Urban Decay Appendix R-1 Urban Decay Study, The Natelson Dale Group, Inc, August 23, 2017

URBAN DECAY STUDY PARADISE VALLEY SPECIFIC PLAN

RIVERSIDE COUNTY, CALIFORNIA

Prepared for: Glorious Land Company

August 23, 2017

SUBMITTED BY: THE NATELSON DALE GROUP, INC.

2 4 8 3 5 L A PALMA AVE SUITE I • YORBA LINDA, CA 92887 O: 714.692.9596 • F: 714.692.9597 • www.natelsondale.com

CONTENTS

1. INTRODUCTION ...... 1

2. SUMMARY OF MAJOR FINDINGS ...... 4

3. HOUSING MARKET DEMAND SUMMARY ...... 10

4. RETAIL MARKET DEMAND SUMMARY ...... 12

5. OFFICE AND INDUSTRIAL MARKET DEMAND SUMMARY ...... 14

6. HOTEL MARKET DEMAND SUMMARY ...... 17

7. ANALYSIS OF PROJECT ALTERNATIVES ...... 22

APPENDIX A: RETAIL DEMAND MODEL ...... 25

APPENDIX B. SCAG DEMOGRAPHIC DATA FOR COACHELLA VALLEY ...... 31

APPENDIX C: SCAG DEMOGRAPHIC DATA FOR EAST COACHELLA VALLEY SUB-REGION ...... 42

APPENDIX D. HOUSING MARKET DEMAND/ABSORPTION ANALYSIS ...... 46

1. INTRODUCTION

This report evaluates the potential market impacts of the proposed Paradise Valley Specific Plan (“Project”) in unincorporated Riverside County. In particular, the study evaluates the extent to which the Project would have negative competitive impacts on existing developed communities and consequently have the potential to result in urban decay.

For purposes of this analysis, the Project is assumed to include the following land uses:

• 8,490 dwelling units of varying densities, including 7,615 ownership units and 875 rental units

• 441,687 square feet of local-serving retail space

• 450,323 square feet of office space

• 106,380 square feet of light industrial space

• 300-room resort hotel/timeshare

• 100-room mid-priced hotel

The analysis assumes that the project would achieve buildout by 2035.

Since this study is being completed as part of the Environmental Impact Report (EIR) process for the proposed project, it focuses on the types of economic impacts that are defined as significant by the California Environmental Quality Act (CEQA). Specifically, per Section 15131(b) of the CEQA Guidelines, a project’s competitive economic impacts in a community or region are considered significant only if they can be tied to physical changes in the environment.

For the purposes of this analysis, urban decay is defined as physical deterioration due to long-term building vacancies. Physical deterioration includes, but is not limited to, abandoned buildings and commercial sites in disrepair, boarded doors and windows, long-term unauthorized use of properties and parking lots, extensive gang or offensive graffiti painted on buildings, dumping of refuse or overturned dumpsters on properties, dead trees or shrubbery, extensive litter, uncontrolled weed growth, and homeless encampments.

Given the above framework, the market impact analysis first determines the extent to which there would be sufficient demand to support the proposed project without negatively impacting existing competitive development in the market area. The findings regarding future market demand are then used to assess the proposed project’s potential to cause urban decay.

In order to place the Project’s potential competitive impacts into appropriate context, the analysis quantifies the total “pools” of future development demand in the larger Coachella Valley region and the East Coachella Valley sub-region where the Project is situated. For purposes of this analysis, the East Coachella Valley is defined to include the cities of Coachella and Indio, the unincorporated communities

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of Thermal and Mecca, and other incorporated areas east, north and south to the County line (excluding Blythe). Figure 1 below provides a map of the East Coachella Valley sub-region.

FIGURE 1. EAST COACHELLA VALLEY SUB-REGION

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Qualifications of the Natelson Dale Group, Inc.

The analysis has been prepared by The Natelson Dale Group, Inc. (TNDG). TNDG is an economic consulting firm focused on economic and workforce development, regional planning, and real estate market analysis. The firm was established in southern California in 1974 and serves public and private sector clients throughout the United States. The firm routinely provides economic analyses for municipal clients as part of land use planning efforts (General Plans and Specific Plans), and also prepares market demand forecasts and project feasibility studies for private developers. One of TNDG’s core practice areas is the preparation of economic development strategic plans (for local governments and regional economic development partnerships) focused on industry attraction and job creation. The firm has a substantial base of project experience in the Coachella Valley, including previous assignments in Palm Springs, Palm Desert, Cathedral City, La Quinta, Indian Wells, Desert Hot Springs, Indio, Coachella and Blythe.

The firm routinely completes market demand studies for proposed development projects as part of public approval processes. TNDG has completed more than 75 urban decay studies as part of CEQA processes.

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2. SUMMARY OF MAJOR FINDINGS

This section of the report briefly summarizes the major findings of the analysis. Detailed documentation of the study methodology is provided in the subsequent chapters and technical appendices.

A. Overall Conclusion Regarding Potential for Urban Decay

Based on the analyses presented in the subsequent chapters of this report (and briefly summarized below), it is TNDG’s conclusion that the proposed Project would not cause urban decay. For all land uses, TNDG’s analyses conclude that demand for new development in the market areas affected by the project would be more than sufficient to support the proposed Project without having adverse competitive impacts on existing development or communities.

B. Market Setting of Proposed Project

The location and market orientation of the proposed Project generally limit the potential for it to cause urban decay. As documented in detail in a separate report prepared for this CEQA process1, the Project’s land use mix – providing an optimal balance of residential development, resident-serving commercial amenities, and employment-generating uses – will result in a community with a high degree of self- sufficiency. The Project is expected to be largely self-contained, minimizing the need for in-commutes, out-commutes and other market interaction with external communities.

The Project’s planned retail development (the land use category for which the issue of urban decay is most frequently a concern), will be sufficient to fulfill the daily shopping and service needs of Paradise Valley residents, but will not be large enough to attract significant amounts of patronage from residents of other parts of the Coachella Valley. As such, the Project is not likely to affect the market performance of retail centers in other communities (since the existing customers of these external shopping centers would have no reason to travel to Paradise Valley for what will essentially be neighborhood/local scale shopping facilities).

The substantial demographic growth projected for the overall Coachella Valley region is also a strong mitigating factor against the potential for urban decay. Over the next twenty years (i.e., between 2015 and the Project’s anticipated buildout in 2035), Coachella Valley growth in households, housing units and employment is projected as follows:

1 See Analysis of Onsite Employment Potentials, Paradise Valley Specific Plan, prepared by The Natelson Dale Group, Inc. and dated August 22, 2017.

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Table 1 Projected Growth in Households and Employment 2015-2035 Coachella Valley Variable 2015 2035 20-year Change % Change Households 168,798 251,101 83,303 49%

Housing Units 239,714 356,594 116,880 49%

Employment 169,309 280,386 111,077 66%

Source: TNDG, based on demographic forecasts from SCAG 2016 RTP.

Within the East Coachella Valley sub-region, 20-year growth in households and employment is projected as follows:

Table 2 Projected Growth in Households and Employment 2015-2035 East Coachella Valley Variable 2015 2035 20-year Change % Change Households 39,241 77,549 38,308 98%

Housing Units 56,059 110,784 54,725 98%

Employment 35,671 76,215 40,544 114%

Source: TNDG, based on demographic forecasts from SCAG 2016 RTP.

The projected growth will generate substantial demand for new residential, commercial and industrial development. As a result, future development such as the proposed Project will primarily be focused on satisfying incremental (new) demand rather than diverting demand from existing developed communities. In this type of dynamic development environment, the potential for urban decay is significantly reduced.

C. Potential Market Impact of Proposed Project

Table 3 on the following page compares the proposed Project’s development quantities to the projected demand for new development over the next 20 years. The table also measures the Project’s market impact in terms of the size of the Project relative to the total existing supply in the Coachella Valley and the Project’s potential capture rates of future (incremental) demand for new development. For all land uses the Project would be well accommodated within the projected future envelopes of demand.

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Table 3 Summary of Projected Market Impact by Land Use Paradise Valley Specific Plan

Residential Retail Office Industrial Resort Hotel Hotel (Units) (Square Feet) (Square Feet) (Square Feet) (Rooms) (Rooms)

Proposed Project 8,490 441,687 450,323 106,380 300 100

Existing Supply, Coachella Valley 242,315 23,400,319 8,843,692 12,647,939 10,046 4,434

Project as % of Existing Coachella Valley Supply 3.5% 1.9% 5.1% 0.8% 3.0% 2.3%

Existing Occupancy Rate (commercial uses) N/A 88.7% 90.0% 91.1% 60.1% 58.1%

Projected New Demand, 2015-2035:

Coachella Valley 116,880 N/A (1) 4,694,445 7,698,075 2,212 976

East Coachella Valley 54,725 N/A 1,713,469 2,809,699 N/A (2) N/A

Project's Shares of New Demand, 2015-2035:

Coachella Valley 7.3% N/A 9.6% 1.4% 13.6% 10.2%

East Coachella Valley 15.5% N/A 26.3% 3.8% N/A N/A

Notes:

(1) The Project’s proposed retail development is not compared to regional/sub-regional demand since it would serve internal (resident) demand. (2) For the hotels, the relevant market area is the entire Coachella Valley; thus, demand is not projected for the East Coachella Valley sub-region.

Source: The Natelson Dale Group, Inc. (TNDG)

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D. Impacts of Project’s Residential Development

The proposed Project would include a total of 8,490 dwelling units. Between 2015 and 2035, total demand for new housing is projected at 116,880 dwelling units for the Coachella Valley region and 54,725 dwelling units for the East Coachella Valley sub-region. Based on these projections, the proposed Project would capture 7.3% of available regional demand and 15.5% of available sub-regional demand over the course of its buildout period. Thus, the amount of residential development planned for the proposed Project is well within the envelopes of projected regional and sub-regional demand.

E. Impacts of Project’s Retail Development

The proposed Project would include 441,687 square feet of retail space, which would be oriented – in terms of scale and anticipated tenant mix – to serving the Project’s internal (resident) demand. The sufficiency of resident demand to support the planned retail space is fully documented in Chapter 4 of this report. Since the proposed Project’s retail space would not depend upon demand from external consumers (and is, in fact, unlikely to attract substantial external demand given its distance from other population centers), it is not projected to have a market impact on existing retail facilities in other parts of the Coachella Valley.2

F. Impacts of Project’s Office Development

The proposed Project would include a total of 450,323 square feet of office space. Between 2015 and 2035, total demand for new office space is projected at approximately 4.7 million square feet for the Coachella Valley region and approximately 1.7 million square feet for the East Coachella Valley sub- region. Based on these projections, the proposed Project would capture 9.6% of available regional demand and 26.3% of available sub-regional demand over the course of its buildout period. Thus, the amount of office development planned for the proposed Project is well within the envelopes of projected regional and sub-regional demand.

G. Impacts of Project’s Industrial Development

The proposed Project would include a total of 106,380 square feet of industrial space. Between 2015 and 2035, total demand for new industrial space is projected at approximately 7.7 million square feet for the Coachella Valley region and approximately 2.8 million square feet for the East Coachella Valley sub-region. Based on these projections, the proposed Project would capture 1.4% of available regional demand and 3.8% of available sub-regional demand over the course of its buildout period. Thus, the

2 As discussed above, the scale and anticipated tenant mix of the project’s proposed retail development would be primarily oriented to serving the project’s internal (resident) demand, although some freeway oriented demand may be served by some of the project’s retail uses. From an urban decay perspective, it is important to note that the potential to attract some “external demand” is not premised on attracting resident retail demand from other Coachella Valley communities, but relates strictly to capturing a nominal share of occasional visitor/highway- traveler demand.

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amount of industrial development planned for the proposed Project is well within the envelopes of projected regional and sub-regional demand.

H. Impacts of Project’s Resort Hotel

The proposed Project would include a 300-room resort hotel/timeshare. Given that the Coachella Valley, collectively, is a well-recognized visitor destination, the relevant market area for the hotel demand analysis is the Valley as a whole. Between 2015 and 2035, total demand for new resort hotels in the Coachella Valley is projected at 2,212 rooms. Based on this projection, the proposed Project would capture 13.6% of available demand for new resort hotels over the course of its buildout period. Thus, the planned resort hotel within the proposed Project would be readily supported within the projected demand growth.

I. Impacts of Project’s Mid-Priced Hotel

The proposed Project would include a 100-room mid-priced hotel. As noted previously, the relevant market area for the hotel demand analysis is the Coachella Valley as a whole. Between 2015 and 2035, total demand for new mid-priced hotels in the Coachella Valley is projected at 976 rooms. Based on this projection, the proposed Project would capture 10.2% of available demand for new mid-priced hotels over the course of its buildout period. Thus, the planned mid-priced hotel within the proposed Project would be readily supported within the projected demand growth.

J. Other Pending Development and the Potential For Urban Decay

As documented in the foregoing summary, the substantial projected growth in the Coachella Valley region and the East Coachella Valley sub-region will generate demand for new residential, commercial and industrial development that far exceeds the amounts of development planned for the Paradise Valley project. As such, the project would be fully supportable within incremental (new) demand and would not significantly impact the market shares of existing development. The strong market opportunities in the Coachella Valley will naturally induce other developers and property owners to pursue entitlements and formulate plans for future development projects. In this regard it is not uncommon, in regions experiencing dynamic growth, for the “backlog” of pending development to exceed foreseeable demand. While, in theory, strong developer interest in a region can result in a market being overbuilt, economic realities make it highly unlikely for this to actually occur to an extent that would result in urban decay.

In markets experiencing above-average population and employment growth, such as the Coachella Valley, project proponents often attempt to get projects moving along in the entitlement process much earlier than warranted by market demand. By getting their projects “first-in-line”, developers hope to obtain commitments from investors and commercial tenants before other projects are proposed and entitled. As specific projects are actually implemented, other proposed projects will reevaluate their development plans. In some cases, they will adjust their land use mix; in others, they will extend their buildout timeframes or drop development plans altogether.

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The potential for overbuilt development markets is also mitigated to a large extent by project financing constraints (i.e., in the absence of sufficient market demand to meet financial underwriting requirements, projects are unable to proceed).

A seeming overabundance of planned development simply means that only those projects that are most highly desired by the market will actually be developed while those less desirable will remain on the drawing board. For example, the 7,000-dwelling unit Kill Ranch specific plan that was approved by Riverside County in 1999 remains undeveloped today while other large communities approved at later dates have been fully developed and sold out. This is but one of several such examples.

Whereas aggressive pursuit of entitlements (by the development community) is a favorable indication of market strength, the possibility that entitlements (or projects seeking entitlements) may exceed foreseeable demand is not necessarily indicative that a market will ultimately become overbuilt. Indeed, from community planning and economic development perspectives, it is generally considered desirable for a region to be reasonably “over-entitled” since it allows for the flexibility needed for regional growth to occur efficiently and economically. In communities where the supply of entitled land is insufficient to fully meet anticipated demand, the inevitable result is upward pressure on land values (or unreasonable expectations by land owners as to the market price of their land). This condition can delay a region’s growth (by causing potential projects to become financially infeasible) and also work counter to other community objectives such as expanding the availability of affordable housing. If entitlements fail to keep ahead of growth potentials, the potential for a sub-region such as the Eastern Coachella Valley to contribute to the region’s growth needs (including quality, relatively affordable communities) may be stymied.

Based on the above factors, it is TNDG’s conclusion that the impacts of the Paradise Valley project, when combined with other potential development projects, would not be significant from the standpoint of urban decay. In effect, the practical realities of real estate supply/demand conditions strongly mitigate against the potential for sustained overbuilding of markets and thereby provide a market-based mechanism for preventing urban decay.

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3. HOUSING MARKET DEMAND SUMMARY

Table 4 below provides TNDG’s forecast of total demand for new housing units in the Coachella Valley between 2015 and 2035. The projections are based on the following factors/assumptions:

• Total households by year are derived from the recently-released SCAG demographic forecasts.3

• Total households are translated to the expected number of housing units, reflecting the fact that a sizeable portion of housing units in the Coachella Valley are for vacation/seasonal use and are not occupied by permanent households. Thus, the total number of housing units is about 42% larger than the number of households. This factor is based on the actual existing ratio in the Coachella Valley4.

Table 4 Projected Demand for New Housing Units Coachella Valley 2015-2035 Area 2012 2015 2020 2035 Total households 158,739 168,798 189,044 251,101

Total housing units 225,429 239,714 269,028 356,594

Incremental Demand for New Housing Units, 2015-2035: 116,880

Source: TNDG, based on demographic forecasts from SCAG 2016 RTP.

Following the same methodology, Table 5 (on the next page) provides TNDG’s forecast of housing demand in the East Coachella Valley sub-region.

3 The SCAG data are for the years 2012, 2020 and 2035. TNDG estimated 2015 households by interpolating between SCAG’s 2012 and 2020 numbers. 4 For the 2012 benchmark year, TNDG has estimated the numbers of housing units based on data from the California Department of Finance; total households in 2012 are from the SCAG data. The ratio of housing units to households in 2012 is assumed to apply in future years.

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Table 5 Projected Demand for New Housing Units East Coachella Valley 2015-2035 Area 2012 2015 2020 2035 Total households 34,190 39,241 49,372 77,549

Total housing units 48,843 56,059 70,351 110,784

Incremental Demand for New Housing Units, 2015-2035: 54,725

Source: TNDG, based on demographic forecasts from SCAG 2016 RTP.

A more detailed housing market analysis (prepared by Market Profiles) is provided in Appendix D of this report.

It should be noted that the Market Profiles report has been prepared independently of the market demand forecasts included in this urban decay study and has a somewhat different purpose (supporting the developer’s planning with regard to product mix, pricing, phasing and development timing) from the urban decay study. As such, the Paradise Valley capture rates of total market demand are not directly comparable to the market shares indicated on Table 3 of the urban decay study. Whereas the Market Profiles report considers capture rates during the specific years when home sales are expected to be active at the project (approximately 2021 through 2035), the urban decay study considers a somewhat longer timeframe (2015 through 2035). The differences in timeframes are appropriate to the unique purposes of the two reports. Whereas the Market Profiles report is focused on capture rates during the years in which Paradise Valley will have an active sales program (for purposes of guiding project planning and feasibility assumptions), the urban decay study recognizes that urban decay is not a phenomenon that occurs in a single year (or at the time at project is proposed), but is a function of the overall, long-term market environment in which projects area built. Thus, for purposes of evaluating the potential for urban decay, it is necessary to consider the supply/demand environment leading up to a project’s introduction in the market.

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4. RETAIL MARKET DEMAND SUMMARY

Appendix A of this report provides an analysis of the amount of retail space that could be supported in Paradise Valley based on the Project’s internal demand (i.e., demand generated by the Project’s full- and part-time residents). The retail demand model (described in greater detail in Appendix A) calculates supportable onsite retail space based on the following major factors:

• The total number of full-time households within the Project; • The projected average household income for full-time Project residents; • The number of seasonal/part-time “households” within the Project; • The average household income of part-time/seasonal residents; • Projected retail spending of full- and part-time residents/households5; • Projection of the total amount of retail space that could be supported by the spending of the Project’s full- and part-time residents.

The projections indicate support for a total of 469,246 square feet of retail space onsite (i.e., resident demand is approximately 28,000 square feet more than the amount of retail space proposed in the Specific Plan, indicating that the project’s internal resident/demand would be more than sufficient to support the planned amount of retail development). Per the Paradise Valley Specific Plan, it is anticipated that this total complement of retail space will be divided among several neighborhood- or community-scale shopping centers. The International Council of Shopping Centers (ICSC) defines key characteristics of these shopping center types as follows:

Table 6 Key Characteristics Neighborhood and Community Shopping Centers Typical Gross Leasable Area Shopping Center Type (square feet) Trade Area Size Neighborhood 30,000-125,000 3 miles Community (“large neighborhood center”) 125,000-400,000 3-6 miles

Source: ICSC (“U.S. Shopping-Center Classifications and Characteristics,” August 2015)

Given that the types of retail facilities planned for the proposed Project would have a maximum trade area of 6 miles and the Project is situated approximately 8 miles from the nearest urbanized area, it is highly unlikely that the Project’s retail space would attract patronage from outside the Project.

5 The spending potentials of part-time residents are adjusted to reflect the fact that they will only be onsite during a portion of the year.

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Residents in the next nearest residential area (the city of Coachella) would have little incentive to travel to Paradise Valley to shop since they have a substantially larger supply of retail shopping opportunities in their own community (and in the neighboring city of Indio).

Due to the internal orientation of the Project’s retail space, TNDG believes there is virtually no possibility of the Project causing negative competitive impacts on existing retail facilities elsewhere in the Coachella Valley.

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5. OFFICE AND INDUSTRIAL MARKET DEMAND SUMMARY

This chapter projects demand for new office and industrial space within the Coachella Valley region and East Coachella Valley sub-region over the next 20 years (2015-2035).

Existing Office Market in Coachella Valley. Based on data from CoStar Realty Information, Inc., the existing office market in the Coachella Valley comprises 8,843,692 square feet6. The existing office occupancy rate is 90%, which is within the 90-95% range generally accepted to represent a healthy commercial office market.

Existing Industrial Market in Coachella Valley. Based on data from CoStar Realty Information, Inc., the existing industrial market in the Coachella Valley comprises 12,647,939 square feet7. The existing office occupancy rate is 91%, which is within the 90-95% range generally accepted to represent a healthy industrial market. Projected Future Growth in Office and Industrial Demand. This analysis projects future office and industrial space demand based on anticipated growth in Coachella Valley (and East Coachella Valley) employment. The most recent (2015) demographic forecasts from the Southern California Association of Governments (SCAG)8 indicate the following employment growth for the Coachella Valley:

Table 7 Projected Growth in Employment 2015-2035 Area 2012 2015 2020 2035 Coachella Valley 149,593 169,277 210,347 280,386

East Coachella Valley 28,877 35,671 50,729 76,215

Source: TNDG, based on demographic forecasts from SCAG 2016 RTP.

Table 8 on the following page provides TNDG’s projections of demand for new office construction in the Coachella Valley and East Coachella Valley over the next 20 years. The projections are based on the following factors/assumptions:

6 CoStar indicates a current (4th Quarter 2015) office inventory of 8,039,720 square feet. The CoStar database excludes some smaller office buildings, which TNDG estimates would increase the inventory by 10% (8,039,720 X 110% = 8,843,692). TNDG has calibrated this 10% adjustment based on estimated existing office employment in the Coachella Valley. 7 CoStar indicates a current (4th Quarter 2015) industrial space inventory of 11,498,126 square feet. The CoStar database excludes some smaller industrial buildings, which TNDG estimates would increase the inventory by 10% (11,498,126 X 110% = 12,647,939). TNDG has calibrated this 10% adjustment based on estimated existing industrial employment in the Coachella Valley. 8 SCAG data are for the years 2012, 2020 and 2035. TNDG estimated 2015 employment by interpolating between SCAG’s 2012 and 2020 numbers.

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• Total employment growth, per the recently released SCAG projections.

• Office employment is estimated at 23% of total employment, based on an industry-by-industry analysis of the portions of employees utilizing office space. This percentage has been calibrated by TNDG based on current estimated employment in the Coachella Valley and the existing inventory of occupied office space.

• Office space demand is projected at 175 square feet per office employee. The basis for this factor is fully documented in TNDG’s companion report.9

• Total construction demand is projected at 105% of occupied space demand (this adjustment allows for a stabilized occupancy rate of 95%).

Table 8 Projected Demand for New Office Construction 2015-2035

Coachella East Coachella Valley Valley

Employment Growth, 2015-2035 111,077 40,544

Office Jobs @ 23% of total new jobs 25,548 9,325

Demand for new office space @ 175 square feet per job 4,470,900 1,631,875

Adjusted up by 5% (allows for stabilized occupancy of 95%) 4,694,445 1,713,469

Source: TNDG

Table 9 on the following page provides TNDG’s projections of demand for new industrial space construction in the Coachella Valley and East Coachella Valley over the next 20 years. The projections are based on the following factors/assumptions:

• Total employment growth, per the recently released SCAG projections.

• Industrial employment is estimated at 6% of total employment, based on an industry-by- industry analysis of the portions of employees utilizing office space. This percentage has been calibrated by TNDG based on current estimated employment in the Coachella Valley and the existing inventory of occupied industrial space.

9 See Analysis of Onsite Employment Potentials, Paradise Valley Specific Plan, prepared by The Natelson Dale Group, Inc. and dated August 22, 2017.

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• Industrial space demand is projected at 1,100 square feet per industrial employee. This factor has been derived by TNDG based on an analysis of existing employment-to-space ratios for the Coachella Valley, and is consistent with prevailing industry standards (in which it is recognized that industrial employment densities can vary from 600 square feet per employee for light industrial/business park space to over 2,000 square feet per employee for warehouse/distribution space).

• Total construction demand is projected at 105% of occupied space demand (this adjustment allows for a stabilized occupancy rate of 95%).

Table 9 Projected Demand for New Industrial Space 2015-2035

Coachella East Coachella Valley Valley

Employment Growth, 2015-2035 111,077 40,544

Industrial Jobs @ 6% of total new jobs 6,665 2,433

Demand for new space @ 1,100 square feet per job 7,331,500 2,675,904

Adjusted up by 5% (allows for stabilized occupancy of 95%) 7,698,075 2,809,699

Source: TNDG

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6. HOTEL MARKET DEMAND SUMMARY

This chapter of the report describes the methodology for projecting future demand for new hotel development in the Coachella Valley. The hotel analysis is divided into two market segments corresponding to the two hotel facilities proposed within the Paradise Valley Specific Plan:

• Segment 1: Resort hotels; and • Segment 2: Mid-priced hotels.

The hotel market data presented below are from STR – the leading provider of hotel industry performance data.10 The customized STR used in the analysis are specific to the Coachella Valley and cover the market’s historic performance between 2000 and 2015.11 Standard hotel industry metrics considered in the analysis:

• Supply (total inventory of rooms) by year; • Average annual occupancy rate by year; • RevPAR (average revenue per available room night) by year; • Demand (total occupied room nights) by year; and • Year-over-year change in demand.

The analysis of historic (2000-2015) market performance by segment provides one basis for TNDG’s projection of future development demand for new hotels.

Growth in Demand Generators. Hotel markets are typically evaluated in terms of three broad sources of demand: resident-based demand, business-oriented demand, and tourist-related demand. While the importance of each source varies between regions (and there also tends to be a degree of overlap among the three categories), they provide a useful framework for projecting future growth in the number of supportable hotel rooms in a region. That is, hotel demand can generally be expected to increase as a region’s resident population, employment and tourism grow. The following data provide general indications of the potential strength of the Coachella Valley hotel market:

Measurement Average Annual Indicator Geographic Area Period Growth Rate Growth in Households Coachella Valley 2015-2035 2.0% Growth in Employment Coachella Valley 2015-2035 2.6% Growth in Visitor Expenditures Riverside County 1992-2014 1.1%

10 The two major market segments considered in this report reflect data aggregations for the following sub- segments tracked by STR: Segment 1 – Upscale, Upper Upscale and Luxury; and Segment 2 – Economy, Midscale and Upper Midscale. 11 Performance measures for 2015 have been estimated by TNDG based on year-to-date performance data (available through October 2015) from STR.

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The projected growth in households and employment are based on the latest demographic forecasts from the Southern California Association of Governments (released in December 2015). The SCAG data are provided for the following years: 2012, 2020, 2035 and 2040 (see Appendix B). The 2015 numbers have been estimated by TNDG by interpolating between SCAG’s 2012 estimate and 2020 projection.

Although no official forecasts are available for Coachella Valley tourism growth, long-term historic data for Riverside County provide a strong basis for understanding potential future trends. The indicated historic growth rate (for inflation adjusted visitor expenditures) is based on data from Dean Runyon Associates, a nationally prominent analyst of the impacts of tourism on local economies.12

A. Projected Demand for New Resort Hotel Rooms

Table 10 below summarizes the market performance of Coachella Valley resort hotels for the period 2000 through 2015.

Table 10 Summary of Market Performance, 2000-2015 Coachella Valley Resort Hotel Segment

Annual Demand Annual Supply Occupancy (Occupied Demand Year (Total Rooms) Rate RevPAR Room Nights) Growth 2000 8,546 62% $92.95 1,938,263 N/A 2001 8,616 58% $85.86 1,821,513 -6.0% 2002 8,723 58% $81.99 1,855,737 1.9% 2003 8,738 57% $79.47 1,826,113 -1.6% 2004 8,825 61% $85.12 1,965,875 7.7% 2005 9,094 60% $88.42 1,992,829 1.4% 2006 8,746 64% $101.16 2,033,093 2.0% 2007 8,442 60% $98.68 1,857,449 -8.6% 2008 9,045 57% $91.02 1,866,150 0.5% 2009 9,583 51% $73.04 1,776,015 -4.8% 2010 9,730 52% $71.77 1,845,075 3.9% 2011 9,647 56% $81.38 1,976,218 7.1% 2012 9,682 58% $88.12 2,040,067 3.2% 2013 9,656 59% $91.57 2,066,175 1.3% 2014 9,876 59% $97.89 2,131,367 3.2% 2015 10,046 60% $106.81 2,208,319 3.6% Average Annual Growth 1.1% 0.9% 0.9%

Source: STR; TNDG.

12 The Dean Runyon data indicate total visitor expenditures in Riverside County of $3.00 billion in 1992 and $6.50 billion in 2014. Based on the Consumer Price Index (CPI), the 1992 estimate would be $5.06 billion in 2014 dollars. Thus, the “real” (inflation adjusted) growth rate between 1992 and 2014 was 1.1% per year.

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Table 11 provides TNDG’s projection of future growth in the number of supportable resort hotel rooms in the Coachella Valley. The projections are based an annual demand growth rate of 1.0%. Given the demand growth generators described above (e.g., annual demand growth ranging from 1.3% to as high as 7.1% for each of the last five years), TNDG believes that the indicated growth rate of 1.0% is relatively conservative.

Table 11 Projected Coachella Valley Demand Growth Resort Hotels, 2015-2035

Supportable Rooms, 2015 10,046

Projected Average Annual Growth Rate 1.0%

Supportable Rooms, 2035 12,258

Demand Growth (Change in Supportable Rooms) 2,212

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B. Projected Demand for New Mid-priced Hotel Rooms

Table 12 below summarizes the market performance of Coachella Valley mid-priced and economy hotels for the period 2000 through 2015.

Table 12 Summary of Market Performance, 2000-2015 Coachella Valley Mid-priced/Economy Hotel Segment

Annual Demand Annual Supply (Total Occupancy (Occupied Demand Year Rooms) Rate RevPAR Room Nights) Growth 2000 4,041 62% $36.38 916,094 N/A 2001 4,204 60% $36.65 921,042 0.5% 2002 4,212 59% $36.06 914,724 -0.7% 2003 4,390 58% $35.06 923,449 1.0% 2004 4,404 61% $38.95 983,399 6.5% 2005 4,404 61% $40.39 986,736 0.3% 2006 4,404 64% $46.12 1,027,778 4.2% 2007 4,404 62% $47.38 990,285 -3.6% 2008 4,404 56% $43.05 905,209 -8.6% 2009 4,404 49% $34.48 785,766 -13.2% 2010 4,356 49% $33.80 775,475 -1.3% 2011 4,351 53% $36.51 833,975 7.5% 2012 4,359 55% $40.76 879,569 5.5% 2013 4,384 56% $42.63 892,363 1.5% 2014 4,458 56% $45.99 917,883 2.9% 2015 4,434 58% $49.80 939,663 2.4% Average Annual Growth 0.6% 2.1% 0.2%

Source: STR; TNDG.

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Table 13 provides TNDG’s projection of future growth in the number of supportable mid- priced/economy hotel rooms in the Coachella Valley. The projections are based an annual demand growth rate of 1.0%. Given the demand growth generators described above (e.g., annual demand growth ranging from 1.5% to as high as 7.5% for each of the last five years), TNDG believes that the indicated growth rate of 1.0% is relatively conservative.

Table 13 Projected Coachella Valley Demand Growth Mid-priced/Economy Hotels, 2015-2035

Supportable Rooms, 2015 4,434

Projected Average Annual Growth Rate 1.0%

Supportable Rooms, 2035 5,410

Demand Growth (Change in Supportable Rooms) 976

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7. ANALYSIS OF PROJECT ALTERNATIVES

This section of the report considers the potential urban decay impacts of the three project alternatives defined in the project Environmental Impact Report (EIR):

All-Seniors Alternative. This project alternative would have the same number of dwelling units (8,490) as the Proposed Project, but the entire project would be an age-restricted (age 55+) community. The commercial/industrial components of the project would be re-sized based on the unique demographic characteristics of an all-seniors community.

Reduced Footprint Alternative. This project alternative would have the same number of dwelling units (8,490) as the Proposed Project, but the development would be compressed onto a smaller footprint (resulting in smaller effective lot sizes). The reduced lot sizes would affect the nature of the project in two ways: 1) the distribution of residential units by product type would be more heavily weighted towards higher-density/lower-priced product types, and 2) the sales price per unit (even within the same product category) would be lower.13 These effects would, in turn, affect the demographic makeup of the community. The commercial/industrial components of the project would be modified to reflect the change in the project’s demographic mix.

Reduced Density Alternative. This project alternative would have 4,250 dwelling units, or half the number of units in the Proposed Project. The lower-density project would result in a housing product mix that is more heavily weighted towards higher-priced product types with larger lots. The 50% reduction in residential development would also result in an across-the-board reduction in commercial/industrial development within the project.

Assumed Commercial and Industrial Land Uses for the Project Alternatives

In a separate report (“companion report”) prepared for the Paradise Valley project14, TNDG has evaluated market demand for commercial and industrial land uses for each project alternative. Table 14 on the following page summarizes projected commercial and industrial development for the three project alternatives (numbers for the Proposed Project are also provided for comparison). These land use assumptions are the basis for evaluating the urban decay impacts of the project alternatives.

13 Based on the market study completed for the Proposed Project, the project applicant estimates that prices of for-sale housing would decrease by 10% for the Reduced Footprint Alternative. 14 See Analysis of Onsite Employment Potentials, Paradise Valley Specific Plan, prepared by The Natelson Dale Group, Inc. and dated August 22, 2017.

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Table 14 Commercial and Industrial Land Uses Paradise Valley Specific Plan Proposed Project and Project Alternatives Reduced Reduced Proposed All-Seniors Footprint Density Land Use Project (1) Alternative (2) Alternative (3) Alternative (4) Retail (square feet) 441,687 392,682 419,912 201,341

Office (square feet) 450,323 158,511 450,323 172,098

Light Industrial / 106,380 42,832 106,380 46,503 Business Park (square feet) Resort Hotel 300 300 300 150 (guest rooms) Business Hotel 100 100 100 50 (guest rooms)

(1) For the Proposed Project, the square footages of retail, office and industrial space are less than the maximum square footages that could be supported by market demand; square footages (and related employment potentials) have been adjusted down to the Specific Plan control totals. (2) For the All-Seniors Alternative, the square footages of retail, office and industrial space are based on TNDG’s market demand models (see companion report15). The retail demand model reflects the alternative’s housing mix and associated income levels. The office/industrial models are based on the same per-dwelling unit demand factors used for the Proposed Project, but have been adjusted by a factor of 35% (i.e., reduced by 65%) to reflect the typical land use mix of an age-restricted community (see Appendix H of the companion report for documentation of this factor). The hotels are assumed to be the same as the Proposed Project (since demand for the hotels is not expected to be impacted by the change in dwelling units). (3) For the Reduced Footprint Alternative, the retail square footage reflects the somewhat lower average housing price (which results in a lower average household income level). The office/industrial demand is projected to be the same as the Proposed Project (since the dwelling unit count is the same; as with the Proposed Project, office and industrial square footages have been adjusted down to the Specific Plan control totals (since theoretical market demand would exceed the Specific Plan allocations). Hotels are assumed to be the same as for the Proposed Project. (4) For the Reduced Density Alternative, square footages of retail, office and industrial space are based on TNDG’s market demand models (see companion report). The model projections have been adjusted by a factor of 76% to reflect the market constraints associated with a substantially smaller community (see Appendix I of the companion report for documentation of this factor).

15 Analysis of Onsite Employment Potentials, Paradise Valley Specific Plan, prepared by The Natelson Dale Group, Inc. and dated August 22, 2017.

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Potential Urban Decay Impacts of Project Alternatives

As described in detail in the preceding chapters of this report, it is TNDG’s conclusion that the Proposed Project would not cause urban decay. For all land uses, TNDG’s analyses conclude that demand for new development in the market areas affected by the project would be more than sufficient to support the Proposed Project without having adverse competitive impacts on existing development or communities.

Since the project alternatives would involve commercial and industrial development quantities that are equal to or less than (depending on the land use and the alternative) the Proposed Project, TNDG concludes that none of the project alternatives would cause urban decay.

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APPENDIX A: RETAIL DEMAND MODEL

Demand for retail goods and services within the model described in this appendix is generated by residents within the built-out Paradise Valley community. The three primary factors associated with retail demand for this population are projected population (full-time and seasonal), income levels, and the portion of income allocated toward retail expenditures. In the demand model, the percent of income allocated to retail goods has been adjusted to reflect the relative affluence of the community, and projected retail demand for project residents is disaggregated into various retail categories based upon historic retail expenditure patterns in Riverside County.

Table A-1 shows total income and potential retail sales for the Paradise Valley Specific Plan Area with the project built out. The total income is derived from the anticipated housing prices within the project and the typical income levels for homebuyers in the project’s price ranges.

Table A-1 Total Income and Potential Retail Sales Projections Paradise Valley Specific Plan Area (In thousands of 2015 dollars)

Buildout Total Income: $603,613

Total $603,613

Potential Retail Sales: $177,118

Total $177,118

29% Source: TNDG

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Projected retail demand for project residents is disaggregated into various retail categories based upon historic retail expenditure patterns in Riverside County. The percentage distribution of retail sales by retail category is as follows (Table A-2):

Table A-2

Distribution of Retail Sales by Retail Category

Paradise Valley Specific Plan Area

% Distribution

Retail Category Buildout

Shopper Goods:

Apparel 7.3%

General Merchandise 15.6%

Furniture/Appliances 2.0%

Specialty 8.2%

Subtotal 33.1%

Convenience Goods:

Food 18.6%

Eating and Drinking 11.6%

Subtotal 30.2%

Heavy Commercial Goods:

Building Materials/Hardware 6.3%

Auto Dealers and Parts 16.2%

Service Stations 14.1%

Subtotal 36.7%

Total 100.0%

Source: TNDG, based on historic trends reported by the State Board of Equalization for Riverside County.

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Based on the above percentages, Table A-3 (below) allocates total projected retail sales (in thousands of dollars) by major category.

Table A-3

Projected Demand for Retail Sales by Retail Category

Paradise Valley Specific Plan Area (In thousands of 2015 dollars)

Retail Category Buildout

Shopper Goods:

Apparel $12,842

General Merchandise $27,709

Furniture/Appliances $3,523

Specialty $14,583

Subtotal $58,658

Convenience Goods:

Food $32,975

Eating and Drinking $20,560

Subtotal $53,536

Heavy Commercial Goods:

Building Materials/Hardware $11,128

Auto Dealers and Parts $28,743

Service Stations $25,054

Subtotal $64,925

Total $177,118

Source: TNDG

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In Table A-4 below, the retail sales categories in Table A-3 are reinterpreted in terms of how the categories would likely be expressed, in some cases in greater categorical detail, within the community of Paradise Valley. Note that this process also results in a reduction of the expected retail sales amount total (since some of the retail expenditures indicated on Table A-3 above are in categories not relevant to this analysis, such as automobile dealerships).

Table A-4

Net Supportable Retail Sales

Paradise Valley Specific Plan Area (In thousands of 2015 dollars)

Retail Category Buildout

Drug Stores 1/ $2,494

Other GAFO Stores 2/ $56,164

Supermarkets 3/ $29,678

Other Food Stores $3,298

Eating and Drinking $20,560

Building Materials/Hardware $11,128

Auto Parts Stores 4/ $3,449

Total $126,770

1/ Assumes Drug Stores account for 9% of total General Merchandise sales.

2/ GAFO = General Merchandise/Apparel/Furniture/Other (specialty).

3/ Assumes Supermarkets account for 90% of total Food sales.

4/ Assumes Auto Parts account for 12% of total Automotive Group sales.

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The final series of steps in the retail analysis translates the dollar volumes of projected retail sales into supportable square footages of retail space. Projected sales volume requirements per square foot of retail space by retail category are derived from typical sales standards, such as the Urban Land Institute’s Dollars & Cents of Shopping Centers periodic publication, and from typical sales-per-square- foot data from representative stores in each retail category. These standards are shown in Table A-5.

Table A-5

Sales Per Square Foot Standards

Paradise Valley Specific Plan Area

Retail Category Sales / Square Feet

Drug Stores $600

Other GAFO $300

Supermarkets $450

Other Food Stores $400

Eating / Drinking $400

Building / Hardware / Garden $250

Auto Parts $200

Source: TNDG, based on data published by ULI and Retail MAXIM.

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The above standards are applied to net demand for retail sales in each retail category in order to convert sales figures to net supportable square feet of retail space. Table A-6 (below) provides these estimates for the resident base at Paradise Valley upon buildout. Note that a factor has been included to account for service industries, such as hair salons, real estate brokerages, and other such functions, that typically occupy shopping center-type space.

Table A-6

Potential Supportable Square Feet of Retail Development

Paradise Valley Specific Plan Area

Retail Category Buildout

Drug Stores 4,156

Other GAFO 187,213

Supermarkets 65,950

Other Food 8,244

Eating and Drinking 51,401

Building Materials / Hardware 44,513

Auto Parts Stores 17,246

Services Space @ 25% of Retail 94,681

Total 469,246

Source: TNDG

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APPENDIX B. SCAG DEMOGRAPHIC DATA FOR COACHELLA VALLEY

EMP EMP EMP EMP TAZ HH 2012 HH 2020 HH 2035 HH 2040 2012 2020 2035 2040 43468700 2 2 2 2 0 0 0 0 43471100 0 0 0 0 17 51 87 91 43471300 0 0 1 2 0 0 0 0 43471400 30 30 30 30 0 0 0 0 43472100 0 0 1 1 7 7 7 7 43472200 11 25 45 57 0 0 0 0 43472300 126 335 656 831 29 228 435 463 43473100 0 0 1 1 5 1,671 3,313 3,547 43473200 27 29 36 38 0 119 453 500 43473300 0 0 0 0 0 65 243 268 43473400 303 303 361 369 48 60 74 76 43474100 0 82 205 272 40 75 157 168 43474200 21 236 550 727 0 9 33 38 43474300 26 26 38 45 0 22 69 75 43474400 12 12 41 48 9 21 46 48 43474500 137 268 436 536 0 3 9 10 43474600 67 67 67 67 98 868 1,523 1,593 43474700 0 0 0 0 33 71 153 162 43474800 8 8 8 8 0 126 389 418 43474900 0 0 0 0 0 89 104 119 43475100 122 122 122 122 21 53 86 100 43475200 0 0 0 0 0 0 0 0 43475300 0 0 0 0 0 0 0 0 43476100 0 0 0 0 0 1 3 3 43476200 85 94 114 117 4 4 5 5 43476300 1,116 1,202 1,617 1,718 153 243 334 348 43477100 1,278 1,411 1,713 1,746 445 624 799 824 43477200 466 511 612 624 424 537 649 665 43478100 235 304 475 496 3064 3440 3810 3863 43478200 637 701 843 858 875 1124 1370 1405 43479100 402 443 537 548 217 261 305 310 43479200 552 646 873 899 993 1,260 1,523 1,561 43480100 805 866 999 1,013 250 274 297 301 43480200 753 828 993 1,011 3,539 3,612 3,683 3,693 43481100 150 167 206 222 6 24 65 71 43481200 280 289 311 328 116 156 200 200 43482100 868 1,004 1,327 1,364 4,082 4,465 4,843 4,897

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43482200 857 960 1,200 1,227 628 864 1,096 1,130 43483100 1,215 1,340 1,614 1,644 515 691 864 889 43483200 1,049 1,152 1,377 1,401 618 764 909 929 43484100 884 985 1,209 1,234 367 476 583 598 43484200 719 779 914 928 38 38 39 39 43485100 678 748 908 926 90 93 96 97 43485200 938 1,025 1,215 1,235 449 507 563 571 43485300 798 859 991 1,006 483 498 513 516 43486100 1,023 1,172 1,366 1,461 86 86 86 86 43486200 1,035 1,562 2,171 2,499 41 43 44 44 43486300 57 99 158 192 1 1 1 1 43486400 37 138 279 360 13 119 231 247 43486500 688 987 1,053 1,073 226 463 710 744 43487100 0 0 0 0 0 0 0 0 43488100 2 4 8 8 0 1 2 2 43488200 4 10 15 16 0 6 15 15 43488300 68 101 137 153 16 190 373 399 43488400 0 0 0 0 0 9 34 37 43488500 3 6 7 7 7 178 372 399 43488600 122 123 126 127 109 279 424 444 43489100 1,718 1,874 2,214 2,252 2,345 2,635 2,919 2,960 43489200 0 0 0 0 685 769 839 846 43490100 1,575 1,692 1,946 1,974 137 182 227 233 43490200 539 581 675 685 257 388 518 536 43490300 19 21 23 24 171 226 263 265 43491100 392 431 519 529 99 148 196 203 43491200 1,045 1,153 1,393 1,419 227 256 284 288 43492100 576 894 1,264 1,462 81 133 182 188 43492200 1,067 1,549 1,824 1,842 505 719 937 974 43493100 411 667 977 1,141 741 966 1,180 1,205 43494100 214 320 438 444 239 403 574 600 43494200 586 837 878 896 521 645 774 791 43494300 626 908 1,058 1,069 140 515 908 960 43495100 105 143 243 255 1,044 1,151 1,239 1,247 43495200 82 90 109 111 95 151 203 210 43496100 552 595 801 851 535 805 1,076 1,116 43496200 55 62 78 80 490 839 1,134 1,165 43497100 118 130 157 159 9 166 321 343 43497200 0 0 0 0 660 1,125 1,570 1,631 43497300 862 937 1,100 1,117 890 1,003 1,098 1,108

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43497400 108 119 142 144 109 270 427 449 43498100 942 1,055 1,309 1,337 340 348 360 360 43498200 350 390 479 489 455 759 1,059 1,102 43498300 4 5 13 13 442 1,586 2,735 2,906 43498400 923 1,032 1,334 1,383 795 955 1,120 1,145 43499100 642 945 1,259 1,259 272 679 1,108 1,170 43499200 668 992 1,356 1,372 224 308 394 408 43499300 474 722 1,004 1,161 36 542 1,070 1,147 43500100 105 118 147 150 103 817 1,521 1,621 43500200 1 1 1 1 0 0 0 0 43500300 521 592 753 771 753 853 950 965 43500400 179 199 244 250 11 11 11 11 43501100 786 1,168 1,595 1,685 50 198 351 372 43501200 199 345 529 635 108 140 167 176 43501300 507 510 531 539 20 35 51 58 43501400 946 950 977 983 107 122 136 136 43501500 378 569 787 903 317 673 1,042 1,094 43501600 23 23 25 25 6 11 18 18 43502100 517 554 736 779 49 91 135 142 43502200 0 24 157 185 0 25 97 107 43502300 380 424 648 699 408 408 408 408 43502400 2,277 2,425 2,596 2,596 734 759 780 783 43503100 0 45 291 344 7 372 749 806 43503200 2 69 434 514 31 473 932 1,004 43503300 0 8 56 65 0 22 68 75 43504100 833 890 986 986 734 1,060 1,392 1,444 43504200 1,451 1,556 2,055 2,136 512 588 667 679 43505100 25 28 36 42 41 52 59 66 43505200 36 40 50 56 1 19 35 44 43505300 0 0 574 668 33 44 59 66 43505400 283 295 778 872 20 52 67 75 43505500 21 27 37 39 20 22 25 30 43505600 73 79 88 91 9 18 42 49 43505700 311 316 322 330 124 149 181 183 43506100 143 298 499 609 11 493 998 1,070 43506200 58 95 138 163 89 91 92 92 43507100 9 10 14 15 884 1,168 1,430 1,465 43507200 0 3 24 30 134 188 243 252 43507300 645 689 904 956 49 49 49 49 43507400 375 407 556 593 127 211 297 311

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43507500 400 464 776 851 92 170 249 262 43507600 76 108 274 312 806 983 1,139 1,159 43507700 6 6 8 8 291 446 586 606 43508100 1,745 1,870 2,358 2,358 817 1,103 1,396 1,441 43508200 1,242 1,330 1,649 1,649 177 289 405 423 43509100 347 384 533 564 134 136 136 136 43509200 912 979 1,302 1,381 1,030 1,233 1,437 1,468 43510100 91 104 161 175 24 202 416 449 43510200 984 1,091 1,614 1,736 663 1,042 1,324 1,368 43511100 451 510 794 832 487 925 1,389 1,459 43511200 570 653 1,047 1,099 825 1,165 1,535 1,592 43512100 1,658 1,777 2,137 2,137 401 509 617 632 43512200 91 103 161 175 78 133 191 200 43512300 19 21 29 31 27 45 85 89 43512400 183 200 282 293 11 52 97 104 43513100 429 461 616 637 23 88 161 172 43513200 380 420 619 666 758 1,063 1,375 1,423 43514100 1,089 1,163 1,506 1,506 533 799 1,071 1,113 43514200 742 789 1,005 1,033 193 198 203 204 43514300 478 509 655 675 384 384 384 384 43515100 0 0 0 0 31 44 319 354 43515200 0 0 0 0 11 14 17 17 43515300 0 0 0 0 81 156 231 233 43515400 0 4 31 37 0 4 13 15 43516100 685 695 712 719 50 192 333 348 43517100 389 413 528 543 1,786 2,071 2,385 2,433 43517200 220 236 313 323 89 99 103 103 43517300 716 762 972 999 678 678 678 678 43518100 669 748 924 950 2,495 3,290 4,106 4,230 43518200 120 128 143 148 56 56 56 56 43518300 48 52 69 69 67 202 346 368 43519100 207 235 389 413 156 315 492 519 43519200 1,057 1,126 1,443 1,485 173 177 177 177 43520100 501 531 673 691 593 702 823 841 43520200 705 771 1,079 1,119 123 136 148 150 43521100 284 323 494 516 1,344 1,669 2,108 2,269 43521200 185 202 282 293 1,547 1,707 1,867 1,891 43521300 405 444 618 640 1,055 1,435 1,849 1,912 43522100 0 0 0 0 1,062 1,706 2,442 2,848 43522200 1 1 1 1 93 93 93 93

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43522300 0 0 0 0 37 134 230 239 43523100 179 192 257 266 541 998 1,503 1,580 43523200 214 232 320 333 390 566 761 790 43523300 616 653 822 843 910 1,015 1,131 1,149 43524100 84 98 127 131 2,318 2,961 3,628 3,764 43524200 804 893 1,123 1,157 340 411 476 522 43525100 691 697 709 714 223 307 341 375 43525200 56 58 75 79 17 17 17 17 43525300 43 52 65 77 69 69 69 69 43525400 662 662 662 662 75 91 169 248 43525500 593 605 643 649 34 69 118 133 43525600 132 132 132 132 15 15 15 15 43526100 706 762 880 897 118 120 121 122 43526200 1,290 1,395 1,615 1,648 270 306 341 346 43527100 16 20 35 41 28 87 335 411 43527200 818 818 839 854 1,908 1,908 1,908 1,908 43527300 268 277 297 310 279 325 395 399 43527400 3 3 3 3 575 651 775 778 43527500 1,250 1,260 1,359 1,373 83 141 204 209 43528100 893 1,019 1,281 1,320 3,529 3,840 4,161 4,209 43528200 1,022 1,180 1,520 1,573 1,448 1,677 1,913 2,048 43528300 740 824 998 1,024 879 998 1,147 1,551 43529100 99 108 128 131 1,556 1,759 2,107 2,311 43529200 1,783 1,919 2,197 2,238 165 181 196 199 43530100 2,006 2,170 2,510 2,560 1,020 1,072 1,124 1,131 43530200 336 371 446 457 2,168 2,601 2,851 2,984 43530300 1,175 1,267 1,456 1,484 3,558 3,767 3,977 4,172 43531100 1,396 1,602 2,023 2,085 2,818 3,055 3,300 3,337 43531200 818 943 1,229 1,276 1,584 1,812 2,046 2,081 43532100 664 717 826 842 743 1,059 1,165 1,286 43532200 675 723 819 833 434 580 798 906 43533100 72 80 97 100 18 18 18 18 43533200 140 156 178 180 209 359 514 538 43533300 627 695 921 967 516 546 576 581 43533400 643 722 831 837 346 593 847 884 43534100 92 150 292 315 897 972 1,499 1,594 43534200 1,192 1,309 1,557 1,594 1,102 1,944 3,567 4,640 43535100 140 165 258 280 2,564 2,847 3,326 3,322 43536100 370 378 915 1,029 130 317 684 839 43536200 68 68 68 68 963 1,099 1,317 1,322

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43537100 130 136 155 164 76 76 76 76 43538100 1,062 1,160 1,367 1,398 518 526 534 536 43538200 1,122 1,217 1,416 1,446 246 270 295 299 43538300 1,292 1,411 1,660 1,697 225 338 352 353 43539100 814 997 1,476 2,101 4,278 4,547 4,670 4,707 43539200 584 645 779 799 250 254 258 259 43540100 485 543 732 768 134 134 135 136 43540200 819 925 1,266 1,333 977 1,225 1,481 1,517 43540300 45 46 46 46 1,056 1,245 1,440 1,466 43540400 279 316 435 458 317 334 352 355 43540500 351 377 429 437 16 20 24 24 43541100 73 87 134 145 168 994 1,846 1,964 43541200 1,202 1,294 1,482 1,509 68 69 71 71 43541300 914 984 1,128 1,149 730 904 1,016 1,043 43542100 1,738 1,858 2,040 2,054 49 49 49 49 43543100 1,404 1,498 1,651 1,668 67 68 68 68 43544100 907 972 1,072 1,084 1,799 1,857 1,919 1,927 43544200 783 848 940 948 1,929 2,034 2,142 2,156 43545100 790 858 947 954 1,495 1,519 1,540 1,544 43545200 1,789 2,156 2,677 2,733 2,528 4,134 5,788 6,040 43546100 1,146 1,146 1,146 1,146 26 137 196 213 43546200 1,224 1,224 1,224 1,224 781 800 895 894 43546300 1,824 1,824 1,825 1,825 99 122 170 200 43547100 1,221 1,488 1,952 2,010 2,179 3,234 4,318 4,484 43547200 1,736 1,851 2,028 2,035 264 329 396 410 43548100 1,530 1,594 1,698 1,716 594 765 1,046 1,092 43548200 809 846 894 906 619 630 756 909 43549100 1,451 1,641 2,017 2,109 2,348 3,600 4,931 5,110 43549200 534 553 633 654 443 485 565 565 43549300 780 795 832 845 211 217 243 249 43550100 859 1,012 1,361 1,444 141 149 166 169 43550200 103 187 430 493 53 146 243 256 43550300 138 180 293 320 13 24 35 37 43551100 548 642 856 906 34 219 413 440 43551200 1,648 1,980 2,710 2,749 407 615 834 865 43551300 496 588 805 857 243 282 323 328 43552100 2 6 13 14 50 59 68 69 43552200 303 327 363 367 24 99 177 189 43552300 686 745 831 836 442 525 609 621 43552400 94 108 131 133 51 66 81 85

THE NATELSON DALE GROUP, INC. Page 36 Urban Decay Study Paradise Valley Specific Plan

43552500 159 177 203 204 45 49 53 54 43552600 241 261 293 294 69 107 146 150 43553100 822 977 1,344 1,431 319 397 479 490 43553200 861 1,055 1,542 1,660 117 118 118 119 43553300 816 1,057 1,615 1,746 162 368 584 614 43554100 275 302 336 340 69 110 153 157 43554200 117 149 232 253 47 48 48 48 43554300 361 398 448 454 305 326 351 353 43555100 235 299 574 659 338 1,107 1,920 2,025 43556100 863 1,044 1,487 1,593 190 487 800 843 43556200 492 575 763 808 51 64 79 81 43556300 721 837 947 947 262 319 364 370 43556400 409 471 531 531 82 82 82 82 43556500 0 0 0 0 0 16 49 54 43557100 821 1,007 1,431 1,530 1,534 2,187 2,873 2,968 43557200 589 689 841 841 1,139 1,485 1,851 1,900 43558100 607 704 747 747 296 514 743 774 43558200 0 0 0 0 346 480 606 623 43558300 965 1,131 1,455 1,455 437 493 550 559 43559100 458 534 609 609 231 494 770 808 43559200 631 769 1,085 1,159 758 1,150 1,563 1,620 43560100 1,033 1,109 1,109 1,109 103 233 369 388 43561100 830 963 1,085 1,085 1,865 1,966 2,072 2,086 43561200 491 584 765 765 812 1,576 2,382 2,494 43562100 1,635 1,889 2,356 2,356 538 955 1,390 1,449 43562200 785 917 1,219 1,289 231 511 807 848 43563100 2 2 2 2 131 218 291 301 43563200 495 570 626 626 265 590 924 970 43563300 140 160 174 174 149 244 344 358 43563400 0 0 0 0 455 512 555 561 43563500 69 80 103 103 327 463 585 601 43564100 1,363 1,599 2,141 2,268 214 278 345 355 43564200 1,499 2,553 2,658 2,676 276 669 1,026 1,080 43565100 46 103 273 317 23 44 67 70 43565200 165 245 285 285 38 47 57 58 43565300 30 30 41 49 30 83 185 200 43565400 14 15 25 29 97 106 152 166 43565500 20 77 372 578 36 312 563 600 43566100 12 15 17 17 20 172 502 657 43566200 69 81 82 82 165 235 318 325

THE NATELSON DALE GROUP, INC. Page 37 Urban Decay Study Paradise Valley Specific Plan

43566300 226 267 334 348 117 546 986 1,086 43566400 580 638 724 730 107 119 141 156 43566500 81 87 87 87 2 52 167 197 43566600 108 111 134 140 20 101 180 296 43566700 19 23 23 23 32 32 32 32 43566800 81 81 103 103 41 87 118 133 43566900 4 6 14 38 3 9 50 65 43567100 286 290 312 316 367 653 943 1,010 43567200 27 41 67 73 3 6 13 14 43567300 39 43 43 43 107 174 337 413 43567400 11 14 33 41 39 125 290 367 43567500 42 49 49 49 6 86 334 492 43567600 0 0 0 0 557 557 557 587 43567700 60 87 91 91 45 87 252 329 43567800 38 42 63 71 9 34 66 74 43568100 744 944 1,436 1,576 134 446 778 820 43568200 80 81 81 81 219 319 386 396 43568300 482 557 681 681 19 19 19 19 43568400 807 944 1,180 1,180 698 1,006 1,331 1,376 43568500 141 171 239 240 1,515 1,967 2,435 2,500 43569100 786 1,344 1,506 1,506 135 675 1,166 1,239 43569200 980 1,739 2,845 2,845 277 1,061 1,773 1,880 43570100 172 197 197 197 17 209 383 409 43570200 506 757 759 759 290 604 889 931 43571100 15 88 474 732 243 801 1,346 1,366 43571200 1,210 1,943 1,948 1,948 837 2,036 3,123 3,286 43571300 418 505 506 506 1,673 3,030 4,260 4,444 43571400 1,072 1,762 1,766 1,766 380 814 1,208 1,267 43571500 2 2 2 2 2 37 62 65 43572100 13 137 804 1,277 84 1,525 2,834 3,029 43572200 9 18 66 103 1,508 2,103 2,699 2,801 43572300 21 56 164 192 31 166 309 328 43572400 0 0 0 0 1,815 1,823 1,843 1,855 43572500 600 714 983 1,047 472 518 565 572 43573100 544 752 753 753 777 1,117 1,439 1,470 43573200 712 1,196 1,199 1,199 151 406 639 674 43574100 790 1,369 1,809 1,809 183 300 417 420 43574200 266 353 354 354 116 475 800 849 43575100 31 34 34 34 54 192 380 392 43575200 256 265 357 376 372 438 760 993

THE NATELSON DALE GROUP, INC. Page 38 Urban Decay Study Paradise Valley Specific Plan

43575300 0 0 0 0 49 87 168 411 43575400 191 205 281 301 150 226 294 294 43576100 50 280 1,511 2,345 0 128 471 522 43576200 3 70 435 699 0 180 699 775 43576300 54 197 950 1,426 0 272 1,029 1,140 43576400 8 75 435 688 37 1,174 2,206 2,360 43576500 1 11 62 99 0 44 170 188 43577100 379 388 465 465 119 167 224 331 43577200 270 288 288 288 48 50 168 247 43577300 3 4 4 4 100 104 111 111 43577400 280 280 300 300 299 308 425 499 43577500 298 311 388 422 67 162 336 535 43577600 43 43 43 43 0 86 251 410 43577700 13 20 1,245 1,490 279 290 342 417 43577800 50 56 1,056 1,260 185 185 255 497 43577900 77 82 622 779 34 87 252 370 43578100 24 24 24 24 20 52 96 113 43578200 31 35 35 35 82 91 106 115 43578300 0 0 0 0 2,277 2,483 2,686 2,693 43578400 239 247 296 313 364 364 377 501 43578500 27 88 399 622 41 114 217 245 43578600 0 0 0 0 248 310 372 374 43578700 65 69 78 78 51 173 336 493 43578800 5 7 7 7 87 87 87 87 43578900 5 5 5 5 2 34 67 99 43579100 192 205 655 868 15 235 1,002 1,312 43579200 72 83 1,518 1,907 33 217 669 985 43579300 7 9 10 10 10 10 10 10 43580100 2 2 2 2 0 18 58 63 43580200 6 49 164 197 16 168 502 821 43580300 6 7 7 7 0 43 84 123 43580400 155 155 188 207 123 228 671 823 43580500 147 147 373 419 6 26 42 58 43580600 0 0 0 0 0 52 251 328 43580700 1,538 1,542 1,638 1,676 306 398 483 524 43580800 14 14 43 50 60 260 459 480 43580900 48 48 50 50 7 18 51 66 43581100 17 23 34 38 56 87 135 165 43581200 171 178 274 360 7 83 132 162 43581300 22 29 106 124 0 103 200 246

THE NATELSON DALE GROUP, INC. Page 39 Urban Decay Study Paradise Valley Specific Plan

43581400 18 19 19 19 204 204 204 204 43581500 2 2 2 2 73 98 148 163 43581600 15 15 15 15 0 25 75 82 43581700 98 107 149 149 47 47 336 493 43582100 0 0 0 0 2 7 12 12 43583100 34 34 84 94 0 43 51 58 43583200 146 146 146 146 6 18 33 41 43583300 479 485 499 501 2 18 36 65 43583400 83 86 105 111 36 99 381 470 43583500 84 88 120 129 2 25 75 99 43584100 0 3,830 4,693 5,929 0 291 716 1,270 43587200 0 2 8 10 558 562 566 567 43589100 641 694 783 839 168 335 795 889 43590100 632 715 830 849 1,127 1,287 1,453 1,476 43591100 978 1,104 1,283 1,312 270 386 552 578 43592100 1,083 1,242 1,479 1,521 1,749 2,180 2,844 2,968 43593100 1,110 1,249 1,439 1,469 371 501 640 660 43594100 670 779 1,004 1,039 214 880 1,617 1,865 43596200 319 321 362 381 27 162 295 308 43597100 76 85 122 131 12 165 380 469 43597300 10 10 10 10 41 56 97 104 43468400 39 41 44 46 264 264 264 264 43468500 29 30 34 36 35 74 112 115 43468600 0 0 1 1 49 49 49 49 43471200 331 334 370 375 79 173 268 277 43585100 210 1,046 7,672 9,378 143 296 809 1,012 43586100 0 8 244 300 0 61 167 181 43587100 329 336 353 358 55 130 253 330 43588100 245 276 350 364 271 288 332 367 43597200 70 95 218 250 33 256 593 682

163,253 194,605 257,178 273,440 153,312 215,407 286,835 304,246

THE NATELSON DALE GROUP, INC. Page 40 Urban Decay Study Paradise Valley Specific Plan

EMP EMP EMP EMP City HH 2012 HH 2020 HH 2035 HH 2040 2012 2020 2035 2040 Blythe 4,514 5,165 6,077 6,220 3,719 5,060 6,449 6,629 Cathedral City 17,092 18,618 24,954 25,991 10,794 15,591 20,494 21,238 Coachella 9,214 20,295 34,102 40,117 8,543 20,055 32,244 34,423 Desert Hot Springs 9,108 14,403 19,735 21,875 3,669 7,865 12,273 12,893 Indian Wells 2,755 3,097 4,220 4,447 3,982 5,379 6,821 7,021 Indio 23,819 28,372 37,714 39,330 16,031 25,556 35,464 36,834 La Quinta 14,889 16,484 18,859 19,073 12,422 16,592 20,852 21,493 Palm Desert 23,352 25,716 30,666 31,401 36,874 42,893 50,152 53,579 Palm Springs 22,866 25,275 30,706 31,309 26,347 35,433 44,528 45,771 Rancho Mirage 8,871 9,609 13,096 13,559 12,339 16,055 19,946 20,537 Total of Cities 136,480 167,034 220,129 233,322 134,720 190,479 249,223 260,418

Unincorporated 26,773 27,571 37,049 40,118 18,592 24,928 37,612 43,828

CV excluding Blythe 158,739 189,440 251,101 267,220 149,593 210,347 280,386 297,617

THE NATELSON DALE GROUP, INC. Page 41 Urban Decay Study Paradise Valley Specific Plan

APPENDIX C: SCAG DEMOGRAPHIC DATA FOR EAST COACHELLA VALLEY SUB-REGION

For purposes of utilizing the SCAG demographic forecasts, the following traffic analysis zones (TAZ’s) were included in the East Coachella Valley sub-region:

HH HH HH HH EMP EMP EMP EMP TAZ 2012 2020 2035 2040 2012 2020 2035 2040 43549100 1,451 1,641 2,017 2,109 2,348 3,600 4,931 5,110 43550100 859 1,012 1,361 1,444 141 149 166 169 43550200 103 187 430 493 53 146 243 256 43550300 138 180 293 320 13 24 35 37 43551100 548 642 856 906 34 219 413 440 43551200 1,648 1,980 2,710 2,749 407 615 834 865 43551300 496 588 805 857 243 282 323 328 43553100 822 977 1,344 1,431 319 397 479 490 43553200 861 1,055 1,542 1,660 117 118 118 119 43553300 816 1,057 1,615 1,746 162 368 584 614 43554200 117 149 232 253 47 48 48 48 43555100 235 299 574 659 338 1,107 1,920 2,025 43556100 863 1,044 1,487 1,593 190 487 800 843 43556200 492 575 763 808 51 64 79 81 43556300 721 837 947 947 262 319 364 370 43556400 409 471 531 531 82 82 82 82 43556500 0 0 0 0 0 16 49 54 43557100 821 1,007 1,431 1,530 1,534 2,187 2,873 2,968 43557200 589 689 841 841 1,139 1,485 1,851 1,900 43558100 607 704 747 747 296 514 743 774 43558200 0 0 0 0 346 480 606 623 43558300 965 1,131 1,455 1,455 437 493 550 559 43559100 458 534 609 609 231 494 770 808 43559200 631 769 1,085 1,159 758 1,150 1,563 1,620 43560100 1,033 1,109 1,109 1,109 103 233 369 388 43561100 830 963 1,085 1,085 1,865 1,966 2,072 2,086 43561200 491 584 765 765 812 1,576 2,382 2,494 43562100 1,635 1,889 2,356 2,356 538 955 1,390 1,449 43562200 785 917 1,219 1,289 231 511 807 848 43563100 2 2 2 2 131 218 291 301 43563200 495 570 626 626 265 590 924 970 43563300 140 160 174 174 149 244 344 358 43563400 0 0 0 0 455 512 555 561 43563500 69 80 103 103 327 463 585 601 43564100 1,363 1,599 2,141 2,268 214 278 345 355 43564200 1,499 2,553 2,658 2,676 276 669 1,026 1,080 43565100 46 103 273 317 23 44 67 70

THE NATELSON DALE GROUP, INC. Page 42 Urban Decay Study Paradise Valley Specific Plan

43565200 165 245 285 285 38 47 57 58 43565300 30 30 41 49 30 83 185 200 43565500 20 77 372 578 36 312 563 600 43567100 286 290 312 316 367 653 943 1,010 43567600 0 0 0 0 557 557 557 587 43568100 744 944 1,436 1,576 134 446 778 820 43568200 80 81 81 81 219 319 386 396 43568300 482 557 681 681 19 19 19 19 43568400 807 944 1,180 1,180 698 1,006 1,331 1,376 43568500 141 171 239 240 1,515 1,967 2,435 2,500 43569100 786 1,344 1,506 1,506 135 675 1,166 1,239 43569200 980 1,739 2,845 2,845 277 1,061 1,773 1,880 43570100 172 197 197 197 17 209 383 409 43570200 506 757 759 759 290 604 889 931 43571100 15 88 474 732 243 801 1,346 1,366 43571200 1,210 1,943 1,948 1,948 837 2,036 3,123 3,286 43571300 418 505 506 506 1,673 3,030 4,260 4,444 43571400 1,072 1,762 1,766 1,766 380 814 1,208 1,267 43571500 2 2 2 2 2 37 62 65 43572100 13 137 804 1,277 84 1,525 2,834 3,029 43572200 9 18 66 103 1,508 2,103 2,699 2,801 43572300 21 56 164 192 31 166 309 328 43572400 0 0 0 0 1,815 1,823 1,843 1,855 43572500 600 714 983 1,047 472 518 565 572 43573100 544 752 753 753 777 1,117 1,439 1,470 43573200 712 1,196 1,199 1,199 151 406 639 674 43574100 790 1,369 1,809 1,809 183 300 417 420 43574200 266 353 354 354 116 475 800 849 43575100 31 34 34 34 54 192 380 392 43575200 256 265 357 376 372 438 760 993 43575300 0 0 0 0 49 87 168 411 43575400 191 205 281 301 150 226 294 294 43576100 50 280 1,511 2,345 0 128 471 522 43576200 3 70 435 699 0 180 699 775 43576300 54 197 950 1,426 0 272 1,029 1,140 43576400 8 75 435 688 37 1,174 2,206 2,360 43576500 1 11 62 99 0 44 170 188 43577100 379 388 465 465 119 167 224 331 43577200 270 288 288 288 48 50 168 247 43577300 3 4 4 4 100 104 111 111 43577400 280 280 300 300 299 308 425 499 43577500 298 311 388 422 67 162 336 535 43577600 43 43 43 43 0 86 251 410 43577700 13 20 1,245 1,490 279 290 342 417 43577800 50 56 1,056 1,260 185 185 255 497

THE NATELSON DALE GROUP, INC. Page 43 Urban Decay Study Paradise Valley Specific Plan

43577900 77 82 622 779 34 87 252 370 43578100 24 24 24 24 20 52 96 113 43578200 31 35 35 35 82 91 106 115 43578300 0 0 0 0 2,277 2,483 2,686 2,693 43578400 239 247 296 313 364 364 377 501 43578500 27 88 399 622 41 114 217 245 43578600 0 0 0 0 248 310 372 374 43578700 65 69 78 78 51 173 336 493 43578800 5 7 7 7 87 87 87 87 43578900 5 5 5 5 2 34 67 99 43579100 192 205 655 868 15 235 1,002 1,312 43579200 72 83 1,518 1,907 33 217 669 985 43579300 7 9 10 10 10 10 10 10 43580100 2 2 2 2 0 18 58 63 43580200 6 49 164 197 16 168 502 821 43580300 6 7 7 7 0 43 84 123 43580400 155 155 188 207 123 228 671 823 43580500 147 147 373 419 6 26 42 58 43580600 0 0 0 0 0 52 251 328 43580700 1,538 1,542 1,638 1,676 306 398 483 524 43580800 14 14 43 50 60 260 459 480 43580900 48 48 50 50 7 18 51 66 43581100 17 23 34 38 56 87 135 165 43581200 171 178 274 360 7 83 132 162 43581300 22 29 106 124 0 103 200 246 43581400 18 19 19 19 204 204 204 204 43581500 2 2 2 2 73 98 148 163 43581600 15 15 15 15 0 25 75 82 43581700 98 107 149 149 47 47 336 493 43582100 0 0 0 0 2 7 12 12 43583100 34 34 84 94 0 43 51 58 43583200 146 146 146 146 6 18 33 41 43583300 479 485 499 501 2 18 36 65 43583400 83 86 105 111 36 99 381 470 43583500 84 88 120 129 2 25 75 99 43584100 0 3,830 4,693 5,929 0 291 716 1,270 43585100 210 1,046 7,672 9,378 143 296 809 1,012 43586100 0 8 244 300 0 61 167 181

39,878 55,769 85,078 94,389 33,660 57,278 85,267 92,723

Blythe-area TAZ's 5,688 6,397 7,529 7,761 4,783 6,549 9,052 9,700

THE NATELSON DALE GROUP, INC. Page 44 Urban Decay Study Paradise Valley Specific Plan

EVC, excluding 34,190 49,372 77,549 86,628 28,877 50,729 76,215 83,023 Blythe

HH HH HH HH EMP EMP EMP EMP 2012 2020 2035 2040 2012 2020 2035 2040 Blythe-area TAZ's:

43587200 0 2 8 10 558 562 566 567 43589100 641 694 783 839 168 335 795 889 43590100 632 715 830 849 1,127 1,287 1,453 1,476 43591100 978 1,104 1,283 1,312 270 386 552 578 43592100 1,083 1,242 1,479 1,521 1,749 2,180 2,844 2,968 43593100 1,110 1,249 1,439 1,469 371 501 640 660 43594100 670 779 1,004 1,039 214 880 1,617 1,865 43587100 329 336 353 358 55 130 253 330 43588100 245 276 350 364 271 288 332 367

Total, Blythe area 5,688 6,397 7,529 7,761 4,783 6,549 9,052 9,700

THE NATELSON DALE GROUP, INC. Page 45 Urban Decay Study Paradise Valley Specific Plan

APPENDIX D. HOUSING MARKET DEMAND/ABSORPTION ANALYSIS

THE NATELSON DALE GROUP, INC. Page 46 Urban Decay Study Paradise Valley Specific Plan MARKET DEMAND ABSORPTION ANALYSIS PARADISE VALLEY COACHELLA VALLEY, CALIFORNIA

2017

Prepared for:

GLC ENTERPRISES LLC 75-410 Gerald Ford Drive, Suite 103 Palm Desert CA 92211

Prepared by:

MARKET PROFILES 14032 Enderle Center Drive, Suite 220 Tustin, CA 92780 Telephone Number: 714/546-3814 Facsimile Number: 714/546-0953

www.marketprofilesinc.com Market Profiles

Real Estate Research and Consultants for over 40 years

January 31, 2017

Mr. Paul Lin GLC Enterprises LLC 75-410 Gerald Ford Drive, Ste. 103 Palm Desert CA 92211

SUBJECT: PARADISE VALLEY MARKET ANALYSIS

This report presents Market Profile’s findings relative to the projections of absorption, market demand and values for the proposed Paradise Valley master planned community in the Coachella Valley. It also addresses the unique advantages of the project’s location and opines upon the future likelihood of any other “New City” development in the Valley.

We have used 2015 as the stable market pricing benchmark and forecast from that date the probable pricing and absorption for the 2023-2035 time period.

Section I is the market capture analysis and Section II forecasts the demand for the Coachella Valley Market Area and probable capture for the subject site. Section III looks at the future master planned communities a portion of which may be developed during the build out of Paradise Valley. Section IV presents the 13-year absorption exhibits by village and product type.

We appreciate the opportunity to work with you in formulating the absorption estimates and marketing potential for this exciting project. The following is our qualifications as it relates to a community of the scale of Paradise Valley.

Qualifications, Related Experience Established in 1968 Market Profiles has conducted more than 2,500 major market feasibility studies on real estate developments throughout California, Arizona, Nevada and Texas. The company is headquartered in Tustin, California with a satellite office in Dallas, Texas. Market Profiles is not debarred, suspended or otherwise declared ineligible to contract by any federal, state or local public agency.

Over the past 40+ years, Market Profiles has established a solid reputation for our work on large master planned communities. Our primary role in the process is to ensure that there’s sufficient market support (depth of demand) for the proposed residential land use

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Market Profiles

Real Estate Research and Consultants for over 40 years and to make sure that the sum of these components is greater than the individual land uses; thus, providing the necessary “synergy” to absorb multiple product lines.

Market Profiles is a leader in providing economic analysis, market consulting, and product research, covering the complete spectrum of real estate development. We have conducted feasibility analysis for master planned communities totaling over 250,000 acres. Our consulting practice is one of the most detailed, sophisticated, and innovative in the real estate industry, allowing us to contribute to the understanding of complex and forward thinking master planned concepts throughout California.

Market Profiles, Inc. firmly believes that our unique background of varied experience in large scale development programs (including new towns, master planned communities, mixed-use residential, vertical mixed-use assisted living, mid-rise, tax credit apartments, work force housing, single family development, and commercial development) has allowed us to serve your team in both a comprehensive and cost-effective manner.

Market Profiles pioneered the research approach of a thorough understanding of consumer demand, consumer demographics, supply dynamics and residential environment leads to successful development. We offer our historical experience and research disciplines to ensure the highest and best use opportunities for Paradise Valley and are presented for your consideration.

Sincerely, MARKET PROFILES INC.

Boyd D. Martin CEO

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TABLE OF CONTENTS

SECTION DESCRIPTION PAGE NO.

I INTRODUCTIN AND SUMMARY OF FINDINGS Introduction ...... I-1 Location Map ...... I-1 Location Advantages ...... I-2 The Market Analysis ...... I-2 Product Recommendations ...... I-2 Development Timing and Absorption ...... I-3 Projected Market Capture ...... I-5 Prevailing Wind Pattern ...... I-6 The Project Specifics ...... I-7 Paradise Valley Proposed New Home Products ...... I-8

II NEW HOME MARKET DEMAND FORECAST Introduction ...... II-1 Housing Profile ...... II-1 Employment Trends ...... II-1 New Home Sales Trends ...... II-2 Coachella Velley Submarket Areas ...... II-2 Price Trends ...... II-3 Projected New Home Demand ...... II-3 Exhibits ...... II-4-11

III SUMMARY OF FUTURE DEVELOPMENTS Introduction ...... III-1 Coachella Valley Cities ...... III-1 Major Specific Plans ...... III-2 Market Share Methodology ...... III-2 Market Share Examples ...... III-4

IV PRICING AND ABSORPTION EXHIBITS

i

SECTION I INTRODUCTION AND SUMMARY OF FINDINGS

Market Profiles, Inc.

SECTION I MARKET CAPTURE FORECAST

INTRODUCTION This section of the report presents a summary of the findings of the market analysis along with a forecast of market capture for the proposed Paradise Valley master planned community located in the eastern portion of the Coachella Valley. Section II of this report presents a forecast of new home demand for the Coachella Valley for the period 2015 through 2030, and Section III presents a summary of residential units planned for future development in the Valley.

The Paradise Valley community consists of approximately 1,800 acres planned for a balanced mix of residential, commercial, recreational, and passive land uses. All Land uses are balanced based on historical relationships and synergy necessary for a successful New Town community. The location of the subject property is shown below.

PARADISE VALLEY LOCATION MAP

Family homes must be offered in a variety of product configurations and price ranges to support the commercial and office uses in the new town community. The residential neighborhoods will be complimented by well-planned and designed parks, schools, and commercial services. The preliminary land use plan is presented on the following page. As currently planned, the community will consist of approximately 8,490 units.

I-1

Market Profiles, Inc.

THE LOCATION ADVANTAGES Proximity - Paradise Valley is strategically located on the I-10 Freeway, the most significant coast-to-coast Interstate Highway in the southern United States. In this new city, residents will enjoy a secure, tranquil life style within the ambiance of a small town while still conveniently located minutes from the incredibly diverse shopping, dining, and entertainment centers of the Valley’s other cities.

Natural Setting - Paradise Valley’s physical setting abutting the Joshua Tree National Park is surrounded by thousands of acres of natural open space that are designated to be preserved in perpetuity. The large lots will serve as a natural buffer to the open space. The virtual privacy of this secluded oasis offers an unprecedented opportunity to promote a new dimension of healthy outdoor experiences that fully embrace the design principals of a New Town community. An elaborate network of walking trails and biking paths will connect each of the diverse neighborhoods to the recreation, shopping, dining, entertainment, and work centers throughout the project to encourage a vehicle free lifestyle with a high level of positive social, work and recreational interaction. These life enhancing and enriching features must be in proper balance.

THE MARKET ANALYSIS Within the Coachella Valley, there are no existing projects that offer a similar combination of elements proposed for the Paradise Valley new town. Accordingly estimates of the absorption potential for the project are not based upon inappropriate comparables, but instead rely on the internal dynamics of this unique development. The mix of large lots are necessary because it does not give the impression of an urban development which doesn’t fit this location. Moreover, within the context of the long term growth projections for the Coachella Valley, Paradise Valley’s outlook is very positive. As a case in point, the Southern California Association of Governments forecasts that 97,000 new household formations will be added to the existing Coachella Valley base of 171,419 households over the next fifteen years. The new household should follow the existing Coachella Valley ratio of 66% owning a home. This sizable increase in households raises important questions of where this growth will, or more importantly, can occur in the Valley. With respect to Paradise Valley the answer is very favorable.

PRODUCT LINE RECOMMENDATIONS Each Village density categories support a wide range of both single-level and two-story plans at balanced densities, affording the opportunity to create neighborhoods unlike any in the market area. Over the life of the project, at various times the homes will be targeted to appeal to a number of segments across the full spectrum of the market. The

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primary product/consumer targets are 2ND homes, retired, pre-retired, adult and primary families.

Importantly, the subject community as a New Town will create its own, unique and balanced environment, and – as the various non-residential elements come on stream – thus pricing is somewhat independent of the surrounding area. It is critical that the Residential and Commercial components support each other in a balanced approach to land planning. Pricing for the various residential program elements has been established to be internally consistent within the subject project, while at the same time being realistically priced relative to achieved pricing in the market areas studied for this report. The non-residential elements including the town center and employment parks will offer a unique New Town experience.

The summary of recommended parameters including average base pricing, average unit size and mix by product type, for the proposed product lines, shows a grand total of 8,490 residential units. General market and senior market products are presented on separate tables. Note that pricing is based on product selling in the 2015 period (i.e., without adjustment for inflation in later years), and does not include premium revenue for views, size and other factors. Any loss of the multiple product offering will adversely affect the overall perception and community values.

DEVELOPMENT TIMING AND ABSORPTION ESTIMATES The proposed residential products shown in section I are targeted to a broad range of the market, in the price segments and product types that will account for approximately 80 percent of total market demand. To establish a base for further development and establish an image for the Specific Plan area, initial development of the area must include a broad array of products on a variety of lot sizes and configurations. With this base of activity and value levels established, attached housing (typically targeted to the lower price points, serving a segment not financially possible for detached units to serve) can be introduced in strategic locations, particularly near support facilities including retail and office uses. The synergy derived from the affordable and large lot discretionary product will be damaged if the land plan leans too heavily on either product and the new town concept will not be accepted.

The non-residential uses will support existing residents (at the time they are built) and provide for the needs of future residents as the area grows. Thus, they are suggested for introduction after the area has developed its residential base (at least two years, but possibly longer). Assuming that the market continues to recover, there appears to be sufficient market growth and demand to absorb the recommended programs over a

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Market Profiles, Inc. period of as little as 13 years based on demand alone, particularly when the critical mass of activity is established. This will be accomplished by the simultaneous offering of a series of balanced and complementary product lines (from a variety of builders) at the same time. The land plan should not appear to be dense (urban) or loose (rural) but should offer a balanced approach. The specific absorption schedule is shown in the exhibit section of this report. However, it should be stated that a project as large as Paradise Valley new product releases will be a result of normal development cycles.

Each land use recommendation should be phased in at the appropriate time in the life of the Plan Area, and will be active in the market area for a specific number of years. The non-residential uses will be developed only if a sufficient number of residential rooftops in the community have been established.

The absorption tables (see exhibits section) shows estimated absorption rates (translated into selling periods required to fully absorb the offered units) for the various balanced land uses. Should the recommended balance of land uses not be forthcoming the absorption conclusions will not occur in the recommended time line. Based on the project’s location, known proposed major development projects, assumed pricing levels and the firm’s general experience with similar developments, Market Profiles estimates the indicated capture rates for each of the recommended land uses. The opportunity to create a new town must provide the recommended broad range of lifestyles to be successful.

Each product type was assigned an annual absorption rate typically found in the Coachella Valley during the 2003/2004-time line (a normal market). The detached product lines were assigned 30-40 units per year while the attached programs were assigned 50 units per year. The attached were given a higher rate due to lower pricing parameters.

Note that Market Profiles has forecast that all of the land uses can be absorbed from a demand perspective in a period of 13 years mentioned above. At any given time, there may be more than one land use or village being developed and offered simultaneously, including multiple residential products. Timing and phasing of individual neighborhood releases should be planned to provide as wide an array of product as possible in order to achieve a New Town Community.

The individual phase and new neighborhood releases are scheduled approximately every 2 years. The product lines in each phase are a replacement of similar lots or densities in the prior phase (excluding active adult) or when the sales approach 75% of the prior release. While this puts scheduling pressure on the master developer it yields a continuous release of consumer products.

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In the context of the current market in Coachella Valley, there is no project that provides the combination of elements that will be offered in the proposed Paradise Valley New Town. Thus, estimates of absorption for the proposed project cannot be based on any direct comparables, but rather must rely on the internal dynamics of the entire Coachella Valley. In order to estimate absorption Market Profiles has made the explicit assumption that the non-residential elements of the project will be phased in a way that maximizes absorption potential for the residential components, and that a significant portion of the non-residential development will be completed and open for business in the initial years of the development’s marketing of residential units. We cannot express sternly enough that the balance of residential, office, retail and commercial be developed in the scale recommended to be successful. These uses are interdependent and each has been recommended in the proper sequence and land uses to establish a thriving new town community. Increasing or decreasing any component of the recommended land uses will jeopardize the successful creation of a New Town Community.

PROJECTED MARKET CAPTURE As described in Section II of this report, it is projected that the demand for new homes in the Coachella Valley Market Area will average 2,500 homes per year from 2016 through 2020, rising to 4,700 homes per year from 2021 through 2030 (Exhibit II-9). This equates to the annual need for an average of 4,000 new homes over the 2023-2035 period and beyond.

As discussed above, there are limited options in the Valley for new home development of significant scale. The Paradise Valley planned community will offer arguably the most desirable New Town Community for the Coachella Valley Market Area. The property’s location will offer a unique pristine residential environment. In addition to being the largest new, fully planned community, Paradise Valley is uniquely located with respect to climate as illustrated in the figure below. The community is situated outside the primary wind corridor that plagues the Valley. Moreover, with an elevation of 1,500 feet, the residents will enjoy more mild summer temperatures than those of the valley floor.

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PREVAILING WIND PATTERN – COACHELLA V ALLEY

Paradise Valley offers immediate access to I-10, subsequently any part of the Valley can be easily reached. Further, the majority of the Valley’s future employment growth is projected to occur in the eastern portions of the Valley (see report Section II).

Paradise Valley must provide a mix of detached and attached product concepts designed to address each of the Valley’s major new home buyer segments. As shown on page I-8, the bulk of the community’s proposed new homes will be priced within the Valley’s highest demand price ranges which fall between $200,000 and $400,000 (see report Section II). The balance of the annual demand forecast will be above the $400,000 price level. Importantly, the community will include a major Active Adult neighborhood component as retired households constitute an important new homebuyer segment in the Valley. The land plan should present a harmonious blend of all land use types and sizes as recommended.

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Given the locational and design characteristics of Paradise Valley, together with the limited competitive options that will be available, it is projected that the community capture could average approximately 15 percent of the Coachella Valley new home market over it buildout. This capture rate assumes the continuous offering of multiple new home product lines and villages. Based upon the development phasing and product concepts recommended for Paradise Valley, it is projected that annual home sales could (if the recommended balanced approach is accomplished) average roughly 550 homes per year. This equates to an average buildout capture rate of 12.5 percent of the average annual projected Coachella Valley new home demand. Hence, the projected overall market capture for the Paradise Valley new home products is well within the achievable limits.

THE PROJECT SPECIFICS

For purposes of estimating the project’s potential, Market Profiles has made the explicit assumption that the non-residential elements of the plan will be phased in a way that maximizes the absorption potential for the residential components. Accordingly, a significant portion of the non-residential development will be completed and open for business in the initial years of the development’s marketing of residential units. We want to emphasize that each land use is dependent of the scale and delivery of all recommended land uses.

The property will be divided into five major villages containing 8,490 homes. VILLAGE 1 (Town Center): 1,180 units VILLAGE 2 (Town Center West): 1,509 units VILLAGE 3 (Casa): 1,852 units (Active Adult) VILLAGE 4 (North): 943 units VILLAGE 5 (East): 1,986 units VILLAGE 6 (South): 1,021 units

This approach will allow for a variation in the marketplace for each of the neighborhoods, giving consumers a wide range of choice in price and lifestyle.

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Market Profiles, Inc.

PARADISE VALLEY PROPOSED NEW HOME PRODUCTS EXHIBIT I-1 Paradise Valley General Market Products Product Units Square Footage 2015 Price 2023 Price

Town Center HHDR 420 1,000 200,000 $225,299

Town Center HHDR 211 1,200 240,000 $270,358

Town Center HHDR 413 1,350 270,000 $304,153

Towns 92 1,700 308,000 $346,960

Duplex-Adult 282 1,600 304,000 $342,454

Duplex-Family 530 1,600 296,000 $333,442

Triplex-Adult 274 1,400 266,000 $299,647

Duplex-Luxury 51 2,000 400,000 $450,597

Small Lot (40’x62’) 122 1,500 277,500 $312,602

Small Lot (45’x80’) 321 1,600 320,000 $360,478

Standard Lot (40’x90’) 1 1,600 315,000 $354,845 375 Standard Lot (40’x90’) 2 1,750 325,000 $366,110

Standard Lot (40’x100’) 134 1,700 320,000 $360,478

Standard Lot (45’x100’) 344 1,800 342,000 $385,260

Small Lot (50’x70’) 451 1,700 314,500 $354,282

Standard Lot (50’x90’) 267 2,200 395,000 $444,965

Standard Lot (50’x100’) 600 2,200 418,000 $470,874

Standard Lot (55’x100’) 1 2,400 445,000 $501,289 594 Standard Lot (55’x100’) 2 2,650 455,000 $512,554

Standard Lot (60’x100’) 184 2,400 450,000 $506,922

Standard Lot (60’x100’) 232 2,750 522,500 $588,592

Standard Lot (65’x110’) 101 2,300 402,500 $453,413

Standard Lot (70’x100’) 1 169 2,750 519,750 $585,495

Standard Lot (70’x100’) 2 222 3,000 540,000 $608,306

Standard Lot (75’x100’) 3,000 540,000 $608,306 117 Standard Lot (75’x100’) 2,600 455,000 $512,554

Large Lot (85’x115’) 132 3,100 558,000 $628,583 Paradise Valley Active Adult Products Town Center HHDR 418 1,200 240,000 $270,358

Duplex 407 1,350 243,000 $273,738

Small Lot (50’x70’) 97 2,000 350,000 $394,272

Small Lot (40’x90’) 208 1,600 296,000 $333,442

Standard Lot (50’x90’) 184 1,800 320,000 $360,478

Standard Lot (65’x110’) 159 2,300 402,500 $453,413

Standard Lot (75’x100’) 276 2,600 455,000 $512,554

Large Lot (85’x115’) 102 3,100 558,000 $628,583

Total Units 8490 2,023 $373,236 $420,447

The prices are shown as current values in 2015 and estimated increasing at a modest 1.5 percent (normally 3.5%) annually as a conservative approach to future values.

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SECTION II NEW HOME MARKET DEMAND FORECAST

Market Profiles, Inc.

SECTION II NEW HOME MARKET DEMAND FORECAST

INTRODUCTION This section presents a review of the major factors that influence the demand for new homes in the Coachella Valley located in eastern Riverside County. The factors evaluated in the demand analysis include housing profiles of the Coachella Valley, population and household growth forecasts, employment growth, new home market trends, and sub- regional growth patterns. Based on the data analysis, a forecast of demand for new homes for the years 2016 through 2035 has been formulated.

The exhibits that are referenced in the text can be found following the last page of text for this section of the report (beginning on page II-5).

HOUSING PROFILE Exhibit II-1 presents housing profiles of the Coachella Valley and of Riverside County. Single family homes account for 56 percent of the Valley’s housing stock compared to 68 percent countywide. Single family attached homes account for 16 percent of the stock compared to 7 percent countywide. Homeowners account for 66 percent of the households in the Valley compared to 68 percent countywide.

The median housing value in the Coachella Valley is $293,460 compared to a countywide figure of $282,739.

EMPLOYMENT TRENDS Employment trends are a major indicator of housing demand because jobs attract new households to a region and they provide the income required to make housing payments. Employment in Riverside and San Bernardino counties is monitored by the state on a combined, bi-county basis. Exhibit II-2 presents a historical summary of employment growth in the Riverside-San Bernardino bi-county region (hereinafter referred to as the Inland Empire).

Following the recession, the Inland Empire generated positive employment growth in 2011 (3,200 net new jobs). Job growth accelerated in 2013 through 2015 with an average of 51,400 jobs added annually. In conjunction with national trends, economic conditions in the Inland Empire are projected to remain healthy for at least the next two years resulting in positive employment growth ranging from 3.0 to 3.6 percent in 2016 and 2017 (i.e., 42,000 to 48,000 jobs per year).

Comparable employment data for the Coachella Valley is not available, however, economic indicators reveal that the Valley’s economy generally follows the trend for the greater Inland Empire region. The primary generator of economic activity in the Valley is tourism and retail sales. Exhibit II-3 shows that retail sales in the Valley grew strongly in the first half of the decade then fell in 2007 through 2009. Retail sales rose significantly in 2010 through 2013 increasing by an average of 6.7 percent annually. Data for 2014 and 2015

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Market Profiles, Inc. has not been released by the state, however, it is projected that additional increases in sales were experienced and Market Profiles projects further gains in retail sales for 2016 and 2017.

NEW HOME SALES TRENDS For the purposes of monitoring the Coachella Valley new home market the Valley has been divided into five submarket areas as follows:

. Palm Springs-Cathedral City-Desert Hot Springs

. Rancho Mirage

. Palm Desert

. La Quinta-Indian Wells

. Indio-Coachella

A map showing the boundaries of each submarket area is presented below.

COACHELLA VALLEY SUBMARKET AREAS

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PRICE TRENDS Exhibit II-4 shows the average base price of new homes sold in the five submarket areas of the Coachella Valley. The average price of a new detached home sold in the Valley during the fourth quarter of 2015 was $648,083. The Indio-Coachella submarket has consistently offered the most favorable home values. The average sale price in the submarket in the fourth quarter of 2015 was $391,181. With the market recovery, the average new home sale price in the submarket has risen by 32 percent since 2012.

PROJECTED NEW HOME DEMAND Exhibit II-5 presents a forecast of household and employment growth in the Coachella Valley through 2035. The primary agency for long-term growth forecasting in Southern California is the Southern California Association of Governments (SCAG). With respect to the Coachella Valley, SCAG projects growth of just over 3,800 households per year from 2012 to 2020, rising to over 4,100 households annually from 2021 to 20351.

Exhibit II-6 presents a summary of historical and projected future household growth and housing unit demand in the Valley. The projected future household growth will directly generate demand for about 4,100 occupied residential units per year from 2016 through 2035. With respect to total housing units, an additional 30% increment must be added to make accommodation for vacation/second homes (20% to 25%) and a vacancy factor (5% to 10%). Thus, the total projected housing unit growth is projected to be 5,885 units per year. Based upon the current Coachella Valley ownership proportion of 66.5% (see Exhibit II-1), 3,900 of the future housing units will be owner purchases (i.e., projected new home demand).

The anticipated geographic distribution of future household growth by community is shown in Exhibit II-5 (which is based upon the most recent demographic forecast from the Southern California Association of Governments). Through 2020, nearly half (49%) of the growth is expected to occur in the southeastern portions of the Valley (i.e., Indio, Coachella, and unincorporated areas of the southeastern Coachella Valley). From 2020 to 2035, these southeastern areas are projected to account for 46% of the future household growth. Future employment growth is projected to lag behind household growth in the southeastern region of the Valley, accounting for 36% of the valley-wide employment growth.

Exhibit II-7 shows the price distribution of new home sales in the Coachella Valley for the first three quarters of 2015. The majority of homes sold were priced between $200,000 and $400,000. The absence of sales below the $200,000 price point is primarily due to a lack of product offerings. Cost constraints dictate that most homes priced under $200,000 will consist of attached product concepts or mobile homes.

The projected price distribution of future new home demand in the Valley is presented in Exhibit II-8. This distribution is consistent with, and supported by, the pattern of actual

1 Southern California Association of Governments (SCAG), Forecast are from SCAG’s 2016 Regional Transportation Plan (RTP), scheduled for adoption in May 2016. II-3

Market Profiles, Inc. sales activity that is occurring (Exhibit II-7), in combination with the price composition of the Valley’s existing single family housing stock (i.e., the resale market).

An important determinant of the price distribution of new home demand in any market is the price structure of the existing single family housing stock. Home buyers in any given market tend to conform their purchase decisions to the prevailing market value structure. Moreover, the majority of new home sales transactions involve existing homeowners who are moving-up to a larger home or one with higher quality features. Hence, the volume of activity within a given price range is related to the scale of existing homes within that price range and/or the price range immediately below it (i.e., the size of the buyer pool). In most cases, buyers will be utilizing the equity from their present home to reduce the mortgage amount and monthly payment requirement for the purchase of a new home.

Household incomes are generally not a good indicator of the price distribution of new home demand because move-up buyers will be utilizing the equity from their present home and, with respect to first time buyers, specialized mortgage instruments and down payment assistance (public and private sources) are often utilized to augment their purchasing power.

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EXHIBIT II-1 HOUSING PROFILE COACHELLA VALLEY AND RIVERSIDE COUNTY 2015 Coachella Riverside DESCRIPTION Valley County YEAR ROUND UNITS IN STRUCTURE 218,890 835,519 SINGLE UNITS DETACHED 55.8% 68.1% SINGLE UNITS ATTACHED 14.8% 6.2% DOUBLE UNITS 2.4% 1.3% 3 T0 19 UNITS 12.9% 10.3% 20 TO 49 UNITS 1.5% 1.8% 50+ UNITS 2.8% 2.7% MOBILE HOME OR TRAILER 9.5% 9.3% ALL OTHER 0.2% 0.2% OCCUPIED UNITS 157,495 718,572 OWNER OCCUPIED 66.5% 67.5% RENTER OCCUPIED 33.5% 32.5% OWNER OCCUPIED PROPERTY VALUES 104,793 484,848 UNDER $80,000 10.8% 8.7% $80,000 TO $99,999 2.6% 2.0% $100,000 TO $149,999 8.6% 8.4% $150,000 TO $199,999 10.4% 10.9% $200,000 TO $299,999 18.8% 24.3% $300,000 TO $399,999 14.6% 18.3% $400,000 TO $499,999 10.6% 12.3% $500,000 TO $749,999 11.8% 9.3% $750,000 TO $999,999 6.2% 3.5% $1,000,000+ 5.6% 2.4% MEDIAN PROPERTY VALUE $293,460 $282,739 HOUSING UNITS BY YEAR BUILT 218,890 835,519 BUILT 2005 TO PRESENT 4.6% 4.8% BUILT 2000 TO 2004 25.2% 27.3% BUILT 1990 TO 1999 14.5% 15.3% BUILT 1980 TO 1989 23.3% 21.0% BUILT 1979 OR EARLIER 32.4% 31.7% Source: Nielsen SiteReports, Market Profiles

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EXHIBIT II-2 EMPLOYMENT GROWTH SAN BERNARDINO-RIVERSIDE COUNTIES 2001-2017 Total Annual Change Year Employment Number Percent 2017 1,439,500 42,000 3.0% 2016 1,397,500 48,000 3.6% PROJECTED 2015 1,349,500 50,000 3.8% 2014 1,299,500 53,100 4.3% 2013 1,246,400 51,100 4.3% 2012 1,195,300 32,400 2.8% 2011 1,162,900 3,200 0.3% 2010 1,159,700 (18,400) -1.6% 2009 1,178,100 (80,900) -6.4% 2008 1,259,000 (43,700) -3.4% 2007 1,302,700 3,100 0.2% 2006 1,299,600 45,100 3.6% 2005 1,254,500 62,500 5.2% 2004 1,192,000 61,700 5.5% 2003 1,130,300 37,000 3.4% 2002 1,093,300 35,100 3.3% 2001 1,058,200 41,400 4.1% Source: California Employment Development Department, Market Profiles

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EXHIBIT II-3 TAXABLE RETAIL SALES COACHELLA VALLEY CITIES AND RIVERSIDE COUNTY 2004 THROUGH 2013 Sales in Thousands City 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Cathedral City $779,076 $820,702 $791,703 $709,311 $546,722 $453,476 $482,281 $528,345 $560,758 $618,342 Coachella $157,722 $200,828 $242,166 $257,387 $241,819 $185,768 $197,136 $215,754 $227,022 $232,627 Desert Hot Springs $77,200 $88,493 $90,275 $87,369 $85,051 $73,273 $82,806 $105,632 $118,941 $122,502 Indian Wells $25,404 $27,918 $29,053 $30,134 $29,054 $27,715 $30,061 $34,235 $35,087 $37,543 Indio $627,217 $675,657 $703,726 $616,177 $539,400 $460,477 $481,228 $534,873 $606,582 $670,393 La Quinta $510,913 $603,110 $667,010 $735,647 $644,113 $552,468 $463,456 $609,077 $638,047 $654,275 Palm Desert $1,228,112 $1,317,337 $1,373,122 $1,375,037 $1,227,615 $1,038,073 $1,091,059 $1,182,576 $1,242,899 $1,283,310 Palm Springs $592,896 $652,807 $695,764 $671,753 $648,728 $579,183 $610,488 $662,012 $728,329 $758,274 Rancho Mirage $399,643 $426,634 $429,789 $422,090 $328,774 $261,917 $279,730 $291,206 $295,517 $312,755 Totals $4,398,183 $4,813,486 $5,022,608 $4,904,905 $4,291,276 $3,632,350 $3,718,245 $4,163,710 $4,453,182 $4,690,021 Total Riverside County $18,715,949 $20,839,212 $21,842,345 $21,242,516 $18,689,249 $16,057,488 $16,919,500 $18,576,285 $20,016,668 $21,306,774 Source: California Dept. of Equalization, Market Profiles

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EXHIBIT II-4 AVERAGE NEW HOME SALE PRICE -- DETACHED HOMES COACHELLA VALLEY SUBMARKET AREAS 2005 THROUGH 2015 Coachella Palm Springs/ La Quinta- Palm Rancho Indio/ Quarter Valley Cathedral City Indian Wells Desert Mirage Coachella 2015-4 $648,083 $750,102 $1,112,276 $389,782 $1,086,121 $391,181 -3 $520,419 $841,495 $728,763 $316,563 $1,350,742 $378,631 -2 $495,382 $665,753 $1,068,198 $354,111 $1,320,632 $333,498 -1 $545,711 $683,655 $1,160,391 $425,102 $1,298,132 $329,827 2014-4 $602,395 $843,110 $1,390,263 $408,907 $911,983 $344,395 -3 $511,173 $774,387 $905,222 $449,002 $1,028,498 $340,789 -2 $494,081 $1,085,923 $909,494 $390,506 $808,195 $304,439 -1 $550,673 $918,216 $1,130,411 $399,123 * $339,716 2013-4 $606,711 $649,749 $1,235,600 $441,742 $815,995 $320,848 -3 $469,000 $678,310 $707,717 $355,948 $798,620 $302,254 -2 $566,097 $843,852 $1,136,233 $387,528 $823,195 $298,228 -1 $493,860 $843,230 $711,158 $333,584 $793,995 $287,073 2012-4 $639,511 $686,485 $1,308,680 $558,088 $835,995 $281,490 -3 $406,567 $593,780 $992,759 $318,980 * $257,161 -2 $384,200 $563,235 $777,800 $299,990 * $293,141 -1 $445,061 $598,334 $1,456,105 $336,799 * $257,361 2011-4 $465,936 $467,295 $1,471,209 $638,119 $491,667 $266,161 -3 $459,151 $381,529 $878,156 $310,218 * $244,538 -2 $373,735 $347,393 $789,615 $308,899 $514,000 $264,246 -1 $306,623 $433,500 $510,611 $322,990 * $256,454 2010-4 $413,168 * $879,641 $306,290 * $288,418 -3 $460,495 * $941,426 $314,790 * $255,228 -2 $399,008 $256,243 $921,055 $319,490 $807,400 $254,477 -1 $314,897 $259,557 $759,373 $337,156 $728,324 $230,007 2009-4 $323,978 $261,889 $651,728 $361,276 $594,900 $225,458 -3 $382,899 $340,785 $751,697 $396,990 $750,000 $267,672 -2 $309,152 $325,057 $630,716 $311,298 $833,333 $237,845 -1 $361,241 $250,841 $674,045 $294,992 $757,580 $284,765 2008-4 $459,516 $333,063 $837,821 $413,289 $1,382,995 $302,817 -3 $392,885 $318,065 $533,011 $836,472 $956,863 $279,981 -2 $422,016 $458,013 $632,575 $469,774 $1,000,654 $296,786 -1 $390,599 $345,003 $610,655 $419,899 $1,254,450 $303,530 2007-4 $458,730 $390,529 $772,017 $374,031 $810,274 $318,588 -3 $478,600 $403,466 $945,824 $441,523 $1,393,232 $367,903 -2 $537,118 $501,638 $1,057,179 $508,434 $1,016,810 $368,033 -1 $518,364 $489,408 $954,220 $599,184 $1,238,159 $381,946 2006-4 $525,217 $513,692 $835,766 $633,813 $1,572,393 $383,947 -3 $489,544 $437,661 $580,862 $683,233 $1,659,986 $412,816 -2 $514,668 $532,864 $862,537 $668,067 $796,470 $401,512 -1 $582,641 $421,068 $1,166,962 $709,900 $645,268 $403,747 2005-4 $500,197 $749,515 $751,012 $406,822 $668,567 $416,448 -3 $455,776 $753,384 $588,660 $413,075 $598,486 $391,122 -2 $468,413 $757,523 $674,862 $397,788 $625,674 $402,360 -1 $487,063 $736,646 $792,518 $462,322 $521,254 $381,349 * No sales activity. Source: Residential Trends, Market Profiles

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EXHIBIT II-5 PROJECTED HOUSEHOLD AND EMPLOYMENT GROWTH COACHELLA VALLEY 2012 TO 2035 Projected Household Growth 2012 2020 2035 Incr. 2012 to 2020 Incr. 2020 to 2035 Community Households Households % Incr./Yr. Households % Incr./Yr. HH % Dist. HH % Dist. Cathedral City 17,092 18,618 1.1% 24,954 2.0% 1,526 5.0% 6,336 10.3% Coachella 9,214 20,295 10.4% 34,102 3.5% 11,081 36.1% 13,807 22.4% Desert Hot Springs 9,108 14,403 5.9% 19,735 2.1% 5,295 17.2% 5,332 8.6% Indian Wells 2,755 3,097 1.5% 4,220 2.1% 342 1.1% 1,123 1.8% Indio 23,819 28,372 2.2% 37,714 1.9% 4,553 14.8% 9,342 15.2% La Quinta 14,889 16,484 1.3% 18,859 0.9% 1,595 5.2% 2,375 3.9% Palm Desert 23,352 25,716 1.2% 30,666 1.2% 2,364 7.7% 4,950 8.0% Palm Springs 22,866 25,275 1.3% 30,706 1.3% 2,409 7.8% 5,431 8.8% Rancho Mirage 8,871 9,609 1.0% 13,096 2.1% 738 2.4% 3,487 5.7% Unincorporated (Southeast)(1) 1,157 705 -6.0% 5,733 15.0% -452 -1.5% 5,028 8.2% Unincorporated (Other) 25,616 26,866 0.6% 31,316 1.0% 1,250 4.1% 4,450 7.2% Total Coachella Valley 158,739 189,440 2.2% 251,101 1.9% 30,701 100.0% 61,661 100.0% (1) Negative growth in southeast unincorporated area between 2012 and 2020 implies annexation of existing households to cities.

Projected Employment Growth 2012 2020 2035 Incr. 2012 to 2020 Incr. 2020 to 2035 Community Jobs Jobs % Incr./Yr. Jobs % Incr./Yr. Jobs % Dist. Jobs % Dist. Cathedral City 10,794 15,591 4.7% 20,494 1.8% 4,797 7.9% 4,903 7.0% Coachella 8,543 20,055 11.3% 32,244 3.2% 11,512 18.9% 12,189 17.4% Desert Hot Springs 3,669 7,865 10.0% 12,273 3.0% 4,196 6.8% 4,408 6.3% Indian Wells 3,982 5,379 3.8% 6,821 1.6% 1,397 2.3% 1,442 2.1% Indio 16,031 25,556 6.0% 35,464 2.2% 9,525 15.7% 9,908 14.1% La Quinta 12,422 16,592 3.7% 20,852 1.5% 4,170 6.9% 4,260 6.1% Palm Desert 36,874 42,893 1.9% 50,152 1.0% 6,019 9.9% 7,259 10.4% Palm Springs 26,347 35,433 3.8% 44,528 1.5% 9,086 15.0% 9,095 13.0% Rancho Mirage 12,339 16,055 3.3% 19,946 1.5% 3,716 6.1% 3,891 5.6% Unincorporated (Southeast) 4,303 5,118 2.2% 8,507 3.4% 815 1.3% 3,389 4.8% Unincorporated (Other) 14,289 19,810 4.2% 29,105 2.6% 5,521 9.1% 9,295 13.3% Total Coachella Valley (2) 149,593 210,347 4.4% 280,386 1.9% 60,754 100.0% 70,039 100.0% (2) The SCAG estimates and projections are from the forthcoming 2016 Regional Transportation Plan (RTP). RTP forecasts for unincorporated areas were not available at the time this report was prepared. Employment and household numbers for the unincorporated portions of the Coachella Valley were were estimated by The Natelson Dale Group, Inc. based on data from the previous (2012) RTP. Source: SCAG Regional Transportation Plan, Market Profiles II-9

EXHIBIT II-6 HOUSING GROWTH SUMMARY COACHELLA VALLEY 2015 - 2035 New New Annual Housing Total Households Housing Unit Demand Year Households Per Year Units/Year** Owner*** Renter 2015* 168,798 to 4,128 5,898 3,922 1,976 2020 189,440 to 4,111 5,872 3,905 1,967 2035 251,101 * Market Profiles estimate based upon SCAG RTP forecast ** 30% additive above household base to account for second homes (15-20%) and vacancy factor (5-10%) *** Coachella Valley owner tenure = 66.5% Source: SCAG, Market Profiles

EXHIBIT II-7 NEW HOME SALES BY PRICE RANGE COACHELLA VALLEY FIRST THROUGH THIRD QUARTERS 2015 40% 35% 30% 25% 20%

15% Percent 10% 5% 0% 0

Source: Residential Trends, Market Profiles

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EXHIBIT II-8 PROJECTED ANNUAL NEW HOME DEMAND DISTRIBUTED BY PRICE RANGE COACHELLA VALLEY 2016 - 2035 ANNUAL SALES PERCENT BASE PRICE RANGE AVERAGE / YEAR DIST. Under $200,000 195 5% $200,000-$300,000 900 23% $300,000-$400,000 1,130 29% $400,000-$500,000 700 18% $500,000-$600,000 310 8% $600,000-$700,000 195 5% $700,000-$800,000 120 3% $800,000 and Over 350 9% TOTAL 3,900 100.0% ANNUAL NEW HOME DEMAND COACHELLA VALLEY 2016-2035 1,200

1,000

800

600

400 # of Homes of # 200

0

Source: Market Profiles

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SECTION III SUMMARY OF FUTURE DEVELOPMENTS

Market Profiles, Inc.

SECTION III SUMMARY OF FUTURE DEVELOPMENTS

INTRODUCTION This section presents a brief review of potential future master planned communities in the Eastern Coachella Valley, with a focus on major projects that are likely to be offering products in a similar time line as Paradise Valley.

COACHELLA VALLEY CITIES The major communities in the adjacent cities of Indio, Coachella, and the unincorporated area of Thermal represent potential future offerings within the Competitive Market Area. These master planned/specific planned developments are listed below.

THERMAL masterplan Data Grand Total COACHELLA 273 Sum of units 1,178 Number of Projects 8 KOHL RANCH Sum of units 7,171 Number of Projects 4 PANORAMA: A COLLEGE TOWN Sum of units 2,099 Number of Projects 9 THERMAL 551 Sum of units 2,354 Number of Projects 7 Total Sum of units 12,802 COACHELLA BRANDENBURG/BUTTERS Sum of units 1,086 Number of Projects 2 LA ENTRADA Sum of units 8,000 Number of Projects 4 DESERT LAKES Sum of units 6,800 Number of Projects Vista Del Agua Sum of units 1,640 Number of Projects Total Sum of units 17,532 INDIO FIESTA DE VIDA Sum of units 1,368 Number of Projects 8 POLO ESTATES; LLC Sum of units 772 Number of Projects 2 SUNCAL COMPANIES Sum of units 3200 Number of Projects PALM DESERT HEIGHTS DEV GROUP Sum of units 1150 Number of Projects COACHELLA VALLEY HOUSING COALITION Sum of units 950 Number of Projects TERRA LAGO Sum of units 124 Number of Projects 1 TERRA LAGO EAST Sum of units 851 Number of Projects 4 Total Sum of units 8,430 Travertine Point (16,000 units) is 8 mi. south of mecca and not applicable

III-1

Market Profiles, Inc.

However, while there are twelve specific plans that are planned for the eastern Coachella Valley only three (Kohl Ranch, La Entrada and Desert Lakes) are of significant or equal size to Paradise Valley.

The Kohl Ranch is a 2,172-acre development is planned for over 7,171 residential units along with commercial and business park uses. The community will feature a major lake element. The project is located immediately south of the Desert Resorts Regional Airport which will impact the northern portion of the community. The second master plan known as The La Entrada specific plan proposed for a potential total of about 8,000 units. The third master planned community (Desert Lakes) contains 1936 acres and 6,800 units.

SPECIFIC PLAN UNITS KOHL RANCH 7,171 LA ENTRADA 8,000 DESERT LAKES 6,800

About eight miles south of Mecca (beyond the established Coachella Valley Competitive Market Area) there is a major proposed community that is located on the northwestern edge of the Salton Sea. This development, currently known as Travertine Point, is processing entitlements for approximately 16,000 residential units on roughly 5,000 acres. Presently, it's development time frame is projected to overlap with portions of Paradise Valley’s sales phases. However, from the standpoint of competitive influence, Travertine Point is located in a less desirable area and also outside the principal east-west path of the future housing expansion.

MARKET SHARE METHODOLOGY Market Profiles has found that a single project or master planned community cannot capture all of the forecasted demand within a given price range due to the variety of subjective choices made by consumers when they have only one alternative (e.g., they do not like the location, they prefer a different style of architecture, etc.). Likewise, the forecast absorption for an individual floor plan within a project is dependent upon the price and capture rate of that floor plan. It is extremely important to stratify the consumer demand with as many non-competitive product lines (relative to other product lines internal to the same development project) and Villages as the market will accept. Each Village should have an offering of between 5 and 10 active new home projects at all times to meet that market demand.

Absorption projections for a master planned community assume that the marketing plan for each Village within the Master Plan will consist of an aggressive, well executed sales and merchandising program including a model complex for each project within a specific Village are easily identified and located.

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Market Profiles, Inc.

Each new home community within a Village should create no internal competition and be phased at the appropriate time in the life of the Village, as it will be active in the market for a specific number of years before the inventory is sold out.

The traditional replacement concept is that a lot size or house size can be developed over many years at multiple locations or villages. Once each price and square footage category has proven acceptable to the market, we often reduce the lot size in later phases or Villages while keeping the price and square footage consistent.

The ultimate principle is that multiple product offerings must have varying lot and house sizes so as not to compete with each other. This principle of no internal competition has proven successful for individual projects as well as Villages within a Master Planned Community or New Town concepts. While this puts scheduling pressure on the master developer, it yields a continuous release of non-competitive consumer products.

Each product type recommended for Paradise Valley is planned to be non-competitive within its Village and assigned an annual capture supported by the overall economic demand (exhibit II-8) projected from 2016 to 2035. Specifically, the detached product lines based on size and price point were assigned an absorption rate of 30-50 units per year (typical of Coachella Valley project sales rates from 1996-2005). The cluster programs were determined to have a higher absorption potential of 50+ units per year given their lower price points and larger consumer demand. The attached and senior products were also given a higher absorption rate of 50+ units per year due to lower pricing parameters and later market entry.

In order to better understand the context of the assigned capture results for Paradise Valley in the general market area we reviewed historical performances of several communities over many years. The table on the next page supports the ability of a new community with multiple product offerings to achieve a 15-25 percent overall market capture.

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Market Profiles, Inc.

MASTER PLANNED COMMUNITIES MARKET SHARE EXAMPLES YEAR MASTER PLANNED COMMUNITY ANNUAL SALES CV SALES % OF MARKET 1996 SUN CITY PALM DESERT 214 1,287 16.6% 1997 SUN CITY PALM DESERT 294 1,950 15.1% 1998 SUN CITY PALM DESERT 97 2,226 4.4% 1999 SUN CITY PALM DESERT 463 2,850 16.2% 2000 SUN CITY PALM DESERT 470 3,330 14.1% 2001 SUN CITY PALM DESERT 1,078 4,029 26.8% 2002 SUN CITY PALM DESERT 1,044 4,079 25.6% 2003 SUN CITY PALM DESERT 300 5,768 5.2% 2004 SUN CITY PALM DESERT 500 5,851 8.5% SUN CITY PALM DESERT 9 YEAR AVERAGE CAPTURE 15% 2003 SHADOW HILLS 455 5,768 7.9% 2004 SHADOW HILLS 344 5,851 5.9% 2005 SHADOW HILLS 1,082 5,313 20.4% 2006 SHADOW HILLS 725 3,510 20.7% 2007 SHADOW HILLS 260 1,883 13.8% 2008 SHADOW HILLS 378 1,524 24.8% SHADOW HILLS 6 YEAR AVERAGE CAPTURE 16% 2008 TRILOGY 261 1,610 16.2% Source: Residential Trends, Market Profiles

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SECTION IV EXHIBITS

EXHIBIT I-1 Paradise Valley General Market Products Product Units Square Footage 2015 Price 2023 Price

Town Center HHDR 420 1,000 200,000 $225,299

Town Center HHDR 211 1,200 240,000 $270,358

Town Center HHDR 413 1,350 270,000 $304,153

Towns 92 1,700 308,000 $346,960

Duplex-Adult 282 1,600 304,000 $342,454

Duplex-Family 530 1,600 296,000 $333,442

Triplex-Adult 274 1,400 266,000 $299,647

Duplex-Luxury 51 2,000 400,000 $450,597

Small Lot (40’x62’) 122 1,500 277,500 $312,602

Small Lot (45’x80’) 321 1,600 320,000 $360,478

Standard Lot (40’x90’) 1 1,600 315,000 $354,845 375 Standard Lot (40’x90’) 2 1,750 325,000 $366,110

Standard Lot (40’x100’) 134 1,700 320,000 $360,478

Standard Lot (45’x100’) 344 1,800 342,000 $385,260

Small Lot (50’x70’) 451 1,700 314,500 $354,282

Standard Lot (50’x90’) 267 2,200 395,000 $444,965

Standard Lot (50’x100’) 600 2,200 418,000 $470,874

Standard Lot (55’x100’) 1 2,400 445,000 $501,289 594 Standard Lot (55’x100’) 2 2,650 455,000 $512,554

Standard Lot (60’x100’) 184 2,400 450,000 $506,922

Standard Lot (60’x100’) 232 2,750 522,500 $588,592

Standard Lot (65’x110’) 101 2,300 402,500 $453,413

Standard Lot (70’x100’) 1 169 2,750 519,750 $585,495

Standard Lot (70’x100’) 2 222 3,000 540,000 $608,306

Standard Lot (75’x100’) 3,000 540,000 $608,306 117 Standard Lot (75’x100’) 2,600 455,000 $512,554

Large Lot (85’x115’) 132 3,100 558,000 $628,583 Paradise Valley Active Adult Products Town Center HHDR 418 1,200 240,000 $270,358

Duplex 407 1,350 243,000 $273,738

Small Lot (50’x70’) 97 2,000 350,000 $394,272

Small Lot (40’x90’) 208 1,600 296,000 $333,442

Standard Lot (50’x90’) 184 1,800 320,000 $360,478

Standard Lot (65’x110’) 159 2,300 402,500 $453,413

Standard Lot (75’x100’) 276 2,600 455,000 $512,554

Large Lot (85’x115’) 102 3,100 558,000 $628,583

Total Units 8490 $373,236 $420,447 EXHIBIT I-2 PARADISE VALLEY TOWN CENTER JANUARY 2016 ABSORPTION BY YEAR PRODUCT SALES YEARS TOWN CENTER YEARS 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 TOTAL (Product types) VILLAGE PA # COMMUNITY UNITS

TOWNS VILLAGE 1 1-1 TC 92 50 42 92 Stacked flats HHDR 1200 VILLAGE 1 1-3 TC 211 50 50 50 50 11 211 Stacked flats HHDR 1350 VILLAGE 1 1-4 TC 413 50 50 50 50 50 50 50 50 13 413 55'x100' VILLAGE 1 1-6 TC 114 50 50 14 114 50'X70' VILLAGE 1 1-7 TC 88 50 38 88 45'X80' VILLAGE 1 1-7 TC 67 50 17 67 45'X80' VILLAGE 1 1-7 TC 59 33 26 59 55'X100' VILLAGE 1 1-8 TC 66 36 30 66 60'X100' VILLAGE 1 1-8 TC 70 50 20 70 60'X100' VILLAGE 2 2-1 TC WEST 77 30 47 77 50x100 VILLAGE 2 2-2 TC WEST 92 50 42 92 45x80 VILLAGE 2 2-2 TC WEST 100 24 50 26 100 50'x100 1 VILLAGE 2 2-2 TC WEST 89 32 50 7 89 50'x100 2 VILLAGE 2 2-4 TC WEST 118 50 50 18 118 Duplex VILLAGE 2 2-4 TC WEST 129 50 50 29 129 40'X62' VILLAGE 2 2-5 TC WEST 122 50 50 22 122 Stacked flats HHDR 1000 VILLAGE 2 2-6 TC WEST 420 50 50 50 50 50 50 50 50 20 420 Triplex-adult VILLAGE 2 2-7 TC WEST 60 50 10 60 Triplex-adult VILLAGE 2 2-7 TC WEST 130 40 50 40 130 45X100 VILLAGE 2 2-9 TC WEST 172 50 50 50 22 172

ABSORPTION BY YEAR 2,689 300 342 635 522 338 212 107 100 63 50 20 2,689 EXHIBIT I-3 PARADISE VALLEY CASA VILLAGE JANUARY 2016 ABSORPTION BY YEAR PRODUCT SALES YEARS CASA VILLAGE ACTIVE ADULT YEARS 2029 2030 2031 2032 2033 2034 TOTAL (Product types) VILLAGE PA # COMMUNITY UNITS MIXED USE VILLAGE 3 3-1 CASA 418 75 75 75 75 75 43 418 DUPLEX VILLAGE 3 3-2 CASA 46 46 46 DUPLEX VILLAGE 3 3-2 CASA 101 50 51 101 65x110 VILLAGE 3 3-3 CASA 86 50 36 86 75x100 VILLAGE 3 3-3 CASA 74 50 24 74 65x110 VILLAGE 3 3-3 CASA 73 23 50 73 DUPLEX VILLAGE 3 3-4 CASA 114 50 50 14 114 50x90 VILLAGE 3 3-5 CASA 90 50 40 90 50x70 VILLAGE 3 3-5 CASA 97 50 47 97 DUPLEX VILLAGE 3 3-5 CASA 146 50 50 46 146 40X90 VILLAGE 3 3-5 CASA 92 42 50 92 50x90 VILLAGE 3 3-5 CASA 94 50 44 94 40x90 VILLAGE 3 3-5 CASA 116 50 50 16 116 75x100 VILLAGE 3 3-6 CASA 100 26 24 50 100 85x110 VILLAGE 3 3-6 CASA 51 30 21 51 85x115 VILLAGE 3 3-7 CASA 51 11 40 51 75x100 VILLAGE 3 3-7 CASA 102 26 40 36 102 ABSORPTION BY YEAR 1,851 271 374 411 351 305 139 1,851 EXHIBIT I-4 PARADISE VALLEY NORTH VILLAGE JANUARY 2016 ABSORPTION BY YEAR PRODUCT SALES YEARS NORTH VILLAGE YEARS 2025 2026 2027 2028 TOTAL (Product types) VILLAGE PA # COMMUNITY UNITS Duplex-Adult VILLAGE 4 4-1 NORTH 97 50 47 97 Duplex-Adult VILLAGE 4 4-1 NORTH 56 56 56 40X90 VILLAGE 4 4-2 NORTH 74 50 24 74 50x100 VILLAGE 4 4-2 NORTH 116 50 50 16 116 Duplex-Family VILLAGE 4 4-3 NORTH 66 50 16 66 Duplex Luxury VILLAGE 4 4-3 NORTH 51 51 51 Standard Lot (60' X 100') VILLAGE 4 4-4 NORTH 107 40 40 27 107 Standard Lot (70' X 100') VILLAGE 4 4-4 NORTH 66 40 26 66 Duplex-Family VILLAGE 4 4-5 NORTH 38 38 38 Triplex Adult; COMM'L 16 AC VILLAGE 4 4-6 NORTH 84 40 44 84 45x80 VILLAGE 4 4-7 NORTH 40 40 40 45x80 VILLAGE 4 4-7 NORTH 56 56 56 Duplex-Family VILLAGE 4 4-8 NORTH 51 34 17 51 Duplex-Family VILLAGE 4 4-8 NORTH 41 30 11 41 ABSORPTION BY YEAR 943 268 385 201 89 943 EXHIBIT I-5 PARADISE VALLEY EAST VILLAGE JANUARY 2016 ABSORPTION BY YEAR PRODUCT SALES YEARS EAST VILLAGE YEARS 2031 2032 2033 2034 2035 TOTAL (Product types) VILLAGE PA # COMMUNITY UNITS Duplux Family VILLAGE 5 5-1 EAST 191 50 50 50 41 191 40 x 100 VILLAGE 5 5-1 EAST 134 50 50 34 134 70X100 1 VILLAGE 5 5-3 EAST 81 40 41 81 85X115 VILLAGE 5 5-3 EAST 46 46 46 45X100 VILLAGE 5 5-4 EAST 172 50 50 50 22 172 50X70 1 VILLAGE 5 5-6 EAST 207 50 50 50 57 207 50X90 VILLAGE 5 5-7 EAST 109 50 59 109 55X100 1 VILLAGE 5 5-8 EAST 121 50 50 21 121 60X100 VILLAGE 5 5-8 EAST 162 50 50 50 12 162 55X100 2 VILLAGE 5 5-8 EAST 98 30 40 28 98 55X100 1 VILLAGE 5 5-9 EAST 139 39 50 50 139 70X100 1 VILLAGE 5 5-9 EAST 88 40 40 8 88 50X100 VILLAGE 5 5-10 EAST 140 50 50 40 140 55X100 2 VILLAGE 5 5-10 EAST 56 16 40 56 40X90 VILLAGE 5 5-10 EAST 86 50 36 86 70X100 2 VILLAGE 5 5-11 EAST 156 40 40 40 36 156 ABSORPTION BY YEAR 1,986 266 461 613 464 182 1,986 EXHIBIT I-6 PARADISE VALLEY SOUTH VILLAGE JANUARY 2016 ABSORPTION BY YEAR PRODUCT SALES YEARS SOUTH VILLAGE YEARS 2033 2034 2035 TOTAL (Product types) VILLAGE PA # COMMUNITY UNITS 50X70 2 VILLAGE 6 6-1 SOUTH 156 50 50 56 156.0 50x90 VILLAGE 6 6-1 SOUTH 62 50 12 62.0 40X90 1 VILLAGE 6 6-1 SOUTH 90 50 40 90.0 40X90 2 VILLAGE 6 6-1 SOUTH 55 30 25 55.0 50x90 VILLAGE 6 6-1 SOUTH 97 39 58 97.0 40X90 1 VILLAGE 6 6-1 SOUTH 70 40 30 70.0 75x100 1 VILLAGE 6 6-3 SOUTH 87 30 30 27 87.0 75x100 2 VILLAGE 6 6-4 SOUTH 30 30 30.0 65x110 VILLAGE 6 6-4,5 SOUTH 101 40 40 21 101.0 duplex-family VILLAGE 6 6-6 SOUTH 143 50 50 43 143.0 50X100 VILLAGE 6 6-7 SOUTH 44 44 44.0 85X115 VILLAGE 6 6-8 SOUTH 85 30 30 25 85.0 ABSORPTION BY YEAR 1,020 361 359 1,020 EXHIBIT I-7 PARADISE VALLEY ANNUAL QUALIFYING INCOMES Product Units 2023 Price 20 % DOWN PAYMENT MORTGAGE AMOUNT MP PYMT 4% 30 yr (PITI) ANNUAL INCOME 28% Town Center HHDR 420 $225,299 $45,060 $180,239 $1,123.32 $47,179 Town Center HHDR 211 $270,358 $54,072 $216,287 $1,347.98 $56,615 Town Center HHDR 413 $304,153 $60,831 $243,322 $1,516.48 $63,692 Towns 92 $346,960 $69,392 $277,568 $1,729.91 $72,656 Duplex-Adult 282 $342,454 $68,491 $273,963 $1,707.45 $71,713 Duplex-Family 530 $333,442 $66,688 $266,753 $1,662.51 $69,826 Triplex-Adult 274 $299,647 $59,929 $239,718 $1,494.02 $62,749 Duplex-Luxury 51 $450,597 $90,119 $360,478 $2,246.64 $94,359 Small Lot (40’x62’) 122 $312,602 $62,520 $250,081 $1,558.61 $65,461 Small Lot (45’x80’) 321 $360,478 $72,096 $288,382 $1,797.31 $75,487 Standard Lot (40’x90’) $354,845 $70,969 $283,876 $1,769.23 $74,308 375 Standard Lot (40’x90’) $366,110 $73,222 $292,888 $1,825.40 $76,667 Standard Lot (40’x100’) 134 $360,478 $72,096 $288,382 $1,797.31 $75,487 Standard Lot (45’x100’) 344 $385,260 $77,052 $308,208 $1,920.88 $80,677 Small Lot (50’x70’) 451 $354,282 $70,856 $283,426 $1,766.42 $74,190 Standard Lot (50’x90’) 267 $444,965 $88,993 $355,972 $2,218.56 $93,179 Standard Lot (50’x100’) 600 $470,874 $94,175 $376,699 $2,347.74 $98,605 Standard Lot (55’x100’) 594 $501,289 $100,258 $401,031 $2,499.39 $104,974 Standard Lot (55’x100’) 2 $512,554 $102,511 $410,043 $2,555.55 $107,333 Standard Lot (60’x100’) 184 $506,922 $101,384 $405,537 $2,527.47 $106,154 Standard Lot (60’x100’) 232 $588,592 $117,718 $470,874 $2,934.67 $123,256 Standard Lot (65’x110’) 101 $453,413 $90,683 $362,731 $2,260.68 $94,949 Standard Lot (70’x100’) 169 $585,495 $117,099 $468,396 $2,919.23 $122,608 Standard Lot (70’x100’) 222 $608,306 $121,661 $486,645 $3,032.97 $127,385 Standard Lot (75’x100’) $608,306 $121,661 $486,645 $3,032.97 $127,385 117 Standard Lot (75’x100’) $512,554 $102,511 $410,043 $2,555.55 $107,333 Large Lot (85’x115’) 132 $628,583 $125,717 $502,866 $3,134.06 $131,631 Paradise Valley Active Adult Products Town Center HHDR 419 $264,000 $52,800 $211,200 $1,316.28 $55,284 Duplex 407 $270,000 $54,000 $216,000 $1,346.20 $56,540 Small Lot (50’x70’) 97 $400,000 $80,000 $320,000 $1,994.37 $83,763 Small Lot (40’x90’) 208 $345,000 $69,000 $276,000 $1,720.14 $72,246 SFD (50’x90’) 184 $365,000 $73,000 $292,000 $1,819.86 $76,434 SFD (65’x110’) 159 $455,000 $91,000 $364,000 $2,268.59 $95,281 Standard Lot (75’x100’) 276 $525,000 $105,000 $420,000 $2,617.61 $109,940 Large Lot (85’x115’) 102 $625,000 $125,000 $500,000 $3,116.20 $130,880 Total Units 8,490 $421,080 EXHIBIT I-8 PARADISE VALLEY TOWN CENTER JANUARY 2016

ABSORPTION BY YEAR PRODUCT SALES YEARS YEARS 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 TOTAL PRODUCT TYPES VILLAGE PA # COMMUNITY UNITS TOWNS 1 1-1 TC 92 50 42 92 Stacked flats HHDR 1 1-3 TC 211 50 50 50 50 11 211 Stacked flats 1 1-4 TC 413 50 50 50 50 50 50 50 50 13 413 55'x100' 1 1-6 TC 114 50 50 14 114 50'X70' 1 1-7 TC 88 50 38 88 45'X80' 1 1-7 TC 67 50 17 67 45'X80' 1 1-7 TC 59 33 26 59 55'X100' 1 1-8 TC 66 36 30 66 60'X100' 1 1-8 TC 70 50 20 70 60'X100' 2 2-1 TC WEST 77 30 47 77 50x100 2 2-2 TC WEST 92 50 42 92 45x80 2 2-2 TC WEST 100 24 50 26 100 50'x100 2 2-2 TC WEST 89 32 50 7 89 50'x100 2 2-4 TC WEST 118 50 50 18 118 Duplex 2 2-4 TC WEST 129 50 50 29 129 40'X62' 2 2-5 TC WEST 122 50 50 22 122 Stacked flats 2 2-6 TC WEST 420 50 50 50 50 50 50 50 50 20 420 Triplex-adult 2 2-7 TC WEST 60 50 10 60 Triplex-adult 2 2-7 TC WEST 130 40 50 40 130 45X100 2 2-9 TC WEST 172 50 50 50 22 172 MIXED USE 3 3-1 CASA 418 75 75 75 75 75 43 418 DUPLEX 3 3-2 CASA 46 46 46 DUPLEX 3 3-2 CASA 101 50 51 101 65x110 3 3-3 CASA 86 50 36 86 75x100 3 3-3 CASA 74 50 24 74 65x110 3 3-3 CASA 73 23 50 73 DUPLEX 3 3-4 CASA 114 50 50 14 114 50x90 3 3-5 CASA 90 50 40 90 50x70 3 3-5 CASA 97 50 47 97 DUPLEX 3 3-5 CASA 146 50 50 46 146 40X90 3 3-5 CASA 92 42 50 92 50x90 3 3-5 CASA 94 50 44 94 40x90 3 3-5 CASA 116 50 50 16 116 75x100 3 3-6 CASA 100 26 24 50 100 85x110 3 3-6 CASA 51 30 21 51 85x115 3 3-7 CASA 51 11 40 51 75x100 3 3-7 CASA 102 26 40 36 102 Duplex-Adult 4 4-1 NORTH 97 50 47 97 Duplex-Adult 4 4-1 NORTH 56 56 56 40X90 4 4-2 NORTH 74 50 24 74 50x100 4 4-2 NORTH 116 50 50 16 116 Duplex-Family 4 4-3 NORTH 66 50 16 66 Duplex Luxury 4 4-3 NORTH 51 51 51 Standard Lot (60' X 100') 4 4-4 NORTH 107 40 40 27 107 Standard Lot (70' X 100') 4 4-4 NORTH 66 40 26 66 Duplex-Family 4 4-5 NORTH 38 38 38 Triplex Adult; COMM'L 4 4-6 NORTH 84 40 44 84 45x80 4 4-7 NORTH 40 40 40 45x80 4 4-7 NORTH 56 56 56 Duplex-Family 4 4-8 NORTH 51 34 17 51 Duplex-Family 4 4-8 NORTH 41 30 11 41 Duplux Family 5 5-1 EAST 191 50 50 50 41 191 40x100 5 5-1 EAST 134 50 50 34 134 70X100 5 5-3 EAST 81 40 41 81 85X115 5 5-3 EAST 46 46 46 45X100 5 5-4 EAST 172 50 50 50 22 172 50X70 5 5-6 EAST 207 50 50 50 57 207 50X90 5 5-7 EAST 109 50 59 109 55X100 5 5-8 EAST 121 50 50 21 121 60X100 5 5-8 EAST 162 50 50 50 12 162 55X100 1 5 5-8 EAST 98 30 40 28 98 55X100 2 5 5-9 EAST 139 39 50 50 139 70X100 5 5-9 EAST 88 40 40 8 88 50X100 5 5-10 EAST 140 50 50 40 140 55X100 1 5 5-10 EAST 56 16 40 56 40X90 5 5-10 EAST 86 50 36 86 70X100 5 5-11 EAST 156 40 40 40 36 156 50X70 6 6-1 SOUTH 156 50 50 56 156 50x90 6 6-1 SOUTH 62 50 12 62 40X90 1 6 6-1 SOUTH 90 50 40 90 40X90 2 6 6-1 SOUTH 55 30 25 55 50x90 6 6-1 SOUTH 97 39 58 97 40X90 2 6 6-1 SOUTH 70 40 30 70 75x100 1 6 6-3 SOUTH 87 30 30 27 87 75x100 2 6 6-4 SOUTH 30 30 30 65x110 1 6 6-4 SOUTH 36 36 36 65x110 2 6 6-5 SOUTH 65 40 25 65 duplex-family 6 6-6 SOUTH 143 50 50 43 143 50X100 6 6-7 SOUTH 44 44 44 85X115 6 6-8 SOUTH 86 30 30 26 86 ABSORPTION BY YEAR 8490 300 342 635 522 606 597 579 563 740 862 1234 964 546 8,490