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CC 2014-09-23_08.i. Housing Successor Pearwood HillsMEMORANDUM TO: CITY COUNCIUHOUSING SUCCESSOR TO THE DISSOLVED REDEVELOPMENT AGENCY FROM: STEVEN ADAMS, CITY MANAGER ff. SUBJECT: CONSIDERATION OF APPRAISAL OF PEARWOOD HILLS PROPERTY DATE: SEPTEMBER 23, 2014 RECOMMENDATION: It is recommended the City Council/Housing Successor to the Dissolved Redevelopment Agency: 1 ) authorize the City Manager to contract for an updated appraisal of the Pearwood Hills property; and 2) appropriate $3,400 from the Affordable Housing In-Lieu Fee Fund. IMPACT ON FINANCIAL AND PERSONNEL RESOURCES: It is recommended that the $3,400 cost be funded from the Affordable Housing In Lieu Fee Fund since the property is a housing asset and the proceeds will be used for an affordable housing purpose. BACKGROUND: , The City owned 7.2 cicres just east of the City limit adjacent to the Pearwood Avenue property, which had been acquired for drainage purposes. Drainage was detained in a portion slightly over 2.5 acres. Therefore, approximately 4.5 acres of the property consisted of an oak studded hillside knoll above the small valley that functions as the storm drainage basin. As a result, in 2013, the City Council approved subdividing and annexing the property. It was then sold to the Redevelopment Agency. Since the property has been deemed a housing asset, it does not fall under the jurisdiction of the Oversight Board to the Successor Agency to the Dissolved Redevelopment Agency. Item 8.i. - Page 1 HOUSING SUCCESSOR TO THE FORMER REDEVELOPMENT AGENCY · CONSIDERATION OF APPRAISAL OF PEARWOOD HILLS PROPE~TY SEPTEMBER 23, 2014 PAGE2 ANALYSIS OF ISSUES: The steps involved in dissolving the Redevelopment Agency have been completed. As a result, staff is. recommending the City proceed to sell the property so the revenues ·can be used for affordable housing purposes, primarily targeted for the proposed San Luis Obispo Housing Authority affordable housing project at the property on Halcyon Road recently acquired with funding assistance from the City. The first step is to obtain an appraisal. Staff .recommends the City contract with Hawkes Real Estate Appraisal since they prepared the original appraisal used for the acquisition of the property by.the Redevelopment Agency. ALTERNATIVES: . . The following alte~natives are presented for consideration: Approve staff's recommendations; Direct staff to seek proposals for the appraisal services; Do not seek an appraisal at this time and delay consideration of sale; or Provide staff other direction. ADVANTAGES: The appraisal will help ensure the City complies with State requirements for dispo~ing of housing. assets and will help generate· revenues that can be used to meet affordable·housing needs in the community. - DISADVANTAGES: Some neighborhood concerns were expressed regarding development of the Pearwood Hills property when the subdivision was considered and approved. ENVIRONMENTAL REVIEW: No environmental review is required for this item. . . PUBLIC NOTIFICATION AND COMMENTS: The agenda was posted in front of the City Hall on Thursday, September 18, 2014 and on the City's website on Friday, September 19, 2019. Attachments: 1 . Proposal for Appraisal Services Item 8.i. - Page 2 September 11, 2014 Steve Adams City Manager City of Arroyo Grande 300 E. Branch Street Real Estate Appraisal 4927 Coughlin Way Santa Maria, California 93455 Telephone: 805-937-6375 Fax: 805-800-1134 HawkesAppraisal@ve1izon.net Arroyo Grande, California 93420 By email Re: Appraisal Proposal-Pearwood project, 7.16 acres, APN 007-462-001 Dear Mr. Adams: . ' '' As you requested I am submitting this proposal for an appraisal of the referenced real estate, located off of Huasna Road just northeast of Pearwood Avenue in the City of Arroyo Grande. The property is identified by Assessor's Parcel Number 007-462-001 and consists of7.16 acres . of vacant land with an approved map for four residential parcels and an open space parcel with a .drainage easement. The purpose of the appraisal is to estimate the current market value of the 100% undivided fee simple interest in the real estate. The appraisal is to provide the indicated value for the entire property as it is, four lots with a fifth common lot, and will be competed for the use of the City of Arroyo Grande as it pursues the marketing of the property. The appraisal is to consider the real property only: personal property such as growing crops, equipment, livestock, vehicles, :furnishings; etc., will not be considered in the analysis, The appraisal report and its use will be subject to the statements, limiting conditions and other terms set forth in the appraisal report. At your request, I can provide you with a copy of the standard. assumptions and limiting conditions used. Any additional assumptions or limiting conditions required in order to complete the assignment will be prominently identified in the assignment. I can provide a· summary narrative appraisal report that will meet your requirements for a fee of $3,400. The fee will be due one half as a retainer upon your acceptance of this proposal, and the balance.upon delivery of the completed report. After I have received your authorization to proceed, it ~ill take approximately seven to eight weeks .to complete the report. The time· frame is my best estimate based upon my current work load: as my'work load changes, the amount of time required 'to complete the assignment may change as well. At the time the appraisal is authorized, I will provide a more current estimate of the completion date.. . It should be noted that I previously appraised the property: the date of value was.January 14, 2009, the report was dated February 2, 2009, and the client for the assignme.nt was the City of Arroyo Grande. The appraisal report will be in a summary format sufficient for your current purposes, but while the analysis will be complete, the report itself will not be suitable for some purposes. An updated appraisal in a suitable format rp.ay be required if the value is to be used for other purposes. This proposal does not include any additional work or updates. If the scope of the ATTACHMENT 1 Item 8.i. - Page 3 assignment should be expanded at your request, the additional work will be billed at the current hourly rate and added to the initial appraisal fee. The fee for expanding the scope of the project, or such services as report updates, consultations, attendance at depositions, and appearances before a court or administrative agency shall be billed at the rate current at the time the services are performed or according to arrangement made in advance. The current rate for testimony before a court, administrative agency, or in a deposition is $220 per hour: the rate for all other additional services is $150 p~r hour. Any additional work will be billed on a periodic basis (monthly, quarterly, etc.) and will be due within 30 days of billing. Any fee or portion of the fee not paid when due as specified above shall be subject to a service charge of 1 1/2 percent per -month on the unpaid balance. In order to expedite this assignment, I will need the following: 1) Name and telephone number of the person to contact for access. 2) The approved map with all conditions. _ 3) Any available engineering reports or studies on the property, including any on the cost to develop the property. The completion date cannot be met without these items. This appraisal report will conform with and be subject to the requirements of the Uniform Standards of Professional Appraisal Practice as promulgated by the Appraisal Standards Board of the Appraisal Foundation. The report will comply with the standards of the California Office of Real Estate Appraisers, by which I am licensed as a Certified General Real Estate Appraiser. Thank you for your interest in our services and for giving Hawkes .R,eal Estate Appraisal the opportunity to be of service to you. If this proposal meets with your approval, please sign in the space provided below and return a signed copy of the letter along with the retainer fee~ If you have any questions or need any additional information, please call me. Authorized Representative( s) Signature: _____________ __:_ ___ Date: ______ _ Name (Printed): ------------------------- Item 8.i. - Page 4 ,K~~ ~-'~'"'-·Jf~ Real Estate Appraisal 4927 Coughlin Way Santa Mana, Cahfmma 93455 Telephone: 805-937-6375 Fax: 805-800-1134 HawkesAppra1sal@verizon.net PROFESSIONAL QUALIFICATIONS ED HAWKES REAL ESTATE APPRAISER Item 8.i. - Page 5 Real Estate Appraisal 4927 Coughlin Way Santa Mana, California 93455 Telephone: 805-937-6375 Fax: 805-800-1134 HawkesAppra1sal@verizon.net ED HAWKES CGREAAG007710 Ed Hawkes has over 25 years of e>.<perience appraising real estate of ail types. Whife the appraisal of agricultural real estate is a specialty, Hawkes Real Estate Appraisal offers a full spectrum of real estate appraisal services including commercial, industrial, and residential appraisals. Appraisals completed by Ed Hawkes have been used for estate and business planning, tax return preparation, tax assessment appeals, litigation, land acquisition-both by eminent domain and by negotiation, and financing. After working several years in production agriculture; Ed Hawkes became a staff appraiser for Bank of America, specializing in the appraisal of agricultural real estate, equipment, and crops. He then spent ·several years managing farm and ranch real estate for Bank of America and Wells Fargo Bank. Returning to appraisal, he worked first as an independent residential appraiser, then as a staff appraiser with the firm of Reeder, Gilman, and Associates, and, following another brief stint as an independent appraiser, was the Chief Apprai.ser for Rincon Corporation, a full service agricultural real estate firm. · In 2009, he left Rincon to start Hawkes Real Estate Appraisal. Over the years, Mr. -Hawkes has accumulated extensive experience appraising property of all types for a variety of clients and purposes. A partial list of clients is attached. Item 8.i. - Page 6 Appraisal Experience 2009-Present 2000-2009 1998 -2000 1991 -1998 1989 -1991. 1983 -1985 Ed Hawkes Certified General Real Estate Appraiser California Certificate No. AG007710 Hawkes Real Estate Appraisal Duties: Principal Santa Maria, CA Rincon Corporation Duties: Chief Appraiser Santa Maria, CA Independent Real Estate Appraiser Duties: Appraise agricultural, commercial, industrial, and residential real estate on fee and subcontract basis Santa Maria, CA Reeder, Gilman & Associates: Appraisers & Consultants Duties: Appraise agricultural, commercial, industrial, and multi- family real estate. Santa Maria, CA Independent Real Estate Appraiser Duties: Appraise single family residential real estate. Santa Maria, CA Bank of America, NT&SA, Appraisal Department Duties: Appraise agricultural and residential real estate. Yuba City, CA Relevant Professional Experience 1988.-1989 Wells Fargo Bank, NA, Trust Real Estate Division Duties: Manage trust owned agricultural real estate throughout Southern California Santa Maria, CA 1985 -1988 Bank of America, NT&SA, Agricultural OREO Dept. Farm Management Section Duties: Manage and market bank owned farms and ranches in the Sacramento and San Joaquin Valleys Sacramento, CA International Right of Way Association Member #04743011 Education California Polytechnic State University, San Luis Obispo Bachelor of Science; Agricultural Management Qualified Expert Witness: San Luis Obispo County Superior Court, Santa Barbara County Superior Court Continuing Education Subjects: Eminent Domain Law; Skills of Expert Testimony; Conservation Easement Seminar; Market Trends Seminars; Separating Real Property, Personal Property, and Intangible Assets; Capitalization Theory and Technique; Condemnation Appraising; AppraisC!I Consulting, Appraisal Review; Option Value; Farm Appraisal; Valuation for Financial Reporting; Special Purpose Properties Seminar; IRS·Valuation Summit; USPAP; Federal and State Laws and Regulations; Elements of California Real Estate Law, and others. Item 8.i. - Page 7 Client List (Partial) The following is a list of some of the clients served by Ed Hawkes over the last thirteen years, first as part of Rincon Corporation, and then as Hawkes Real Estate Appraisal. The list includes private individuals, estates, law firms, government agencies, and financial, in·stitutional, agricultural, industrial, and commercial firms. Agencies Cambria Community Services District City of San Luis Obispo County of Santa Barbara Los Osos Community Services District Santa Ynez Band of Chumash Indians USDA Farm Service Agency Agricultural Firms Apia Billita Corporation Hi Thompson Investments King .Ranch Rosemary Farms Sierra Madre Ranch Santa Maria Berry Farms Sisquoc Ranch Rancho Laguna Farms Equity Ag Financial, Inc. Sisquoc Ranch Environmental Organizations Land Trust for Santa Barbara County Wildlife Conservation Board Financial Institutions Community Bank of Santa Maria Community West Bank, N.A. Rabobank Mid Coast Mortgage Mission Community Bank Residential Mortgage Corp Pacific Capital Bancorp Wells Fargo Bank Legal and Accounting Firms Ambrecht & Associates . Lapp, Fatch, Myers & Gallagher Mullen & Henzel Sinsheimer Juhnke Lebens & Mcivor Twitchell & Rice Weldon & DeGasparis Oliver Sandifer & Murphy Price Postel & Parma Item 8.i. - Page 8