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Home My WebLink About07-22-20 Board Packet 1 OTAY WATER DISTRICT SPECIAL MEETING OF THE BOARD OF DIRECTORS BY TELECONFERENCE 2554 SWEETWATER SPRINGS BOULEVARD SPRING VALLEY, CALIFORNIA WEDNESDAY July 22, 2020 3:00 P.M. AGENDA 1. ROLL CALL 2. PLEDGE OF ALLEGIANCE 3. APPROVAL OF AGENDA 4. PUBLIC PARTICIPATION – OPPORTUNITY FOR MEMBERS OF THE PUBLIC TO SPEAK TO THE BOARD ON ANY SUBJECT MATTER WITHIN THE BOARD'S JURISDICTION BUT NOT AN ITEM ON TODAY'S AGENDA In lieu of in-person attendance, members of the public may submit their comments on agendized and non-agendized items via email at boardsecre-tary@otaywater.gov. Public comments submitted will be read into the record at the Board Meeting and the public may continue to listen to meetings. The information on how to listen to the District’s live streaming can be found at this link: https://otaywater.gov/board-of-directors/agenda-and-minutes/board-agenda/ RECESS TO CLOSED SESSION 5. CLOSED SESSION a) CONFERENCE WITH REAL PROPERTY NEGOTIATORS pursuant to Cali- fornia Government Code section 54956.8 Property: SALT CREEK GOLF COURSE 525 HUNTE PARKWAY CHULA VISTA, CA 91914 Agency negotiator: General Counsel Under negotiation: Disposition of Property 2 RETURN TO OPEN SESSION 6. REPORT ON ANY ACTIONS TAKEN IN CLOSED SESSION. THE BOARD MAY ALSO TAKE ACTION ON ANY ITEMS POSTED IN CLOSED SESSION ACTION ITEMS 7. ENGINEERING AND WATER OPERATIONS a) APPROVE THE JULY 3, 2020 PURCHASE AGREEEMENT FOR $222,500 FOR THE BUENA VISTA AVENUE PROPERTY IN SPRING VALLEY AND AUTHORIZE THE GENERAL MANAGER TO OPEN ESCROW TO COMPLETE THE SALE OF THE PROPERTY (KENNEDY) 8. ADJOURNMENT All items appearing on this agenda, whether or not expressly listed for action, may be deliberated and may be subject to action by the Board. The Agenda, and any attachments containing written information, are available at the District’s website at www.otaywater.gov. Written changes to any items to be considered at the open meeting, or to any attachments, will be posted on the District’s website. Copies of the Agenda and all attachments are also available through the District Secretary by contacting her at (619) 670-2280. If you have any disability which would require accommodation in order to enable you to participate in this meeting, please call the District Secretary at 670-2280 at least 24 hours prior to the meeting. Certification of Posting I certify that on July 20, 2020, I posted a copy of the foregoing agenda near the reg- ular meeting place of the Board of Directors of Otay Water District, said time being at least 24 hours in advance of the special meeting of the Board of Directors (Government Code Section §54954.2). Executed at Spring Valley, California on July 20, 2020. /s/ Susan Cruz, District Secretary STAFF REPORT TYPE MEETING: Special Board MEETING DATE: July 22, 2020 SUBMITTED BY: Bob Kennedy Engineering Manager PROJECT: P1210-018000 DIV. NO. 5 APPROVED BY: Rod Posada, Chief, Engineering Jose Martinez, General Manager SUBJECT: Approval of the July 3, 2020 Purchase Agreement for $222,500.00 for the Buena Vista Avenue Property in Spring Valley GENERAL MANAGER’S RECOMMENDATION: That the Otay Water District (District) Board of Directors (Board) approve the July 3, 2020 Purchase Agreement for $222,500.00 for the Buena Vista Avenue property in Spring Valley and to authorize the General Manager to open an escrow to complete the sale of the property (see Exhibit A for District property location). COMMITTEE ACTION: Please see Attachment A. PURPOSE: To request the Board to approve the July 3, 2020 Purchase Agreement for $222,500.00 for the Buena Vista Avenue property in Spring Valley and to authorize the General Manager to open an escrow to complete the sale of the property. Agenda Item 7a 2 ANALYSIS: As a regular course of business, the District periodically reviews the need and use of real estate (property) it owns. This is done to ensure that the District’s current and future property needs are provided for, and that property that is no longer required is disposed of in order to minimize costs and associated liabilities of property ownership. The retention of real property that is surplus to the District’s needs increases the operating expense by increasing the requirement to maintain and manage the property. After an evaluation of District-owned properties, staff identified the Buena Vista Avenue property in Spring Valley as not required for District use and on January 2, 2019 the Board adopted Resolution No. 4355 declaring this surplus property and directed staff to solicit offers for the surplus property. On February 22, 2019, staff solicited offers for the lease or sale of the surplus properties from Preferred Entities of the opportunity to purchase or lease the properties for specified priority uses, as required by Government Code § 54222 et seq. On May 31, 2019, the District received an appraisal of the Buena Vista Avenue property in Spring Valley from Hendrickson Appraisal Company, Inc. (see Exhibit B) that valued the property at $200,000. This appraisal was performed to assist the District in determining the market value of the subject property. Staff did not receive any offers for the Buena Vista Avenue property in Spring Valley from any Preferred Entities, and on May 21, 2019, staff advertised for the service of a real estate broker (Broker) with experience in dealing in commercial and residential real estate. On August 14, 2019, the District signed a Sales Listing Agreement with Pacific Coast Commercial (PCC) to provide Broker services for the District (see Exhibit C). PCC prepared a broker’s opinion and recommended a listing price of $220,000.00. PCC prepared the property’s marketing program and listed the property on August 26, 2019 (see Exhibit D). The District received an offer on the property on September 20, 2019. The District submitted a counteroffer on November 21, 2019 modifying the terms of the original offer; however, the buyer cancelled the agreement before it was scheduled to go to the January Board meeting for approval. The District received several other offers since that time, but the buyers have backed out before staff could bring a signed purchase agreement to the Board. 3 The District received an offer on the property on May 22, 2020, which the Board rejected on July 1, 2020. The Board directed staff to prepare a counteroffer to the buyer who had submitted an offer for $222,500. The District submitted a counteroffer on July 5, 2020, modifying the terms of the purchase agreement dated July 3, 2020, which was approved by the prospective buyer, Erika Rodriquez, Trustee for an LLC to be formed within 10 days of opening escrow, subject to the terms of the Purchase Agreement and the approval by the Board (see Exhibit E). The anticipated members of the LLC are expected to be Erika Rodriquez Esquire, Alex Aguilar, husband of Erika Rodriquez and Broker of Record for the buyer. A possible third participant, Sylvia Evans as a Trustee of the James and Sylvia Evans family trust. FISCAL IMPACT: Joe Beachem, Chief Financial Officer Acceptance of this offer will result in revenue of approximately $222,500.00, less escrow and closing costs. This property was used for potable purposes and the proceeds will be credited back to the potable general fund. The Engineering Outside Services budget covered the cost of appraisal services and environmental services. Currently, Engineering’s expenses have not exceeded anticipated expenses and it is expected that there will be sufficient funds available to offset the expected costs. STRATEGIC GOAL: This Project supports the District’s Mission statement, “To provide exceptional water and wastewater service to its customers, and to manage District resources in a transparent and fiscally responsive manner” and the District’s Vision, “To be a model water agency by providing stellar service, achieving measurable results, and continuously improving operational practices.” LEGAL IMPACT: None. BK/RP:jf P:\Public-s\Real Estate Services\4 Surplus Properties - Jan 2019\Staff Reports\Staff Report Special July 22, 2020 Board\BD Special July to Approve PA for Buena Vista Ave - Staff Report.docx Attachments: Attachment A – Committee Action Exhibit A – Buena Vista Ave. Property Location Map Exhibit B – Buena Vista Ave. Property Appraisal 4 Exhibit C – Sales Listing Agreement Exhibit D – Buena Vista Ave. Property Marketing Program Exhibit E – Buena Vista Ave. Property Purchase Agreement ATTACHMENT A SUBJECT/PROJECT: P1210-018000 Approval of the July 3, 2020 Purchase Agreement for $222,500.00 for the Buena Vista Avenue Property in Spring Valley COMMITTEE ACTION: No Committee meeting was held for this item. The Board requested staff to bring this Purchase Agreement to a Special Board Meeting for consideration of this item. OTAY WATER DISTRICTOWD PARCEL 579-364-17-00LOCATION MAP EXHIBIT A November 2018F C:\OneDrive\Otay Water District\ENG OPERATING - Documents\Technician\Info for Others\OWD\Bob K\District Owned Parcel Research\Exhibit B, Buena Vista Ave Property.mxd "` "` "` "` "` "` "` "` "` "` "` "` "` "`"` "`"` "` "`"` "` "`"` "` "` "` "` "` "` "`"`"` "`"` "` "` 33 33 $R ¹r ¹r $R $R $R ¹r ¹rl? l?l? l? l?l?l? l? l? l? l?l? l? l? 1004-2PUMP STATION Maria Ave Chestnut St Buena Vista Ave ROW 5793641700 5793580900 5793640800 5793640700 5793581800 5793640100 5793641900 5793641800 5793640600 5793641600 5793642000 5793640300 5793640500 5793640400 5793640200 5793641500 5793810800 5793810700 5793810600 5793810500 5793810400 5793810300 5793582100 5793810200 5793810100 5793750100 5793750200 5793810900 5793570900 5793632300 5 7 9 3 6 3 2 4 0 0 5 7 9 3 6 3 2 5 0 0 579 36 32 600 579 36 32000 5793631900 5793640900 5793631800 5793631700 5793572300 VICINITY MAP PROJECT SITE DIV 5 DIV 1 DIV 2 DIV 4 DIV 3 ÃÅ54 !\ ÃÅ125 ÃÅ94 ÃÅ905 §¨¦805 FNTS Legend SURPLUS PROPERTY: 0.29 ACRES (approx) PARCEL LINES 0 10050 Feet 100' (approx) 127' (approx) HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants HAC File No. 2019116 9665 Campo Road, Spring Valley, CA APPRAISAL OF Two Legal Lots located On the West Side of Buena Vista Avenue South of Chestnut Street Spring Valley, California 91977 Owner: Otay Municipal Water District EFFECTIVE DATE OF APPRAISAL: May 28, 2019 DATE OF REPORT: May 31, 2019 APPRAISED FOR Otay Municipal Water District 2554 Sweetwater Springs Boulevard Spring Valley, CA 91978 APPRAISED BY Hendrickson Appraisal Company, Inc 3530 Camino del Rio North, Suite 205 San Diego, CA 92108 (619) 282-0800 May 31, 2019 Mr. Bob Kennedy 2554 Sweetwater Springs Boulevard Spring Valley, CA 91978 Reference: Two 6,375± Vacant Residential Lots Ownership: Otay Municipal Water District 2554 Sweetwater Springs Boulevard, Spring Valley, CA 91978 Our File No. 2019116 Dear Mr. Kennedy, At your request and authorization, the above referenced properties and their environs have been inspected and analyzed for the purpose of formulating an opinion of the market value of the fee-simple interest in the subject properties. The purpose of the appraisal is for use by the Otay Municipal Water District for potential disposition purposes. The intended user of this appraisal is the Otay Municipal Water District, the property owner. This appraisal report describes the facts and reasoning upon which our opinions are based. The analysis and final report have been prepared in compliance with, and subject to the requirements of the Uniform Standards of Professional Appraisal Practice (USPAP) as published by the Appraisal Foundation. The report satisfies the requirements of USPAP Standard 2-2(b) for appraisal reports. The report contains abbreviated discussions relating to the subject property and the appraisal analysis performed, but is sufficient to meet the needs of the client. The appraisal addresses the market value of only the two southerly legal lots which make up the southern half of the entire Otay Municipal Water District ownership. Based upon our investigations and analysis, and by virtue of our experience as real estate analysts and appraisers, it is our opinion that the market value of the subject properties as of May 28, 2019 was: Lot 18 - $100,000 Lot 19 - $100,000 This appraisal is subject to certain additional assumptions and limiting conditions that are made a part of this report. Acceptance and use of this report by the client or any other party constitutes acceptance of these assumptions and limiting conditions. Thank you for this opportunity to be of service. Should you have any questions regarding this appraisal, please contact us at (619) 282-0800. Respectfully submitted, Edward A. Beaver Ted G. Hendrickson, MAI California Certified General Appraiser California Certified General Appraiser License No: AG009555 License No: AG004974 3 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ● Consultants TABLE OF CONTENTS TABLE OF CONTENTS ............................................................................................................................ 3 ASSUMPTIONS AND LIMITING CONDITIONS .................................................................................. 4 CERTIFICATION ...................................................................................................................................... 6 SUMMARY OF SALIENT FACTS AND CONCLUSIONS .................................................................... 7 AERIAL PHOTOGRAPH .......................................................................................................................... 8 INTRODUCTION ...................................................................................................................................... 9 AREA MAP .............................................................................................................................................. 13 NEIGHBORHOOD MAP ......................................................................................................................... 14 AREA DESCRIPTION ............................................................................................................................. 15 PLAT MAP ............................................................................................................................................... 17 SITE DESCRIPTION ............................................................................................................................... 18 SUBJECT PHOTOGRAPHS.................................................................................................................... 20 HIGHEST AND BEST USE .................................................................................................................... 24 VALUATION OF SUBJECT PROPERTY.............................................................................................. 25 SALES COMPARISON APPROACH ..................................................................................................... 26 MARKET DATA ADDENDUM ............................................................................................................. 35 4 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ● Consultants ASSUMPTIONS AND LIMITING CONDITIONS This appraisal report is prepared subject to the following conditions and stipulations: Hypothetical Condition: A hypothetical condition is defined as that which is contrary to what exists but is supposed for the purpose of analysis. Hypothetical conditions assume conditions contrary to known facts about physical, legal, or economic characteristics of the subject property. By definition the use of a hypothetical condition might affect the assignment results. The opinion of the market value of the two legal lots making up the southerly half of the current ownership is based on the hypothetical condition that the property owner has completed the necessary steps with the San Diego County Assessor’s office to have those lots identified with an individual Assessor Parcel Number for each lot. General Assumptions: (1) The appraisers were provided a copy of a preliminary title report for review. (2) No responsibility is assumed for matters legal in character or nature. No opinion is rendered as to title, which is assumed to be good and marketable. All existing liens, encumbrances, and assessments have been disregarded, unless otherwise noted, and the property is appraised as though free and clear, having responsible ownership and competent management. It is assumed that the property is readily marketable and free of all liens and encumbrances except any specifically discussed in this report (3) Information, estimates and opinions furnished by others, and contained in this report are assumed to be true, correct and reliable. A reasonable effort has been made to verify such information, however, no responsibility for its accuracy is assumed by the appraisers. Should any of this information prove to be incorrect, we reserve the right to amend our appraisal accordingly. Photographs, plats and maps furnished in this report are intended to assist the reader in visualizing the property. (4) No soils or geotechnical investigation report was provided by the client. It is assumed that there are no hidden or unapparent conditions of the property, subsoil or structures which would render it more or less valuable than otherwise comparable properties. No responsibility is assumed for such conditions or for engineering which might be required to discover such factors. The appraisers are not qualified to analyze said conditions, and urge the client to retain an expert in this field if desired. No visible evidence of soils subsidence was observed during our inspection of the property. (5) No opinion is rendered as to the value of sub-surface gas, oil or mineral rights, or whether the property is subject to surface entry for the exploration of removal of such materials, except as is expressly stated in this appraisal report. 5 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ● Consultants (6) All opinions of value are presented as the appraisers’ considered opinion based upon the facts and data set forth in this report. The appraisers assume no responsibility for changes in the market conditions or the inability of the owner to locate a purchaser within a reasonable time at the appraised market value. (7) It is assumed that there are no legitimate environmental or ecological issues that would prevent orderly development of the land to its highest and best use under economically feasible conditions. (8) Testimony or attendance in court or other hearing by reason of this appraisal, with reference to the property in question, shall not be required unless arrangements have previously been made with the client a reasonable amount of time in advance relative to such additional employment. Additional pre-trial and court testimony is beyond the scope of this appraisal assignment and will be compensated for at the appraiser’s standard hourly rate. (9) By acceptance and use of this report, the user agrees that any liability for error, omissions or judgment of the appraisers is limited of the amount of the fee charged for this appraisal. Anyone acting in reliance upon the opinions, judgments, conclusions or data contained herein, who has the potential for monetary loss due to this reliance is advised to secure an independent review and verification of all such conclusions and/or facts. The user agrees to notify the appraiser, prior to any irrevocable investment decision, of any error which could reasonably be determined from a thorough and knowledgeable review. (10) The date of value to which the opinions expressed in this report apply is set forth in the letter of transmittal. The appraisers assume no responsibility for economic or physical factors occurring at some later date which may affect the opinions herein stated. The appraisers reserve the right to make such adjustments to the analyses, opinions and conclusions set forth in this report as may be required by consideration of additional or more reliable data that may become available. (11) The projections included in this report are used to assist in the valuation process and are based on current market conditions and anticipated short term supply and demand factors. Therefore, the projections are subject to changes in future conditions that cannot be accurately predicted by the appraisers and could affect the future income or value projections. (12) The possession of this report, or a copy thereof, does not carry with it the right of publication, nor may it be used for any purpose other than described in this report, without the previous written consent of Hendrickson Appraisal Company, Incorporated. 6 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ● Consultants CERTIFICATION The undersigned 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 not performed any services, as appraisers or in any other capacity, regarding the property that is the subject of this report within the 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 with this assignment. (6) Our engagement in this assignment was not contingent upon developing or reporting predetermined results. (7) Our compensation for completing this assignment is not contingent upon 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) The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice and the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. (9) The undersigned have both made a personal inspection of the property that is the subject of this report. (10) The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representative. (11) As of the date of this report, Ted G. Hendrickson, MAI, has completed the continuing education program for Designated Members of the Appraisal Institute. Edward A. Beaver had completed continuing education requirements for California General Appraiser Certification. Edward A. Beaver Ted G. Hendrickson, MAI California Certified General Appraiser California Certified General Appraiser AG009555 AG004974 7 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ● Consultants SUMMARY OF SALIENT FACTS AND CONCLUSIONS Property Type The subject is a municipal property owned by the Otay Municipal Water District. Location The subjects are located on the west side of Buena Vista Avenue approximately 160 lineal feet south of Chestnut Street in the Spring Valley community of unincorporated San Diego County. Assessor’s Parcel Number Portion of 579-364-17 Owner(s) of Record Otay Municipal Water District Site Size/shape Per the Assessor’s Plat Map the entire holding is 200’ by 127.5’, or 25,500± square feet (0.59 Acre) comprising four identical legal lots of 6,375± square feet each. Both the entire holding and each of the individual legal lots are rectangular in shape. Improvements The northerly two legal lots comprising the entire Assessor Parcel are improved with a small, Otay Municipal Water District pump station which is not being appraised as part of this assignment. Zoning RS, Residential Suburban, County of San Diego. Minimum lot size is 6,000 square feet. Land Use VR-7.3, Village Residential, 7.3 dwelling units per acre. Highest & Best Use The Highest and Best Use of the subject legal lots was determined to be to develop each lot with a single family residence comparable to numerous surrounding properties. Property Rights Appraised Fee Simple Interest Effective Date of Value May 28, 2019 Value Conclusion $100,000 per lot, $200,000 total. 8 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ● Consultants AERIAL PHOTOGRAPH Aerial view of subject looking generally north. Indicated property boundaries are approximate. The portion being appraised is the two legal lots at the south end of the property, identified in blue in the photo above.. 9 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ● Consultants INTRODUCTION Executive Summary The purpose of this appraisal is to develop an opinion of the market value of the two legal lots making up the southern half of a four lot parcel of land owned by the Otay Municipal Water District. The subject lots are located on the west side of Buena Vista Avenue a short distance south of Chestnut Street in the La Presa section of Spring Valley, an unincorporated community in San Diego County. This appraisal is the result of a thorough analysis and the findings are reported in an Appraisal Report format which is intended to comply with the reporting requirements set forth under Standards Rule 2-2(a) of the Uniform Standards of Professional Appraisal Practice. As such, it presents discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraisers’ opinion of value. Factual market data sheets are included in the addenda to this report, and additional supporting documentation concerning the data, reasoning, and analyses is retained in the appraisers’ files. The depth of discussion contained in this report is specific to the needs of the client and for the intended use stated below. The appraisers are not responsible for unauthorized use of this report. The client and intended user of this appraisal is the Otay Municipal Water District. The intended use of this appraisal report is to assist the client in making decisions relating to potential disposition of a portion of their property. The entire holding is an approximately 25,500 square foot parcel of residential zoned land. It is identified with a single Assessor Parcel Number, but actually comprises four individual legal lots, each 6,375± square feet in size. The northerly two lots are improved with a small, 1,150± pump station. The southerly two lots are vacant. Our assignment is to develop an opinion of the market value of the two southerly lots for potential disposition by the client. They were appraised using the Sales Comparison Approach to value. We have appraised the two lots under the Hypothetical Condition that the Otay Municipal Water District has completed the necessary steps to secure individual Assessor Parcel Numbers for the two individual lots. According to Raul Cortes of the San Diego County Assessor’s Mapping Division, since no lot lines need to be adjusted, all that is required is to go to the downtown Assessor’s Office and fill out the necessary paperwork. He noted that there is no charge for the service. Valuation and Inspection Dates The effective date of appraisal is May 28, 2019. 10 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ● Consultants Scope of Work This appraisal assignment requires us to develop an opinion of the market value of the fee simple interest in two lots of a four lot parcel identified with a single Assessor Parcel Number. The following discussion summarizes the methodology applied in developing our opinion of the value. The subject property was inspected and photographed on May 28, 2019. The surrounding environs were also toured and analyzed. The appraisers contacted representatives of the San Diego County Planning Department to determine current zoning and land use designations for the subject property, as well as any proposed changes to land use under the County’s General Plan Update. Information gleaned there was used in conjunction with analysis of the current market for residential real estate in the subject area in developing our opinion of the subject property’s highest and best use. We also contacted representatives of the San Diego County Assessor’s Mapping division to determine what steps would be necessary to secure individual Assessor Parcel Numbers for the two southerly vacant lots. In the valuation process, the subject property's physical characteristics and economic potential were analyzed in order to develop an opinion of market value. Typically when developing this value, there are three approaches used to develop an opinion of market value: the Cost Approach, the Sales Comparison Approach, and the Income Approach. In this case since only land is being valued, the appraisers used only the Sales Comparison Approach. The appraisers searched for sales of properties similar to the subject which were then verified through conversations with parties to the transactions. The final opinion of subject value is supported with the best available data from the marketplace. Purpose and Intended Use of the Appraisal The purpose of this appraisal is to provide an opinion of market value for the subject properties, as of the effective date of value. It is our understanding that this appraisal will be used in the decision making process regarding potential disposition of the property. Definition of Market Value Market value is the most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: 11 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ● Consultants 1. Buyer and seller are typically motivated; 2. Both parties are well informed or well advised, and acting in what they consider their best interests; 3. A reasonable time is allowed for exposure in the open market; 4. Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and 5. The price represents normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.1 Property Rights Appraised The property rights appraised are those of the fee simple interest which is defined as: Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat.2 Exposure Time Exposure time is defined in The Dictionary of Real Estate as: [The] estimated length of time that the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal. Comment: Exposure time is a retrospective opinion based on an analysis of past events assuming a competitive and open market.3 The following opinion regarding marketing period for the subject property is based on information obtained during our market research for this assignment. Based upon numerous discussions with knowledgeable brokers specializing in the residential market, as well as buyers and sellers of similar property, it is our view that the marketing period for the subject property would likely be in the range of six months, assuming the property is marketed at its market value. Function of the Appraisal 1 Appraisal Institute, The Dictionary of Real Estate Appraisal, 6th ed. (Chicago: Appraisal Institute, 2015) PDF e-book. 2 Ibid 3 Ibid. 12 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ● Consultants The function of the appraisal is to assist the client in decision making regarding possible disposition of a portion of their property. Intended Users of this Report This appraisal is intended for the sole use of the client for the stated function and use. The use of the appraisal by anyone other than the stated intended user and for any other use than the stated intended use is prohibited. The appraisers are not responsible for unauthorized distribution or use of the report. 13 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ● Consultants AREA MAP 14 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ● Consultants NEIGHBORHOOD MAP ` 15 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ● Consultants AREA DESCRIPTION San Diego County is located in the extreme southwest corner of the continental United States, adjacent to the international boundary with Mexico. The Pacific Ocean forms the western boundary, the Orange and Riverside County lines form the northern boundary and the Imperial County line forms the eastern boundary, approximately 85 miles inland from the ocean. The subject property is located in the La Presa section of the Spring Valley community of unincorporated San Diego County. The Spring Valley Community Planning Area is a relatively heavily populated suburban environment that covers approximately eleven square miles. The predominant land use in the area is single family residential, but since the 1970’s denser housing areas have been developed. The highest densities are currently on Kenwood Dr., Jamacha Rd., and Canyon Rd. There are over 1,000 businesses in the community from small, family-owned enterprises to heavy industry in Spring Valley. Some areas of the community were developed prior to implementation of current zoning and land use regulations which resulted in some intermingling of industrial and single family residential development. The area has seen a recent increase in the number of higher density properties intended for lower income individuals. The largest portion of the Spring Valley Planning Area is single-family residential homes. There are two primary business areas. First is the former downtown area on Bancroft Dr. from SR-94 south to Sweetwater Rd. The other is in the area known as La Presa in the south eastern portion of the CPA from approximately Omega St. south to Sweetwater Rd. Other specific neighborhoods include Bancroft, Brookside, Spring Valley, Lakeside, Dictionary Hill, Sweetwater Village, Rancho San Diego and La Presa. The Spring Valley Community is served by two existing freeways: State Route 94 which is a major east- west artery in the northern portion of the community, and State Route 125 which runs generally north- south along the western side of the community. Other four lane roads in the community include Sweetwater Road, Paradise Valley Road, Elkelton Boulevard and Jamacha Boulevard. Public transportation is provided by the Metropolitan Transit System which has several bus routes serving the community. The San Diego Trolley also has convenient stops in La Mesa and Lemon Grove, a short distance to the north and west. There are currently four developed public parks in the Spring Valley Community. Utility services are provided as follows: water in the subject portion of Spring Valley is provided by the Otay Water District; sewer service is primarily provided by the County with small pockets, mainly in hilly areas, requiring septic systems; gas and electricity are provided by SDG&E; telephone and cable television services are 16 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ● Consultants available from a variety of carriers. Police protection is provided by the San Diego County Sheriff’s Department with the California Highway Patrol providing enforcement on state highways and County public roads; fire protection is the responsibility of the San Miguel Consolidated Fire Protection District. As of January 1, 2017 the population of the Spring Valley/Casa de Oro community was 97,138, or approximately 2.7% of the total County population. As of February 2019, the unemployment rate in Spring Valley was 5.0%, higher than the 4.2% for the State of California, 3.5% for San Diego County and 3.8% for the nation as a whole. The subject's immediate location is on the west side of Buena Vista Avenue a short distance south of its intersection with Chestnut Street. It is in the La Presa section of Spring Valley, a primarily residential area known as Dictionary Hill. The entire surrounding area is built out with residential development of varying ages. The high concentration of residential properties in the immediate area benefits both retail and office properties in the area. The market for residential properties in the Spring Valley Area has been improving for the last several years. The appraisers reviewed sales of single family residences in the subjects’ zip code from May 2017 to present as reported in the San Diego County Multiple Listing Service. Only sales of homes between 1,000 SF and 2,000 SF were included in the sample as that is the size range most prevalent in the area. The sales were analyzed on the basis of dollars per square foot of living area in order to minimize the effect of homes of different sizes. The data sample was slightly under 300 sales in size, sufficient to yield credible results. Analysis of those sales indicated that single family residence selling prices have increased at a rate of approximately 3.5% per year since the beginning of May 2917. 17 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ● Consultants PLAT MAP Only the two lots being appraised are highlighted above. 18 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ● Consultants SITE DESCRIPTION Location – The subject lots are located on the west side of Buena Vista Avenue approximately 260 feet south of Chestnut Street in the La Presa section of the Spring Valley community of unincorporated San Diego County. Owner – Otay Municipal Water District APN – Currently a portion of 579-364-17. We are appraising the subject lots under the hypothetical condition that the owner has completed the necessary process with the San Diego County Assessor’s Office to have individual Assessor Parcel Numbers assigned to the two subject lots. Legal Description – The following legal description for the entire subject holding was extracted from a Preliminary Title Report provided by the client. The subject properties are Lots 18 and 19 identified below. Real property in the City of (unincorporated area), County of San Diego, State of California, described as follows: Lots 16, 17, 18 and 19 in Block 23 of East San Diego Villa Heights, according to Map Thereof No. 1317 filed in the Office of the Recorder of San Diego County. Together with that portion of the alley adjoining said property on the west, vacated and abandoned by Instruments Recorded November 13, 1980 as Instrument No. 80-382405 and 80-382406, both of Official Records. Access – The properties are accessible from either direction on Buena Vista Avenue. Size and Shape – County Assessor’s data and other public records indicate that the two subject lots are both 50’ x 127.5’, or 6,375 square feet in size. They are both rectangular in shape. Please refer to the plat map. Zoning and Land Use – Both lots are zoned RS, Residential Suburban, by the County of San Diego and are in an area of 6,000 square foot minimum lot size. The County land use designation is VR-7.3, Village Residential with a maximum density of 7.3 dwelling units per acre. Both lots are legal and conforming. Topography – The lots are somewhat sloping with up banks on their west sides. There is sufficient level area on each of them to permit development with a residence similar to those on surrounding sites. Drainage – Based on our site inspection, the properties appear to have adequate drainage. Development Status – The two subject lots are currently vacant. 19 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ● Consultants Utilities – All typical utilities are available and operating in the subject area. Street Improvements – Buena Vista Avenue is a two lane asphalt paved residential street in the area of the subjects. There are concrete curbs and gutters on both sides of the street but no sidewalks along the subject frontage. Easements/Encumbrances – The appraisers were provided a title report to review. The report identified only two easements which encumber portions of the two subject lots, both for utilities and both at the extreme western end of the lots. These easements are not considered to limit development of the subject to its highest and best use. Soil Conditions - No soils and geotechnical investigation report was provided by the client. Our site inspection revealed no visible evidence of soils subsidence or other adverse soil conditions. It is assumed as a limiting condition of this report that the load bearing capacity of the site is similar to other developed properties in the vicinity and adequate to support any legal improvements that might be proposed for the property. Flood Hazard – Flood Insurance Rate Map 06073C1930G (map not printed), dated May 16, 2012, indicates that the subject property is in White Zone X. White Zone X is identified as areas outside the 500 year flood plain. Environmental Issues – Both subject lots are vacant, mapped residential lots surrounded by improved residential properties. There are no known environmental issues. 20 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ● Consultants SUBJECT PHOTOGRAPHS Lot 18 viewed from across Buena Vista Drive. Lot 18 viewed from the fence line. 21 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ● Consultants SUBJECT PHOTOGRAPHS Lot 19 viewed from across Buena Vista Drive. Lot 19 viewed from the fence line. 22 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ● Consultants SUBJECT PHOTOGRAPHS Looking north on Buena Vista Drive. The subjects are to the left. Looking south on Buena Vista Drive. The subjects are to the right. 23 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ● Consultants Property Data Use History – The entire holding was formerly the site of a large water storage tank. Review of historic aerial photos using Google Earth indicates that at some point between September 1996 and June 2002 the tank was removed and the existing pump station was constructed. The tank had occupied portions of both of the subject lots, but the lots appear to have been vacant since it was removed. Sales History – Information provided by the client states that the four lot holding was acquired by the current owner on December 31, 1959. There have been no known vesting changes since that date. Property Taxes/Assessed Values The subject lots are owned by a municipal water district and are not taxed. 24 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ● Consultants HIGHEST AND BEST USE As used in this report, Highest and Best Use is defined as: That reasonable and probable use which will support the highest present value as of the date of the appraisal, and That use from among reasonably probable and legal alternative uses, found to be physically possible, appropriately supported, financially feasible, and which results in the highest land value. There are two distinct analyses in the highest and best use process; the highest and best use analysis of the site as if it were vacant, and the highest and best use analysis of the site as improved. Following is a brief summary of the subject’s highest and best use as vacant and improved. The determination of the highest and best use of a property either improved or vacant, must consider the following four criteria. Is the potential use: (1) legally permissible, (2) physically possible, (3) financially feasible, and (4) maximally productive. These criteria should be considered in the above order, as qualification under the latter criteria would be irrelevant if a use is physically or legally prohibited. As If Vacant: The subject properties are two legal lots that make up the southern half of a single Assessor’s Parcel comprising four identical legal lots. Per the Assessor Plat Map, each lot is 50’ x 127.5’, or 6,375 square feet in size, and both are rectangular in shape offering good utility. They are interior parcels on the west side of Buena Vista Avenue a short distance south of its intersection with Chestnut Street in the La Presa area of Spring Valley. Both lots have somewhat sloping topography and are slightly above the grade of Buena Vista Avenue. The entire area is zoned RS, Residential Suburban, by the County of San Diego and are in an area requiring 6,000 square foot minimum lot sizes. The zoning is in conformance with the Village Residential 7.3 land use designation. The lots are in a large, well established residential subdivision in the La Presa portion of Spring Valley. The entire surrounding area comprises generally older single family residences on 6,000 square foot minimum lots. Developing each of the lots with a single family residence would be legally permissible, physically possible, financially feasible, maximally productive and is considered to be the highest and best use of the two subject properties. As Improved: The two subject lots are vacant. 25 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ● Consultants VALUATION OF SUBJECT PROPERTY Typically when developing an opinion of the market value of a property, three approaches to value are used - the Cost Approach, the Sales Comparison Approach and the Income Approach. The Cost Approach is useful in valuing new or proposed improvements which represent the Highest and Best Use of the site, or special use properties that are not frequently exchanged in the market. This valuation method relates the value of the subject property to the cost of a similar site and the reproduction cost of the improvements. However, the subject properties are vacant residential lots and the Cost Approach is not relevant. The Sales Comparison Approach compares the subject property with similar properties which have sold recently. Comparison of the similarities and dissimilarities of comparable properties to the subject provides an indication of value that is derived directly from the actions of buyers and sellers in the marketplace. In this analysis, the Sales Comparison Approach will be used to develop an opinion of the market value of the subject properties. The Income Approach analyzes the economic characteristics of a property through its ability to produce income. This approach generally involves Direct Capitalization of a property’s one year stabilized net operating income using a market derived overall capitalization rate. As with the Cost Approach, the subject properties are vacant lots and the Income Approach is not relevant. The appraisers searched for recent sales, escrows and listings of similar properties in the subject area. Data sources included the San Diego County Multiple Listing Service, public records, and conversations with brokers active in the subject market. Detailed write-ups of each of the comparables used are contained in the addendum to this appraisal report. 26 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ● Consultants SALES COMPARISON APPROACH The Sales Comparison Approach is based on the principal of substitution, which implies that a prudent buyer would pay no more to purchase a particular property than it would cost to obtain a comparable substitute property. A common unit of comparison used in this approach for vacant residential lots is the total selling price per lot. The Sales Comparison Approach is a typical method of analysis that a potential investor or owner/user purchaser in a property of this type would use in the decision process. The subject properties are vacant, conforming legal residential lots. They are both 6,375± square feet in size. They are somewhat sloping lots with up banks at the back of each lot, but have ample developable area to be improved with single family residences similar to many other lots in the immediate area. The appraisers conducted a search for listings, pending sales, and recent sales of similar residential lots. The market data research included the use of published sales information services, public records, and interviews with buyers, sellers, and other real estate professionals active in the commercial retail segment of the real estate market. Our search focused on sales of vacant residential lots in the subject area. Since the subject area was built out many years age, there were only limited recent sales of vacant lots in the vicinity. We located a total of five sales considered suitable for developing an opinion of the market value of the subject properties. All are located within approximately three miles of the subject, four are in Spring Valley and one is in neighboring La Mesa. One sale occurred in May 2017, the other four in 2019. They bracket the subject somewhat widely in selling price and physical characteristics and are considered to be the most reliable available indicators of subject market value. COMPARABILITY FACTORS The following discussion identifies the comparability factors that were considered by the appraisers in the valuation process of the subject property. Market Conditions There were insufficient sales of vacant land parcels in the subject area to do meaningful selling price trend analysis. As an alternative, since land prices generally tend to follow trends in selling prices of improved residential properties, we reviewed sales of single family homes in the subject zip code for the period from May 2017 to present. We limited the search to homes built since 1975 and between 1,000 SF and 2,000 SF as these are considered most representative of the type of home expected to be constructed on the subject properties. Nearly 300 sales were analyzed on a dollars per square foot basis in order to minimize the effect of differing home sizes. The date range includes the recording dates of all five comparable sales. Analysis of the data indicated that the trend in selling price increased approximately 6.95% for the two 27 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ● Consultants years of the analysis, or approximately 3.5% per year. These trends were discussed with brokers and other market participants during confirmation of data used in this and other appraisal reports. While individual opinions varied to some extent, the overall consensus of these individuals tends to support the results of our sales data analysis. Based on our analysis of improved residential sales reported by the San Diego County MLS, in conjunction with numerous conversations with brokers, buyers and/or sellers involved with sales of residential land properties, we have concluded that 3.5% per year, or 0.29% per month, is an appropriate rate at which to adjust sales for differing market conditions as of the date of sale. Location The subject property is located in the La Presa area of Spring Valley. The subject property’s immediate area located on Buena Vista Drive north of Apple Street is a long established residential neighborhood with basic quality housing. Two of the sales are also in the La Presa area and are considered similar in location to the subject. The other three are all considered superior in varying degrees to the subject in terms of their location. Consideration was given to the comparables’ locations as they compare to the subject property’s location. Property Size When considering properties of differing size on a per lot basis, larger lots are superior to smaller lots. Four of the sale properties are larger than the subjects and are considered superior to the subject in that regard. Site Utility The subject properties are rectangular in shape and somewhat sloping, considered to be average in site utility. Two of the sales are considered similar in utility. The other three are considered inferior to the subject in utility, two due to steep terrain and one due to a drainage ditch on the property. View Due to the topography in the area the subject property offers some view of the area and hills to the east. Two of the sales are considered to have inferior view potential, one is generally similar, and two are superior in varying degrees due to steep topography of the sites. Access The subject is accessible from either direction on Buena Vista Drive. Two of the subjects are accessible only via a long, narrow easement road. The other three comparable sales are considered generally similar to the subject in access. 28 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ● Consultants Zoning/Land Use The subject properties have zoning and land use classifications intended for single family development. Four of the sales are similar in this regard. The fifth is zoned for multiple residential use but could accommodate a maximum of only two units, or one SFR. Offsite Improvements The subject street has partial offsites including concrete curbs and gutters, but no sidewalks at the subject location. Three of the sales are on easement roads with no county offsite improvements. The other two have partial offsites. Development Potential/Status The subject properties are vacant, individual residential lots with the potential for development with one single family residence each. All five comparable sales are considered similar to the subjects in this regard. The table on the following page summarizes the land sales, and the considerations and adjustments that were made. A detailed discussion follows regarding the comparability of each sale to the subject with respect to property rights, financing, conditions of sale, market conditions on the date of sale, geographic location, site utility, view potential, access, zoning, offsites and development potential. . 29 SUBJECT SALE NO. 1 SALE NO. 2 SALE NO. 3 SALE NO. 4 SALE NO. 5 Property Location Buena Vista Avenue West of Gillespie Drive West of Gillespie Drive 8657 Golf Drive 9360 Hollyhock Road High Street S of Chestnub Street South of Jamacha Road South of Jamacha Road at Waite Drive Spring Valley Spring Valley (La Presa)Spring Valley (La Presa)Spring Valley Spring Valley (Casa de Oro)La Mesa Owner/Seller Otay Water District Jackson Family Trust Jackson Family Trust M&M Clint Cable Deutsche Bank Socal Metro Holdings Buyer N/A Aaron Leavitt Aaron Leavitt Christopher Welton Murphy/Pechacek Rehouse LLC Assessor Parcel Number(s)Por 579-364-17 584-510-20 584-510-19 499-361-19 500-160-14 475-352-14 Recording Date 03/12/19 03/07/19 03/06/19 01/25/19 04/28/17 Document No.0088562 0081756 0080628 0028612 0192134 Land Area (SF)6,375 13,454 14,037 18,000 18,146 6,098 Site Utility (Shape & Topo)Rectangular/sloping Rectangular/level Rectangular/level Steep slope w/tiers Rectangular/gentle slope Steep slope View Some distant hills None None Panoramic Some Area Good area to S and W Zoning/Land Use RS/VR-7.3 RS/VR-7.3, SD County RS/VR-7.3, SD County RS/VR-2.9, SD County RS/VR-4.3, SD County R3/Multi Res, La Mesa Minimum lot size 6,000 6,000 6,000 15,000 10,000 6,098 Access 1 Street Easement road Easement road 1 Street End of private road 1 Street Offsites Curbs/gutters only.Partial on Gillespie Partial on Gillespie Paved road only Paved road only Partial offsites Devel Status Vacant legal lot Pomegranite orchard Pomegranite orchard Vacant land Vacant land Vacant land Devel Potential/Status 1 SFR 1 SFR 1 SFR 1 SFR 1 SFR 1 SFR or 2 Apartment Proposed Use 1 SFR 1 SFR 1 SFR 1 SFR Not disclosed Highest & Best Use SFR development.Residential Residential Residential Residential Residential Comments The subjects are two adjacent, identical legal lots which are currently portions of APN 579-364- 17. This is a generally rectangular, essentially level lot partially improved with a pomegranite orchard. Lot cannot be split due to narrow easement access road. This is a generally rectangular, essentially level lot improved with a pomegranite orchard. Lot cannot be split due to narrow easement access road. This is a steeply sloping residential lot in the La Mesa Country Club section of Spring Valley. Sold with plans for a 3,300± SF house. This is a generally rectangular, sloping site at the end of a private road. There is no private road maintenance agreement. This is an irregular shaped, steeply sloping lot a short distance from SR- 94. Permitted uses include 1 SFR or 2 apartments. Topo limits site utility. Price $80,000 $50,000 $161,000 $155,000 $94,000 Conditions of Sale/Market: Property Rights Fee Simple Subtotal $80,000 $50,000 $161,000 $155,000 $94,000 Financing Cash Equivalent Subtotal $80,000 $50,000 $161,000 $155,000 $94,000 Condition of Sale Market Subtotal $80,000 $50,000 $161,000 $155,000 $94,000 Market Conditions Stable/Improving $0 $0 $0 $0 $0 Market Condition Adj. Price/SF $80,800 $50,500 $162,610 $156,550 $100,580 Location Spring Valley Similar Similar Superior Consid Superior Superior Site Size (Ac)6,375 Superior Superior Superior Superior Similar Site Utility (Shape & Topo)Rectangular/sloping Similar Consid Inferior Inferior Similar Inferior View Some distant hills Inferior Inferior Consid Superior Similar Superior Access 1 Street Inferior Inferior Similar Similar Similar Zoning/Land Use RS/VR-7.3 Similar Similar Similar Similar Similar Offsites Full Offsites Slgt Inferior Slgt Inferior Similar Slgt Inferior Similar Devel Potential/Status SFR development.Similar Similar Superior Similar Similar OVERALL COMPARABILITY Inferior Substantially Inferior Substantially Superior Substantially Superior Sim to Slgt Superior COMPARABLE LAND SALES SUMMARY AND ANALYSIS COMPARABILITY ANALYSIS PHYSICAL CHARACTERISTICS HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 30 Land Sale No. 1 W of Gillespie Drive S of Jamacha Road, Spring Valley, CA This is the March 2019 sale of an approximately 13,454 square foot vacant residential zoned lot located in the La Presa area of Spring Valley. The selling price was $80,000. It was a cash to seller transaction. It is a generally level, rectangular lot situated at the west end of a narrow easement road extending west from Gillespie Drive. It is accessible only from the east on the easement road across three other properties in the area. It is zoned RS (Residential Suburban) by the County of San Diego with a minimum lot size of 6,000 square feet. It has a Land Use classification of VR-7.3 (Village Residential, 7.3 units per acre). The zoning and land use classifications suggest that this property could be split into two legal lots, however, the confirming source stated that the County will not permit it to be split because the easement access road is too narrow. As of the date of sale the southern half of this sale was improved with a pomegranate grove. The buyer of this property reportedly plans to build an SFR. This sale was adjusted slightly upward to $80,800 to account for differing market conditions as of the date of sale. This sale comparable is considered superior to the subject relative to its larger lot size. It is inferior to the subject in terms of its lack of view amenity, its easement road access and slightly inferior as to offsite improvements. It is considered generally similar to the subject in other respects including its La Presa location, site utility, zoning and development potential. Overall, this comparable sale is considered inferior to the subject and indicates a price greater than $80,800 for the subject property. Land Sale No. 2 W of Gillespie Drive S of Jamacha Road, Spring Valley, CA This is the March 2019 sale of an approximately 14,037 square foot vacant residential zoned lot located in the La Presa area of Spring Valley. The selling price was $50,000. It was a cash to seller transaction. It is adjacent to Sale 1 above and was purchased by the same buyer at approximately the same time. The selling price of this property was reduced by $30,000 due to anticipated remediation costs of a drainage ditch which crosses the property. The confirming source noted that, absent the ditch it would have sold for $80,000. It is a generally level, rectangular lot situated at the west end of a narrow HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 31 easement road extending west from Gillespie Drive. It is accessible only from the east on the easement road across three other properties in the area. It is zoned RS (Residential Suburban) by the County of San Diego with a minimum lot size of 6,000 square feet. It has a Land Use classification of VR-7.3 (Village Residential, 7.3 units per acre). The zoning and land use classifications suggest that this property could be split into two legal lots, however, the confirming source stated that the County will not permit it to be split because the easement access road is too narrow. As of the date of sale this property was improved with a pomegranate grove. The buyer reportedly plans to build an SFR. This sale was adjusted slightly upward to $50,500 to account for differing market conditions as of the date of sale. This sale comparable is considered superior to the subject relative to its larger lot size. It is considerably inferior to the subject in terms of its site utility (remedial cost of curing the drainage ditch), inferior as to lack of view amenity, its easement road access and slightly inferior as to offsite improvements. It is considered generally similar to the subject in other respects including its La Presa location and zoning.. Overall, this comparable sale is considered substantially inferior to the subject and indicates a price substantially more than $50,500 for the subject property. Land Sale No. 3 8657 Golf Drive, Spring Valley, CA This is the March 2019 sale of an approximately 18,000 square foot vacant residential zoned lot located in the La Mesa Country Club neighborhood of northern Spring Valley. The selling price was $161,000 in a cash to seller transaction. The lot slopes steeply upward from Golf Drive and has a level pad area near the top of the site. It is generally rectangular in shape. It is an interior lot which is accessible from either direction on Golf Drive, a two lane, asphalt paved road with asphalt curbs but no other offsites. The property is zoned RS (Residential Suburban) by the County of San Diego with a minimum lot size of 15,000 square feet. It has a Land Use designation of VR-2.9 (Village Residential, 2.9 dwelling units per acre). The confirming source noted that the seller had some preliminary work toward development and that water was in, sewer was connected and electricity and gas were present. He also noted that there were plans available for an approximately 3,300 SF residence, but that the buyer opted not to use them. This sale was adjusted slightly upward to $162,610 to account for differing market conditions as of the date of sale. This sale comparable is considered superior to the subject in terms of its location in northern Spring Valley and its development status with utility connections. It is superior in overall lot size and HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 32 considerably superior as a result of its panoramic view potential. It is inferior to the subject relative to its steeply sloping site utility. It is considered generally similar to the subject in other respects including, access, zoning and offsites. Overall, this sale is considered substantially superior to the subject and indicates a subject value of substantially less than $162,610. Land Sale No. 4 9360 Hollyhock Road, Spring Valley, CA This is the January 2019 sale of an approximately 18,146 square foot vacant residential zoned lot located in the Casa de Oro neighborhood of northern Spring Valley. The selling price was $155,000 in a cash to seller transaction. This was an REO sale that was originally listed for $117,000, but the confirming source stated that they received multiple offers for the property and it eventually sold for the $155,000 noted above. The broker indicated that $155,000 was generally representative of its market value. The lot slopes gently upward from Hollyhock Lane, a private road extending east from Hollyhock Road. It is generally rectangular in shape. It is an interior lot which is accessible only from the west on Hollyhock Lane, an unmaintained road with no road maintenance agreement between neighbors. The property is zoned RS (Residential Suburban) by the County of San Diego with a minimum lot size of 10,000 square feet. It has a Land Use designation of VR-4.3 (Village Residential, 4.3 dwelling units per acre). This sale was adjusted slightly upward to $156,550 to account for differing market conditions as of the date of sale. This sale comparable is considerably superior to the subject in terms of its location in the Casa de Oro section of Spring Valley and slightly superior in overall lot size. It is slightly inferior to the subject relative to its offsites. It is considered generally similar to the subject in other respects including site utility, view potential, access and zoning. Overall, this sale is considered substantially superior to the subject and indicates a subject value of substantially less than $156,550. HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 33 Land Sale No. 5 High Street at Waite Drive, La Mesa, CA This is the April 2017 sale of an approximately 6,098 square foot vacant residential zoned lot located at the corner of High Street and Waite Drive in the City of La Mesa. The selling price was $94,000 in a cash to seller transaction. The lot slopes steeply upward from High Street and is irregular in shape. There is an approximately 3,700 square foot generally level pad area at the east side of the property. It is a corner lot but is accessible only from High Street, a two lane, asphalt paved road with concrete curbs and gutters but sidewalks only on one side of the street. The property is zoned R3 (Multiple Unit Residential) by the City of La Mesa with a minimum net lot size of 2,420 square feet per dwelling unit. It has a Land Use designation of Multi-Residential. Development standards would permit development of this property with either single family or multi family improvements. However, given that substantial grading would be required to provide the 4,840 net square feet needed for two multi-family units, it is considered more likely that the property will eventually be improved with a single family dwelling. This sale was adjusted upward to $100,580 to account for differing market conditions as of the date of sale. This sale comparable is considered superior to the subject in terms of its location in La Mesa and superior relative to its view potential. It is inferior to the subject relative to its steeply sloping site utility. It is considered generally similar to the subject in other respects including site size, access, zoning, offsites and development potential. Overall, this sale is considered similar to slightly superior to the subject and indicates a subject value in the range of $100,580. HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 34 The following table summarizes the comparability of the five comparable sales to the subject property, from the most inferior to the most superior. LAND SALE COMPARABLES Comp # Address Sale Date Size (SF) Sale Price* Comparability 2 W of Gillespie Drive, Spring Valley 03/07/19 14,037 $50,500 Substantially Inferior 1 W of Gillespie Drive, Spring Valley 03/12/19 13,454 $80,800 Inferior Subj Buena Vista Dr S of Chestnut, SV $100,000 5 High Street @ Waite Drive, La Mesa 04/28/17 6,098 $100,580 Similar to Slightly Superior 4 9360 Hollyhock Road, Casa de Oro 01/25/19 18,146 $156,550 Substantially Superior 3 8657 Golf Drive, Spring Valley 03/06/19 18,000 $162,610 Substantially Superior * Market Conditions adjusted price per square foot After consideration of economic, physical, and locational differences which have an influence on value, the comparable sale properties bracket the subjects’ market value, albeit widely, due to a lack of similar lot sales in the area. Comparables 1 and 5 were considered most similar and given greatest weight in our analysis. These sales bracket the subject value in the range of approximately $80,800 to $100,580 with Sale 5 requiring the fewest considerations for differing physical characteristics. Based on the bracketing effect of Sales 1 and 5, with support from the other sales and discussions with knowledgeable sources in the area, it is our opinion that the value of the subject properties is $100,000 per lot. Indicated Value 2 Lots x $100,000/Lot = $200,000 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 35 MARKET DATA ADDENDUM HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 36 LAND SALES MAP HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 37 Land Sale 1 Location: West of Gillespie Drive South of Jamacha Road, Spring Valley, CA. APN: 584-510-20 Size & Shape: 13,454 square feet, rectangular in shape. Topography: Generally level. View: None. Zoning: RS (Residential Suburban) San Diego County, 6,000 square foot minimum lots. Utilities: Typical utilities are available in the area. Access/Offsites: Accessible via an easement access road extending west from Gillespie Drive. Improvements: None at the time of sale. Sale Price: $80,000 Terms: Cash to seller. Transaction: Document Number: 2019-0088562 Recording Date: March 12, 2019 Transfer Tax: $88.00, Full Value Buyer: Aaron Leavitt Seller: Jackson Family Trust Confirmed by: Brian Turner, selling agent. Comments: At the time of sale, the southern half of this property was used as a pomegranate orchard and the northern half was vacant. Despite being large enough to be split into two residential lots, the County will not permit the split because the easement access road is too narrow. The buyer reportedly intends to construct a single family residence on the lot. As of our inspection, no work had commenced. HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 38 Land Sale 1 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 39 Land Sale 2 Location: West of Gillespie Drive South of Jamacha Road, Spring Valley, CA. APN: 584-510-19 Size & Shape: 14,037 square feet, rectangular in shape. Topography: Generally level. View: None. Zoning: RS (Residential Suburban) San Diego County, 6,000 square foot minimum lots. Utilities: Typical utilities are available in the area. Access/Offsites: Accessible via an easement access road extending west from Gillespie Drive. Improvements: None at the time of sale. Sale Price: $50,000 Terms: Cash to seller. Transaction: Document Number: 2019-0081756 Recording Date: March 7, 2019 Transfer Tax: $55.00, Full Value Buyer: Aaron Leavitt Seller: Jackson Family Trust Confirmed by: Brian Turner, selling agent. Comments: At the time of sale, this property was used as a pomegranate orchard. Despite being large enough to be split into two residential lots, the County will not permit the split because the easement access road is too narrow. This sale is adjacent to Sale 1 above. Its selling price was discounted $30,000 to offset anticipated costs of remediating a drainage ditch that crosses the property. The selling agent stated that, absent the ditch, it would have sold for $80,000. The buyer reportedly intends to construct a single family residence on the lot. As of our inspection, no work had commenced. HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 40 Land Sale 2 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 41 Land Sale 3 Location: 8657 Golf Drive, Spring Valley, CA APN: 499-361-19 Size & Shape: Approximately 18,000 square feet, generally rectangular in shape. Topography: Steeply sloping site with a generally level pad area at the top. View: Panoramic view to north and west. Zoning: RS (Residential Suburban), County of San Diego, 15,000 SF minimum lot size. Utilities: Typical utilities are operating to the site. Access/Offsites: This property is accessible from either direction on Golf Drive, a two lane, asphalt paved road. Improvements: None, the site was vacant as of the date of sale. Sale Price: $161,000 Terms: Cash to seller. Transaction: Document Number: 2019-0080628 Recording Date: March 6, 2019 Transfer Tax: $177.10, full value. Buyer: Christopher Welton Seller: Clint & Laurie Cable Confirmed by: Adam Stone, selling agent. Comments: This sale property is located in the La Mesa Country Club neighborhood of Spring Valley. It is a steeply sloping site with a generally level pad area at the top. Since the building pad area is at the top of the site, the property offers a sweeping view to the north and west. According to the selling agent, the seller had completed some preliminary development steps including utility connections. The buyer reportedly intends to construct a single family residence on the property. HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 42 Land Sale 3 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 43 Land Sale 4 Location: 9360 Hollyhock Road, Spring Valley, CA APN: 500-160-14 Size & Shape: Approximately 18,146 square feet, generally rectangular in shape. Topography: Gently sloping. Zoning: RS (Residential Suburban), County of San Diego, 10,000 SF minimum lot size. Utilities: Typical utilities are available. Access/Offsites: This property is accessible via Hollyhock Lane, an unmaintained private road with no road maintenance agreement between neighbors. Improvements: None, this property was vacant as of the date of sale. Sale Price: $155,000 Terms: Cash to seller. Transaction: Document Number: 2019-0028612 Recording Date: January 25, 2019 Transfer Tax: $170.50, full value. Buyer: Patrick Murphy Seller: Deutsche Bank Confirmed by: Scott Varley, selling agent. Comments: This was a previously developed property from which the improvements were removed in early 2014. It is a gently sloping property situated at the end of a poorly maintained private road extending generally east from Hollyhock Road. It was also an REO sale, originally listed for $117,000, but the selling agent noted that they received multiple offers which drove the price up to $155,000. The agent noted that the final price was generally representative of his opinion of market value of the property. The buyer reportedly intends to construct a residence on the site. As of our inspection no work had commenced. HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 44 Land Sale 4 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 45 Land Sale 5 Location: High Street at Waite Drive, La Mesa, CA APN: 475-352-14 Size & Shape: Approximately 6,098 square feet, irregular in shape. Topography: Steeply sloping up from the street with a generally level pad area at the top. Zoning: R3 (Multi Unit Residential), City of La Mesa. Utilities: Typical utilities are available. Access/Offsites: This property is at the corner of High Street and Waite Drive but is accessible only from High Street. Improvements: None, this property was vacant as of the date of sale. Sale Price: $94,000 Terms: Cash to seller. Transaction: Document Number: 2017-0192134 Recording Date: April 28, 2017 Transfer Tax: $103.40, full value. Buyer: Rehouse LLC Seller: Socal Metro Holdings LLC Confirmed by: Public records. Comments: This is a small, steeply sloping lot at the intersection of High Street and Waite Drive in La Mesa. There is an approximately 3,700 square foot generally level pad area at the top of the lot. The R3 zoning requires 2,420 net square feet per dwelling unit for multiple units. Thus, significant grading would be required to develop two dwelling units on the property. It is considered more likely that one single family residence will be developed. We were unable to contact the buyer to determine his intentions for the property. HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 46 Land Sale 5 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 47 TITLE REPORT HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 48 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 49 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 50 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 51 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 52 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 53 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 54 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 55 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 56 GENERAL ADDENDA HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 57 HENDRICKSON APPRAISAL COMPANY, INC. Hendrickson Appraisal Company, Inc. is a midsized appraisal firm that was incorporated in 1986 to provide professional consultation on matters relating to valuation of real estate and real property. The firm specializes in valuation of commercial, industrial, entitled and unentitled vacant land, and subdivision property. Appraisers within the firm provide valuation consultation and expert witness testimony relating to several legal matters involving: eminent domain property acquisitions, estate matters, real property misrepresentation matters and partnership disputes, bankruptcy and foreclosure matters, and diminution of value matters involving construction defects, soils subsidence and hazardous waste issues. In addition to court testimony, arbitration and mediation services are provided to facilitate settlement on valuation issues, as appropriate. The firm specializes in appraisal of office buildings, retail centers, industrial property, restaurants, marinas, multi-use property, special use property, large entitled and unentitled vacant land holdings, many of which involve sensitive habitat issues, and residential subdivision and golf course oriented planned residential developments. Detailed sensitivity analysis, including discounted cash flow analysis on income producing property (offices, retail and industrial) and multi-phased residential subdivision cash flow analysis, is a specialty area of the firm. In addition to valuation of property based upon their highest and best use as developed from market analysis, Hendrickson Appraisal Company, Inc. provides consulting services relating to alternative uses for various property, under differing use scenarios. Following is a brief summary of the organization of the company. Ted G. Hendrickson, MAI, the principal valuation expert within the firm has over 30 years of appraisal experience, primarily oriented toward commercial and subdivision appraising. He has extensive expert witness experience having testified many times in arbitration and court proceedings. Associate appraisers in the company are either MAI designated or advanced candidates for the MAI designation and are State of California Certified General appraisers. The average experience level of the firm's staff appraisers is 15 years, with primary emphasis on appraisal of all types of commercial property, large land holdings and residential subdivisions at various densities. HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 58 TED G. HENDRICKSON, MAI PROFESSIONAL QUALIFICATIONS Ted G. Hendrickson, MAI is the president and principal valuation expert of Hendrickson Appraisal Company, Inc., a midsized appraisal firm specializing in valuation of commercial, industrial, large vacant land holdings and land subdivision property. Mr. Hendrickson has over 30 years of experience as a real estate appraiser and consultant, primarily specializing in valuation of commercial property. Mr. Hendrickson is a qualified expert witness, having given testimony on several occasions in Superior Court and in the Federal Court system. Mr. Hendrickson has testified in several cases involving: eminent domain property acquisitions, estate matters, real property misrepresentation matters and partnership disputes, bankruptcy and foreclosure matters, and diminution of value matters involving construction defects, soils subsidence and hazardous waste issues. Mr. Hendrickson has also served as valuation expert and arbitrator in arbitration hearings involving property valuation and lease negotiations with the Port of San Diego and in other public and private corporate real estate matters. Mr. Hendrickson's appraisal experience includes valuation of the following property types: commercial, retail, office, industrial, multi-residential, special use property such as food processing facilities, tidelands property including marinas, hotels and restaurants, vacant unentitled land with sensitive habitat issues, and subdivision land with detailed highest and best use analysis. He has extensive experience in valuing large office buildings and other income producing property, as well as land subdivisions (residential and industrial) using discounted cash flow sensitivity analysis. Mr. Hendrickson holds the highest designation in the appraisal field, the MAI designation. He is past President of the San Diego Chapter of the Appraisal Institute and has served on several regional committees. HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 59 QUALIFICATIONS TED G. HENDRICKSON, MAI APPRAISAL EXPERIENCE: 1986-Present: Hendrickson Appraisal Company, Inc. President; Real estate appraiser, reviewer, consultant, analyst, and expert witness Full range of Appraisal/Consulting services, including mediation and arbitration services Right of Way Eminent Domain Valuation Specialist 1984-1986: Independent Appraiser specializing in appraisal and feasibility analysis of commercial, industrial, offices, multi-phased subdivisions and income property. 1973-1983: Home Federal: 1973-1979: Appraiser Analyst specializing in appraisals of subdivisions, commercial, retail centers, office and industrial property. 1979-1983: Appraisal Dept. Manager, Vice President. Responsible for reviewing and appraising commercial, residential, and industrial property. 1970-1973: California Department of Transportation. Staff appraiser specializing in valuation of residential and commercial property for right of way eminent domain purposes. EDUCATION: Undergraduate and post graduate professional studies California State University, Northridge - B.S. degree in Real Estate Finance University of Southern California (Graduate School of Business) University of Washington (Graduate School of Business) Appraisal Institute Courses and Seminars: (Courses taken at various universities throughout the U.S.) ▪ Industrial Appraising ▪ Appraisal of Income Property ▪ Investment Analysis ▪ Capitalization Theory ▪ Litigation Testimony ▪ Skills of Expert Testimony ▪ Real Estate Risk and Analysis ▪ Discounted Cash Flow Analysis ▪ Valuation of Partial Interests ▪ Subdivision Analysis and Feasibility ▪ Analysis of Money Market Rates ▪ Standards of Professional Practice ▪ Valuation of Easements ▪ Impact of Hazardous Substances on Real Estate ▪ Highest and Best Use Analysis ▪ Market Land Use Analysis ▪ Financial Forecasting ▪ Environmental and Biological Issues ▪ Cost Analysis ▪ Master Planned Communities/Land Planning ▪ Mitigation Land Analysis ▪ Standards for Federal Lands Acquisitions (USFLA) ▪ Valuation of Lease Interests ▪ Eminent Domain Law PROFESSIONAL: Membership and Service MAI Designation (#6603) with the Appraisal Institute California Certified General Appraiser (AG004974) California Real Estate Broker’s License (#530471) Member of the International Right of Way Association (#1148112) Chairman and member of several Appraisal Institute committees Past President of the San Diego Chapter of the Appraisal Institute COURT EXPERIENCE: Qualified Expert Witness Testified in California State Superior Court and U.S. Federal Court Testified in Arbitration and Mediation Proceedings - government agencies and private corporations HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers ▪ Consultants 60 QUALIFICATIONS EDWARD A. BEAVER APPRAISAL EXPERIENCE: 1987-Present Associate Appraiser, Hendrickson Appraisal Company, Inc. Residential: Appraisal of all types of residential properties ranging from senior citizen condominiums to large custom estate properties, both existing and proposed. Appraisal of all types of residential properties for public acquisition under eminent domain law including full and partial fee acquisitions, permanent and temporary easement acquisitions and analysis of just compensation for severance damages and benefits. Income property: Appraisal of large residential income properties, multi-phased planned industrial park properties, vacant land intended for multi-unit residential properties, improved industrial properties, commercial/retail properties, proposed residential subdivision properties and appraisal of leasehold interests. Appraisal of complex commercial and residential income properties for public acquisition under eminent domain law including full and partial fee acquisitions, permanent and temporary easement acquisitions and analysis of just compensation for severance damages and benefits. Experience includes giving sworn testimony during arbitration proceedings. PROFESSIONAL: Practicing Affiliate in the Appraisal Institute. State of California Certified General Appraiser #AG009555. EDUCATION: Elmhurst College, Elmhurst, Illinois – B.S. degree in Mathematics. National University, San Diego, California – MBA degree with emphasis in Computer Management. Appraisal Institute Courses/Seminars Basic Valuation Procedures Standards of Professional Practice A Standards of Professional Practice B Capitalization Theory and Techniques A Capitalization Theory and Techniques B Case Studies in Real Estate Valuation Appraising from Blueprints and Specs Planning and Land Use Apartment Valuations Appraisal Regulations of Federal Banking Agencies OREA Laws and Regulations Applying Economic Forecasts Environmental Risk and Analysis Property Profile of Operating Expenses Master Planned Communities Easement Valuation Expert Witness Testimony Leasehold Analysis Eminent Domain Law Litigation Valuation 7 Hour National USPAP Update Uniform Appraisal Standards for Federal Land Acq. RE Finance Statistics and Valuation Modeling Operating Expense Seminar Supporting Capitalization Rates Appraisal Applications of Regression Analysis Stats and Graphs 1 Review Theory – General EXHIBIT C Two Vacant Residential Lots Lot 18 ±6,375 SF | $125,000 Lot 19 ±6,375 SF | $125,000 Both Lots ± 12,750 SF | $220,000 Option to Purchase Together or Separate Vince Provenzano President of Brokerage Vince@PacificCoastCommercial.com Lic. 00780182 (619) 469-3600 | 10721 Treena St., Ste 200 | San Diego, CA 92131 | www.PacificCoastCommercial.com | Lic. 01209930 Tyler McKee Sales & Leasing Associate Tyler@PacificCoastCommercial.com Lic. 02082617 The information contained herein has been given to us by the owner of the property or other sources we deem reliable, we have no reason to doubt its accuracy, but we do not guarantee it. All information including zoning and use should be verified prior to purchase. FOR SALE Property Overview Development Opportunity Two +/- 6,375 SF Vacant Residential Lots Parcel Size: +/- 12,750 SF Lot APN # 579-364-17-00 Sale Price: $220,000 ($125,000 Per Lot) • Situated in Spring Valley • Zoned: RS, Residential Suburban, County of San Diego • Land Use: VR-7.3, Village Residential, 7.3 Dwelling Units Per Acre • Minimum Lot Size is 6,000 SF EXISTING LAYOUT Immediate Access to Hwy 125 with Easy Access to Hwy 54, & 94 Heavily Populated Suburban Area Covering Approx. 11 Miles Property Offers Views of the Area & Hills to the East with Some Lake Views Average Household Income: $86,139 within a 5 Mile Radius (2019) Information Source: CoStar The predominant land use in the area is single family residential, but since the 1970’s denser housing areas have been developed. The market for residential properties in the Spring Valley Area has been improving for the last several years. The high concentration of residential properties has benefited both retail and office properties. Public transportation is provided by the Metropolitan Transit System which has several bus routes serving the community. 354,361 full time population 74,958 day time population 365,403 population growth (2024) $86,139 avg. household income 3.00 avg. household size 68,339 owner occupied population 9,026 businesses 4 public parks * demographics source: costar, based upon a 5 mile radius 48,084 renter occupied population Spring Valley | Market Snapshot SURROUNDING AREA AERIAL 19,565 VPD JAMACHA ROAD & COUSHATTA LANE ADDENDUM (C.A.R. Form ADM, Revised 12/15) No. The following terms and conditions are hereby incorporated in and made a part of the: Purchase Agreement, Residential Lease or Month-to-Month Rental Agreement, Transfer Disclosure Statement (Note: An amendment to the TDS may give the Buyer a right to rescind), Other , dated , on property known as in which is referred to as ("Buyer/Tenant") and is referred to as ("Seller/Landlord"). The foregoing terms and conditions are hereby agreed to, and the undersigned acknowledge receipt of a copy of this document. Date Date Buyer/Tenant Seller/Landlord Buyer/Tenant Seller/Landlord © 1986-2015, California Association of REALTORS®, Inc. United States copyright law (Title 17 U.S. Code) forbids the unauthorized distribution, display and reproduction of this form, or any portion thereof, by photocopy machine or any other means, including facsimile or computerized formats. THIS FORM HAS BEEN APPROVED BY THE CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). NO REPRESENTATION IS MADE AS TO THE LEGAL VALIDITY OR ACCURACY OF ANY PROVISION IN ANY SPECIFIC TRANSACTION. A REAL ESTATE BROKER IS THE PERSON QUALIFIED TO ADVISE ON REAL ESTATE TRANSACTIONS. IF YOU DESIRE LEGAL OR TAX ADVICE, CONSULT AN APPROPRIATE PROFESSIONAL. This form is made available to real estate professionals through an agreement with or purchase from the California Association of REALTORS®. It is not intended to identify the user as a REALTOR®. REALTOR® is a registered collective membership mark which may be used only by members of the NATIONAL ASSOCIATION OF REALTORS® who subscribe to its Code of Ethics. Published and Distributed by: REAL ESTATE BUSINESS SERVICES, LLC. a subsidiary of the California Association of REALTORS® 525 South Virgil Avenue, Los Angeles, California 90020 ADM REVISED 12/15 (PAGE 1 OF 1) ADDENDUM (ADM PAGE 1 OF 1) Phone: Fax: Produced with zipForm® by zipLogix 18070 Fifteen Mile Road, Fraser, Michigan 48026 www.zipLogix.com One (1) X Vacant Land Purchase Agreement and Joint Escrow Instructions July 3, 2020 Lots 18 & 19 Buena Vista Ave Spring Valley, CA 91977 Erika Rodriguez, Trustee for LLC to be formed , See Addendum one (1) attached Otay Water District This Addendum is attached to the Vacant Land Purchase Agreement dated July 3, 2020 and is in response to the request from the Otay Water District Board of Directors, as conveyed via email, dated July 2, 2020 at 11:40 am by Vince Provenzano, Listing Broker representing Otay Water District. In this email the buyer is requested to make changes to the original Purchase Agreement and Re-Submit for final Board Approval. Board of Directors, at closed session, agreed to move forward with the offer originally dated June 24, 2020 conditioned on certain conditions of the board; 1. Otay Water District, Board of Directors, has requested that All Buyers must be identified; The buyer, Erika Rodriguez will be forming an LLC upon opening of escrow, the final participants of the LLC will be identified to the Board within 10 days of opening of escrow. The anticipated members of the LLC are expected to be Erika Rodriguez Esquire, Alex Aguilar, Husband of Erika Rodriguez and Broker of Record for Buyers Brokerage firm, Axia Real Estate Group, Inc. and a possible third participant, Sylvia Evans, in name of her Trust, who is the Grandmother of Alex Aguilar, Alex Aguilar is also a trustee of her Grandmothers trust, The James and Sylvia Evans family Trust. 2. Contingencies to be removed within 17 days of final Board Approval and execution of the Vacant Land Purchase Agreement. 3. Sale of Subject Property is subject to OWD Board Approval. 4. Escrow to be Granite Escrow, Lynn Yockey 5. Title to be with First American, Mark McDonald. X X Erika Rodriguez, Trustee for LLC to be formed Otay Water District See Addendum one (1) attached Axia Real Estate Group, Inc., 1450 Frazee Rd. Suite 303 San Diego CA 92108 6197434118 8883171496 Vacant Lots, Carlos Aguilar 07/05/2020 04:53 PM PDT Erika Rodriguez, Trustee for LLC to be formed