Integra Realty Resources •
Integra Realty Resources 16030 Ventura Boulevard T 818.290.5400
Los Angeles Suite 620 F 818.290.5401
Encino,CA 91436-4473 www.irr.com
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April 7, 2015
Carol W. Lynch, Esq.
City Attorney for Rancho Palos Verdes
Richards, Watson&Gershon
355 South Grand Avenue,40th Floor
Los Angeles, CA 90071
Ellen M. Berkowitz, Esq.
Counsel for Green Hills Memorial Park
Gresham Savage Nolan &Tilden, PC
333 South Hope Street 35th Floor
Los Angeles, CA 90071
SUBJECT: Proposal to provide real estate appraisal services
Vista Verde Condominium Units
2110 Palos Verdes Drive North
Lomita, California 90717
Impact on Market Value Due to Pacific Terrace Mausoleum at Green Hills
Memorial Park
Sent via E-mail
Dear Mses. Lynch and Berkowitz:
In response to your recent request for proposal, this writing expresses our interest and
availability for the completion of appraisal services concerning the property referenced
above. The property which is the subject of this proposal includes the 25 individual
condominium units which comprise the Vista Verde complex in Lomita.
1110
Carol W. Lynch, Esq.
•
Ellen M. Berkowitz, Esq.
April 7, 2015
Page 2
Scope of Services
Our scope of services will comply with the 19 points itemized on the Appraisal
Scope/Instructions that were provided to us and are dated March 27, 2015. A copy of this
document is included as Exhibit A.
In summary, we will determine the diminution in value (if any) associated with each of the
individual condominium units resulting from the construction of the existing mausoleum. As
per your instructions, the diminution in value will be estimated by comparing the difference
in value due to the mausoleum in its"after" condition (the mausoleum that currently exists),
as compared to a mausoleum that might have been constructional in the "before" condition
and below-ground internments more than 16 feet from the property line in the area located
between the Green Hills Memorial Park (GHMP) western property line and the GHMP
maintenance yard, including adjacent to the Vista Verdes condominium property.
As per your instructions,we will meet with unit owners during an inspection of the individual
units and will meet with representatives of GHMP. Our fee quote below includes one meeting
with representatives of GHMP, and two days allocated to inspections of the individual
condominium units (inclusive of meeting with the owners that wish to meet with us). If the
property owners are not able to meet with us on one of the two days scheduled and additional
trips to the property are required,these will be billed on an hourly basis,including travel time
(in accordance with our schedule of hourly rates set forth in Exhibit B).
Upon completion of our analysis, we would prepare an appraisal report in full compliance
with the Uniform Standards of Professional Appraisal Practice. Our work product will consist
of one narrative report, with a separate section showing our calculation of damages (if any)
associated with each individual unit. We do not anticipate providing a separate report for
each unit in the complex.
Fee and Timing
For our services as described above, our fee for the completion of an appraisal report is
proposed at$40,000 (based on $20,000 from each of you). We propose to have our report
completed within 60 days of receiving notice to proceed.
Information to Be Provided by Client
Attached to this letter you will find Exhibit C,which is a list of information that would be useful
and/or necessary for us in the completion of our appraisal services on your behalf. In
completing this proposal at the above-referenced fee and timing, we have assumed that the
information identified on Exhibit C will be made available to us at the onset of our assignment.
In the absence of receiving some of these referenced items, it may be necessary for us to
include limitations and/or special assumptions within the appraisal report, or to spend
additional time(at additional cost)to identify and gather this information from other sources.
If you believe any of the items identified on Exhibit C will not be available to us during the
Lirr,
• io
Carol W. Lynch, Esq.
Ellen M. Berkowitz, Esq.
April 7, 2015
Page 3
course of our appraisal, please notify us immediately so we may discuss the situation and
address it to your satisfaction.
Supplemental Services
Additional services requested for consultation, special studies, negotiations, preparation of
or appearance for testimony, and similar services will be provided upon request and will be
billed additionally at the hourly rates set forth as Exhibit A to this proposal. Fees will be billed
monthly based on the work actually completed.
General Issues
Payment for services will be handled as follows: A retainer in the amount of$20,000 (based
on $10,000 from each of you) is due at the time we receive notice to proceed. Payment for
the completion of reports will be due upon their completion. Each party will be responsible
for 50% of the remaining fee of $20,000 ($10,000 each). To the extent that supplemental
services are requested,these will be billed on a monthly basis. For these services,if provided,
an advance retainer may be requested. For these services,if provided, payment is due within
30 days of the invoice date. Fees unpaid after 30 days are subject to a finance charge equal
to 1.5% per month on all unpaid balances.
If any party other than yourself will be responsible for payment,that party must also sign this
proposal to acknowledge our agreement and this authorization to proceed.
This proposal is valid for 14 days.
Our appraisal analysis will incorporate the Assumptions and Limiting Conditions which are
attached to this proposal as Exhibit D. To the extent that we prepare a written appraisal
report, these Assumptions and Limiting Conditions (or a set which is effectively equivalent)
will be incorporated into the appraisal report.
Fees quoted herein are for the provision of professional services and are not in any way
contingent upon the valuation reported or the outcome of any pending matter for which
valuation is required. In the event of any controversy, claim, or dispute between us related
to this agreement,or the breach thereof,enforcement of this agreement will be governed by
and construed in accordance with the laws of the State of California. The venue for any action
to enforce or interpret this agreement shall be in the County of Los Angeles, State of
California.
Damages(if any)for which the appraiser and/or appraisal firm would be liable will be limited
to the amount of compensation paid as the fee for providing services.
If this proposal meets with your approval, our receipt of a signed copy of this letter, along
with a retainer of$20,000 (based on $10,000 from each of you), will serve as our notice to
proceed.
i�'1r
•
Carol W.Lynch,Esq.
Ellen M.Berkowitz,Esq.
April 7,2015
Page 4
Thank you for the opportunity of submitting this proposal. if you have any questions or
comments about it,please call me.
Sincerely,
Integra Realty Resources—Los Angeles
(f:' )A, . ' fit
J
Beth B. Finestone,MAI,FRICS
Managing Director
BBF/mt
Enclosures: Exhibit A(Appraisal Scope/Instructions)
Exhibit B(Hourly Rates)
Exhibit C(Information Requested from Client)
Exhibit D(Assumptions and Limiting Conditions)
Professional Qualifications of Beth B. Finestone,MAI,FRICS
Agreed&Accepted This 7 Day of A- P ,2015
By: cirY or flertNGt-fo PIrL_-os
e t TY M 4-N R-G 0 0 0 cJtA✓t t.c.ivt o t ""
Name(Print) Authorized Signature
The party signing above will be responsible for payment of fees provided under this
agreement,unless a different party,as identified below,accepts such responsibility.
The party below accepts responsibility for payment under the terms of the
agreement.
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Exhibit A
Appraisal Scope/Instructions
TO: Beth Finestone, MAI
FROM: Carol Lynch, City Attorney for Rancho Palos Verdes; Scott Noya,
Daley& Heft, LLP, counsel for Rancho Palos Verdes; Ellen
Berkowitz, Gresham Savage Nolan &Tilden, PC, counsel for Green
Hills; Michael N. Friedman, Hirschberg & Friedman, LLP, counsel for
Vista Verde Owners Association
DATE: March 27, 2015
SUBJECT: Instructions and Scope of Appraisal of Vista Verde HOA
Condominium Units Re: Impact on Market Value Due to Mausoleum
at Green Hills Memorial Park
Introduction:
This memorandum addresses instructions and scope of appraisal assignment by the City of
Rancho Palos Verdes ("City"), Green Hills Memorial Park ("GHMP"), and Vista Verde Owners'
Association ("VVOA").
You have been retained by City, GHMP, and WOA to prepare an appraisal expressing your
opinion as to the value of the subject WOA condominium units in a "before" and "after"
condition analysis. Your appraisal is requested to assist City, GHMP and WOA in their effort to
resolve a dispute as described below.
Sound public policy and fairness require that the parties have the benefit of your independent
judgment of value, consistent with the law, proper appraisal methodology and rules of
professional practice. Nothing in this document is to be construed as an expression of any
valuation opinion by legal counsel. It is for you to find independently the relevant facts and
independently reach a conclusion of value.
Should you have any questions in regard to the legal applicability of any of these statements to
the appraisal assignment, please do not hesitate to contact Scott Noya by email at
snoyadaleyheft.com so that the question(s) may be identified and shared with counsel for all
parties who will then confer and attempt to provide a unified response. You are not to take
instructions separately from Mr. Noya, or counsel for any particular party, unless all parties have
provided their written consent (permissible by email). In responding to any question(s) you may
have, we will be careful to avoid any discussion of value.
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Rancho Palos Verdes—Green Hills—Appraisal of Vista Verde HOA Condominium Units
March 27, 2015
Page 2 of 9
Background Facts:
GHMP operates a private cemetery with a street address of 27501 Western Avenue, Rancho
Palos Verdes, CA, located entirely within the jurisdiction of City, but with portions of the
cemetery also bordering the City of Lomita, the City of Rolling Hills Estates, and the City of Los
Angeles.
WOA is comprised of the owners of a residential condominium complex with a street address
of 2110 Palos Verdes Drive North, Lomita, CA, located entirely within the jurisdiction of City of
Lomita, and immediately adjacent to a portion of GHMP. A total of 25 condominium units exist
at the WOA complex. Parking, a common area with community room, patio and pool are
included within the WOA complex.
A dispute has arisen regarding the approvals given by the City to GHMP relating to the location,
height and operation of that certain GHMP mausoleum building identified as the Memorial
Terrace Mausoleum aka Pacific Terrace Mausoleum ("Mausoleum") in Area 11 of GHMP,
associated Mausoleum roof-top burial activities, and alleged adverse impacts to WOA property,
individual WOA units and VVOA members.
The following addresses issues for appraisal of WOA condominium units, including common
areas, regarding assessment of any impact on market value due to the construction and
operation of the Mausoleum in its current location, height and configuration ("after" condition)
compared to a Mausoleum that might have been constructed in the location depicted in the
attached 1991 Master Plan map, which depicted a Mausoleum located south of the existing
maintenance yard with an 80-foot setback from the north property line and which established a
16-foot setback from adjacent residential zones for below ground interments, including adjacent
to the WOA property ("before" condition).
Summary of Appraisal Assignment:
The below commentary and summary of the scope of the appraisal and instructions for
completing the appraisal are provided with the understanding that an appraiser operating under
his or her professional obligations determines an appropriate scope of work to produce credible
assignment results. Therefore, the minimum requirements for the scope of work are determined
by the appraiser. The following comments and instructions are provided subject to that
understanding:
1. Assignment: Provide an independent, impartial and objective appraisal to assess any
diminution in value of each WOA condominium unit, i.e., the difference in the value due
to the Mausoleum in its "after" condition, compared to a Mausoleum that might have
been constructed in the "before" condition and below ground interments more than 16
feet from the property line in the area located between the GHMP western property line
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Rancho Palos Verdes—Green Hills —Appraisal of Vista Verde HOA Condominium Units
March 27, 2015
Page 3 of 9
and the GHMP maintenance yard, including adjacent to the WOA property, as depicted
in the map attached hereto and labeled as GHMP Area 11 Map from 1991 Master Plan
(the location of that hypothetical Mausoleum is depicted in the map in magenta and the
below ground interment locations are outlined with yellow; the green colored area should
be disregarded as it is of no significance for appraisal purposes.)
2. Conduct site visit to Vista Verde condominium complex to inspect existing conditions,
meet with unit owners during inspection of individual units, and review materials from
WOA members regarding conditions relevant to their properties.
3. Conduct site visit to GHMP and meet with representatives to understand the proximity,
location and extent of cemetery operations immediately adjacent to the Vista Verde
condominium complex, including roof-top interment activities at the Mausoleum structure
in its "after" condition and potential interment activities in the "before" condition.
4. Current Uniform Standards of Professional Appraisal Practice (USPAP) shall apply to
the assignment. The appraiser's valuation conclusions and summary of work shall be
provided in a written report.
5. Intended users of the appraisal shall include the City, GHMP, and WOA (including
individual unit owners).
6. The appraiser is instructed to assume that the "highest and best use" of the subject
WOA units in the before and after condition is the existing use "as improved". Do not
analyze whether a different highest and best use may exist if WOA improvements were
removed.
7. The appraiser is instructed to assume that the "before" and "after" conditions, and all
uses of the Mausoleum in its "before" and "after" conditions, fully comply with all
applicable law and have been properly approved by the City.
8. "Market value" definitions apply.
9. Current date of value applies. Effective date of value shall be the date of inspection.
10. The parties anticipate the market approach, using comparable sales in the relevant
geographic market area (as the appraiser determines is applicable), shall apply. If the
appraiser determines either (or both) the income or cost of reproduction approach are
also appropriate to the assignment, the appraisal should include a reconciliation of the
approaches used, if necessary, and a final value determination.
11. Provide sales history for the subject property(ies) from the time of original construction to
the present. This data is requested even if the appraiser does not rely upon the sales
history for valuation purposes.
12. Provide area and neighborhood market analysis, including summary of discussions with
local appraisers and real estate agents with respect to changing market conditions, and
elements of comparison.
13. Provide map of comparable sales utilized.
14. Sales utilized in report shall be identified and included in an adjustment chart in the
report. Include subject property(ies) in the adjustment chart. Include adequate narrative
discussion to allow the reader to understand and follow the appraiser's logic and
conclusions of value.
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Rancho Palos Verdes—Green Hills—Appraisal of Vista Verde HOA Condominium Units
March 27, 2015
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15. Provide appropriate matched pairs analysis for quantitative adjustments. Quantitative
adjustments should have sound market support, generally in the form of paired sales
analysis.
16. Qualitative adjustments shall be supported with adequate explanation/rationale. Where
applicable, include sales that bracket the subject.
17. For market conditions (time) adjustments, if spreadsheets are used for making time
adjustments, clearly describe how many periods were included in the calculation.
18. Identify in the report all sales considered by the appraiser but ultimately not utilized in
arriving at final value conclusions. No listings may be used for any purpose. Pending
sales shall be identified as such and provide date when "pending" status last confirmed
prior to report date.
19. State all assumptions and limiting conditions of the appraisal. Include reference to these
instructions.
Cemetery Operations in "Before" Condition
Prior to construction of the Mausoleum in its current location, the VVOA property was subject to
all impacts (positive or negative) of the GHMP property and associated cemetery operations.
Burial services typically include gatherings of mourners, amplified voice and/or music, military
gunshot salutes (for funerals of veterans, police, fire and other first responders), and other
common aspects of cemetery operations such as site maintenance activities. Pre- and post-
burial operations include operation of heavy equipment for purposes of preparing burial sites,
closing burial sites after a funeral, and general maintenance. Attached is a photo of the area
between the interior road and the WOA property in the before condition prior to construction of
the Mausoleum.
Daily visitations to interment sites may also occur during park operating hours, which are from 7
a.m. to dusk, seven days a week.
In the "before" condition, a Mausoleum was permitted to be constructed in the location south of
the existing maintenance yard with an 80-foot setback from the north property line. (See area of
attached map marked in magenta and outlined in orange.) Below ground interments were
allowed up to sixteen (16) feet from the property line between GHMP and the WOA complex
from the GHMP western property line to the GHMP maintenance yard (See area of attached
map outlined in yellow. ) Many interment sites are designed for two-person capacity, meaning
burial operations at a single space may take place twice over a period of time spanning an
undetermined number of years.
Mausoleum Construction and Operation in "After" Condition
In October 2013 GHMP completed construction of the Mausoleum in its current location
eight (8) feet from GHMP's common property boundary line with WOA. (As stated
above, the appraiser is instructed to assume that all aspects of the Mausoleum in it's
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Rancho Palos Verdes—Green Hills—Appraisal of Vista Verde HOA Condominium Units
March 27, 2015
Page 5 of 9
"before" and "after" conditions fully comply with all applicable laws and properly-issued
City approvals.)
After completion of construction, GHMP began operating the Mausoleum, which
operations include conducting burials and associated activities on the roof of the
Mausoleum. Until several months ago, burial services may have included amplified
sound (spoken word and music). The Mausoleum roof-top operations also include
activities common to cemetery operations such as heavy equipment operation
associated with pre- and post- burial preparations and closures, and family visits to
gravesites. Most burial services last for approximately %/2 hour; pre-and post- burial
preparations and gravesite closures are completed in approximately 1 hour. Family visits
range from a few minutes to several hours.
To protect the privacy of both mourners and VVOA unit owners, GHMP has been experimenting
with the erection of temporary fabric screening panels between the units and the Mausoleum
roof during burial services. Additionally, GHMP has instituted certain operational practices with
respect to the Mausoleum for the benefit of itself, mourners and VVOA residents. The appraiser
is instructed to assume that these operational practices will continue to be utilized by GHMP
and they should be included as part of both the "before" and "after" conditions.
a. The entire length of the tractor ramp shall be left clear at all times when not in
use. No vehicles, landscaping equipment, construction equipment, storage
containers, etc. are allowed to be parked, stored or allowed to be left on the
tractor ramp.
b. The Northern (rear) wall of the Mausoleum shall be screened by a type of wall
vine landscaping. Said landscaping shall be planted and allowed to grow on the
wall only, to the satisfaction of the Director, and shall not grow above the wall.
c. The guardrail along the tractor ramp and along the top of the Mausoleum building
along the north (rear) shall not be a solid wall and shall be maintained as a
wrought iron guardrail.
d. Pre-service burial/plot preparation requiring mechanized equipment and post-
service plot backfilling of the rooftop ground interments on the Pacific
Terrace/Memorial Terrace Mausoleum building shall only be allowed between the
hours of 10:00am and 3:00pm, Monday through Sunday.
e. Burials and associated burial services on the roof top ground interments of the
Pacific Terrace/Memorial Terrace Mausoleum building shall only be allowed
between the hours of 10:00am and 3:00pm, Monday through Sunday.
f. Limit the use of the mini-haul vehicle (which is illustrated in Green Hills' power
point presentation to the Planning Commission on May 13, 2014) for pre-service
burial/plot preparation and post-service plot backfilling of the rooftop ground
interments to between the hours of 10:00am and 3:00 p.m., Monday through
Sunday.
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Rancho Palos Verdes—Green Hills—Appraisal of Vista Verde HOA Condominium Units
March 27, 2015
Page 6 of 9
g. The use of amplified sound shall be prohibited on the rooftop of the Pacific
Terrace/Memorial Terrace Mausoleum building. This prohibition shall not apply
to the playing of "taps" as part of funeral services for military personnel and for
police, fire and other first responders.
h. All services on the rooftop of the Pacific Terrace/Memorial Terrace Mausoleum
building shall be conducted within temporary covered tenting that is enclosed on
a minimum of 2 sides, as illustrated in Green Hills' power point presentation to
the Planning Commission on May 13, 2014. One of the two covered sides shall
be the north side facing the Vista Verde condominium complex. Said temporary
tenting shall be erected no earlier than 2 hours prior to the burial service and
shall be removed within 2 hours after the burial service.
i. Sales personnel shall be allowed to show potential roof-top ground interment
plots on the Pacific Terrace/Memorial Terrace Mausoleum building in Area 11,
only between the hours of 10:00am and 3:00pm Monday through Sunday.
j. Every week, small flags shall be placed on any burial site located on the Pacific
Terrace/Memorial Terrace Mausoleum that is scheduled to be utilized for an
interment within 7 days, thereby providing neighboring property owners with
advanced notice of scheduled interments and burial services. Green Hills shall
also post on its publicly accessible website (www.greenhillsmemorial.com)
additional details concerning the anticipated time and date of scheduled burial
services.
k. At least one employee of Green Hills shall attend and monitor every service
occurring on the rooftop of the Pacific Terrace/Memorial Terrace Mausoleum for
the entirety of all burial services to ensure that the services are orderly and
comply with these conditions of approval.
I. No interments shall be allowed on the roof of the Pacific Terrace/Memorial
Terrace Mausoleum building that are within 16-feet from the northern property
line. Specifically, plots illustrated in sections 540 through 553, as depicted in the
attached burial plot plan are eliminated.
1814827
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Rancho Palos Verdes — Green Hills —Appraisal of Vista Verde HOA Condominium Units
March 27, 2015
Page 8 of 9
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Rancho Palos Verdes — Green Hills —Appraisal of Vista Verde HOA Condominium Units
March 27, 2015
Page 9 of 9
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Exhibit B
Schedule of Hourly Rates
John G. Ellis, MAI, CRE, FRICS: $360 per hour for appraisal and consulting
(Senior Managing Director) $450 per hour for trial preparation and expert testimony
Beth B. Finestone, MAI, FRICS: $335 per hour for appraisal and consulting
(Managing Director) $375 per hour for trial preparation and expert testimony
Adam M. Bogorad, MAI: $260 per hour for appraisal and consulting
(Director) $300 per hour for trial preparation and expert testimony
Other Directors/Senior Consultants: $200 to$250 per hour
Senior Analysts: $180 to$230 per hour
Analysts: $140 to$175 per hour
Researchers: $90 to$135 per hour
Administrative Staff: $75 per hour
(For supplemental
documentation requests)
Effective for the six-month period starting January 1, 2015
0 0
Exhibit C
Information Needed to Complete Appraisal Assignment for
Vista Verde Condominium Units, 2110 Palos Verdes Drive North, Lomita, California 90717
A summary of items we typically need to complete a well-documented report are summarized below.
1. Name and telephone number of contacts to obtain access to the subject units;
2. Contact information to set up meeting with Green Hills memorial Park representatives and to visit
the property;
3. Copy of materials that Visa Verde Owners Association would like us to review;
4. Copy of HOA CC&Rs;
5. The most recent title policy or commitment for the Vista Verde units, if available;and
6. Any other information you would like me to consider or think would be helpful.
0 0
Exhibit D
Assumptions and Limiting Conditions
This appraisal is based on the following assumptions,except as otherwise noted in the report.
1. The title is marketable and free and clear of all liens,encumbrances,encroachments,easements and restrictions. The
property is under responsible ownership and competent management and is available for its highest and best use.
2. There are no existing judgments or pending or threatened litigation that could affect the value of the property.
3. There are no hidden or undisclosed conditions of the land or of the improvements that would render the property more
or less valuable. Furthermore,there is no asbestos in the property.
4. The property is in compliance with all applicable building, environmental, zoning, and other federal, state and local
laws,regulations and codes.
5. The information furnished by others is believed to be reliable,but no warranty is given for its accuracy.
This appraisal is subject to the following limiting conditions,except as otherwise noted in the report.
1. The conclusions stated in our appraisal apply only as of the effective date of the appraisal, and no representation is
made as to the effect of subsequent events.
2. No changes in any federal,state or local laws,regulations or codes(including,without limitation,the Internal Revenue
Code)are anticipated.
3. No environmental impact studies were either requested or made in conjunction with this appraisal,and we reserve the
right to revise or rescind any of the value opinions based upon any subsequent environmental impact studies. If any
environmental impact statement is required by law,the appraisal assumes that such statement will be favorable and
will be approved by the appropriate regulatory bodies.
4. Unless otherwise agreed to in writing,we are not required to give testimony,respond to any subpoena or attend any
court,governmental or other hearing with reference to the property without compensation relative to such additional
employment.
5. We have made no survey of the property and assume no responsibility in connection with such matters. Any sketch or
survey of the property included in this report is for illustrative purposes only and should not be considered to be scaled
accurately for size. The appraisal covers the property as described in this report, and the areas and dimensions set
forth are assumed to be correct.
6. No opinion is expressed as to the value of subsurface oil,gas or mineral rights,if any,and we have assumed that the
property is not subject to surface entry for the exploration or removal of such materials,unless otherwise noted in our
appraisal.
7. We accept no responsibility for considerations requiring expertise in other fields. Such considerations include,but are
not limited to, legal descriptions and other legal matters such as legal title,geologic considerations,such as soils and
seismic stability,and civil,mechanical,electrical,structural and other engineering and environmental matters.
8. The distribution of the total valuation in the report between land and improvements applies only under the reported
highest and best use of the property. The allocations of value for land and improvements must not be used in
conjunction with any other appraisal and are invalid if so used. The appraisal report shall be considered only in its
entirety. No part of the appraisal report shall be utilized separately or out of context.
9. Except as provided in the Agreement,neither all nor any part of the contents of this report(especially any conclusions
as to value,the identity of the appraisers,or any reference to the Appraisal Institute)shall be disseminated through
advertising media, public relations media, news media or any other means of communication (including without
limitation prospectuses, private offering memoranda and other offering material provided to prospective investors)
without the prior written consent of the person signing the report.
10. Any income and expense estimates contained in the appraisal report are used only for the purpose of estimating value
and do not constitute predictions of future operating results.
11. If the property is subject to one or more leases, any estimate of residual value contained in the appraisal may be
particularly affected by significant changes in the condition of the economy, of the real estate industry, or of the
appraised property at the time these leases expire or otherwise terminate.
12. No consideration has been given to personal property located on the premises or to the cost of moving or relocating
such personal property;only the real property has been considered.
13. The current purchasing power of the dollar is the basis for the value stated in our appraisal;we have assumed that no
extreme fluctuations in economic cycles will occur.
14. The value found herein is subject to these and to any other assumptions or conditions set forth in the body of this
report but which may have been omitted from this list of Assumptions and Limiting Conditions.
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Assumptions and Limiting Conditions Page 2
15. The analyses contained in the report necessarily incorporate numerous estimates and assumptions regarding property
performance,general and local business and economic conditions,the absence of material changes in the competitive
environment and other matters. Some estimates or assumptions, however, inevitably will not materialize, and
unanticipated events and circumstances may occur;therefore,actual results achieved during the period covered by our
analysis will vary from our estimates,and the variations may be material.
16. The Americans with Disabilities Act(ADA)became effective January 26,1992. We have not made a specific survey or
analysis of any property to determine whether the physical aspects of the improvements meet the ADA accessibility
guidelines. In as much as compliance matches each owner's financial ability with the cost to cure the non-conforming
physical characteristics of a property,we cannot comment on compliance to ADA. Given that compliance can change
with each owner's financial ability to cure non-accessibility, the value of the subject does not consider possible
noncompliance. A specific study of both the owner's financial ability and the cost to cure any deficiencies would be
needed for the Department of Justice to determine compliance.
17. Except as provided in the Agreement, the appraisal report is prepared for the exclusive benefit of the Client, its
subsidiaries and/or affiliates. Except as provided in the Agreement, it may not be used or relied upon by any other
party. Except as provided in the Agreement,all parties who use or rely upon any information in the report without our
written consent do so at their own risk.
18. No studies have been provided to us indicating the presence or absence of hazardous materials on the subject property
or in the improvements,and our valuation is predicated upon the assumption that the subject property is free and clear
of any environment hazards including, without limitation, hazardous wastes, toxic substances and mold. No
representations or warranties are made regarding the environmental condition of the subject property and the person
signing the report shall not be responsible for any such environmental conditions that do exist or for any engineering
or testing that might be required to discover whether such conditions exist. Because we are not experts in the field of
environmental conditions,the appraisal report cannot be considered as an environmental assessment of the subject
property.
19. The person signing the report may have reviewed available flood maps and may have noted in the appraisal report
whether the subject property is located in an identified Special Flood Hazard Area. We are not qualified to detect such
areas and therefore do not guarantee such determinations. The presence of flood plain areas and/or wetlands may
affect the value of the property, and the value conclusion is predicated on the assumption that wetlands are non-
existent or minimal.
20. Integra is not a building or environmental inspector. Integra does not guarantee that the subject property is free of
defects or environmental problems. Mold may be present in the subject property and a professional inspection is
recommended.
21. The appraisal report and value conclusion for an appraisal assumes the satisfactory completion of construction,repairs
or alterations in a workmanlike manner.
22. Integra Realty Resources—Los Angeles,an independently owned and operated company shall prepare the appraisal for
the specific purpose so stated elsewhere in this proposal. The intended use of the appraisal is stated in the General
Information section of the report. Except as provided in the Agreement,the use of the appraisal report by anyone
other than the Client is prohibited. Accordingly, except as provided in the Agreement, the appraisal report will be
addressed to and shall be solely for the Client's use and benefit.
23. The conclusions of this report are estimates based on known current trends and reasonably foreseeable future
occurrences. These estimates are based partly on property information, data obtained in public record, interviews,
existing trends, buyer-seller decision criteria in the current market,and research conducted by third parties,and such
data are not always completely reliable. Integra Realty Resources, Inc. and the undersigned are not responsible for
these and other future occurrences that could not have reasonably been foreseen on the effective date of this
assignment. Furthermore, it is inevitable that some assumptions will not materialize and that unanticipated events
may occur that will likely affect actual performance. While we are of the opinion that our findings are reasonable based
on current market conditions,we do not represent that these estimates will actually be achieved,as they are subject
to considerable risk and uncertainty. Moreover,we assume competent and effective management and marketing for
the duration of the projected holding period of this property.
24. All prospective value estimates presented in this report are estimates and forecasts which are prospective in nature
and are subject to considerable risk and uncertainty. In addition to the contingencies noted in the preceding paragraph,
several events may occur that could substantially alter the outcome of our estimates such as,but not limited to changes
in the economy, interest rates,and capitalization rates, behavior of consumers, investors and lenders,fire and other
physical destruction, changes in title or conveyances of easements and deed restrictions, etc. It is assumed that
conditions reasonably foreseeable at the present time are consistent or similar with the future.
As will be determined during the course of the assignment,additional assumptions may be required in order to complete the
assignment,which additional assumptions shall be reasonably satisfactory to Client and shall be stated in full in the report. The
appraisal shall also be subject to those assumptions.
11110 0
Beth B. Finestone, MAI, FRICS ntegraRealty Resources
Los Angeles
16030 Ventura Boulevard
Experience Suite 620
Ms. Finestone,Managing Director for and a principal of INTEGRA REALTY RESOURCES—LOS ANGELES, Encino,CA 91436-4473
has been with the firm since 2004 and has been appraising in Southern California since 1981.She has
specialized in valuation and consulting services related to public agency clients and for major, T 818.290.5400
investment-grade commercial properties, e.g., office, industrial, retail, multifamily, land, and special F 818.290.5401
purpose properties,for over 30 years.
www.irr.com/losangeles
Ms.Finestone previously held senior positions with Finestone&Associates and Cushman&Wakefield
of California. At Finestone & Associates from 1996 through 2003, she specialized in real estate
appraisal, valuation and consulting services with focus on preparation of appraisals for industrial,
commercial, and special purpose properties.This focus included consultation services, due diligence
work,litigation support,and expert witness designation.
At Cushman & Wakefield of California, Inc. from 1983 through 1996, Ms. Finestone was in the Los
Angeles Appraisal Services Group, specializing in real estate valuation and consulting. By the end of
her tenure, she was responsible for the management the Los Angeles Valuation Advisory Services
Group, including preparation and review of appraisal reports, business development, consulting and
litigation work, management and coordination of multi-property assignments and national accounts,
professional staff development,and support staff supervision.
Ms. Finestone's clients include public agencies, right-of-way firms, lenders, institutional investors,
major corporations, law firms, and individual property owners. Her services include a wide range of
specialized studies including value diminution (from both internal and external influences), market
demand, feasibility, severance damages and project benefits, investment analysis, assessment
allocation, reuse analysis, and the valuation of partial interests including leasehold, leased fee,
possessory interests,and minority interests.
Recent assignments include the appraisal of the Del Mar Fairgrounds, Racetrack, and Horsepark; 39
properties for the SR-91 Improvement Project; 10 properties for the Devore Interchange
Improvements Project; and 28 properties for the Lakeview and Tustin Avenues/Rose Drive Grade
Separation Project. Ms. Finestone has also been active in the appraisal of large tracts of mitigation
land for Orange County Transportation Authority(OCTA).She has been involved in the appraisal of a
number of mitigation parcels in Northern California for the High Speed Rail Authority.These involved
land banks and conservation easements. Ms. Finestone also has significant experience valuing
transportation corridor properties. She has been extensively involved in valuing rail corridors and
crossings as part of the proposed high-speed rail project in Central California.In addition,she has also
appraised a number of federally owned properties, including the West Los Angeles Federal Building,
federal courthouses in Los Angeles and Orange counties, and two Army Reserve centers in the Los
Angeles area. Ms. Finestone also has significant appraisal review experience and has reviewed large
numbers of appraisals for Hatch Mott MacDonald,OCTA,City of Ontario,and the Los Angeles Unified
School District.Her assignments have included a wide variety of property types,including:
Apartment complexes Industrial manufacturing Restaurants
Auto service/gas stations Mixed retail/residential Shopping centers
Camps and schools Mitigation and open space land Single-family residences
Cold-storage facilities Mobile home parks Special purpose properties
Commercial land Office buildings Subdivisions
Condominiums Produce marts Theaters
Healthcare properties Rail and transportation corridors Warehouse/distribution
Hotel/motel properties Religious facilities Wind farms
Industrial land Residential land
Professional Activities
Member: Appraisal Institute(MAI No.7973)
Fellow: Royal Institution of Chartered Surveyors(FRICS No.1259538)
Member: International Right of Way Association
Member: CREW(Commercial Real Estate Women),Member Services Committee Member ■
License: California State Certified General Real Estate Appraiser No.AG004030
bfinestone@irr.com—818.290.5455
0 0
Beth B. Finestone, MAI FRICS Los Angeles
Recognition 16030 Ventura Boulevard
Suite 620
• Los Angeles Business Journal 2009 Nominee for Executive of the Year — Women Making a Encino,CA 91436-4473
Difference,May 2009
• Designated one of Real Estate Southern California's 2006 Women of Influence,October 2006 T 818.290.5400
Seminar Presentations F 818.290.5401
• The Trouble with Ignoring Building Code Violators (SCCAI 43rd Annual Litigation Seminar, www.irr.com/losangeles
Moderator,November 15,2013)
• Conflicting Mandates&Instructions Between USPAP, Yellow Book,&Caltrans Appraisal Guidelines
(IRWA Annual Valuation Seminar,April 24,2012)
• Current Issues in Real Estate Appraisal(Lorman Education Services, live audio conference, March
8,2012)
• The Role of the Appraiser in Construction Defect Litigation:Measuring Damages from Construction
Defects(MCLE-approved presentation,January 11,2012,March 4,2010,and February 10,2010)
Expert Testimony
Ms.Finestone has qualified as an expert witness in real estate matters and has testified before:
• Superior Courts:Los Angeles and Orange Counties
• Arbitration Hearings:Los Angeles County
• Tax Appeal Boards:Los Angeles and San Diego Counties
Education
M.B.A.,Pepperdine University
B.S.,Kinesiology,University of California,Los Angeles
Ms.Finestone is currently certified by the Appraisal Institute's program of continuing education for its
designated members. She successfully completed the following courses and other requirements of
the MAI designation through the Appraisal Institute and American Institute of Real Estate Appraisers:
• Real Estate Appraisal Principles(2004)
• Basic Valuation Procedures(2004)
• Capitalization Theory and Techniques,Parts I,II,Ill
• Case Studies in Real Estate Valuation
• Report Writing and Valuation Analysis
• Real Estate Investment Analysis
• Income Property Demonstration Report
• The Sales Comparison Approach
• Standards of Professional Practice(2007)
• Federal&State Laws and Regulations(2004)
• Real Estate Finance(2004)
• Comprehensive Examination
She has attended the following courses,seminars,and workshops:
• Annual Litigation Seminar(Appraisal Institute,2013,2007,and 2006)
• IRS Valuation Summit(Appraisal Institute,2013)
• Annual L.A./Orange County Market Trends Seminar(Appraisal Institute,2015 and 2013)
• Appraising the Appraisal:Appraisal Review—General(Appraisal Institute,2012)
• Annual Valuation Seminar(IRWA,2012)
• Business Practices and Ethics(Appraisal Institute,2012,2007)
• 7-Hour National USPAP Update Course(Appraisal Institute,2014,2012,2010,2007,2006,2004)
• Principles of Real Estate Appraisal(IRWA,2012)
• Jobs and Commercial Real Estate—"It's Not Rocket Science"
• Appraisal Curriculum Overview(Appraisal Institute,2011)
• National IRS Symposium(American Society of Appraisers,2011)
• Annual Summer Conference—Commercial Session(Appraisal Institute,2011,2008)
• Federal Agency Update(Appraisal Institute/IRWA,2010) 19
• IRS Valuation Summit(Appraisal Institute,2010)
bfinestone@irr.com—818.290.5455
0 a
Beth B. Finestone, MAI, FRICS Integra Realty Resources
Los Angeles
• 16th Annual L.A./Orange County Market Trends Seminar(Appraisal Institute,2009) 16030 Ventura Boulevard
• Appraising Income Properties in a Declining Market(Integra Realty Resources,2009) Suite 620
• Everything Al Has Not Taught You About Litigation Appraisal(Appraisal Institute,2009) Encino,CA 91436-4473
• Introduction to Environmental Issues(IRWA,2009)
• Investment Grade Property Valuation in a Declining Market(Appraisal Institute,2009) T 818.290.5400
• Litigation Appraising:Specialized Topics and Applications(Appraisal Institute,2009) F 818.290.5401
• Principles of Real Estate Engineering(IRWA,2009)
• Principles of Real Estate Law(IRWA,2009) www.irr.com/losangeles
• Real Property Asset Management(IRWA,2009)
• The Appraiser's Role in Public Acquisitions(Appraisal Institute,2009)
• Valuation Issues in Eminent Domain in the Current Market(Appraisal Institute,2009)
• 53rd Annual International Education Conference,(IRWA,2007)
• ABCs of Easement Valuation(IRWA,2007)
• After-Effects of Katrina on Appraisal(IRWA,2007)
• Appraisal Special Purpose Properties(Appraisal Institute,2007)
• Eminent Domain Appraisal(IRWA,2007)
• Evaluating Commercial Construction(Appraisal Institute,2007)
• Principles of Real Estate Negotiation(IRWA,2007)
• Statistics Review with Appraisal Applications(Appraisal Institute,2007)
• Direct and Inverse Condemnation(2006)
• Contemporary Approaches to Land Valuation(Appraisal Institute,2005)
• Introducing the Metro Orange Line(Appraisal Institute,2005)
• Real Estate Outlook(CSUN Center for Real Estate,2005)
• Southern California Market Trends Seminar(Appraisal Institute,2000)
Representative Appraisal Assignments
• As designated review appraiser for the Los Angeles Unified School District in charge of reviewing
all appraisal assignments valued in excess of $1,000,000, has completed approximately 50
appraisal reviews of residential,commercial,and mixed-use properties.
• Highest and best use appraisal of the Federal Building site in West Los Angeles (28.2 acres).
Included expanded highest and best use analysis to determine possible development scenarios to
result in the highest return to the underlying land.
• Appraisal of approximately five acres of land in the City of Beverly Hills, under three different
scenarios. Assignment completed for the City for use in determining highest and best use of the
site and to aid in lease negotiations with a proposed developer for long-term lease of the site.
• Appraisal of 9,800 acres of land in Kern County for use as a wind farm. Jointly retained by the
seller(GE Wind Energy)and the buyer(Los Angeles Department of Water and Power)to act as the
third appraiser to determine the purchase/sale price of the site.
• Project manager for valuation of approximately 39 separate sites, including office, retail,
hotel/motel, industrial, and land, in the City of Bellflower which the City wished to acquire for
redevelopment.
• Appraisal of the Del Mar Fairgrounds, Racetrack,and Horsepark for the California Department of
General Services.This included in excess of 450 acres of land and over 1,000,000 square feet in
improvements.
• Disposition appraisal of the United States Army Reserve Centers in West Los Angeles (Wilshire
Boulevard and Federal Avenue) and Sherman Oaks (Sepulveda Boulevard and Magnolia Avenue).
These assignments involved an expanded highest and best use analysis and consideration of
possible general plan and zoning changes.The charged political climate associated with the West
Los Angeles area necessitated a number of interviews with City Council members of surrounding
districts to aid in determining possible uses for the site that would be supported by senior
planning officials with the City and County who were also interviewed.
• Appraisal of the Concerto high-rise residential complex in downtown Los Angeles, adjacent to
Staples Center, as part of bankruptcy proceedings.The assignment involved an expanded highest
and best case analysis to analyze the property as condominiums for sale and as an apartment
complex.
li
bfinestone@irr.com—818.290.5455
• •
Beth B. Finestone, MAI, FRICS ntegra Realty Resources
Los Angeles
• Valuation of a number of high-rise office buildings in downtown Los Angeles.These included the 16030 Ventura Boulevard
First Interstate Tower, Broadway Plaza, Southern California Gas Company Tower, Wells Fargo Suite 620
Tower,Wells Fargo Center at Bunker Hill,International Tower,R&T Plaza,The Park,and 550 South Encino,CA 91436-4473
Hope.
• Multiple appraisal assignments for Southern California Edison Company included: T 818.290.5400
• Central Valley Phase I: Appraisal of 34 existing overhead distribution, transmission line and F 818.290.5401
power pole easements which SCE wanted to update and perfect.These involved residential,
commercial and agricultural properties. For the agricultural properties,the valuation included www.irr.com/losangeles
and analysis of the loss in value from orchard trees being taken.
• Central Valley Phase II:Appraisal of 16 new acquisitions for overhead distribution,transmission
line and power pole easements. This involved all agricultural properties and included an
analysis of compensation for trees being taken. The project was highly contentious and
significant research related to severance damages was completed.
• Barstow/Daggett:Appraisal of 44 overhead transmission line and power pole easements which
SCE wanted to update and perfect. These involved residential and unimproved agricultural
land.
• Victorville:Appraisal of 38 overhead distribution,transmission line and power pole easements
which SCE wanted to update and perfect.These included improved residential and commercial
properties.
• Tehachapi:Appraisal of 14 overhead distribution,transmission line and power pole easements
which SCE wanted to update and perfect. These included residential, commercial and
unimproved agricultural properties.
• Corona: Ongoing assignment related to the acquisition of 11 subsurface easements for
underground transmission and distribution lines. These represent the acquisition of new
easements which partially overlap previously existing easements in favor of SCE. All of the
properties involved are improved with single-family residences.
• Ongoing appraisals of multiple transportation corridor easement in San Bernardino and Riverside
counties for Overland,Pacific&Cutler,Inc.,including:
• Milliken Avenue Grade Separation Project: Upgrade of the existing Milliken Avenue/Mission
Boulevard/Union Pacific Railroad at-grade crossing within the City of Ontario.
• SR-91 Widening Project:Acquisitions and easements for the widening of State Route 91 within
the City of Corona.
• Devore Interchange Improvements Project:Acquisition and easements for the construction of
an improved interchange at 1-15 and 1-215 within the City of Devore.
• Appraisal of multiple properties for the M2 Environmental Mitigation Program for the OCTA:
• The Aliso Canyon property is a 150.87± acre site perched on a Laguna Beach hillside,
overlooking the Pacific Ocean.The property was appraised for potential acquisition purposes
related to an open-space conservation program.
• The Irvine Mesa Corridor consisted of the appraisal of 20 parcels totaling 669.99±acres in the
Silverado Canyon area of southeastern Orange County.The report was intended to assist with
the acquisition of the land from the owner, the Wildlands Conservancy. This property was
comprised of a number of parcels which we appraised individually as well as in bulk.
• Located just west of the Cleveland National Forest,we appraised the MacPherson Property to
assist the consideration of acquisition possibilities related to an open-space conservation
program.The 202.78±acre site is located north of Silverado Canyon Road,just east of Santiago
Canyon.
• The Saddleback Meadows property represents 222± acres of rugged terrain in the Trabuco
Canyon area of southeastern Orange County. A potential buyer of the property was
considering an open space conservation use for the site.
• The Saddleback Valley Christian School site consists of 52±acres located in the City of San Juan
Capistrano,just west of Interstate 5.
• Review work for OCTA:
• I-5 HOV Improvement Project:Ongoing review work of approximately 10 appraisals related to
the widening of the I-5 HOV.
• Lakeview Grade Separation Project: Review of approximately 28 appraisals, some of which
■
involved dual appraisal of complex part-take assignments.
Irre
bfinestone@irr.com—818.290.5455