Merced County, California ±3,221 Acres for Sale

MERCED COUNTY, CALIFORNIA ±3,221 ACRES FOR SALE

TABLE OF CONTENTS 01 02 03 EXECUTIVE SUMMARY PROPERTY DESCRIPTION LOCATION OVERVIEW

04 05 06 MARKET ANALYSIS MASTER PLAN DEVELOPMENT INTERIM INVESTMENT OPTIONS

07 08 09 MITIGATION CONSERVATION EASEMENTS WATER

Tom Kaljian/Broker Marlene Lefmann/Realtor 209-826-8864 760-831-2400 CONTACT [email protected] [email protected] License #00528796 License #01734433

OFFERING MEMORANDUM

TKRE, on behalf of Donn Campion, is pleased to offer 3,221 acres of prime, historic California land suitable for a wide variety of uses. The property consists of 22 assessor parcels located in Merced County between the city of Los Banos and the San Luis Reservoir and recreational area, 45 minutes Southeast of San Jose. The Ranch is currently unimproved and consists of flat grazing land, gently rolling hills with pastoral views and areas of open space having conservation potential for Kit Fox, Burrowing Owl, and Swainson’s Hawk. Proposed for ultimate residential development, Agua Fria presents a unique opportunity for interim revenue potential from energy generation, mitigation credits, habitat conservation and continued grazing.

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E X E C U T I V E S U M M A R Y

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• 3,221 contiguous acres in Merced County • Pristine and historic California land with a diversity of potential uses • Excellent access to Interstate 5, State Highway 152 and 33 • 45-minute drive time to San Jose and the Silicon Valley, which have experienced explosive growth in the high technology industries • Approved community plan for Residential and Mixed Uses – nearby newer Residential development • Suitable for more affordable housing as compared to San Jose and Silicon Valley having some of the highest residential values in the United States • On and offsite mitigation potential with an existing conservation bank and identified valuable habitat • Historical wind generation and an adjacent 40KW substation • Utility infrastructure is nearby including electric power, water delivery and natural gas • Ample recreational opportunities at the San Luis Reservoir and O’Neill Forebay

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P R O P E R T Y D E S C R I P T I O N

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IMMEDIATE TERM OPPORTUNITIES:

Energy Generation

Continued Ranching

Open Space, Mitigation and Conservation Banking

MEDIUM - LONG TERM OPPORTUNITIES:

Mixed Use Urban Development

Expansion of Wind, Solar and Energy Development

Possible Water Rights from the Central Valley Water Project

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PROPERTY DETAILS

ACRES: ±3,221

Electricity: Overhead Power and 40 megawatts transformer/substation, sited for 30 megawatt. Phone: Cellular

UTILITIES: Water: A portion of the ranch is within the SLWD boundary, a part of the Central Valley Project. Additional water can be purchased and supplemented from on site wells. Sewer: Not extended to the property

ZONING: A-2 (Agriculture Exclusive)

Foothill Pasture, Urban Reserve, Open Space: GENERAL PLAN: Approved Community Plan for Mixed Use Development

Just south of State Highway 152, the major East/West corridor and West of LOCATION: Interstate 5, the primary North/South Freeway in Merced County.

Grazing Land and Pending Expansion of CURRENT USE: Existing Conservation Bank Land

Mixed-Use Urban Development, Energy POSSIBLE USES: Generation, Mitigation Credits, Habitat Conservation 8 OFFERING MEMORANDUM

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L O C A T I O N O V E R V I E W

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MERCED COUNTY Located just 45 minutes south of San Jose and the greater Silicon Valley, Merced County short rainy season in the winter and a long, dry growing season. Most of the manufacturing in offers a unique location to draw employees to the county is also related to agricultural distribution and processing. Non-manufacturing sector its more affordable MSA. The relative living employers include the county/city government, education, and retail. Merced County is home cost in San Jose-Sunnyvale-Santa Clara area is to a modern community college, Merced College, and the University of California’s tenth 160 percent above the national average, while campus, University of California, Merced, which is the first research university built in the U.S. Merced is at 94%. The average home price in in the 21st century. Physical expansion, hiring and increased enrollment at the University of San Jose is $845,000, therefore Agua Fria California Merced will spill over into many industries in the metro area. Thanks to faculty and offers developers a distinctive opportunity to staff additions, state government employment growth has been outpacing that of the state build medium-income housing units serving and nation since the university opened in 2005. Governor Jerry Brown’s new budget will the regional market. Merced County has sustain momentum by unlocking more funds for state universities if they increase enrollment rich agricultural land and is the sixth largest of in-state students. The healthy state budget will keep tuition rates from rising, protecting agricultural county in the nation, generating student budgets and spurring retail spending. Strength will extend past the public sector. The primarily dairy products, almonds, poultry, state legislature recently approved an expansion of MCD’s campus that will boost the student cattle, and potatoes. Three rivers run through body from less than 7,000 to more than 10,000 by 2020. Construction on the new facilities begins this fall and will create 10,000 temporary construction jobs. The influx of new students the county, providing irrigation for crops: the Chowchilla, the Merced, and the San Joaquin. over the next four years will provide a lift to housing and retail spending. Like much of California, Merced County has a MODESTO

DRIVE TIME SAN JOSE MERCED San Jose 40 miles, 45 minutes

Modesto 45 miles, 60 minutes Merced 45 miles, 60 minutes Fresno 80 miles, 1 hour 25 minutes

FRESNO 12

OFFERING MEMORANDUM ACCESS

152 PLANNED HIGHWAY INTERCHANGE HIGHWAY 152 & 33 INTERCHANGE EXISTING DIAMOND INTERCHANGE

TRANSIT HUB

Agua Fria is accessed from Highway 152, along Jasper Sears Road or from the Interstate 5 along Billie Wright road. A diamond highway interchange exists at Hwy 152 and Hwy 133, providing access to the ranch. As the development of the surrounding Villages of Laguna San Luis progresses, regional access will be further enhanced with construction of an additional interchange, transit hub, and local roadways within the proposed Villages Of Laguna San Luis new town.

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P A R C E L O V E R V I E W

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CAMPION PARCELS

EXISTING EASEMENTS

128’ FEE SIMPLE EXCLUSION

39.57 AC 9 AC 078-190-046

39.57 AC 078-190-046

136.7 AC 211.4 AC 39.69 AC 078-190-038 078-190-047 078-190-045 12.2 AC 441 AC 078-190-047 078-190-033 213.6 AC 39.66 AC 078-190-045 078-190-047 39.66 AC 078-190-047 80 AC 36 AC 078-190-051 078-190-052 147.07 AC 124 AC 158 AC 078-190-056 078-190-052 078-190-029 160 AC 158 AC 078-190-053 078-190-054 80 AC 77.5 AC 078-190-055 078-190-026

158.44 AC 155.24 AC 158 AC 088-010-017 088-010-018 088-010-021

100 AC 088-010-019 160 AC 088-010-022 160 AC 088-010-020

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U R B A N D E V E L O P M E N T P L A N

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Under the Merced County approved community plan, 1,020 acres are proposed for urban land uses. These uses include residential, village center commercial, BILLIE WRIGHT ROAD recreation and parks, and public utility facilities.

Residential uses include primarily 6,000 to 8,000 sqft. lots as well as medium and high density housing sites to accommodate a variety of housing styles and income levels.

Residential designations are consistent with existing County General Plan designations. The Low Density categories ranging from 3.30 to 4.25 dwelling units per acre (du/ac) are consistent with County zoning districts R-1-5000 and R-1. The Medium Density categories ranging from 12.00 to 18.00 du/ac are consistent with Zoning Ordinance districts R-2 and R-3.

RESIDENTIAL 933 acres 3,493 dwelling units

COMMERCIAL 9.0 acres

INSTITUTIONAL USES – SCHOOL, FIRE, UTILITIES 16.75 acres

RECREATION / OPEN SPACE 61.25 acres HABITAT CONSERVATION, STORM WATER 2,200.50 acres FILTRATION / DETENTION TOTAL SUDP AREA 3,220.50 acres

TOTAL PLANNED DEVELOPMENT 1,020 acres

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DRAFT URBAN DEVELOPMENT PLAN

OFFERING MEMORANDUM

AGUA FRIA AND THE SURROUNDING VILLAGES OF LAGUNA SAN LUIS

Highway O‘Neill Forebay Exhibit 1 Villages of Laguna San Luis

SUDP Diagram, 2007,

San Luis Reservoir overlain by state recreation area Agua Fria Village SUDP diagram

Villages of Laguna San Luis boundary Highway 152 Agua Fria Village boundary Gonzaga Road Jasper Sears Road Campion Ownership of 1,328 Acre Overlap of USBOR 153 Acre Agua Fria Village and Villages of Laguna San Luis Ownership 40 MW substation Pacheco wind farm turbines or towers

PG&E 160 Acre Mitigation The “Pacheco Wind Farm” contains seventy-eight operational or stand-

ing electricity generating wind turbines or towers as well as a 40 megawatt power substation with a 70 Kv “inner-tie” to adjacent 230 Kv power transmission lines. The inner-tie connects directly to the “bus-bar” within CalTrans 40 Acre Mitigation Pacheco Wind Farm: the PG&E Los Banos Substation less than one mile to the north. The 40 78 wind 40 megawatt megawatt substation has the ability to generate power to supply 40,000 turbines Power or towers Substation Villages of homes or 124,000 residents. The Pacheco Wind Farm is documented Laguna San Luis Agua Fria upon PG&E facility maps and California state power grid maps. Conservation Bank 136 Acres Land uses and infrastructure initially planned within Campion owned portions of Sections 28, 29 and 30, along with associated environmental impacts, have been acknowledged within the Villages CP and DEIR. The 3,220 acre Agua Fria Village project has received Merced County Acreage within Sections 28, 29, and 30 Guidance Package approval, and 1,821 acres of its land area exists owned by Donn Campion within the CVP and SLWD. The Agua Fria Village project has received 1,328 Acre Overlap of Agua Fria Village related approvals including certified DEIR and FEIRs with the SLWD as and Villages of Laguna San Luis the lead agency - SCH#95062021, or documented support from the USBOR, USFWS, SWRCB, CDFG, SLWD, and LAFCO. Donn Campion owns 98% of the Urban Reserve and Open Space designated land area within the Villages CP and SUDP within Sections 28, 29 and 30. Campion was a founding and 25% funding member of the “Villages Development Consortium.” Through application of the planning process mandated by CEQA Statutes and Guidelines, constraints were identified within Sections 28, 29 and 30. As a result, Campion allocated planned land uses to within his contiguous property to the south, which was not restricted as severely by the constraints. In further compliance with CEQA, Campion prepared the Agua Fria Village EIR Alternative SUDP Diagram which is being processed by Merced County as an independent CP and SUDP boundary. Agua Fria Village was conceived as the 3rd village of the Villages of Laguna San Luis.

Since Campion-owned acreage within Sections 28, 29 and 30 exists within the Agua Fria Village open space tabulations but the acreage is available for purchase by the Villages Of Laguna San Luis for use as habitat mitigation.

0 2000 feet 1 mile north Notes: base map scanned of US Geological Survey 7.5 minute topographic maps for Volta, San Luis Dam, Los Banos Valley, and Ortigalita Peak NW quads. San Luis Dam 7.5 minute quadrangle Volta 7.5 minute quadrangle Los Banos Valley 7.5 minute quadrangle Ortigalita Peak NW 7.5 minute quadrangle

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ENTITLEMENT CHRONOLOGY - DATES & EVENTS

Date Event Date Event

February 1990 Villages of Laguna San Luis New Town July 1995 Draft EIR for Agua Fria Village and Environmental Planning process Alternative published initiated January 1996 EIR for Agua Fria Village inclusion April 1991 Preliminary EIR prepared for Villages certified by San Luis Water District and submitted to County February 1996 U.S. Bureau of Reclamation petitions May 1991 Merced County prepares Initial Study State Water Resources Control for Village’s EIR Board to include Agua Fria Village Conceptual Development Planning June 1991 Wild Wind Ranch SUDP diagram Area in the Central Valley Project prepared as the third village and included with the Villages of Laguna May 1996 San Luis Water District approves San Luis SUDP diagram annexation of 1,645 acres of Agua Fria Village 1992 Administrative Draft EIR prepared for Villages reviewed by County June 1996 LAFCO approval of 1,645 acre Agua Fria Village annexation July 1993 Campion purchases Agua Fria Ranch June 1997 State Water Resources Control Board 1993 Revised Draft Program EIR prepared distributes Agua Fria Village approval by County for Villages to 21 public agencies for review April 1994 Community Specific Plan for Villages June 1997 State Water Resources Control published by County Board approved including 1,645 acres of Agua Fria Village in Central May 1994 U.S. Fish and Wildlife executes letter Valley Project (CVP) supporting Agua Fria Village EIR planning alternative October 1998 U.S. Bureau of Reclamation approves Agua Fria Village inclusion June 1994 Second revised Agua Fria Village in Water District and CVP SUDP diagram May 2002 Formation of 136.7 acre Agua Fria July 1994 California Fish and Game executes Conservation Bank letter supporting Agua Fria Village EIR planning alternatives 2003-2004 Western Area Power Administration condemns Campion acreage and September 1994 San Luis Water District adopts constructs Path 15 500 KV power line Resolution to consider annexation January 2006 Third revised Agua Fria Village SUDP February 1995 U.S. Fish and Wildlife executes letter diagram supporting Agua Fria Village EIR Conceptual Development Plan August 2006 Fourth revised Agua Fria Village SUDP alternative diagram May 1995 Initial study for Agua Fria Village February 2007 Approval of “Agua Fria Village inclusion in Water District approved Guidance Package” by Merced County by San Luis Water District

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AGENCY REQUIREMENTS

APPROVED

U.S.Fish and Wildlife Service (USFWS) approved the 1,645-acre Merced County encroachment permit for the extension of a Agua Fria Village Inclusion - May 1994; February 1995. natural gas line to the Agua Fria Village property - March 2001.

USFWS approved the Agua Fria Wildlife Habitat Management Merced County approved the Agua Fria Village “Guidance Plan- May 2002. Package” which includes the conceptual Specific Urban Development Plan Diagram - 2007 San Luis Water District (SLWD) annexed the Agua Fria Village Inclusion Area and Certified the State Clearinghouse # 95062021 U.S. Bureau of Reclamation (USBOR) approved the 1,645-acre Inclusion EIRs - January and May 1996. Agua Fria Village Inclusion - October 1998

California Department of Fish and Game (CDFG) approved the State Water Resources Control Board (SWRCB) approved the 1,645-acre Agua Fria Village Inclusion - July 1994. 1,645-acre Agua Fria Village Inclusion into the Central Valley Project (CVP) water service area - June 1997. Local Agency Formation Commission (LAFCO) approved the 1,645-acre Agua Fria Village water service area annexation - June 1996

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AGENCY REQUIREMENTS

INITIATED TO-BE-FILED

U.S. Army Corps of Engineers (USACE) Section 404B wetland Merced County encroachment permits for utility lines within existing fill / mitigation county road rights-of-way. plan - November 2007. Merced County Fire Department fire station approval. SLWD water and wastewater treatment plant approvals. San Joaquin Valley Unified Air Pollution Control District authority to USFWS Formal Section 7 Consultation initiated in conjunction construct permit. with the U.S. Bureau of Reclamation - May 2007. California Department of Transportation (Caltrans) encroachment permit.

USFWS Section 7 Consultation “Incidental Take” permit. Public Utilities Commission certificate of public convenience and necessity. USBOR joint approval of the Agua Fria Village Section 7 Consultation.

CDFG 2081 “Incidental Take” permit and Section 1600 “Streambed Alteration” permits.

USACE joint Section 7 Consultation and 404B permit approval.

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P O W E R G E N E R A T I O N

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Agua Fria Ranch remains one of the best locations in the State of California for the siting of a base load power generation facility. Power can be generated through reactivation of the windfarm or potentially the development of gas powered energy generation facilities. Related property approvals and site attributes include the following:

1. Merced County approved Conditional Use Permit # 2905, June 22, 1985 establishing the “Pacheco Wind Farm,” This facility is documented as such upon Pacific Gas & Electric facilities maps. The Pacheco Wind Farm consists of a 40-megawatt electrical power transformer substation which includes an inter-tie connection to a 70 KV powerline. This independent line extends along with 230 KV lines directly into the adjacent Los Banos Regional Power Substation bus bar. If fully functional the Pacheco Wind Farm substation is capable of generating power supply for 40,000 homes or approximately 124,000 residents.

2. Seventy-eight General Electric wind powered turbines or towers remain. The turbines and facility have not been active for several years and most of the turbines are disassembled or missing. Defunct wind turbines can be replaced with fewer contemporary turbines which are significantly more efficient. A Phase I Environmental Site Assessment has determined that there are no hazardous materials including PCB’s within this facility or elsewhere upon the Agua Fria Ranch property.

Agua Fria Ranch exists contiguous to the Los Banos Regional Power Substation. Multiple regional 500 KV and 230 KV overhead power transmission lines extend from the substation bisecting the Ranch.

3. A regional 36 inch, 1,000 PSI PG&E natural gas line exists two miles east of Agua Fria. A gas line extension from this facility to Agua Fria has been previously approved through a Merced County Encroachment Permit within the Billie Wright Road County right- of-way.

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H A B I TA T M I T I G A T I O N / C O N S E R VA T I O N

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The substantial projected revenues from mitigation credit sales, combined with the significant tax savings opportunities makes the Agua Fria Multi-Species Conservation CONSERVATION LANDS Bank an exciting investment opportunity.

The Owner has opened Phase I of a Federal and State-approved Conservation Bank. This bank has sold mitigation credits to Public Agencies, Developers and private corporations. Wildlife Mitigation credit purchases have enabled these entities to 39.57 AC 9 AC 078-190-046 comply with the Wildlife Agency requirements. A portion of the revenues received 39.57 AC has been set aside for perpetual management of Phase I (Phase I is sold out). 078-190-046

A proposed opening of Phase 2 of the conservation bank (3,100 acres) is under review 136.7 AC 297.37 AC 39.69 AC 078-190-038 EXISTING CONSERVATION 078-190-047 and further action on this process may be deferred to any new owner. EASEMENT 12.2 AC The Conservation Bank serves wildlife species found not only in Region 3 (property’s 441 AC 078-190-047 078-190-033 region), but Region 4 (Bay Area) as well. This greatly expands the viability of mitigation 213.6 AC 39.66 AC 078-190-045 078-190-047 credit sales. All development in Region 3 has a federally mandated mitigation ratio of 39.66 AC 3-to-1 for protection of the San Joaquin Kit Fox. 078-190-047 80 AC 36 AC 078-190-051 078-190-052 Opportunities for conservation include the establishment of maximum flexibility for 147.07 AC 124 AC development options, revenue generation and tax savings options via a multi-phased 158 AC 078-190-056 078-190-052 conservation bank agreement. 078-190-029 160 AC 158 AC 078-190-053 Current Federal and California Tax codes offer substantial tax savings for individual 078-190-054 and corporate landowners who establish and donate conservation easements for the 80 AC 77.5 AC purposes of protection of wildlife and agricultural land. 078-190-055 078-190-026

158.44 AC 088-010-017 155.24 AC 158 AC 088-010-018 088-010-021

100 AC 088-010-019 160 AC

160 AC 088-010-022 088-010-020

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WA T E R

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The Agua Fria Ranch is within the boundary of the San Luis Water District but has a limited allocation from the Central Valley Project. However, the District using its existing facilities will convey water secured by the landowner upon the execution of a conveyance agreement. The landowner must provide evidence from the US Bureau of Reclamation or the US Fish and Wildlife Service that the project is in conformance with ESA requirements and has secured a water supply with the reliability that is acceptable to the San Luis Water District. As of 2017 Since Agua Fria Ranch has a limited allocation of water from the San Luis Water District: Additional water for development would have to be: 1. Brought in from outside the district. 2. Purchased from owners of existing water rights within the San Luis Water District 3. Extracted from Wells

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MATT MARSCHALL Senior Vice President +1 858 404 7202 [email protected] Lic. 00616335 RANDY GRIMSMAN Senior Vice President +1 916 446 8745 [email protected]