHOTO NO. 5: Interior view of hotel lobby and reception area.
PHOTO NO. 6: Interior view of dining room and breakfast area.
area.
R . P . L A U R A I N
& A S S O C I A T E S
APPRAISERS - ANALYSTS
5-4
PHOTO NO. 7: Interior view of kitchen adjacent to breakfast
PHOTO NO. 8: Interior view of first level hallway.
a
1+.
PHOTO NO. 10: Interior view of guest room undergoing
renovation.
R . P . L A U R A I N
& ASSOCIATES
APPRAISERS - ANALYSTS
5-5
PHOTO NO. 9: Interior view of former office currently being
converted to guest room.
PHOTO NO. 11: Interior view of typical guest room containing
two beds.
one bed.
P . L A U R A IN
APPRAISERS - ANALYSTS
5-7
PHOTO NO. 13: Interior view of typical guest room containing
PHOTO NO. 14: Interior view of typical bathroom.
P . L A U R A I N
n n ~ n r• ~r c o
APPRAISERS . ANALYSTS
5-8
PHOTO NO. 15: Interior view of typical bathroom.
PHOTO NO. 16: Interior view of typical bathroom.
STREET SCENE 1: View looking west along Glendon Way from
the intersection of Ivar Avenue.
R . P . L A U R A I N
G. A C C n T A T r Q
APPRAISERS • ANALYSTS
5-9
STREET SCENE 2: View looking south along Ivar Avenue from
the intersection of Glendon Way.
R . P . L A U R A I N
& A S S O C I A T E S
APPRAISERS • ANALYSTS
5-10
STREET SCENE 3: View looking east along Glendon Way from a
point west of the subject property.
STREET SCENE 4: View looking north along Ivar Avenue from a
point south of the subject property.
MANAGEMENT AGREEMENT
P. L A U R A IN
a /i a J v m i c a
APPRAISERS • ANALYSTS
MANAGEMENT AGREEMENT FOR THE OPERATION
OF HOTEL ROSEMEAD
This MANAGEMENT AGREEMENT FOR THE OPERATION OF HOTEL
ROSEMEAD (the "Agreemenf) is entered into as of October 14, 2008 by and between
the ROSEMEAD COMMUNTTY 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 tperator, 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
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. T'he 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
Majeurc Events as described in Section 20 (such date, as so extended, being the
"Commencement Date').
„o j,~ (d) Costs of Renovation. Except for the Commission's Contnbution (as
gL;1 defined in Section 4(e) below), all costs and expenses of the Renovation, including,
IMS IA without limitatio architectural and engineering fees, insurance costs, permit fees, and
costs o a or, materials, fixtures, equipment, furnishings and supplies, shall
be solely
:;c66f 4 &4 bome by the Operator and the Commission shall have no liability whatever in connection
Y y O r Itt (J therewith In performing the Renovation, the Operator agrees that it will expend not less
1 than the amounts set forth on Exhibit A for each of the items of work, fixtures,
(W ct'f ]4tS 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 then the Operator shall be entitled to expend such savings on other
1.A #49144325-0179 v3 7
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 (T) 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. Rebrandina. 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.
b. Operational Duties. During the Terra 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 tD 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 #4814-4325-0179 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. OQperating 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 `Troposed Operating Budget'l 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 Team. Upon approval
by the Commission, which approval will not be unreasonably withheld, the Proposed 4
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 #4914-4325-0179 v3
(a) Operating _Account All fiords 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 Accounf). 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 requcst, 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 €14814432MI79 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 (W/o) 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 funds without reimbursement t
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 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 (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 hen, 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 alien 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 (901%) 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 Indemniri. 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 #4814-4325-0179 A 7
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
reanediation 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, 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, savants, 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 tern 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, PCBs, hazardous wastes, toxic substances or related materials, including, without
hmitation, 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 1!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 Tenn 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 (1) 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 17th), 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 Facihties,-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 Mari. 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 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 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 #4814-4325-0179 v3 10
f
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 man-bits 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
_ n•
By
b~U~ ~tl
Print Name
Its Executive Director
ROSEMEAD INN HOTEL PARTNERS
LLC,
a California limited liability company
By
HWd ~~aa~ i So~~ HF, cs3
Print Name & Title
ATTEST:
Commission Secretary
LA 04814-4325-0179 v3
11
APPROVED AS TO FORM:
seph M. Mon ,
Commission unsel
4.
I.A #4914-432.5.0179 v3 12
EX BRIT "A"
WORK, FIXTURES, EQUPMENT, FURNISHINGS AND SUPPLIES
AND RELATED COSTS FORMING A PART OF THE RENOVATION
1 .1
Exterior
Description
Budget Length
Landscape
$
2,000.00
Power Wash and Paint
$
15,000.00
Sinage
$
8,000.00
Patch/Repair/Mist/
$
3,500.00
Pool/new deck
$
5,500.00
Parking Lot
$
-
Front door focus pt.
$
2,000.00
Mist,
$
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
B
udget
LOBBY Fuminshing
$
3,000.00
Focus pt. lighting
$
1,500.00
Paint and theme for reception an $
4,000.00
Misc.
$
1,500.00
Elevator
$
700.00
Sound/speaker
$
800.00
Subtotal 11500-00
Hallway
Carpet $ -
Paint $ 4,500.00
Lighting $ 2,400.00
Subtotal $ 6,900.00
length
Width
150
width
150
100
5
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
A-1
Restroom
Ught 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.Q0
r S%,! 50.00
Fumishing
T.Vs 1 $ 100.00
Uens/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
Wifl 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
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
r
QUALIFICATIONS
OF
APPRAISERS
R . P . L A U R A I N
R A J J V I- 1 R 1 C J
APPRAISERS - ANALYSTS
PROFESSIONAL QUALIFICATIONS
AND
CLIENT REFERENCES
OF
Ronald P. Laurain
California Certification No. AG 007689
FIRM AFFILIATION:
R. P. Laurain & Associates, Inc.
3353 Linden Avenue, Suite 200
Long Beach, California 90807-4503
(562) 426-0477
Ronald P. Laurain, President
John P. Laurain, Vice President
Benjamin V. Balos, Associate Appraiser
Vaughn A. Hosmann, Consulting Appraiser
PROFESSIONAL ORGANIZATION AFFILIATIONS:
Appraisal Institute
Senior member; hold professional endorsement and designation
"SRPA" (senior real property appraiser), and "SRA" (senior
residential appraiser).
Past President, Chapter No. 94, Long Beach, California (1969).
Director (1971-74).
Delegate to California Appraisers Council (1973-80).
Served as chairman or member of various committees including
Education Committee, Legislation & Research Committee,
Professional Practices (Ethics) Committee, Senior Designation
Committee, and Examination Committee.
District Vice Governor (1979-81).
American Society of Appraisers
Senior member; hold professional endorsement and designation
"ASA" in urban real estate.
Past President of Los Angeles Chapter (1974-75).
Ethics Counselor (1975-76).
Served as chairman or member of various committees including
Membership Committee, Education Committee, Examiners
Committee, and International Convention Education Committee.
R . P . L A U R A I N
& ASSOCIATES
APPRAISERS - ANALYSTS
1
PROFESSIONAL QUALIFICATIONS/REFERENCES (Continued)
PROFESSIONAL ORGANIZATION AFFILIATIONS: (Continued)
International Right of Way Association
Senior member; hold professional endorsement and designation
"SRWA."
Member of Professional Development Committee,
Los Angeles Chapter
Certified General Real Estate Appraiser by the
Office of Real Estate Appraisers, State of California.
Certification No. AG 007689.
American Arbitration Association
Member of National Panel of Arbitrators (1968 - present).
California Appraisers' Council
President (1979).
EXPERT WITNESS:
Qualified as an expert on Real Property Valuation in the following
courts:
Los Angeles County Superior Courts.
Orange County Superior Courts.
Federal Bankruptcy Court.
APPRAISAL SERVICES FOR:
Appraisal services rendered for:
Cities:
City of Arcadia
City of Bell
City of Bellflower
City of Buena Park
City of Carson
City of Cerritos
City of Claremont
City of Colton
City of Commerce
City of Compton
City of Cudahy
City of El Monte
City of El Segundo
City of Gardena
City of Garden Grove
City of Hawaiian Gardens
City of Huntington Beach
City of Huntington Park
City of Industry
City of Inglewood
City of Irwindale
City of Lakewood
City of La Mirada
City of La Puente
R . P . LAURA IN
& A S S O C I A T E S
APPRAISERS - ANALYSTS
2
PROFESSIONAL QUALIFICATIONS/REFERENCES (Continued)
APPRAISAL SERVICES FOR: (Continued)
Cities: (Continued)
City of Lomita
City of Long Beach
City of Los Angeles
City of Lynwood
City of Monterey Park
City of Norwalk
City of Ontario
City of Paramount
City of Pasadena
City of Redondo Beach
City of Riverside
Redevelopment Agencies:
Anaheim Redevelopment Agency
Bell Redevelopment Agency
Buena Park Redevelopment Agency
City of Rolling Hills Estates
City of San Jacinto
City of San Juan Capistrano
City of Santa Ana
City of Santa Fe Springs
City of Santa Monica
City of Signal Hill
City of South El Monte
City of West Hollywood
City of Whittier
Carson Redevelopment Agency
Compton Community Redevelopment Agency
Corona Redevelopment Agency
El Cajon Redevelopment Agency
Hawaiian Gardens Redevelopment Agency
Huntington Beach Redevelopment Agency
Huntington Park Redevelopment Agency
Inglewood Redevelopment Agency
La Mirada Redevelopment Agency
Long Beach Redevelopment Agency
Los Angeles Community Redevelopment Agency
Los Angeles County Redevelopment Agency
Maywood Redevelopment Agency
Monterey Park Redevelopment Agency
Paramount Redevelopment Agency
Pasadena Redevelopment Agency
Santa Fe Springs Redevelopment Agency
Signal Hill Redevelopment Agency
Whittier Redevelopment Agency
Other Public Agencies:
Bassett Unified School District
Caltrans
Central Basin Municipal Water District
Compton Unified School District
R . P . LAURA IN
& ASSOCIATES
APPRAISERS - ANALYSTS
3
PROFESSIONAL QUALIFICATIONS/REFERENCES (Continued)
APPRAISAL SERVICES FOR: (Continued)
Other Public Agencies: (Continued)
Cucamonga County Water District
Federal Aviation Administration (FAA)
Federal Housing Administration (FHA)
Long Beach Transit Company
Long Beach Unified School District
Long Beach Water Department
Los Angeles County Department of Beaches and Harbors
Los Angeles County Facilities Management Department
Los Angeles County Internal Services Department
Los Angeles County Metropolitan Transportation Authority
Los Angeles Unified School District
Metropolitan Water District of Southern California
Pasadena Unified School District
Port of Long Beach
Port of Los Angeles
Port of San Diego
Resolution Trust Corporation (RTC)
Southern California Rapid Transit District
State of California, Santa Monica Mountains Conservancy
Trust for Public Land, national land conservation organization
U. S. Department of Housing and Urban Development (HUD)
U. S. Department of Interior, National Park Service
U. S. Department of the Navy
Partial Corporate List:
Abrasive Finishing Co.
Allstate Insurance Co.
American Savings
American Title Company
Aminoil U.S.A., Inc.
Bank of America
Boise Cascade
Buffums
Capital Westward Inc.
Cascade Pump Company
Chevron USA
CNA Insurance
Coast Federal Bank
Commercial Grinding Co.
Coopers & Lybrand
Douglas Equipment Co.
Family Health Program
Farmers & Merchants Bank
Federal Home Loan Mortgage
Corporation
Federal Mogul Corporation
Ferro Corporation
Goodwill Industries
Great Western Bank
Harbor Bank
Harriman Jones Medical Clinic
Hartford Insurance Group
International Industrial
Properties
International Rectifier
R . P . L A U R A I N
& ASSOCIATES
APPRAISERS - ANALYSTS
4
PROFESSIONAL QUALIFICATIONS/REFERENCES (Continued)
APPRAISAL SERVICES FOR: (Continued)
Partial Corporate List: (Continued)
Kaiser Foundation
Pan Pacific Nederland
Lloyds Bank
Queen City Bank
Long Beach Community
Republic Metal
Hospital
Rosecrans Medical Group
Long Beach Memorial
Sabin Robbins Paper Co.
Hospital
South Bay Leasing Corp.
Long Beach Bank
Southwest Diversified, Inc.
Manhattan Properties, Inc.
Suburban Coastal Corp.
Marriott Corporation
Sumitomo Bank
Northern Trust Bank
Texaco USA
Northrop Corporation
University Advisory Co.
Obispo Medical Clinic
Univ. of Southern California
Orange Coast Title Co.
Wells Fargo Bank
Pacific Business Bank
World Towers, Ltd.
Pacific Valve, Inc.
Zurn Industries
Attorneys:
Atkinson & Atkinson
Nossaman, Guthner,
Thomas G. Baggot
Knox & Elliott
Ball, Hart, Hunt, Brown,
Oliver, Barr & Vose
and Baerwitz
O'Melveny & Myers
Christensen, White, Miller
Pray, Price, Williams
Fink & Jacobs
& Russell
Mark Curtis
James C. Powers
Josephine A. Fitzpatrick
Glenn L. Rabenn
Garner & Kreinces
Norman Rasmussen
Patrick A. Hennessey
Richards, Watson &
Kirtland & Packard
Gershon
Lawrence H. Lackman
Marc S. Rothenberg
Laskin & Graham
Jack D. Scott
Jeffrey Lyon
Robert F. Waldron
Martin & Stamp
Williams & Williams
M. D. Miguelez
David E. Wulfsberg
Linda Moon
George S. Zugsmith
R . P . L A U R A IN
& A S S O C I A T E S
APPRAISERS - ANALYSTS
5
PROFESSIONAL QUALIFICATIONS/REFERENCES (Continued)
ACADEMIC BACKGROUND:
Graduate of secondary schools in Wayne County (Detroit area),
Michigan.
Advanced studies at Henry Ford College, and the University of
Michigan Extension.
Completed additional studies at Compton College, and the
University of California at Los Angeles Extension. Received
Certificate in Real Estate from U.C.L.A.
Successfully completed classes in Real Estate including:
Real Estate Appraisal I, Advanced Real Estate Appraisal,
Condemnation Appraising and Eminent Domain, Principles of
Income Property Appraising, Legal Aspects of Real Estate, Real
Estate Law, Real Estate Finance, Real Estate Management, Real
Estate Practice, and Real Estate Research, plus various courses
and seminars sponsored by the national appraisal
organizations.
INSTRUCTOR:
California State University, Long Beach
Real Estate Appraisal
Guest speaker and lecturer on subject of real estate appraisal at
various universities, colleges, professional appraisal organi-
zations, etc., including: UCLA, California State University, Long
Beach; Long Beach Community College; Cerritos Community
College; Appraisal Institute; American Society of Appraisers;
and, International Right of Way Association.
ADVISOR:
Member of Assessment Practices Advisory Council (1978-83) Los
Angeles County Assessor
Real Estate Examination Revision Study Committee
Department of Real Estate, State of California
R. P. LAURA IN
k A R R n r i A T R R
APPRAISERS - ANALYSTS
6
PROFESSIONAL QUALIFICATIONS/REFERENCES (Continued)
BUSINESS AFFILIATIONS:
Roy C. Laurain, Realtor and Appraiser, Detroit area, Michigan
Staff Assistant - 2 years
T. H. Scanlon Appraisal Company, Detroit area, Michigan
Staff Appraiser - 2 years
Security Bank (12 branches), Detroit area, Michigan
Chief Appraiser - 1 year
Locke Land Services, Long Beach, California
Senior Appraiser, and Vice President - 7 years
R. P. Laurain & Associates, Inc., Long Beach, California
Appraisers -Analysts, established January, 1969.
R . P . L A U R A I N
& ASS O C I ATE S
APPRAISERS - ANALYSTS
7
BACKGROUND AND QUALIFICATIONS
Benjamin V. Balos
Certified General Real Estate Appraiser
California Certification No. AG 040853
ASSOCIATE APPRAISER:
R. P. Laurain & Associates, Inc.
3353 Linden Avenue, Suite 200
Long Beach, California 90807
Office: (562) 426-0477 - Fax: (562) 988-2927
rpla@rpiaurain.com
APPRAISAL BACKGROUND:
Real estate research and analysis services performed on projects
for the following public agencies and private corporations while
associated with R. P. Laurain & Associates, Inc., since 2005:
Cities:
City of Baldwin Park
City of Covina
City of Cypress
City of Huntington Park
City of La Mirada
City of Long Beach
City of Ontario
City of Riverside
City of Santa Fe Springs
City of Seal Beach
City of South El Monte
City of West Hollywood
Redevelopment Agencies:
Azusa Redevelopment Agency
Burbank Redevelopment Agency
Compton Community Redevelopment Agency
Long Beach Redevelopment Agency
Los Angeles Community Redevelopment Agency
Monrovia Redevelopment Agency
R . P . L A U R A I N
& ASSOCIATES
APPRAISERS - ANALYSTS
1
BACKGROUND AND QUALIFICATIONS (Continued)
APPRAISAL BACKGROUND: (Continued)
Other Public Agencies:
Alameda Corridor Transportation Authority
Los Angeles County Chief Administrative Office
Los Angeles County Registrar/Recorder
Los Angeles County Treasurer and Tax Collector
Los Angeles Unified School District
Port of Los Angeles
Riverside County Transportation Commission
Attorneys:
Richards, Watson & Gershon, LLP
Squire, Sanders & Dempsey, LLP
Tredway, Lumsdaine & Doyle, LLP
ACADEMIC BACKGROUND:
Cypress Community College
Allied Business School
Real Estate Appraisal
Kaplan Professional School
Real Estate Appraisal
Calvary Chapel Bible College
R . P . L A U R A I N
& ASSOCIATES
APPRAISERS - ANALYSTS
ATTACHMENT C
May 5, 2010
Ms. Michelle Ramirez
Economic Development Manager
City of Rosemead
8838 East Valley Blvd.
Rosemead, CA 91770
To: Ms. Ramirez
My buyer's intention is to totally renovate and remodel the existing 53 unit
hotel using the highest level of building materials to enhance both the
interior and exterior of the building. The intention is to upgrade the
community and promote more future business for the City of Rosemead and
also provide a forum for international visitors from China to create more
business opportunities for the community.
The total offer is $4,400,000. The cash down payment is $2,500,000
with a promissory note in the amount of $1,900,000. The note will be
guaranteed by Mr. Lian Yue Song, the buyer, and will be paid in six equal
annual installments at zero per cent interest over a six year term. The first
installment will be paid on the 365'' calendar date from the close of escrow.
Each installment, thereafter, will be paid on the same calendar date of each
subsequent year for the remaining term of the note.
The City shall allow the Buyer to install a sign at the south corner of Olney
Street and Ivar Street (the exact location To Be Determined) directly facing
the 10 freeway for an unlimited time. The size and height to be mutually
agreed upon by all parties.
Sincerely,
Helen W g
Autho ' d Representative of Mr. Lian Yue Song
YEN'S CONSTRUCTION INC
C.S.L : 897784
Address : 5612 HUDDART AVE
City, State, Zip : ARCADIA CA 91006
PHONE : 626-203-2387
Quotation For : commercial TI & Remodel
Name:
Company :
Address : 8233 Glendon Way
City, State, Zip : Rosemead CA 91770
Phone:
Comments or Special Instructions : Job site on
PROPOSAL
Date : 4/16/2010
Quotation
Customer I D
Prepared By : Candy Jeng
Rosemead CA 91770
Sale Person
P.O. Number
Shi Date
Ship Via o.b. Poin
Terms
Special
Location
Description Items
Quantity
Unit Price
Amount
All Rooms
Demolition & hauling all room & Bathrooms.
53
$ 1,500.00
S 79,500.00
Remove popcorn ceiling & compound, patch all
53
$ 1,000.00
$ 53,000.00
Hole & creak
$ -
Replace all outlet & Switch, Install dimmable
53
$ 2,000.00
S 106,000.00
recesses can lighting hall way & bedrooms.
53
$ 2,000.00
$ 106,000.00
Replace slide door & install mirror closet door.
53
$ 2,000.00
S 106,000.00
Bathroom total remodel, replace sink, faucet, water
53
S 12,000.00
$ 636,000.00
Hoses, counter top mirror, floor tile, bathtub, vent,
$ -
Lighting, Shower head & all ass'y, toilet, wall file up
$ -
to ceiling.
$ -
Painting bedrooms & bathrooms.
53
$ 1,000.00
$ 53,000.00
Replace 30 once commercial carpet.
53
$ 2,000.00
S 106,000.00
hall way
3 hall way, ceiling, painting & carpet.
3
$ 8,000.00
$ 24,000.00
Breakfast room
Ceiling, Painting, the floor, counter top.
1
S 30,000.00
S 30,000.00
Office room
Ceiling, Painting, carpet floor, restroom remodel.
1
$ 25,000.00
S 25,000.00
Reception
Painting, counter top.
1
$ 20,000.00
$ 20,000.00
Building
Painting, balcony, fences.
53
$ 2,000.00
$ 106,000.00
Swinging pool
Remodel, filter & piping
1
$ 27,000.00
$ 27,000.00
Landscaping
Fix concrete fence, plant flower, Springer system.
1
$ 50,000.00
S 50,000.00
Parking lot
Painting & repair, sign, Lighting.
1
$ 120,000.00
S 120,000.00
Building
Stone venner& top of crown molding.
1
$ 200,000.00
$ 200,000.00
A/C
Replace A/C at all rooms.
53
$ 2,500.00
$ 132,500.00
S -
S -
Subtotal
$ 1,980,000.00
Tax Rate
Sale Tax
Shipping
THANK YOU FOR YOUR BUSINESS TOTAL
$ 1,980,000.00
May 3, 2010
Ms. Michelle Ramirez
Economic Development Manager
City of Rosemead
8838 East Valley blvd.
Rosemead, CA 91770
To Ms. Ramirez
My Buyers intention is to totally renovate and remodel the existing 53 unit
hotel using the highest level of building materials to enhance both the
interior and exterior of the building. The intention is to upgrade the
community and promote more future business for the City of Rosemead and
also provide a forum for international visitors from China to create more
business opportunities for the community.
The offer is to include the existing streets adjacent to the subject site owned
by the city.
The total offer is $4,600,000. The cash down payment is $2,700,000 with
a promissory note in the amount of $1,900,000. The note will be guaranteed
by Mr. Lian Yue Song, the Buyer, and will be paid in six equal annual
installments at zero per cent interest over a six year term. The first
installment will be paid on the 365th calendar date from the close of escrow.
Each installment, thereafter will be paid on the same calendar date of each
subsequent year for the remaining term of the note.
The City shall allow the Buyer to install a sign at the south corner of Olney
Street and War Street (the exact location To Be Determined) directly facing
the 10 freeway for an unlimited time. The size and height to be mutually
agreed upon by all parties.
Sincerely,
L `Helen W an
Authorize Representative of Mr. Lian Yue Song
TENT'S CONSTRI CTI0ITIN I N'C
C.S.L : 897784
Address : 5612 HUDDART AVE
City, State, Zip : ARC_ADLA CA 91006
PHONE : 626-203-2387
Quotation For : commercial TI & Remodel
Name:
Company
Address : 8233 Glendon Way
City, State, Zip : Rosemead CA 91770
Phone:
1---- r . Cn-;.] Inrtrn ntinnc Anh Site an
Date : 4/162010
Quotation
Customer I D
Prepared By : Candy Jeng
Rosemead CA 91770
Sale Person
P.O. Number
Ship Date
Ship Via .o.b. Poio
Terms
Special
Location
Description Items
Quantity
Unit Price
Amount
All Rooms
Demolition & hauling all room & Bathrooms.
53
S 1,500.00
S 79,500.00
Remove popcorn ceiling & compound, patch all
53
$ 1,000.00
S 53,000.00
Hole & creak.
S -
Replace all outlet & Switch, Install dimmable
53
$ 2,000.00
S 106,000.00
recesses can lighting hall way & bedrooms.
53
$ 2,000.00
S 106,000.00
Replace slide door & install mirror closet door.
53
$ 2,000.00
S 106,000.00
Bathroom total remodel, replace sink, faucet, water
53
S 12,000.00
S 636,000.00
Hoses, counter top mirror, floor tile, bathtub, vent,
S -
Lighting, Shower head & all ass'y, toilet, wall tile up
S -
to ceiling.
$ -
Painting bedrooms & bathrooms.
53
S 1,000.00
S 53,000.00
Replace 30 once commercial carpet.
53
S 2,000.00
S 106,000.00
hall way
3 hall way, ceiling, painting & carpet.
3
$ 8,000.00
S 24,000.00
Breakfast room
Ceiling, Painting, tile floor, counter top.
1
$ 30,000.00
S 30,000.00
Office room
Ceiling, Painting, carpet floor, restroom remodel.
1
S 25,000.00
S 25,000.00
Reception
Painting, counter top.
1
S 20,000.00
S 20,000.00
Building
Painting, balcony, fences.
53
$ 2,000.00
S 106,000.00
Swinging pool
Remodel, filter & piping
I
S 27,000.00
S 27,000.00
Landscaping
Fix concrete fence, plant flower, Springer system.
1
$ 50,000.00
$ 50,000.00
Parking Jot
Painting & repair, sign, Lighting.
1
S 120,000.00
S 120,000.00
Building
Stone venner& top of crown molding.
1
$ 200,000.00
S 200,000.00
A/C
Replace A/C at all rooms.
53
S 2,500.00
S 132500.00
S -
S -
S -
S -
S -
Subtotal
$ 1,980,000.00
Tax Rate
Sale Tax
Shipping
THANK YOU FOR YOUR BUSINESS
TOTAL
$ 1,980,000.00
April 19, 2010
Ms. Michelle Ramirez
Economic Development Manager
City of Rosemead
8838 East Valley blvd.
Rosemead, CA 91770
To Ms. Ramirez
My Buyers intention is to totally renovate and remodel the existing 53 unit
hotel using the highest level of building materials to enhance both the
interior and exterior of the building. The intention is to upgrade the
community and promote more future business for the City of Rosemead and
also provide a forum for international visitors from China to create more
business opportunities for the community.
The offer is to include the existing streets adjacent to the subject site owned
by the city.
The total offer is $2,900,000 as an all cash offer in an "As Is" condition.
As there was a limited time to include various materials requested by the
city, we will be happy to present more information as requested.
of Mr. Lian Yue Song
Sincerely,
PROPOSAL FOR ROSEMEAD COMMUNITY
DEVELOPMENT COMMISSION
SUBMITTED BY:
QIAO GARDEN GROUP REAL ESTATE CO. LTD.
APRIL 19, 2010
SectionlV. Existing Site Conditions.
It is the intention of the Buyer to include as part of the purchase the adjoining portion of
Ivar Ave. It is also understood that this parcel would be used as a permanent parking
easement with an access easement to a U-Haul Business at 3527 Ivar Ave. As a result of
the additional parking, it will be the developer's intention once the additional parking
spaces have been determined to either increase the size of the existing 53 unit motel or
add a restaurant or retail space to accommodate the increase in added parking.
Section V. Developer Team Obligations.
It is and has always been the goal of Qiao Garden Group to provide to the most energy
efficient and updated technology in building materials while also considering the most
fashionable design qualities for both patrons and pedestrians in the utilization user
friendly courtyards and thoroughfares. It is our objective to retain the existing 53 unit
hotel structure on the site and activate a major renovation and rehabilitation of the
building. That will be consistent with both the Rosemead Redevelopment Plan and
General Plan. A site plan utilizing these facets in the development are presently being
designed by our architect and development team in order to provide the committee at a
later date with a visual rendering of the conceptual plan.
Section VI. Developer
A. Development Entity
Name: Lian Yue Song
Entity: Qiao Garden Group Real Estate Co. Ltd.
Address: 55 North LingPing Road, Hong Kou District, Shanghai
Phone Number: 01186 65077888
Contractor Company: Jen's Construction, Inc.
Contractor Name: Candy Jeng
Address: 5612 Huddart Ave.
Arcadia, CA 91006
Phone: 626 203-2387
Please refer to Exhibit C for costs and references
B. Developer Associates
United States Authorized Representative: Helen Wang
Address: 1406 Palm Ave. Suite D
San Gabriel, CA 91776
Phone: (626) 780-3261
Qiao Garden Group Real Estate Co. Ltd.
Qiao Garden Group (Formerly named "Watanabe Group") was founded in 1989, and
mainly engaged in investment, development, construction and property management for
their chains of both office buildings and hotel resorts. Qiao Garden Group has offices in
both China and US. Qiao Garden Group has built, owned and managed multiple office
buildings and hotel resorts in Shanghai, Su Zhou, and Hang Zhou. Presently, they own
and manage approximately 1,000,000 square feet of commercial and mixed use real
estate in Cluna.
The President and CEO is Lian Yue Song.
1976 Joined Chinese Navy
1978 Aviation officer of Navy East Sea Fleet, Ning Bo
1985 Studied Journalism/Photography in Ren Min University of China, Beijing
1987 Awarded Elite 10 photographers in China by Chinese Photographers Association
1989 President & General Manager of Hainan Dube Real Estate Investment &
Development Company.
1990 President of Dube International Commercial Co., Ltd., Tokyo, Japan
1992 General Manager of Shanghai Dube International Commercial Co., Ltd.
2000 President of CEO of International Investment Company, Los Angeles, USA
2004 President of American Dube Office Investment Company
2004 to Present. President and CEO of Qiao Garden Group Real Estate Co. Ltd.
Mr. Lian Yue Song has a team of advisors and consultants including Mr. Walter J. Conn
and US Marketing consultant, Mr. Andrzej Siobowicz.
B. Financial Capability
The development entity will use all cash to purchase, renovate and operate the
development. The source of the funds will be received from Mr. Lian Yue Song's bank.
It is called China Commercial Bank, Su Zhou Branch. (Please refer to Exhibit A)
C. Development Experience
The following projects are some of the numerous project of the development teams
experience in mixed use, retail and hotel construction and renovation. (Please refer to
Exhibit B).
Exhibit A
BANK FUNDS AND LETTER
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Exhibit B
PAST, PRESENT. AND FUTURE
PROJECTS
Qiao Garden Office Buildings
Address: No. 55 N. Lin Ping Rd., Hong Kou
District, Shanghai, China
OIL 1 It is a full functioning mixed use office building
MAC- l - with a total of 161,400 square feet. The office size
Qiao Garden. Dube varies from 215.2 to 2152 square feet. Presently, a
International portion of the building is being used as Qiao
Commercial Building
Garden Corporate Headquarters.
Address: No. 73 Wu Hua Rd., Hong Kou District,
Qiao Garden. Dube Wu
Hua Yuan Building
ib_)cIYWAZI
A C
Qiao Garden. Dube Tian
Bao Wealth Creative
Park
Shanghai, China.
It is a mixed-use totally completed commercial
building with total building size of 159,248 square
feet.
Address: No. 881 Tian Bao Rd., Hong Kou District,
Shanghai, China
It is a newly build crux-use commercial building
with total building size of 180,768 square feet being
totally renovated for completion in June, 2010.
This is adjacent to public park.
Present Construction of Resort Condominium Hotels
Shanghai Qiao Garden
North American
Resort Condominium
Hotel
Address: No. 372, 376 Ziwei St. Zhangjiang,
Pudong Xinqu, Shanghai, China
Boutique style condominium hotel with total
building size of 43,210 square feet, divided
into 178 one bedroom and one bath
luxuriously renovated condominium hotel
units.
Address: No. 162 Long Jing Village, Hang
Zhou City, China. This is a 49 unit resort
condominium hotel with a building size of
~A
Hang Zhou Long Jing
Village Qiao Garden
North American Resort
Condominium Hotel
Su Zhou Qiao Garden
North American Resort
Condominium Hotel
279,760 square feet.
Address: No. 1436 Ren Min Rd. Ping Jiang
District, Su Zhou City, China. A reort
condominium hotel 106 units with a total
building size of
11) 1836,000 square feet.
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Future Construction projects being designed and permitted
for construction renovation in the immediate future.
Shanghai Qiao Garden Chong Ming
Island Resort Hotel
San Ya Qiao Garden Resort Hotel
Nanjing Qiao Garden Resort Hotel
Section VI L Submission Requirements.
Enclosed materials included.
Section 1X. Reservation Rights
Beijing Qiao Garden
Hotel
Qingdao Qiao Garden
Resort Hotel
It is understood and appreciated that the Rosemead Community
Development Commission may make any additional request for clarification,
confirmation and modification of any information we have submitted.
It is also understood that the property is being sold "As Is".
Exhibit C
COST OF CONSTRUCTION
TEN'S CONSTRUCTION INC.
- - C-.S.L c-- 897-7Sa - - -
Address : 5612 HUDDART AVE
City, State, Zip : ARCADIA CA 91006
PHONE : 626-203-2387
Quotation For : commercial TI & Remodel
Name:
Company :
Address : 8233 Glendon Way
City, State, Zip : Rosemead CA 91770
Phone :
Comments or Special Instructions : Job site on
PROPOSAL
Date : 4116/2010
Quotation :
Customer I D :
Prepared By : Candy Jeng
Rosemead CA 91770
Sale Person
P.O. NMber
ship Date
ship via
F.o.b. Point
Terms
Special
Location
Description Items
Quantity
Unit Price
Amount
A[1 Rooms
Demolition & hauling all room & Bathrooms.
53
$ 1,500.00
$ 79,500.00
Remove popcorn ceiling & compound, patch all
53
S 500.00
$ 26,500.00
Hole & creak
$ -
Replace all outlet & Switch, Install dimmable
53
S 1,500.00
$ 79,500.00
recesses can lighting hall way & bedrooms.
53
S 2,000.00
$ 106,000.00
Replace slide door & install mirror closet door.
$ -
Bathroom total remodel, replace sink, faucet, water
53
$ 9,500.00
$ 503,500.00
Hoses, counter top mirror, floor tile, bathtub, vent,
$ -
Lighting, Shower bead & all ass'y, toilet, wall tile up
$ -
to ceiling.
$ -
Painting bedrooms & bathrooms.
53
$ 800.00
$ 42,400.00
Replace 30 once commercial carpet.
53
$ 1,000.00
$ 53,000.00
haD way
3 hall way, ceiling, painting & carpet.
3
$ 8,000.00
$ 24,000.00
Breakfast room
Ceiling, Painting, tile floor, counter top.
1
$ 8,000.00
$ 8,000.00
e Office room
Ceiling, Painting, carpet floor, restroom remodel-
1
$ 15,000.00
$ 15,000.00
Reception
Painting, counter top.
1
$ 10,000.00
$ 10,000.00
Building
Painting, balcony, fences.
53
S 2,000.00
$ 106,000.00
Swinging pool
Remodel, filter & piping.
1
$ 15,000.00
$ 15,000.00
Landscaping
Fix concrete fence, plant flower, Springer system.
1
$ 11,600.00
$ 11,600.00
Parking lot
Painting & repair, sign, Lighting.
I
$ 20,000.00
$ 20,000.00
$ -
$ -
SubtOtal
$ 1,100,000.00
Tax Rate
Sale Tax
Shipping
THANK YOU FOR YOUR BUSINESS
TOTAL
$ 1,100,000.00
JEN' S CONSTRUCTION INC.
C.S.L : 897784-
Address: 5612 HUDDART AVE
ty, State, Zip : ARCADIA CA 91006
PHONE : 626-203-2387
REFERENCE
Date : 4/17/2010
Prepared By : Candy Jeng
YEAR
JOB SITE
OWNER
PHONE
NOTE
2005
Arcadia
Kathryn Chao
626-446-4588
Commercial TI
Arcadia
Kathryn Chao
626-446-4588
Commercial TI
Riverside
Eli
626-278-5501
Remodel
Pasadena
Huntington Development
626-705-6588
Under Ground Ventilation
Sierra wades
Joanne Young
626-355-3328
Remodel
2006
Torrance
Steve Calhoun
310-257-2290
Remodel
Torrance
And Xu
310-531-3755
Commercial TI
Pasadena
Jane Chan
626-674-6588
Under Ground Ventilation
Monterey Park
Kenneth Kong
714-7474233
Commercial TI
Wihttier
Mrs Won
213-617-9745
Commercial TI
2007
Rowland Heights
Alex Woo
62640&1888
Commercial TI
Rowland Heights
Cindy Chuen
626-228-5889
Commercial TI
Arcadia
Katbryn Chao
626-446-4588
Commercial TI
Harbor City
John Gong
310-938-8600
Commercial TI
Monterey Park
Mrs. Young
626-571-9688
Remodel
San Gabriel
Mr. Cben
626-573-5656
Remodel
Harbor C'
John Gong
310-938-8600
Commercial TI
Carson City
Joi Szeto
Commercial TI
Anaheim
Mr. Lee
714-826-6021
Ramada inn. Remodel
Carson C'
Frieda Lee
310-326-3822
Commercial TI
Torrance
Kari Lee
310-891-3944
Commercial Addition
2008
Monterey Park
Timm Phu
626-348-7814
Remodel
Chino Hill
Michelle Ogle
310-629-7153
Commercial TI
Harbor C'
Joi Szeto
310-989-8823
Remodel
Pasadena
Huntington Development
626-705-6588
Under Ground Ventilation
Fullerton
Mrs Wei
714-968-0984
18 Unit Apartment TI
Arcadia
Inversever
626-300-4093
Commercial Water heater
2009
Rowland Hights,
Liu Y. C.
626-757-8994
20 Unit Commercial TI
San Gabriel
Eli
626-278-5501
Fountain
Azusa
Peter Shu
626-374-3283
Remodel
San Brendino
Mr Liu
626-271-6686
Commercial TI
Arcadia
John Won
626-222-2963
Remodel
Brea Mall
MicheUe Ogle
310-629-7153
Commercial TI
Rowland Heights
Peter Sbu
626-374-3283
Addition
N. CA Cupertino
Scott Jen
408-582-4958
Remodel
Fulluton
Michelle le
310-629-7153
Mail Box
Alhambra
Wind Kuo
626-616-1227
Fance
2010
N. CA Saratoga
Su
408-540-0366
Remodel
La Puente
Alan Shu
626-353-0921
Commercial TI
Torrance
Joi Szeto
310-989-8823
Apartment Remodel