Special Meeting Agenda Oversight Board to The

SPECIAL MEETING AGENDA

OVERSIGHT BOARD TO THE SUCCESSOR AGENCY TO THE DISSOLVED EL MONTE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF EL MONTE

City of El Monte City Council Chambers City Hall East 11333 Valley Boulevard El Monte, California 91731

Thursday, June 23, 2016 5:00 P.M.

CALL TO ORDER

FLAG SALUTE

ROLL CALL Members of the Oversight Board Andre Quintero, City of El Monte, Chair Carrie Sutkin, County of Los Angeles Velma Perdomo, County of Los Angeles Kris Olaffson, El Monte City School District Javier Hernandez, County of Los Angeles Michelle Solorzano, City of El Monte Norma Garcia, Community College District’s Member

CITY STAFF Jesus M. Gomez, City Manager Alex Hamilton, Assistant City Manager Minh Thai, Economic Development Director David F. Gondek, Assistant City Attorney

APPROVAL OF AGENDA

ORAL COMMUNICATION

050.026.00 June 23,2016 Page 2

PUBLIC COMMENT:

As provided under Government Code Section 54954.3, this time has been set aside for persons in the audience to provide comment or make inquiries on matters appearing on this Special Meeting agenda only. Although no person is required to provide their name and address as a condition to attending a meeting, persons who wish to address the body are asked to state their name and address. Each speaker will be limited to three (3) continuous minutes. Speakers may not lend any portion of their speaking time to other persons or borrow additional time from other persons. All comments or queries presented by a speaker shall be addressed to the body as a whole and not to any specific member thereof. No questions shall be posed to any member of the body except through the presiding official of the meeting, members of the body are under no obligation to respond to questions posed by speakers but may provide brief clarifying responses to any comment made or questions posed.

Except as otherwise provided under the Brown Act (Gov. Code Section 54950 et seq.), the Board may not deliberate or take action upon any matter not listed on this posted agenda but may order that any such matter be placed on the agenda for a subsequent meeting. The Board may also direct staff to investigate certain matters for consideration at a future meeting.

All comments or queries presented by a speaker shall be addressed to the Board as a body and not to any specific member thereof. No questions shall be posed to any member of the Board except through the presiding official of the meeting, the Chair and/or Vice-Chair. Members of the Board are under no obligation to respond to questions posed by speakers but may provide brief clarifying responses to any comment made or questions posed. The Board may not engage in any sort of prolonged discussion or deliberation with any speaker or group of speakers on matters that are not listed on this agenda.

Enforcement of Decorum: The Chief of Police, or such member, or members of the Police Department as the Chief of Police may designate, shall serve as the Sergeant-at- Arms of any Oversight Board meeting. The Sergeant-at-Arms shall carry out all orders and instructions given by the presiding official for the purpose of maintaining order and decorum at the meeting. While members of the public are free to level criticism of Board policies and the action(s) or proposed action(s) of the Board or its members, members of the public may not engage in behavior that is disruptive to the orderly conduct of the proceedings, including, but not limited to, conduct that prevents other members of the public from being heard when it is their opportunity to speak or which prevents members of the audience from hearing or seeing the proceedings. Members of the public may not threaten any person with physical harm or act in a manner that may reasonably be interpreted as an imminent threat of physical harm. All persons attending the meeting must adhere to the Board’s policy barring harassment based upon a person’s race, religious creed, color, national origin, ancestry, physical handicap, medical condition, marital status, gender, sexual orientation or age.

June 23,2016 Page 3

APPROVAL OF MINUTES

1. Regular Meeting of April 7, 2016

NEW BUSINESS

1. Report by Successor Agency staff regarding the Meet and Confer conference with State Department of Finance on April 28, 2016.

(Requested Action: Oral Report from Successor Agency staff)

2. Receive and file a presentation and oral report regarding the Appraisal Ad Hoc Committee’s recommendation and confirm the recommendation by the Ad Hoc Committee regarding the appraisal and authorize Successor Agency staff to initiate negotiation for the sale of Property 49 (“Parking Lot Adjacent to Church” – APN 8568-034-930) to the Archdioses of Los Angeles to provide parking for the Our Lady of Guadalupe Church.

(Requested Action: Receive and file a presentation and oral report from Successor Agency staff)

3. Receive and file a presentation and oral report regarding a License Agreement between the City of El Monte as Successor Agency to the Former El Monte Community Redevelopment Agency and Santa Fe Trail Holdings, LLC permitting the Developer Access to for Area Y of the Santa Fe Trail Plaza Project for due diligence investigation, building demolition, and related staging

(Requested Action: Receive and file a presentation and oral report from Successor Agency staff)

4. Potential Refinancing of Bonded Indebtedness

(Requested Action: Sucessor Agency staff will present a description of a proposed refinancing of certain outstanding bonded indebtedness of the Former Redevelopment Agency. The purpose of the refinancing will be to provide for long term debt service obligation of the Successor Agency at the lowest feasible rate of interest)

5. Comments from Oversight Board Members. June 23,2016 Page 4

ADJOURNMENT

The next regular Oversight Board meeting will take place on Thursday, July 7, 2016, at El Monte City Hall – East, City Council Chambers, 11333 Valley Boulevard, El Monte, California.

This Agenda will be posted on the City’s website, www.ci.el-monte.ca.us, and physically posted as of not less than 24 hours prior to the start of the subject meeting. Although it is the City’s practice and desire to electronically post a copy of this Agenda along with supporting material as part of its website posting, the size or formatting of certain supporting materials may render their website posting infeasible. Nevertheless, all supporting materials related to any item on this Agenda, that is made available to the members of the Board may be inspected by members of the public at the Secretary’s Office located at 11333 Valley Boulevard, El Monte, Monday through Thursday, 7:30 am – 5:30 pm. For more information, please call the Secretary’s Office at (626) 580-2016.

All public meetings and events sponsored or conducted by the City of El Monte are held in sites accessible to persons with disabilities. Requests for accommodations may be made by calling the office of the Secretary at (626) 580-2016 at least three (3) working days prior to the event, if possible. This Agenda and copies of documents distributed at the meeting are available in alternative formats upon request.

Posted To: City of El Monte Website on June 22, 2016 MINUTES FOR APPROVAL

REGULAR MEETING AGENDA OVERSIGHT BOARD TO THE SUCCESSOR AGENCY TO THE DISSOLVED EL MONTE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF EL MONTE

City of El Monte City Council Chambers City Hall East 11333 Valley Boulevard El Monte, California 91731

Thursday, April 7, 2016 5:00 P.M.

CALL TO ORDER: 5:58 p.m.

FLAG SALUTE: Chairman Quintero

ROLL CALL Members of the Oversight Board Andre Quintero, City of El Monte, Chair - present Carrie Sutkin, County of Los Angeles - absent Velma Perdomo, County of Los Angeles - present Kris Olaffson, El Monte City School District - absent Javier Hernandez, County of Los Angeles - absent Michelle Solorzano, City of El Monte - present Norma Garcia, Community College District’s Member - present

CITY STAFF Jesus M. Gomez, City Manager Alex Hamilton, Assistant City Manager Minh Thai, Economic Development Director David F. Gondek, Assistant City Attorney

APPROVAL OF AGENDA m) Chairman Quintero s) Board Member Solorzano 4-0

ORAL COMMUNICATION: None

PUBLIC COMMENT: None

APPROVAL OF MINUTES

1. Special Meeting of January 28, 2016

m) Chairman Quintero s) Board Member Solorzano 4-0

NEW BUSINESS

1. Consideration and Approval of a Resolution by the Oversight Board for Consulting and Support Services related to the Dissolution of the Former El Monte Community Redevelopment Agency

(Requested Action: Approve the proposed Professional Services Agreement with Rosenow Spevacek Group, Inc. (RSG))

• RESOLUTION OF THE OVERSIGHT BOARD TO THE SUCCESSOR AGENCY FOR THE FORMER EL MONTE COMMUNITY REDEVELOPMENT AGENCY APPROVING AN AGREEMENT BETWEEN ROSENOW SPAVECEK GROUP, INC. AND THE CITY OF EL MONTE AS SUCCESSOR AGENCY TO THE EL MONTE COMMUNITY REDEVELOPMENT AGENCY, WITH THE OVERSIGHT BOARD AS A THIRD PARTY BENEFICIARY) FOR REDEVELOPMENT DISSOLUTION CONSULTING SERVICES (Resolution OB-59)

m) Chairman Quintero s) Board Member Garcia 4-0

2. Report by Successor Agency staff on the progress pertaining to the potential disposition of Parcel 49 of PMP Part B.

m) Chairman Quintero s) Board Member Garcia 4-0

3. Comments from Oversight Board Members: None

ADJOURNMENT: 6:01 p.m.

APPROVED:

______Andre Quintero, Chairman Oversight Board to the Successor Agency to the Dissolved El Monte Community Redevelopment Agency City of El Monte

A P P R A I S A L R E P O R T

Valuation of a Commercial Zoned Remnant Parcel NEC of Orchard Street & Iris Lane El Monte, California

April 7, 2016 Our File No. 16-03

City of El Monte City Hall West 11333 Valley Boulevard El Monte, California 91731-3293

Attn: Mr. Minh Thai Economic Development Director

Re: Appraisal of a 5,330 Sq.Ft. Commercial Zoned Remnant Parcel NEC of Orchard Street & Iris Lane El Monte, California

Ladies & Gentlemen:

Pursuant to your request and authorization, we have conducted the investigations and analyses necessary to form an opinion of the current fair market value of the fee simple interest in the 5,330 sq.ft. commercial zoned parcel of land located at the northeast corner of Orchard Street and Iris Lane, El Monte, California 91731.

Based on our experience as real estate analysts and appraisers, we have formed the opinion that the fair market value of the fee simple estate in the subject property, as of April 4, 2016, and subject to the Assumptions and Limiting Conditions set forth in the report which follows, is as follows:

FIFTY-NINE THOUSAND DOLLARS $59,000

The appraisal report, which follows, sets forth the data and analyses upon which our opinion of fair market value is, in part, predicated. Respectfully submitted,

Peter B. Finnerty, MAI Certified General Real Estate Appraiser California Certificate No. AG001937

1300 Bristol Street North, Suite 210, Newport Beach, California 92660 (949) 752-9323 • FAX (949) 752-4920 • E-Mail [email protected] EXECUTIVE SUMMARY

Property Type and Location: Vacant Land NEC of Orchard Street and Iris Lane El Monte, California

Date of Value: April 4, 2016

Property Rights: Fee Simple Estate

Site Data Size: 5,330 Sq.Ft. or 0.12 of an Acre

Shape: Triangular

Zoning: C1- Limited Commercial General Plan Land Use Designation - Neighborhood Commercial Improvement Data Type: N/A Year Built: N/A Building Area: N/A

Status: Parking lot used by the adjacent Our Lady of Guadalupe Church

Highest and Best Use

“As If Vacant”: Joinder with the adjacent property to the east and continued use as a part of the Church operation. Otherwise, future retail/commercial development when demand results in an economically feasible project.

Sales Comparison Approach: $59,000 Fair Market Value Opinion: $59,000 AERIAL VIEW OF THE SUBJECT PROPERTY

T A B L E O F C O N T E N T S

INTRODUCTION ...... 1

SITE DESCRIPTION ...... 7

THE IMPROVEMENTS...... 15

ASSESSED VALUATION AND TAXES ...... 16

MARKET ANALYSIS ...... 17

HIGHEST AND BEST USE ...... 23

VALUATION METHODOLOGY ...... 25

SALES COMPARISON APPROACH ...... 26

VALUATION ...... 34

CERTIFICATION...... 35

ADDENDA:

Building Area Envelope Exhibit Sale Data Photographs Qualifications Partial List of Clients

INTRODUCTION

Purpose of the Appraisal and Property Identification

The purpose of this appraisal is to provide an opinion of the market value of the fee simple interest in the 5,330 sq.ft. commercial zoned parcel of land located at the northeast corner of Orchard Street and Iris Lane, El Monte, California 91731.

The opinions set forth in this report are subject to the Assumptions and Limiting Conditions presented beginning on page 3.

Appraisal Reporting Option

In compliance with Standards Rule 2-2 of the Uniform Standards of Professional Appraisal Practice this appraisal report has been prepared under the written Appraisal Report option.

Scope of the Appraisal Process

The scope of the appraisal process involved applying the applicable recognized methods and techniques that are necessary in order to produce a credible appraisal. The procedures used for this appraisal assignment are summarized as follow:

1. Personal inspections of the subject property and the neighborhood were completed.

2. Analyses of the characteristics and development trends for the competing markets and the neighborhood were conducted.

3. An analysis of the highest and best use of the subject property was made, giving consideration to the existing zoning, as well as current and prospective uses for the property.

4. Research and analysis were conducted to collect and verify market data related to the subject property and comparable properties.

5. The appraisal was performed by developing a valuation opinion from the applicable valuation approach.

6. A report was prepared to provide an identification and description of the subject property, to summarize the market data considered, and to summarize the analysis and conclusions leading to the opinion of value.

This appraisal and report have been prepared in conformance with the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation as well as the Code of Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute and the requirements of the City of El Monte, in effect as of the date of the report.

Date of Valuation

The opinions expressed in this appraisal and report are as of April 4, 2016.

The effective date of the report is the same date as set forth on the transmittal letter.

Interest Appraised

The property rights appraised are the fee simple estate.

Fair Market Value Defined

The term "fair market value” is defined, by the instructions provided to the appraiser by the client, as follows:

The fair market value is the amount in cash, or on terms reasonably equivalent to cash, for which in all probability the property valued would have sold on the effective date of the appraisal, after a reasonable exposure time on the open competitive market, from a willing and reasonable knowledgeable seller to a willing and reasonably knowledgeable buyer, with neither acting under any compulsion to buy or sell, giving due consideration to the legally permitted uses, at the time of the appraisal.

This appraisal is predicated on an all cash to the seller transaction at a price equal to the value conclusion reached in this appraisal along with a reasonable exposure time in the open market ranging from 3 months to 8 months prior to the date of value.

Fee Simple Estate Defined

The term "fee simple estate"1 is defined as follows:

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.

Highest and Best Use Defined

"Highest and Best Use"2 is an appraisal concept which has been defined as follows:

1 Ibid, p. 78.

2 Ibid, pg. 93

The reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported, financially feasible, and that results in the highest value.

The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum productivity.

Alternatively, that probable use of land or improved property - specific with respect to the user and timing of the use - that is adequately supported and results in the highest present value.

Intended Use of the Appraisal and the Intended Users

This appraisal is intended for use by the intended user(s), of whom we have knowledge, for their specific need.

The intended users are the City of El Monte, the El Monte Successor Agency to the former El Monte Redevelopment Agency, the Los Angeles Roman Catholic Archdiocese, and the California State Department of Finance.

The intended use of this appraisal is aid in negotiations of a sale of the property from the El Monte Successor Agency to the former El Monte Redevelopment Agency to the Los Angeles Roman Catholic Archdiocese.

Use of this appraisal by anyone else for any other purpose is not intended.

Assumptions and Limiting Conditions

The analyses and opinions set forth in this appraisal are subject to the following assumptions and limiting conditions. Note that the assumptions and limiting conditions could potentially have an impact on the value opinion reached in this appraisal.

No responsibility is assumed by us for matters which are legal in nature. No opinion of title is rendered, and the subject property is appraised as though free of all encumbrances and the title is assumed to be marketable.

No survey of the boundaries of the property was undertaken by us. All areas and dimensions furnished to us are presumed to be correct.

Information contained in this appraisal has been gathered from sources which are believed to be reliable, and, where feasible, has been verified. No responsibility is assumed for the accuracy of information supplied by others.

Our research indicted that a maintenance agreement between the El Monte Successor Agency to the former El Monte Redevelopment Agency and the Los Angeles Roman Catholic Archdiocese exists. We were unable to review that agreement and assume for purposes of this appraisal that the agreement does not have any impact on the value of the land.

It is assumed that if the subject property were to be sold to a buyer that is not the adjacent church owner, the gates restricting access to the subject site along Iris Lane would be moved to a location consistent with the ownership boundary between the subject site and the church property along Iris Lane.

No title insurance policy was uncovered during our investigations. According to our on-site inspection of the property, there are no apparent easements which would be detrimental to the value of the property.

This appraisal is predicated on the assumption that the existence of hazardous materials, which may or may not be present on the property, was not observed by the appraisers, unless otherwise stated in the appraisal. The appraisers have no knowledge of the existence of such materials on or in the property. The appraisers, however, are not qualified to detect such substances. The presence of substances such as asbestos or lead-based paint, or other potentially hazardous materials may affect the value of the property. The value opinion is predicated on the assumption that no such material exists on or in the property that would cause a loss in value. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required to discover them.

No soils or geotechnical reports were uncovered in our investigations. It is assumed that soil conditions are fairly stable and that the underlying geological formations are adequate to support the existing or any proposed highest and best use improvements. No representations, however, are made concerning these matters.

It is assumed that the subject property is in compliance with the Americans with Disabilities Act (ADA) in reaching the valuation conclusions set forth in this appraisal. The regulations affecting the property are recorded under Title III of the ADA in 28 CFR, Part 36. The appraisers are not experts regarding the subject's compliance with this act.

We assume no responsibility for economic or physical factors which may affect the opinions herein stated which may occur at some date after the date of value.

Your appraiser has inspected, as far as possible, by observation, the land; however, it was impossible to personally inspect areas beneath the surface of the land; therefore, no representation is made as to these matters unless specifically considered in the appraisal.

The subject property is appraised assuming that it is under responsible ownership and competent management.

No opinion is expressed as to the value of sub-surface 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.

No opinion is intended to be expressed on matters which require legal expertise or specialized investigation or knowledge beyond that customarily employed by real estate consultants and appraisers.

Maps, plats, and exhibits included herein are for illustration only, as an aid in visualizing matters discussed within the report. They should not be considered as surveys nor relied upon for any other purpose, nor should they be removed from, reproduced, or used apart from this report.

We shall not be required, by reason of this appraisal, to give testimony or to be in attendance in court or any governmental or other hearing with reference to the subject property without prior arrangements having first been made with us relative to such additional employment.

No engineering survey has been made by us. Except as specifically stated, data relative to size and area were taken from sources considered reliable. No encroachment of real property improvements is considered to exist, except where specifically set forth.

The forecasts of future events which influence the valuation process are predicated on the continuation of historic and current trends in the market as perceived as of the date of value. The actual outcomes may differ due to changes in the environment between the date of value and the future date involved in the forecast.

The signatory of this appraisal is a member of the Appraisal Institute. The Bylaws and Regulations of the Appraisal Institute require each member to control the use and distribution of each report signed by such member. Therefore, except as hereinafter provided, the party for whom this appraisal report was prepared may distribute copies of it, in its entirety, to such third parties as may be selected by the party for whom this report was prepared; however, selected portions of this report shall not be given to third parties without the prior written consent of the signatory of this report. Further, neither all nor part of this report shall be disseminated to the general public by the use of advertising media, public relations media, news media, sales media or other media for public communication without the prior written consent of the signatory of this report.

Legal Description

The legal description is set forth as follows:

Portions of Lots 31 and 32 of Tract No. 51734, in the City of El Monte as recorded in Map Book 1212, Pages 75 through 78, records of Los Angeles County, California.

Ownership

The vesting of the fee simple estate in the subject property, as of the date of valuation, is as follows:

El Monte Successor Agency to the former El Monte Redevelopment Agency

Property Transfer History

There have been no transfers of the fee simple estate in the subject property within the 3 year period prior to the date of value based on our research.

As of the date of value, the property was not being marketed or in escrow but was in negotiations to be purchased by the Los Angeles Roman Catholic Archdiocese.

SITE DESCRIPTION

Location

The subject property is located along the northeastern corner of Orchard Street and Iris Lane, El Monte, California.

According to the data in the Los Angeles County Assessor’s records, the census tract is 4327.00.

A copy of the Plat Map for the subject property is included for reference on the following page. Street scene and subject property photographs are included beginning on page 12.

Size and Shape

The subject site is a triangular shaped parcel that covers 5,330 sq.ft., or approx. 0.12 of an acre. The site area calculations are based on the measurements set forth on the Los Angeles County Assessor’s Map.

The subject site has approximately 122' of frontage along the eastern side of Orchard Street and 87' of frontage along the north side of Iris Lane.

Topography and Drainage

The topography of the subject site is fairly level at street grade.

On-site drainage is via gravity flow toward the adjacent streets and then into the local flood control system.

Soils and Geology

No soils or geotechnical report were uncovered in our investigations. It is assumed that soil conditions are fairly stable and that the underlying geological formations are adequate to support the existing and any proposed highest and best use improvements. No representations, however, are made concerning these matters.

Utilities

Based on our on-site inspection of the property, it appears that all utility services are available. Suppliers of utility services in the local area are as follow:

Water ...... City of El Monte Sewer ...... City of El Monte Electricity ...... Southern California Edison Company Natural Gas ...... Southern California Gas Company

PLAT MAP

Easements, Covenants, Conditions, and Restrictions

No title insurance policy on the subject property was uncovered during our investigations. According to our on-site inspection of the property, there are no apparent easements which would be detrimental to the value of the property.

Nuisances and Hazards

Based on a physical inspection of the subject site and the surrounding area, the subject site does not appear to be impacted with hazards or nuisances.

The site is located in Flood Zone X, which is an area outside of the 100 year flood plain with no flood insurance required. The map is dated September 26, 2008 and the Community Panel Number is 06037C 1675F.

In addition, the site is not located in a designated seismic or geologic special study area according to the Alquist- Priolo Special Studies Zone Act Map.

There is no visual or physical evidence that would indicate surface contamination due to spillage or disposal of hazardous chemicals at the site. However, no representations are made as to these matters.

Zoning and Planning

The zoning of the subject property is C1, Limited Commercial. The general plan land use designation is Neighborhood Commercial.

Allowed uses according to the C1 zoning include general and medical offices, medical laboratory, automobile parking, bakery shops, banks, barber shops, beauty shops, confectionery stores, dressmaking, drug stores, appliance stores, florists, grocery stores, restaurants, shoe stores, clothing stores, tailor shops, and massage establishments.

According to the C1, Limited Commercial, zoning, the site development standards are set forth in the table which follows.

City of El Monte Development Standards

C1 Limited Commercial Minimum Lot Area None Minimum Lot Width None Maximum Bldg. Height 40' Maximum Lot Coverage None Maximum Density None Setbacks - Front Yard 5' - Side Yard 5' - Rear Yard 20' Parking Requirements 1 space for every 250 sq.ft. of gross floor area for retail and office uses

The subject property is currently being used as secured overflow parking for Our Lady of Guadalupe Church. Church uses are only allowed in a C1 zoning with a Conditional Use Permit (CUP). Our investigation with the City of El Monte Planning Department indicated that the adjacent church has a CUP allowing the existing use.

After deducting the setback areas from the gross site area (5,330 sq.ft.), the buildable envelope of the site is a triangular shaped parcel covering approximately 2,125 sq.ft., or 40% of the site area. This is more restrictive than typical because of the triangular shaped lot.

Based on an analysis of the buildable envelope as well as the remainder area to provide necessary parking, it appears that a 2-story rectangular shaped retail or office building containing approximately 2,000 sq.ft. could be constructed on the site and still provide the necessary parking of 8 spaces. An exhibit used to support the building envelope calculations is included in the Addenda to this report for reference.

Streets & Access

The subject property has existing access from 1 driveway located along the north line of Iris Lane. Iris Lane is a 38' wide asphalt paved street with 1 lane of traffic in each direction. Iris Lane is improved with concrete curbs and gutters plus a concrete drainage swale running down the center.

Although Iris Lane is indicated to be a public street on the Los Angeles County Assessor’s map, there are metal railing gates at Orchard Street and Montecito Drive that allow the adjacent Our Lady of Guadalupe Church to control access to this street.

The subject property has frontage along the east line of Orchard Street. Orchard Street is a 60' wide asphalt paved street with 1 lane of traffic in each direction. Orchard Street is improved with concrete curbs and gutters, sidewalks, fire hydrants, and street lights.

The subject property is easily accessible from the San Bernardino Freeway (Interstate 10). The San Bernardino Freeway is located 0.4 of a mile to the south. This freeway is accessed via Orchard Street to the south to Ramona Boulevard, then west on Ramona Boulevard to Peck Road, then south on Peck Road to the access ramps.

The nearest commuter rail line is located approximately 0.6 of a mile to the west along Tyler Avenue to the north of Valley Boulevard, El Monte.

Iris Lane and Orchard Street are local collector streets. No traffic count data was available for either of these streets.

Summary and Analysis

The subject property is a commercial zoned parcel that is fairly level in topography and all utilities are available. Access to the site is good with freeway accessibility within 0.4 of a mile and a commuter rail line within 0.6 of a mile. The zoning designation and the general plan land use allow a variety of commercial and office uses.

The triangular shape of the site, the setback requirements, and the small size inhibit the utility of the parcel compared to other commercial parcels in the City of El Monte.

Iris Avenue and Orchard Street are local collector streets with fairly low average daily traffic counts.

STREET SCENES

View of Orchard Street looking in a northerly direction

View of Orchard Street looking in a southerly direction

View of Iris Lane looking in an easterly direction

View of Iris Lane looking in a westerly direction.

SUBJECT PROPERTY PHOTOGRAPHS

View of the subject site looking in a southerly direction from the northern corner

View of the subject site looking in a northerly direction from Iris Lane at the SEC of the site

THE IMPROVEMENTS

The description of the existing improvements on the site is based on our on-site inspection. The improvements include an asphalt paved and striped parking area covering approximately 4,270 sq.ft. with approximately 14 parking spaces including 9 concrete parking stops. There is a 7' high iron railing fence that surrounds the parking area including two 12' sections that are rolling gates.

Accrued Depreciation

The subject improvements are in average condition. The parking area and fencing improvements were constructed in 2010. The actual age of the improvements is approximately 6 years old.

Due to average maintenance and replacements of worn-out short-lived items over time, the effective age is estimated to be equal to the chronological age, or approximately 6 years old. The typical life expectancy for the parking area and fencing improvements on the subject property is approximately 15 years according to the Marshall Valuation guidelines.

Accrued depreciation that is observed is attributable to physical deterioration. There does not appear to be any functional obsolescence. There also appears to be external obsolescence impacting the improvements from not reflecting the highest and best use of the site and not contributing to the value of the land for development to its highest and best use.

Therefore, the total accrued depreciation is indicated to be 40% of the replacement cost new of the improvements and the remaining economic life is estimated to be approximately 9 years, based on land value trends.

ASSESSED VALUATION AND TAXES

Real property taxes in California are limited to 1% of the market value of the property, as of a specified base year. The base year valuation is the 1975 Assessor's market value estimate, or market value indicated by a sale, or market value based upon reappraisal of the property which is triggered by new construction or leasing of the property on a long-term basis.

In addition to the taxes at 1% of the base year market value, there is an additional tax to amortize any previous voter-approved bonded indebtedness. The 2015-16 tax rate for the subject property, as of the date of value, was 1.418591%.

To provide for inflation, if there is no sale, lease, or new construction, there is a maximum 2% per year increase allowed in the assessed values assigned to the land and improvements.

Since the subject property is owned by a public agency, the El Monte Successor Agency to the former El Monte Redevelopment Agency, there are no assessments, real property taxes, or direct assessment taxes associated with the subject parcel.

MARKET ANALYSIS

The subject property is located to the east of the downtown area of the City of El Monte. This area is also located in the southeastern section of the County of Los Angeles, California. A location map is included on the following page for reference.

The value of real estate is influenced by four basic forces. These environmental forces are categorized as physical, social, economic, and political.

Physical Environment

The physical environment affecting the subject property is composed of both natural and man-made resources. The region's physical environment can be described as providing the necessary elements to support a variety of residential, recreational, industrial, and commercial real estate developments.

The natural environment surrounding the subject property consists of positive aspects such as the temperate Southern California weather. The man-made environment includes a combination of various community facilities, an adequate public service infrastructure, adequate schools, and an overcrowded transportation network at peak travel times. There is also adequate police and fire protection, in addition to parks and community services.

Social Environment

The social environment within a 3 mile radius of the subject property can be described as a population that has a 2015 median household income that is 2.3% lower than the median income for the County of Los Angeles and 32% higher than the median household income for the City of El Monte. The population growth rate is forecast to be approximately 0.4% per year on a compound annual basis between 2015 and 2020, which is similar to slightly higher than the forecast for the City of El Monte and lower than for the County of Los Angeles.

The median age of the local population is 34 years old, which is slightly higher than the median age for the City of El Monte and slightly lower than the median age for the County of Los Angeles. The average household size is approximately 3.89 people, which is higher than for the County of Los Angeles. The percentage of the local population (age 25+) with a 4 year college degree is 13%, compared to 20% for the County of Los Angeles. The housing stock in the local area is approx. 61% owner-occupied housing, 34% renter occupied, and 5% vacant. Consequently, the area's population and social environment create good demand capacity for the products produced by the region's various industries.

Economic Environment

The economic environment influencing the subject property is strongly related to the activity within the county and regional economic environment. The economic environment impacting the subject property is in a sluggish growth stage.

LOCATION MAP

The stagnation in the economy appears to be related to weak wage growth, the difficulty of obtaining credit, increasing, but still low interest rates, as well as a large Federal budget deficit. The unemployment rate has declined to pre-recession levels. The forecast is for a continued slow expansion of the economy during 2016.

Political Environment

The political environment impacting the subject property is created by numerous governmental influences, including the State of California, the County of Los Angeles, and the City of El Monte. All planning and developmental guidelines for the subject land parcel are the responsibility of the City of El Monte Zoning Department and Building Department. The General Plan of the City of El Monte controls land uses and is aimed at balancing the growth. Regulations created by these governmental bodies affect the ownership, transfer, and development of real property.

The regulations imposed by all levels of government have attempted to promote orderly growth, provide a mix of land uses, and create a desirable environment in which to work and live. The efforts in government regulations have focused on proper planning as well as environmental consequences of development.

The County of Los Angeles is the local taxing authority. The County collects taxes and distributes the funds to amortize such long term debts as school bonds, utility bonds, and direct assessment taxes.

Surrounding Land Uses

The subject property is located just to the east of the downtown area of the City of El Monte. The downtown area is located between Santa Anita Avenue and Ramona Boulevard along Valley Mall to the west of the subject property.

To the north of the subject property, are a single-family residence, Coffield Avenue, a duplex, a single-family residence, Pine Avenue, an industrial use, plus single-family and multi-family residences in the background.

To the north and west are single-family residences and multi-family residences. To the west are single-family residences.

To the south are single-family residences, a parking lot portion of Our Lady of Guadalupe Church, Ramona Blvd. Along Ramona Boulevard are a variety of commercial and retail uses, a Labor Union Hall, plus restaurants. There is also a closed former bank branch located on the south side of Ramona Boulevard. To the south of Ramona Boulevard are primarily multi-family land uses.

To the east is the Our Lady of Guadalupe Church.

The subject property is easily accessible from the San Bernardino Freeway (Interstate 10). The San Bernardino Freeway is located 0.4 of a mile to the south. This freeway is accessed via Orchard Street to the south to Ramona Boulevard, then east on Ramona Boulevard to Peck Road, then south on Peck Road to the access ramps.

The nearest commuter rail line is located approximately 0.6 of a mile to the west along Tyler Avenue to the north of Valley Boulevard, El Monte.

Retail Market Overview

The Los Angeles County Retail Market is currently in an expansion phase. The vacancy level as of the end of the 2nd quarter 2015 was 4.7%, which is down from the 5.0% vacancy rate reported as of the end of the 2nd quarter 2014, according to the Marcus & Millichap Retail Research Report, 3rd quarter 2015.

During the period from the middle of 2014 to the middle of 2015, 800,000 sq.ft. of new retail space was completed in Los Angeles County and the net absorption level was indicated to be a positive 1.6 million sq.ft. The average asking rental rate, as of the 3rd quarter 2015, was indicated to be $2.88 per sq.ft. on a net rental basis. This reflects a 9.3% increase over the average asking rental rate as of the 3rd quarter 2014.

There are approximately 1.4 million sq.ft. of new retail space under construction in Los Angeles County as of the 3rd quarter 2015.

Taxable retail sales in the San Gabriel Valley have been increasing since 2009 at a rate ranging from 2% to 6% per year. The peak year in the prior retail cycle was in 2007, according to data from the California State Board of Equalization. It is forecast that during 2016, the taxable retail sales in the San Gabriel Valley are forecast to increase to a level higher than experienced during 2007.

Within the City of El Monte, taxable sales have been increasing each year since 2010 at a rate ranging from 2% to 11%.

The retail market is characterized by decreasing vacancy rates, positive net absorption, limited new construction, and increasing asking rental rates.

Local shopping is located to the west at the intersection of Ramona Boulevard and Valley Boulevard or to the east at the intersection of Ramona Boulevard and Peck Road.

The local commercial district appears to have a vacancy level that is higher than reported for the County of Los Angeles.

Traffic counts along Orchard Street and Iris Lane were not available since these streets are local collector streets. Historical traffic counts along Ramona Boulevard were indicated to be approximately 19,000 vehicles per day. More current data from a traffic study performed by Kunzman & Associates dated October 8, 2015 indicated a traffic count along Ramona Boulevard to the west of the subject site in the range from 9,000 to 14,000 vehicles per day.

For reference purposes, traffic counts in excess of 30,000 vehicles per day are necessary to attract most retailers.

Due to the location without frontage along an arterial street and the lack of visibility, the physical exposure of the subject site is not considered to be desirable for retail use.

Office Market Overview

The Los Angeles County Office Market is currently in an expansion phase even with a very high vacancy rate. The vacancy level as of the end of 2015 was 14.7%, which is down from the 15.4% vacancy rate reported as of the end of 2014, according to Daum Commercial Real Estate Services.

During 2015, 1.19 million sq.ft. of new office space was completed in Los Angeles County and the net absorption level was indicated to be a positive 2.6 million sq.ft. The current average asking rental rate is indicated to be $2.83 per sq.ft. on a full service gross basis as of the end of 2015, which reflects a 7.6% increase over the average asking rental rate as of the end of 2015.

There are approximately 2.25 million sq.ft. of new office space under construction in Los Angeles County as of the end of 2015.

The vacancy level in the San Gabriel Valley office submarket, in which the subject property is located, as of the end of 2015 was 16.5%, which is down from the 16.9% vacancy rate reported as of the end of 2014, according to Daum Commercial Real Estate Services. The vacancy rate in the San Gabriel Valley submarket is the highest rate reported of the Los Angeles County submarkets.

During 2015, 166,408 sq.ft. of new office space was completed in the San Gabriel Valley office submarket. The net absorption level was indicated to be a positive 44,000 sq.ft. The current average asking rental rate is indicated to be $2.15 per sq.ft. on a full service gross basis as of the end of 2015, which reflects a 3.4% increase over the average asking rental rate as of the end of 2014.

There were approximately 47,178 sq.ft. of new office space under construction in the San Gabriel Valley office submarket as of the end of 2015.

Overall, the local office market is indicated to have a high vacancy level, which is decreasing slowly, limited new construction, positive net absorption, and increasing asking rental rates.

The limited new construction in the local submarket provides a window of opportunity, while the very high current vacancy rates is reflective of only moderately increasing demand in the local area.

Market Analysis Conclusions

The impact of the physical, social, economic, and political forces is evidenced by the developments in the local area.

The high vacancy rate in the office market indicates that demand is not strong enough in the local area to support new construction.

The commercial market overview indicates limited support for additional retail space in the subject’s location. The fundamental demand characteristics are fairly strong due to a high percentage of owners in the area, the median income levels, and the location close to schools, employment, commuter rail service, and freeways. Our analysis of the relationship between population and income levels indicates that demand for new retail space is limited in the local area.

In addition to limited current demand for additional retail space, the location at the corner of two collector streets with limited visibility to traffic and the triangular shape of the site appear to result in the subject site being in a less than competitive position in the local commercial land market.

HIGHEST AND BEST USE

The "Highest and Best Use" is that use which is most likely to produce the greatest return over a given period of time. Net return refers to the residual left over from gross yield after all costs have been deducted. Only those uses which are natural, probable, and legally permissible may be considered tenable. Thus, Highest and Best Use may be defined as the available use and program of future utilization that produces the highest present land value.

We have investigated and analyzed the Highest and Best Use of the subject property "as if vacant" and “as improved” in regard to the following four considerations.

Legally Permitted

The subject property is zoned C1, Limited Commercial. The General Plan designation for the subject site is Neighborhood Commercial. The allowed uses include a variety of office and retail uses.

The existing use of the site is for parking associated with the adjacent Our Lady of Guadalupe Church.

Physically Possible

The physical characteristics of the subject property, such as its size, frontage, topography, accessibility and utilities appear to be adequate for only limited development.

The small size and triangular shape of the subject site result in limited utility after deducting the required setback areas.

Economically Feasible

The high vacancy rate in the office market indicates that demand is not strong enough in the local area to currently support new construction of office space.

Even though there is limited demand for additional retail space in the local area, the lack of frontage on a primary arterial street would most probably results in a severe marketability problem. In addition, any type of retail establishment that would be allowed would need to be compatible with the neighbors, who include single-family residences and the church. This significantly further reduces the potential pool of retail tenants.

Our analysis of the economic feasibility for the current development of a small retail development on the subject property is based on a comparison of the land value opinion from the analysis of land sales and the value indication from a cursory Developmental Analysis. The value comparisons indicate that development of the subject property, with a good quality retail development appears to be marginally economically feasible, as long as the land value is fairly low.

Most Profitable

The most profitable use conclusion is reached by taking the economic feasibility analysis one step further in which a recommendation for the most profitable use is reached from the various uses that were considered in the economic feasibility analyses.

Based on our analyses, retail development of the site is only marginally feasible, if the appropriate type of tenant is located. Due to the lack of exposure and shape problems, the attraction of the potential retail tenants to the site reflects a marketability problem.

Therefore, it appears that the current highest and best use of the subject land is for joinder with the adjacent church property. Joinder with the adjacent church property would negate the impact from the small size and triangular shape. The highest and best use would be as a part of the church operation.

Conclusion of Highest and Best Use

After having applied the tests of availability, adaptability and demand, we have concluded that the highest and best use of the land “as if” vacant is joinder with the adjacent church property in order to mitigate the future impact on value from the small size, triangular shape, lack of primary street exposure, and marketability issues.

The existing improvements are consistent with the highest and best use of the property for joinder with the adjacent larger church owned parcel.

Therefore, the highest and best use of the subject property “as improved” is for continued use of the existing parking lot improvements.

VALUATION METHODOLOGY

Basis of Valuation

Valuation is based upon general and specific background experience, opinions of qualified informed persons, consideration of all data gathered during the investigative phase of the appraisal, and analysis of all market data available to the appraiser.

Valuation Approaches

Three basic approaches to value are available to the appraiser: the Cost Approach, the Income Approach, and the Sales Comparison Approach.

Cost Approach

This approach entails the preparation of a replacement or reproduction cost estimate of the subject property improvements as if they were new and then deducting for losses in value sustained through age, wear and tear, functionally obsolescent features, and external factors affecting the property.

The land value is then added to the depreciated cost and entrepreneurial incentive to arrive at a value opinion.

Income Approach

This approach is based upon the theory that the value of property tends to be set by the expected net income to the owner. It is in effect the capitalization of the expected future income into present worth. This approach requires an estimate of net income, an analysis of all expense items, the selection of a capitalization technique, and the processing of the net income stream into a value indication.

Sales Comparison Approach

This approach is based upon the principle that the value of a property tends to be set by the price at which comparable properties have recently been sold or for which they can be acquired.

This approach requires a detailed comparison of sales of comparable properties with the subject property. One of the main requisites, therefore, is that sufficient transactions of comparable properties be available to provide an accurate indicator of value and that accurate information regarding price, terms, property description, and use be obtained through interview and observation.

The value opinion of the fee simple interest in the subject property is supported through an application of a Sales Comparison Approach to support the current value of the land “as if vacant” and available for development to its highest and best use.

No Cost Approach was utilized, since there are no existing building improvements. A portion of the Cost Approach has been utilized to provide an opinion of the depreciated replacement cost of the site improvements.

No Income Approach was utilized, since buyer’s and seller’s of vacant land do not typically rely on an opinion of the capitalized land rental in making buy/sell decisions, when land sales are available.

SALES COMPARISON APPROACH

The Sales Comparison Approach to Value consists of a comparison of the entire property being appraised or various portions thereof with other similar properties which have sold or which are offered for sale. The indication of market value is the price at which an equally desirable property has recently sold, or can be purchased in the open market. The value found by the study of comparable sales yields market value directly in accordance with its legal definition. This approach is based on the principle of substitution which asserts that, when a property is replaceable, its value tends to be set by the cost of acquisition of an equally desirable substitute property, assuming no costly delay is encountered in making the substitutions.

Market Data Investigation

A search was undertaken to uncover sales of comparable commercial zoned land parcels in the City of El Monte as well as land parcels with limited utility throughout Los Angeles and Orange Counties between the middle of 2013 and the current time.

Our search uncovered five relevant sales that include 3 recent commercial land sales in the City of El Monte plus 2 sales of land with limited utility and an irregular shape located in the Cities of Whittier and Orange that have been utilized in the valuation analysis.

On the following page is a summary of the sale data that are used in the valuation analysis. On the page after the sales summary is a map indicating the location of the sale data in relation to the subject property. A plat map and photograph of each of the land sale data are included in the Addenda for reference.

Analysis of the Sale Data

Five comparable closed land sales were utilized in the analysis to reach an opinion of the fair market value of the subject parcel. Based on discussions with buyers of similar properties and active real estate agents in the commercial land market, the unit of comparison used in the local market for commercial land is the price per square foot of site area.

Adjustments to all of the comparables were considered for property rights transferred, condition of sale, financing terms, demolition costs or contributory value of existing improvements, date of sale or market conditions, status of development approvals, location, physical condition of the land, topography, shape, density of development, access, size of the site, and zoning differences.

Adjustments to the land sale data were based on interviews with buyers, sellers, and agents active in the local market, general economic trends, analysis of the land sale data to extract matched-pair adjustments, where possible, and from our appraisal experience from analyzing similar data sets to extract similar adjustments. Included following the summary table and map are a discussion of the adjustments considered for each of the comparable land data.

COMPARABLE COMMERCIAL & LIMITED UTILITY LAND DATA SUMMARY Status of Data No./ Location Recorded Zoning/ Land Area Density Development Sale Price Grantor/Grantee APN/Doc. No. Date of Sale Shape (Sq.Ft./Acres) Intended Use (FAR) Approvals Total $/Sq.Ft. Financing/Confirmation No. 1 2615 N. Durfee Ave. 3/23/15 MMU 22,500 Mixed-Use N/A None $800,000 $35.56 En-Shen Chu & Nan-Shen Tu El Monte 0.52 Development Aplus Capital Investment, LLC APN 8109-001-008 Rectangular All Cash #309576 Paul Siu, seller's agent

No. 2 3937 Peck Rd. 1/23/15 MMU 16,120 Rehab. Existing 0.10 None $635,000 $39.39 Olga A. Maslov El Monte 0.37 Improvements ARWA, LLC APN 8568-019-013 Rectangular All Cash #80529 Michael Boguslavsky, seller's agent

No. 3 12432 Valley Blvd. 8/27/15 C3 45,560 Unknown N/A None $2,150,000 $47.19 Kun Y Lin El Monte 1.05 Welcome Investment, LLC APN's 8109-013-014 & 015 Irregular All Cash #1057188 Sophia Tuan, seller's agent

No. 4 S/L of Washington Blvd. 3/02/15 T 35,150 Unknown N/A None $387,000 $11.01 Union Pacific Railroad Co. & 380' E/O Lambert Rd. 0.81 Sangjin Oh Whittier Long & Narrow 55% CTNL APN's 8170-034-802 & 803 David Knowlton, seller's agent #224504

No. 5 1543 N. Tustin Ave. 7/25/13 CTR, R1-7 108,900 To be used for car N/A None $520,000 $4.78 Union Pacific Railroad Co. Tustin & R1-8 2.50 parking and open SFV Properties, LLC APN's Portion of 375-521, Long & Narrow space 20% CTNL 378-302, & 378-313 David Knowlton, seller's agent #396926

COMPARABLE COMMERCIAL & LIMITED UTILITY LAND SALE DATA MAP

It is virtually impossible to quantify every necessary adjustment to equate the comparables to the subject property. Our analysis of the land sale data utilizes quantifiable adjustments where they can be extracted and qualitative adjustments when quantitative adjustments cannot be extracted.

Price Per Square Foot Analysis

Individual qualitative comparisons of the sale data to the subject property are set forth in a summary grid which is included on the following page. The adjustment grid summarizes the adjustments considered for each of the comparable land data to equate them to the subject property.

Property Rights:

The property rights appraised are the fee simple estate. All of the land sale data are transfers of the fee simple estate and no adjustments are warranted for property rights.

Conditions of Sale

All of the sale data were arm’s length transactions at market prices, therefore, no adjustments are necessary for the conditions of sale.

Financing

All of the transfers were all cash to the seller transactions and no adjustments are warranted for financing.

Demolition Costs

The sales of Land Data Nos. 1 and 3 included buildings that do not reflect the highest and best use of the site and are a burden on having a vacant site. The cost of demolition for the improvements on Land Data Nos. 1 and 3 are estimated to be $9,000 and $35,000, respectively. The demolition cost estimates are based on data from the Marshall Valuation Service Cost Manual. The demolition costs represent an upward adjustment since those costs need to be spent in order to have a vacant site available for development to its highest and best use.

The sale of Land Data No. 2 included two very old buildings that are planned to be rehabilitated. Based on our research, most of the value was indicated to be in the land with approximately $35,000 considered to be the contributory value of the improvements. The contributory value of the improvements reflects a downward adjustment to the sale price in order to reflect the value of the land only.

Land Data Nos. 4 and 5 were vacant at the time of sale and no adjustments are warranted.

LAND DATA ADJUSTMENT ANALYSIS - COMMERCIAL & LIMITED UTILITY LAND VALUATION - NEC OF ORCHARD STREET AND IRIS LANE, EL MONTE

Subject Property Sale Data No. 1 Sale Data No. 2 Sale Data No. 3 Sale Data No. 4 Sale Data No. 5

S/L of Washington Blvd. & Address: NEC of Orchard St. & Iris Lane 2615 N. Durfee Ave. 3937 Peck Rd. 12432 Valley Blvd. 380' N/O Lambert Rd. 1543 N. Tustin Ave. El Monte El Monte El Monte El Monte Whittier Orange

Total Sale Price: N/A $800,000 $635,000 $2,150,000 $387,000 $520,000 Price/Sq.Ft.: $35.56 $39.39 $47.19 $11.01 $4.78 Property Rights: Fee Simple Similar Similar Similar Similar Similar Conditions of Sale: Arm's Length Similar Similar Similar Similar Similar Financing: All Cash to Seller Similar Similar Simlar Similar Similar Demolition: None Inferior Superior Inferior Similar Similar Date of Sale: Current 3/23/15 1/23/15 8/27/15 3/02/15 7/25/13 $2.16 $2.61 $1.68 $0.24 $0.26 Adjusted $/Sq.Ft. Indicator $37.72 $42.01 $48.87 $11.26 $5.03

Location: NEC of Orchard St. & Iris Lane Superior Superior Superior Slightly Superior Slightly Superior Approvals: None Similar Similar Similar Similar Similar Density (FAR): N/A Similar Similar Similar Similar Similar Topography & Shape Fairly Level & Irregular Superior Superior Superior Similar Similar Access: Paved Road Similar Similar Similar Similar Similar Physical Condition: Utilities Available Similar Similar Similar Similar Similar Zoning: C1 Similar Similar Similar Similar Inferior Site Area (Sq.Ft.): 5,330 22,500 16,120 45,560 35,150 108,900

Overall Comparison: Superior Superior Superior Similar to Slightly Superior Inferior

Market Conditions

Based on our investigations and analysis, upward adjustments for market conditions for commercial land with full development potential were supported at a rate of 6% per year (0.50% per month) from the beginning of 2015 through the current time. The market conditions adjustments for land with full development potential were made to Land Data Nos. 1, 2, and 3, only.

Based on our investigations and analysis, upward adjustments for market conditions for open space land and land with limited development potential are lower than for commercial land with full development potential. From our research, upward adjustments for market conditions for open space land and land with limited development potential were supported at a rate of 2% per year (0.167% per month) from 2013 through the current time for Land Data Nos. 4 and 5.

Location

Land Data Nos. 1, 2, and 3 are in locations that are considered to be superior to the location of the subject property. Downward adjustments were made to these land sales due to being in superior locations.

Land Data Nos. 4 and 5 are in locations with greater visibility and much higher passing average daily traffic counts. These land sale comparables are considered to be in slightly superior locations compared to the subject property and downward adjustments for location are warranted.

Physical Characteristics

The adjustment for physical characteristics includes comparisons of topography, shape, availability of utilities, existing street improvements, and street access.

All of the land data are fairly similar to the subject property in all of the physical characteristics, except for shape. Therefore, no adjustments are necessary for physical characteristics other than the shape of the subject site.

Shape

The subject property is fairly small and has a triangular shape which limits its utility for development. After deducting the area covered by the required setbacks imposed by the zoning development standards, the building envelope area of the subject site is a triangular shaped parcel that equates to 40% of the total site area.

Land Data Nos. 1, 2, and 3 have building envelopes that represent 82%, 77%, and 85% of the total site area for each comparable. Substantial downward adjustments were supported for the impact on the building envelope and the lack of marketability associated with the very small building envelope on the subject site.

Land Data Nos. 4 and 5 have long narrow parcels that also impact there ability to be developed and no adjustments are warranted for these parcels.

Zoning

Land Data Nos. 1, 2, and 3 have a similar commercial or mixed-use zoning that allows similar uses as are allowed on the subject site. No adjustments are necessary for zoning differences between these three land sale comparables and the subject site.

Land Data No. 4 is zoned T, Transitional. This zoning allows development with any compatible use following submission of a development plan under the Conditional Use Permit process. Since development of similar types of uses as are allowed on the subject site, no adjustment for zoning was supported for Land Data No. 4.

Land Data No. 5 doesn’t actually have any zoning but is located within areas of commercial and residential zoning. No structures can be constructed on this parcel. Therefore, the zoning is considered to be inferior to the zoning on the subject site and an upward adjustment was made.

Status of Approvals

The subject property has no approvals for development as of the date of value. None of the land sales had approvals for development at the time of sale and are similar to the subject property regarding the status of approvals.

Density

All of the land sales have fairly similar allowed densities of development, except for Land Data No. 5. Since density of development is a function of zoning development standards, the adjustment for zoning differences previously made to Land Data No. 5 implicitly included any impact from density differences.

Site Size

The site size adjustment was based on a comparative analysis of the adjusted indicators for all of the sale data, after making all of the previously discussed adjustments. This comparative analysis provided no support for a size adjustment for site sizes differences to Land Data No. 1, 2, 3, and 4 for their larger site sizes compared to the subject site. An upward adjustment was supported for the larger parcel size of Land Data No. 5.

The price per sq.ft. indicators from the comparable land data range from $47.19 to $4.78, before making any adjustments. After adjustments were considered for property rights transferred, condition of sale, financing, demolition costs, and time of sale or market conditions, the indicated price range per sq.ft. for the subject site from the comparables is from $49.64 to $5.03.

Qualitative adjustments were considered for the elements of comparison including location, status of development approvals, density of development, zoning, access, physical condition of the land, topography, shape, and site size.

On an overall basis after considering all of the elements of comparison discussed, Land Data No. 4 is considered to be slightly superior to similar to the subject property, while Land Data Nos. 1, 2, and 3 are considered to be superior to the subject property, and Land Data No. 5 is considered to be inferior.

A summary of the adjusted indicators of value for the subject site from the analysis of the land sale data is included in the following table.

Sale Data No. Comparison Adjusted $/Sq.Ft. 3 Superior $48.87 2 Superior $42.01 1 Superior $37.72 4 Similar to Slightly Superior $11.26 5 Inferior $5.03

Subject Property $11.00

Based on the comparative analysis performed, the indicated opinion of the fair market value for the subject land parcel is $11 per sq.ft. The calculation of the value indication from the price per sq.ft. analysis, is set forth as follows:

5,330 Sq.Ft. X $11/Sq.Ft. = $58,630

Say $59,000

The value set forth above reflects the value of the land in a vacant condition available for development to its highest and best use. Based on our research, the existing improvements were constructed and have been used by the owner of the church property located to the east of the subject site.

If the subject property were to be sold to a buyer that is not the adjacent property owner, the existing improvements would not contribute to the highest and best use of the site and would have no contributory value. Therefore, the existing improvements do not contribute to the value of the land.

If the subject property were to be sold to the adjacent property owner, the existing improvements that were constructed at their cost would revert to their ownership for their continued use.

For informational purposes and based on cost data from the Marshall Valuation Service, the replacement cost new plus entrepreneurial incentive of the existing improvements is estimated to be approximately $40,500. With an estimated age of 6 years and an estimated useful life of 15 years, the indicated depreciation is 40% of the replacement cost new plus entrepreneurial incentive. Deducting the accrued depreciation amount of $16,200 from the replacement cost new plus entrepreneurial incentive ($40,500) results in the depreciated replacement cost plus entrepreneurial incentive figure of $24,300.

VALUATION

Based on the investigations and analyses undertaken and upon our experience as real estate analysts and appraisers, we have formed the opinion that the fair market value of the fee simple estate in the subject property, as of April 4, 2016, and subject to the Assumptions and Limiting Conditions set forth in this report, is as follows:

FIFTY-NINE THOUSAND DOLLARS

$59,000

CERTIFICATION

I certify that, to the best of my knowledge and belief:

- The statements of fact contained in this report are true and correct.

- The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, impartial, and unbiased professional, analyses, opinions, and conclusions.

- I 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.

- I have not performed appraisal services involving the subject property for this client within the 3 year period preceding the date of this report.

- I have no bias with respect to the property that is the subject of this report or the parties involved with this assignment.

- My engagement in this assignment was not contingent upon developing or reporting predetermined results.

- My 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.

- The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics & Standards of Professional Appraisal Practice of the Appraisal Institute, which include the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation.

- The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.

- As of the date of this report, Peter B. Finnerty has completed the continuing education program of the Appraisal Institute.

- I have made a personal inspection of the properties that are the subject of this report.

- No one provided significant real property appraisal assistance to the person signing this certification.

- I am competent to appraise the property that is the subject of this report based on my previous experience appraising similar types of properties.

Respectfully submitted,

Peter B. Finnerty, MAI Certified General Real Estate Appraiser California Certificate No. AG001937

35 A D D E N D A BUILDING AREA ENVELOPE EXHIBIT Building Area Envelope Calculations LAND SALE DATA PHOTOGRAPHS LAND DATA NO. 1 LAND DATA NO. 2 LAND DATA NO. 3

LAND DATA NO. 4 LAND DATA NO. 5 Q U A L I F I C A T I O N S Q U A L I F I C A T I O N S

PETER B. FINNERTY, MAI

PROFESSIONAL BACKGROUND

Actively engaged in the real estate profession since 1977. President and Principal of Pacific Real Estate Consultants, Inc., with offices at:

1300 Bristol Street North, Suite 210 Newport Beach, California 92660

Before starting Pacific Real Estate Consultants, was employed as Vice-President at Real Estate Analysts of Newport, Inc. (REAN), in Costa Mesa, California. Prior to that, was a Senior Appraiser, Bank of America, in Anaheim, California.

PROFESSIONAL ORGANIZATIONS

Member of Appraisal Institute, with the MAI designation LEED AP, Green Building Certification Institute Member of National Association of Realtors Member of California Association of Realtors Member of Orange Coast Association of Realtors Associate Member of Urban Land Institute

INSTRUCTOR

AIREA Basic Valuation Procedures Course AIREA Capitalization Theory & Techniques, Part A AIREA Capitalization Theory & Techniques, Part B

How to Value your Corporate Real Estate Assets, Seminar for International Association of Corporate Real Estate Executives, Inc.

Real Estate Appraisal 342, Coastline Community College Finance 448, Income Property Appraisals, California State University at Long Beach

Appraisal Institute Appraisal Procedures Course Appraisal Institute Capitalization Theory & Techniques, Part B Appraisal Institute Advanced Applications Course Appraisal Institute Non-Residential Demonstration Appraisal Report Writing Seminar Appraisal Institute Small Hotel/Motel Valuation

EXPERT WITNESS

Superior Court of Orange County Superior Court of Los Angeles County Superior Court of Riverside County Superior Court of San Diego County Federal District Court Federal Bankruptcy Court Arbitration Proceedings

LICENSES

Licensed California Real Estate Broker Certified General Real Estate Appraiser, State of California

EDUCATIONAL ACTIVITIES

B.S., Real Estate Administration, Indiana University, 1976.

Special courses in Real Estate:

Principles of Real Estate Real Estate Appraisals Case Studies in Real Estate Real Estate Law Residential Construction and Design Survey of Real Estate and Land Economics

Courses sponsored by American Institute of Real Estate Appraisers:

Course I-A Principles, Methods, and Techniques of Real Estate Appraising Course I-B Capitalization Theory and Techniques Course II Urban Properties Course VI Introduction to Investment Analysis

SCOPE OF EXPERIENCE

Vacant Land Single-family residential sites, multi-family residential sites, commercial and industrial sites, acreage, planned communities.

Residential Single-family residences, duplexes, apartments, condominiums, planned unit developments, mobile homes.

Commercial Shopping centers (regional, neighborhood and community), retail stores, general office buildings, medical office buildings, car dealerships, banks.

Industrial Single- and multi-tenant warehouses and manufacturing buildings, truck terminals, business parks, R & D buildings, garages, mini-warehouses.

Special Purpose Churches, veterinary hospitals, hotels and resorts, restaurants, theaters, mobile home parks, submerged tidelands, mixed-use developments, landfill properties, contaminated properties. PARTIAL LIST OF CLIENTS

Lending Institutions

American Savings & Loan Assn. Great Western S & L Assn. Bank of America Home Federal S & L of San Diego Bank of British Columbia Imperial S & L Assn. Beverly Hills S & L Merit Savings Bank Butterfield Savings Mitsui Manufacturers Bank California Canadian Bank Morgan Guarantee Trust Co. California Federal S & L Assn. Mortgage Guaranty Ins. Corp. Canadian Commercial Bank Pacific Mutual Life Insurance Chemical Bank Rainier Mortgage Citibank San Diego Federal S & L Assn. Columbia Savings & Loan Security Pacific Nat'l. Bank Coast Savings & Loan Valencia Bank Gibraltar Savings Western Empire Savings & Loan Glendale Federal S & L Assn. Wells Fargo Bank Goldman Sachs

Public Agencies

Burbank Unified School Dist. Orange County Dept. of Real Property Services Calif. Dept. of Real Estate Services Orange County Counsel's Office City of Irvine United States Postal Service Federal Deposit Insurance Corp. United States Army Corps of Engineers Resolution Trust Corporation United States Justice Department Garden Grove Unified School King County, Washington

Developers and Landowners

Birtcher-Pacific Norland Properties Butler Housing Corporation Nu-West Development Company Cadillac Fairview Homes West Pipefitters Welfare Education and Pension Carlton-Browne and Co., Inc. Regis Homes Carma Developers (Canada) Santa Anita Development Company Carma-Sandling Group Daon Development Save-Most Development, Inc. Genstar T & S Development Company The Irvine Company Trammel-Crow Company The Koll Company Valencia Corporation Lincoln Property Warmington Group Meister Company Robert P. Warmington Company Mola Development Company William Lyon Company Newhall Land & Farming Company

Law Firms

Davis & Digrazia McDermott, Will & Emery Gibson, Dunn & Crutcher Morrison & Foerster Latham & Watkins Paul, Hastings, Janofsky & Walker Lewis, D'Amato, Brisbois, & Bisgaard Rhodes & Bidna McCutchen, Black, Verlager and Shey Rosenfeld, Meyer & Susman Rutan & Tucker Urland, Morello, Dunn & Maynard

Corporations and Institutions

AMF Voit, Incorporated W. R. Grace Company ATO Corporation E. F. Hutton Development, Inc. Baldwin United Corporation Kenneth Leventhal & Assoc. University of California at L.A. Ottawa Silicon Corporation Campeau Corporation Fluor Corporation