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Home My WebLink About1992-07-07; City Council; 11765; Rancho Santa Fe Road AD 91-01 AppraiserCIP\r-OF CARLSBAD - AGENP BILL \B # ) 1; 763 5 TITLE: ilTG. 7/7/92 SELECTION OF APPRAISER FOR ASSESSMENT IEPT. FIN DISTRICT NO. 91-1 (RANCH0 SANTA FE ROAD) ?ECOMMENDED ACTION: Adopt Resolution No. 92-&!0y selecting Bruce W. Hull & Associates, Inc. as the appraiser for the Ranch0 Santa Fe Assessment District. ITEM EXPLANATION: The City of Carlsbad is continuing to review the feasibility of the proposed Ranch0 Santa Fe Assessment district. Under Council Policy No. 33, an assessment district project property value to lien ratio should be 4:l after installation of the improvements, but may be as low as 3:l under certain circumstances. In order to determine if the proposed district can meet these requirements, it is necessary to hire an appraiser at this point in the process. The appraiser will be asked to perform a limited scope appraisal of the property prior to the formation of the district to determine whether the project conforms to Council guidelines. In addition, it is expected that the same appraiser will be used for the preparation of the full scope appraisals prior to bond issuance. In late March, the City solicited proposals from a number of appraisers. After reviewing all proposals, considering the firms’ experience, the staffing and the fee structure, the following three appraisers were selected for interviews: COMPANY FEE Bruce W. Hull & Associates Limited scope .................... $15,000 Fullscope ....................... $35,000 ............................. to $45,000 Boznanski & Co. Pacific Realty Advisors Limited scope ..................... $9,500 Fullscope ....................... $19,000 - Limited scope .................... $15,000 Fullscope ....................... $35,000 Each of the above firms were interviewed by a committee consisting of City staff and certain advisors. The committee unanimously recommends the selection of Bruce W. Hull & Associates as the appraiser for the proposed Ranch0 Santa Fe Assessment District. This recommendation is based on the appraiser’s understanding of the assignment and experience on similar projects. FISCAL IMPACT: All appraisal fees will be paid out of funds deposited with the City by the proponents of the district and/or bond proceeds. No costs for appraisal services will be borne by the City. EXHIBITS: 1. Resolution No. 9a- a0 4 selecting the appraiser for the Ranch0 Santa Fe Assessment District (Assessment District 91-l). 1 2 3 4 5 6 7 a 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -. RESOLUTION NO. g2-204 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, SELECTING BRUCE W. HULL & ASSOCIATES AS THE APPRAISERS FOR THE PROPOSED RANCH0 SANTA FE ASSESSMENT DISTRICT IASSESSMENT DISTRICT NO. 91-l) WHEREAS, the City Council of the City of Carlsbad, California, is considering the formation of a special assessment district, pursuant to the terms and provisions of the “Municipal Improvement Act of 1913”, being Division 12 of the Streets and Highways Code of the State of California, for the installation of certain public works of improvement, together with appurtenances and appurtenant work, said special assessment district to be known and designated as Assessment District No. 91-1 (Ranch0 Santa Fe Road) (hereinafter referred to as the “Assessment District”); and, WHEREAS, the City requires the services of an appraiser in order to determine the feasibility of the proposed assessment district and to provide an appraised value at the time of issuance of any bonds; and, WHEREAS, staff has recommended the selection of Bruce W. Hull & Associates as the appraiser for the proposed district due to their experience and knowledge of similar projects. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad as follows: 1. That the above recitals are all true and correct. /// /// /// 1 2 3 4 5 6 7 a 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 2'i 2E 4 2. That Bruce W. Hull & Associates is hereby selected to perform appraisal services for the previously mentioned assessment district such as described in the attached proposal which is incorporated herein by reference. PASSED,APPROVEDANDADOPTED ataregularmeetingofthe City Council on the 7th day of July , 1992, by the following vote, to wit: AYES: Council Members Lewis, Kulchin, Larson, Stanton and Nygaard NOES: None ABSENT: None ATTEST: . ALETHA L. RAUTENKRANZ, City Clerk WJW 4 PROPOSAL FOR APPRAISAL SERVICES COMMUNITV FACIIJTIES DISTRICT NO. 91-l (RANCH0 SANTA FE ROAD) CITY OF CARLSBAD Bruce W. Hull & Associates, Inc. 13844 Atton Parkway suite 138 Irvine, California 92718 ’ . . . REAL ESTAE APPRAISERS & CONSULTANTS April 15, 1992 Mr. James F. Elliott Financial Management Director City of Carlsbad 1200 Carlsbad Drive Carlsbad, California 92008-1899 Reference: Proposal for Appraisal Services Ranch0 Santa Fe Road Assessment District No. 91-1 Carlsbad, California Dear Mr. Elliott: Thank you for providing Bruce W. Hull 8 Associates, Inc. the opportu- nity to submit a proposal to perform appraisal services for the City of Carlsbad on the above referenced project. I believe our experience in Mello-Roes/Assessment District appraisal as well as our ability to work with the financing teams would be an asset to the City in determining the financial viability of the bond issue. In response the following is submitted by Item No. as listed in your solicitation letter of April 6, 1992. ITEM WO. & Fees for Appraisal Services - In estimating the fee I took into consideration the requirement for both a reconnaissance level appraisal as well as a parcel by parcel valuation. Due to the unknowns regarding the scope of the appraisal assignment I would like to suggest an appraisal fee range. This range is anticipated to be $50,000 to $60,000. After initial meetings with the property owners a specific fee range would be quoted. _ ..- Appraisal -roach - In order to value these properties I believe the consultant should consider the following: a) The "city-wide m Communities Facilities District for the City of Carlsbad. As I understand it, this lien is extinguished upon issuance of a building permit. b) The zone level assessment district (or the subject). The lands being appraised should reflect the fair market value as enhanced by those public improvements being issued through the subject bond issue. . 13844 Alton Parkway l Suite 138 Iwine, California 92718 l 714&W2194 I cl The appraiser/consultant should consider the potential of the school mitigation agreement (or if in existence at the time of the appraisal) with the School District. In valuing the properties I believe two valuation methods are applicable. They are the Market Data Approach and the Discounted Cash Flow Approach. In some instances I believe only the market data approach would be applicable. This would be in the valuation of the smaller properties that would be sold in bulk as opposed to the Field- stone project which would take several years to develop and absorb the units. The market data approach is defined as: n . . . an appraisal procedure in which the market value estimate is predicated upon prices paid in actual market transactions and current listings, the former fixing the lower limit of value in a static or advancing market (price wise), and fixing the higher limit in a declining market; and the latter fixing the higher limit in any market. It is a process of analyaing sales of similar recently sold properties in order to derive an indication of the most probable sales price of the property being appraised."' The discounted cash flow approach is defined as nA set of procedures in which an appraiser specifies the quantity, variability, timing, and duration of periodic income, as well as the quantity and timing of reversions, and discounts each to its present value at a specified yield rate.M2 Time Required to Provide Necessary Services - I believe the recon- naissance level appraisal could be completed in a sixty to seventy- five (60 to 75) day period after execution of contract. To be able to achieve that time deadline the cooperation of the property owners is of significant importance. The parcel by parcel valuation could be completed within an additional sixty-day (60) period. 'Real Estate Appraisal Terminology, Revised Edition, 1981 'The Dictionary of Real Estate Appraisal, AIREA, 1984 2 , . I have taken the liberty of including the following list of references for Mello-Roes/Assessment Districts appraisal services. I have also attached a list of Mello-Roes/Assessment Districts on which we have completed appraisals. Tom Broitkreur m 43-348 Mr. Breitkreuz is a senior engineer with the City of .Moreno Valley. I have worked with him on several Mello-Roos Districts within the past several years which include a regional city mall and mixed-use site (200 acres), and an auto mall. Deborah Robinson ted an appraisal for a $22,000,000 Mello-Roos District located in the Chino Hills area of San Bernardino County. This involved three separate residen- tial projects that consisted of several thousand units. Ken Gordes, City Engineer Citv of San Marco8 (619) 744-4020 I have worked with Mr. Gerdes on two separate Mello-Roos Districts involving a total of 40 properties. John Gibson Btone '6 Younaberu (6191 452 0504 In September of 1991 I completed an appraisal for a Mello-Roos District sponsored by the Saddleback Unified School District. This was a master-planned project that involved undeveloped lands, finished lots and completed units. Norman P. YcPhail MUni Ouida CorDoratiOn (6191 481 3725 I am-currently working on a propised 200+ acre mixed use project in the City of Redlands. Mr. McPhail is the bond underwriter for the proposed $12,000,000 Assessment District. This project appears to be a challenging and complex one. Again, thank you for the opportunity to submit this proposal. I hope that we will be considered in the selection of firms for the proposed Community Pacrilities District. Respectfully 1 BRUCR 1. HO L ASSOCIATBS, INC. BWH:dh 3 ATTACHMENT 4 0 I: Q . . 5: % 0 w rc’ cy‘ w . sz d d t: I E ifs ci d d8 2: 2z =%I wx DO P $0 JJS: i$ JJd ;3 88 d I E 2s ‘2 OV =w l O P a c; ;” *ald Pk *v-d sr R a2 6 v d .- . 8 . “6 a 4 , m :ul q 2; lx a$ .- % 8; Q Q 9 Q 9 0 z 9 9 Q 9 m- ;f sf v) a cl z 4 d$ =*I 90 n dS ;z 26 i ;x d d $ 4J l rnk ; ii;