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600-030-010 Chin Family - Fee Appraisal (Mobile Home Park) 04-10-19
APPRAISAL REPORT Proposed Acquisitions City of La Quinta Dune Palms Road Bridge Project OWNERSHIP: Chin Family Properties Limited Partnership Assessor’s Parcel Number: 600-030-010 46400 Dune Palms Road La Quinta, California 92253 Prepared for: Overland, Pacific & Cutler, LLC 2280 Market Street, Suite 200 Riverside, California 92501 Date of Valuation January 2, 2019 Date of Report April 10, 2019 April 10, 2019 John M. Cutler, Sr. Project Manager Overland, Pacific & Cutler, LLC 2280 Market Street, Suite 200 Riverside, California 92501 Re: Our File No. 18-6203 OWNERSHIP: Chin Family Properties Limited Partnership Assessor’s Parcel Number: 600-030-010 Appraisal of a proposed permanent roadway and public utilities easement and proposed temporary construction easement to be located at 46400 Dune Palms Road, in the city of La Quinta, California 92253 Dear Mr. Cutler: In accordance with your authorization, the larger parcel has been examined for the purpose of forming an opinion of the fair market value of the fee simple interest as of January 2, 2019. The function of the appraisal is for use by Overland, Pacific & Cutler, LLC (OPC), the City of La Quinta, Bengal Engineering and the California Department of Transportation to assist in the possible partial acquisition of the larger parcel. The larger parcel is being appraised to provide an opinion of the fair market value. This appraisal will be used in negotiations with the property owner for the possible partial acquisition of the larger parcel as part of the Dune Palms Road Bridge Project. The City of La Quinta proposes to construct an all-weather crossing and remove the existing low-water crossing of Dune Palms Road at the Coachella Valley Storm Water Channel. The crossing will consist of a 480-foot long by 86-foot wide, four-span bridge. The bridge’s typical section consists of six-foot sidewalks on both sides of the bridge, two (2) eight-foot outside shoulders also serving as bike/golf cart lanes, a 10-foot wide raised median, two (2) eleven-foot travel lanes and two (2) twelve-foot travel lanes. Additional project features include reconstruction of the north and south bridge approaches to accommodate the raised profile of the roadway to meet the bridge elevation, installation of a concrete slope protection at the northwest and southeast corners of the bridge, relocation of overhead electrical distribution lines and relocation of sewer lines at the northern bridge abutment. Overland, Pacific & Cutler, LLC April 10, 2019 Page Two The larger parcel is one parcel with a gross site area of 11.29 acres, or 491,792 square feet. It is currently improved with a mobile home park. According to the legal descriptions provided, the project as proposed includes two acquisitions: one permanent roadway and public utilities easement and one temporary construction easement. The proposed acquisitions are as follows. The purpose of the acquisition is for activities associated with Dune Palms Road Bridge Project. LARGER PARCEL AND PROPOSED ACQUISITIONS Acquisition Type Larger Parcel Current Use Assessor’s Parcel Number Larger Parcel Size (gross) Acquisition Area Roadway & Public Utilities Easement Mobile Home Park 600-030-010 11.29 acres 491,792 SF 3,040 SF Temporary Construction Easement Mobile Home Park 600-030-010 11.29 acres 491,792 SF 13,508 SF The project as proposed includes impacts to the larger parcel, including the elimination of two of the existing coaches and the single-family residence located at the southwesternmost corner of the site. Site improvements impacted include, but are not limited to, the existing pool area and driveway entrances located along Dune Palms Road. As of the effective date of this appraisal report, the subject larger parcel is improved with 101 mobile home spaces and a single-family residence; however, as part of a separate project, five mobile home units have been acquired by the City of La Quinta. As such, for purposes of this appraisal report, a total of 97 units is utilized, which includes 96 mobile home spaces and one single-family residence. As part of the separate project, a street easement was also acquired, with would indicate a slightly smaller site size reflected for the larger parcel. This appraisal report will value the total gross site area of 11.29 acres. Typically, when valuing acquisitions, the estimated fair market value of the land to be acquired is based on land sales data for other properties with essentially the same utility and amenities. The larger parcel is zoned RM, Medium Density Residential with a General Plan Land Use of Medium/High Density Residential. Uses include a range of residential uses. Kiley Company Overland, Pacific & Cutler, LLC April 10, 2019 Page Three The following is an Appraisal Report as identified under Section 2-2(a) of the Uniform Standards of Professional Appraisal Practice (USPAP). The appraisal is made in compliance with the guidelines set forth in the Code of Professional Ethics and the Standards of Professional Practice of the Appraisal Institute, and USPAP, adopted by the Appraisal Standards Board of The Appraisal Foundation. The appraisal is made in compliance with the guidelines set forth by California Eminent Domain Law, the California Department of Transportation, and the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (the Uniform Act). APPRAISAL CONCLUSION As of January 2, 2019, the opinion of compensation for the proposed acquisition is as follows: Property Rights Value Opinion Compensation VALUE OF THE LARGER PARCEL IN THE "BEFORE" CONDITION $5,335,000 Permanent Acquisition(s) Roadway & Public Utilities Easement (3,040 Square Feet) $21,280 Site Improvements $9,762 TOTAL PERMANENT ACQUISITIONS $31,042 Damages Value of Remainder as Part of the Whole $5,303,958 Value of the Remainder After Acquisition $5,042,816 TOTAL DAMAGES $261,142 $261,142 Benefits $0 TOTAL BENEFITS $0 TOTAL PROPERTY RIGHTS COMPENSATION $292,184 Temporary Acquisition Temporary Construction Easement - 13,508 Square Feet $34,040 Improvements in TCE Area - Replaced in Kind $258,126 Temporary Impacts $33,600 TOTAL COMPENSATION FOR TCE RIGHTS $325,766 TOTAL COMPENSATION $617,950 ROUNDED $618,000 * Minor differences due to rounding APPRAISAL CONCLUSION Kiley Company Overland, Pacific & Cutler, LLC April 10, 2019 Page Four The following is an appraisal report which sets forth the investigation, data, and analyses upon which the conclusion is predicated. This letter must remain attached to the appraisal report in order for the value to be considered valid. Respectfully submitted, Elizabeth M. Kiley, MAI, AI-GRS Meredith McDonald Certified General Real Estate Appraiser Certified General Real Estate Appraiser Certificate No. AG005391 Certificate No. AG043409 Expiration Date: April 13, 2020 Expiration Date: December 13, 2019 Kiley Company TABLE OF CONTENTS Transmittal Letter ...................................................... i Table of Contents ...................................................... v Introduction .......................................................... 1 Area Description........................................................ 7 Market Conditions ...................................................... 21 Project Description...................................................... 23 Parcel Valuation ........................................................ 26 Appraisal Conclusion .................................................... 69 Certification ........................................................... 70 Qualifications .......................................................... 71 Market Data ........................................................... 75 Addenda ............................................................. 76 Kiley Company Page v INTRODUCTION Property Location:46400 Dune Palms Road La Quinta, California 92253 Assessor’s Parcel Number:600-030-010 Purpose and Intended Use of Report:To provide an opinion of the fair market value for the larger parcel and compensation for the proposed acquisitions. This appraisal will be used in negotiations with the property owner for the possible partial acquisition of the larger parcel. Client:Overland, Pacific & Cutler, LLC Intended Users:Overland, Pacific & Cutler, LLC, the City of La Quinta, Bengal Engineering and the California Department of Transportation Date of Owner Notification:September 20, 2018 by Overland, Pacific & Cutler, LLC; October 22, 2018 by Kiley Company Date of Inspection:November 6, 2018; an exterior inspection was done on January 2, 2019 Date of Value Opinion:January 2, 2019 Date of Report:April 10, 2019 Property Rights Appraised:Fee simple rights for the larger parcel land value and easement rights for the proposed easement acquisitions Non-Realty Rights:There are no non-realty rights valued. Fair Market Value: Fair market value is defined by Sections 1263.320 and 1263.330 of the State of California Code of Civil Procedure as follows: 1263.320. (a) The fair market value of the property taken is the highest price on the date of valuation that would be agreed to by a seller, being willing to sell, but under no particular or urgent necessity for so doing, nor obliged to sell, and a buyer, being ready, willing and able to buy but under no particular necessity for so doing, each dealing with the other with full knowledge of all the uses and purposes Kiley Company Page 1 for which the property is reasonably adaptable and available. (b) The fair market value of property taken for which there is no relevant comparable market is its value on the date of valuation as determined by any method of valuation that is just and equitable. 1263.330. The fair market value of the property taken shall not include any increase or decrease in the value of the property that is attributable to any of the following: (a) The project for which the property is taken. (b) The eminent domain proceeding in which the property is taken. (c) Any preliminary actions of the plaintiff relating to the taking of the property. Appraisal Scope:As part of this appraisal, a number of independent investigations and analyses were made. Three approaches to value have been considered in this appraisal: the cost approach, the sales comparison approach and the income approach. A land sales comparison approach is the approach utilized in the land valuation for the proposed easement acquisitions. The land value concludes at the value of the land without a value attributed to the majority of the improvements associated with the property. The value conclusion assumes the site is ready for development to its most probable highest and best use. Where applicable, portions of the cost approach are used in the valuation of the site improvements impacted by the project as proposed. In addition, the value of the larger parcel as improved in the “before” and “after” conditions is provided. Mobile home parks are typically investment properties, similar to apartment complexes, with the leased fee interest transferred. For the market value of the larger parcel “as improved,” the sales comparison and income approaches are both considered relevant and have been developed. The individual coaches are not owned by the park owner, who only owns the land and site improvements, making the cost approach irrelevant in the value of the larger parcel “as improved.” The fair market value of the larger parcel “as improved” will be established via the Sales Comparison and Income Approaches. Kiley Company Page 2 The larger parcel is zoned for a range of residential uses; to value the larger parcel, sales of similarly zoned land are analyzed. The summary of the scope of work should be considered in conjunction with the assumptions and limiting conditions set forth in this report. The investigations and analyses undertaken include the following: • A physical inspection of the larger parcel was made on November 6, 2018 and January 2, 2019. Athough attempts were made to contact the property owner and representatives, no response was received and the site was inspected from the existing public right-of- way; • Collection and verification of relevant market data gathered from sources such as area brokers, CoStar, myFirstAm, and MLS. Direct and indirect verification was used for this assignment. Direct verification confirms information with a party directly involved in the transaction. Direct verification is attempted for all sales. Indirect verification uses information obtained from a secondary data source such as a public records database, a secondary data provider or another appraiser; • Interviews with knowledgeable professionals as well as local governmental representatives and a review of website information regarding real property values, real estate taxes, and zoning issues in the area; • A primary field study of potentially competitive properties and projects for sale; and • Preparation of an appraisal report, which includes the most pertinent data and analyses used in developing the final value conclusion. Type of Report:Appraisal report USPAP Competency:The appraisers have the required knowledge and experience in the appraisal of similar property types. Estimated Marketing and Exposure Period:A review of the marketing and exposure times of comparable land sales was done as part of our analysis. The review indicated that typical marketing and exposure times for properties similar to the larger parcel range from six to 12 months. However, exposure and marketing times are not relevant to an estimate of fair market value for eminent domain purposes. A Jurisdictional Exception from USPAP is used. Kiley Company Page 3 Ownership:According to public records, ownership is as follows: Chin Family Properties Limited Partnership, a California limited partnership Property History:According to public records, there have been no other reported listings, sales or transfers of the larger parcel in the past five years. Legal Description:The legal description for the larger parcel is included in the Addenda. Assumptions and Limiting Conditions The certification of the appraisers appearing in this appraisal report is subject to the following extraordinary and general assumptions and limiting conditions: Extraordinary Assumptions USPAP defines an Extraordinary Assumption to be “an assumption directly related to a specific assignment, as of the effective date of the assignment results, which, if found to be false, could alter the appraiser’s opinion or conclusion.” The use of an extraordinary assumption may have an effect on the assignment results. This appraisal has the following extraordinary assumptions: Section 1263.330 of the California Code of Civil Procedure requires the appraisers to not consider any effect on value of the project, the eminent domain proceeding, or any preliminary actions of the acquiring agency. The appraisers investigated the real estate market for any influence these issues may have had in the market data selected and analyzed and could not find any. Therefore, we have prepared the appraisal analysis of the subject property in the “before” condition under the extraordinary assumption that these activities have no effect on the value conclusions stated in this appraisal report. Legal descriptions showing the area of the proposed acquisitions have been included herein. This appraisal is based on the information provided by the client that has been relied on in this appraisal report and is assumed to be accurate. Information regarding the temporary construction easement period indicates an estimated construction period of 48 months. This appraisal report is based on the assumption that the stated temporary construction easement duration is accurate. Should the information furnished by others vary, the assignment results could be affected. As of the effective date of this appraisal report, the subject larger parcel is improved with 101 mobile home spaces and a single-family residence; however, as part of a separate project, five mobile home units have been acquired by the City of La Quinta. As such, for purposes of this appraisal report, a total of 97 units is utilized, which includes 96 mobile home spaces and one single-family residence. As part of the separate project, a street easement was also acquired, with would indicate a slightly smaller site size reflected for the larger parcel. This appraisal report will value the total gross site area of 11.29 acres. Kiley Company Page 4 Hypothetical Conditions USPAP defines a hypothetical condition as “a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis.” This appraisal report includes the following hypothetical condition. Use of this hypothetical condition may have had an effect on the appraisal results. The analysis in the “after” condition of the larger parcel has been prepared using the hypothetical condition that the project has been completed per the descriptions, plans and specifications presented in this appraisal report. The reader is advised that the value conclusions may be affected if there are changes in the size, location or design of the acquisition or project. General Assumptions The approximate land area of 11.29 acres, or 491,792 square feet, is based on the tax assessor’s map. For the purposes of this report, the information contained in the public records is utilized. If precise calculations or measurements are required, it is recommended that an architect or surveyor be retained. The date of value, for which the opinion of value is expressed in this report, is set forth in the letter of transmittal. The dollar amount of the value opinion is based on the purchasing power of the United States dollar on that date. A Litigation Guarantee, issued by Lawyers Title Company and dated March 5, 2018, was provided for review. The appraisers are not title experts; it is assumed that there are no existing easements, agreements, or restrictions that would adversely affect the value of the larger parcel. The reader is advised that the current title of this property should be checked carefully, as title issues can influence value. The appraisers retain the right to adjust the conclusion of value if adverse title issues would so warrant. An environmental report was not provided for review. For purposes of this appraisal, it is assumed that there are no hazardous materials on the site, that the site is free of any type of contamination, and that there are no hazardous materials on or in the property that would cause a loss in value. During the inspection, evidence of the existence of potentially hazardous waste materials, endangered species or native habitats was not observed. However, the appraisers are not qualified to detect such substances. No responsibility is assumed for matters legal in character and no opinion is rendered as to title, which is assumed to be good and marketable. The premises are assumed to be free and clear of all leases, use restrictions and reservations, covenants, conditions, easements, cases or actions pending, tax liens, and bonded indebtedness, except as specified. The property is assumed to be under responsible ownership and competent management. Neither all nor any part of the contents of this report, or copy thereof, shall be conveyed to the public through advertising, public relations, news, sales, or any other media, without the prior written consent and approval of the appraisers. This limitation pertains to any valuation conclusion(s), the identity of the appraisers or the firm, and any Kiley Company Page 5 reference to the professional organization with which the appraisers are affiliated or to the designations thereof. No responsibility is assumed for any conditions not readily observable during the customary inspection of the larger parcel which might affect the valuation, except those items specifically mentioned in this report. The right is reserved to change the valuation if so warranted, when supplied with further information if that information so dictates. No survey, legal, or engineering analyses of this property have been made. It is assumed that the legal description and area computations furnished are accurate. However, it is recommended that such analyses be made for exact verification through appropriate professionals before demising, hypothecating, purchasing, or lending occurs, or any decision is made requiring exact survey, legal, or engineering analyses. Maps, plats, and exhibits included in this report are for illustration only, as an aid for the reader in visualizing matters discussed within the report. They should not be considered as surveys or relied upon for any other purpose, nor should they be removed from, reproduced, or used apart from this report. The information furnished by others is believed to be reliable. However, no warranty is given for its accuracy. Oil, gas, mineral, and subsurface rights, if any exist, were not considered in making this appraisal, unless otherwise stated, and are not a part of the appraisal. No responsibility is assumed for economic or physical factors which may occur after the date of this appraisal. In rendering this opinion, no responsibility is assumed for subsequent changes in management, tax laws, or economic or physical factors which may or may not affect said conclusion or opinion. The property is appraised assuming it is in full compliance with all applicable federal, state, and local environmental regulations and laws, unless otherwise stated. The property is appraised assuming that all required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state, or national government or private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is based, unless otherwise stated. No opinion is intended to be expressed for matters that require legal expertise or specialized investigation or knowledge beyond that customarily employed by real estate appraisers. There is no evidence that the site has special resource value for natural, cultural, recreational, or scientific concerns. Kiley Company Page 6 AREA DESCRIPTION Riverside County - Inland Empire The larger parcel is located in Riverside County, California. Riverside is often grouped with adjacent San Bernardino County to form the Riverside-San Bernardino Metropolitan Statistical Area (“MSA”). This region is commonly referred to as the “Inland Empire.” The urbanized areas are concentrated in the western portion of the county. Riverside County is bordered to the west by Los Angeles and Kern counties, to the south by San Diego and Imperial counties, to the southwest by Orange County, to the north by Inyo County, and to the east by Nevada and Arizona. Riverside County (more than 7,200 square miles in area) is the fourth largest county in the state. The county consists of fertile river valleys, low deserts, mountains, foothills and rolling plains. Most of the county’s population and employment are located in the southwestern portion of the county. Riverside and San Bernardino counties have been the biggest beneficiaries of adjacent counties being built out, resulting in both becoming two of the fastest growing counties in the country during some of the last 10 years. Strong growth into outlying areas is made possible by the extensive freeway system that exists throughout Southern California. The Ontario International Airport provides the majority of air transportation for the Inland Empire. Several major airlines, as well as regional commuter airlines, serve the Ontario International Airport. A network of freeways links urbanized areas of the Inland Empire. The major north and south arterials are the Ontario (I-15) Freeway and the Escondido (I-215) Freeway. The Riverside (SR-91), Pomona (SR-60) and San Bernardino (I-10) freeways provide east and west access to Los Angeles and to the desert communities. The following information is provided by the LAEDC Kyser Center for Economic Research, from its economic forecast in February 2017 (the most recent available for the Inland Empire). LAEDC provides some of the most detailed and current data on the economic health of the county. The following pages have been extracted from the 2017-2018 Forecast and Industry Outlook to provide a summary of the outlook for Riverside and San Bernardino counties. Kiley Company Page 7 Kiley Company Page 8 Kiley Company Page 9 Kiley Company Page 10 Kiley Company Page 11 Kiley Company Page 12 Kiley Company Page 13 Kiley Company Page 14 Coachella Valley The Coachella Valley is located in the eastern area of Riverside County and spans approximately 45 miles southeast from the San Bernardino Mountains to the Salton Sea. The valley is approximately 15 miles wide and surrounded on the southwest by the San Jacinto and Santa Rosa Mountains and on the northeast by the Little San Bernardino Mountains. The valley has ±410,000 permanent residents plus 1,000,000 temporary seasonal residents. Tourism brings additional visitors. The valley has some of the warmest winters in the United States, and in a typical year, more than 350 days of sunshine. Nine cities make up the Coachella Valley including Cathedral City, Coachella, Desert Hot Springs, Indian Wells, Indio, La Quinta, Palm Desert, Palm Springs, and Rancho Mirage, plus various unincorporated communities. There are nearly 200 golf courses throughout the valley, as well as countless hiking trails, world class resorts, spas, and restaurants. The Coachella Valley is served by the I-10 Freeway which runs primarily east and west from Los Angeles into Arizona and beyond. Highway 111 branches off of, and runs primarily parallel to, the I-10 from Palm Springs in the north to Indio in the southeast. Coachella Valley Population City 1/1/2000 1/1/2010 1/1/2018 Percentage Change (Last Year) Cathedral City 42,647 51,037 54,791 0.90% Coachella 22,724 40,464 45,635 0.80% Desert Hot Springs 16,582 25,852 29,742 1.30% Indian Wells 3,816 4,941 5,574 0.50% Indio 49,116 75,122 87,883 1.40% La Quinta 23,694 37,307 41,204 1.50% Palm Desert 41,155 48,132 52,769 1.40% Palm Springs 42,807 44,385 74,406 1.20% Rancho Mirage 13,249 17,168 18,738 0.90% Coachella Valley Total 255,790 344,408 410,742 8.20% Source: California Dept. of Finance Kiley Company Page 15 City of La Quinta The city of La Quinta is a resort town, located at the southeastern corner of the Coachella Valley. It is approximately 20 miles east of Palm Springs, 100 miles east of Riverside and 150 miles east of Los Angeles. According to the U.S. Census Bureau, the city has a total of 35.6 square miles, of which 35.1 square miles are land and 0.4 square miles is water. The city’s elevation is approximately 56 feet above sea level. The city has a strong tourism industry, especially during the cooler winter months when “snowbird” tourists visit. According to the city, approximately 18,000 call La Quinta home between the months of October to May. The most prominent industry is golfing with more than 20 golf courses, including the world-famous PGA West, which has been host to numerous prestigious golf tournaments. The number of retail shopping centers has increased over the past 10 years with discount retailers and high-end retailers bringing in millions of revenue dollars to the City. According to the 2016/2017 Comprehensive Annual Financial Report, the top 10 employers within the city are as follows: Employers Activity Number of Employees Desert Sands Unified School District Government 2,677 La Quinta Resort & Club/PGA-West Hotel/Golf Resort 1,450 Walmart Retailer 340 Home Depot Retailer 198 Costco Retailer 180 Target Retailer 170 Lowe’s Home Improvement Retailer 140 Imperial Irrigation District Utility Company 131 Rancho La Quinta Golf Resort 127 Traditions Golf Club Golf Resort 96 Kiley Company Page 16 Kiley Company Page 17 Immediate Neighborhood Description The larger parcel is located on the northern portion of the city of La Quinta, in a populated area of the city, north of the majority of the resorts. Commercial development is located mostly to the south, along Highway 111, which runs throughout Coachella Valley. The immediate neighborhood includes a range of commercial, retail and residential uses. Demographic information reported by STDBOnline.com reports the following information within one-, three- and five-mile radii of the larger parcel. Demographic Profile One Mile Three Mile Five Mile 2018 Population 8,099 76,671 167,843 2023 Population Forecast 8,744 81,055 180,196 2018 Total Households 3,133 27,801 59,783 2018 Household Size 2.58 2.74 2.79 2023 Household Forecast 3,391 29,338 64,145 New Households Forecast 258 1,537 4,362 2018 Median Household Income $78,432 $64,805 $65,292 2023 Median Household Income $95,526 $78,379 $78,917 2018 Average Household Income $109,795 $98,840 $98,052 2023 Average Household Income $133,318 $119,888 $118,784 In conclusion, the larger parcel’s neighborhood and surrounding area is characterized as part of a relatively-densely populated desert area. The following pages provide a neighborhood location map and aerial photograph. Kiley Company Page 18 Kiley Company Page 19 Neighborhood Aerial Kiley Company Page 20 MARKET CONDITIONS The larger parcel is zoned Medium Density Residential by the City of La Quinta. Allowable uses for the larger parcel include multi-family residential, including apartment buildings, condominium and townhome complexes and mobile home parks. The immediate surrounding improvements reflect a range of commercial, retail and residential uses; existing zoning and the location would indicate that, should the property be redeveloped, a knowledgeable buyer or developer would redevelop the site for multi-family residential. As such, the local multi-family residential market was reviewed in order to determine current market conditions as they relate to the subject. Local Market Trends - Residential Land Sales Multiple Listing Service (MLS), as well as Costar, were searched for sales of medium density residential land sales. A review of sale data and reports from brokers active in the area indicate that land prices within the subject’s area are described as mostly stable over the past five years. This is a pattern which mirrors the trends in housing prices in the subject’s specific submarket area for the same period. A search of Coachella Valley land sales data for market trends revealed 66 transactions since January 2014. The data is limited by a lack of supply and prices which are influenced by differences in physical characteristics. COSTAR LAND SALE TRENDS Residential Land Trends in the Coachella Valley 2014 2015 2016 2017 2018 Number of Transactions 17 17 9 10 13 Total Dollar Volume $17,070,000 $22,632,645 $18,162,909 $16,153,830 $19,680,733 Total Land (Acres) 133.40 149.44 76.65 96.00 119.03 Average Number of Acres 7.85 8.79 8.52 10.67 9.16 Average Price PSF of Land $2.94 $3.48 $5.44 $3.55 $3.80 Kiley Company Page 21 The sales survey completed as part of the sales comparison approach reflects sale prices ranging from $4.08 to $10.66 per square foot of land area. Local Area Trends - Improved Mobile Home Parks The sales survey completed as part of the sales comparison approach reflects sale prices ranging from $28,010 to $63,200 per unit. Prices vary due to park location, age and unit size. Brokers and property managers report that the market is mostly stable with demand for well located properties. The market data reflects rent for mobile home coaches within the Coachella Valley ranges from $425 to $775 per space per month. Trends for improved mobile home coaches within all of Southern California reflects the following: Kiley Company Page 22 PROJECT DESCRIPTION Project Purpose The purpose of the project is to replace the existing low-water crossing spanning the Coachella Valley Storm Water Channel (CVSC) at Dune Palms Road with an all-weather access. The proposed improvements will accomplish the following: • Provide reliable route for emergency vehicles, motorists, pedestrians, and bicyclists traveling the corridor • Provide safe access across the CVSC (Whitewater River) and along the corridor during all-weather events • Improve traffic circulation Project Description The project proposes to remove the existing low-water crossing of Dune Palms Road at the CVSC in the City of La Quinta, Riverside County. The crossing will be replaced with a 480 foot long and 86 foot wide four-span bridge. The bridge typical section consists of six-foot sidewalk on both sides of the bridge, two (2) eight-foot outside shoulders also serving as bike/golf cart lanes, a raised median, two (2) eleven-foot travel lanes, and two (2) twelve-foot travel lanes. The proposed improvements will include a reconstruction of the north and south bridge approaches to accommodate the significantly raised profile of the roadway. In order to match the roadway section on the south side of the bridge, the project’s construction limits will be extended to 239 feet of Highway 111. As a part of the bridge construction, concrete slope protection will be installed along the north side of the channel. Additionally, minor removal and replacement of slope protection will be required on the south side of channel west of the proposed bridge and extension of slope protection approximately 465 feet east (downstream) of the proposed bridge. The slope protection is needed for scour countermeasures. As a result of the proposed cast-in-place drilled shaft bridge construction, scour protection within the bottom of the channel should not be required. The installation of the concrete slope protection will require the existing channel bank to be excavated at a 1.5:1 (horizontal to vertical) slope to the bottom of the channel, then at a 1:1 slope to the bottom of the slope protection. The current dirt channel bank is at an approximate slope of 2:1 to 2.5:1. Kiley Company Page 23 Existing Roadway The existing low-water roadway crossing width is 68 feet that would accommodate a four lane roadway section with no median, and eight foot wide sidewalk along the western edge and an eight foot shoulder along the eastern edge of the road. Immediately north of the channel crossing, the existing right-of-way width does accommodate a second northbound through lane; however, the existing mobile home park has a number of encroachments with site improvements within the street right of way. In addition, Dune Palms Road approximately one quarter mile north of the channel low- water crossing is a four lane roadway with a median, and immediately south of the channel crossing, the existing roadway width is sufficient to accommodate four through lanes. Subject Larger Parcel Impacts The project as proposed includes the following proposed acquisitions. In addition, the project as proposed includes impacts to the larger parcel, including the elimination of two of the existing coaches and the single-family residence located at the southwesternmost corner of the site. Site improvements impacted include, but are not limited to, the existing pool area and driveway entrances located along Dune Palms Road. LARGER PARCEL AND PROPOSED ACQUISITIONS Acquisition Type Larger Parcel Current Use Assessor’s Parcel Number Larger Parcel Size (gross) Acquisition Area Roadway & Public Utilities Easement Mobile Home Park 600-030-010 11.29 acres 491,792 SF 3,040 SF Temporary Construction Easement Mobile Home Park 600-030-010 11.29 acres 491,792 SF 13,508 SF Kiley Company Page 24 Kiley Company Page 25 PARCEL VALUATION Appraisal Summary and Valuation Proposed Acquisitions Dune Palms Road Bridge Project PROPERTY IDENTIFICATION Property Location:46400 Dune Palms Road La Quinta, California 92253 Ownership:According to the Litigation Guarantee provided for review, ownership is as follows: Chin Family Properties Limited Partnership, a California limited partnership Assessor’s Parcel Number: 600-030-010 Mailing Address: 3487 Rowena Avenue Los Angeles, California 90027 Legal Description: Included in the Addenda APPRAISAL INFORMATION Date of Owner Notification: September 20, 2018 by Overland, Pacific and Cutler, LLC; October 22, 2018 by Kiley Company Date of Inspection: November 6, 2018; an exterior inspection was done on January 2, 2019 Date of Value: January 2, 2019 Date of Report: April 10, 2019 Property Rights Appraised: Fee simple rights for the larger parcel land value and easement rights for the proposed acquisitions. Proposed Acquisitions: The project as proposed includes the following acquisitions: Acquisition Type Easement Area Roadway and Public Utilities Easement 3,040 square feet Temporary Construction Easement 13,508 square feet Kiley Company Page 26 Owner Notification and Interview: The property owner was notified of the intent to appraise the property via a letter from Overland, Pacific & Cutler, LLC dated September 20, 2018. The property owner was notified of the intent to appraise the property via a letter from Kiley Company dated October 22, 2018. Multiple attempts were made by the appraisers to contact the property owners and property owner attorneys, but were unsuccessful. The larger parcel was inspected from the public right-of-way on November 6, 2018 and January 2, 2019. DESCRIPTION OF THE L ARGER PARCEL Larger Parcel Area:The larger parcel is one parcel; according to the Assessor’s Parcel Map, the larger parcel gross site area is 11.29 acres, or 491,792 square feet. Topography and Shape:The larger parcel is essentially level with a slight slope along the southern and a portion of the western property line; the shape is essentially rectangular. Site Description:The larger parcel is a residentially zoned site improved with a mobile home park, driving areas and landscaping. Frontage:Dune Palms Road: ±633 feet Zoning:The larger parcel is zoned RM, Medium Density Residential with a Medium/High Density General Plan Land designation. According to the City’s Municipal Code, the purpose of the RM zoning designation is “to provide for the development and preservation of medium density neighborhoods (four to eight units per acre) with single-family detached dwellings on medium and small size lots and/or, subject to a specific plan, projects with clustered smaller dwellings, such as one- and two-story single-family attached, townhome or multifamily dwellings, with open space.” Permitted uses within the RM zone include single-family detached dwellings, townhomes, condominium multifamily (“airspace” units), apartment multifamily (rental units), mobile home subdivisions and manufactured homes on individual lots subject to Section 9.60.180, resort residential subject to Section 9.60.320 , congregate living facilities 6 or Kiley Company Page 27 fewer persons, residential care facilities 6 or fewer persons, senior citizen residences 6 or fewer persons subject to Section 9.60.200, public parks, playfields and open space, golf courses and country clubs per Section 9.110.040. Development standards in the RM zone include: Minimum lot size: 5,000 square feet Minimum lot frontage: 50 feet Maximum Structure Height: 28 feet Maximum Number of stories: 2 Minimum front yard setback (non-garage portions of dwelling): 20 feet * Minimum garage setback: 25 feet 1 Minimum interior/exterior side yard setbacks: 5/10 feet2 Minimum rear yard setback: 15 feet Maximum lot coverage: 60% Minimum livable floor area for single-family detached excluding garage: 1,400 square feet Minimum landscape setbacks adjacent to perimeter streets: 10' minimum at any point, 20' minimum average over entire frontage3 Minimum common open area: 30%3 * Projects with five or more adjacent dwelling units facing the same street shall incorporate front setbacks varying between 20 feet and 25 feet or more in order to avoid streetscape monotony. 1 Twenty feet if “roll-up” type garage door is used. 2 For interior setbacks, if the building is over 17 feet in height, the setback is five feet plus one foot for every foot over 17 feet in height or fraction thereof, to a maximum setback of ten feet. The additional setback may be provided entirely at grade level or a combination of at grade and airspace above the 17-foot building. 3 Does not apply to single-family detached if a specific plan is required. Landscaping and open area shall be per the standards of Section 9.60.240. Highest and Best Use:The highest and best use is defined 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.” (Source: The Appraisal of Real Estate, 14th Edition) Physically Possible The larger parcel is a mostly level site in a developed area with average access to utilities and transportation linkages. The site is a rectangular parcel, with sufficient size, width and depth to support many types of development. The Kiley Company Page 28 location, local street exposure and nearby population density appear to support various uses on the site. Legally Permissible The site is zoned RM, Medium Density Residential, which allows for a variety of residential uses up to eights units per acre and minimum lot sizes of 5,000 square feet. Condominium and townhomes, as well as mobile home parks, are also allowed. The subject site, if vacant, would likely be viewed as a potential site for residential development. Financially Feasible Under current economic and financial conditions, surrounding uses and current development trends in the market area suggest that a residential development may be feasible. Maximally Productive Residential development under the allowable zoning would result in the highest value and is concluded to be the maximally productive use of the larger parcel. Most Probable Buyer The most probable buyer would be an investor or developer. Conclusion: Highest and Best Use in the “Before” Condition “As If Vacant” Based on the analysis of the data, the highest and best use of the subject larger parcel “as if vacant” is concluded to be for current residential development as allowed by zoning. “As Improved” The existing improvements are in average condition and appear to be operating successfully. The highest and best use “as improved” would be the continued use of the existing improvements. Improvements: The larger parcel is improved with a mobile home park, constructed in the mid-1960's. There are approximately 96 mobile home spaces, or pads, plus one single-family residence. Site improvements include a gated in-ground swimming pool and pool area, two laundry rooms and public parking. Interior streets are paved with asphalt and there is a concrete block wall and wood fence along Dune Palms Road. Kiley Company Page 29 Existing building improvements impacted by the project as proposed include the single-family residence located at the southwestern corner of the larger parcel and two mobile home coaches near Dune Palms Road. The appraisers were not provided access to the single-family residence and limited information is available through public records for the house. Assessor’s Information: According to public records, current taxes reflect the following: Assessed Land Value Assessed Imp. Value Total Value Base Taxes Special Assessments Total Taxes Tax Rate Area Base Tax Rate $414,209 $755,945 $1,170,154 $18,405 N/Av $18,405 20-026 N/Av ** The reader is advised that the tax rolls are currently closed for Riverside County and tax information is not available. The indicated assessed values are based on information provided by First American Title. In California, real property is assessed at 100% of market value. A reassessment occurs when a property is sold or transferred or when new construction or demolition occurs. Property taxes are limited by law to 1% of assessed value plus voter-approved obligations. Assessments may not increase by more than 2% annually. Utilities: Utilities are available to the site. Soils and Drainage: It is unknown if there are any adverse soil conditions. Environmental Conditions: An environmental report was not provided as part of this assignment. The valuation assumes that the site is clear of any environmental issues, and no consideration has been given to any cost or effects of any possible contamination, remediation or environmental limitations which may exist. A biological report was not available for review. The existence of endangered species or native habitats may or may not be present on the property. The appraisers are not qualified to detect such species. Title Information: A Litigation Guarantee, issued by Lawyers Title Company and dated March 5, 2018, was provided for review. It is assumed that there are no existing easements, agreements, or restrictions that would adversely affect the value of the larger parcel. The reader is advised that current title of this property should be checked carefully as title issues can Kiley Company Page 30 influence value. The right is reserved to adjust the valuation estimate if adverse title items are revealed and would so warrant. Flood Hazards: The larger parcel is located within Flood Zone “X” as indicated on the National Flood Insurance Map, Community Map Panel No. 06065C2234G, dated August 28, 2008. Shaded Zone “X” is described as “areas of 0.2% annual chance flood hazard; areas of 1% annual chance flood with average depths of less than 1 foot or with drainage areas less than 1 square mile; and areas protected by levees from 1% annual chance flood.” The reader is advised that the larger parcel is located immediately adjacent to the Whitewater River, an existing flood control channel riverbed. It is unknown if the larger parcel is located within liquefaction or earthquake-induced zones, as the specific location is not mapped; however, the area immediately adjacent to the larger parcel is mapped and indicates that portions of the immediate area are located in liquefaction and earthquake-induced zones. This is according to a map obtained from the State of California Division of Mines and Geology, Indio Quadrangle. Kiley Company Page 31 Assessor’s Parcel Map Kiley Company Page 32 Larger Parcel Aerial Photograph Kiley Company Page 33 Larger Parcel Site and Street Photographs Dune Palms Road Looking South from Larger Parcel Dune Palms Road Looking North from Vacant Lot Across the Street Kiley Company Page 34a Larger Parcel Site and Street Photographs Dune Palms Road Looking South from Northern Side of the Flood Control Channel, in front of Mobile Home Park Dune Palms Road and Street Improvements in front of Larger Parcel Kiley Company Page 34b Larger Parcel Site and Street Photographs Mobile Home Park Improvements from Existing Right-of-Way Improvements from Existing Right-of-Way Kiley Company Page 34c Larger Parcel Site and Street Photographs Improvements from Existing Right-of-Way Improvements from Existing Right-of-Way Kiley Company Page 34d PROPOSED PROJECT INFORMATION Proposed Acquisitions: According to the information provided, the project as proposed includes the following acquisitions: ACQUISITION AREAS Roadway and Public Utilities Easement 3,040 square feet Temporary Construction Easement 13,508 square feet Roadway and P ublic Utilities Easement The proposed roadway and public utilities easement is approximately 3,040 square feet in size. It is long and narrow, approximately nine feet wide and runs approximately 336.18 feet along the western property line. The proposed permanent roadway and public utilities easement will directly impact the property and the area will no longer be usable to the property owner; it is similar to a partial fee acquisition. Temporary Construction Easement The proposed temporary construction easement is approximately 13,508 square feet in size. It is an irregularly shaped easement, starting at a width of 79.24 feet along the southern property line, narrowing to 21.00 feet at the northern portion of the easement, running approximately 346 feet along the western property line. The temporary construction easement will be for a duration of 48 months. Site Improvements in the Acquisition Areas: The project as proposed includes two easements: one permanent roadway and public utilities easement and one temporary construction easement. Site improvements impacted include the following, broken down by their respective easement: Site Improvements located in the Roadway and Public Utilities Easement Improvement Quantity Concrete Block Wall (three feet high by 48 feet long) 144 square feet Wrought Iron Fence (three feet high by 48 feet long) 144 square feet Wooden Fence (150 linear feet) 150 linear feet Asphalt Paving 360 square feet Kiley Company Page 35 Site Improvements Located in the Temporary Construction Easement Improvement Quantity Pool (at 9' deep) 1 each Concrete Decking 3,000 square feet Landscaping: Bushes 5 each Landscaping: Palm Trees 7 each Wrought Iron Fence (three feet high by 300 feet long) 900 square feet Wooden Fence (three feet high by 300 feet long) 900 square feet Information provided by representatives for the client indicates that the site improvements impacted by the project as proposed not listed above will be protected in place (where possible) or replaced in kind as part of the project. Compensation is not provided for the impacted site improvements. DESCRIPTION OF THE REMAINDER AF TER ACQUISITION Area of Remainder:The project as proposed includes one permanent roadway and public utilities easement and one temporary construction easement; the larger parcel remainder area is as follows: AREA OF THE REMAINDER “Before” Site Area 491,792 SF Less: Roadway and Public Utilities Easement 3,040 SF Net Unencumbered “After” Site Area 488,752 SF Gross Remainder Area (Encumbered and Unencumbered)491,792 SF Kiley Company Page 36 Physical Features After the Acquisition: PHYSICAL FEATURES AFTER THE ACQUISITION Use Slightly Changed Shape Unchanged Topography Unchanged Drainage Unchanged Street Access Unchanged Street Visibility Unchanged Parking Unchanged Zoning Unchanged Highest and Best Use Unchanged Highest and Best Use: The larger parcel highest and best use will be unchanged in the “after” condition. Conclusion: As part of the acquisition, two coaches and the existing single-family residence will be lost. In the “after” condition, the mobile home park will have 94 coach rental spaces and a new pool. The value as improved will result in lower rental income due to the loss of the improvements. In the “after” condition, the larger parcel site “as if vacant” will be effectively unchanged and remain suitable for those uses permitted by zoning. Kiley Company Page 37 Kiley Company Page 38a Kiley Company Page 38b Kiley Company Page 38c Kiley Company Page 38d Kiley Company Page 38e ACQUISITION PHOTOGRAPHS Driveway Entrance and Concrete Block Wall/Wrought Iron Fence for Pool Enclosure Driveway Entrance and Concrete Block Wall/Wrought Iron Fence for Pool Enclosure Kiley Company Page 38f ACQUISITION PHOTOGRAPHS Concrete Block Wall/Wrought Iron Fence for Pool Enclosure Wooden Fence along Western Property Line Kiley Company Page 38g ACQUISITION PHOTOGRAPHS Site Improvements and Coach Impacted by Project Single-Family Residence from the Street Kiley Company Page 38h ACQUISITION PHOTOGRAPHS Wooden Fence along Western Property Line Concrete Block Wall along Western Property Line Kiley Company Page 38i VALUE OF THE LARGER PARCEL In the valuation of the larger parcel, the value of mobile home parks via the sales comparison and income approaches is developed. This will indicate the “Value of the Larger Parcel in the “Before” Condition.” The diminution in value is best measured by the income approach, which is utilized to conclude the “Value of the Remainder After Acquisition” and is provided in this appraisal report. Additionally, the value of the land “as if vacant” via the sales comparison approach is developed based on the sales of residentially zoned land to assist in the estimate of compensation for the areas to be acquired. The “Value of the Whole in the Larger Parcel in the “Before” Condition” will be provided first with the sales comparison approach and income approaches, followed by the land sales comparison approach for the value of the areas to be acquired. The “Value of the Remainder After Acquisition” and conclusion of damages follow. Value of the Larger Parcel in the “Before” Condition The value of the larger parcel in the “before” condition is based on the value of mobile home parks via the sales comparison and income approaches. These two concluded values are then reconciled for the conclusion of value of the larger parcel in the “before” condition. Sales Comparison Approach - Mobile Home Parks The estimated fair market value of the larger parcel is based on improved sales data for other properties with essentially the same utility and amenities. To estimate the value of the larger parcel, a search was conducted of the market area for similar improved mobile home parks. Six transactions, including one currently in escrow, were reviewed, analyzed and utilized in the valuation. Typically, mobile home parks are rented on a per space basis with the tenants responsible for a space rent monthly and their individual coach improvements. Included on the following pages are a Sales Comparison Summary, Comparable Sales Map and an Improved Sales Comparison Adjustment Grid. Kiley Company Page 39 Location APN Grantor/Grantee:COE Date Site Size (SF) Sales Price No. of Units OAR Verification Doc No. Site Size (Acres) Price Per Unit Year Built NOI (Annual) Comments SUBJECT PROPERTY 46400 Dune Palms Road --- 491,792 ---97 --- La Quinta, CA ---11.29 ---+/-1960 --- 600-030-010 --- Comparable No. 1 15500 Bubbling Wells Road 7/9/2018 2,591,820 $16,700,000 317 N/Av Desert Hot Springs, CA 0275603 59.50 $52,681 1977 N/Av 656-265-005; 656-160-009, -010 Grantor:Bubbling Wells Properties, LLC Grantee:BREIT Hidden Springs MHC, LLC Verification:Ross Cooper (broker); public records, recorded grant deed Comparable No. 2 13063 5th Street 5/14/2018 267,894 $2,900,000 74 5.80% Yucaipa, CA 0175025 6.15 $39,189 1946 $168,200 0319-152-48 Grantor:Mobile Home Group III, LLC Grantee:Inversiones California, LLC Verification:Douglas McCauley (broker); public records, recorded grant deed Comparable No. 3 69530 Dillon Road 7/14/2017 1,052,410 $2,717,000 97 N/Av Desert Hot Springs, CA 0289092 24.16 $28,010 +/-1960 N/Av Grantor:SAB Management, LLC Grantee:Oasis Hot Springs Mobile Home Park, LLC Verification:Chuck Wilson (broker); public records, recorded grant deed Comparable No. 4 68916 H Street 4/28/2017 217,800 $2,500,000 73 4.91% Cathedral City, CA 0169645 5.00 $34,247 1950 $122,750 687-262-001 Grantor:Loni Lee Stanchfield, trustee Grantee:L Wang Family Partnership and Wang Discovery, LP Verification:Douglas Danny (Broker); public records, recorded grant deed Comparable No. 5 73687 Didsbury Drive 7/23/2018 109,771 $1,264,000 20 8.00% Twentynine Palms, CA 0267088 2.52 $63,200 +/-1970 $101,120 Grantor:White Star Capital LLC Grantee:MHP BlueSky LLC Verification:Noel Maza (seller); public records, recorded grant deed 0620-111-31 IMPROVED MOBILE HOME SALES COMPARISON SUMMARY TABLE Oasis Hot Springs Mobile Home Park; all cash transaction with no special conditions of sale. Broker reports fair market transaction. No income information available; existing mobile home park and vacant land with entitlements for additional mobile homes included in purchase price. Amenities include pool and laundry. Sky Ridge Park; average rent estimated at $400 per month at the time of sale; owner renovated interior streets and some units; Broker estimates market rents of $450-$500 per month after renovated. All units park-owned; amenities include clubhouse, pool and laundry. Hidden Sands Golf and Racquet Club; mobile home park comprised of one and two bedroom units. No income information publicly available. Broker reports fair market transaction with market rents for mobile home spaces. Wishing Well Mobile Home Estates; senior community approximately 4% vacant at the time of sale; comprised of studio units with one four- bedroom single-family residence on the site. Amenities include large clubhouse, recreation area, pool, laundry facilities and RV storage for residents. Approximately 18 of the units are park-owned; remainder are tenant-owned. Bly Sky Resort; smaller mobile home park with 20 units, mostly one-bedroom units, plus approximately 10 RV lots; average rent of $1,000 per month for mobile home spaces. Units come fully furnished; park includes clubhouse and pool Larger parcel; no income information available. 96 mobile home spaces and one single-family residence = 97 units 654-160-009, -010, -011, -012; 654-150-007 Kiley Company Page 40 Kiley Company Page 41 Subject PropertyComparable No. 1Comparable No. 2Comparable No. 3Comparable No. 4Comparable No. 5Location46400 Dune Palms Road 15500 Bubbling Wells Road 13063 5th Street69530 Dillon Road68916 H StreetCity, StateLa Quinta, CA Desert Hot Springs, CA Yucaipa, CADesert Hot Springs, CA Cathedral City, CATwentynine Palms, CATotal Sale Price Price/SF $52,681 $39,189 $28,010 $34,247 $63,200ADJUSTMENTSRights ConveyedLeased Fee 0% $0 Leased Fee 0% $0 Leased Fee 0% $0 Leased Fee 0% $0 Leased Fee 0% $0 Adjusted Price $52,681 $39,189 $28,010$34,247 $63,200Financing TermsAll Cash 0% $0 Conv. 0% $0 All Cash 0% $0 Conv. 0% $0 Conv. 0% $0 Adjusted Price $52,681 $39,189 $28,010 $34,247 $63,200Condition of SaleNone 0% $0 None 0% $0 None 0% $0 None 0% $0 None 0% $0 Adjusted Price $52,681 $39,189 $28,010 $34,247 $63,200Exp. After PurchaseNone 0% $0 None 0% $0 None 0% $0 None 0% $0 None 0% $0 Adjusted Price$52,681$39,189$28,010$34,247$63,200Date of SaleDate of Value:07/09/18 3.0% $1,580 05/14/18 4.0% $1,568 07/14/17 9.0% $2,521 04/28/17 10.5% $3,596 07/23/18 3.0% $1,896 Adjusted PriceJanuary 2, 2019 6 months$54,262 8 months $40,757 18 months $30,531 21 months $37,842 6 months $65,096ADJUSTED SALES PRICE$54,262$40,757$30,531$37,842$65,096Number of Units 97LocationLa Quinta/Avg-GoodYear Built/Condition +/-1960/Fair-AvgAccess/Visibility AverageAmenitiesPool/LaundryOVERALL COMPARIBILITY* Differences may be due to rounding IMPROVED SALES COMPARISON ADJUSTMENT GRID Very InferiorInferiorSuperiorSimilarVery InferiorSimilarSimilarInferiorSuperiorSl. InferiorSuperiorSimilarInferiorVery InferiorSimilarSimilarSl. InferiorSuperiorSimilarVery InferiorInferiorSimilarSimilarSimilarInferiorSuperior73687 Didsbury Drive$1,264,000SimilarSl. InferiorSl. InferiorSl. InferiorPage 42Kiley Company $2,900,000$2,717,000$2,500,000$16,700,000 Comparable Improved Sales Analysis, Continued Transactional Adjustments The improved comparable sales found were analyzed and reviewed for the following items of comparison: rights conveyed, financing terms, conditions of sale, expenditures after purchase, market conditions, and physical characteristics. The sales reflect no special financing terms, conditions of sale or expenditures made immediately after purchase. To evaluate any changes in market conditions, sale and listing data, along with brokers’ opinions and published market reports regarding the market conditions, have been analyzed. Examination of the market data, trends and patterns was made for an indication of a reliable market conditions adjustment. Trends reports provided by Costar appear to indicate some increases in 2017 with mostly stable conditions during 2018. A market conditions adjustment of 0.5% per month is applied. Physical Consideration The larger parcel is a 96-unit mobile home park with a single family residence, which reflects a total of 97 units. The comparable sales reflect a range of 20 to 317 units; brokers and property managers indicate no significant variance in pricing due to number of units and no adjustments are made. The subject’s general location and neighborhood location are considered overall average to good. All of the comparables are located in areas considered slightly inferior to very inferior, based on the specific demographic information for the comparable. The larger parcel was constructed in the mid 1960's; the comparables were constructed between 1946 and 1977. Adjustments for year built/condition take into consideration the actual year built, but also any remodeling or rehabilitation done over the years that would impact the condition of the improvements. The larger parcel improvements appear to be in fair to average condition. The comparables are considered very inferior to superior, based on the condition. Consideration is indicated where appropriate. The larger parcel is located on a secondary commercial arterial with average access and visibility. It is located within a relatively densely populated area of the city of La Quinta in proximity to local commercial and retail centers. Comparable Nos. 2 and 3 are located in similar areas with similar access and visibility. The remaining comparables are located on secondary Kiley Company Page 43 streets with slightly inferior to inferior access and visibility. Property amenities take into consideration such items as clubhouses, pools, playground and recreation centers, as well as laundry, guest parking and overall appeal of the property. Comparable Nos. 1 and 5 reflect superior amenities such as a small golf course, clubhouse, and furnished coaches. The remaining comparables have similar amenities to the larger parcel. Adjusted Values Per Unit Improved Mobile Home Parks Comparable No. Overall Comparability Indicated Price Per Unit Comparable No. 3 Very Inferior $30,531 Comparable No. 4 Inferior $37,842 Comparable No. 2 Very Inferior $40,757 Comparable No. 1 Similar $54,262 LARGER PARCEL ----$55,000 Comparable No. 5 Superior $65,096 Based on a review of the market data found, the opinion has been formed that the market value of the fee simple interest in the subject property is $55,000 per space (rounded). Improved Sales Comparison Approach Concluded Market Value 97 Spaces x $55,000 Per Space = $5,335,000 Income Approach - Multi-tenant Mobile Home Parks The income approach to value is based primarily on the theory of anticipation. This approach values the subject property based on the future monetary benefits expected to be derived from net operating income (NOI). The projected NOI may be analyzed through the use of a capital value analysis of the income and expenses on a stabilized basis. The capital value analysis or discounted cash flow analysis is often used by investors for the evaluation of income properties. The capital value process begins with an analysis of the income and expense data for comparable rental properties to derive an estimate of the market rent for the subject. The annualized market rent is multiplied by the rentable area of the subject to calculate the potential Kiley Company Page 44 gross income (PGI). Next, the market data is analyzed for an estimate of vacancy and collection loss on a stabilized basis. The projected vacancy and collection loss is deducted from the PGI to arrive at the effective gross income (EGI). The operating expenses are then estimated based on the existing or a typical lease basis. Applicable operating expenses are deducted from the EGI to derive an estimate of the NOI for the property. Finally, the NOI is capitalized by a market-based overall capitalization rate to determine the estimated market value. Market Rent Analysis A survey was made of the subject and similar surrounding market areas for recent leases and asking rents for mobile home parks. The search for rental comparables included all mobile home parks located within the Coachella Valley, with a focus on the communities of La Quinta and Indio. The most important factor considered when selecting the comparables is location. Secondary factors include amenities and condition. Conversations with the majority of the sales and leasing managers for the comparable properties indicate that space rent is not necessarily contingent on coach size but can mainly be a factor of specific location within the larger parks. As such, coach size is not considered as strong a factor. Kiley Company Page 45 SUMMARY OF RENTAL COMPARABLES Location Source/Verification No. of Spaces Space Rent Amenities Comments Rental No. 1 Las Palmas de La Quintas 80000 Avenue 48 Indio 305 $650 - $775 Clubhouse, pool; Tenant pays utilities to park App. 90% occupied; similar location, condition Rental No. 2 Corkill Palms 17989 Corkill Road Desert Hot Springs 81 $425 Clubhouse, putting green, laundry; tenant pays water, sewer, electric; basic cable included App. 96% occupied; inferior location, quality/condition Rental No. 3 Arabian Gardens 81600 Fred Waring Road Indio 248 $650 - $700 Clubhouse, pool; tenant pays all utilities direct Family Park; no vacancies. Property manager reports existing rental range. Overall superior park Rental No. 4 Country Squire Mobile Home Park 66455 Dillon Road Desert Hot Springs 50 $525 Small clubhouse, pool; Tenant pays all utilities Three park-owned units; no vacancies Kiley Company Page 46 Kiley Company Page 47 Market Rent Analysis and Conclusion, Continued Conversations with the leasing agents, sales managers and property owners for the comparable properties indicated a general range for the respective properties. The market data reflects rents for mobile home coaches within the Coachella Valley range from $425 to $775 per space per month. Two coach owners located within the subject mobile home park reported monthly rents of $535 plus utilities. Although requested, income information was not provided by the property owner. The comparables are considered generally similar in terms of age; however, in terms of condition, amenities and overall park appeal, Rental Nos. 1 and 3 are considered superior and would be expected to reflect the upper end of the range. Condition factors include consideration for the general mobile home park condition (maintenance, landscaping, etc.), as well as physical condition of the coaches. While most of the coaches are individually owned in each of the comparable properties, it is considered a reflection on the management and maintenance of each park if coaches are considered to be in fair condition. Based on a review of the market data and conversations with the local property managers and leasing agents for similar mobile home parks, the concluded average monthly rent for the units at subject larger parcel is $575 per space per month. This average takes into consideration that there are some small spaces and larger spaces with a potentially wide range in rents. This rental rate is considered an average rental rate for the entire larger parcel and applied to each mobile home space. A higher rent of $850 per month is applied to the single-family residence. No. Of Units Monthly Rent Per Space Total Monthly Rent TOTAL ANNUAL INCOME 96 $575 $55,200 $662,400 1 $850 $850 $10,200 TOTAL ANNUAL RENTAL INCOME $672,600 Additional Income Although no income information was provided by the property owner, public information and local brokers indicate that additional income is generated for mobile home parks. This includes utility reimbursements, laundry and miscellaneous income for late charges and bounced checks. Kiley Company Page 48 The following provides estimates of additional income associated with the larger parcel and included in the Direct Capitalization Analysis later in this appraisal report. The reader is advised that this also includes additional income associated with the single-family residence at the subject property. Amount (ANNUAL) Utility Reimbursement $980 per space Laundry $100 per space Miscellaneous $30 per space TOTAL $1,110 per space Times 97 spaces $107,670 annual Vacancy and Collection Loss The estimated vacancy and collection loss allowance to be applied in the income analysis is based on a survey of market data and discussions with local real estate brokers specializing in this property type. It is unknown what the actual vacancy at the subject larger parcel was as of the effective date of this appraisal report. Information provided by the client indicates historical vacancy generally fell within the 2% to 6% range. Conversations with property managers for the local mobile home parks reflect vacancy levels in the 5% to 10% range; the rent survey reflected a range of 0% to 10%. The subject’s specific La Quinta location is a positive factor for the subject and would indicate a stabilized vacancy near the lower end of the range. Based on a review of the market data, and conversations with local brokers and property managers, a stabilized vacancy and collection loss of 6% is considered indicated for the subject. Expense Analysis Although requested, historical expenses were not available for review. In addition, there are no published expense reports for mobile home parks. As such, comparable market data is relied on, as well as conversations with local mobile home park managers and brokers. In this instance, the expenses are considered as a percentage of the effective gross income. Kiley Company Page 49 The broker for Comparable No. 2 indicates that the expenses are estimated at 42% of the effective gross income, while the broker for Comparable No. 6 indicates an expense ratio of approximately 45%. Local brokers and property managers surveyed indicate that a mobile home park owner can expect expenses within the 35% to 55% range, depending on the amenities. With a typical pool and laundry room, expenses would be expected to fall within the lower end of the range. The higher expense ratio generally considers properties that have more amenities like a clubhouse, recreation center and play area. Based on these conversations, as well as the comparable data reviewed, an expense allowance of 42% is considered indicated for the larger parcel and has been used in the Direct Capitalization Analysis. Capitalization Rate Three of the sales chosen for review reflected capitalization rates. A review of the primary data for the most similar properties reflect overall capitalization rates between 4.91% and 8.23% as shown in the following table. In addition to the market data, a search was done on CoStar for market trends in Southern Location Site Size (SF) Sales Price No. of Units OAR APN COE Data Site Size (Acres) Price Per Unit Year Built NOI (Annual) DATA NO. 1 13063 5th Street 5/14/2018 267,894 $2,900,000 74 5.80% Yucaipa 6.15 $39,189 1946 $168,200 DATA NO. 2 68916 H Street 4/28/2017 217,800 $2,500,000 73 4.91% Cathedral City 5.00 $34,247 1950 $122,750 DATA NO. 3 73687 Didsbury Drive 7/23/2018 109,771 $1,264,000 20 8.00% Twentynine Palms 2.52 $63,200 +/-1970 $101,120 DATA NO. 4 53080 Harrison Street 3/26/2018 857,348 $950,000 35 7.82% Coachella 19.68 $27,143 +/-1970 $74,290 DATA NO. 5 1441 E. Ramon Road 11/1/2016 808,909 $10,230,000 248 6.10% Palm Springs 18.57 $292,286 1972 $624,030 DATA NO. 6 18075 Langlois Road 2/29/2016 609,840 $2,400,000 179 8.23% Desert Hot Springs 14.00 $68,571 1973 $197,520 CAPITALIZATION RATE ANALYSIS Kiley Company Page 50 California for all mobile home park sales. After consideration of the market conditions, capitalization rate trends, sale and listing data and the larger parcel property characteristics, a capitalization rate between 7.5% and 8.5% appears reasonable for the analysis, given the use of market rental rates. A capitalization rate of 8.00% is used. The direct capitalization analysis and resulting indication of market value via the income approach is as follows: Kiley Company Page 51 Income Approach Conclusion The indicated fee simple market value, as of the effective date of this appraisal report, is as follows. INCOME APPROACH VALUE INDICATION $5,317,540 Reconciliation The sales comparison approach is based on the premise that a purchaser will not pay more for an existing property than for a comparable property of similar utility. This approach directly reflects the actions of buyers and sellers and is the approach most often used by owner-users in this market. The larger parcel is a mobile home park with 97 total spaces. The property would be purchased as an investment property, based on the income stream. The income approach is predicated on the principle of anticipated economic benefits. The information available regarding market rents, vacancy, expenses and investor return requirements is adequate, but actual income Number of Units:97 INCOME: Mobile Home Spaces $55,200 x 12 Months= $662,400 Single-Family Residence $850 x 12 Months= $10,200 Additional Income $1,110 x 97 Spaces = $107,670 Gross Income $780,270 Vacancy & Collection Loss 6%($46,816) EFFECTIVE GROSS INCOME $733,454 LESS: Estimated Expenses 42.0%($308,051) Net Operating Income $425,403 Capitalization Rate 8.00% Indicated Fair Market Value $5,317,540 $54,820 ** Differences may be due to internal rounding Indicated Value per Unit DIRECT CAPITALIZATION ANALYSIS Value of the Larger Parcel In the "Before" Condition Kiley Company Page 52 information was not made available. The income approach provides a reliable indication of value. There is reliable market data available and mobile home park transactions available for comparison to the subject property. Based on the definition of market value used in this appraisal report, the most weight is given the sales comparison approach. RECONCILIATION Sales Comparison Approach $5,335,000 Income Approach $5,317,540 FAIR MARKET VALUE IN THE “BEFORE” CONDITION $5,335,000 CONCLUDED FAIR MARKET VALUE OF THE LARGER PARCEL IN THE “BEFORE” CONDITION Considering the data and analyses presented, the opinion has been formed that as of the effective date of this appraisal report, the reconciled fair market value of the larger parcel in the “before” condition as improved is as follows: CONCLUDED VALUE OF THE WHOLE IN THE “BEFORE” CONDITION $5,335,000 Residentially Zoned Land Sales Analysis To estimate the value of the subject land, a search was conducted of the surrounding market area for sales of properties similar in zoning and density when compared to the subject property. Due to the fully developed nature of the submarket, the search was expanded to include all of the Coachella Valley. The comparable sales are analyzed on a price per square foot of land area basis, which is the typical unit of measure used by buyers in this market. This unit of measure provides a reliable basis for comparison. Each comparable sale is adjusted for factors which differ from the subject site to indicate an adjusted per square foot value. A sales summary, sales adjustment grid and land sales map are on the following pages. Comparable Market Data Sheets are in the Market Data section of this appraisal report. Kiley Company Page 53 Location Assessor's Parcel No. COE Date Acreage Sales Price Grantor/Grantee Doc No. SF Price Per SF Zoning Comments Larger Parcel 46400 Dune Palms Road N/App 11.29 N/App La Quinta, CA 92253 N/App 491,792 600-030-010 Land Sale No. 1 SEC Avenue 52 and Monroe Street 12/7/2018 8.68 $2,050,000 Indio, CA 0477032 378,101 $5.42 767-220-023 Grantor:LBD Realty, LLC Grantee: Land Sale No. 2 SWC Avenue 55 and Monroe Street 12/15/2017 4.36 $775,000 La Quinta, CA 0528028 189,922 $4.08 767-580-014 Grantor:Brent Dill and Eileen Dill, trustees Grantee: Land Sale No. 3 Hovley Lane East 3/17/2017 18.13 $3,700,000 Palm Desert, CA 0110091 789,942 $4.68 624-040-019, 624-060-089 Grantor: Grantee: Land Sale No. 4 Jones Road and Carey Road 2/23/2018 7.50 $2,260,000 Cathedral City, CA 0069512 326,700 $6.92 681-310-014, -016 Grantor: Grantee:Bilt-Mor Developments and Gonzales Investments, LLC Land Sale No. 5 Gerald Ford Drive In Escrow 14.97 $6,600,000 Palm Desert, CA Not available 652,093 $10.12 694-190-087 ** Grantor:Pending Grantee:Pending Land Sale No. 6 1550 Amado Road 6/24/2016 2.80 $1,300,000 Palm Springs, CA 0259323 121,968 $10.66 508-060-036 Grantor: Grantee:Indio 40 Investments, LP WR XVIII, LLC New Cities Investment Partners, LLC RM, Medium Density Residential MSP, Millennium Specific Plan Pensco Trust Company, Allan Singer IRA #60769256 R204M A-1200 Existing vacant long, narrow lot located adjacent to residential developments; existing zoning allows for some residential uses. Morrow Management A-1-10 RM, Medium Density Residential CP, Commercial/ Residential Sale of residentially zoned lot located in Palm Springs; zoned for medium density residential with up to 15 units per acre. Buyer will incur expenditures after purchase to underground utilities. James D. Miller Existing vacant site adjacent to the freeway zoned for mixed-use; currently in escrow to developer who plans to construct apartment complex, as a part of the Millennium Palm Desert master-planned community, suitable for 330 unit apartment complex. ** Reparcelized to reflect indicated parcel number; previous parcel numbers referenced as 694-120-016 and 694-190-059. Secondary location purchased to construct single-family residential development with 46 homes, or a density of 6 units per acre LAND SALES SUMMARY Existing agricultural lot purchased by developer to hold for future residential development. Existing zoning allows for single-family residential; located within an area undergoing development with residential uses Subject larger parcel; improved with mobile home park; zoning allows for up to 8 units per acre Empire South, LLC, dba in California as EPC Ave 52, LLC Buyer plans to construct 400-unit apartment complex with two and three-story buildings; reflected density of 15 units per acre. Kiley Company Page 54 Kiley Company Page 55 Larger ParcelLand Sale No. 1Land Sale No. 2Land Sale No. 3Land Sale No. 4 Land Sale No. 5Land Sale No. 6LocationGerald Ford DriveCity, State La Quinta, CA 92253 Indio, CA La Quinta, CA Palm Desert, CA Cathedral City, CA Palm Desert, CA Palm Springs, CATotal Sale Price Price/SF $5.42 $4.08 $4.68 $6.92 $10.12 $10.66ADJUSTMENTSRights Conveyed Fee Simple 0.0% $0.00 Fee Simple 0.0% $0.00 Fee Simple 0.0% $0.00 Fee Simple 0.0% $0.00 Fee Simple 0.0% $0.00 Fee Simple 0.0% $0.00 Adjusted Price $5.42 $4.08 $4.68 $6.92 $10.12 $10.66Financing Terms All Cash 0.0% $0.00 All Cash 0.0% $0.00 All Cash 0.0% $0.00 Conv. 0.0% $0.00 N/Av0.0% $0.00 Conv.0.0% $0.00 Adjusted Price $5.42 $4.08 $4.68 $6.92 $10.12 $10.66Conditions of Sale None 0.0% $0.00 None 0.0% $0.00 None 0.0% $0.00 None 0.0% $0.00 None 0.0% $0.00 None 0.0% $0.00 Adjusted Price $5.42 $4.08 $4.68 $6.92 $10.12 $10.66Exp. After Purchase None 0.0% $0.00 None 0.0% $0.00 None 0.0% $0.00 None 0.0% $0.00 None 0.0% $0.00 None 0.0% $0.00 Adjusted Price $5.42 $4.08 $4.68 $6.92 $10.12 $10.66Recording Date Date of Value: 12/07/18 0.0% $0.00 12/15/17 0.0% $0.00 03/17/17 0.0% $0.00 02/23/18 0.0% $0.00 In Escrow -20.0% -$2.02 06/24/16 0.0% $0.00 Adjusted Price January 2, 2019 1 month $5.42 13 months $4.08 22 months $4.68 11 months $6.92 $8.10 31 months $10.66Adjusted Sale Price $5.42 $4.08 $4.68 $6.92 $8.10$10.66Site Area (Acres)11.298.684.3618.137.5014.972.80Site Area (SF)491,792378,101 0.0% $0.00 189,922 0.0% $0.00 789,942 10.0% $0.47 326,700 0.0% $0.00 652,093 0.0% $0.00 121,968 -5.0% -$0.53Adjusted Sale Price $5.42 $4.08 $5.15 $6.92 $8.10 $10.13Location Average ZoningResidential Access/VisibilityAverageShape/Topography Rectangular/LevelCondition As if VacantOverall Comparability* Differences may be due to roundingSimilarSimilarSEC Avenue 52 and Monroe StreetSWC Avenue 55 and Monroe Street Hovley Lane East Jones Road and Carey Road 1550 Amado Road$2,260,000 $6,600,000SimilarVery SuperiorSuperiorSimilar$1,300,000SimilarSimilarSimilarSl. InferiorSlightly SuperiorKiley Company$775,000$3,700,000$2,050,000SimilarVery Inferior SimilarSimilarSimilarSl. InferiorSuperiorVery SuperiorInferiorInferior Page 56SimilarSimilarInferiorInferiorSimilarSimilarSimilarSimilarSimilarSimilar46400 Dune Palms RoadSimilarSimilarSimilar SimilarLAND SALES COMPARISON GRID 46400 Dune Palms RoadLa Quinta, CA 92253OWNERSHIP: Chin Family Properties Limited PartnershipVery Inferior Land Value Analysis The sales are analyzed and reviewed for the following transactional elements of comparison: property rights conveyed, financing terms, conditions of sale, expenditures made immediately after purchase (demolition) and market conditions. The land sales were also analyzed and reviewed for the following physical elements of comparison: site size, location, zoning, access/visibility, shape/topography and condition. The land comparables reflect unadjusted land values ranging from $4.08 to $10.66 per square foot of land area. Transactional Adjustments The comparable properties each conveyed the fee simple interest. All of the closed comparables sold with cash or conventional cash-equivalent financing with no special financing terms reported. There were no conditions of sale or expenditures after purchase indicated for the comparables. A review of the current market conditions for residential land, as well as multi-family properties, was made for an indication of appropriate market condition/time adjustments, if applicable. Discussions with real estate brokers and an analysis of individual sales indicate that while there have been some increases in rental rates and improved values, land prices within this specific submarket have been mostly stable. Based on a review of the market data, no adjustment for market conditions is made. Physical Adjustments The comparables range in size from 2.80 to 18.13 acres, compared to the larger parcel’s site size of 11.29 acres. Smaller sites tend to sell for a higher price per square foot than larger sites due to size regression. Land Sale No. 6 is smaller and adjusted downward for this factor; Land Sale No. 3 is larger and adjusted upward. The remaining comparables are considered similar and no adjustments are made. To estimate an appropriate adjustment for locational differences, selling prices in the subject and comparable markets were reviewed along with other factors such as rental rates and supply and demand. Local demographics, such as median income, population, and age, also affect land and are considered in the location adjustment. Land Sale No. 1 is located in an area considered very inferior, while Land Sale Nos. 5 and Kiley Company Page 57 6 are located in areas considered superior and very superior, respectively. The residential zoning of all of the comparable land sales is considered similar to that of the subject site. The larger parcel is located on a secondary commercial street with average access and visibility. Land Sale Nos. 3 and 4 are located on a secondary streets with slightly inferior and inferior access/visibility, respectively. The larger parcel is essentially rectangular with mostly level topography. Land Sale No. 2 is long and narrow and inferior in terms of shape. The remaining comparables are considered similar in terms of shape and topography. The larger parcel is valued “as if vacant.” All of the comparables are considered similar. Conclusion The indicated values reflect a market value range for the subject land. The adjusted range in indicated land values is from $4.08 to $10.13 per square foot of land area. Consideration is given specific characteristics of each of the comparables on a qualitative basis and is detailed as follows: INDICATED VALUE PER SQUARE FOOT Residentially Zoned Land Values Overall Comparability Indicated $/SF Land Sale No. 2 Inferior $4.08 Land Sale No. 3 Inferior $5.15 Land Sale No. 1 Very Inferior $5.42 Land Sale No. 4 Slightly Inferior $6.92 LARGER PARCEL ---- $7.00 Land Sale No. 5 Superior $8.10 Land Sale No. 6 Very Superior $10.13 Based on the preceding investigation and analysis, the fee simple fair market value of the land as of the effective date of this appraisal report is concluded to be $7.00 per square foot, which is calculated as follows: LAND VALUE 11.29 acres, or 491,792 SF x $7.00 PSF= $3,442,544 Kiley Company Page 58 VALUE OF THE AREAS TO BE ACQUIRED The project as proposed includes multiple easement acquisitions, discussed in detail previously in this appraisal report. This section will consider the value of the proposed permanent easement impacted by the project as proposed. The value for the temporary construction easement is included later in this report. Roadway and Public Utilities Easement Based on a review of the areas to be acquired and its proposed uses and limitations, it appears that the effective loss will be significant. For the proposed roadway and public utilities easement, based on a review of the proposed acquisition, uses and restrictions, compensation of the full fee is considered reasonable. While the property owner will continue to retain ownership rights to this area, the area is essentially unusable to the property owner. Compensation is based on 100% of the price per square foot of the larger parcel land value. The following calculation reflects the estimated compensation for the proposed permanent easement: PERMANENT EASEMENT Roadway and Public Utilities Easement 3,040 SF $7.00 PSF x 100% =$21,280 TOTAL PERMANENT EASEMENT COMPENSATION $21,280 Value of the Existing Site Improvements The existing improvements physically located within the proposed roadway and public utilities easement will be removed as part of the project. Compensation for the impacted improvements will be provided as part of the appraisal report. The first step is the estimation of the replacement cost new of the improvements. Replacement cost is the cost of creating an improvement having similar utility, using current standards of design and materials. It is not necessarily the cost of creating a replica of the existing improvements if they are constructed of outdated materials, technique, and design. Kiley Company Page 59 The estimated replacement cost new for the site improvements impacted by the project as proposed varies and is calculated in the following table. SITE IMPROVEMENTS LOCATED IN THE ROADWAY AND PUBLIC UTILITIES EASEMENT Improvement Base Cost Current Cost Mult. Local Cost Mult. Est. Cost Quantity TOTAL COST Concrete Block Wall $12.70/SF x 1.08 x 1.15= $15.77 x 144 SF $2,271 Wrought Iron Fence $21.90/SF x 1.08 x 1.15= $27.20 x 144 SF $3,917 Wooden Fence $32.50/LF x 1.08 x 1.15= $40.37 x 150 LF $6,056 Asphalt Paving $5.64/SF x 1.08 x 1.15= $7.00 x 360 SF $2,520 Total Site Improvements $14,763 ** Minor differences due to internal rounding Indirect costs include cost items not already covered in the Marshall & Swift cost estimates. These estimates are, in part, based upon the costs associated with development of a property. Items included in this estimate are contingency and consulting costs, if applicable. An indirect cost allowance of 15% of the total direct costs is applied. An entrepreneurial incentive of 15% of the costs is included based on research of developer profit expectations. As Marshall & Swift includes some profit in its cost estimates, this estimate is considered reasonable. Accrued depreciation is the loss in value from the replacement cost of the improvements due to any cause as of the date of appraisal. Depreciation is derived from one of three sources: physical deterioration, curable and incurable; functional obsolescence, curable and incurable; and external obsolescence. In this appraisal report, a straight-line method, also referred to as the age/life method is utilized. The site improvements are in average condition and an effective age of seven years is indicated. A depreciation percentage of 50% is indicated, based on a typical 15-year life expectancy for the site improvements. Depreciation is deducted on the direct cost of the site improvements, plus indirect costs and entrepreneurial incentive. The estimated replacement cost new of the subject improvements is summarized on the following table. The estimated accrued depreciation for the site improvements is then deducted. Kiley Company Page 60 COMPENSATION FOR SITE IMPROVEMENTS LOCATED IN THE ROADWAY AND PUBLIC UTILITIES EASEMENT AREA DIRECT COSTS Site Improvements - As Defined Above $14,763 TOTAL DIRECT COSTS $14,763 Plus Indirect Costs 15% $2,214 Replacement Cost New $16,977 Entrepreneurial Incentive on RCN 15% of $16,977 $2,547 Total Replacement Cost New $19,524 Less Depreciation 50% of RCN $19,524 ($9,762) TOTAL SITE IMPROVEMENT COMPENSATION $9,762 ** Minor differences due to internal rounding TOTAL VALUE OF THE AREA TO BE ACQUIRED The total combined value of the areas to be acquired, including the proposed fee acquisition and permanent subsurface easement, is concluded as follows: TOTAL VALUE OF THE AREA TO BE ACQUIRED Area to be Acquired Total Cost Roadway and Public Utilities Easement $21,280 Site Improvements $9,762 TOTAL $31,042 VALUE OF THE REMAINDER AS PART OF THE WHOLE The value of the remainder as part of the whole, which includes the value of the larger parcel in its current condition less the value of the area permanently acquired, is as follows: VALUE OF THE REMAINDER AS PART OF THE WHOLE Market Value of the Whole Before Acquisition (As Improved) $5,335,000 Value of the Part to be Acquired (Land and Improvements)($31,042) Value of the Remainder as Part of the Whole (As Improved)$5,303,958 Kiley Company Page 61 TEMPORARY CONSTRUCTION EASEMENT An exclusive 48-month temporary construction easement is proposed to allow for construction of the project as proposed. A review of the proposed easement to assess the degree of encumbrance on the property was completed in order to ascertain which rights the fee owner retains. The impact on value may be a function of the loss of utility, access and use rights to be transferred and the obligations of the parties during the construction period. Acquisition Estimated Duration Area Temporary Construction Easement 48 months 13,508 Square Feet The temporary construction easement is intended to allow the contractor onto the site to complete construction-related activities. The presence of the proposed temporary construction easement appears to restrict the normal use of the area and a ground rent equivalent to 100% of the market ground rental rate is indicated. In addition to the ground rent analysis completed as part of the compensation for the temporary construction easement, the possible temporary impacts associated with the project are also reviewed. The temporary construction easement valuation section will consider the three factors impacted by the temporary construction easement: the ground rent analysis, temporary construction easement compensation and temporary impacts analysis, as follows: Ground Rent Analysis Data to determine appropriate rates of return on land is limited. Ground lease rents are typically based on a percent of the land value. A survey of real estate owners and investors revealed they expect and utilize ground rent rates of return at 6.00% to 10.00%. Brokers and developers interviewed report that annual ground rent is usually between 6.00% and 8.00% of the total land value. A search for residential ground lease data was made, but none were found. A survey of recent ground lease data reflects rental rates ranging from 6.30% to 8.20% of the land value, which is consistent with the verbal survey data. Realtyrates.com does not report the percentage return for ground rent payments, but does report capitalization and discount rates for land leases. Kiley Company Page 62 Ground Rent Survey Data Owners and Investors 6.00% - 10.00% Brokers and Developers 6.00% - 8.00% Market Data 6.30% - 8.20% Realtyrates.com (Land Leases) 7.18% and 8.08% The rent data reflects the return a property owner expects to earn on their asset. This rate is typically impacted by risk of payment default, division of expenses, lease length, rental rate escalations during the lease term and inflation risk. Considering the range of rates from the market data, the current low interest rate environment, and low risk of the advance bulk payment, a market rental rate of 8.0% of the land value is concluded. Temporary Construction Easement Compensation During the easement duration, the property owner will still be responsible for payment of any applicable property taxes; an amount of 1.0% of the land value is added. Compensation for the temporary workspace is estimated using a 9.0% annual return (8.0% for the ground rent and 1.0% for the property taxes) on the base value of the land at $7.00 per square foot. Temporary Construction Easement Compensation TCE Area Base Land Value (13,508 SF x $7.00/SF) $94,556 9% Annual Return on Land Value $8,510 Monthly Ground Rent on Land Value $709 Estimated Compensation for TCE for 48 Months $34,040 *Minor differences may be due to rounding Value of the Existing Site Improvements in Temporary Construction Easement Area The majority of the existing improvements physically located within the proposed temporary construction easement area will be protected in place or replaced in kind as part of the construction contractor’s work, with the major exception of the pool and enclosure area. While portions of the pool and enclosure area are physically located within the temporary construction Kiley Company Page 63 easement area, the improvements appear to be in fair condition and it has been reported to the appraisers that the engineers believe the project may damage to the improvements during the construction period. As such, compensation to replace the pool and enclosure area will be provided as part of this appraisal report. The replacement cost new without consideration of any depreciation will be provided to allow the property owner to replace the pool at the completion of the construction contractor’s work. The first step is the estimation of the replacement cost new of the improvements. Replacement cost is the cost of creating an improvement having similar utility, using current standards of design and materials. It is not necessarily the cost of creating a replica of the existing improvements if they are constructed of outdated materials, technique, and design. The variance improvements considered in the pool area are as follows: POOL:Estimated at 20 feet by 50 feet, or 1,000 square feet CONCRETE DECKING:Estimated at 3,000 square feet LANDSCAPING:Five bushes, seven palm trees CONCRETE BLOCK WALL/ WROUGHT IRON FENCE 300 linear feet. Each element is approximately three feet high, which reflects an area of 900 square feet each The estimated replacement cost new for the site improvements impacted by the project as proposed varies and is calculated in the following table. Site Improvements located in the Temporary Construction Easement Area Improvement Base Cost Current Mult. Local Mult. Est. Cost Quantity TOTAL COST Pool (at 9' deep) $55,000/EA x 1.08 x 1.15= $68,310 x 1 each $68,310 Concrete Decking $7.89/SF x 1.08 x 1.15= $9.80 x 3,000 SF $29,400 Landscaping: Bushes $73.50/EA x 1.08 x 1.15= $91.29 x 5 each $456 Landscaping: Palm Trees $353/EA x 1.08 x 1.15= $438.43 x 7 each $3,069 Wrought Iron Fence $21.90/SF x 1.08 x 1.15= $27.20 x 900 SF $24,480 Concrete Block Wall $32.50/LF x 1.08 x 1.15= $40.37 x 900 SF $36,333 Total Site Improvements $162,048 ** Minor differences due to internal rounding Kiley Company Page 64 An additional line item for demolition is considered indicated. A demolition cost of $25,000 is provided, based on conversations with local pool contracting companies. Indirect costs include cost items not already covered in the Marshall & Swift cost estimates. These estimates are, in part, based upon the costs associated with development of a property. Items included in this estimate are contingency and consulting costs, if applicable. Additional health fees and requirements for commercial pools are also considered in the indirect costs. An indirect cost allowance of 20% of the total direct costs is applied. An entrepreneurial incentive of 15% of the costs is included based on research of developer profit expectations. As Marshall & Swift includes some profit in its cost estimates, this estimate is considered reasonable. Accrued depreciation is the loss in value from the replacement cost of the improvements due to any cause as of the date of appraisal. Depreciation is derived from one of three sources: physical deterioration, curable and incurable; functional obsolescence, curable and incurable; and external obsolescence. Because the property owner will be able to replace the impacted site improvements at the completion of construction, no depreciation is indicated. The full replacement cost new, plus indirect costs and entrepreneurial incentive is provided as compensation for the site improvements impacted by the temporary construction easement. The estimated replacement cost new of the subject improvements is summarized on the following table. REPLACEMENT COST NEW FOR SITE IMPROVEMENTS IN THE TEMPORARY CONSTRUCTION EASEMENT DIRECT COSTS Site Improvements - As Defined Above $162,048 Demolition Costs $25,000 TOTAL DIRECT COSTS $187,048 Plus Indirect Costs 20% $37,410 Replacement Cost New $224,458 Entrepreneurial Incentive on RCN 15% of $224,458 $33,669 TOTAL REPLACEMENT COST NEW $258,126 Kiley Company Page 65 Temporary Impacts The project as proposed includes the majority of the work to be done from the street and it will be contained within the temporary construction easement area; however, consideration is given for the remaining mobile home spaces within the larger mobile home park for any temporary impacts during the project. Rent Concession During the Temporary Construction Easement Based on discussions with property managers and owners, it is concluded that the subject larger parcel may suffer a loss in income due to the inconvenience of the demolition, construction, noise and possible periodic limitations of parking and access to the individual spaces located adjacent to the temporary construction easement area. Rental concessions may be offered to the spaces or tenants impacted by the project as proposed during the temporary construction easement period. In addition to the appraisers’ experience, property managers and owners were interviewed regarding their experience and opinion regarding possible impacts of a major construction project on occupancy, rental rates and maintenance costs. As of the effective date of this appraisal report, the subject larger parcel includes 97 mobile home coaches, including the single-family residence. After the demolition of the two coaches and the single-family residence, there will be 94 spaces; seven coaches are located immediately adjacent to the temporary construction easement area which could have some adverse impacts due to construction. The majority of the coaches within this area are permanently attached and owned by the individuals who rent the space from the park. It is not likely that the coach owners will vacate the space; however, it is likely that an adjustment to the space rent during this time period is necessary to prevent an increase in vacancy. Based on a review of market data, a rent concession of $100 per month is considered indicated for the seven spaces located immediately adjacent to the temporary construction easement area. RENT CONCESSION DURING TEMPORARY CONSTRUCTION EASEMENT PERIOD 7 units x $100/month x 48 months= $33,600 Kiley Company Page 66 Conclusion - Temporar y Construction Easement Based on a review of the proposed project, the elements of compensation are provided for the area and timing associated with the temporary construction easement. Compensation for these elements is shown below. TEMPORARY CONSTRUCTION EASEMENT ACQUISITION AND IMPACTS Temporary Construction Easement Compensation $34,040 Site Improvements (Pool Enclosure and Demolition) $258,126 Temporary Impacts (Rent Concessions) $33,600 TOTAL COMPENSATION FOR TCE RIGHTS $325,766 VALUE OF THE REMAINDER AF TER ACQUISITION A conclusion of value for the subject property in the “after” condition is made to determine the value of the remainder after acquisition. A direct capitalization analysis, utilizing the income and expenses outlined previously, is provided to reflect the larger parcel value in the “after” condition. The direct capitalization analysis will utilize concluded market rents for the larger parcel, based on the condition of the larger parcel after the completion of construction of the larger project. In the “before” condition, the larger parcel is a 97-space mobile home park. The operating expenses provided are estimated at approximately 42% of the effective gross income. The overall appeal, functionality, rental rate and vacancy will not be permanently impacted by the project as proposed. However, in addition to the lost units, fixed operating expenses will remain the same and be spread over a smaller number of units (94 units in the after condition versus 97 units before the project), which would reflect an increase in the expense ratio. As such, an expense ratio of 43% appears warranted and has been used. The following direct capitalization analysis concludes the market value of the subject property, which will have 94 spaces, in the “after” condition. Utilized in the following direct capitalization analysis are the market rents defined previously in this appraisal report, as well as a similar vacancy and capitalization rate. Kiley Company Page 67 The concluded fair market value of the larger parcel in the “after” condition is as follows: CONCLUDED VALUE OF LARGER PARCEL IN THE “AFTER” CONDITION $5,042,816 DAMAGES An analysis of the subject property remaining after the acquisition indicates a lower value than the indicated value of the remainder as part of the whole, defined as follows. Damages are indicated based on the following loss in value: DAMAGES Value of the Remainder as Part of the Whole $5,303,958 Value of the Remainder After Acquisition ($5,042,816) TOTAL DAMAGES $261,142 Number of Units:94 INCOME: Mobile Home Spaces 94 spaces at $575/month x 12 Months= $648,600 Additional Income $1,110 x 94 Spaces = $104,340 Gross Income $752,940 Vacancy & Collection Loss 6%($45,176) EFFECTIVE GROSS INCOME $707,764 LESS: Estimated Expenses 43.0%($304,338) Net Operating Income $403,425 Capitalization Rate 8.00% Indicated Fair Market Value $5,042,816 $53,647 ** Differences may be due to internal rounding DIRECT CAPITALIZATION ANALYSIS Value of the Larger Parcel In the "After" Condition Indicated Value per Unit Kiley Company Page 68 BENEFITS The possibility of benefits to the property due to the proposed project was investigated. In the “after” condition, there will be new landscaping and a new concrete block wall. These replace older, minimal landscaping in fair condition and a wooden fence in average to fair condition. The aesthetical appeal will be improved; however, there is no way to measure benefits. It was concluded that no monetary benefits will accrue to the remainder property as a result of this project. APPRAISAL CONCLUSION The conclusion of compensation as a result of the proposed project is as follows: Property Rights Value Opinion Compensation VALUE OF THE LARGER PARCEL IN THE "BEFORE" CONDITION $5,335,000 Permanent Acquisition(s) Roadway & Public Utilities Easement (3,040 Square Feet) $21,280 Site Improvements $9,762 TOTAL PERMANENT ACQUISITIONS $31,042 Damages Value of Remainder as Part of the Whole $5,303,958 Value of the Remainder After Acquisition $5,042,816 TOTAL DAMAGES $261,142 $261,142 Benefits $0 TOTAL BENEFITS $0 TOTAL PROPERTY RIGHTS COMPENSATION $292,184 Temporary Acquisition Temporary Construction Easement - 13,508 Square Feet $34,040 Improvements in TCE Area - Replaced in Kind $258,126 Temporary Impacts $33,600 TOTAL COMPENSATION FOR TCE RIGHTS $325,766 TOTAL COMPENSATION $617,950 ROUNDED $618,000 * Minor differences due to rounding APPRAISAL CONCLUSION Kiley Company Page 69 CERTIFICATION We certify that, to the best of our knowledge and belief: 1. The statements of fact contained in this report are true and correct. 2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are our personal, impartial, and unbiased professional analyses, opinions, and conclusions. 3. We have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved. 4. We have performed no services, as appraisers or in any other capacity, regarding the property that is the subject of this report within the past three-year period immediately preceding acceptance of this assignment. 5. We have no bias with respect to the property that is the subject of this report or to the parties involved in this assignment. 6. Our engagement in this assignment was not contingent upon developing or reporting predetermined results. 7. Our compensation is not contingent on the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. 8. Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. 9. Meredith McDonald has made an inspection of the property that is the subject of this report. Elizabeth M. Kiley has not made an inspection of the subject property, but has fully participated in the analyses, opinions and conclusions concerning real estate contained in this report and fully concurs with the conclusions expressed herein. 10. No one provided real property appraisal assistance to the persons signing this certification. 11. The reported analyses, opinions and conclusions were developed, and this report has been prepared in conformity with the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. 12. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. 13. As of the date of this report, Elizabeth M. Kiley has completed the continuing education program for Designated Members of the Appraisal Institute. Elizabeth M. Kiley, MAI, AI-GRS Certified General Real Estate Appraiser Certificate No. AG005391 Expiration Date: April 13, 2020 Meredith McDonald Certified General Real Estate Appraiser Certificate No. AG043409 Expiration Date: December 13, 2019 Kiley Company Page 70 ELIZABETH M. KILEY, MAI, AI-GRS STATEMENT OF QUALIFICATIONS EMPLOYMENT Appraiser/Consultant/President, 1990 to Present Elizabeth M. Kiley, Inc., DBA Kiley Company, Irvine, CA Assistant Vice President/Senior Appraiser, 1984 to 1989 Interstate Appraisal Corporation, Newport Beach, CA Chief Appraiser/Commercial Underwriter, 1982, 1983 to 1984 Cambridge Capital Group, Santa Ana, CA Appraiser, 1982 to 1983 Harold Davidson & Associates, Los Angeles, CA Senior Appraiser, 1979 to 1981 Bank of America NT & SA, Riverside/San Bernardino District, CA EDUCATION Bachelor of Science, Business Administration, 1974 San Diego State University, San Diego, CA Appraisal Institute Courses Appraisal Principles; Appraisal Procedures; Income Capitalization; Advanced Income Capitalization; Standards of Professional Practice A, B & C; Report Writing and Valuation Analysis; Litigation Valuation; Case Studies in Real Estate Valuation; USPAP Professional Seminars 2011 Estate Tax Changes; Update on Climate Change Regulations Affecting Local Governments; Litigation Valuation; Condemnation-Partial Takes and Super Funds Sites; Property Acquisition, Appraisal, and Relocation in an Upside Down Market; Appraising in a Declining or Changing Market; Appraising Apartments; Leasehold Valuation; Easement Valuation; Appraising in the New Regulatory Climate; Feasibility Analysis and Highest and Best Use; Faculty Training Seminar; Federal and State Law and Regulation Workshop; Service Station; Restaurant Seminar; OCTA Partial Take Appraisal Workshop; Moderator E-commerce Panel, 2000 Summer Conference EXPERIENCE Commercial High-rise, mid-rise and garden offices; community and neighborhood shopping centers; single tenant NNN properties; convenience stores; restaurants and fast-food stores; auto dealerships; service stations; bank branches; special-use properties; valuation of fee simple, leased fee, and leasehold interests Industrial Existing and proposed multi-tenant industrial parks; single-tenant buildings; research and development buildings; and self-storage facilities Kiley Company Page 71 ELIZABETH M. KILEY, MAI (Continued) Residential Apartments; proposed subdivisions; condominium complexes; apartment conversions and CBD lofts; mass appraisal for acquisitions Vacant Land Planned community developments; business parks; industrial subdivisions; commercial sites; agricultural land; desert land; and Indian Trust property Litigation Whole and partial take condemnation appraisals; redevelopment agency analyses; ground lease negotiations; bankruptcy appraisals; foreclosures; partnership valuations; estate tax valuations; and contaminated properties Public Agency Railway corridors; transmission line easements, easement upgrades, and electrical substations; open space valuations; water tank sites; libraries; fire stations; correctional institutions; freeway widenings; railroad grade separations QUALIFICATIONS MAI Designation No. 8339, Appraisal Institute Certified General Real Estate Appraiser, Certificate No. AG005391, State of California Expert Witness, Superior Court of California, Los Angeles and Riverside Districts Expert Witness, U. S. District Court, Los Angeles Expert Witness, U. S. Bankruptcy Court, Central District, Los Angeles and Orange Counties Qualified Instructor, Appraisal Principles Course, Appraisal Institute Qualified Instructor, Legal Consideration in Appraisal, Cal State Fullerton AFFILIATIONS Appraisal Institute Elected Regional Representative, 2011; Public Relations Chair, 2003; Moderator for Summer Program, 2000; Executive Committee Member, 1995 to 1996; Member National Public Relations Committee, 1994 to 1996; Assistant Secretary, 1994; Public Relations Chair, 1993; Representative, Regional Committee, 1992 to 1996; Program Chairperson, Orange County, 1991; Co-chair, Highest and Best Use Seminar, 1991; Co-chair, Easement Valuation Seminar, 1990 Commercial Real Estate Women (CREW - Orange County) Regional Conference Chair, 1998; First Vice President, 1997; Second Vice President, 1995; Marketing Publications Chair, 1994 to 1996; Network Lunch Program Chair, 1993; Chapter President, 1991; Membership Chair, 1990; Program Chair, 1990 International Right-of-Way Association Public Agency Liaison, 2010 Member, Board of Directors 2009 and 2010 Presenter for 2010 Spring Seminar - How Energy is Changing Land Use and Values Kiley Company Page 72 MEREDITH A. MCDONALD STATEMENT OF QUALIFICATIONS Appraiser/Consultant, 2016 to Present Elizabeth M. Kiley, Inc., DBA Kiley Company, Irvine, CA Senior Valuation Analyst, 2014 to 2015 Overland, Pacific and Cutler, Irvine, CA Appraiser/Consultant, 2003 to 2014 Elizabeth M. Kiley, Inc., DBA Kiley Company, Tustin, CA Construction Management Administrator, 2001 to 2003 PGP Partners, Inc., Lake Forest, CA Lease Administrator/Property Manager, 2000 PM Realty Group, LP, Newport Beach, CA Assistant Property Manager, 1998 to 2000 Puente Hills Regional Mall The Krausz Companies, Inc., City of Industry, CA EDUCATION Fullerton College, Fullerton, CA Appraisal Institute Courses Basic Appraisal Principles, National 15-Hour USPAP Course, Demonstration Appraisal Report Writing Course, Condemnation Appraising: Principles and Applications Allied Business School Courses Intermediate Real Estate Appraisal Course, Fundamentals of Real Estate Appraisal Course, Real Estate Principles, Real Estate Practices APPRAISAL EXPERIENCE Commercial Single and multi-tenant offices; single-tenant triple-net, retail properties; multi-tenant retail properties (shopping centers, strip retail centers); convenience stores; special use properties; fee simple and leased fees; regional and super-regional shopping centers and malls; banks; fast-food restaurants Industrial Existing and proposed single and multi-tenant buildings; research and development buildings; multi-tenant industrial parks Kiley Company Page 73 MEREDITH A. McDONALD (Continued) Residential Proposed subdivisions; condominium complexes; apartments Vacant Land Planned community developments; commercial sites; residential sites; agricultural land Public Agency Open space valuations; libraries; fire stations; right-of-way and eminent domain; freeway and street widening; grade separations; full and partial acquisitions; easement valuations, public utility easements and temporary construction easements; cut and face building valuations; damages and special benefits analysis; before and after analysis; highest and best analysis for complex acquisitions GENERAL REAL ESTATE EXPERIENCE Lease negotiations including tenant correspondence and review of lease drafts provided by attorneys; construction management including obtaining construction bids, managing construction budgets and construction reconciliation; annual CAM reconciliations for regional mall including invoicing and collections of CAM charges, tracking monthly operating expenses and database maintenance of operating expenses. QUALIFICATIONS Certified General Real Estate Appraiser Certificate No. AG043409, State of California AFFILIATIONS International Right-of-Way Association (IRWA) Associate Member, Treasurer (2017-2018), Secretary (2018-2019) Membership Chair (2011 to 2014) and Nominations/Elections Chair (2015 to Present) Kiley Company Page 74 MARKET DATA Kiley Company Page 75 APN:656-265-005; 656-160-009, -010 Document No.:0275603 Grantor:Bubbling Wells Properties, LLC Grantee: Date of Sale:July 6, 2018 Year Built:1977 Recording Date:July 9, 2018 Site Area (SF):2,591,820 Down Payment:All Cash Site Area Acres:59.50 Financing:All Cash Quality/Condition:Average/Average Sale Price: $16,700,000 Number of Units:317 Sales Price Per UNIT:$52,681 Present Use:Mobile Home Park Capitalization Rate:N/Av Net Operating Income:N/Av Comments: Inspection Date:December 15, 2018 By:Meredith McDonald Source:Costar Verification:Ross Cooper (broker); public records, recorded grant deed COMPARABLE NO. 1 15500 Bubbling Wells Road Desert Hot Springs, CA Hidden Sands Golf and Racquet Club ; mobile home park comprised of one and two bedroom units. No income information publicly available. Broker reports fair market transaction with market rents for mobile home spaces. BREIT Hidden Springs MHC, LLC ** ASSESSOR'S PARCEL NUMBER 656-265-005 ** ASSESSORS PARCEL NUMBERS 656-160-009, -010 APN:0319-152-48 Document No.:0175025 Grantor:Mobile Home Group III, LLC Grantee: Date of Sale:May 10, 2018 Year Built:1946 Recording Date:May 14, 2018 Site Area (SF):267,894 Down Payment:$419,100 (14%)Site Area Acres:6.15 Financing:Conv.Quality/Condition:Average/Average Sale Price:$2,900,000 Number of Units:74 Sales Price Per UNIT:$39,189 Present Use:Mobile Home Park Capitalization Rate:5.80% Net Operating Income:$168,200 Comments: Inspection Date:December 15, 2018 By:Meredith McDonald Source:Costar Verification:Douglas McCauley (broker); public records, recorded grant deed Wishing Well Mobile Home Estates; senior community approximately 4% vacant at the time of sale; comprised of studio units with one four-bedroom single-family residence on the site. Amenities include large clubhouse, recreation area, pool, laundry facilities and RV storage for residents. Approximately 18 of the units are park-owned; remainder are tenant-owned. COMPARABLE NO. 2 13063 5th Street Inversiones California, LLC Yucaipa, CA APN: 654-160-009, -010, -011, -012; 654-150-007 Document No.:0289092 Grantor:SAB Management, LLC Grantee:Oasis Hot Springs Mobile Home Park, LLC Date of Sale:July 10, 2017 Year Built:+/-1960 Recording Date:July 14, 2017 Site Area (SF):1,052,410 Down Payment:All Cash Site Area Acres:24.16 Financing:All Cash Quality/Condition:Average/Average Sale Price:$2,717,000 Number of Units:97 Sales Price Per UNIT:$28,010 Present Use:Mobile Home Park Capitalization Rate:N/Av Net Operating Income:N/Av Comments: Inspection Date:December 15, 2018 By:Meredith McDonald Source:Costar Verification:Chuck Wilson (broker); public records, recorded grant deed COMPARABLE NO. 3 69530 Dillon Road Desert Hot Springs, CA Oasis Hot Springs Mobile Home Park; all cash transaction with no special conditions of sale. Broker reports fair market transaction. No income information available; existing mobile home park and vacant land with entitlements for additional mobile homes included in purchase price. Amenities include pool and laundry. ** ASSESSOR'S PARCEL NUMBER 654-160-009, -010, -011 AND -012 ** ASSESSOR'S PARCEL NUMBER 654-150-007 APN:687-262-001 Document No.:0169645 Grantor:Loni Lee Stanchfield, trustee Grantee:L Wang Family Partnership and Wang Discovery, LP Date of Sale:March 24, 2017 Year Built:1950 Recording Date:April 28, 2017 Site Area (SF):217,800 Down Payment:$50,000 (2%)Site Area Acres:5.00 Financing:Conv.Quality/Condition:Average/Average Sale Price: $2,500,000 Number of Units:73 Sales Price Per UNIT:$34,247 Present Use:Mobile Home Park Capitalization Rate:4.91% Net Operating Income:$122,750 Comments: Inspection Date:December 15, 2018 By:Meredith McDonald Source:Costar Comps Source:Douglas Danny (Broker); public records, recorded grant deed COMPARABLE NO. 4 68916 H Street Cathedral City, CA Sky Ridge Park ; average rent estimated at $400 per month at the time of sale; owner renovated interior streets and some units; Broker estimates market rents of $450-$500 per month after renovated. All units park-owned; amenities include clubhouse, pool and laundry. APN:0620-111-31 Document No.:0267088 Grantor:White Star Capital LLC Grantee: Date of Sale:July 16, 2018 Year Built:+/-1970 Recording Date:July 23, 2018 Site Area (SF):109,771 Down Payment:All Cash Site Area Acres:2.52 Financing:All Cash Quality/Condition:Average/Average Sale Price: $1,264,000 Number of Units:20 Sales Price Per UNIT:$63,200 Present Use:Mobile Home Park Capitalization Rate:8.00% Net Operating Income:$101,120 Comments: Inspection Date:December 15, 2018 By:Meredith McDonald Source:Costar Comps Verification:Noel Maza (seller); public records, recorded grant deed COMPARABLE NO. 5 73687 Didsbury Drive Twentynine Palms, CA Bly Sky Resort ; smaller mobile home park with 20 units, mostly one-bedroom units, plus approximately 10 RV lots; average rent of $1,000 per month for mobile home spaces. Units come fully furnished; park includes clubhouse and pool MHP BlueSky LLC APN:767-220-023 Document No.:0477032 Grantor:LBD Realty, LLC Grantee:Empire South, LLC, dba in California as EPC Ave 52, LLC Date of Sale:November 16, 2018 Site Area (SF):378,101 Recording Date:December 7, 2018 Shape:Rectangular Down Payment:All Cash Intended Use:Hold Financing:All Cash Present Use:Vacant Land Sale Price:$2,050,000 Highest & Best Use:Residential Sale Price PSF (Land):$5.42 Zoning:A-1-10 Comments: Inspection Date:December 15, 2018 By: Meredith McDonald Source:Costar Verification:Public records, recorded grant deed LAND SALE NO. 1 SEC Avenue 52 and Monroe Street Indio, CA Existing agricultural lot purchased by developer to hold for future residential development. Existing zoning allows for single-family residential; located within an area undergoing development with residential uses APN:767-580-014 Document No.:0528028 Grantor:Brent Dill and Eileen Dill, trustees Grantee: Date of Sale:September 28, 2017 Site Area (SF):189,922 Recording Date:December 15, 2017 Shape:Long/Narrow Down Payment:All Cash Intended Use:Hold for Residential Financing:All Cash Present Use:Vacant lot Sale Price: $775,000 Highest & Best Use:Residential Sale Price PSF (Land):$4.08 Zoning:A-1200 Comments: Inspection Date:December 15, 2018 By:Meredith McDonald Source:Costar Verification:Public records, recorded grant deed Existing vacant long, narrow lot located adjacent to residential developments; existing zoning allows for some residential uses. LAND SALE NO. 2 SWC Avenue 55 and Monroe Street La Quinta, CA Morrow Management APN:624-040-019, 624-060-089 Document No.:0110091 Grantor:WR XVIII, LLC Grantee:New Cities Investment Partners, LLC Date of Sale:March 10, 2017 Site Area (SF):789,942 Recording Date:March 17, 2017 Shape:Irregular Down Payment:All Cash Intended Use:Multi-family Residential Financing:All Cash Present Use:Vacant Land Sale Price:$3,700,000 Highest & Best Use:Residential Sale Price PSF (Land):$4.68 Zoning:CP, Commercial/Residential Comments: Inspection Date:December 15, 2018 By: Meredith McDonald Source:Costar Verification:Lee Newell (buyer's representative); public records, recorded grant deed LAND SALE NO. 3 Hovley Lane East Palm Desert, CA Buyer plans to construct 400-unit apartment complex with two and three-story buildings; reflected density of 15 units per acre. *** ASSESSOR'S PARCEL NUMBER 624-040-019 ** ASSESSORS PARCEL NUMBER 624-060-089 APN:681-310-014, -016 Document No.:0069512 Grantor: Grantee:Bilt-Mor Developments and Gonzales Investments, LLC Date of Sale:February 5, 2018 Site Area (SF):326,700 Recording Date:February 23, 2018 Shape:Irregular Down Payment:$510,000 (23%)Intended Use:Residential Financing:Conv.Present Use:Vacant Sale Price:$2,260,000 Highest & Best Use:Residential Sale Price PSF (Land):$6.92 Zoning:R204M Comments: Inspection Date:December 15, 2018 By: Meredith McDonald Source:CoStar Verification:Erik Christianson (broker); public records, recorded grant deed LAND SALE NO. 4 Jones Road and Carey Road Cathedral City, CA Pensco Trust Company, Allan Singer IRA #60769256 Secondary location purchased to construct single-family residential development with 46 homes, or a density of 6 units per acre APN:694-190-087 **Document No.:Not available Grantor:Pending Grantee:Pending Date of Sale:In Escrow Site Area (SF):652,093 Recording Date:In Escrow Shape:Rectangular Down Payment:N/Av Intended Use:Multi-Family Residential Financing:N/Av Present Use:Vacant Sale Price:$6,600,000 Highest & Best Use:Residential Sale Price PSF:$10.12 Zoning:MSP, Millennium Specific Plan Comments: Inspection Date:December 15, 2018 By:Meredith McDonald Source:CoStar Verification:Jim Towery (broker); public records, marketing brochure LAND SALE NO. 5 Gerald Ford Drive Palm Desert, CA Existing vacant site adjacent to the freeway zoned for mixed-use; currently in escrow to developer who plans to construct apartment complex, as a part of the Millennium Palm Desert master-planned community, suitable for 330 unit apartment complex. ** Reparcelized to reflect indicated parcel number; previous parcel numbers referenced as 694-120-016 and 694-190-059. APN:508-060-036 Document No.:0259323 Grantor:James D. Miller Grantee:Indio 40 Investments, LP Date of Sale:May 25, 2016 Site Area (SF):121,968 Recording Date:June 24, 2016 Shape:Rectangular Down Payment:Unknown Intended Use:Residential Financing:Conv.Present Use:Vacant Land Sale Price:$1,300,000 Highest & Best Use:Residential Sale Price PSF (Land):$10.66 Zoning:RM, Medium Density Residential Comments: Inspection Date:December 15, 2018 By: Meredith McDonald Source:Costar Verification:Erik Christianson (broker); public records, recorded grant deed LAND SALE NO. 6 1550 Amado Road Palm Springs, CA Sale of residentially zoned lot located in Palm Springs; zoned for medium density residential with up to 15 units per acre. Buyer will incur expenditures after purchase to underground utilities. ADDENDA Page 76 DEFINITIONS Benefits 1 In eminent domain valuation, the advantageous factors that arise from a public improvement for which private property has been taken. The law in some jurisdictions makes a distinction between general benefits and special benefits because only special benefits are considered in determining the value of the remainder in a partial acquisition. The distinction between special benefits and general benefits is both a factual and a legal question, so appraisers may need to consult legal counsel to resolve questions about the classification of benefits. Comparable Sales When relevant to the determination of the value of property, a witness may take into account as a basis for his opinion the price and other terms and circumstances of any sale or contract to sell and purchase comparable property if the sale or contract was freely made in good faith within a reasonable time before or after the date of valuation. In order to be considered comparable, the sale or contract must have been made sufficiently near in time to the date of valuation, and the property sold must be located sufficiently near the property being valued and must be sufficiently alike in respect to character, size, situation usability, and improvements, to make it clear that the property sold and the property being valued are comparable in value and that the price realized for the property sold may fairly be considered as shedding light on the value of the property being valued. (State of California Evidence Code; Section 816) Damages 1 In condemnation, the loss in value to the remainder in a partial taking of property. Generally, the difference between the value of the whole property before the taking and the value of the remainder after the taking is the measure of the value of the part taken and the damages to the remainder. Note that different regions of the country and different courts may use terms such as consequential damages and severance damages differently. Easement 1 The right to use another’s land for a stated purpose. Fair Market Value Fair market value is defined by Section 1263.320 of the State of California Code of Civil Procedure as follows: (a) The fair market value of the property taken is the highest price on the date of valuation that would be agreed to by a seller, being willing to sell, but under no particular or urgent necessity for so doing, nor obliged to sell, and a buyer, being ready, willing and able to buy but under no particular necessity for so doing, each dealing with the other with full knowledge of all the uses and purposes for which the property is reasonably adaptable and available. (b) The fair market value of property taken for which there is no relevant comparable market is its value on the date of valuation as determined by any method of valuation that is just and equitable. Fee Simple Estate (Fee) 1 Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police powers and escheat. Highest and Best Use 1 1.The reasonably probable use of property that results in the highest value. The four criteria that the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum productivity. 2.The use of an asset that maximizes its potential and that is possible, legally permissible, and financially feasible. The highest and best use may be for continuation of an asset’s existing use or for some alternative use. This is determined by the use that a market participant would have in mind for the asset when formulating the price that it would be willing to bid. (IVS) 3.The highest and most profitable use for which the property is adaptable and needed or likely to be needed in the reasonably near future. (Uniform Appraisal Standards for Federal Land Acquisitions) Highest and Best Use 2 The reasonably probable use of property that results in the highest value. Improvements Pertaining to Realty (a ) As used in this article, “improvements pertaining to the realty” include any machinery or equipment installed for use on property taken by eminent domain, or on the remainder if such property is part of a larger parcel, that cannot be removed without a substantial economic loss or without substantial damage to the property on which it is installed, regardless of the method of installation. (b) In determining whether particular property can be removed “without a substantial economic loss” within the meaning of this section, the value of property in place considered as a part of the realty should be compared with its value it if were removed and sold. (Section 1263.205 of the State of California Code of Civil Procedure) Just Compensation 1 In condemnation, the amount of loss for which a property owner is compensated when his or her property is taken. Just compensation should put the owner in as good a position pecuniarily as he or she would be if the property had not been taken. Larger Parcel 1 In governmental land acquisitions and in valuation of charitable donations of partial interests in property such as easements, the tract or tracts of land that are under the beneficial control of a single individual or entity and have the same, or an integrated, highest and best use. 1. Source: Appraisal Institute, The Dictionary of Real Estate Appraisal, 6th ed. (Chicago: Appraisal Institute, 2015) 2. Source: Appraisal Institute, The Appraisal of Real Estate, 14th Ed. (Chicago: Appraisal Institute, 2013) Elements for consideration by the appraiser in making a determination in this regard are contiguity, or proximity, as it bears on the highest and best use of the property, unity of ownership, and unity of highest and best use. In most states, unity of ownership, contiguity, and unity of use are the three conditions that establish the larger parcel for the consideration of severance damages. In federal and some state cases, however, contiguity is sometimes subordinated to unitary use. Personal Information The term “personal information” means any information that is maintained by an agency that identifies or describes an individual, including, but not limited to, his or her name, social security number, physical description, home address, home telephone number, education, financial matters and medical or employment history. It includes statements made by, or attributed to, the individual (Section 1798.3 of the State of California Code of Civil Procedure) Project Influence The fair market value of the property taken shall not include any increase or decrease in the value of the property that is attributable to any of the following: (a) The project for which the property is taken; (b) The eminent domain proceeding in which the property is taken; (c) Any preliminary actions of the plaintiff relating to the taking of the property. (Section 1263.330 of the State of California Code of Civil Procedure) Remainder 1 In condemnation, that portion of a larger parcel remaining in the ownership of the property owner after a partial taking. Temporary Easement 1 An easement granted for a specific purpose and applicable for a specific time period. Unit Rule, or Individual Fee Rule 1 In condemnation appraisal, a valuation rule with two aspects, the first dealing with ownership interests and the second dealing with physical components. The first aspect of the rule, also referred to as the undivided fee rule, requires that property be valued as a whole rather than by the sum of the values of the various interests into which it may have been carved (such as lessor and lessee, life tenant and remainderman, and mortgagor and mortgagee, etc.). This is an application of the principle that it is the property, not the interests, that is being acquired. The second aspect of the rule is that different physic al elements or components of a tract of land (such as the value of timber and the value of minerals on the same land) are not to be separately valued and added together. Combined Report 46400 Dune Palms Rd, La Quinta, CA 92253 46400 Dune Palms Rd La Quinta, CA 92253 Property Address: 12/12/201846400 Dune Palms Rd, La Quinta, CA 92253Combined Report All information contained herein is subject to the Limitation of Liability for Informational Report set forth on the last page hereof. ©2005-2018 First American Financial Corporation and/or its affiliates. All rights reserved. Property Information Owner(s):Mailing Address:3487 Rowena Ave, Los Angeles, CA 90027 Owner Phone:Unknown Property Address:46400 Dune Palms Rd, La Quinta, CA 92253 County:Riverside APN:600-030-010 Map Coord:Census Tract:045215 Lot#:Block: Subdivision:Tract: Legal:11.29 Acres M/L In Por Ne 1/4 Of Sec 29 T5s R7e For Total Description See Assessors Maps Chin Family Prop Ltd Partnership Vesting Type:N/A Alt. APN:600030010 Use: Zoning: Stories: Basement Area: Year Built / Eff. : Lot Size Ac / Sq Ft: Improvements: Gross Area: Sq. Ft. : # of Units: Parking / #: Garage Area : Mobile Home Park / 11.29 / 491792 102 / Property Characteristics Tax Information Imp Value: Land Value: Total Value: Total Tax Amt: Exemption Type: Tax Year / Area: Tax Value: Improved: $755,945 $414,209 $1,170,154 $18,404.56 2018 / 20-026 65% Sale / Rec Date: Sale Price: Doc No.: Doc Type: Seller: *$/Sq. Ft.: 1st Loan: Loan Type: Transfer Date: Lender: 2nd Mtg.: Prior Sale Amt: Prior Sale Date: Prior Doc No.: Prior Doc Type: Sale and Loan Information *$/Sq.Ft. is a calculation of Sale Price divided by Sq.Feet. Property Profile 46400 Dune Palms Rd, La Quinta, CA 92253 Property Profile 46400 Dune Palms Rd, La Quinta, CA 92253 12/12/2018 Page 1 (of 1) This report is only for the myFirstAm user who applied for it. No one else can rely on it. As a myFirstAm user, you already agreed to our disclaimer regarding third party property information accuracy. You can view it here: www.myfirstam.com/Security/ShowEULA. ©2005-2018 First American Financial Corporation and/or its affiliates. All rights reserved. Transaction History provides records for the past ten years. To request additional information, please contact your local Sales Representative, click here .Customer Service Department, or for an additional fee you may History Record # 1 : FORECLOSURE Recording Date: Recorded Doc #: Document Type: 06/07/2018 000000231240 Lis Pendens Vesting Type: SALE/TRANSFER Buyer: Transaction Date: Recording Date: Recorded Doc #: Document Type: Title Company: Sale Price Type: Sale Price: Seller: History Record # 2 : Chin Family Properties 10/13/2005 11/23/2005 Chin Family Trust Deed Transfer 972219 Vesting Type:N/A SALE/TRANSFER Buyer: Transaction Date: Recording Date: Recorded Doc #: Document Type: Title Company: Sale Price Type: Sale Price: Seller: History Record # 3 : Chin Family Survivors Trust 10/13/2005 11/23/2005 Dune Palms Mobile Estates Llc Deed Transfer 972218 Vesting Type:N/A SALE/TRANSFER Buyer: Transaction Date: Recording Date: Recorded Doc #: Document Type: Title Company: Sale Price Type: Sale Price: Seller: History Record # 4 : Dune Palms Mobile Est Llc 10/03/1996 10/10/1996 Unknown Chin,Henry S Etal Deed Transfer 0000389752 Vesting Type:N/A 46400 Dune Palms Rd, La Quinta, CA 92253Transaction History Transaction History 46400 Dune Palms Rd, La Quinta, CA 92253 12/12/2018 Page 1 (of 2) Continued on next page... All information contained herein is subject to the Limitation of Liability for Informational Report set forth on the last page hereof. ©2005-2018 First American Financial Corporation and/or its affiliates. All rights reserved. 46400 Dune Palms Rd, La Quinta, CA 92253Transaction History Transaction History 46400 Dune Palms Rd, La Quinta, CA 92253 12/12/2018 Page 2 (of 2) ©2005-2018 First American Financial Corporation and/or its affiliates. All rights reserved. Tax Map 46400 Dune Palms Rd, La Quinta, CA 92253 Tax Map 46400 Dune Palms Rd, La Quinta, CA 92253 12/12/2018 Page 1 (of 1) ©2005-2018 First American Financial Corporation and/or its affiliates. All rights reserved. Limitation of Liability for Informational Report IMPORTANT – READ CAREFULLY:THIS REPORT IS NOT AN INSURED PRODUCT OR SERVICE OR A REPRESENTATION OF THE CONDITION OF TITLE TO REAL PROPERTY. IT IS NOT AN ABSTRACT, LEGAL OPINION, OPINION OF TITLE, TITLE INSURANCE COMMITMENT OR PRELIMINARY REPORT, OR ANY FORM OF TITLE INSURANCE OR GUARANTY. THIS REPORT IS ISSUED EXCLUSIVELY FOR THE BENEFIT OF THE APPLICANT THEREFOR, AND MAY NOT BE USED OR RELIED UPON BY ANY OTHER PERSON. THIS REPORT MAY NOT BE REPRODUCED IN ANY MANNER WITHOUT FIRST AMERICAN’S PRIOR WRITTEN CONSENT. FIRST AMERICAN DOES NOT REPRESENT OR WARRANT THAT THE INFORMATION HEREIN IS COMPLETE OR FREE FROM ERROR, AND THE INFORMATION HEREIN IS PROVIDED WITHOUT ANY WARRANTIES OF ANY KIND, AS-IS, AND WITH ALL FAULTS. AS A MATERIAL PART OF THE CONSIDERATION GIVEN IN EXCHANGE FOR THE ISSUANCE OF THIS REPORT, RECIPIENT AGREES THAT FIRST AMERICAN’S SOLE LIABILITY FOR ANY LOSS OR DAMAGE CAUSED BY AN ERROR OR OMISSION DUE TO INACCURATE INFORMATION OR NEGLIGENCE IN PREPARING THIS REPORT SHALL BE LIMITED TO THE FEE CHARGED FOR THE REPORT. RECIPIENT ACCEPTS THIS REPORT WITH THIS LIMITATION AND AGREES THAT FIRST AMERICAN WOULD NOT HAVE ISSUED THIS REPORT BUT FOR THE LIMITATION OF LIABILITY DESCRIBED ABOVE. FIRST AMERICAN MAKES NO REPRESENTATION OR WARRANTY AS TO THE LEGALITY OR PROPRIETY OF RECIPIENT’S USE OF THE INFORMATION HEREIN. Lawyers Title Company 3480 Vine Street Suite 300 Riverside, CA 92507 Phone: (951) 774-0825 Fax: ( ) March 5, 2018 OVERLAND, PACIFIC & CUTLER, INC 2280 MARKET STREET # 200 RIVERSIDE, CA 92501 YOUR REF: CHIN FAMILY LTD OUR NO.: 618650059 Attached is your Litigation Guarantee policy of title insurance, per your instructions. CLTA Guarantee Face Page (06-05-14) Page 2 © California Land Title Association. All rights reserved. The use of this Form is restricted to CLTA subscribers in good standing as of the date of use. All other uses are prohibited. Reprinted under license or express permission from the California Land Title Association. Commonwealth Land Title Insurance Company LLIITTIIGGAATTIIOONN GGUUAARRAANNTTEEEE SUBJECT TO THE LIMITATIONS CONTAINED HEREIN, THE EXCLUSIONS FROM COVERAGE, THE LIMITS OF LIABILITY AND OTHER PROVISIONS OF THE CONDITIONS AND STIPULATIONS HERETO ANNEXED AND MADE A PART OF THIS GUARANTEE Commonwealth Land Title Insurance Company a corporation, herein called the Company GUARANTEES the Assured named in Schedule A against loss not exceeding the liability amount stated in Schedule A which the Assured shall sustain by reason of any incorrectness in the assurance which the Company hereby gives that, according to the public records, as of Date of Guarantee shown in Schedule A: 1. The title to the herein described estate or interest is vested in the vestee named in Schedule A. 2. Except for the matters shown in Schedule B, there are no defects, liens, encumbrances or other matters affecting title to the estate or interest in the land shown in Schedule A, which matters are not necessarily shown in the order of their priority. 3. (a) The current interest holders claiming some right, title or interest by reason of the matters shown in Part II of Schedule B are shown therein. The vestee named in Schedule A and parties claiming to have some right, title or interest by reason of the matters shown in Part II of Schedule B may be necessary parties defendant in an action, the nature of which is referred to in Schedule A. (b) The current interest holders claiming some right, title or interest by reason of the matters shown in Part I of Schedule B may also be necessary parties defendant in an action, the nature of which is referred to in Schedule A. However, no assurance is given hereby as to those current interest holders. 4. The return address for mailing after recording, if any, as shown on each and every document referred to in Part II of Schedule B by specific recording information, and as shown on the document(s) vesting title as shown in Schedule A are as shown in Schedule C. THIS LITIGATION GUARANTEE IS FURNISHED SOLELY FOR THE PURPOSE OF FACILITATING THE FILING OF THE ACTION REFERRED TO IN SCHEDULE A. IT SHALL NOT BE USED OR RELIED UPON FOR ANY OTHER PURPOSE. IN WITNESS WHEREOF, Commonwealth Land Title Insurance Company has caused this Guarantee to be signed and sealed as of the date of policy shown in Schedule A, the Guarantee to become valid when countersigned by an authorized signatory. Commonwealth Land Title Insurance Company Countersigned: By: Authorized Officer or Agent By: President ATTEST Secretary Order No. 618650059-132-SPH CLTA Guarantee Exclusions and Conditions (06-05-14) © California Land Title Association. All rights reserved. The use of this Form is restricted to CLTA subscribers in good standing as of the date of use. All other uses are prohibited. Reprinted under license or express permission from the California Land Title Association. GUARANTEE EXCLUSIONS AND CONDITIONS (06-05-14) EXCLUSIONS FROM COVERAGE Except as expressly provided by the assurances in Schedule A, the Company assumes no liability for loss or damage by reason of the following: (a) Defects, liens, encumbrances, adverse claims or other matters affecting the title to any property beyond the lines of the Land. (b) Defects, liens, encumbrances, adverse claims or other matters, whether or not shown by the Public Records (1) that are created, suffered, assumed or agreed to by one or more of the Assureds; or (2) that result in no loss to the Assured. (c) Defects, liens, encumbrances, adverse claims or other matters not shown by the Public Records. (d) The identity of any party shown or referred to in any of the schedules of this Guarantee. (e) The validity, legal effect or priority of any matter shown or referred to in any of the schedules of this Guarantee. (f) (1) Taxes or assessments of any taxing authority that levies taxes or assessments on real property; or, (2) proceedings by a public agency which may result in taxes or assessments, or notices of such proceedings, whether or not the matters excluded under (1) or (2) are shown by the records of the taxing authority or by the Public Records. (g) (1) Unpatented mining claims; (2) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (3) water rights, claims or title to water, whether or not the matters excluded under (1), (2) or (3) are shown by the Public Records. GUARANTEE CONDITIONS 1. Definition of Terms. The following terms when used in the Guarantee mean: (a) the "Assured": the party or parties named as the Assured in Schedule A, or on a supplemental writing executed by the Company. (b) "Land": the Land described or referred to in Schedule A, and improvements affixed thereto which by law constitute real property. The term "Land" does not include any property beyond the lines of the area described or referred to in Schedule A, nor any right, title, interest, estate or easement in abutting streets, roads, avenues, alleys, lanes, ways or waterways. (c) "Mortgage": mortgage, deed of trust, trust deed, or other security instrument. (d) "Public Records": those records established under California statutes at Date of Guarantee for the purpose of imparting constructive notice of matters relating to real property to purchasers for value and without knowledge. (e) "Date of Guarantee": the Date of Guarantee set forth in Schedule A. (f) “Amount of Liability”: the Amount of Liability as stated in Schedule A. 2. Notice of Claim to be Given by Assured. The Assured shall notify the Company promptly in writing in case knowledge shall come to the Assured of any assertion of facts, or claim of title or interest that is contrary to the assurances set forth in Schedule A and that might cause loss or damage for which the Company may be liable under this Guarantee. If prompt notice shall not be given to the Company, then all liability of the Company shall terminate with regard to the matter or matters for which prompt notice is required; provided, however, that failure to notify the Company shall in no case prejudice the rights of the Assured under this Guarantee unless the Company shall be prejudiced by the failure and then only to the extent of the prejudice. 3. No Duty to Defend or Prosecute. The Company shall have no duty to defend or prosecute any action or proceeding to which the Assured is a party, notwithstanding the nature of any allegation in such action or proceeding. 4. Company's Option to Defend or Prosecute Actions; Duty of Assured to Cooperate. Even though the Company has no duty to defend or prosecute as set forth in Paragraph 3 above: (a) The Company shall have the right, at its sole option and cost, to institute and prosecute any action or proceeding, interpose a defense, as limited in Paragraph 4 (b), or to do any other act which in its opinion may be necessary or desirable to establish the correctness of the assurances set forth in Schedule A or to prevent or reduce loss or damage to the Assured. The Company may take any appropriate action under the terms of this Guarantee, whether or not it shall be liable hereunder, and shall not thereby concede liability or waive any provision of this Guarantee. If the Company shall exercise its rights under this paragraph, it shall do so diligently. (b) If the Company elects to exercise its options as stated in Paragraph 4(a) the Company shall have the right to select counsel of its choice (subject to the right of the Assured to object for reasonable cause) to represent the Assured and shall not be liable for and will not pay the fees of any other counsel, nor will the Company pay any fees, costs or expenses incurred by an Assured in the defense of those causes of action which allege matters not covered by this Guarantee. (c) Whenever the Company shall have brought an action or interposed a defense as permitted by the provisions of this Guarantee, the Company may pursue any litigation to final determination by a court of competent jurisdiction and expressly reserves the right, in its sole discretion, to appeal from an adverse judgment or order. (d) In all cases where this Guarantee permits the Company to prosecute or provide for the defense of any action or proceeding, the Assured shall secure to the Company the right to so prosecute or provide for the defense of any action or proceeding, and all appeals therein, and permit the Company to use, at its option, the name of the Assured for this purpose. Whenever requested by the Company, the Assured, at the Company's expense, shall give the Company all reasonable aid in any action or proceeding, securing evidence, obtaining witnesses, prosecuting or defending the action or lawful act which in the opinion of the Company may be necessary or desirable to establish the correctness of the assurances set forth in Schedule A or to prevent or reduce loss or damage to the Assured. If the Company is prejudiced by the failure of the Assured to furnish the required cooperation, the Company's obligations to the Assured under the Guarantee shall terminate. 5. Proof of Loss or Damage. (a) In the event the Company is unable to determine the amount of loss or damage, the Company may, at its option, require as a condition of payment that the Assured furnish a Order No. 618650059-132-SPH CLTA Guarantee Exclusions and Conditions (06-05-14) © California Land Title Association. All rights reserved. The use of this Form is restricted to CLTA subscribers in good standing as of the date of use. All other uses are prohibited. Reprinted under license or express permission from the California Land Title Association. signed proof of loss. The proof of loss must describe the defect, lien, encumbrance, or other matter that constitutes the basis of loss or damage and shall state, to the extent possible, the basis of calculating the amount of the loss or damage. (b) In addition, the Assured may reasonably be required to submit to examination under oath by any authorized representative of the Company and shall produce for examination, inspection and copying, at such reasonable times and places as may be designated by any authorized representative of the Company, all records, books, ledgers, checks, correspondence and memoranda, whether bearing a date before or after Date of Guarantee, which reasonably pertain to the loss or damage. Further, if requested by any authorized representative of the Company, the Assured shall grant its permission, in writing, for any authorized representative of the Company to examine, inspect and copy all records, books, ledgers, checks, correspondence and memoranda in the custody or control of a third party, which reasonably pertain to the loss or damage. All information designated as confidential by the Assured provided to the Company pursuant to this paragraph shall not be disclosed to others unless, in the reasonable judgment of the Company, it is necessary in the administration of the claim. Failure of the Assured to submit for examination under oath, produce other reasonably requested information or grant permission to secure reasonably necessary information from third parties as required in the above paragraph, unless prohibited by law or governmental regulation, shall terminate any liability of the Company under this Guarantee to the Assured for that claim. 6. Options to Pay or Otherwise Settle Claims: Termination of Liability. In case of a claim under this Guarantee, the Company shall have the following additional options: (a) To pay or tender payment of the Amount of Liability together with any costs, attorneys’ fees, and expenses incurred by the Assured that were authorized by the Company up to the time of payment or tender of payment and that the Company is obligated to pay. (b) To pay or otherwise settle with the Assured any claim assured against under this Guarantee. In addition, the Company will pay any costs, attorneys' fees, and expenses incurred by the Assured that were authorized by the Company up to the time of payment or tender of payment and that that the Company is obligated to pay; or (c) To pay or otherwise settle with other parties for the loss or damage provided for under this Guarantee, together with any costs, attorneys' fees, and expenses incurred by the Assured that were authorized by the Company up to the time of payment and that the Company is obligated to pay. Upon the exercise by the Company of either of the options provided for in 6 (a), (b) or (c) of this paragraph the Company’s obligations to the Assured under this Guarantee for the claimed loss or damage, other than the payments required to be made, shall terminate, including any duty to continue any and all litigation initiated by the Company pursuant to Paragraph 4. 7. Limitation of Liability. (a) This Guarantee is a contract of Indemnity against actual monetary loss or damage sustained or incurred by the Assured claimant who has suffered loss or damage by reason of reliance upon the assurances set forth in Schedule A and only to the extent herein described, and subject to the Exclusions From Coverage of this Guarantee. (b) If the Company, or the Assured under the direction of the Company at the Company’s expense, removes the alleged defect, lien or, encumbrance or cures any other matter assured against by this Guarantee in a reasonably diligent manner by any method, including litigation and the completion of any appeals therefrom, it shall have fully performed its obligations with respect to that matter and shall not be liable for any loss or damage caused thereby. (c) In the event of any litigation by the Company or with the Company’s consent, the Company shall have no liability for loss or damage until there has been a final determination by a court of competent jurisdiction, and disposition of all appeals therefrom. (d) The Company shall not be liable for loss or damage to the Assured for liability voluntarily assumed by the Assured in settling any claim or suit without the prior written consent of the Company. 8. Reduction of Liability or Termination of Liability. All payments under this Guarantee, except payments made for costs, attorneys' fees and expenses pursuant to Paragraph 4 shall reduce the Amount of Liability under this Guarantee pro tanto. 9. Payment of Loss. (a) No payment shall be made without producing this Guarantee for endorsement of the payment unless the Guarantee has been lost or destroyed, in which case proof of loss or destruction shall be furnished to the satisfaction of the Company. (b) When liability and the extent of loss or damage has been definitely fixed in accordance with these Conditions, the loss or damage shall be payable within thirty (30) days thereafter. 10. Subrogation Upon Payment or Settlement. Whenever the Company shall have settled and paid a claim under this Guarantee, all right of subrogation shall vest in the Company unaffected by any act of the Assured. The Company shall be subrogated to and be entitled to all rights and remedies which the Assured would have had against any person or property in respect to the claim had this Guarantee not been issued. If requested by the Company, the Assured shall transfer to the Company all rights and remedies against any person or property necessary in order to perfect this right of subrogation. The Assured shall permit the Company to sue, compromise or settle in the name of the Assured and to use the name of the Assured in any transaction or litigation involving these rights or remedies. If a payment on account of a claim does not fully cover the loss of the Assured the Company shall be subrogated to all rights and remedies of the Assured after the Assured shall have recovered its principal, interest, and costs of collection. 11. Arbitration. Either the Company or the Assured may demand that the claim or controversy shall be submitted to arbitration pursuant to the Title Insurance Arbitration Rules of the American Land Title Association (“Rules”). Except as provided in the Rules, there shall be no joinder or consolidation with claims or controversies of other persons. Arbitrable matters may include, but are not limited to, any controversy or claim between the Company and the Assured arising out of or relating to this Guarantee, any service of the Company in connection with its issuance or the breach of a Guarantee provision, or to any other controversy or claim arising out of the transaction giving rise to this Guarantee. All arbitrable matters when the amount of liability is $2,000,000 or less shall be arbitrated at the option of either the Company or the Assured. All arbitrable matters when the amount of liability is in excess of $2,000,000 shall be arbitrated only when agreed to by both the Company and the Assured. Arbitration pursuant to this Guarantee and under the Order No. 618650059-132-SPH CLTA Guarantee Exclusions and Conditions (06-05-14) © California Land Title Association. All rights reserved. The use of this Form is restricted to CLTA subscribers in good standing as of the date of use. All other uses are prohibited. Reprinted under license or express permission from the California Land Title Association. Rules shall be binding upon the parties. Judgment upon the award rendered by the Arbitrator(s) may be entered in any court of competent jurisdiction. 12. Liability Limited to This Guarantee; Guarantee Entire Contract. (a) This Guarantee together with all endorsements, if any, attached hereto by the Company is the entire Guarantee and contract between the Assured and the Company. In interpreting any provision of this Guarantee, this Guarantee shall be construed as a whole. (b) Any claim of loss or damage, whether or not based on negligence, or any action asserting such claim, shall be restricted to this Guarantee. (c) No amendment of or endorsement to this Guarantee can be made except by a writing endorsed hereon or attached hereto signed by either the President, a Vice President, the Secretary, an Assistant Secretary, or validating officer or authorized signatory of the Company. 13. Severability In the event any provision of this Guarantee, in whole or in part, is held invalid or unenforceable under applicable law, the Guarantee shall be deemed not to include that provision or such part held to be invalid, but all other provisions shall remain in full force and effect. 14. Choice of Law; Forum (a) Choice of Law: The Assured acknowledges the Company has underwritten the risks covered by this Guarantee and determined the premium charged therefor in reliance upon the law affecting interests in real property and applicable to the interpretation, rights, remedies, or enforcement of Guaranties of the jurisdiction where the Land is located. Therefore, the court or an arbitrator shall apply the law of the jurisdiction where the Land is located to determine the validity of claims that are adverse to the Assured and to interpret and enforce the terms of this Guarantee. In neither case shall the court or arbitrator apply its conflicts of law principles to determine the applicable law. (b) Choice of Forum: Any litigation or other proceeding brought by the Assured against the Company must be filed only in a state or federal court within the United States of America or its territories having appropriate jurisdiction. 15. Notices, Where Sent. All notices required to be given the Company and any statement in writing required to be furnished the Company shall include the number of this Guarantee and shall be addressed to the Company at Commonwealth Land Title Insurance Company, Attn: Claims Department, P.O. Box 45023, Jacksonville, FL 32232-5023. Order No. 618650059-132-SPH CLTA Guarantee Form No. 1 (06-05-14) Litigation Guarantee © California Land Title Association. All rights reserved. The use of this Form is restricted to CLTA subscribers in good standing as of the date of use. All other uses are prohibited. Reprinted under license or express permission from the California Land Title Association. LITIGATION GUARANTEE SCHEDULE A Order No.: 618650059-132-SPH Amount of Liability: $301,000.00 Date of Guarantee: February 26, 2018 Fee: $1,003.00 1. Name of Assured: CITY of LA QUINTA 2. The estate or interest in the Land that is the subject of this Guarantee is: A FEE 3. This Land referred to in this Guarantee is situated in the State of CALIFORNIA, County of Riverside, and is described as follows: See Exhibit A attached hereto and made a part hereof. 4. This Litigation Guarantee is furnished solely for the purpose of facilitating the filing of an action to PUBLIC STREET IMPROVEMENT. It shall not be used or relied upon for any other purpose. 5. ASSURANCES: According to the Public Records as of the Date of Guarantee, a. Title to the estate or interest is vested in: CHIN FAMILY PROPERTIES LIMITED PARTNERSHIP, A CALIFORNIA LIMITED PARTNERSHIP b. Except for the matters shown in Schedule B, there are no defects, liens, encumbrances or other matters affecting title to the estate or interest in the land shown in Schedule A, which matters are not necessarily shown in the order of their priority. c. The current interest holders claiming some right, title or interest by reason of the matters shown in Part II of Schedule B are as shown therein. The vestee named herein and parties claiming to have some right, title or interest by reason of the matters shown in Part II of Schedule B may be necessary parties defendant in an action, the nature of which is referred to above in paragraph 4. d. The current interest holders claiming some right, title or interest by reason of the matters shown in Part I of Schedule B may also be necessary parties defendant in an action, the nature of which is referred to above in paragraph 4. However, no return address for mailing after recording is shown in Schedule C as to those current interest holders. 6. The return address for mailing after recording, if any, as shown on each document referred to in Part II of Schedule B by specific recording information, and as shown on the document(s) vesting title as shown above in paragraph 5(a), are as shown in Schedule C. Order No. 618650059-132-SPH CLTA Guarantee Form No. 1 (06-05-14) Litigation Guarantee © California Land Title Association. All rights reserved. The use of this Form is restricted to CLTA subscribers in good standing as of the date of use. All other uses are prohibited. Reprinted under license or express permission from the California Land Title Association. EXHIBIT A LEGAL DESCRIPTION All that certain real property situated in the County of Riverside, State of California, described as follows: Parcel 1: Beginning at a point 660 feet South of the Northwest corner of the Northeast Quarter of Section 29, Township 5 South, Range 7 East, San Bernardino Base and Meridian; thence South 660 feet; thence East 660 feet to a point 1320 feet South of the Northerly boundary line of said Section; thence North 660 feet to a point 660 feet South of the said Northerly boundary line; thence 660 feet West to the point of beginning. Excepting therefrom the right of way of the Coachella Valley Storm Water District, as acquired by the District by Decree of Condemnation, recorded October 6, 1923 in Book 591, Page 223 of Deeds, in the Office of the County Recorder of the County of Riverside, State of California. Also excepting therefrom a right of way for public highway and public utility purposes over, the Westerly rectangular 30 feet of said property, as conveyed to the County of Riverside, by deed recorded May 24, 1933 in Book 122, Page 374 of Official Records in the Office of the county Recorder of the County of Riverside, State of California, said property is also shown by map of Record of Survey on file in Book 8, Page 14 of Records of Survey, in the Office of the County Recorder of said County, in the Office of the County Recorder of Riverside, State of California. Also except that portion as described in the deed to the County of Riverside, recorded July 1, 1969 as Instrument No. 66907, of Official Records. Parcel 2: The West half of the Southwest Quarter of the Northeast Quarter of Section 29, Township 5 South, Range 7 East, San Bernardino Base and Meridian, lying North of the Coachella Valley Storm Water District right of way, containing five acres or less and described as follows: Beginning 1320 feet South of the Northwest corner of the West Quarter of the Northeast Quarter of Section 29, Township 5 South, Range 7 East, San Bernardino Base and Meridian, thence South 330 feet; thence 660 feet East; thence 330 feet North to a point 1320 feet South of the North boundary of said Section; thence West 660 feet to the point of beginning; Excepting therefrom a right of way for public highway and public utilities purposes over the Westerly rectangular 30 feet of said property, as conveyed to the County of Riverside, by deed recorded May 24, 1933 in Book 122, Page 374 of Official Records. Also excepting therefrom any portion included in the Coachella Valley Storm Water District as acquired by said District by Decree of Condemnation recorded October 6, 1923, in Book 591, Page 223 of Deeds, and more particularly described by metes and bounds as follows: That portion of the North half of Section 29, Township 5 South, Range 7 West, San Bernardino Base and Meridian, that is bounded as follows: Beginning t a point in the West line of the Northwest Quarter of said Section distant South 0°1’30” East 386.48 feet from the Northwest corner of said Section; thence South 71°25’ East 3143.51 feet; thence Easterly along a curve concave to the North; to which said last described line is tangent, and having a radius of 2664.93 feet, a distance of 1409.54 feet; thence North 78°18’ East tangent to said curve 947.52 feet to a point in the East line of said Section 29; thence South 0°98’ East along the East line of said Section 408.30 feet; thence South 78°18’ West, 856.66 feet; thence Westerly along a curve concave to the North to which Order No. 618650059-132-SPH EXHIBIT A (Continued) 81021 CLTA Guarantee Form No. 1 (06-05-14) Page 3 Litigation Guarantee © California Land Title Association. All rights reserved. The use of this Form is restricted to CLTA subscribers in good standing as of the date of use. All other uses are prohibited. Reprinted under license or express permission from the California Land Title Association. said last described line is tangent and having a radius of 3064.93 feet, a distance of 1619.95 feet; thence North 71°25’ West 3008.83 feet to a point in the West line of said Section 29; thence North 0°01’30” West along the West line of said Section 422.06 feet to the point of beginning. EXCEPTING there from the mobile home or manufactured housing unit and appurtenances, if any, located on said land. APN: 600-030-010 Order No. 618650059-132-SPH CLTA Guarantee Form No. 1 (06-05-14) Litigation Guarantee © California Land Title Association. All rights reserved. The use of this Form is restricted to CLTA subscribers in good standing as of the date of use. All other uses are prohibited. Reprinted under license or express permission from the California Land Title Association. SCHEDULE B Defects, liens, encumbrances or other matters affecting title: Part I A. Property taxes, which are a lien not yet due and payable, including any assessments collected with taxes to be levied for the fiscal year 2018-2019. B. Property taxes, including any personal property taxes and any assessments collected with taxes, are as follows: Tax Identification No.: 600-030-010-8 Fiscal Year: 2017-2018 1st Installment: $9,041.37, paid. 2nd Installment: $9,041.37, UNPAID (Delinquent after April 10) Penalty and Cost: $942.76 Homeowners Exemption: NONE Code Area: 020-026 C. Escaped taxes for the year 2017 Bill No.: 930012 Total Tax: $79.30 1st Installment: $39.65 PAID 2nd Installment: $39.65 Must be paid by: April 10, 2018 Supplemental Bill #: 008535646-3 D. Escaped taxes for the year 2017 Bill No.: 930013 Total Tax: $77.44 1st Installment: $38.72 PAID 2nd Installment: $38.72 Must be paid by: April 10, 2018 Supplemental Bill #: 008535647-4 E. Escaped taxes for the year 2017 Bill No.: 930014 Total Tax: $79.10 1st Installment: $39.55 PAID 2nd Installment: $39.55 Must be paid by: April 10, 2018 Supplemental Bill #: 008535648-5 F. The lien of supplemental or escaped assessments of property taxes, if any, made pursuant to the provisions of Chapter 3.5 (commencing with Section 75) or Part 2, Chapter 3, Articles 3 and 4, respectively, of the Revenue and Taxation Code of the State of California as a result of the transfer of title to the vestee named in Schedule A; or as a result of changes in ownership or new construction occurring prior to date of policy. 1. Water rights, claims or title to water, whether or not disclosed by the public records. 2. Easement(s) in favor of the public over any existing roads lying within said Land. Order No. 618650059-132-SPH SCHEDULE B – Part I (Continued) 81021 CLTA Guarantee Form No. 1 (06-05-14) Page 5 Litigation Guarantee © California Land Title Association. All rights reserved. The use of this Form is restricted to CLTA subscribers in good standing as of the date of use. All other uses are prohibited. Reprinted under license or express permission from the California Land Title Association. 3. Easement(s) for the purpose(s) shown below and rights incidental thereto as set forth in a document: In favor of: General Telephone Company of California, a Corporation Purpose: transmission of electric energy for communication Recording Date: February 16, 1970 Recording No: as Instrument No. 18029 of Official Records Affects: Portion of said land 4. Matters contained in that certain document Entitled: Domestic Water and/or Sanitation Systems Installation Agreement Dated: July 1, 1995 Executed by: Coachella Valley County Water District and Dune Palms Mobile Estates Recording Date: February 23, 1996 Recording No: as Instrument No. 1996-063213 of Official Records Reference is hereby made to said document for full particulars. 5. The Land described herein is included within a project area of the Redevelopment Agency shown below, and that proceedings for the redevelopment of said project have been instituted under the Redevelopment Law (such redevelopment to proceed only after the adoption of the Redevelopment Plan) as disclosed by a document. Redevelopment Agency: La Quinta Redevelopment Agency Recording Date: October 4, 2007 Recording No: as Instrument No. 2007-619749 of Official Records 6. The search did not disclose any open mortgages or deeds of trust of record, therefore the Company reserves the right to require further evidence to confirm that the property is unencumbered, and further reserves the right to make additional requirements or add additional items or exceptions upon receipt of the requested evidence. Order No. 618650059-132-SPH CLTA Guarantee Form No. 1 (06-05-14) Litigation Guarantee © California Land Title Association. All rights reserved. The use of this Form is restricted to CLTA subscribers in good standing as of the date of use. All other uses are prohibited. Reprinted under license or express permission from the California Land Title Association. SCHEDULE B Part II 1. An unrecorded lease with certain terms, covenants, conditions and provisions set forth therein as disclosed by the document Entitled: Laundry Room Lease Lessor: H.S. Chin Lessee: Web Service Company, Inc. Recording Date: September 10, 1976 Recording No: as Instrument No. 134765 of Official Records and Recording Date: January 18, 1988 and Recording No: as Instrument No. 1988-5058 of Official Records The present ownership of the leasehold created by said lease and other matters affecting the interest of the lessee are not shown herein. Order No. 618650059-132-SPH CLTA Guarantee Form No. 1 (06-05-14) Litigation Guarantee © California Land Title Association. All rights reserved. The use of this Form is restricted to CLTA subscribers in good standing as of the date of use. All other uses are prohibited. Reprinted under license or express permission from the California Land Title Association. SCHEDULE C Addresses Chin Family Properties Limited Partnership 46400 Dune Palms Road La Quinta, California (OWNERS of Record) Chin Family Properties Limited Partnership 3487 Rowena Avenue Los Angeles, California 90027 (OWNERS of Record) Chin Family Properties Limited Partnership c/o: Greenwald, Hoffman, Meyer & Montes, LLP 500 N. Brand Boulevard, Suite 920 Glendale, California 91203 (OWNERS of Record) Web Service Company, Inc. 3690 Freeman Boulevard Redondo Beach, California 90278 (LESSEE under Item 1, Part II) 2. Any and all parties known to the plaintiff to have or claim any interest in said land, or whose interest could be ascertained by an inspection of said land or by making inquiry of persons in possession thereof, should also be named as parties defendant. www.OPCservices.com | 2280 Market Street, Suite 200, Riverside, CA 92501 ph 951.683.2353 | fx 951.683.3901 September 20, 2018 Chin Family Properties Limited Partnership City Project No. 2011-05 3487 Rowena Avenue Federal Project No. BRLKS-5433(014) Los Angeles, CA 92253 Re: Notice of Decision to Appraise Dune Palms Bridge Project Address: 46400 Dune Palms Road, La Quinta, CA 92253 APN: 600-030-010 Dear Property Owners: The City of La Quinta (City) has decided to appraise the above-referenced real property, which is commonly known as 46400 Dune Palms Road, La Quinta, CA 92253, and is identified as Riverside County Tax Assessor’s Parcel Number 600-030-010. The City is considering acquiring a Road and Public Utility Easement and a Temporary Construction Easement (Subject Property) over portions of your Property, for public street purposes, in connection with the proposed Dune Palms Bridge Project (Project). Please see Exhibits “A” and “B”, attached hereto, that legally describe and depict the proposed easements. No determination has been made at this time to actually purchase Subject Property. Instead, the decision to appraise is an initial step that could lead to a purchase offer by The City of La Quinta. The City of La Quinta, in order to maintain the safety and efficient operation of its roads and bridges, is proposing replacement of the existing low water crossing that spans the Coachella Valley Storm Water Channel at Dune Palms Road, a secondary but vital north-south arterial roadway with a bridge. Final improvements will allow for safer, more reliable passage for all users. The City has retained the services of Overland, Pacific & Cutler, LLC (OPC), a right of way consulting firm, to discuss the proposed acquisition of the Subject Property for the proposed Project with you. OPC will also explain the proposed transaction and coordinate the acquisition process. This letter is not an offer to purchase. It is a notice to advise you that the City would like to appraise the Subject Property to determine its present fair market value. The City is required to obtain an independent appraisal of the fair market value of the Subject Property prior to making any offer to purchase property intrerests for a public project. The appraisal will be the basis for any offer made to you by the City to purchase the Subject Property. No decision has been made at this time to acquire the Subject Property. This is a notice of appraisal only and does not constitute a request to vacate the Subject Property, nor does this letter establish eligibility for relocation assistance or payments. In the next few days, you will receive a letter from Elizabeth M. Kiley, MAI, of the Kiley Company, an independent appraisal firm retained on behalf of the City, notifying you of proposed dates for the appraiser’s inspection of the Subject Property. The appraiser will advise you, in writing, of your right to accompany them during the inspection of the Subject Property. You are encouraged to provide the The City of La Quinta Notice of Decision to Appraise P a g e |2 appraiser with all information you wish the appraiser to consider in connection with his appraisal of the Subject Property. Your cooperation with the appraiser will be greatly appreciated. If you have any tenants occupying the Subject Property, we would also appreciate your notifying them of the appraisal and request their cooperation. Your contact with the appraiser is voluntary. The appraiser, however, will not be able to enter onto the Subject Property unless the appraiser obtains your consent to conduct the physical inspection. If you do not consent to the physical Inspection, the appraiser will inspect the Subject Property from the public right of way. All services and/or benefits to be derived from any right-of-way activity will be administered without regard to race, color, national origin, or sex, in accordance with Title VI of the Civil Rights Act of 1964 2000d, et seq.) and Section 162(a) of the Federal Highway Act of 1973 (23 U.S.C. 324). Enclosed for your information are a copy of Title VI Statutes and Regulations, the Title VI Complaint Process, and a booklet entitled “Caltrans and You” that discusses these right-of-way requirements. The enclosed brochure entitled “Your Property Your Transportation Project” contains information pertaining to the process involved in the property acquisition. If you have any questions about the enclosed information or would like additional information, please contact me at 760-776-1238. After the appraisal is completed, the City will review and approve the documents. The City will then make a decision as to whether to extend an offer to purchase the Subject Property. If the City decides to make an offer, the offer will be based on the fair market value of the Subject Property and the City will negotiate with you and attempt to reach an agreement. Sincerely, John M. Cutler Sr. Project Manager Enclosures: Exhibits “A” and “B” Title VI Package Your Property Your Transportation Project cc: Elizabeth M. Kiley, MAI, The Kiley Company John Peterson, Peterson Law Group 19800 MacArthur Blvd #290, Irvine, CA 92612 Page 1 of 1 EXHIBIT “A” LEGAL DESCRIPTION ROADWAY AND PUBLIC UTILITIES EASEMENT - DUNE PALMS BRIDGE (APN 600-030-010 / CHIN FAMILY PROPERTIES LIMITED PARTNERSHIP) That certain parcel of land located in the City of La Quinta, County of Riverside, State of California being a portion of that certain parcel of land described in a Quitclaim Deed recorded November 23, 2005 as Doc. # 2005-0972217 of Official Records of said County, more particularly described as follows: The Westerly 53.00 feet of the Southerly 660.00 feet of the Northerly 1320.00 feet of the Westerly 660.00 feet of the Northwest Quarter of the Northeast Quarter of Section 29, Township 5 South, Range 7 East, San Bernardino Meridian. EXCEPTING THEREFROM any portion of said parcel of land included in the Coachella Valley Storm Water District as acquired by said District by Decree of Condemnation recorded October 6, 1923, in Book 591, Page 223 of Deeds; ALSO EXCEPTING THEREFROM a right-of-way for public highway and public utilities purposes over the Westerly rectangular 30 feet of said parcel of land, as conveyed to the County of Riverside, by deed recorded May 24, 1933 in Book 122, Page 374 of Official Records; ALSO EXCEPTING THEREFROM the easterly 14 feet of the westerly 44 feet of said parcel of land as described in the deed to the County of Riverside, recorded July 1, 1969 as Instrument No. 66907, of Official Records; ALSO EXCEPTING THEREFROM the Northerly 290.00 feet of said parcel of land. CONTAINING: 3,040 Square Feet, more or less. SUBJECT TO all Covenants, Rights, Rights-of-Way and Easements of record. Graphically depicted on ‘EXHIBIT “B” – PLAT’, attached hereto and by this reference made a part hereof. This legal description was prepared by me or under my direction. ______________________________ Benjamin Daniel Egan, PLS 8756 Prepared August 21, 2018 Page 1 of 2 EXHIBIT “A” LEGAL DESCRIPTION TEMPORARY CONSTRUCTION EASEMENT - DUNE PALMS BRIDGE (APN 600-030-010 / CHIN FAMILY PROPERTIES LIMITED PARTNERSHIP) That certain parcel of land located in the City of La Quinta, County of Riverside, State of California being a portion of that certain parcel of land described in a Quitclaim Deed recorded November 23, 2005 as Doc. # 2005-0972217 of Official Records of said County, more particularly described as follows: COMMENCING at the intersection of the westerly line of the northeast quarter of Section 29, Township 5 South, Range 7 East, San Bernardino Meridian with the northerly line of that parcel of land included in the Coachella Valley Storm Water District as acquired by said District by Decree of Condemnation recorded October 6, 1923, in Book 591, Page 223 of Deeds; Thence along said northerly line South 71°20’45” East a distance of 55.99 feet to a line parallel with and 53.00 feet easterly, as measured at right angles, from said westerly line of the northeast quarter of Section 29, said point being the POINT OF BEGINNING; Thence along said parallel line North 00°09’52” West a distance of 346.00 feet; Thence leaving said parallel line at right angles North 89°50’08” East a distance of 21.00 feet to a line parallel with and 74.00 feet easterly, as measured at right angles, from said westerly line of the northeast quarter of Section 29; Thence along said parallel line South 00°09’52” East a distance of 101.54 feet; Thence leaving said parallel line at right angles South 89°50’08” West a distance of 16.00 feet to a line parallel with and 58.00 feet easterly, as measured at right angles, from said westerly line of the northeast quarter of Section 29; Thence along said parallel line South 00°09’52” East a distance of 44.00 feet; Thence leaving said parallel line at right angles North 89°50’08” East a distance of 19.00 feet to a line parallel with and 77.00 feet easterly, as measured at right angles, from said westerly line of the northeast quarter of Section 29; Thence along said parallel line South 00°09’52” East a distance of 92.00 feet; Thence leaving said parallel line at right angles North 89°50’08” East a distance of 41.00 feet; Page 2 of 2 Thence leaving said parallel line South 18°40’58” East a distance of 31.49 feet to a line parallel with and 128.00 feet easterly, as measured at right angles, from said westerly line of the northeast quarter of Section 29; Thence along said parallel line South 00°09’52” East a distance of 104.17 feet to the northerly line of said parcel of land included in the Coachella Valley Storm Water District as acquired by said District by Decree of Condemnation recorded October 6, 1923, in Book 591, Page 223 of Deeds; Thence along said northerly line North 71°20’45” West a distance of 79.24 feet to the POINT OF BEGINNING. CONTAINING: 13,508 Square Feet, more or less. SUBJECT TO all Covenants, Rights, Rights-of-Way and Easements of record. Graphically depicted on ‘EXHIBIT “B” – PLAT’, attached hereto and by this reference made a part hereof. This legal description was prepared by me or under my direction. ______________________________ Benjamin Daniel Egan, PLS 8756 Prepared August 21, 2018 DUNE PALMS BRIDGE PROJECT TITLE VI PACKAGE The project proposed by The City of La Quinta will be receiving federal financial assistance. Pursuant to Title VI of the Civil Rights Act of 1964, no person in the United States shall, on the grounds of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance. Other statutes provide protection against discrimination on the basis of sex, age or disability. The enclosed Title VI Package is being provided for your information to further explain your rights. The Package includes the following documents: Title VI Booklet Title VI of the 1964 Civil Rights Act and Related Statutes The U.S. Department of Commerce of the Census, Language Identification Flashcard Right of Way Title VI Surve y Form with Self-Addressed Stamped Envelope Right of Way Title VI Discrimination Complaint Form It is requested the Right of Way Title VI Surve y form be completed and returned in the self-addressed stamped envelope. If you read or speak a language different than English, please write your name and address on the top of the page and check the appropriate box on the Language Identification Flashcard; or, if you believe you have been subjected to discrimination, please fill out the Right of Way Title VI Discrimination Complaint form and return to the following: John Cutler Project Manager Overland, Pacific & Cutler, LLC 2280 Market Street, Suite 200 Riverside, CA 92501 Jan 2017 Your Rights Under Title VI and Related Statutes This brochure is designed to inform you of the requirements of Title VI of the Civil Rights Act of 1964 and your rights under those requirements. Caltrans& You District 1 Equal Employment Opportunity (EEO) Office 1656 Union Street Eureka, CA 95501 (707) 445-5318 District 2 EEO Office 1657 Riverside Drive Redding, CA 96001 (530) 225-3055 District 3 EEO Office 703 B Street Marysville, CA 95901 (530) 741-7130 District 4 EEO Office P.O. Box 23660, MS 6A Oakland, CA 94623 (510) 286-5871 District 5 EEO Office 50 Higuera Street San Luis Obispo, CA 93401 (805) 549-3037 District 6 EEO Office 1352 West Olive Avenue Fresno, CA 93728 (559) 444-2522 District 7 EEO Office 100 S. Main Street Los Angeles, CA 90012 (213) 897-0797 District 8 EEO Office 464 West 4th Street, MS 1249 San Bernardino, CA 92401 (909) 383-6396 District 9 EEO Office 500 S. Main Street Bishop, CA 93514 (760) 872-0752 District 10 EEO Office 1976 East Dr. Martin Luther King Jr. Blvd. Stockton, CA 95205 (209) 948-3911 District 11 EEO Office 4050 Taylor Street, MS 251 San Diego, CA 92110 (619) 688-4249 District 12 EEO Office 1750 East 4th Street, Suite 100 Santa Ana, CA 92705 (657) 328-6595 This publication will be made available in alternative formats: Braille Large print Computer disc Audio version or in a different language upon request by calling the Caltrans Office of Business & Economic Opportunity (916) 324-8379 711 (TTY) Headquarters Title VI Coordinator 1823 14th Street, MS 79 Sacramento, CA 95811 (916) 324-8379 What does this mean? That Caltrans strives to ensure that access to and use of all programs, services, or benefits derived from any Caltrans activity will be administered without regard to race, color, national origin, sex, age, disability or socioeconomic status. Caltrans will not tolerate discrimination by a Caltrans employee or recipients of federal funds such as cities, counties, contractors, consultants, suppliers, universities, colleges, planning agencies, and any other recipients of federal-aid highway funds. Caltrans prohibits all discriminatory practices, which may result in: • Denial to any individual of any service, financial aid, or benefit provided under the program to which he or she may be otherwise entitled; • Different standards or requirements for participation; • Segregation or separate treatment in any part of the program; • Distinctions in quality, quantity, or manner in which the benefit is provided; • Discrimination in any activities conducted in a facility built in whole or part with federal funds. To ensure compliance with Title VI, related statutes, and the Presidential Executive Order on Environmental Justice, Caltrans will: • Avoid or reduce harmful human health and environmental effects on minority and low-income populations; • Ensure the full and fair participation by all communities including low-income and minority populations in the transportation decision-making process; • Prevent the denial of, reduction in, or significant delay in the receipt of benefits by minority and low-income populations. Additionally, any recipient, including, but not limited to, Metropolitan Planning Organizations and cities and counties, who receive federal financial aid bears a responsibility to administer its program and activities without regard to race, color, national origin, sex, age, disability, or socioeconomic status. Benefits and Services Caltrans’ mission is to provide the people of California with a safe, efficient, and effective inter-modal transportation system. All of the work Caltrans performs is intended to assist the transportation needs of all the people of California regardless of race, color, national origin, sex, age, disability, or socioeconomic status. Are your rights being violated? If you believe that you have been discriminated against because of your race, color, national origin, sex, age, or disability, you may file a written complaint with the Caltrans Equal Employment Opportunity (EEO) Office. District EEO offices are located statewide. The addresses and telephone numbers are located on the back of this brochure. Title VI complaints are forwarded to Sacramento for investigation by the Caltrans Office of Business & Economic Opportunity Title VI Program. Who bears the responsibility to Title VI? All of Caltrans employees and its functional programs.The Caltrans Office of Business & Economic Opportunity Title VI Program provides continuous leadership, guidance, and technical assistance to ensure ongoing compliance with Title VI and the Executive Order on Environmental Justice. What is Title VI? Title VI is a statute provision of the Civil Rights Act of 1964. Title VI (Sec. 601) of the Civil Rights Act of 1964 provides: “No person in the United States shall, on the grounds of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance.” (42 U.S.C. Sec. 2000d) Additionally, Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations 1994 provides: “Each Federal agency shall make achieving environmental justice part of its mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of its programs, policies, and activities on minority populations and low-income populations.” Related statutes provide protection against discrimination on the basis of sex, age, or disability by programs receiving federal financial assistance. October 22, 2018 Chin Family Properties Limited Partnership 3487 Rowena Avenue Los Angeles, CA 90027 RE: NOTICE OF INTENT TO APPRAISE REAL PROPERTY Assessor Parcel Number: 600-030-010 Address: 46400 Dune Palms Road, La Quinta Dear Property Owner: The City of La Quinta (the “City”) has requested an appraisal of your property at the above referenced address for possible acquisition purposes by the City as part of the Dune Palms Bridge Project. The City, in order to maintain the safety and efficient operation of its roads and bridges, is proposing the replacement of the existing low water crossing that spans the Coachella Valley Storm Water at Dune Palms Road, a north-south arterial highway. The Kiley Company, an independent real estate appraisal firm, has been retained to appraise the property that is subject to a possible acquisition. We would like to inspect the property at your earliest convenience. If you or one of your representatives would like the opportunity to accompany us during our inspection, please notify us as soon as possible. Your attendance is completely optional. You are invited to provide information about your property if you feel it has an effect on the value. If the property is leased it would be helpful if you would provide us with the terms of the lease or leases. If you have any questions regarding our inspection, please contact Meredith McDonald or myself in our office at (714) 665-6515 during normal business hours. Thank you for your cooperation. Elizabeth M. Kiley, MAI, AI-GRS Certified General Real Estate Appraiser Certificate No. AG005391