City of Culver City, California
Redevelopment Agency Agenda Item Report
RECOMMENDATION:
Staff recommends the Redevelopment Agency approve a professional services
agreement with PKF Consulting for a market study of the feasibility of a full service
hotel as a component of the Washington/National “Triangle Site” development
project in a total amount not to exceed $14,000.
BACKGROUND/DISCUSSION:
On March 6, 2008 the Agency provided conceptual approval of the proposed
revisions to the Washington - National Transit Oriented Development project also
known as the “Triangle Site”. The plan provided a variety of development
alternatives incorporating office, retail, residential, restaurant and hotel uses located
around a central major open space. Two of the plan development alternatives
included a high-end, boutique hotel component which provided a favorable return to
the city through transient occupancy tax (TOT) but somewhat less residual land
value return to the Agency. Overall the development alternatives with a hotel
provided the greatest city revenue on an annual basis. The plan recommended that
the Agency commission a market study to identify the potential market area and
price point for the proposed hotel.
To this end staff has requested proposals for such a study. HVS Consulting and
Valuation (“HVS”) of San Francisco, and PKF Consulting (“PKF”) of Los Angeles
have submitted proposals to undertake such a study. Both firms are experienced in
performing market studies for hotel viability. Staff recommends PKF Consulting be
chosen for this survey due to their extensive experience in such research and their
close proximity to the subject area.
Meeting Date: 07/21/08 Item Number: A-1
AGENDA ITEM: Approval of a Professional Services Agreement with PKF
Consulting for a Market Study of the Feasibility of a Full Service Hotel as part of
the Washington/National Project.
Contact Person/Dept.: Glenn Heald/ CDD Phone Number: (310) 253-5752
Fiscal Impact: Yes [X] No [] General Fund: Yes [X] No []
Public Hearing: [] Action Item: [X] Attachments: [X]
Public Notification: Master E-Mail Notification List (07/16/08).
Department Approval:
Sol Blumenfeld (06/24/08)
Executive Director Approval:
Jerry B. Fulwood (07/16/08)
Chief Financial Officer Approval:
Jeff Muir (by M. Noller) (07/02/08)
City of Culver City, California
Redevelopment Agency Agenda Item Report
FISCAL ANALYSIS:
The proposal for PKF is $13,000 plus out-of-pocket expenses, estimated to be less
than $1,000. Staff is requesting authorization to expend an amount not-to-exceed
$14,000 from Account No. 55092620.619800 “Other Contractual Services” to fund a
market study of the feasibility of a full service hotel by PKF Consulting. There is
sufficient funding in the 2008-09 Agency budget for this expense.
ATTACHMENTS:
1. Proposal by PKF Consulting.
2. Proposal by HVS Consulting & Valuation.
MOTION:
That the Redevelopment Agency:
1. Approve a Professional Services Agreement with PKF Consulting for a Market
Survey for a Full Service Hotel, for a total amount not to exceed $14,000 from
Account 55092620.619800 “Other Contractual Services”; and,
2. Authorize the Agency General Counsel to review/prepare the necessary
documents; and,
3. Authorize the Executive Director to execute such documents on behalf of the
Agency.
07/21/08
Consideration of Authorization to Enter into a Professional
Services Agreement for a Market Study of the Feasibility of a
Full Service Hotel as part of the Washington/National
Project.
MEETING DATE:
AGENDA ITEM:
ATTACHMENTS
Pages
1. Proposal by PKF Consulting 1-7
2. Proposal by HVS Consulting & Valuation 8-15Attachment 1
March 14, 2008
Ms. Elaine Gerety Warner
Senior Management Analyst
City of Culver City
Community Development
9770 Culver Boulevard
Culver City, California
Dear Ms. Gerety Warner:
PKF
aonsulting
865 South Figueroa Street
Suite 3500
Los Angeles CA 90017
Telephone (213) 650-0900
Teiefax (213) 623-5240
www.pktc.corn
Sent via email: elaine.gerety-warner culvercity. org
In accordance with your request we are pleased to submit this proposal for professional services in
connection with a study of potential market demand for a proposed hotel to be located in Culver
City, California. We understand that you are evaluating the development of a hotel and would like
us to assist you in determining the demand for and market feasibility of the proposed project.
To assist you in your planning process, we will be pleased to conduct a study to ascertain the
0 01/- I00111•11 000 ' .01=011100 0211000•100i 00600001 •ali* 0000 it g .#1n1 .01.0.4 uiti I t trarnhosselzunvii a.m% Soul I a Ih: indicated, our analysis will assist you and your associates in establishing a program for the
development of the property.
Pia CONSULTING
PKF Consulting (PKF/C) is an international firm of management consultants, industry
specialists, and appraisers who provide a full range of services to the hospitality, real estate, and
tourism industries.
Other related companies include the NU Capital, which provides real estate transaction and
capital markets services, and The PKF Hospitality Research Group, a hospitality-related
market research firm.
Headquartered in San Francisco, the firm has offices in New York, Philadelphia, Boston,
Atlanta, Houston, Dallas, Los Angeles, and Washington, DC. PKF Consulting is a member of the
Pannell Kerr Forster International Association, with 300 offices in 90 countries.
The firrn is staffed and equipped to provide the leisure and real estate industries with the
following key services: Asset Advisory Services, Transaction Advice and Due Diligence,
Appraisal and Valuation, International Hospitality Consulting, Public Sector leisure and Tourism
Consulting, and Litigation Support.
Senior professionals of the firm have been a part of the hospitality business for upwards of 25
years. They head teams of consultants who bring a broad range of experience - corporate finance,
Member, PKF Entemational, Ltd,Ms. Elaine Gerety Warner
City of Culver City
hotel operations, resort planning, international tourism - to meeting client needs. Real estate
professionals carry MAT (Member of the Appraisal Institute), CRE (Counselor of Real Estate)
and ISHC (International Society of Hospitality Consultants) designations.
METHODOLOGY
The study will be conducted in phases and the work program will be concerned with the
determination of current and potential future lodging demand in the market area, the assessment of
existing and potential future supply and the share of the market that could reasonably be attained by
the proposed project, and our facilities recommendations. Our work plan for the study will be as
follows.
ANALYSIS OF THE SITE LOCATION
This part of the study is designed to evaluate the site in terms of its opportunities and constraints for
development. Some of the factors to be examined include:
> Access
> Visibility
> Ambiance
> Present utilization
•
Topegritphy-
> Relationship to demand generators
> Relationship to area amenities
> Advantages/disadvantages of the site versus the major competitors
AREA REVIEW
We will gather and analyze relevant economic data regarding the market area to determine whether
the overall economic environment in the area appears to be suitable for hotel development We will
examine correlations between key economic factors and the demand for lodging and will utilize any
available forecasts of these indicators in our evaluation of potential future demand.
We will perform primary market research in the site area, consisting of interviews with key demand
generators, inspection and evaluation of competition and discussions with persons familiar with
development patterns and the local hotel market. Among those with whom we will conduct such
interviews are:
> Managers of tourist attractions
> Owners and managers of potentially competitive lodging facilities
> Government officials in zoning, development and transportation
> Major employers in the area
> Convention and Visitors Bureau representatives
On the basis of the foregoing research, we will prepare estimates of future growth in demand for,
and the supply of lodging facilities in the market area.Ms. Elaine Gerety Warner
City of Culver City
3
We will analyze historical economic growth in the area and the characteristics of each of the
principal segments of demand for hotels. Then, using the information gathered in our research, we
will estimate growth in demand for each market segment and project demand for each of the next
five years, expressed in terms of room nights.
FACILITIES RECOMMENDATIONS
As part of our analysis, we will review your plans for the proposed project and make preliminary
recommendations as to the proposed hotel's facilities, including:
• Number, type, and mix of guest rooms
• Restaurant and lounge facilities, if appropriate
• Banquet and meeting space requirements
? Other facilities and amenities
These recommendations are intended to provide you with the basis for a design program for the
proposed hotel.
MARKET SHARE ESTIMATES
The focus here will-be on estimated-demand for the subject hotel. Upon completion of the estimate
of market area supply and demand for the future, we will estimate the share of the market that the
proposed facilities should reasonably be expected to capture for the hotel's first five years of
operation.
Based upon an analysis of the sources of demand available to the subject property and its estimated
competitive position, we will estimate the average daily room rate that could potentially be achieved
in a representative year, in current value dollars, and over the first five years of operation of the
subject hotel.
Since the estimated operating results will be based on estimates and assumptions that are subject to
uncertainty and variation, we will not represent them as results that will actually be achieved.
REPORT
We will codify our conclusions into a draft of a report suitable for presentation to third parties in
connection with the negotiation of a joint venture, lease, franchise or management agreement or for
use in connection with primary mortgage financing. The draft report will be for the internal use only
of you and other members of the planning team and for discussion purposes with us. Once you have
reviewed the draft report, we will be pleased to review it with you, address any additional questions
or concerns necessary and then finalize our report.Ms. Elaine Gerety Warner
City of Culver City
4
LIMITATIONS OF THE STUDY
Our final report will be subject to the attached assumptions and limiting conditions.
PROFESSIONAL FEES
Our professional fees for the assignment, based on our current hourly billing rates and an
estimate of the hours required, will be $13,000. Any hours expended due to changes in the scope
of the assignment will be billed at our normal hourly billing rates, which are as follows:
Per Hour
Senior Vice President $300 - $450
Vice President 225 - 300
Associates 200 - 225
Consultants 110- 185
In addition to our fees, we will be reimbursed for any out of pocket expenses incurred in
performance of the assignment such as travel of our representatives while in the field, long distance
telephone, computer costs and photocopying. We estimate that our expenses will not exceed $1,000.
Af,--arany-time during the course o e s sy we orm an initial opinion that there is insufficient
demand for the proposed facilities, we will suspend the assignment at that point and discuss our
findings with you. If you desire that we terminate the assignment at this point, we will write you a
brief letter summarizing our findings and charge you only for that time actually incurred to date at
our regular per diem rates, plus expenses.
As is customary in assignments of this nature, we request a retainer of $7,000 at the start of the
assignment. The remainder of our fees and expenses will be billed and payable on a progress basis.
STUDY TIMETABLE
Based on our present scheduling, we could commence the assignment within one to two weeks of
receiving your authorization to proceed. We anticipate providing you with a draft of our full report
within three to four weeks of starting the assignment.
APPROVAL AND ACCEPTANCE
If the foregoing correctly states the nature of the work you wish undertaken at this time, and
arrangements are satisfactory, please sign a copy of this proposal and return it to us, together with
the requested retainer, as our authorization for the assignment. If, on the other hand, you have any
questions, please do not hesitate to call on us.Ms. Elaine Gerezy Warner
City of Culver City
5
We appreciate having the opportunity to submit this proposal and look forward to working with you
and your associates on this most interesting assignment.
Sincerely,
PKF Consulting
By Bruce Baltin
Senior Vice President
APPROVED AND ACCEPTED:
By
Title
DateSTATEMENT OF ASSUMPTIONS AND LIMITING CONDITIONS
This report is made with the following assumptions and limiting conditions:
Economic and Social Trends - The consultant assumes no responsibility for economic, physical or demographic
factors which may affect or alter the opinions in this report if said economic, physical or demographic factors were not
present as of the date of the letter of transmittal accompanying this report. The consultant is not obligated to predict
future political, economic or social trends.
Information Furnished by Others - In preparing this report, the consultant was required to rely on information
furnished by other individuals or found in previously existing records and/or documents. Unless otherwise indicated,
such information is presumed to be reliable. However, no warranty, either express or implied, is given by the consultant
for the accuracy of such information and the consultant assumes no responsibility for information relied upon later
found to have been inaccurate. The consultant reserves 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 data or more reliable data that may
become available.
Hidden Conditions - The consultant assumes no responsibility for hidden or unapparent conditions of the property,
subsoil, ground water or structures that render the subject property more or less valuable. No responsibility is assumed
for arranging for engineering, geologic or environmental studies that may be required to discover such hidden or
unapparent conditions.
Hazardous Materials - The consultant has not been provided any information regarding the presence of any material
or substance on or in any portion of the subject property or improvements thereon, which material or substance
possesses or may possess toxic, hazardous and/or other harmful and/or dangerous characteristics. Unless otherwise
stated in the report, the consuIt qnt diii nnt heccuue_awate_olthe_pr i
if •• . - I the
consultant's inspection of the subject property. However, the consultant is not qualified to investigate or test for the
presence of such materials or substances. The presence of such materials or substances may adversely affect the value
of the subject property. The value estimated in this report is predicated on the assumption that no such material or
substance is present on or in the subject property or in such proximity thereto that it would cause a loss in value. The
consultant assumes no responsibility for the presence of any such substance or material on or in the subject property,
nor for any expertise or engineering knowledge required to discover the presence of such substance or material. Unless
otherwise stated, this report assumes the subject property is in compliance with all federal, state and local
environmental laws, regulations and rules.
Zoning and Land Use - Unless otherwise stated, the projections were formulated assuming the hotel to be in full
compliance with all applicable zoning and land use regulations arid restrictions.
Licenses and Permits - Unless otherwise stated, the property is assumed to have all required licenses, permits,
certificates, consents or other legislative and/or administrative authority from any local, state or national government Or
private entity or organization have been or can be obtained or renewed for any use on which the value estimate
contained in this report is based.
Engineering Survey - No engineering survey has been made by the consultant. Except as specifically stated, data
relative to size and area of the subject property was taken from sources considered reliable and no encroachment of the
subject property is considered to exist.
Subsurface Rights - No opinion is expressed as to the value of subsurface oil, gas or mineral rights or whether the
property is subject to surface entry for the exploration or removal of such materials, except as is expressly stated.
Maps. Plats and Exhibits - Maps, plats and exhibits included in this report are for illustration only to serve as an aid in
visualizing matters discussed within the report. They should not be considered as surveys or relied upon for any other
purpose, nor should they be removed from, reproduced or used apart from the report.STATEMENT OF ASSUMPTIONS AND LIMITING CONDITIONS
(continued)
Legal Matters - No opinion is intended to be expressed for matters which require legal expertise or specialized
investigation or knowledge beyond that customarily employed by real estate consultants.
Right of Publication - Possession of this report, or a copy of it, does not carry with it the right of publication. Without
the written consent of the consultant, this report may not be used for any purpose by any person other than the party to
whom it is addressed. In any event, this report may be used only with proper written qualification and only in its
entirety for its stated purpose.
Testimony in Court - Testimony or attendance in court or at any other hearing is not required by reason of rendering
this appraisal, unless such arrangements are made a reasonable time in advance of said hearing. Further, unless
otherwise indicated, separate arrangements shall be made concerning compensation for the consultant's time to prepare
for and attend any such hearing.
Archeological Significance - No investigation has been made by the consultant and no information has been provided
to the consultant regarding potential archeological significance of the subject property or any portion thereof. This
report assumes no portion of the subject property has archeological significance.
Compliance with the American Disabilities Act - The Americans with Disabilities Act ("ADA") became effective
January 26, 1992. We assumed that the property will be in direct compliance with the various detailed requirements of
the ADA.
Definitions and Assumptions - The definitions and assumptions upon which our analyses, opinions and conclusions
are based are set forth in appropriate sections of this report and are to he part of these_Estneral assuroptions_as if
included here in their entirety.
Dissemination of Material - Neither all nor any part of the contents of this report shall be disseminated to the general
public through advertising or sales media, public relations media, news media or other public means of communication
without the prior written consent and approval of the consultant(s).
Distribution and Liability to Third Parties - The party for whom this report was prepared may distribute copies of
this appraisal report only in its entirety to such third parties as may be selected by the party for whom this report was
prepared; however, portions of this report shall not be given to third parties without our written consent. Liability to
third parties will not be accepted.
Use in Offering Materials - This report, including all cash flow forecasts, market surveys and related data,
conclusions, exhibits and supporting documentation, may not be reproduced or references made to the report or to PKF
Consulting in any sale offering, prospectus, public or private placement memorandum, proxy statement or other
document ("Offering Material") in connection with a merger, liquidation or other corporate transaction unless PKF
Consulting has approved in writing the text of any such reference or reproduction prior to the distribution and filing
thereof_
Limits to Liability - PKF Consulting cannot be held liable in any cause of action resulting in litigation for any dollar
amount which exceeds the total fees collected from this individual engagement.
Legal Expenses - Any legal expenses incurred in defending or representing ourselves concerning this assignment will
be the responsibility of the client.Attachment 2
Proposal for a Market Study,
Product Recommendation and
Financial Projections
Proposed Full Service Hotel
Culver City, California
Submittedio:—
Ms Elaine Gerety-Warner
Senior Management Analyst
City of Culver City
Community Development
9770 Culver Blvd.
Culver City, California 90232
+1 (310) 253-5777
+1 (310) 253-5779 FAX
elaine.gerety-wamer@culvercity.org
Prepared by:
HVS Consulting & Valuation
Division of M&R Valuation Services, Inc.
116 New Montgomery Street, Suite 620
San Francisco, California 94105
+1 (415) 896-0868
+1(415) 896-0516 FAX
smellen@hvs.com
March 17, 2008IVS
Proposal for a Market Study, Product Recommendation and
Financial Projections
Pursuant to our conversation, we are pleased to submit this proposal for
services of the HVS Consulting & Valuation division of M&R Valuation
Services, Inc. in connection with a Proposed Full Service Hotel in Culver City,
California. This proposal sets forth a description of the objectives and scope
of the assignment, along with the methodology to be employed, an estimate of
the time requirements, and a schedule of professional fees.
Objective The preliminary objective of this assignment is to evaluate market supply and
_d_emand_and provide a product_recommenclation_for_a_proposed_fulLservice
hotel on your site (Phase One). We will analyze the relevant economics and
prepare a projection of rooms revenues (Phase Two). A 10-year cash flow
projection will then be prepared (Phase Three). We may then, upon your
request, prepare a concise written report of our findings (Phase Four). Our
valuation will be performed in accordance with the standards stipulated by
the Uniform Standards of Professional Appraisal Practice (USPAP).
In order to accomplish the objectives described above, our work will be conducted
in four phases, which typically include the following steps:
Phase One:
1. An inspection of the site will be made to determine the suitability of the
Market Research and
land for the proposed development. The physical orientation of the subject
Product
site with respect to access to and visibility from highways, other forms of
Recommendation
transportation, and the local demand for accommodations will be analyzed.
We will also review the supportive nature of surrounding land uses as
they relate to the subject property.
2. Architectural plans or preliminary conceptual drawings for the proposed
improvements will be reviewed, if available.
3. The demand for transient accommodations will be investigated to identify
the various generators of visitation operating within the local market. The
current and anticipated potential of each of these market segments will be
evaluated to determine the extent of existing and future demand based
on interviews with officials of business and government as well as statistical
data collected during fieldwork. In conjunction with the identification of
potential demand, an investigation will be made of the strengths of the
1HVS Consulting & Valuation, San Francisco, California
Proposal 3
HVS
Phase Two:
Forecast of Occupancy
and Average Rate
respective market segments. Seasonality, weekly demand fluctuations,
vulnerability to economic trends and changes in travel patterns, and
other related factors will be analyzed.
4. Potentially competitive lodging facilities will be evaluated to determine
their market position with respect to the subject. Identified properties displaying
similar market attributes will receive a physical inspection along with
selective management interviews to estimate levels of occupancy, room rates,
market penetrations, and other pertinent operational characteristics. The
competitive factors that will be specifically reviewed include: location,
market orientation, quality of facilities and amenities, physical condition,
management expertise, operating performance and chain affiliation.
5. The potential for future hotel development will be assessed to determine
the prognosis of the Culver City and West LA. market over the short- and
long-term. Through interviews with hotel operators, developers, government
officials_and_others, w_e_wilLascertain whether_any_po_tentially competitive projects are under construction, proposed, or rumored.
6. Statistical data relating to general economic and demographic trends often
foreshadow future potential for market areas and neighborhoods.
Interviews with local chambers of commerce, economic development
agencies, demand generators and other related organizations, along with
an investigation of the subject's primary market area, will reveal patterns
reflecting growth, stability, or decline and the impact upon the demand
for lodging accommodations.
7. Based upon our field research and supply and demand analysis, we will
develop a recommendation regarding the optimum lodging product for
the proposed property Facilities and operating characteristics that will
lend to the project's feasibility will be delineated_
At the conclusion of Phase One we will organize and analyze all of the data
compiled during our field research and fill in any missing information.
Economic and demographic statistics, market supply and demand trends,
competitive data, pertinent observations and our product recommendation
will be set forth for discussion. Based upon our research we will provide you
with a verbal overview of our findings.
Upon finalization of the preliminary hotel programming, we will proceed
with Phase Two, as follows:
1. Based on the data and information gathered during the fieldwork phase,
along with our extensive library of actual hotel operating statements,HVS Consulting & Valuation, San Francisco, California
Proposal 4
Phase Three:
10-Year Forecast of
Income and Expense
financing statistics, area hotel trends, and investor requirements, we will
first perform a supply and demand analysis to determine historical and
projected overall market performance.
2. Our supply and demand analysis will then be expanded into a forecast of
the proposed subject's performance based upon potential market penetration
by demand segment and/or through a seasonality analysis resulting in a
forecast of occupancy up through a stabilized level of operation.
3. Average rate for the subject property will be forecast based upon segmented
rates, crosschecked with comparative competitive average rates, resulting
in a quantification of the subject's overall rooms revenue.
At the conclusion of Phase Two we will provide you with our data and
analysis in chart form for your review and discussion.
Upon your review of our Phase Two findings, and upon your authorization,
we will proceed with Phase Three a 10-year forecast of income and expense,
as follows:
1. Local data relating to departmental revenues, other than rooms, will be
researched. In most instances, we will utilize actual departmental revenue
results from comparable properties in our economic analysis of your
proposed hotel.
2. Local labor costs, sales, energy rates, and assessed values and taxes will be
researched and considered in the analysis. Using actual expense
statements from comparable lodging facilities, we will develop expense
estimates corresponding to the level of activity and quality of operations
indicated by the projected occupancy and average rate and other
departmental revenues.
3. A 10-year forecast of income and expenses (net income available for debt
service) representing future expectations of income potential will be made
through a series of build-up years, a stabilized year and beyond. Our
projected income statements conform with the Uniform System of
Accounts for Hotels and include a detailed line-by-line account of all
revenue and expense sources.
At the conclusion of our analysis we will set forth our forecast of income and
expense in chart form for your review and discussion.I-TVS Consulting & Valuation, San Francisco, California
Proposal 5
"VS
Upon your request we will prepare a concise 15- to 25-page market study and
financial projection report setting forth our ten year forecast of income and
expense. The report will set forth the data and analysis that forms the basis
for our product recommendation and forecast.
To aid us in performing this assignment, we request that you provide us with
the following information (where applicable):
1. Overall project description;
2. Architectural plans and or renderings;
3. Site plan;
4. The latest real property tax bills for the subject site;
5. Pertinent leases;
6. Contact person to arrange for site inspection.
We anticipate that Phase One: Mar Research anThod — uct Recommendation
can be completed within approximately 10 to 15 days of our receipt of the
executed agreement and all requested information. At this time we will verbally
summarize our findings and product recommendation. Phase Two: Forecast
of Occupancy and Average Rate will require an additional 5 to 10 days to
complete following your authorization to proceed. At the conclusion of Phase
Two, we will provide you with our forecast in chart form. Preparation of
Phase Three: Ten-Year Forecast of Income and Expense will take an additional
5 to 10 days to prepare following your authorization to proceed. After your
review of our findings and upon your authorization, we will then proceed
with Phase Four: Market Study Report, which will take an additional 5 to 10.
days to prepare.
Our fees for this assignment are as follows: Phase One - Market Research
and Product Recommendation: $6,500; Phase Two - Forecast of Occupancy
and Average Rate: $2,000; Phase Three - Ten-Year Forecast of Income and
Expense: $3,000; Phase Four - Market Study and Financial Projections Report:
$3,500. We request payment of our fees upon submission of our invoices at
the conclusion of each phase.
Please keep in mind that additional fieldwork and analysis may be required
to update our findings if a significant amount of time elapses between any of
the Phases. We retain the right to revise our timing and fee estimates if
additional fieldwork and analysis are required.
Phase Four:
Market Study and
Financial Projections
Report
Requested Information
Timing
Professional Fees
`2_I4VS Consulting Se Valuation, San Francisco, California Proposal 6
HVS
It is our normal policy to provide a draft copy of our final report for your
review. Upon your approval of this draft, we will commence printing the
final report, which will be delivered to you when our invoice for services has
been paid in full. This fee covers all report preparation costs, such as graphics,
photographs, typing, proofreading, printing and binding, and includes three
copies of the final report which will be delivered to you.
In addition to our professional fee, you agree to reimburse us for out-of-
pocket research, travel, and related expenses incurred on your behalf. You
will be billed for these expenses upon completion of our Phase One work.
If this assignment is terminated during the course of any phase of our work,
we are entitled to charge you for the time incurred on the assignment up to
that point at our hourly rates.
In the event that after completing the fieldwork phase (Phase One) of the
study it becomes necessary to alter the parameters of the study, such as the
property description, date of value, financial, management, or ownership
structure; or any other factor which could change the final estimate of value,
HVS will be entitled to charge an additional fee based upon our current per-diem
rates and the time required to incorporate the necessary changes into our
analysis and report. In addition, the estimate of timing will be extended by an
amount equal to the added work.
Additional fees will also be charged on an hourly basis for any work which
exceeds the scope of this proposal, including performing additional research,
analysis and/or alternate valuation scenarios; reviewing other appraisals
and/or other studies and documents related to the property; telephone calls
and/or meetings with any party which we believe goes beyond the time
generally expended during the course of an assignment of this nature; and
attending out-of-town meetings.
Hourly rates of professional staff are as follows Managing Director - $400;
Senior Vice President - $300; Director - $275; Vice President - $250; Assistant
Vice President - $225; Senior Associate - $200; Associate - $175; Consulting and
Valuation Analyst - $150; Editor - $100. Any meeting or presentation not
previously agreed to as being part of this assignment that requires the
Managing Director to travel out of the San Francisco Bay Area will be charged
at a minimum per-diem rate of $3,200. Hourly and per-diem rates will be
charged at the rate in effect at the time that they occur.
Notwithstanding the fee payment schedule set forth above, if at any time
while performing this assignment it becomes necessary to suspend work for a
period of thirty (30) days or more, then HVS will be entitled to bill for thefr-IVS Consulting & Valuation, San Francisco, California
Proposal 7
portion of the assignment completed up to the suspension (less any retainer
paid) at its current per-diem rates.
If payment for professional fees and out-of-pocket research, travel, and related
expenses is not received within thirty (30) days of the billing date, HVS
reserves the right to suspend all work until payment is made and apply a
service charge of .8 percent per month or fraction thereof to the total unpaid
sum. It is further agreed that in the event legal action becomes necessary to
enforce collection of bills rendered, you will be responsible for all collection
costs, including, but not limited to, court costs and reasonable legal fees. It is
understood that HVS may extend the time for payment on any part of
billings rendered without affecting the understanding outlined above.
It is agreed that the liability of HVS, its employees, and anyone else
assodated with this assignment is limited to the amount of the fee paid as
liquidated damages. You acknowledge that any opinions, recommendations,
and conclusions expressed during this assignment will be rendered by the
staff of M&R Valuation Services, Inc. acting solely as employees and not as
individuals. Any responsibility of HVS is limited to the client, and use of our
product by third parties shall be solely at the risk of the client and/or third
parties.
The study described in this proposal will be made subject to certain assumptions
and limiting conditions. A copy of our normal assumptions and limiting
conditions will be provided upon request. If in the sole opinion of HVS it
becomes necessary to add additional assumptions and limiting conditions in
order to properly characterize and represent our conclusions, these additional
assumptions and limiting conditions will become a part of our final report.
If the foregoing proposal meets with your acceptance, please sign and return
one copy of this agreement. Your signature beneath the words "AGREED TO
AND ACCEPTED," signifies your agreement to employ HVS for these services.
In order to schedule our assignments and perform your study in accordance
with the timing set forth above, we ask that we receive an executed copy of
this agreement, together with your retainer check, on or before June 30, 2008.
You acknowledge that you are retaining the HVS Consulting St Valuation
division of M&R Valuation Services, Inc., to provide the services described in
this proposal. M&R Valuation Services, Inc. is licensed to use the service mark
HVS.
I LiIIIVS Consulting & Valuation, San Francisco, California
Proposal 8
HVS
We appreciate the opportunity of submitting this proposal and look forward
to working with you on this assignment.
Very truly yours,
HVS Consulting & Valuation
A Division of MckR Valuation Services, Inc.
Suzanne R. Mellen, CRE, MAT, FRICS
Managing Director
AGREED TO AND ACCEPTED:
City of Culver City
By: Elaine Gerety-Warner
Date:
SRM/smj