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Home My WebLink AboutCC AG PKT 2010-10-25 #I AGENDA STAFF REPORT DATE: October 25, 2010 TO: Honorable Mayor and City Council THRU: David Carmany, City Manager FROM: Robbeyn Bird, CPA, Director of Administrative Services/Treasurer SUBJECT: FIRE STATION NO. 48 BONDS SUBSTITUTION & REPLACEMENT OF COLLATERAL SUMMARY OF REQUEST: That the City Council direct the City Manager to pursue replacement of the collateral used for the private placement bond for the construction of Fire Station No. 48. BACKGROUND: On January 15, 2009, the Seal Beach Public Financing Authority issued $6.3 million in Lease Revenue Bonds to build a new Fire Station No. 48 located at 3131 North Gate Road (Beverly Manor Road). The collateral used for the private placement bond was City Hall and Fire Station No. 44 with the understanding that upon completion of the new facility, the collateral would be replaced with the new building thereby releasing City Hall and Fire Station No. 44 as collateral. In order to complete the lease substitution, an appraisal of the new facility must be completed. In addition, there are costs associated for the lease substitution to be paid to bank counsel, special counsel, financial advisor, trust administrator, and the title company. Attached to this staff report is a proposal for the appraisal of Fire Station No. 48 and cost estimates for completing the necessary documents for the lease substitution. FINANCIAL IMPACT: The estimated cost for the lease substitution will be $20,510 as detailed in the attached documents. Budget Amendment No. 11 -04 -02 is requesting additional funds to compensate the appraiser of the property, financial advisor, bank counsel, special counsel, trust administrator, and the title company. Agenda Item 1 Page 2 RECOMMENDATION: That the City Council direct the City Manager to pursue replacement of the collateral used for the private placement bond for the construction of Fire Station No. 48. SUBMITTED BY: NOTED AND APPROVED: i Y i. d R. � Robbeyn Biad, CPA tavid Carman, Director of Administrative Services/ City Manager City Treasurer Attachments: A. Appraisal Proposal B. Estimate Costs for Lease Substitution PARKCENTER REALTY ADVISORS .4ppraisers and Consultants 801 North Parkcenter Drire, Suite 210 Santa Ana, California 92705 714.547.1733 Fax 714.972.1492 October 6, 2010 CITY OF SEAL BEACH 211 8 Street Seal Beach, California 90740 Attention: Ms. Robbeyn Bird, CPA Director of Administrative Services Reference: Appraisal Proposal Fire Station #48 Seal Beach, California Gentlemen: At your request, Parkcenter Consultants, Inc., doing business as Parkcenter Realty Advisors, is pleased to submit a proposal for appraisal services on the above referenced property, a recently completed fire station in Seal Beach, California. Upon receiving authorization to proceed, we will prepare an appraisal of the fire station premises, inclusive of the Community Room, for the purpose of estimating market value of the fee simple interest in the property. Function of the report is for use by the City of Seal Beach in substituting this property as security for lease revenue bonds which financed the project. The appraisal will be performed by the Cost Approach To Value, considered to be the applicable appraisal methodology for newly constructed, special purpose public improvements. The appraisal will be transmitted to you in the format of a Restricted Appraisal, which will briefly describe the property and surroundings, appraisal methodology, market data considered for comparison purposes, and the reasoning and analysis leading to our opinion of market value. Intended user of the report will be the City of Seal Beach, and its bond financing advisors and consultants whom they may designate for the stated purpose. Because the brief restricted reporting format may omit detailed information concerning the property, reliance on the report is limited to the client and intended users. We will require the following information in our performance of the appraisal: • Construction plans made available for our review and selection of individual pages to be copied; • Itemized summary of construction costs for the project, including indirect costs such as those for design and fmancing; • Preliminary Title Report, to be furnished for our review prior to completion of the appraisal. The fee for this assignment will be $6,500. We will require approximately 30 days to complete the assignment once written authorization has been received. The report will be delivered to you in triplicate unless otherwise stated. CITY OF SEAL BEACH October 6, 2010 Attention: Ms. Robbeyn Bird, CPA Page 2 The fee is payable immediately upon delivery of the report. Accounts outstanding after 30 days will be billed at the rate of 12% per annum interest charge. If it is necessary to collect the balance of the fee through litigation, legal fees will be paid by the client if Parkcenter Realty Advisors prevails. The appraisal will be made in conformance and subject to the requirements of the Code of Ethics and Standards of Professional Practice of the Appraisal Institute, and the Uniform Standards of Professional Practice (USPAP). By accepting and executing this agreement, the client understands no warranties, guarantees or assurances of any kind are expressed or implied by Parkcenter Realty Advisors with respect to the outcome of the appraisal, or the specific value opinion. Parkcenter Realty Advisors will assume no liability in connection with the appraisal assignment for any reason other than the appraiser's(s') sole negligence or willful misconduct. Upon notice by Parkcenter Realty Advisors, the client further agrees to defend, indemnify and hold harmless the appraiser against any loss resulting from and/or as a part of, litigation with the client or third parties over the assignment for any reason other than the appraiser's sole negligence or willful misconduct. The appraisal report will be subject to the conditions and stipulations of the following Limiting Conditions. 1) No responsibility is assumed by Parkcenter Realty Advisors for matters, which are legal in nature. 2) No opinion of title is rendered and the property is appraised as though free of all encumbrances and title marketable. 3) The appraisal covers the property described only. 4) No survey of the boundaries of the property will be made. All areas and dimensions furnished our appraiser are assumed to be correct. 5) Sources of information are believed to be correct and, where feasible, have been verified. 6) That the term "market value" as used therein, is defined as, "the most probable price which 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, knowledgeably and assuming the price is not affected by undue stimulus." 7) That the date of value to which the conclusions and opinions expressed in the report apply, is set forth in the letter of transmittal. Further, that the dollar amount of any value opinion therein rendered is based upon the purchasing power of the American dollar on that date. 8) That the appraiser assumes no responsibility for economic or physical factors, which may affect the opinions therein stated, occurring at some date after the date of value. 9) That appraiser reserves the right to make such adjustments to the valuation therein reported, as may be required by consideration of additional data or more reliable data that may become available. 10) That maps, plats and exhibits included therein are for illustration only as an aid in visualizing matters discussed within the report. They should not be considered as survey, or relied upon for any other purpose, nor should they be removed from, reproduced, or used apart from the report. CITY OF SEAL BEACH October 6, 2010 Attention: Ms. Robbeyn Bird, CPA Page 3 11) By reason of the appraisal, Parkcenter Realty Advisors is not required to give testimony or to be in attendance in court or at any governmental or other hearing with reference to the property without prior arrangements having been made relative to such additional employment. 12) Disclosure of the contents of any appraisal report is governed by the By -Laws and Regulations of the Appraisal Institute. Neither all nor any part of the contents of the report, especially any conclusions as to value, the identity of the appraiser(s), or the firm, Parkcenter Realty Advisors, with which they are connected, or any reference to the Appraisal Institute or to the MAI or RM designation, shall be disseminated to the public through advertising media, public relations media, sales media or any other public means of communication without the prior written consent and approval of the authors. 13) This appraisal report is prepared for the sole and exclusive use of the client identified herein for the stated intended use. No third parties are authorized to rely upon this report without the express prior written consent of Parkcenter Realty Advisors. If this proposal meets with your acceptance, please indicate by signing this letter in the space provided and return one copy to us with the retainer amount. Respectfully submitted, PARKCENTER REALTY ADVISORS By: 7 1 - t,-__ -r--7-... Christopher N. Hardy, MAI Senior Vice President Certified General Real Estate Appraiser State of California No. AG003369 CNH:pmd Accepted by � l j , Date Name /Title /U "7Z' /d J Seal Beach Public Financing Authority Lease Revenue Bonds Series 2009 Fire Station Project Estimated Costs for Lease Substitution Payee Role Amount Bank of America, N.A. Purchaser of Bonds $ - Kathleen C. Johnson Bank Counsel $ 2,500.00 Richards, Watson & Gershon Special Counsel $ 4,500.00 M F Whipple & Associates Financial Advisor $ 1,000.00 Wells Fargo Bank, N.A. Trust Administrator $ 500.00 First American Title Insurance Company Title Company $ 5,510.00 Total Estimated Costs $ 14,010.00 10/13/2010