HomeMy WebLinkAbout07 APPROVE AGREEMENT FOR AQUISITION OF REAL PROPERTY & RESIDENTAL LEASE AGREEMENT FOR PROPERTY AT 2061 VALHALLA DRIVE FOR THE SIMON RANCH RESERVOIR, (CIP NO. 60114)nda
AGENDA REPORT Ree e eld m
City Manager
Finance Director
MEETING DATE: OCTOBER 2, 2018
TO: JEFFREY C. PARKER, CITY MANAGER
FROM: DOUGLAS S. STACK, DIRECTOR OF PUBLIC WORKS/CITY ENGINEER
SUBJECT: APPROVE AGREEMENT FOR ACQUISITION OF REAL PROPERTY AND
RESIDENTIAL LEASE AGREEMENT FOR PROPERTY AT 2061 VALHALLA
DRIVE FOR THE SIMON RANCH RESERVOIR, BOOSTER PUMP STATION,
AND PIPELINE REPLACEMENT PROJECT (CIP NO. 60114)
SUMMARY
At the direction of the City Council, staff has successfully negotiated an acquisition agreement for
the residential property located at 2061 Valhalla Drive, adjacent to the Simon Ranch Reservoir.
The acquisition of the property will facilitate construction of the Simon Ranch Reservoir and
Booster Pump Station Replacement Project (CIP No. 60114). Staff seeks City Council approval
for this purchase and authorization to execute the necessary agreement and associated
documents.
RECOMMENDATION
It is recommended that the City Council:
1. Approve the Agreement for the Acquisition of Real Property between the City of Tustin, a
municipal corporation of the State of California, and Chong Sang Kim and Cho Hea Kim,
Trustees of the Kim Trust dated October 3, 1990 (Owner) for the property at 2061 Valhalla
Drive (APN 104-611-30) and authorize the Mayor and City Clerk to execute the agreement
and associated documents on behalf of the City; and
2. Approve Residential Lease Agreement between the City of Tustin, a municipal corporation
of the State of California ("LANDLORD"), and Chong Sang Kim and Cho Hea Kim,
Trustees of the Kim Trust dated October 3, 1990 ("TENANT") for the property at 2061
Valhalla Drive (APN 104-611-30) and authorize the Mayor and City Clerk to execute the
agreement on behalf of the City.
FISCAL IMPACT
The total purchase price for acquisition of the property is $1,950,000. Sufficient funds from the
2013 Water Bonds Fund (Fund 306) have been appropriated for the purchase. It was determined
that ownership of the property by the City will facilitate construction of the project, resulting in
approximately $306,000 in construction cost savings and allow for reservation of a permanent
access and maintenance easement valued at $100,000. Upon completion of the project, the
property will be sold at fair market value at that time. The Residential Lease Agreement has no
fiscal impact.
1349879.1
Approve Acquisition of Real Property at 2061 Valhalla Drive, CIP 60114
October 2, 2018
Page 2
CORRELATION TO THE STRATEGIC PLAN
The proposed project furthers Goal B of the City of Tustin Strategic Plan pertaining to Public
Safety and the Protection of Assets, in that the project will improve vital public facilities which
enhance Tustin's readiness in responding to fire and drought conditions.
BACKGROUND AND DISCUSSION
The City of Tustin is proceeding with its plans to demolish the existing Simon Ranch Reservoir
and construct a replacement water reservoir and booster pump station at 11811 Outlook Lane.
The project site is an incorporated City of Tustin island surrounded by unincorporated County of
Orange territory and is bounded by Valhalla Drive to the southwest, Outlook Lane to the
southeast, and single family residences to the north, northwest and northeast.
The existing reservoir was constructed in 1960 and consists of a rectangular 1.4 million gallon
(MG), partially buried structure with trapezoidal bottom and side walls lined with gunite, and a
concrete roof. As the surrounding land was subsequently subdivided and developed with single
family residences, property lines were established right up to the reservoir walls on the northwest
and northeast sides. As a result, demolition of the existing reservoir requires encroachment onto
the two adjacent residential properties. On November 15, 2016, the City Council authorized the
Director of Public Works to initiate discussions with property owners, make offers, and execute
agreements for the acquisition of temporary construction easements. The Public Works
Department retained a Right -of -Way Agent in conjunction with the City Attorney's Office, and an
independent appraiser to provide appraisal services for the City.
During negotiations with Dr. Chong Sang Kim, owner of the subject property located at 2061
Valhalla Drive (Assessor Parcel Number 104-611-30) and to the northwest of the proposed
replacement water reservoir and booster pump station, a request was made by Dr. Kim for the
City to consider acquiring the entire property in fee title, instead of the temporary construction
easement. It was determined that ownership of the property would enable the City to realize
savings in mobilization, limited shoring, improved slope stabilization, and sound wall construction
estimated at $278,000. The building corner of the subject property lies only 15 feet from the
property line adjacent to the reservoir. Also, the need for a temporary construction easement
valued at $28,000 would be eliminated. It is expected that the City will recuperate the purchasing
funds with the sale of the property following construction of the project, with potential property
value appreciation. In addition, the City, as owner of the property, could grant itself at no cost a
permanent easement over a portion of the property for future access and maintenance, valued at
approximately $100,000.
The option to purchase the property was presented to the City Council in Closed Session on
January 16, 2018. The City Council authorized the Director of Public Works to proceed with the
acquisition process. The property was appraised by Kevin J. Donahue, MAI to determine current
fair market value, and the amount of just compensation for the property was determined to be
$1,950,000. In accordance with applicable laws, a written offer and pertinent items were delivered
to the owners for consideration. The Offer to Acquire Real Property and the Appraisal Report are
attached. Also attached is a Residential Lease Agreement, which will allow the property owners
to occupy the property until no later than January 31, 2019 without payment of rent. The City's
construction schedule will not be impacted.
The City's purchase offer was accepted and the attached Agreement for Acquisition of Real
Property and Residential Lease Agreement have been signed by the property owners and are
now presented to the City Council for approval. The City Attorney has approved the agreements
as to form.
1349879.1
Approve Acquisition of Real Property at 2061 Valhalla Drive, CIP 60114
October 2, 2018
Page 3
It is recommended that the City Council approve the attached Agreement for Acquisition of Real
Property and the Residential Lease Agreement between the City of Tustin and Chong Sang Kim
and Cho Hea Kim, Trustees of the Kim Trust dated October 3, 1990 (Owner) and authorize the
Mayor and City Clerk to execute the agreements and associated documents on behalf of the City
for the property at 2061 Valhalla Drive (APN 104-611-30).
r
Do glas . Stack, P.E.
re of Public Works/City Engineer
Attachments: 1. Offer to Acquire Real Property and Appraisal Report
2. Agreement for Acquisition of Real Property
3. Residential Lease Agreement
1349879.1
ATTACHMENT 1
OFFER TO ACQUIRE REAL PROPERTY AND APPRAISAL REPORT
I Jenner, Suite 200
Irvine,CA 92619
949,951.5263 ph 1949.951.65651 fax
RECEIPT OF OFFER PACKAGE
Simon Ranch Reservoir Replacement Project
2061 Valhalla Drive, Santa Ana, CA
APN: 104-611-30
Property Owner: Chong Sang Kim and Cho Hea Kim, Trustees of The Kim
Trust, dated October 3, 1990
2. Property Address: 2061 Valhalla Drive
Santa Ana, CA 92705
This is to acknowledge receipt of the offer package containing the following items:
❑ Written Offer Letter Dated June 27, 2017
❑ Appraisal Report
❑ Legal Description and Plat Map
❑ Agreement for Acquisition of Real Property
❑ Grant Deed
❑ Acquisition Brochure
Chong Sang Kim and Cho Hea Kim, Trustees of The Kim Trust, dated October 3, 1990
Chong Sang Kim, Trustee
Cho Hea Kim, Trustee
1307450.1
Date
Date
June 27, 2018
Chong Sang Kim and Cho Hea Kim, Trustees of
The Kim Trust, dated October 3, 1990
2061 Valhalla Drive
Santa Ana, CA 92705
Re: Offer to Acquire Real Property
Simon Ranch Reservoir Replacement Project
2061 Valhalla Drive, Santa Ana, CA 92705
Assessor Parcel No. 104-611-30
Dear Mr. & Mrs. Kim:
1 Jenner, Suite 200
Irvine, CA 92618
949.951.5263 ph, 1949.951,61651 fax
The City of Tustin (hereinafter referred to as the "City', is proceeding with its plans to demolish
the existing Simon Ranch Reservoir and to construct a new water tank and associated
improvements as well as offsite pipeline improvements which is known as the Simon Ranch
Reservoir Replacement Project (the "Project'). The City is interested in negotiating the purchase
the real property you own located at 2061 Valhalla Drive, Santa Ana, CA 92705 and identified by
the Orange County Assessor as Assessor Parcel Number 104-611-30 (the "Property"). The
Property is described in Exhibit "A" and depicted in Exhibit "B" enclosed with this letter.
Overland, Pacific & Cutler, Inc. ("OPC") has been contracted by the City to contact the property
owners in order to acquire the necessary rights for the Project. A review of public records
indicates that you are the owners of record of the Property. The City previously made you an
offer to acquire a 2,247 square foot temporary construction easement in the Property. Pursuant
to your request that the City consider acquiring the Property instead of the temporary construction
easement, the City has appraised the Property. The purpose of this letter is to extend the City's
offer to acquire the Property.
The City has determined the amount of just compensation for the Property is the sum of
$1,950,000. The City's offer is not less than what the City has determined to be the fair market
value of the Property. The basis for that determination is explained in the enclosed appraisal
report prepared by Scott Lidgard of Lidgard and Associates, Inc. dated March 13, 2018.
It is the City's hope that this price is agreeable to you and that the acquisition can begin
immediately. This offer is, however, conditioned upon the City's ratification of the offer by
execution of a contract of acquisition in a form and substance approved by the City Council of the
1307457.1
The Kim Trust, Dated October 3, 1990
2061 Valhalla Drive, Santa Ana, CA 92705
Page 2
City of Tustin. This offer is also based on the assumption that the Property is free of contamination
and requires no remediation. If contamination is found, this offer will be subject to amendment.
You have the right to obtain your own independent appraisal as part of the acquisition process.
Pursuant to California Code of Civil Procedure section 1263.025, you are entitled to receive the
reasonable cost, up to five thousand dollars ($5,000), for an independent appraisal you obtain.
The appraisal you obtain must be conducted by an appraiser licensed by the California Bureau of
Real Estate Appraisers (formerly the California Office of Real Estate Appraisers) and your request
for reimbursement must be submitted in writing to the City with a copy of the appraisal and an
invoice from the appraiser.
Although you have the right to obtain your own appraisal and are entitled to receive up to $5,000
for your appraisal as described above, please note that the City is not obligated to accept your
appraiser's value of the Property. The City, however, will review your appraisal and if appropriate,
confer with the City's independent appraiser regarding the merits of your appraisal.
If you wish to accept this offer, please do so by communication with Mona Montano of Overland,
Pacific & Cutler, Inc. at 949-268-5723 as soon as possible. A written agreement concerning the
acquisition of the Property will then be prepared and forwarded to you for your review and
approval. If you have any questions or wish to discuss this matter further, please feel free to call
Mona Montano at the number noted above.
Sincerely,
Over/and, Pacific & Cutler, Inc.
Daniela Borbe
Project Manager
On behalf of City of Tustin
Enclosures:
Legal Description and Plat Map
Appraisal Report
Acquisition Brochure
1307457.1
- o
Prepared for
CITY OF TUSTIN
c/o Overland, Pacific & Cutler, Inc.
1 Jenner, Suite 200
Irvine, California 92618
Date of Report
March 13, 2018
MARKET VALUE STUDY
KIM OWNERSHIP
SINGLE FAMILY RESIDENCE
2061 VALHALLA DRIVE
SANTA ANA, CALIFORNIA
Effective Date
of Appraisal
March 6, 2018
Prepared by
Scott A. Lidgard, MAI, cCM
LIDGARD AND ASSOCIATES, INC.
2592 North Santiago Boulevard
Orange, California 92867-1862
Report Reference No. 8119
LIDGAi AND ASSOCIATES
Ar'PRAISERS-CONSULTANTS
March 13, 2018
City of Tustin
c/o Overland, Pacific & Cutler, Inc.
1 Jenner, Suite 200
Irvine, California 92618
Attention: Mona Montano
Project Manager
Subject: Market Value Study
Kim Ownership
2061 Valhalla Drive
Santa Ana, California
2592 North Santiago Boulevard
Orange, California 92867-1862
(714) 633-8441 or (562) 988-2926
scott@lidgardine.com
In accordance with your request and authorization, I have completed an
appraisal study of the above -referenced property on behalf of the client indicated
above. The entire subject property is sought to be acquired by the City of Tustin
in connection with the Simon Ranch Reservoir Replacement Project
The valuation study consisted of (1) notification of the property owner regarding
the necessity of the appraisal study, (2) an complete on-site inspection of the
subject property, (3) a review of public records, (4) the research and collection of
comparable market data in the immediate and general subject market area, (5)
a valuation employing applicable methodology based on an analysis of the
comparable market data, and (6) preparation of this formal narrative appraisal
report in summation of the activities outlined above.
The subject property is located on the northeasterly side of Valhalla Drive,
beginning 165± feet northwesterly of Outlook Lane, within unincorporated
Orange County territory. The site has an interior (versus corner) location,
effectively rectangular land configuration, level topography, and contains 23,200±
square feet of land area. The property has a partial city light view of Southern
Orange County. The highest and best use of the subject property is residential
development.
The subject property is presently improved with a one-story single family
residence of wood frame and stucco construction. The dwelling contains 4
bedrooms, 31/2 bathrooms, 3,567 square feet of living area, was originally
constructed in 1973 and renovated throughout the years. on-site improvements
located within the boundaries of the subject property include a three -car
detached garage, wood frame patio covers, barbecue island, swimming
LIDGARD AND ASSOCIATES Real Estate Appraisal and Consultation
INCORPORATED
City of Tustin
c/o Overland, Pacific & Cutler, Inc.
Attention: Mona Montano
Project Manager
March 13, 2018
Page 2
pool/spa, concrete paving, brick paving, perimeter fencing/walls including
numerous retaining walls, inground irrigation system, and ornamental
landscaping. Overall condition is rated good, considering the age. Reference
the accompanying appraisal report for a complete description of the subject
property.
The purpose of this appraisal study is to estimate the fair market value of the
unencumbered fee simple interest in the subject property, in as -is condition, as
well as to provide an estimate of the fair market rental value thereof. Market
value is defined in The California Code of Civil Procedure, §1263.320, as:
"(A) The fair market value of the property taken is the highest price on the
date of valuation that would be agreed to by a seller, being willing to sell
but under no particular or urgent necessity for so doing, nor obliged to
sell, and a buyer, being ready, willing, and able to buy but under no
particular necessity for so doing, each dealing with the other with full
knowledge of all the uses and purposes for which the property is
reasonably adaptable and available.
(B) The fair market value of property taken for which there is no relevant
market is its value on the date of valuation as determined by any method
of valuation that is Just and equitable. "
The intended use of this report is to assist the City of Tustin in complying with
eminent domain requirements for their purchase negotiations with the private
property owner. Intended users are City officials, along with consultants thereof,
for the explicit purpose and intent indicated above. This report is not intended to
be delivered to, or relied upon by, third parties, except as provided for in the
eminent domain law.
After considering the various factors which influence value, the market values of
the subject property, in as -is condition, as of March 6, 2018 are as follows:
Unencumbered fee simple market value: $1,950,000.
Fair market rental value: $5,000 per month.
This appraisal complies with the reporting requirements set forth in the Uniform
Standards of Professional Appraisal Practice, under Standard Rule 2-2(a). This
report contains a moderate level of detail with respect to the market data,
appraisal methodology, and reasoning supporting the analysis, opinions, and
conclusions. It contains sufficient information for the purpose, intent, and users
for which it is written.
LIDGARD AND ASSOCIATES
INCORPORATED Real Estate Appraisal and Consultation
City of Tustin
c/o Overland, Pacific & Cutler, Inc.
Attention: Mona Montano
Project Manager
March 13, 2018
Page 3
This appraisal report is submitted in triplicate; I have retained a file copy. If you
require any additional information from our file, please do not hesitate to contact
the undersigned.
Very truly yours,
LIDGARD AND ASSOCIATES, INC.
Scott A. Lidgard, MAI, CCIM
Certified General Real Estate Appraiser
California Certification No. AG 004014
Renewal Date: March 13, 2020
SAL:sp
LIDGARD AND ASSOCIATES
INCORPORATED Real Estate Appraisal and Consultation
TABLE OF CONTENTS
Title Page
Letter of Transmittal
Table of Contents
PREFACE
Executive Summary
Location Map
Date of Value
Purpose of the Appraisal
Intent and Users of the Appraisal
Property Rights Appraised
Appraiser's Certification
Scope of the Appraisal
Assumptions and Limiting Conditions
Terms and Definitions
SUBJECT PROPERTY DESCRIPTION
Vestee
Property Address
Legal Description
Plat Map
Site Description
Building Improvements
Plot Plan Drawing
Other Improvements
Assessment Data
Ownership History
Owner Notification
Neighborhood Environment
VALUATION ANALYSIS
Highest and Best Use Analysis
Valuation Methods
Sales Comparison Approach
Fair Market Rental Value
Final Estimate of Value
Exposure Time
LUDGA W AIS"D ASSOCLkTES
APPRATSERS-CONSULTANTa
—I I, ov�t�t� I �
EXECUTIVE SUMMARY
PURPOSE OF APPRAISAL: Estimation of the fair market value of the
subject property in as -is condition, as well as to
provide an estimate of the fair market rental
value thereof. The entire subject property is
sought to be acquired by the City of Tustin in
connection with the Simon Ranch Reservoir
Replacement Project.
CLIENT IDENTIFICATION: City of Tustin c/o Overland, Pacific, & Cutler, Inc.
DATE OF VALUE: March 6, 2018
DATE OF REPORT: March 13, 2018
PROPERTY ADDRESS: 2061 Valhalla Drive
Santa Ana, California
VESTEE: Chong Sang Kim and Cho Hea Kim, Trustees of
The Kim Trust, dated October 3, 1990
SITE:
Land area: 23,200± square feet, per Assessor's records.
Map coordinates: Thomas Bros. Map Page 830, Grid E-2.
Census tract: Property located in Government Census Tract
756.06.
Land shape: Effectively rectangular land configuration.
Zoning: E-4 (small estates).
Soil contamination: None known or observed by appraiser,
however, a comprehensive soil study was not
provided for review. The subject property has
been appraised herein as though free of soil
contaminants, if any.
Present use:
Highest and best use:
Assessor's No.
IMPROVEMENTS:
Use:
Dwelling area:
Single family residential use.
Residential development.
104-611-30
Single family residential use.
3,567 square feet.
LI CARD ANTSSSOCU
APPRAISE RS-CONSULTANTS,
1
EXECUTIVE SUMMARY (Continued)
IMPROVEMENTS: (Continued)
Construction quality: Average quality, Class D construction.
Condition: Overall condition is rated good, considering the
age.
Floor plan: Floor plan includes a foyer, living room with
sunken conversation area, formal dining room,
kitchen, eating area, family room, 4 bedroms, 3
1/2 bathrooms, and service porch.
Year built: Originally constructed in1973 and renovated in
1985 and 2009.
HIGHEST AND BEST USE
VALUE INDICATIONS:
Sales Comparison
Approach:
Cost -Summation
Approach:
Income Capitalization
Approach:
Existing single family residence.
$1,950,000.
Not applicable.
Not applicable.
RECONCILIATION: Sales Comparison Approach is the only
approach considered applicable in the subject
case. The Cost -Summation Approach and
Income Capitalization Approach are not
considered applicable in the subject case for
reasons discussed in the Valuation Analysis
Section.
VALUE CONCLUSIONS:
Unencumbered fee simple market value: $1,950,000.
Fair market rental value: $5,000 per month.
L L A D AND ASSOCIATES
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APP 1' AI$VRS-CONSVLTANTS
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DATE OF VALUE
The date of value employed in this appraisal report, and all opinions and
computations expressed herein, are based on March 6, 2018, said date
being generally concurrent with the inspection of the subject property and
valuation analysis process.
PURPOSE OF THE APPRAISAL
The purpose of this appraisal report is to express an estimate of the market
value of the subject property, in fee simple, absent any liens, leases, or other
encumbrances, as of the date of value set forth above. The definition of
market value is set forth in the following portion of this section following the
heading "Definition of Market Value"
Further, it is the purpose of this appraisal report to describe the subject
property, and to render an opinion of the highest and best use based on (1)
the character of existing and potential development of the property
appraised, (2) the requirements of local governmental authorities affecting
the subject property, (3) the reasonable demand in the open market for
properties similar to the subject property, and (4) the location of the subject
property considered with respect to other existing and competitive
residential districts within the immediate subject market area.
Further, it is the purpose of this appraisal report to provide an outline of
certain factual and inferential information which was compiled and analyzed
in the process of completing this appraisal study.
INTENT AND USERS OF THE APPRAISAL
The intended use of this report is to assist the City of Tustin in complying
with eminent domain requirements for their purchase negotiations with the
private property owner. Intended users are City officials, along with
consultants thereof, for the explicit purpose and intent indicated above. This
report is not intended to be delivered to, or relied upon by, third parties,
except as provided for in the eminent domain law.
PROPERTY RIGHTS APPRAISED
The property rights appraised herein are those of the unencumbered fee
simple interest. Fee simple is defined in the 12th Edition of The Appraisal of
Real Estate, as, 'Absolute ownership by any other interest or estate, subject
only to the limitations imposed by the governmental powers of taxation,
eminent domain, police power, and escheat. "
APPRAISERS -CONSULTANT,',
3
CERTIFICATION
The undersigned does hereby certify, except as otherwise noted in this
appraisal report, that:
I have personally inspected the subject parent property; I have no present or
contemplated future interest in the real estate which is the subject of this
appraisal report. Also, I have no personal interest or bias with respect to the
subject matter of this appraisal report, or the parties involved in this
assignment.
My engagement in this assignment, and the amount of compensation, are not
contingent upon the reporting or development of pre -determined values or
direction in value that favors (1) the cause of the client, (2) the amount of the
value opinion, (3) the attainment of predetermined/stipulated results, or (4) the
occurrence of a subsequent event directly related to the intended use of this
appraisal. To the best of my knowledge and belief, the statements of fact
contained in this appraisal report, upon which the analyses, opinions, and
conclusions expressed herein are based, are true and correct.
This appraisal report sets forth all of the assumptions and limiting conditions
(imposed by the terms of this assignment or by the undersigned), affecting
my personal, impartial, and unbiased professional analyses, opinions, and
conclusions.
The reported analyses, opinions, and conclusions, were developed, and this
report has been prepared, in conformity with the Uniform Standards of
Professional Appraisal Practice, and the Code of Professional Ethics. As of the
date of this report, I have completed the requirements of the continuing
education program of the State of California as well as the Appraisal Institute.
The use of this report is subject to the requirements of the Appraisal Institute
relating to review by its duly authorized representatives.
I have previously appraised the subject property as of August 11, 2017.
Jason P. Boyer provided real property appraisal assistance to the person
signing this report with respect to data collection, inspection of the property,
and report preparation. No one other than the undersigned assisted in the
preparation of the analyses, conclusions, and opinions of the real estate
appraisal study.
Scott A. Lidgard, MAI, CCIM
Certified General Real Estate Appraiser
California Certification No. AG 004014
Renewal Date: March 13, 2020
Date: March 13, 2018
LUD Al AN -D A.S O IATA
APPRAISER S-CONSU L`I'ANTS
S!
SCOPE OF THE APPRAISAL
The appraiser, in connection with the following appraisal study, has:
1. Been retained, and has accepted the assignment, to make
an objective analysis/valuation study of the subject property,
and to report, without bias, an estimate of fair market value.
2. Toured the general area by automobile to acquaint himself
with the extent, condition, and quality of nearby
developments, sales and offerings in the area, density and
type of development, topographical features, economic
conditions, trends toward change, etc.
3. Viewed the subject property and completed an exterior
inspection from the adjacent rights-of-way in order to
acquaint himself with the current particular attributes, or
shortcomings, of the subject site.
4. General descriptive information relating to the subject
property, such as land area, building size, construction type,
building age/condition, etc., was obtained from a review of
public records, observed from adjacent rights-of-way, or
assumed based on the nature and quality of the
development.
5. Made a visual observation concerning public streets,
access, drainage, and topography of the subject property.
6. Obtained information regarding public utilities and sanitary
sewer available at the subject site.
7. Made, or obtained from other qualified sources, calculations
on the area of land contained within the subject property.
8. Taken photographs of the subject property, together with
photographs of the immediate environs.
9. Made, or caused to be made, a search of public records for
factual information regarding the recent sales of the subject
property, and for recent sales of comparable properties.
LIDGGARD AND ASSOCIATES.
APP RMSERS-CON SULTAN S
9
SCOPE OF THE APPRAISAL (Continued)
10. Reviewed current maps, zoning ordinances, and other
material for additional background information pertaining to
the subject property, and sale property.
11. Attempted to visualize the subject property as it would be
viewed by a willing and informed buyer, as well as a willing
and informed seller, absent the proposed public acquisition
project.
12. Formed an opinion of the highest and best use applicable to
the subject property appraised herein.
13. Formed an estimate of market value, as of the date of value
expressed herein, for the subject property. The valuation
methodology primarily relied upon is the Sales Comparison
Approach based on comparable market data located within
the immediate and general subject market area.
14. Prepared and delivered this appraisal report in summation
of all the activities outlined above.
LIDGARD AND ASSOCIATES
APPRAISERS -CONSULTANTS
NTS
101
ASSUMPTIONS AND LIMITING CONDITIONS
This appraisal is made with the following understanding as set forth in items
No. 1 through 18, inclusive:
1. That liability of Lidgard and Associates, Inc., along with the
specific appraiser responsible for this report, is limited to the
client only and to the fee actually received by the firm.
There is no accountability, obligation or liability to any third
party reader/user of this report. In the event this appraisal
report is delivered to anyone other than the client for whom
this report was prepared, it is the client's responsibility to
make such party and/or parties aware of all limiting
conditions and assumptions of this assignment and related
discussions.
2. That in the event the client or any third party brings legal
action against Lidgard and Associates, Inc., or the preparer
of this report, and the appraiser prevails, the party initiating
such legal action shall reimburse Lidgard and Associates,
Inc. and/or the appraiser for any and all costs of any nature,
including attorney's fees, incurred in their defense.
3. This appraisal report is intended to comply with reporting
requirements set forth in the Uniform Standards of
Professional Appraisal Practice, under Standard Rule 2-2(a).
It contains a moderate level of detail with respect to the
market data, appraisal methodology, and reasoning
supporting the analysis, opinions, and conclusions. This
report contains sufficient information for the intended use
and users for which it was written.
4. That title to the subject property is assumed to be good
and merchantable. Liens and encumbrances, if any, have
not been deducted from the final estimate of value. The
vesting was obtained from County Records, or other
sources, and has been relied upon as being accurate. The
subject property has been appraised as though under
responsible ownership. The legal descriptions are assumed
accurate.
5. That the appraiser assumes there are no hidden or
unapparent conditions of the subject property, subsoil,
structures, or other improvements, if any, which would
render them more or less valuable. Further, the appraiser
LIDGARD AND ASSOCIATES
APPi ATSERS-CONSULTrINTS
7
ASSUMPTIONS AND LIMITING CONDITIONS (Continued)
assumes no responsibility for such conditions or for the
engineering which might be required to discover such
conditions. That mechanical and electrical systems and
equipment, if any, except as otherwise may be noted in this
report, are assumed to be in good working order. The
property appraised is assumed to meet all governmental
codes, requirements, and restrictions, unless otherwise
stated.
6. That no soils report, topographical mapping, or survey of the
subject property was provided to the appraiser; therefore
information, if any, provided by other qualified sources
pertaining to these matters is believed accurate, but no
liability is assumed for such matters. Further, information,
estimates and opinions furnished by others and contained
in this report pertaining to the subject property and market
data were obtained from sources considered reliable and
are believed to be true and correct. No responsibility,
however, for the accuracy of such items can be assumed
by the appraiser.
7. That unless otherwise stated herein, it is assumed there are
no encroachments, easements, soil toxics/contaminants, or
other physical conditions adversely affecting the value of the
subject property.
8. That no opinion is expressed regarding matters which are
legal in nature or other matters which would require
specialized investigation or knowledge ordinarily not
employed by real estate appraisers, even though such
matters may be mentioned in the report.
9. That no oil rights have been included in the opinion of value
expressed herein. Further, that oil rights, if existing, are
assumed to be at least 500 feet below the surface of the
land, without the right of surface entry.
10. That the distribution of the total valuation in this report
between land and improvements, if any, applies only under
the existing program of utilization. The separate valuations
for land and improvements must not be used in conjunction
with any other appraisal and are invalid if so used.
LD ARD AND ASSOCIATES
APPRAISV RS-CONSU LTANTS
ASSUMPTIONS AND LIMITING CONDITIONS (Continued)
11. That the valuation of the property appraised is based upon
economic and financing conditions prevailing as of the date
of value set forth herein. Further, the valuation assumes
good, competent, and aggressive management of the
subject property.
12. That the appraiser has conducted a visual inspection of the
subject property and the market data properties. Should
subsequent information be provided relative to changes or
differences in (1) the quality of title, (2) physical condition or
characteristics of the properties, and/or (3) governmental
restrictions and regulations, which would increase or
decrease the value of the subject property, the appraiser
reserves the right to amend the final estimate of value.
13. That the appraiser, by reason of this appraisal, is not
required to give testimony in court or at any governmental
or quasi -governmental hearing with reference to the
property appraised, unless contractual arrangements have
been previously made therefor.
14. That drawings, plats, maps, and other exhibits contained in
this report are for illustration purposes only and are not
necessarily prepared to standard engineering or
architectural scale.
15. That this report is effective only when considered in its entire
form, as delivered to the client. No portion of this report will
be considered binding if taken out of context.
16. That possession of this report, or a copy thereof, does not
carry with it the right of publication, nor shall the contents of
this report be copied or conveyed to the public through
advertising, public relations, sales, news, or other media,
without the written consent and approval of the appraiser,
particularly with regard to the valuation of the property
appraised and the identity of the appraiser, or the firm with
which he is connected, or any reference to the Appraisal
Institute, or designations conferred by said organizations.
LIDGART ANDS O I�,.'TE
APP RATS ERS -Co NSULTr+ NT"5
X
ASSUMPTIONS AND LIMITING CONDITIONS (Continued)
17. That the form, format, and phraseology utilized in this report,
except the Certification, and Terms and Definitions, shall not
be provided to, copied, or used by, any other real estate
appraiser, real estate economist, real estate broker, real
estate salesman, property manager, valuation consultant,
investment counselor, or others, without the written consent
and approval of Scott A. Lidgard.
18. That this appraisal study is considered completely
confidential and will not be disclosed or discussed, in whole
or in part, with anyone other than the client, or persons
designated by the client.
LID+ -A.I D AND ASSOCLkMS
APP RAISERS -CON SU LTANTS
10
TERMS AND DEFINITIONS
Certain technical terms have been used in the following report which are
defined, herein, for the benefit of those who may not be fully familiar with
said terms.
FAIR MARKET VALUE:
The highest price, estimated in terms of money, which would be paid by a
willing buyer to a willing seller, allowing sufficient reasonable time to find a
buyer, both buyer and seller acting without duress and both being fully
advised as to the purposes to which the property can be best used. Fair
Market Value is estimated as of the date of valuation set forth in the
appraisal.
The California Code of Civil Procedure, S1263.320, states: "(A) The fair
market value of the property taken is the highest price on the date of
valuation that would be agreed to by a seller, being willing to sell but under
no particular or urgent necessity for so doing, nor obliged to sell, and a
buyer, being ready, willing, and able to buy but under no particular necessity
for so doing, each dealing with the other with full knowledge of all the uses
and purposes for which the property is reasonably adaptable and available.
(B) The fair market value of property taken for which there is no relevant,
comparable market is its value on the date of valuation as determined by
any method of valuation that is just and equitable."
SALES COMPARISON APPROACH:
One of the three accepted methods of estimating Fair Market Value. This
approach consists of the investigation of recent sales of similar properties to
determine the price at which said properties sold. The information so
gathered is judged and considered by the appraiser as to its comparability
to the subject property. Recent comparable sales are the basis for the Sales
Comparison Approach.
COST -SUMMATION APPROACH:
Another accepted method of estimating Fair Market Value. This approach
consists of estimating the new construction cost of the building and yard
improvements and making allowances for appropriate amount of
depreciation. The depreciated reconstruction value of the improvements is
then added to the land value estimate gained from the Sales Comparison
Approach. The sum of these two figures is the value indicated by the Cost -
Summation Approach.
LJDGARD AND ASSOCIATES
APPRAISERS -CONS LTANTS
11
TERMS AND DEFINITIONS (Continued)
INCOME CAPITALIZATION APPROACH:
The Income Capitalization Approach consists of capitalizing the net income
of the property under study. The capitalization method studies the income
stream, allows for (1) vacancy and credit loss, (2) fixed expenses, (3)
operating expenses, and (4) reserves for replacement, and estimates the
amount of money which would be paid by a prudent investor to obtain the
net income. The capitalization rate is usually commensurate with the risk,
and is adjusted for future depreciation or appreciation in value.
DEPRECIATION:
Used in this appraisal to indicate a lessening in value from any one or more
of several causes. Depreciation is not based on age alone, but can result
from a combination of age, condition or repair, functional utility,
neighborhood influences, or any of several outside economic causes.
Depreciation applies only to improvements. The amount of depreciation is a
matter for the judgment of the appraiser.
HIGHEST AND BEST USE:
Used in this appraisal to describe that private use which will (1) yield the
greatest net return on the investment, (2) be permitted or have the
reasonable probability of being permitted under applicable laws and
ordinances, and (3) be appropriate and feasible under a reasonable
planning, zoning, and land use concept.
LIDGARD AND ASSOCLATES
APPRAISERS -CONSULTANTS
12
i3VvlmdM1 k. r—mll-tiIuill' JL Lnt, Lal
SUBJECT PROPERTY
Aerial view of subject property located on the northeasterly side of Valhalla
Drive, beginning 165± feet northwesterly of Outlook Lane, within
unincorporated Orange County territory. See additional photographs of the
subject property in the Addenda Section.
VESTEE: Chong Sang Kim and Cho Hea Kim, Trustees
of The Kim Trust, dated October 3, 1990.
Mailing Address: 2061 Valhalla Drive
Santa Ana, California 92705
Telephone: (714) 665-3321
PROPERTY ADDRESS: 2061 Valhalla Drive
Santa Ana, California
LEGAL DESCRIPTION: Lot 80 of Tract No. 3883 in the County of
Orange, State of California, as per map
recorded in Book 166, Pages 5 through 11,
inclusive of Miscellaneous Maps, in the office
of the County Recorder of said county.
L ID ARD AND ASSOCIATES
APPRAISERS -CO NSU LTANTS
1
APPRAI SERS-CONSULTANTS
SITE DESCRIPTION
LOCATION: Northeasterly side of Valhalla Drive,
beginning 165± feet northwesterly of Outlook
Lane, within unincorporated Orange County
territory. Property has a partial city light view
of Southern Orange County.
MAP COORDINATES: Thomas Bros. Map Page 830, Grid E-2.
CENSUS TRACT: Property located in Government Census
Tract No. 756.06.
LAND SHAPE: Effectively rectangular land configuration;
see highlighted portion of plat map on the
opposite page.
DIMENSIONS: Various dimensions; reference plat map.
LAND AREA: 23,200± square feet, per Assessor's records.
TOPOGRAPHY: Effectively level topography.
DRAINAGE: Appears to be adequate; no depressions or
low areas were noted within the boundaries
of the subject property which would cause a
water ponding condition during the rainy
season.
SOIL STABILITY: Appears to be adequate based upon the
existing development at the subject site, as
well as surrounding developments; it should
be noted that a soils report was not provided
for review.
SOIL CONTAMINATION: None known or observed, however, a soils
study has not been provided for review. The
subject property has been appraised as
though free of soil contaminants.
ACCESS: The subject property has 143.85 lineal feet of
frontage along Valhalla Drive.
RIGHT-OF-WAY WIDTH: Valhalla Drive: 40 feet.
STREET SURFACING: Asphalt paved traffic lanes.
4
SITE DESCRIPTION (Continued)
CURB AND GUTTER: Concrete curb and gutter (each side of
street).
SIDEWALK: Concrete sidewalk along portion of subject
frontage.
STREET LIGHTS: Mounted on ornamental standards.
PUBLIC UTILITIES: Water, gas, electric power, and telephone
are available at the site.
SANITARY SEWER: Available to site.
ENCROACHMENTS: None known, or observed during the field
inspection, however, a survey of the subject
property was not provided for review.
EASEMENTS: Based on a preliminary title report prepared
by Commonwealth Land Title Company,
dated December 30, 2016, there are no
easements encumbering the subject
property. It is assumed there are no "cross -
lot" or "blanket" easements.
ILLEGAL USES:
None apparent.
EARTHQUAKE FAULT: The subject property is not located within an
earthquake fault study zone. The greater
Southern California area, however, is
generally prone to earthquakes and other
seismic disturbances. No seismic or geo-
logical studies have been provided for
review. No responsibility is assumed for the
possible impact on the subject property of
seismic activity and/or earthquakes.
FLOOD HAZARD AREA: The subject property is located within Zone
X, per data issued by the Federal
Emergency Management Agency. Property
is depicted on Flood Map Panel
06059C0168J, dated December 3, 2009.
PRESENT USE: Single family residential use.
LIDGAR D AND A.SSOCL TE'
3
SITE DESCRIPTION (Continued)
ZONING: The subject property is located within the E-4
(small estates) zone district of the County of
Orange. The purpose and intent of the E-4
zone classification is to provide for the
development and maintenance of low -
medium density single family residential
neighborhoods in which open spaces and
deep setbacks predominate.
Current development standards include a (1)
minimum lot size of 20,000 square feet, (2)
maximum site coverage of 35%, (3)
maximum building height of three stories or
35 feet, whichever is most restrictive.
The on-site automobile parking requirement
for single family residential use is two
enclosed spaces per dwelling unit.
Based on an inspection of the subject
property, as well as a review of current zone
standards, the existing subject development
generally represents a conforming land use.
HIGHEST AND BEST USE: The reader is referred to the first portion of
the Valuation Analysis Section for a detailed
discussion regarding the highest and best
use of the subject property.
BUILDING IMPROVEMENTS
MAIN DWELLING
TYPE OF STRUCTURE: Single family residence.
NO. OF STORIES: One story.
DWELLING SIZE: 3,567 square feet per Orange County
Assessor's records.
YEAR BUILT: Originally constructed in 1973 and renovated
in 1985 and 2009.
LID ARD AND ASSOCIATES
APPRAMERS- eaNsULTANTs
0
Landscaping Landscaping
(Sloped) (sloped)
slope )
Concrete
Pool L.--
Concrete
Garage
Concrete
Main Dwelling
P
aConcrete Brick
Valhalla
Landscaping
(Sloped)
-IJE)GARL> ANE> ASSOCIATES
APPRAISERS-CON SULTA'NT
Drive
BUILDING IMPROVEMENTS (Continued)
MAIN DWELLING (Continued)
CONSTRUCTION QUALITY: Average -good quality, Class D (wood frame)
construction.
FOUNDATION: Reinforced poured concrete column and wall
footings.
EXTERIOR WALLS: Stucco over wood framing exterior walls with
wood fascia.
ROOF SURFACING: Plywood roof deck supported by wood frame
truss structure with lightweight concrete tile
roof surfacing. Roof surfacing replaced in
approximately 1993.
FLOORS: Concrete slab flooring with carpet and
ceramic tile floor coverings.
INTERIOR WALLS: Painted drywall over wood stud interior walls.
CEILINGS: Painted drywall wood stud ceilings.
DOORS: Wood frame with glass panel front entry door
and wood frame/panel interior doors.
WINDOWS: Plate glass windows set in wood frames and
dual pane vinyl frame sliding windows.
Windows replaced throughout the dwelling in
approximately 2009.
ELECTRICAL:
Conventional electrical wiring system.
PLUMBING: Conventional plumbing system. Dwelling
has 31/2 bathrooms, kitchen sink, and a 80±
gallon water heater.
HEATING AND COOLING: Dual central forced air central heating and
cooling system.
CONDITION: Overall condition is rated good, considering
the age.
APPRAISERS-CONSU LTANTS.
5
BUILDING IMPROVEMENTS (Continued)
MAIN DWELLING (Continued)
FLOOR PLAN: Floor plan includes a foyer, living room with
sunken conversation area, formal dining
room, kitchen, eating area, family room, 4
bedrooms, 31/2 bathrooms, and service
porch. Dwelling has two wood burning
fireplaces with gas log lighters. Family room
has an extensive stone wall and hearth
surrounding fireplace.
KITCHEN FEATURES: Kitchen features include stain grade
cabinets, quartz stone drainboard and
backsplash, double bowl stainless steel sink,
garbage disposal, built-in oven (Kitchenaid),
countertop range (Thermador, four electric
burners), hood and vent fan, built-in
refrigerator (Kitchenaid), and dishwasher
(Kitchenaid). All appliances have stainless
steel finish.
OTHER IMPROVEMENTS
COMMENT: Other on-site improvements located within
the boundaries of the subject property
include a three -car detached garage, wood
frame patio covers, barbecue island,
swimming pool/spa, concrete paving, brick
paving, perimeter fencing/walls including
numerous retaining walls, inground irrigation
system, and ornamental landscaping.
ASSESSMENT DATA
ASSESSOR'S PARCEL NO.: 104-611-30
ASSESSED VALUATIONS: Land: $ 73,458.
Improvements: $185,831.
TAX CODE AREA: 89-027.
TAX YEAR: 2017-2018
L IDGARD AND ASSOCIATES
APPRA[SCR,S-00NSU LTA*,4`i'S
C
ASSESSMENT DATA (Continued)
REAL ESTATE TAXES: $2,705.15*
SPECIAL ASSESSMENTS: $457.72 per annum.
* In the event the subject property is sold -transferred
to a private party, the real estate taxes will be
adjusted to approximately 1.07223% of the sale -
transfer price, per Proposition 13. In the absence of
a sale -transfer, the maximum allowable annual
increase in the assessed valuations is 2%.
OWNERSHIP HISTORY
COMMENT: The subject property was acquired by the
present owner on June 15, 1994 as
Document No. 401764. A non -market
related grant deed transferring ownership
between two related parties recorded
October 22, 2014 as Document No. 428842.
Due to the date of acquisition, the purchase
price is not considered relevant to the
current market value.
The property has not been marketed for sale
through the local Multiple Listing Service in
recent years.
OWNER NOTIFICATION
COMMENT: The property owner was notified of the
appraisal study by letter from Overland,
Pacific & Cutler, LLC, acquisition consultants
for the City of Tustin, dated February 9, 2018,
and Lidgard and Associates, Inc., dated
February 12, 2018. Reference copies of the
notification letters set forth in the Addenda
Section.
The property owner was advised of the
entitlement to accompany the appraiser at
the time of the appraisal inspection. The
letter also invited the owner to complete an
LS A AND ASSOCLATES
APPRAISE RS -CON SUL'TANTS
7
OWNER NOTIFICATION (Continued)
COMMENT: (Continued) enclosed Property Data Form with
information such as recent property
upgrades and tenant information.
The owner responded to the letters of
notification by making telephone contact with
the appraiser. An inspection of the subject
property was conducted on March 1, 2018 in
the presence of the property owner.
NEIGHBORHOOD ENVIRONMENT
COMMUNITY: The subject property is located in
unincorporated Orange County territory
within a community commonly known as
North Tustin.
The community of North Tustin is situated in
central Orange County. Neighboring and
adjoining communities include Orange,
Tustin, Santa Ana, Orange Park Acres, EI
Modena, and Villa Park. Major nearby
freeways include the Santa Ana (5) Freeway,
Costa Mesa (55) Freeway, the Garden Grove
(22) Freeway, and the Eastern
Transportation (261 Toll Road) Corridor.
North Tustin encompasses 6.7 square miles;
the elevation is 256 feet above sea level. The
total population, as of 2010, is 24,917
persons. The average household size is
approximately 2.88 persons. The median
household income is $119,207. There are a
total of 8,866 housing units including
attached and detached dwellings.
There is a variety of cultural, recreational,
educational, and entertainment options in the
greater central Orange County area.
Tourism and entertainment facilities include
the Anaheim Convention Center, Honda
Center, Angel Stadium, Disneyland Resort,
LMOARD ANID ASSOCIATES
APPRATSV RS -CONSULTANTS
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NEIGHBORHOOD ENVIRONMENT (Continued)
COMMUNITY: (Continued) Anaheim Resort, The Rinks Anaheim Ice,
Orange County Fairgrounds, Irvine Lake, and
Irvine Regional Park.
LAND USES: The predominant land use within the
immediate area along secondary streets is
single family residential dwellings situated on
large land parcels. Commercial retail and
office developments are located along Red
Hill Avenue and Newport Avenue. Existing
developments, for the most part, consist of
one and two story structures of either
reinforced concrete or wood frame
construction.
Predominant land uses within the general
vicinity include the Trader Joes, Tustin Ranch
Golf Club, Peters Canyon Regional Park, EI
Modena Open Space, Orange Hill
Restaurant, The Market Place, In -N -Out
Burger, Target, BJ's Restaurant &
Brewhouse, Orchard Hills Apartments,
Walgreens, Tustin Plaza Apartments, Pioneer
Middle School and Ladera Elementary
School.
Existing land uses within the area are
generally compatible when considered in the
context of the longevity of respective uses.
There are no substantial adverse conditions
which would have a measurable impact on
the value or marketability of the subject
property.
BUILT-UP: The immediate neighborhood is effectively
85% built-up.
Residential: 70±% owners.
30±% tenants.
Commercial: 40±% owners.
60±% tenants.
L DGARD AND ASSOCIATES
91
NEIGHBORHOOD ENVIRONMENT (Continued)
AGE RANGE: Existing developments in the area range
from 5 years to exceeding 50 years.
PRIDE OF OWNERSHIP: Overall pride of ownership, evidenced by an
ongoing maintenance program, is rated
average.
OTHER: The availability and adequacy of public
facilities, transportation, and retail/office
commercial facilities are rated average. The
County of Orange provides police and fire
protection to the subject district
See Valuation Analysis in the following section.
I., D ARD AND ASSOCIATE
PPRATSERS-CONSULTANTS
10
Art* K A 1,111-'K' b-UUN6UL L A NIZI
VALUATION ANALYSIS
The purpose of this valuation study is the estimation of fair market value of
the unencumbered fee simple interest in the subject property, in as -is
condition, as well as to provide an estimate of the fair market rental value
thereof. The entire subject property is sought to be acquired by the City of
Tustin in connection with the Simon Rancho Reservoir Replacement Project.
The date of value employed in this study is March 6, 2018.
Prior to the application of the appraisal process, which in this case employs
the Sales Comparison Approach and Direct Rental Comparison Approach, it
is necessary to consider and analyze the highest and best use of the subject
property.
H/GHESTAND BEST USEANALYS/S;
Highest and best use is defined in The Appraisal of Real Estate, by the
Appraisal Institute, 14th Edition, Page 332, as:
"The reasonably probable use of property that results in the
highest value. "
In the process of forming an opinion of highest and best use, consideration
must be given to various environmental and political factors such as zoning
restrictions, probability of zone change, private deed restrictions, location,
land size and configuration, topography, and the character/quality of land
uses in the immediate and general subject market area.
There are three basic criteria utilized in the highest and best use analysis of
a property as if vacant, as well as presently improved. The three criteria are
summarized as follows:
1. Physically possible.
2. Legally permissible.
3. Financially feasible.
The foregoing are typically considered sequentially; for example, a specific
use may prove to be maximally productive, however, if it is not legally
permissible, or physically possible, its productivity is irrelevant.
Physically Possible:
The physical possibility of developing a specific property is governed, in part,
by the size, shape, area, and terrain of the property in question. The
availability of public utilities is also an important consideration in the analysis
of a property's overall development potential.
LI CARD AND ASSOCIATES
APPRAIStKS-CONSU LTANTS
1
VALUATION ANALYSIS (Continued)
H/GHESTAND BEST USEANALYS/S: (Continued)
Physically Possible: (Continued)
Additional physical considerations are warranted when analyzing the highest
and best use of the subject property, as presently improved. The size,
architectural design, and condition of the existing building improvements are
important elements, and may have a substantial impact on the highest and
best use of a property, as presently improved.
Legally Permissible:
Legally permissible uses are determined, in part, by a community's general
plan, zoning requirements, local building codes, and private deed
restrictions.
The general plan of a community is established to assure continuity of
development within the community and the surrounding area. There is
usually a consistency between the general plan of a community and the
various zone classifications. The zone classification sets forth the various
types of development allowed within a specific zone district. Zoning
requirements typically constitute the available choices of development for a
property. Local building codes are generally addressed as part of the zone
classification, and include items such as maximum building densities,
building height restrictions, setback and parking requirements, etc. Private
deed restrictions relate to mutual agreements under which a property was
acquired. Said restrictions may prohibit certain types of development.
Financially Feasible:
Those uses which meet the first two criteria, i.e. physically possible and
legally permissible, are further analyzed in order to determine which uses
produce an adequate return on the investment. The specified use is
considered financially feasible if the net income capable of being generated
is enough to satisfy the required rate of return and provide a return on the
land. Among those uses which are considered financially feasible, that use
which produces the highest price, or value, consistent with the required rate
of return, is considered the highest and best use of the property.
Conclusion (as if vacant).
The subject property has an interior (versus corner) location along a
secondary residential street. The site has an effectively rectangular land
configuration, level topography, and contains 23,200 square feet of land
area. Vehicular access, as well as pedestrian access, are rated average.
Property has a partial city light view of Southern Orange County.
APPRAISE RS -CONSULTANTS
0
VALUATION ANALYSIS (Continued)
H/GHESTAND BEST USEANALYS/Se (Continued)
Conclusion (as if vacant); (Continued)
All public utilities such as water, gas, electric power, telephone, as well as
sanitary sewer are available to the site. The physical characteristics of the
subject parcel are considered adequate to accommodate a variety of legally
permissible uses.
As stated, the subject property is located within the E-4 (small estates) zone
of the County of Orange. The primary legally permitted use within the E-4
zone classification is single family residential development with a minimum
lot size of 20,000 square feet. The optimal utility of the subject site is as
zoned.
Based on the demand, the physical characteristics of the site, as well as the
legally permissible uses, it is the appraiser's opinion that the maximally
productive use, and therefore, the highest and best use of the subject land,
as if vacant, is a single family residential development.
Conclusion (as improved):
The subject property, as presently improved, is obviously physically
possible, and generally conforms to current development standards.
Overall condition of the subject dwelling and on-site improvements is rated
good, considering the age.
The overall functional utility of the subject property is competitive with the
preponderance of improved single family residential properties in the
immediate market area. The subject property, as improved, is considered
financially feasible, and represents the maximally productive use at the
present time.
Based on an inspection of the subject property, as well as the valuation
analysis which considered property values, historical occupancy rates, as
well as expressed tenant and owner/user demand, the existing
development represents the highest and best use of the subject property.
The value of the subject property as presently improved exceeds that of the
underlying land parcel.
VAL UA T/ON METHODS:
There are three conventional methods (approaches) which can be used to
estimate value. They are the Sales Comparison Approach, Cost -Summation
Approach, and Income Capitalization Approach. Following is a brief
description of each approach to value.
IJGARD AND ASSOCIATES
AV PR AB ERS -CON SULTANTS
3
VALUATION ANALYSIS (Continued)
VALUATION METHODS: (Continued)
Sales Comparison Approach,
This approach consists of the investigation of recent sales of
similar properties to determine the price at which said
properties sold. The information so gathered is judged and
considered by the appraiser as to its comparability to the
subject property. Recent comparable sales, either vacant land
or improved properties, are the basis for the application of the
Sales Comparison Approach.
Cost -Summation Approach:
The Cost -Summation Approach consists of estimating the
construction cost new of the building and yard improvements
and making allowances for the appropriate amount of accrued
depreciation. The depreciated reconstruction value of the
improvements is then added to the land value estimate. The
sum of these two figures is the value indicated by the Cost -
Summation Approach.
Income Capitalization Approach;
The Income Capitalization Approach consists of the capitalizing
of net income of the property under appraisement. The
capitalization methodology studies the income stream, allows
for (1) vacancy and credit loss, (2) fixed expenses, and (3) oper-
ating expenses. The value indicated by the Income
Capitalization Approach represents the money which would be
paid by a prudent investor to obtain the net income capable of
being generated by the property. The capitalization rate is
usually commensurate with the inherent risk.
The appraisal process is concluded by reconciliation of the indications of
value obtained from the applicable valuation methods. Consideration is
given to the type and reliability of data used, as well as the applicability of
each approach. It should be understood that the reconciliation is not an
averaging process, but an analysis of data upon which the various
approaches were developed.
The Sales Comparison Approach is the only approach considered
applicable as a reliable indicator of value when estimating the
unencumbered fee simple market value of the subject property. The Direct
Rental Comparison Approach, which is an adaptation of the Sales
Comparison Approach, has been employed in order to estimate the fair
market rental value thereof. The Cost -Summation Approach is without
LIDGARD AND ASSOCIATES
A]PPRAiSCRS-CONSLTLT .Nrs
11
VALUATION ANALYSIS (Continued)
VALUATION METHODS: (Continued)
meaningful application due to the age and nonconforming status of the
existing development and resultant difficulty in accurately estimating
accrued depreciation. The Income Capitalization Approach has not been
applied inasmuch as the subject property would not typically be acquired for
investment -type purposes.
SALES COMPARISONAPPROACH;
The Sales Comparison Approach takes into account properties which have
sold in the open market. This approach, whether applied to vacant or
improved property, is based on the Principle of Substitution which states,
"The maximum value of a property tends to be set by the cost of acquiring
an equally desirable substitute property, assuming no costly delay is
encountered in making the substitution." Thus, the Sales Comparison
Approach attempts to equate the subject property with sale properties by
analyzing and weighing the various elements of comparability.
The Sales Comparison Approach has been applied to the subject property
after an investigation and analysis was conducted of single family residential
properties having recently sold within the immediate market area.
Comprehensive information pertaining to each of the sale properties
employed herein is contained in the appraiser's file and data base.
Reference the Market Data Map, on the following page, for an illustration of
the location of the various sale properties.
The knowledge and understanding of present and historical value patterns
and trends affecting the local real estate market are based on the
observation of market conditions and the appraisal of other residential
properties, as well as information obtained from various sources which
include the following:
• Owners: Interviews were conducted with owners of
residential properties in the general research area to
determine various market trends, and value patterns.
• Tenants: Interviews were conducted with various tenants of
residential properties located within the immediate subject
market area.
• Real estate brokers and salespersons: A number of active
brokers and salespersons within the greater subject market
area were interviewed regarding existing and historical lease
and sales data, as well as value patterns and trends.
LIDGARD AND ASSOCIATES
APPRAISERS -CONSULTANT
5
LIDGARD AND ASSOCIATES .. .
APPRAISERS -CONSULTANTS
VALUATION ANALYSIS (Continued)
SALES COMPAR/SONAPPROACH; (Continued)
• Public officials: Various public officials were interviewed
regarding (1) existing or proposed projects which have an
impact on real property values, (2) economic trends, (3) level
of public services, (4) zone classifications and building
standards, and (5) property tax structure and assessment
districts.
• Published data: Information was gathered and studied
regarding population, unemployment levels, employment
centers, residential sales data as well as rental data, and
other demographic and economic factors.
Following is a summary of those sales considered helpful when estimating
the value of the subject property as presently improved.
Dwelling On-site Land/Bldg. $/SF Land
Data Date Lot Size Size Br/Ba Built Parking Ratio Sale Price $/SF Dwel.
1. 6-17 20,400 sf 3,536 sf 5 br/31/2 ba 1976 3 -gar. 5.77:1 $1,653,000. $ 81.03
2071 Racquet Hill, Santa Ana $467.48
2. 8-17 13,148 sf 3,549 sf 5 br/3 be 1998 2 -gar
12165 Zielian Court, Tustin
3. 8-17 26,325 sf 3,395 sf 5 br/51/2 ba 1973 3 -gar
2121 Valhalla Drive, Santa Ana
4. 9-17 20,800 sf 3,513 sf 5 br/3 ba 1976 3 -gar
2032 Racquet Hill, Santa Ana
5. 12-17 7,638 sf 3,901 sf 5 br/4 be 1999 3 -gar
2348 Pieper Lane, Tustin
6. 2-18 20,295 sf 3,827 sf 5 br/31/2 ba 1970 3 -gar
11822 Skyline Drive, Santa Ana
3.70:1 $1,711,000. $130.13
$482.11
7.75:1 $1,895,000. $ 71.98
$558.17
5.92:1 $1,960,000. $ 94.23
$557.93
1.96:1 $1,700,000. $222.57
$435.79
5.30:1 $1,650,000. $ 81.30
$431.15
All of the properties surveyed are located within the immediate and general
subject market area. The properties contain dwellings ranging in size from
3,395 to 3,901 square feet of living area, and were originally constructed
between 1970 and 1999. The floor plans range from 5 bedrooms/3
bathrooms to 5 bedrooms/51/2 bathrooms. The parcels range in size from
7,638 to 26,325 square feet of land area.
After viewing each of the sale properties, and verifying details of the various
transactions, the primary unit of analysis employed herein is the overall
purchase price. Two other factors developed from the residential sale
LITS `ARD AND ASSOCIATES
APPRAISERS -CONSULTANTS
C
VALUATION ANALYSIS (Continued)
SALES COMPAR/SONAPPROACH,• (Continued)
Elements of Comparability -(Continued)
properties were utilized as secondary units of analysis; they are the (1)
overall purchase price per square foot of land area, and (2) overall purchase
price per square foot of building area.
The overall purchase prices range from $1,650,000 to $1,960,000. The
purchase prices produce a range of value of $71.98 to $222.57 per square
foot of land area, and $431.15 to $558.17 per square foot of dwelling area.
The land/building area ratio was also considered in the analysis of the
improved residential sale properties when compared to the subject
property. The subject property has a ratio of 6.50:1. As can be noted, the
land/building area ratios of the sale properties range from 1.96:1 to 7.75:1.
All of the sales employed herein conveyed title to the fee simple interest, and
represent arm's-length transactions. Financing terms of each sale were
typical of the subject market area. Adjustments for property rights
conveyed, conditions of sale, and financing are therefore not warranted.
Market Conditions.-
Certain
onditions:
Certain of the sale properties considered extended over a time period back
to the second quarter of 2017. The time frame permitted the development
of a rather comprehensive real estate market profile. The improved sale
properties employed in this study are set forth in chronological order, and
took place between June, 2017 and February, 2018.
Based on discussions with residential brokers and salespersons, as well as
extensive media coverage, a substantial upward trend in value and market
activity commenced in 2012 after relatively stagnant market conditions. The
escalating value trend continues, albeit at a slower pace. It is apparent that
the supply of residential properties is generally in equilibrium with the
demand. This condition is anticipated to continue throughout the remaining
portion of this year. Differing market conditions impacting the sale
properties were considered in the valuation analysis employed herein.
Elements of Comparability.-
After viewing all of the single family residential sale properties, an analysis
was made of the various elements of comparability. Some of those
elements include, but are not limited to, the following:
LIDGA D AND ASSOCLATES
APPRAISERS-CONSULTA''TS
7
VALUATION ANALYSIS (Continued)
SALES COMPAR/SONAPPROACH; (Continued)
Elements of Comparability.- (Continued)
General location.
Immediate environmental influences.
Zoning.
Land size and configuration.
Dwelling age and condition.
Type/capacity of on-site parking.
Vehicular and pedestrian access.
Topography, view amenity.
Dwelling size.
No. of bedrooms/bathrooms.
Construction quality.
Extent of on-site improvements.
A Relative Comparison Analysis (RCA) has been conducted between the
individual comparable properties and the subject property. The RCA is a
qualitative technique for analyzing comparable sales, and is a valuable tool
employed to illustrate whether the characteristics of a comparable property
are inferior, superior, or similar to those of the property under appraisement.
The Relative Comparison Analysis is similar to paired data analysis without
the use of arbitrary or unsupportable quantitative adjustments. This
technique acknowledges the imperfect nature of the subject real estate
market. The primary objective is to bracket the subject property between
the comparable sales with respect to the similarity, superiority, and inferiority
thereof. Superior elements of comparability of an individual sale property
would reflect a downward adjustment to the value indication thereof.
Conversely, inferior elements suggest an upward adjustment.
Additionally, it is important to note that the above elements of comparability
were not assigned equal weight in making the analysis of each property.
The immediate environmental influences, land area, effective dwelling
age/condition, overall construction quality, dwelling size, number of
bedrooms/bathrooms, parking capacity/type, and extent of other on-site
improvements were considered the most important factors in the subject
case.
Overall marketability of each sale property was also considered.
Marketability is the practical aspect of selling a property in view of all the
elements constituting value, and certain economic and financing conditions
prevailing as of the date of sale. Allowance was made for these factors
when considered applicable.
Sales Comparison Analysis:
Reference the following pages for a description of each sale property
employed herein.
LIDGARD AND ASSOCIATES
APPRAISE RS-C€iNSU LTANTS
X
u
MARKET DATA NO. 1
mLL
mml
2071 Racquet Hill, Santa Ana
The sale property consists of a single story dwelling of wood frame and
stucco construction, built in 1976. The floor plan includes 5 bedrooms, 31/2
bathrooms, two fireplaces, and 3,536 square feet of living area. Marketing
features include a guard gated location, office, bonus room, newer
hardwood flooring, and stainless steel appliances. Overall condition is rated
average -good, considering the age. The underlying land parcel contains
8,150 square feet of land area. Additional features include a swimming
pool/spa, and four -car attached garage. Landscaping improvements/ -
maintenance are rated average.
The property was originally offered for sale at $1,695,000. The purchase
price was $1,653,000, which included $330,900 cash down to a concurrent
first trust deed note of $1,322,100 with MUFG Union Bank. The cash down
payment represents 20% of the total purchase price. The deed recorded
June 29, 2017 as Document No. 269946. Further details regarding the
transaction are summarized as follows:
Grantor: Kathryn Latta Trust
Grantee: Johansson Living Trust
Assessor's Parcel No.: 502-191-02
APPRAISERS -CONSULTANTS
A
MARKET DATA NO. 2
12165 Zielian Court, Tustin
The sale property consists of a single story dwelling of wood frame and
stucco construction, built in 1998. The floor plan includes five bedrooms,
three bathrooms, two fireplaces, and 3,549 square feet of living area.
Marketing features include a guard gated location, a gourmet kitchen, walk-
in pantry, custom entertainment center, custom bathrooms, French doors,
travertine and hardwood flooring, and ornate chandeliers. Overall condition
is rated average -good, considering the age. The underlying land parcel
contains 13,148 square feet of land area. Additional features include a
swimming pool/spa, and two -car attached garage. Landscaping
improvements/maintenance are rated average.
The property was originally offered for sale at $1,775,000 and was on the
market 120 days. The purchase price was $1,711,000, which included
$961,000 cash down to a concurrent first trust deed note of $750,000 with
Community America Credit Union. The cash down payment represents
56% of the total purchase price. The deed recorded August 11, 2017 as
Document No. 340659. Further details regarding the transaction are
summarized as follows:
Grantor: Shrikhande 2002 Family Trust
Grantee: Viren P. & Shritin J. Patel, & Prakash C. & Sushila Patel
Assessor's Parcel No.: 501-271-12
APPRAISERS -CONSULTANTS
10
MARKET DATA NO. 3
2121 Valhalla Drive, Santa Ana
The sale property consists of a two-story dwelling of wood frame and stucco
construction, built in 1973. Overall condition is rated average -good,
considering the age. The underlying land parcel contains 26,325 square
feet of land area. Additional features include a swimming pool/spa and
three -car attached garage. Landscaping improvements/maintenance are
rated average.
The property was originally offered for sale at $1,895,000 and was on the
market 47 days. The purchase price was $1,895,000, which included
$405,000 cash down to a concurrent first trust deed note of $1,490,000 with
MUFG Union Bank. The cash down payment represents 20% of the total
purchase price. The deed recorded August 30, 2017 as Document No.
370340. Further details regarding the transaction are summarized as
follows:
Grantor: Barbara A. Hess
Grantee: Thomas & Tiffany Bulowski
Assessor's Parcel No.: 104-611-38
LIDGA)F D AND ASSOCIATES
APPRAISERS -CONSULTANTS
11
MARKET DATA NO. 4
2032 Racquet Hill, Santa Ana
The sale property consists of a single story dwelling of wood frame and
stucco construction, built in 1976. The floor plan includes five bedrooms,
three bathrooms, three fireplaces, and 3,513 square feet of living area.
Marketing features include exposed beam ceilings, office with custom built-
ins, gourmet kitchen, and entertainer's bar. Overall condition is rated
average -good, considering the age. The underlying land parcel contains
20,800 square feet of land area. Additional features include a swimming
pool/spa and three -car attached garage. Landscaping improvements/ -
maintenance are rated average.
The property was originally offered for sale at $1,950,000 and was on the
market 10 days. The purchase price was $1,960,000, which included
$392,000 cash down to a concurrent first trust deed note of $1,568,000 with
MUFG Union Bank. The cash down payment represents 20% of the total
purchase price. The deed recorded September 19, 2017 as Document No.
397816. Further details regarding the transaction are summarized as
follows:
Grantor: G. J. & P. E. Ekstrom Trust
Grantee: Stephen D. & Kathryn M. Lind
Assessor's Parcel No.: 502-192-03
UD+Irl RE) A -D ASSOCIATES
APPRATSMS-C ON SULTANT5
12
MARKET DATA NO. 5
2348 Pieper Lane, Tustin
The sale property consists of a two-story dwelling of wood frame and stucco
construction, built in 1999. The floor plan includes five bedrooms, four
bathrooms, two fireplaces, and 3,901 square feet of living area. Marketing
features include a guard gated location and close proximity to Tustin Ranch
Golf Course. Overall condition is rated average -good, considering the age.
The underlying land parcel contains 7,638 square feet of land area.
Additional features include a swimming pool/spa and three -car attached
garage. Landscaping improvements/maintenance are rated average.
The property was originally offered for sale at $1,775,000 and was on the
market 98 days. The purchase price was $1,700,000, which included
$340,000 cash down to a concurrent first trust deed note of $1,700,000 with
a conventional lender. The cash down payment represents 20% of the total
purchase price. The deed recorded December 19, 2017 as Document No.
546570. Further details regarding the transaction are summarized as
follows:
Grantor: Mazin & Sophia J. Habbas
Grantee: Sunki & Miehee Rhee
Assessor's Parcel No.: 501-271-52
APPRAISERS -CONSULTANTS
13
MARKET DATA NO. 6
11822 Skyline Drive, Santa Ana
The sale property consists of a two-story dwelling of wood frame and stucco
construction, built in 1970. The floor plan includes 5 bedrooms, 31/2
bathrooms, one fireplace, and 3,827 square feet of living area. Marketing
features include textured hardwood flooring, exposed beam ceilings,
gourmet kitchen, plantation shutters, and den with built-in bookcases.
Overall condition is rated average -good, considering the age. The
underlying land parcel contains 20,295 square feet of land area. Additional
features include a three -car attached garage. Landscaping improvements/ -
maintenance are rated average.
The property was originally offered for sale at $1,699,000 and was on the
market 191 days. The purchase price was $1,650,000, which included
$247,500 cash down to a concurrent first trust deed note of $1,402,500 with
Wells Fargo Bank. The cash down payment represents 15x/0 of the total
purchase price. The deed recorded February 13, 2018 as Document No.
49772. Further details regarding the transaction are summarized as follows:
Grantor: Sherry S. Bull Trust
Grantee: James & Kathrine Pack
Assessor's Parcel No.: 104-611-04
LIDGARD AND ASSOCIATES
APPRAISERS-CONSULTA59Ta
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VALUATION ANALYSIS (Continued)
SALES COMPARISONAPPROACH: (Continued)
Sales Comparison Analysis: (Continued)
Reference the Market Analysis Comparison Grid set forth on the following
facing page. A Relative Comparison Analysis has been conducted between
the individual sale properties and the subject property with consideration
assigned to property rights conveyed, conditions of sale, sale terms
(financing), as well as the significant elements of comparability.
By way of review and comparison, the subject parcel has an interior (versus
corner) location, an effectively rectangular land configuration, level
topography, partial city light view, and contains 23,200 square feet of land
area. The main dwelling is of wood frame and stucco construction, has 4
bedrooms, 31/2 bathrooms, contains 3,567 square feet of living area, was
originally constructed in 1973 and renovated throughout the years. Overall
condition of the building and on-site improvements is rated good,
considering the age.
In addition to the consummated sale transactions discussed herein,
research was expanded to include three reasonably comparable single
family residential properties presently in escrow within the general subject
market area, as follows:
As can be noted, the properties contain dwellings ranging in size from 3,390
to 3,467 square feet of living area, and were built between 1992 and 1998.
The floor plans range from 5 bedrooms/3 bathrooms to 5 bedrooms/31/2
bathrooms and are situated on parcels ranging in size from 6,081 to 9,375
square feet of land area. The overall asking prices range from $1,300,000 to
$1,600,000. The properties have been on the market between 15 and 110
days.
APPRAI FRS -CONSULT NTS
15
Dwelling
On-site
Land/Bldg.
Days on
Data
Lot Size Size Br/Ba
Built
Parking
Ratio
Asking Price
Market
1.
9,375 sf 3,433 sf 5 br/31h ba
1995
3 -gar.
2.73:1
$1,600,000.
110
2605 Cypress, Tustin
2.
6,642 sf 3,467 sf 5 br/31/2 ba
1992
2 -gar.
1.92:1
$1,300,000.
15
12585 Prescott Avenue, Tustin
3.
6,081 sf 3,390 sf 5 br/3 ba
1998
2 -gar.
1.79:1
$1,350,000.
51
11617 McDougall, Tustin
As can be noted, the properties contain dwellings ranging in size from 3,390
to 3,467 square feet of living area, and were built between 1992 and 1998.
The floor plans range from 5 bedrooms/3 bathrooms to 5 bedrooms/31/2
bathrooms and are situated on parcels ranging in size from 6,081 to 9,375
square feet of land area. The overall asking prices range from $1,300,000 to
$1,600,000. The properties have been on the market between 15 and 110
days.
APPRAI FRS -CONSULT NTS
15
VALUATION ANALYSIS (Continued)
SALES COMPAR/SONAPPROACH.• (Continued)
Sales Comparison Analysis; (Continued)
All of the sale transactions employed herein were considered helpful in the
valuation analysis of the subject property as presently improved with the
single family residence. Following is a summary relating the overall
comparability of the individual sale properties to the subject property:
Based on the foregoing, the value of the subject property, as indicated by
the Sales Comparison Approach, is estimated at $1,950,000, which reflects
$84.05 per square foot of land area, and $546.68 per square foot of dwelling
area.
FA/R MARKET RENTAL VALUE. -
In addition to estimating the unencumbered fee simple interest in the
subject property, it is the purpose of this study to estimate the fair market
rental value applicable thereto.
The Direct Rental Comparison Approach was applied to the subject property
for the purpose of estimating rental value. The Direct Rental Comparison
Approach takes into account properties which have rented/leased in the
open market. This approach, whether applied to vacant or improved
property, is based on the Principle of Substitution, which states, "The
maximum (rental) value of a property tends to be set by the cost of
acquiring (renting) an equally desirable substitute property, assuming no
costly delay is encountered in making the substitution. "
While the principle of substitution generally relates to fee simple market
value, it is also applicable to rental value. Thus, the Direct Comparison
method attempts to equate the subject property with other reasonably
similar rental properties by analyzing and weighing the various elements of
comparability.
LIDGA. AND ASSOC RTES
APPRMSRR.S-CONSVLTA TS
16
Overall
Data
Comparability
Sale Price
6
inferior
$1,650,000.
1
inferior
$1,653,000.
5
inferior
$1,700,000.
2
inferior
$1,711,000.
3
inferior
$1,895,000.
Subject
- - - -
$1,950,000.
4
superior
$1,960,000.
Based on the foregoing, the value of the subject property, as indicated by
the Sales Comparison Approach, is estimated at $1,950,000, which reflects
$84.05 per square foot of land area, and $546.68 per square foot of dwelling
area.
FA/R MARKET RENTAL VALUE. -
In addition to estimating the unencumbered fee simple interest in the
subject property, it is the purpose of this study to estimate the fair market
rental value applicable thereto.
The Direct Rental Comparison Approach was applied to the subject property
for the purpose of estimating rental value. The Direct Rental Comparison
Approach takes into account properties which have rented/leased in the
open market. This approach, whether applied to vacant or improved
property, is based on the Principle of Substitution, which states, "The
maximum (rental) value of a property tends to be set by the cost of
acquiring (renting) an equally desirable substitute property, assuming no
costly delay is encountered in making the substitution. "
While the principle of substitution generally relates to fee simple market
value, it is also applicable to rental value. Thus, the Direct Comparison
method attempts to equate the subject property with other reasonably
similar rental properties by analyzing and weighing the various elements of
comparability.
LIDGA. AND ASSOC RTES
APPRMSRR.S-CONSVLTA TS
16
VALUATION ANALYSIS (Continued)
FAIR MARKET RENTAL VALUE.- (Continued)
Direct Rental Comparison Approach.-
The
pproach;
The Direct Rental Comparison Approach was utilized to estimate the rental
value of the subject property after an investigation and analysis was
conducted of reasonably comparable single family residential properties
located within the immediate and general subject market area.
Following is a summary of those properties considered helpful in the
analysis of the subject property. Reference the Market Data Map on the
following page for an illustration of the location of the various rental
properties surveyed.
As can be noted, the properties surveyed pertain to three, four and five
bedroom dwellings ranging in size from 3,291 to 3,816 square feet of living
area. The properties were originally developed between 1957 and 1976.
The leases commenced between March, 2016 and July, 2017. The monthly
rental rates range from $4,500 to $5,300, which reflects $1.26 to $1.83 per
square foot of living area. The predominant range is between $4,800 and
$5,300.
After viewing each of the comparable rental properties, and obtaining certain
information pertinent to rental value, an analysis was conducted of the
various elements of comparability which, among others, include the
following:
LIDGARD AND ASSOCIATES
APPRAISE RS -CONSULTANTS
17
Dwelling
On-site
Land/Bldg.
Monthly
$/SF
Data
Date Lot Size Size Br/Ba
Built
Parking
Ratio
Rent
Dwellina.
R1.
5-16 20,038 sf 3,291 sf 5 br/21/2 ba
1965
2 -gar.
6.09:1
$4,600
$1.40
1351 Faren Drive, Orange County
R2.
9-16 23,958 sf 3,300 sf 5 br/41/2 ba
1976
2 -gar.
7.26:1
$5,300
$1.61
2212 Racquet Hill, Orange County
R3.
9-16 12,880 sf 3,633 sf 4 br/4 ba
1965
3 -gar.
3.55:1
$5,000
$1.38
10506 Grove Oak Drive, Orange County
R4.
7-17 11,614 sf 3,816 sf 4 br/3 ba
1973
3 -gar.
3.04:1
$4,800
$1.26
10761 Quadrille Place, Orange County
R5.
1-18 9,147 sf 3,552 sf 6 br/4 ba
1995
3 -gar.
2.58:1
$5,000
$1.41
2321 Coffman Drive, Tustin
R6.
2-18 13,971 sf 3,439 sf 4 br/31/2 ba
2000
2 -gar.
4.06:1
$6,300
$1.83
11823 Willard Avenue, Tustin
As can be noted, the properties surveyed pertain to three, four and five
bedroom dwellings ranging in size from 3,291 to 3,816 square feet of living
area. The properties were originally developed between 1957 and 1976.
The leases commenced between March, 2016 and July, 2017. The monthly
rental rates range from $4,500 to $5,300, which reflects $1.26 to $1.83 per
square foot of living area. The predominant range is between $4,800 and
$5,300.
After viewing each of the comparable rental properties, and obtaining certain
information pertinent to rental value, an analysis was conducted of the
various elements of comparability which, among others, include the
following:
LIDGARD AND ASSOCIATES
APPRAISE RS -CONSULTANTS
17
lit
Ep"'.^°�`
" R4AV
`doer $4
1=3+ " 33
800 ' '
6) 11
yon
R 1 +C ion
k t )j !
j7 -P` $4,600 �.�� t !' �04i
U
�t1#�it S
i� nt Dept
3 is�n¢rt�7 tR
a �a Y
E
t1to Wan
r
1+ r s s - 3
A. 261
+ON
JX
"! �:�+A nNo Usti m
3 j , r_.i ! �{ "ori (� i f',
pion
t�«
kl�
J 3 nU &
Hill'A R3
1" Ptk t
c:
NW
�Tu
�rEirus
ikh Park
41
s w e t
cI ..
XV
R2
$5,300 it � -
��
rinl R61300
r t
` 100P.
Iz
,''
Fran �o
od'r1 o14r,
Ma oras AirP6 .
S n
Tustin
it mi 0.5
APPftAISraRS-CON SUUrANTS
VALUATION ANALYSIS (Continued)
FA/RMARKETRENTAL VALUE: (Continued)
Direct Rental Comparison Approach; (Continued)
General location.
Immediate environmental influences.
Zoning.
Land size and configuration.
Dwelling age and condition.
Type/capacity of on-site parking.
Vehicular and pedestrian access.
Topography, view amenity.
Dwelling size.
No. of bedrooms/bathrooms.
Construction quality.
Extent of on-site improvements.
As in the previous Sales Comparison Approach, a Relative Comparison
Analysis (RCA) has been conducted between the individual comparable
properties and the subject property. The RCA is a qualitative technique for
analyzing comparable sales, and is a valuable tool employed to illustrate
whether the characteristics of a comparable property are inferior, superior,
or similar to those of the property under appraisement.
The Relative Comparison Analysis is similar to paired data analysis without
the use of arbitrary or unsupportable quantitative adjustments. This
technique acknowledges the imperfect nature of the subject real estate
market. The primary objective is to bracket the subject property between
the comparable sales with respect to the similarity, superiority, and inferiority
thereof. Superior elements of comparability of an individual sale property
would reflect a downward adjustment to the value indication thereof.
Conversely, inferior elements suggest an upward adjustment.
Additionally, it is important to note that the above elements of comparability
were not assigned equal weight in making the analysis of each property.
The immediate environmental influences, land area, effective dwelling
age/condition, overall construction quality, dwelling size, number of
bedrooms/bathrooms, parking capacity/type, and extent of other on-site
improvements were considered the most important factors in the subject
case.
The commencement date of the various leases, as well as the overall
marketability of each rental property were also considered. Marketability is
the practical aspect of renting a property in view of all the elements
constituting value, and certain economic and financing conditions prevailing
as of the date of the lease agreement. An allowance was made for these
factors when considered applicable.
Reference the following pages for a description of each rental property
employed herein.
L.DGARD AND ALSSOCtATES
AP RAISERS-CONSU LTA*,4T$
im
RENTAL DATA NO. 1
1351 Faren Drive, Orange County
The property consists of a single story dwelling of wood frame and stucco
construction, built in 1965. The floor plan includes 5 bedrooms, 21/2
bathrooms, one fireplace, and 3,291 square feet of living area. Marketing
features include remodeled kitchen and bathrooms, recessed lighting,
formal dining room, wet bar, and master bedroom walk-in closet. Overall
condition is rated average -good, considering the age.
The underlying land parcel contains 20,038 square feet of land area.
Additional features include a swimming pool/spa and two -car attached
garage. Landscaping improvements/maintenance are rated average.
The property was leased in May, 2016 at monthly rental rate of $4,600,
reflecting $1.40 per square foot of dwelling area. Further details regarding
the transaction are summarized as follows:
Lessor: Sheri Lynn Gail
Lessee: Not disclosed
Assessor's Parcel No.: 502-282-01
LIDGARD AND ASSOCIATES
APPRATSRRS-cOtvSULTFi NT"S
19
RENTAL DATA NO. 2
22122 Racquet Hill, Orange County
The property consists of a single story dwelling of wood frame and stucco
construction, built in 1976. The floor plan includes 5 bedrooms, 41/2
bathrooms, one fireplace, and 3,300 square feet of living area. Marketing
features include a remodeled kitchen, French doors, and hardwood flooring.
Overall condition is rated average -good, considering the age.
The underlying land parcel contains 23,958 square feet of land area.
Additional features include a swimming pool, built-in barbecue, and two -car
attached garage. Landscaping improvements/maintenance are rated
average.
The property was leased in September, 2016 at monthly rental rate of
$5,300, reflecting $1.61 per square foot of dwelling area. Further details
regarding the transaction are summarized as follows:
Lessor: Christopher T. McCormack
Lessee: Not disclosed
Assessor's Parcel No.: 502-194-18
APPRAISERS -CONS" L TANTS
20
RENTAL DATA NO. 3
10506 Grove Oak Drive, Orange County
The property consists of a two-story dwelling of wood frame and stucco
construction, built in 1965. The floor plan includes four bedrooms, four
bathrooms, three fireplaces, and 3,633 square feet of living area. Marketing
features include unobstructed views, gourmet kitchen with island, and built-
in shelves. Overall condition is rated average -good, considering the age.
The underlying land parcel contains 12,880 square feet of land area.
Additional features include a swimming pool/spa and three -car attached
garage. Landscaping improvements/maintenance are rated average.
The property was leased in September, 2016 at monthly rental rate of
$5,000, reflecting $1.38 per square foot of dwelling area. Further details
regarding the transaction are summarized as follows:
Lessor: Kourosh Boutorabi
Lessee: Not disclosed
Assessor's Parcel No.: 503-143-08
LMOA1 D AND ASSO LATES
APPRAISERS -CONSULTANTS
21
RENTAL DATA NO. 4
10761 Quadrille Place, Orange County
The property consists of a two-story dwelling of wood frame and stucco
construction, built in 1973. The floor plan includes four bedrooms, three
bathrooms, two fireplaces, and 3,816 square feet of living area. Marketing
features include city lights and hills views, recessed lighting, crown molding,
and bonus room. Overall condition is rated average -good, considering the
age.
The underlying land parcel contains 11,614 square feet of land area.
Additional features include a swimming pool/spa and three -car attached
garage. Landscaping improvements/maintenance are rated average.
The property was leased in July, 2017 at monthly rental rate of $4,800,
reflecting $1.26 per square foot of dwelling area. Further details regarding
the transaction are summarized as follows:
Lessor: Tuan M. Nguyen & Chau N. M. Dao
Lessee: Not disclosed
Assessor's Parcel No.: 503-221-05
L IDGARD AND ASSOCIATES
APPRAISERS-CONSTJ LTANTS
22
RENTAL DATA NO. 5
2321 Coffman Drive, Tustin
The property consists of a two-story dwelling of wood frame and stucco
construction, built in 1995. The floor plan includes six bedrooms, four
bathrooms, one fireplace, and 3,552 square feet of living area. Marketing
features include a complete guest suite with private kitchen and bathroom,
guard gated community, marble and hardwood flooring, gourmet kitchen,
bonus room with wet bar, upgraded bathrooms, and second floor loft with
custom cabinetry. Overall condition is rated average -good, considering the
age.
The underlying land parcel contains 9,147 square feet of land area.
Additional features include a fire pit, barbecue island, and three -car attached
garage. Landscaping improvements/maintenance are rated average.
The property was leased in January, 2018 at monthly rental rate of $5,000,
reflecting $1.41 per square foot of dwelling area. Further details regarding
the transaction are summarized as follows:
Lessor: Alan Ali Katoozi
Lessee: Not disclosed
Assessor's Parcel No.: 501-241-69
LID ARI3 AND ASSOCIATES
A.P'RALSER.S-CoNsvLTANTS
23
RENTAL DATA NO. 6
11823 Willard Avenue, Tustin
The property consists of a single story dwelling of wood frame and stucco
construction, built in 2000. The floor plan includes 4 bedrooms, 31/2
bathrooms, one fireplace, and 3,439 square feet of living area. Marketing
features include a gated community, travertine flooring, courtyard with
fountain, gourmet kitchen, family room with sound system, and French
doors. Overall condition is rated average -good, considering the age.
The underlying land parcel contains 13,971 square feet of land area.
Additional features include a swimming pool/spa and two -car attached
garage. Landscaping improvements/maintenance are rated average.
The property was leased in February, 2018 at monthly rental rate of $6,300,
reflecting $1.83 per square foot of dwelling area. Further details regarding
the transaction are summarized as follows:
Lessor: Samireh Z. Said
Lessee: Not disclosed
Assessor's Parcel No.: 502-511-22
IJDGARD AND A ASO IATES
APPRAISERS -CONSULTANTS
24
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VALUATION ANALYSIS (Continued)
FAIRMARKETRENTAL VLAUE--(Continued)
Direct Renta/ Comparison Approach: (Continued)
Reference the Market Analysis Comparison Grid set forth on the opposite
page. The comparable rental properties have been compared to the
subject property with consideration assigned to the various elements of
comparability. All of the rental transactions employed herein were
considered helpful in the valuation analysis of the subject property as
presently improved with the single family residence. Following is a
summary relating the overall comparability of the individual sale properties
to the subject property:
Based on the foregoing, the value of the subject property, as indicated by
the Direct Rental Comparison Approach, is estimated at $5,000, which
reflects $1.40 per square foot of dwelling area.
FINAL EST/MATES OF VALUE
Based on (1) an analysis of the various sale and rental properties employed
herein, (2) the overall condition, quality, and features of the subject property,
and (3) current real estate market conditions in the general market area, the
respective market values of the subject property in as -is condition, as of the
date of value set forth herein, are as follows:
Unencumbered fee simple market value: $1,950,000.
Fair market rental value: $5,000 per month.
EXPOSURE TIME --
Exposure time is defined in the 2014-2015 Edition of the Uniform Standards
of Professional Appraisal Practice as the "estimated length of time that the
property interest being appraised would have been offered on the market
LED ARTS AND ASSOCIATES
APPRAISERS-CONSQ LTANTS
25
Overall
Data
Comparability
Sale Price
1
similar
$4,600
4
similar
$4,800
3
similar
$5,000
Subject
- - - -
$5,000.
5
similar
$5,000
2
similar
$5,300
6
similar
$6,300
Based on the foregoing, the value of the subject property, as indicated by
the Direct Rental Comparison Approach, is estimated at $5,000, which
reflects $1.40 per square foot of dwelling area.
FINAL EST/MATES OF VALUE
Based on (1) an analysis of the various sale and rental properties employed
herein, (2) the overall condition, quality, and features of the subject property,
and (3) current real estate market conditions in the general market area, the
respective market values of the subject property in as -is condition, as of the
date of value set forth herein, are as follows:
Unencumbered fee simple market value: $1,950,000.
Fair market rental value: $5,000 per month.
EXPOSURE TIME --
Exposure time is defined in the 2014-2015 Edition of the Uniform Standards
of Professional Appraisal Practice as the "estimated length of time that the
property interest being appraised would have been offered on the market
LED ARTS AND ASSOCIATES
APPRAISERS-CONSQ LTANTS
25
VALUATION ANALYSIS (Continued)
EXPOSURE TIME: (Continued)
prior to the hypothetical consummation of a sale at market value on the
effective date of the appraisal. ' Exposure time is a retrospective opinion
based on an analysis of past events assuming a competitive and open
market. The reasonable exposure time is a function of price, time, and use,
not an isolated opinion of time alone.
The exposure time of a particular property is a direct function of supply and
demand within a particular market segment. Generally, a higher demand
results in a shorter marketing period. During the course of extensive market
research, interviews were conducted of parties involved in the transactions
regarding the sale properties employed in the Sales Comparison Approach.
Based on said interviews, as well as interviews with a number of real estate
brokers and other market participants, the exposure time estimated for the
subject property, assuming an aggressive and comprehensive marketing
program, is estimated at approximately three months.
LIUG ARD AND ASSO L TFT
26
11.i -1-1.g I. V. t5, -11,."-c R.', 4.r§:—a,7
See Photo No. 1 on first page of Subject Property Section.
PHOTO NO. 2: View looking northeasterly at the subject
property from Valhalla Drive.
PHOTO NO. 3: View looking southwesterly across the rear
portion of the subject property.
LIDGARD AND ASSOCIATES
AY PR ATS ERS -CONS V L`CA N TS
PHOTO NO. 4: View looking southerly at the rear portion of the
main dwelling.
PHOTO NO. 5: View looking westerly across the rear portion of
the subject property.
L.IO ARIA AND ASSOCIATES
PHOTO NO. 6: View looking southwesterly across the rear
portion of the subject property.
PHOTO NO. 7: Interior view of foyer.
LIDGARD AND ASSOC" A'TES
APPRAiSF RS -CONSULTANTS
PHOTO NO. 8: Interior view of living room.
PHOTO NO. 9: Interior view of kitchen and dining area.
LI GARD AND ASSOCIATES
ATE
PHOTO NO. 10: Interior view of typical bedroom.
PHOTO NO. 11: Interior view of typical bathroom.
LIDGARD ANID ASSOCIATES
PHOTO NO. 12: Interior view of service porch.
L DGARD AND ASSOCIATES
APPRAIS r.RS-CO NSU LTANTS
STREET SCENE 1: View looking northwesterly along Valhalla
Drive from the subject frontage.
STREET SCENE 2: View looking southeasterly along Valhalla
Drive from the subject frontage.
LIDGARD AND ASSOCIATES
APPRAISERS -CONSULTANTS
AFVKAINI',(Kb-(O N S U 1A AN'[,S
commonweami
r LANA TITLE 00WANY
Commonwealth Land Title Company
4100 Newport Place Dr.
Newport Beach, CA 92660
Phone: (949) 724-3140
Overland, Pacific & Cutler, Inc.
Our File No: 09202723
2280 Market St #200
Title Officer: Chris Maziar
Riverside, CA 92501
e-mail: unitl0@cltic.com
Phone: (949) 724-3170
Attn: Elena Cannon
Fax: (949) 258-5740
Your Reference No: PTR -001 TUS-013
Property Address: 2061 VALHALLA DR, Santa Ana Area, California
PRELIMINARY REPORT
Dated as of December 30, 2016 at 7:30 a.m.
In response to the application for a policy of title insurance referenced herein, Commonwealth Land Title Company hereby
reports that it is prepared to issue, or cause to be issued, as of the date hereof, a policy or policies of title insurance describing
the land and the estate or interest therein hereinafter set forth, insuring against loss which may be sustained by reason of any
defect, lien or encumbrance not shown or referred to as an exception herein or not excluded from coverage pursuant to the
printed Schedules, Conditions and Stipulations or Conditions of said policy forms.
The printed Exceptions and Exclusions from the coverage and Limitations on Covered Risks of said policy or policies are set
forth in Attachment One. The policy to be issued may contain an arbitration clause. When the Amount of Insurance is less
than that set forth in the arbitration clause, all arbitrable matters shall be arbitrated at the option of either the Company or the
Insured as the exclusive remedy of the parties. Limitation on Covered Risks applicable to the CLTA and ALTA
Homeowner's Policies of Title Insurance which establish a Deductible Amount and a Maximum Dollar Limit of Liability for
certain coverages are also set forth in Attachment One. Copies of the policy forms should be read. They are available from
the office which issued this report.
The policy(s) of title insurance to be issued hereunder will be policy(s) of Commonwealth Land Title Insurance
Company.
Please read the exceptions shown or referred to below and the exceptions and exclusions set forth in Attachment One of
this report carefully. The exceptions and exclusions are meant to provide you with notice of matters which are not
covered under the terms of the title insurance policy and should be carefully considered It is important to note that this
preliminary report is not a written representation as to the condition of title and may not list all liens, defects, and
encumbrances affecting title to the land.
This report (and any supplements or amendments hereto) is issued solely for the purpose of facilitating the issuance of a
policy of title insurance and no liability is assumed hereby. If it is desired that liability be assumed prior to the issuance of a
policy of title insurance, a Binder or Commitment should be requested.
Order No: 09202723-920-CMM-CM8
SCHEDULE A
The form of policy of title insurance contemplated by this report is:
ALTA Homeowner's Policy of Title Insurance (12-2-13)
ALTA Extended Loan Policy of Title Insurance (6-17-06)
The estate or interest in the land hereinafter described or referred to covered by this report is:
A FEE
Title to said estate or interest at the date hereof is vested in:
Chong Sang Kim and Cho Hea Kim, Trustees of The Kim Trust, Dated October 3,1990
The land referred to herein is situated in the County of ORANGE, State of California, and is described as follows:
SEE EXHIBIT "A" ATTACHED HERETO AND MADE A PART HEREOF
Order No: 09202723-920-CMM-CM8
EXHIBIT "A"
THE LAND REFERRED TO HEREIN IS SITUATED IN COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS
DESCRIBED AS FOLLOWS:
LOT 80 OF TRACT NO. 3883, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED
IN BOOK 166 PAGES 5 TO 11, INCLUSIVE OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY
RECORDER OF SAID COUNTY.
Assessor's Parcel Number: 104-611-30
Order No: 09202723-920-CMM-CM8
SCHEDULE B — Section A
The following exceptions will appear in policies when providing standard coverage as outlined below:
1. (a) Taxes or assessments that are not shown as existing liens by the records of any taxing authority that levies taxes
or assessments on real property or by the Public Records; (b) proceedings by a public agency that may result in taxes
or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the Public
Records.
2. Any facts, rights, interests or claims that are not shown by the Public Records but that could be ascertained by an
inspection of the Land or that may be asserted by persons in possession of the Land.
3. Easements, liens or encumbrances, or claims thereof, not shown by the Public Records.
4. Any encroachment, encumbrance, violation, variation or adverse circumstance affecting the Title that would be
disclosed by an accurate and complete land survey of the Land and not shown by the Public Records.
5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof,
(c) water rights, claims or title to water, whether or not the matters excepted under (a), (b) or (c) are shown by the
Public Records.
6. Any lien or right to a lien for services, labor of material not shown by the Public Records.
Order No: 09202723-920-CMM-CM8
SCHEDULE B — Section B
At the date hereof Exceptions to coverage in addition to the printed exceptions and exclusions in said policy form would be
as follows:
A. Property taxes, which are a lien not yet due and payable, including any assessments collected with taxes to be levied
for the fiscal year 2017-2018.
B. Property taxes, including any personal property taxes and any assessments collected with taxes, are as follows:
Tax Identification No.:
104-611-30
Fiscal Year:
2016-2017
1st Installment:
$1,553.74 Paid
2nd installment:
$1,553.74 Open (Delinquent after April 10)
Penalty and Cost:
$178.37
Homeowners Exemption: $7,000.00
Code Area: 89-027
Prior to close of escrow, please contact the Tax Collector's Office to confirm all amounts owing, including current
fiscal year taxes, supplemental taxes, escaped assessments and any delinquencies.
C. The lien of supplemental or escaped assessments of property taxes, if any, made pursuant to the provisions of
Chapter 3.5 (commencing with Section 75) or Part 2, Chapter 3, Articles 3 and 4, respectively, of the Revenue and
Taxation Code of the State of California as a result of the transfer of title to the vestee named in Schedule A or as a
result of changes in ownership or new construction occurring prior to Date of Policy.
D. Any liens or other assessments, bonds, or special district liens including without limitation, Community Facility
Districts, that arise by reason of any local, City, Municipal or County Project or Special District.
Water rights, claims or title to water, whether or not disclosed by the Public Records.
2. Any easements not disclosed by the public records as to matters affecting title to real property, whether or not said
easements are visible and apparent.
Covenants, conditions and restrictions but omitting any covenants or restrictions, if any, including but not limited to
those based upon race, color, religion, sex, sexual orientation, familial status, marital status, disability, handicap,
national origin, citizenship, immigration status, primary language, ancestry, source of income, gender, gender
identity, gender expression, medical condition or genetic information, as set forth in applicable state or federal laws,
except to the extent that said covenant or restriction is permitted by applicable law, as set forth in the document
Recording Date: August 22, 1962
Recording No: Book 6222, Page 500, of Official Records
Said covenants, conditions and restrictions provide that a violation thereof shall not defeat the lien of any mortgage
or deed of trust made in good faith and for value.
Modification(s) of said covenants, conditions and restrictions
Recording Date: May 10, 1965
Recording No: Book 7513, Page 945, of Official Records
Modification(s) of said covenants, conditions and restrictions
Recording Date: November 23, 1964
Recording No: Book 7312, Page 197, of Official Records
Order No: 09202723-920-CMM-CM8
Memorandum of Agreement
Executed by: Red Hill Ridge Estates, a Limited Partnership and The Pacific Telephone and Telegraph
Company, a corporation
Recording Date: July 12, 1963
Recording No.: Book 6629, Page 7, of Official Records
5. The search did not disclose any open mortgages or deeds of trust of record, therefore the Company reserves the right
to require further evidence to confirm that the property is unencumbered, and further reserves the right to make
additional requirements or add additional items or exceptions upon receipt of the requested evidence.
6. Any invalidity or defect in the title of the vestees in the event that the trust referred to herein is invalid or fails to
grant sufficient powers to the trustee(s) or in the event there is a lack of compliance with the terms and provisions of
the trust instrument.
If title is to be insured in the trustee(s) of a trust, (or if their act is to be insured), this Company will require a Trust
Certification pursuant to California Probate Code Section 18100.5.
The Company reserves the right to add additional items or make further requirements after review of the requested
documentation.
END OF SCHEDULE B EXCEPTIONS
PLEASE REFER TO THE "NOTES AND REQUIREMENTS SECTION" WHICH FOLLOWS FOR
INFORMATION NECESSARY TO COMPLETE THIS TRANSACTION
ArrK A I N1 KZS-KVNZ�UL I AN L*
February 9, 2018
Kim Trust
Chong Sang Kim and Cho Flea Kim, Trustees
2061 Valhalla Drive
Santa Ana, CA 92705
Dear Mr. & Mrs. Kim:
The City of Tustin, (the "City's is considering the construction of a public project called the Simon
Ranch Reservoir Replacement Project (the 'Project). On July 10, 2017, you received a Notice of
Decision to Appraise Property explaining that this is .a public project which may require the
purchase of a portion of your property at 2061 Valhalla Drive, Santa Ana, California 92705 also
known by Assessor Parcel Number (APN) 104-611-30, located within the Project area. Based on
recent meetings and discussions between you and the Project team, you have indicated your
desire to sell your entire property by means of a voluntary acquisition by the City. No decision
has yet been made by the City to acquire your property. Before that decision can be made, the
law provides that your property first be appraised. The purpose of this letter is to advise you of
the decision to appraise and shall serve as advance written notice of your opportunity to
accompany the appraiser during their inspection of your property. The City has retained the
services of Overland, Pacific & Cutler, Inc. (OPC), a right-of-way acquisition firm, to discuss
this Project with you, explain the proposed transaction and related. effects and benefits, and
coordinate the acquisition process.
Lidgard and Associates, Inc., an independent appraisal firm, has been contracted by the City
to appraise your property that is subject to possible acquisition. You will be contacted by the
appraiser to arrange an appointment to inspect your property.
The enclosed acquisition policies and procedures document contains information pertaining to the
process involved in the property acquisition.
This is a preliminary notice only and does not constitute the City's determination to
acquire any property for the Project nor is this a request or demand that you vacate
your property. Additionally, this notice does not establish eligibility for relocation
payments or any other relocation assistance by the City.
1294421.1
February 12, 2018
Chong Sang Kim and Cho Hea Kim
Trustees of the Kim Trust
2061 Valhalla Drive .
Santa Ana, California 92705
Subject: Real Estate Appraisal Study
2061 Valhalla Drive
APN: 104-611-30
Santa Ana, California
Dear Property Owners;
2592 North Santiago Bou$o
Orange, California 92867-
(714) 633-8441 or (562) 986
scott@lidgardinc.com.
Our firm has been retained by the City of Tustin to prepare an appraisal study
pertaining to the proposed acquisition of the above referenced property in
connection with the Simon Ranch Reservoir Replacement Project.
If you or your representative wish to accompany the appraiser at the time of the
inspection, it would be appreciated if you would contact the undersigned by
telephone to arrange an appointment convenient to your schedule. I can be
reached at (714) 633--8441.
As part of our real estate valuation study, we would like to consider and analyze
certain information requested on the enclosed "Property Data" form. Please
provide any additional information that you feel is relevant to the value of your
property. A return envelope is provided for your convenience.
In the event you have any questions regarding the purpose of the appraisal, or the
authority of our assignment, please contact Mona Montana of Overland, Pacific, &
Cutler, Inc., the City's acquisition consultants, at (949) 951-5263. Thank you in
advance for your cooperation.
Very truly yours,
LIDGARD A OCIATES, INC.
cott A. Iridgard, MAI, cCIM
Certified General Real Estate Appraiser
California Certification No. AG 004014
SAI_.:sp
LIDGARD .AND ASSOCIATES
INCORPORATED Real Estate Appraisal and Consultation
In the meantime, if you need additional information or have any questions, please contact your
OPC acquisition agent:
Mona Montano
Project Manager
Overland, Pacific &. Cutler, Inc,
Penner, Suite 200, Irvine, CA 92618
Phone (949) 951.5263
Sincerely,
Overland, Pacific & Cutler, Inc.
Daniela Borbe
Project Manger
Enclosures: Handbook on Acquisition Brochure
Legal Description
Assessor Parcel Map
1294921.1
AFrktAlti N:S U L�t ANJ Z$
BACKGROUND AND QUALIFICATIONS
Scott A. Lidgard, MAI, CCIM
President of
LIDGARD AND ASSOCIATES
INCORPORATED
Full service appraisal firm encompassing all types of real
property including commercial, industrial, complex residential,
and special use properties. Scott A. Lidgard has over 30 years'
experience in the appraisal of real property for various clients
including public agencies, corporations, law firms in connection
with litigation support, accountants, and private clients.
OFFICE ORGANIZATIONAL STRUCTURE:
Principal Appraiser:
Market Research Analyst:
Market Research Analyst:
Market Research Analyst:
Market Research Assistant
Office Administrator:
Office Assistant:
Scott A. Lidgard
Jason T. Clayton
Jason P. Boyer
Andrew S. Lidgard
Mayra Villegas-Garcia
Sarah A. Petty
Kelly M. Lidgard
PROFESSIONAL ORGANIZATION AFFILIATIONS:
MAI Designated Member of the Appraisal Institute
(Member No. 11715).
CCIM (Certified Commercial Investment Member) designated
member of the CCIM Institute (Member No. 11262).
STATE CERTIFICATION:
Certified General Real Estate Appraiser by the Office of Real
Estate Appraisers, State of California. Certificate No.
AG004014.
BROKER'S LICENSE:
Licensed California Real Estate Broker (License No. 00825141).
EXPERT WITNESS:
Qualified as an expert on Real Property Valuation in the Los
Angeles, Orange, San Bernardino, and Riverside County
Superior Courts, as well as Federal Bankruptcy Court.
LI DGARD ANIS ASSOCIATES
APPRAi3ERS CQ'..NSULTANTS
BACKGROUND AND QUALIFICATIONS (Continued)
ACADEMIC BACKGROUND
California State University, Fullerton
B.A., Business Administration, emphasis in real estate finance.
Successfully completed various educational courses and
seminars sponsored by the Appraisal Institute, as well as
other real estate and business organizations.
BUSINESS AFFILIATIONS:
Appraisal Experience:
President, Lidgard and Associates, Inc., Orange, California,
established October 1, 1997.
Vice President, R. P. Laurain & Associates, Inc., Long Beach,
California, between 1984 and 1997.
Real Estate Sales Associate, Merrill Lynch Realty, Placentia,
California, between 1982 and 1984.
BOARD OF DIRECTORSHIPS:
Sergeant at Arms, Long Beach Rotary
President, Belmont Estates HOA, Orange
Vice President, Canyon Rim Villas HOA, Anaheim Hills
Treasurer, Orchard Owner's Association, Orange
Board of Directors, Villa Heights HOA, Villa Park
APPRAISAL SERVICES RENDERED:
Real estate appraisal services performed on projects for the
following public agencies and private corporations, since 1984:
Cities:
City of Anaheim
City of Azusa
City of Baldwin Park
City of Bell
City of Bellflower
City of Bell Gardens
City of Brea
City of Carson
City of Cathedral City
City of Costa Mesa
City of Diamond Bar
City of Downey
City of Fullerton
City of Garden Grove
City of Glendora
City of Hawaiian Gardens
City of Highland
City of Huntington Park
City of Indio
City of Irvine
City of La Mirada
City of La Habra
City of La Quinta
City of Laguna Hills
City of Long Beach
City of Lynwood
1JDCA D A AS +I CAT E
APPRAISERS -.CONSULTANTS
City of Mission Viejo
City of Montclair
City of Monterey Park
City of Murrieta
City of Ontario
City of Palm Desert
City of Palm Springs
City of Pasadena
City of Pico Rivera
City of Placentia
City of Pomona
City of Rancho Mirage
City of Redondo Beach
BACKGROUND AND QUALIFICATIONS (Continued)
APPRAISAL SERVICES RENDERED (Continued)
Cities: (Continued)
City of Rialto City of Santa Ana City of Upland
City of Riverside City of Santa Clarita City of Whittier
City of San Clemente City of Signal Hill City of West Covina
City of San Bernardino City of Stanton City of Yorba Linda
City of San Juan Capistrano City of Tustin City of Victorville
Redevelopment Agencies:
Baldwin Park Redevelopment Agency
Bell Redevelopment Agency
Bell Gardens Redevelopment Agency
Buena Park Redevelopment Agency
Carson Redevelopment Agency
Cathedral City Redevelopment Agency
EI Monte Redevelopment Agency
Garden Grove Redevelopment Agency
Glendale Redevelopment Agency
Huntington Beach Redevelopment Agency
Huntington Park Redevelopment Agency
Inglewood Redevelopment Agency
La Puente Redevelopment Agency
Long Beach Redevelopment Agency
Los Angeles Community Redevelopment Agency
Norwalk Redevelopment Agency
Ontario Redevelopment Agency
Palm Desert Redevelopment Agency
Rialto Redevelopment Agency
Riverside Redevelopment Agency
San Bernardino Redevelopment Agency
Signal Hill Redevelopment Agency
West Covina Community Development Commission
Whittier Redevelopment Agency
Yorba Linda Redevelopment Agency
Other Government Agencies:
Calleguas Municipal Water District
County of Los Angeles, Internal Services Division
County of Riverside
Inland Empire Utilities Agency
Long Beach Unified School District
Los Angeles County Sanitation District
Los Angeles Unified School District
Orange County Transportation Authority
Palm Springs Unified School District
LIDGAFJ:) ANI> A SS04CIATTE
APPRAISERS-CONSU TAN 'S
BACKGROUND AND QUALIFICATIONS (Continued)
APPRAISAL SERVICES RENDERED (Continued)
Other Government Agencies: (Continued)
Placentia Unified School District
Port of Long Beach
Port of Los Angeles
Resolution Trust Corporation
Riverside County Transportation Commission
State of California
U. S. Department of Navy
U. S. Marshal Service
Victor Valley Wastewater Reclamation Authority
Financial Institutions:
American First Federal Credit Union
Farmers and Merchants Bank
First Federal Bank
First Federal Credit Union
Fiscal Federal Credit Union
Harbor Bank
Long Beach Bank
Mineral King National Bank
Northern Trust Bank
Queen City Bank
Sumitomo Bank, Ltd.
Union Bank
Asset Management Companies:
Amresco, Inc.
American Residential Mortgage Corporation
BEI Management, Inc.
Emerson International
Equitable Real Estate Investment Management
EQ Services
Icon Associates
Independence One
Pacific Southwest Partners
Private Companies/Corporations:
Allstate Insurance Company
Best, Best & Krieger, LLP
Bonnie, Hopkins & Bastardi, LLP
Bridgestone/Firestone, Inc.
Black & Vetch Corporation
Buchalter Nemer, A Professional Corporation
Burke, Williams & Sorenson, LLP
California Eminent Domain Law Group
LIDCrA. D ANID ASSOCLATES
APPRAISERS-CONSU LT%NTS
BACKGROUND AND QUALIFICATIONS (Continued)
APPRAISAL SERVICES RENDERED (Continued)
Private Companies/Corporations: (Continued)
Carl Karcher Enterprises
Chapman University
Century Law Group
Daley & Heft, LLP
Eastman Kodak Company
Ferro Corporation
Flagstar Companies
Guild Financial
Hahn & Hahn, LLP
Harbor Chevrolet
Inland Partners Corporation
Kaufman and Broad
Latham & Watkins, Attorneys at Law
Long Beach Memorial Medical Center
Madden, Jones, Cole & Johnson, Attorneys at Law
Oliver, Vose, Sandifer, Murphy & Lee
Pan Pacific Development
Rutan & Tucker, LLP
Scotsdale Insurance
Snell & Wilmer, Attorneys at Law
T.R.W.
The Trust for Public Land
Westport Packers
Windes and McClaughry, Accountancy Corporation
Wise, Wiezorek, Timmons & Wise, Attorneys at Law
APPRAISERS -CONSULTANTS
EXHIBIT "A"
LEGAL DESCRIPTION
THE LAND REFERRED TO 1=%EIN IS SITUATED IN COUNTY OF ORAN-GE, STATE OF CALIFORNIA- AND IS
DESCRIBED AS FOLLOWS:
I-wm-uf--f
IT rim L; i - u u ucu GF, —31 WEE -of
Pli BOOK 166 PAGES 5 TO 11, INCLUSR"E OF IYUSCELLANTEOUS MAPS, IN THE OFFICE OF THE COUNTY
RECORDER OF SAID COU -Nn'
1307460.1
1307460.1
EXHIBIT "B"
PLAT MAP
vt I
Project: Simon Ranch Reservoir Replacement Project
Parcel No: 104-611-30
Escrow #:
Title Company: Commonwealth Land Title Company
Date of Preliminary Title Report: 12/30/2016
Grantors: Cho Sang Kim and Cho Hea Kim, Trustees of
The Kim Trust, Dated October 3, 1990
Grantee: CITY OF TUSTIN, a municipal corporation of the State of California
AGREEMENT FOR ACQUISITION OF REAL PROPERTY
WHEREAS, the above-named Grantors own that certain real property located in the City of Santa Ana,
County of Orange, State of California legally described in the Legal Description identified as Exhibit "A"
and depicted on the Plat Map identified as Exhibit `B", attached hereto and made a part hereof ("Property");
and
WHEREAS, Grantors intend to convey to City of Tustin ("City") and City intends to acquire from Grantors
the Property, as described and depicted in the Grant Deed identified as Exhibit "C" for the purpose of
constructing the Simon Ranch Reservoir Replacement Project ("Project") pursuant to the terms and
conditions set forth herein; and
NOW, THEREFORE, in consideration of the payment and other obligations set forth below, Grantors and
City mutually agree as follows:
1. Full and Complete Agreement
The parties have herein set forth the whole of their agreement ("Agreement"). The performance of
this Agreement constitutes the entire consideration for the Property and shall relieve the City of all
further obligations or claims on this account, or on account of the location, grade or construction of
the proposed public improvement.
The City requires the Property for the Project, a public use for which the City has the authority to
exercise the power of eminent domain. Grantors are conveying the Property under threat of eminent
domain.
2. Payment
A. Purchase Price.
The parties agree that the amount of One Million Nine Hundred Fifty Thousand and No/ 100
Dollars ($1,950,000.00) ("Purchase Price") is the full amount of compensation due and owing
to Grantors for conveyance of the Property to City.
3. Execution and Delivery to Escrow
City shall open an escrow with the title company identified above ("Escrow Holder") by delivery of
a fully executed copy of this Agreement. Upon full execution of this Agreement by the parties
("Effective Date"), Grantors shall execute and notarize the Grant Deed, in the form of Exhibit "C",
attached hereto and made a part hereof. City shall tender the Purchase Price to the Escrow Holder,
which shall be paid when title to the Property vests in the City.
1307510.1
A. Close of Escrow
Unless extended by the mutual agreement of the parties, the escrow shall close within ninety
(90) days after the Effective Date of this Agreement and shall be the date the Grant Deed is
recorded in the Recorder's Office for Orange County ("Close of Escrow").
B. City's Right to Cancel Escrow
The City reserves the right to cancel escrow and terminate this Agreement if at any time the
City determines that the Property is no longer needed for the Project.
C. Escrow Holder's Right to Discharge Liens
The Escrow Holder may expend any or all monies payable under this Agreement and
deposited into escrow to discharge any obligations which are liens upon the Property,
including, but not limited to, those arising from judgments, assessments, delinquent taxes for
other than the fiscal year in which the escrow closes, or debts secured by deeds of trust or
mortgages, and/or to defray any other incidental costs other than those specified in Section 2
hereof to be borne by the City. The Escrow Holder shall release payment to Grantors, return
any credited amounts to City, and record the Grant Deed in the Recorder's Office for Orange
County upon the Close of Escrow.
D. Escrow Instructions
This Agreement may serve in whole or in part as escrow instructions. The issuance of any
further escrow instructions shall be the sole responsibility of City. The Grantors agree to
execute such additional documents as may be reasonably necessary to consummate the
purchase and sale herein contemplated.
E. Fees
The City shall pay all Grantors' and City's usual escrow, recording, and title insurance fees
incurred in this transaction.
F. Taxes
Taxes for the fiscal year in which the escrow closes shall be cleared and paid for in the
manner required by Section 5086 of the Revenue and Taxation Code. As a deduction from
the amount shown in Section 2A, above, City shall be authorized to pay any delinquent taxes
due in any fiscal year, except the fiscal year in which this escrow closes, together with
penalties and interest thereon.
G. No Removal of Easements or Rights of Way
Grantors shall not be required to remove: (i) easements or rights-of-way for public roads or
public utilities, if any; and (ii) items specifically identified on "Title Exceptions" identified as
Exhibit "D", attached hereto, if any.
H. Assessments
The City is not assuming responsibility for payment or subsequent cancellation of unpaid
assessments on the Property acquired under this transaction. The assessments remain the
obligation of Grantors. Payment for the Property acquired under this transaction is made upon
the basis that the Grantors retain their obligation to the levying body respecting said
assessments.
1307510.1
I. Mortgages or Deeds of Trust
Any monies payable under this Agreement up to and including the total amount of unpaid
principal and interest on note(s) secured by mortgage(s) or deed(s) of trust, if any, and all
other amounts due and payable in accordance with the terms and conditions of said deed(s) of
trust or mortgage(s), shall upon demand(s) be made payable to the mortgagee(s) or
beneficiary(ies) entitled thereunder; said mortgagee(s) or beneficiary(ies) are to furnish
Grantors with good and sufficient receipt showing said monies credited against the
indebtedness secured by said mortgage(s) or deed(s) of trust.
4. Just Compensation; Waiver and Release
A. Grantors agree that performance of this Agreement by City, including the payment recited in
Section 2A, above, shall constitute full and fair compensation and consideration for any and
all claims that Grantors, and their successors and assigns, may have against City by reason of
the acquisition, improvement, possession, use and/or occupancy of the Property, and Grantors,
on behalf of themselves and their successors and assigns, hereby knowingly and voluntarily
waive, and expressly release and discharge City, and any and all of City's employees, agents,
officers, servants, representatives, contractors, attorneys and assigns, from liability in regard
to, any and all such claims, including claims for severance or taking compensation or damages
to the remainder not taken on account of the acquisition of the Property or the location,
establishment, construction and/or operation of the above-named Project. This waiver and
release shall survive the Close of Escrow.
B. The foregoing waiver and release shall include the waiver and release of any and all rights or
claims that Grantors have, may have had or may in the future have under Article 1, Section 19
of the California Constitution, the Eminent Domain Law, or any other law or regulation;
except as provided herein. Grantors, on behalf of themselves and their successors and assigns,
further knowingly and voluntarily waive and expressly release and discharge City, and any
and all of City's employees, agents, officers, servants, representatives, contractors, attorneys
and assigns, from liability in regard to any claims for the following: precondemnation
damages, inverse condemnation, lost business goodwill, lost profits, lost rents, severance
damages, mitigation damages, compensation for the construction and use of the Project in the
manner proposed, damage to or loss of improvements pertaining to the realty, machinery,
fixtures, inventory, equipment and/or personal property, interest, any right to repurchase,
leaseback from City, or receive any financial gain from, City's sale of any portion of the
Property, any right to challenge City's adoption of a resolution of necessity, pursuant to Code
of Civil Procedure sections 1245.245, any right to receive any notices pursuant to Code of
Civil Procedure section 1245.245, any right to enforce any other obligation placed upon City
pursuant to Code of Civil Procedure sections 1245.245 and 1263.615, any other rights
conferred upon Grantors pursuant to Code of Civil Procedure sections 1245.245 and 1263.615
and 1263.025, and claims for litigation expenses, attorney's fees and/or costs. This waiver
and release shall survive the Close of Escrow. Grantors are aware of and understand all
potential benefits to which they are otherwise entitled and have had the opportunity to discuss
potential benefits with representatives of the City and with legal counsel of their choice.
5. Waiver under Section 1542
The parties intend that this Agreement will result in a full, complete, and final resolution and
settlement of any and all claims, causes of action or disputes which exist, or may exist, between
them as to the acquisition, possession and/or use of the Property by the City, except as expressly
provided herein. It is therefore understood that the waiver, under this Agreement, of any rights,
damages, compensation or benefits to which a party is, or may be, entitled is intended to be full
and complete. Accordingly,
1307510.1
A. Grantors hereby waive any and all rights or benefits arising from and/or related to the City's
acquisition, possession and/or use of the Property that it may have under section 1542 of the
Civil Code of the State of California which provides:
"a general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if known by
him must have materially affected his settlement with the debtor."
B. The Grantors represent and warrant that they understand the effect of this waiver of section
1542 and have had the opportunity to discuss the effect of this waiver with counsel of their
choice.
6. Title Insurance
City may obtain a CLTA extended coverage Grantors' policy of title insurance in the amount of the
Purchase Price insuring that clear title to the Property is vested in City upon recording of the Grant
Deed.
7. Possession and Use of the Property Pending Close of Escrow
It is agreed and confirmed by the parties hereto that notwithstanding other provisions in the
Agreement, the right of possession and use of the Property by City, including the right to remove
and dispose of improvements, shall commence on the date the amount of funds as specified in
Clause 2A of the Agreement are deposited into the escrow controlling this transaction. The amount
shown in Clause 2A of the Agreement includes, but is not limited to, full payment for such
possession and use, including damages, if any, from said date. It is further agreed that,
notwithstanding the City's right of possession and use of the Property set forth in this paragraph, the
single-family residence will be protected in place until the Close of Escrow. However, City makes
no representation that the Project shall be constructed, and no liability or obligation whatsoever shall
be incurred by City by reason of any failure„to construct the Project for any reason. If, after City
takes possession, the Property subsequently is not acquired by City for any reason, City shall restore
the Property to the condition existing prior to the City's possession or use hereunder, unless
otherwise agreed by the parties.
8. Eminent Domain
A. It is mutually understood that the acquisition of the Property by City is for a public purpose,
and therefore, the Property is otherwise subject to taking by the power of eminent domain.
The acquisition by and through this Agreement is in lieu of City's exercise of the power of
eminent domain.
B. If any eminent domain action that includes the Property, or any portion thereof, has been filed
by City and after said filing the Grantors subsequently agree and consent to the dismissal of
said action, then the Grantors hereby waive any and all claims to any money that may have
been deposited in any Court or with the State Treasurer in any such action and waive any and
all claims for damages, costs, or litigation expenses, including attorney's fees, arising by
virtue of the abandonment of the action pursuant to Section 1268.510 of the California Code
of Civil Procedure.
9. Amendment
This agreement may be modified, changed, or rescinded only by an instrument in writing executed
by the parties hereto.
1307510.1
10. No Leases
A. Grantors warrant that there are no leases, except as disclosed on Exhibit `B" attached
hereto, on all or any portion of the Property exceeding a period of one month, and the
Grantors further agree to defend and indemnify and hold the City harmless and reimburse
the City for any and all of its losses and expenses occasioned by reason of any tenant, lease
or occupant of all or a portion of the Property for a period exceeding one month other than
what is disclosed on Exhibit "E." A general release or quitclaim deed will be required from
any lessee that has a lease term exceeding one month. Said general releases or quitclaim
deeds are to be provided to Escrow Holder or the City prior to the Close of Escrow.
Grantors agree not to assign, transfer or sell to any third party any right, title or interest
Grantors have in the Property.
11. Grantors' Representations
A. Grantors make the following representations and warranties:
i. Grantors certify that they own full legal title to the Property, and have full power and
authority to convey all property rights described herein to City.
ii. This Agreement constitutes a legal, valid, and binding obligation of Grantors enforceable
in accordance with its terms.
iii. To the best of Grantors' knowledge there is no suit, action, arbitration, legal,
administrative or other proceeding or inquiry pending or threatened against the
Property, or any portion thereof, or pending or threatened against Grantors which could
(i.) affect Grantors' title to the Property, or any portion thereof, (ii.) affect the value of
the Property, or any portion thereof, or (iii.) subject Grantors to liability.
iv. To the best of Grantors' knowledge, there are no uncured notices, which have been
served upon Grantors from any governmental agency notifying Grantors of any
violations of law, ordinance, rule, or regulation, which would affect the Property, or any
portion thereof.
v. There are no Hazardous Substances (as defined in Paragraph 14 below), or storage tanks
containing Hazardous Substances, in, on, under, or about the Property.
A. To the best of Grantors' knowledge, there has been no production, storage, disposal,
presence, observance, or release of any Hazardous Substances in, on, under, or about
the Property.
vii. The Grantors and the Property are not in violation of any federal, state, or local law,
ordinance, regulation, order, decree, or judgment relating to Hazardous Substances
and/or environmental conditions in, on, under, or about the Property.
viii.To the best of Grantors' knowledge, there are no notices or other information giving
Grantors reason to believe that any conditions existing on the Property or in the vicinity
of the Property subject or could subject any Grantors of the Property to potential
liabilities under any federal, state or local law, statute, ordinance, regulation, rule, order,
decree, or other governmental requirement that pertains to the regulation of Hazardous
Substances and/or the protection of public health and safety and/or the environment,
1307510.1
including, but not limited to, the ambient air, soil, soil vapor, groundwater, surface
water or land use.
ix. To the best of Grantors' knowledge, there are no violations of any federal, state or local
law, statute, ordinance, regulation, rule, order, decree, or other governmental
requirement that pertains to the regulation of Hazardous Substances and/or the
protection of public health and safety or the environment, including, but not limited to,
the ambient air, soil, soil vapor, groundwater, surface water or land use, nor of any
legal, administrative or other action or proceeding, pending or threatened, affecting the
Property and relating to Hazardous Substances and/or environmental compliance.
x. To the best of Grantors' knowledge, there is no license, permit, option, right of first
refusal, or other agreement, written or oral, which affects the Property or any portion
thereof. Grantors will defend and indemnify the City, its successor and/or assigns
against any and all claims, demands, causes of action filed against the City, its
successors/or assigns by someone claiming a legal interest in or right to the Property, or
any portion thereof.
xi. To the best of Grantors' knowledge conveyance of the property rights described herein
will not constitute a breach or default under any agreement to which Grantors are bound
and/or to which the Property is subject.
B. Each of the above warranties and representations is material and is relied upon by City
separately and collectively. Each of the above representations shall be deemed to have been
made as of the date that the Grant Deed is recorded. If, before the recording of the Grant
Deed, Grantors discover any information or facts that would materially change any of these
warranties and representations, Grantors shall immediately give notice in writing to City of
such facts and information. If any of the foregoing warranties and representations cease to
be true before the recording of the Grant Deed, the City may, at its unfettered discretion,
either cancel and terminate this Agreement or give the Grantors the option to remedy the
problem before the recording of the Grant Deed or deduct from the payments required by
Section 2, above, as a credit to City, in an amount as determined by the City reasonably
required to remedy the problem.
12. Hazardous Substances
A. Liability for Hazardous Substance
The parties acknowledge, understand, and agree that any liability associated with the
presence of any Hazardous Substances, as defined below, on or adjacent to any portion of
the Property shall be governed by the provisions of Section 15 below, regardless of whether
any inspection, examination, sampling, testing, assessment, or other investigation is
conducted by City.
"Hazardous Substance(s)" includes, but is not limited to, any hazardous or toxic
substance, material or waste, or any solid waste, pollutant, or contaminant that is:
(i) Regulated by any local governmental agency, the State of California or the United States
Government; (ii) defined as such in any federal, State, or local statute, ordinance, rule, or
regulation applicable to the property, including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended (Title 42
United States Code sections 9601-9675), the Resource Conservation and Recovery Act
(Title 42 United States Code sections 6901-6992k), the Carpenter -Presley -Tanner
Hazardous Substance Account Act (California Health and Safety Code sections 25330-
25395), and the Hazardous Waste Control Law (California Health and Safety Code sections
1307510.1
25100-25250.25); (iii) listed in the United States Department of Transportation Table (49
CFR § 172.101) or by the Environmental Protection Agency, or listed as hazardous
substances by any equivalent State of California or local governmental agency, or any
successor agency (40 CFR Part 302); (iv) asbestos or asbestos containing material; (v) radon
gas; (vi.) petroleum or petroleum fractions; (vii) any explosive substances (viii)
polychlorinated biphenyl; (ix) a radioactive material, and (x) per chlorate.
13. Indemnification
A. Each party (hereafter the "Indemnifying Party") agrees and covenants to indemnify, defend
(with counsel acceptable to the other party) each other party (hereinafter "Indemnified
Party"), which consent shall not be unreasonably withheld), and hold the Indemnified Party,
and its officers, employees and agents, harmless from and against any and all liabilities,
penalties, losses, damages, costs, expenses (including reasonable attorneys' fees, whether for
outside counsel or the City Attorney), causes of action, claims, or judgments that arise by
reason of any death, bodily injury, personal injury, property or economic damage, or
violation of any law or regulation, or damage to the environment, including ambient air,
soil, soil vapor, groundwater, or surface water, and resulting from or in any way connected
with:
i. any acts or omissions related to the performance of this Agreement;(ii) any breach of
this Agreement, or; (iii.) the occupancy or use of the Property (including, but not limited
to, the use, storage, treatment, transportation, release, or disposal of Hazardous
Substances on or about any portion of the Property), by the Indemnifying Party, its
officers, employees, agents, engineers, contractors or subcontractors, or any other
person or entity employed by or acting on their behalf.
B. The parties further agree and understand as follows: a party does not, and shall not be
deemed to, waive any rights against the other party which it may have by reason of the
aforesaid indemnity and hold harmless agreement because of any insurance coverage
available; the scope of the aforesaid indemnity and hold harmless agreements are to be
construed broadly and liberally to provide the maximum coverage in accordance with their
terms; no specific term or word contained in this Section shall be construed as a limitation
on the scope of the indemnification and defense rights and obligations of the parties unless
specifically so provided. The provisions of this Section shall survive the recording of any
deeds hereunder.
14. Attorney Fees
Either party may bring a suit or proceeding to enforce or require performance of the terms of this
Agreement, and the prevailing party in such suit or proceeding shall be entitled to recover from the
other party reasonable costs and expenses, including attorney's fees.
15. Notices
Any notice that either party may or is required to give the other shall be in writing, and shall be
either personally delivered or sent by registered or certified mail, return receipt requested. If by
mail, service shall be deemed to have been received by such party at the time the notice is delivered,
to the following address:
To City:
City of Tustin
300 Centennial Way
Tustin, CA 92780
Attention: Public Works Director
1307510.1
To Grantors:
Cho Sang Kim and Cho Hea Kim, Trustees of
The Kim Trust, Dated October 3, 1990
2061 Valhalla Drive
Satna Ana, CA 92705
With a copy to:
Woodruff, Spradlin & Smart
Craig Farrington/Alyson Suh
555 Anton Boulevard, Suite 1200
Costa Mesa, CA 92626
16. Recording
Either party may record this Agreement in the Recorder's Office for the County of Orange. The
fully executed Grant Deed will be recorded in the Recorder's Office for the County of Orange.
17. Binding on Successors
This Agreement shall be binding on and shall inure to the benefit of the City and Grantors, and their
respective heirs, personal representatives, successors, assigns, and transferees, and their past, present
and future officers, employees and agents. The City may freely assign any or all of its interests or
rights under this Agreement.
18. Brokers
Grantors and City each warrant to the other that no person or entity can properly claim a right to a
commission, finder's fee, or other compensation with respect to the transaction contemplated by this
Agreement. If any broker or finder makes any claim for a commission or finder's fee, the party
through which the broker or finder makes such claim shall indemnify, defend and hold the other
party harmless from all liabilities, expenses, losses, damages or claims (including the indemnified
party's reasonable attorneys' fees) arising out of such broker's or fmder's claims.
19. Time of Essence
Time is of the essence for each condition, term, and provision in this Agreement.
20. Waivers
No waiver of any breach of any covenant or provision in this Agreement shall be deemed a waiver
of any other covenant or provision in this Agreement and no waiver shall be valid unless in writing
and executed by the waiving party.
21. Severability
If any term or provision of this Agreement shall, to any extent, be held invalid or unenforceable, the
remainder of this Agreement shall not be affected, so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner adverse to either party. Upon such
determination that any term or provision is illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties
as closely as possible in an acceptable manner to the end that transactions contemplated hereby are
fulfilled to the greatest extent possible.
22. Construction
Section headings are solely for the convenience of the parties and are not a part of and shall not be
used to interpret this Agreement. The singular form shall include the plural and vice versa. This
Agreement shall not be construed as if it had been prepared by one of the parties, but rather as if
1307510.1
both parties have prepared it. Unless otherwise indicated, all references to Sections are to this
Agreement.
23. Governing Law
This Agreement shall be construed in accordance with and governed by the laws of the State of
California. Any legal action arising under or related to this Agreement shall be brought and
prosecuted in the Orange County Superior Court.
24. Entire Agreement
The parties have herein set forth the whole of their Agreement. All prior oral discussions,
representations, and/or agreements, if any, are specifically superseded by this Agreement, which is
intended by the parties to contain all of the terms and conditions agreed to by them with regards to
acquisition of the Property by City.
25. Signatures on Behalf of an Entity
Each individual executing this Agreement on behalf of an entity represents and warrants that he or
she has been authorized to do so by the entity on whose behalf he or she executes this Agreement
and that said entity will thereby be obligated to perform the terms of this Agreement.
26. Counterparts
This Agreement may be executed in counterparts, including by facsimile or e-mail, each of which so
executed shall, irrespective of the date of its execution and delivery, be deemed an original, and all
such counterparts together shall constitute one and the same instrument.
27 City Council Approval
This Agreement may be subject to approval by the City's governing City Council.
REMAINDER OF PA GEINTENTIONALLYLEFT BLANK
SIGNATURE PAGE FOLLOWS
1307510.1
IN WITNESS WHEREOF, the parties have executed this Agreement on the dates set forth below.
GRANTORS:
Cho Sang Kim and Cho Hea Kim, Trustees of
The Kim Trust, Dated October 3, 1990
Date:
Chong Sang Kim, Trustee
Cho Hea Kim, Trustee
GRANTEE:
CITY OF TUSTIN, a municipal
corporation of the State of California
Date:
By: _
Name:
Its:
APPROVED AS TO FORM:
Date:
By:
General Counsel
ATTEST:
Date:
By:
9
Name Title
*Note: If Grantor is a corporation, the following two signatures are required: (1) the first signature by either
the Chairman of the Board, the President, or any Vice President of the corporation and (2) the second
signature by either the Secretary, any Assistant Secretary, the Chief Financial Officer or any Assistant
Treasurer of the corporation.
1307510.1
EXHIBIT "A"
Legal Description of Property
DESCRIBED AS FOLLOWS -
LOT 80 OF TRACT NO,3893, IN TIS COUNTY OF ORANGE, STATE OF CALIFORMA, AS PER MAP RECORDED
IN BOOK 166 PAGES 5 TO 11, INCLUSIVE OF MSCELLA-NEOITS MAPS, IN THE OFFICE OF THE COUNTY
RECORDER OF SAID COUNTY
1307510.1
e
1307510.1
EXHIBIT `B"
Plat Map
11,
EXHIBIT "C"
Grant Deed
1307510.1
EXHIBIT "D"
Title exceptions that will not be removed, if any, as noted in preliminary title report dated
December 30,2016: 1, 3 and 4
1307510.1
EXHIBIT "E"
Leases and Other Possessory Rights
1307510.1
RECORDING REQUESTED BY
AND FOR THE BENEFIT OF AND
WHEN RECORDED MAIL TO:
City of Tustin
300 Centennial Way
Tustin, CA 92780
Attn: City Clerk
APN: 104-611-30 1
No recording fee required: SPACE ABOVE THIS LINE FOR RECORDER'S USE
Exempt pursuant to Code 27383
C —A IL t a-= C
CHONG SANG KIM and CHO HEA KIM, TRUSTEES OF THE KIM TRUST, DATED
OCTOBER 3, 1990 (hereinafter "Grantors"), are the owners of that certain real property located
in the County of Orange, State of California, designated as Assessor's Parcel Number 104-611-30
("Grantors' Property"). FOR VALUABLE CONSIDERATION, receipt of which is hereby
acknowledged, Grantors hereby grant to the CITY OF TUSTIN, a municipal corporation,
("Grantee"), all that real property more particularly described in Exhibit "A" and depicted in Exhibit
"B" attached hereto, which are incorporated herein by this reference.
Date:
1307460.1
The Kim Trust, Dated October 3, 1990
Chong Sang Kim, Trustee
Cho Hea Kim, Trustee
ACKNOWLEDGEMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who
signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of
that document.
STATE OF
COUNTY OF
On before me, Notary Public, personally
appeared who proved to
me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State Of California that the foregoing paragraph is true
and correct.
WITNESS my hand and official seal.
(Seal)
Signature
1307460.1
CERTIFICATE OF ACCEPTANCE
THIS IS TO CERTIFY, That the City of Tustin, a municipal corporation, hereby accepts for public
purposes the real property described in the within deed and consents to the recordation thereof.
DATED:
By:
**NAME**
**TITLE**
1307460.1
EXHIBIT "A"
LEGAL DESCRIPTION
'E
TBE LAND REFERRED TO BEREDW IS SITUATED IN COUNTY OF OF-kNT(-T, STATE OF CALIFO RNLk AND IS
DESCRIBED AS FOLLOWS-
IL75 usloi il tdowto =loap
a Koll) 3 Wl V�l t4i 96%111 11MOIN I
1307460.1
1307460.1
EXHIBIT "B"
PLAT MAP
Acquiring Agency:
CITY OF TUSTIN
Project Name:
Simon Ranch Reservoir Replacement Project
Acquiring Agency Representative:
Overland, Pacific & Cutler, Inc.
1 Jenner, Suite 200
Irvine, CA 92618
Phone: 949.951.5263
This question and answer brochure intends to provide a non-technical, understandable
discussion of the Acquiring Agency (listed above) property acquisition procedures and the
principal rights and options available to you, the property owner. If the Acquiring Agency
decides to acquire your property, it must abide by these procedures to fulfill its obligations
under applicable federal and/or state law.
The Acquiring Agency has retained the professional firm of Overland, Pacific & Cutler, Inc.
(OPQ to assist in the acquisition process. Their address and telephone number is listed above.
Please contact them if you have any questions about the acquisition procedures or your rights.
1255315.1
GENERAL PROPERTY ACQUISITION QUESTIONS
1. Who Will Make The Decision To Buy My Property?
The decision to acquire property for a public project usually involves many persons and many
decisions. The final decision to proceed with the project is made by the Acquiring Agency after
a thorough review which often includes public hearings to obtain the views of interested
citizens.
If you have any questions about the project or the selection of your property for acquisition,
you should ask a representative of the Acquiring Agency.
2. How Will The Acquiring Agency Determine How Much To Offer For My Property?
Before making you an offer, the Acquiring Agency will obtain an appraisal of your property by a
competent real property appraiser who is familiar with local property values. The appraiser will
inspect your property and provide a professional opinion of its current fair market value in an
appraisal report. After the appraiser has completed the report, a review appraiser may recheck
the work to ensure that the estimate is fair and the work conforms with professional appraisal
standards.
The Acquiring Agency is required to offer you
amount cannot be less than the fair market
Acquiring Agency on the basis of its appraisal.
3. What Is Fair Market Value?
"just compensation" for your property. This
value of your property, as determined by the
Fair market value is sometimes defined as that amount of money which would probably be paid
for a property in a sale between a willing seller, who does not have to sell, and a willing buyer,
who does not have to buy. The fair market value of a property is generally considered to be
"just compensation". Fair market value does not take into account intangible elements such as
sentimental value, goodwill, business profits, or any special value that your property may have
for you or for the Acquiring Agency.
4. How Does An Appraiser Determine The Fair Market Value Of My Property?
Each parcel of real property is different and therefore no single formula can be devised to
appraise all properties. Among the factors an appraiser typically considers in estimating the
value of real property are:
• How it compares with similar properties in the area that have been sold recently.
• How much it would cost to reproduce the buildings and other structures, less any
depreciation.
• How much rental income it could produce.
S. Will I Have A Chance To Talk To The Appraiser?
Yes. You must be contacted about the Acquiring Agency's decision to appraise your property
and given the opportunity to accompany the appraiser during the inspection of your property.
1255315.1
You may then inform the appraiser of any special features which you believe may add to the
value of your property. It is in your best interest to provide the appraiser with all the useful
information you can in order to ensure that nothing of allowable value will be overlooked. If
you are unable to meet with the appraiser, you may wish to have a person who is familiar with
your property represent you in a meeting with the appraiser.
6. Can I Hire My Own Appraiser And Will I Be Reimbursed For The Cost?
Yes. Should you elect to have an independent appraisal conducted in addition to the appraisal
conducted by the Acquiring Agency, you are entitled to be reimbursed for the reasonable costs
of the appraisal, up to $5,000. In order to receive any reimbursement, the appraiser you chose
must be licensed with the Bureau of Real Estate Appraisers (BREA) and comply with the
Uniform Standards of Professional Appraisal Practice. For information regarding licensed
appraisers, please visit the BREA web site at www.brea.ca.gov.
Appraisals of property to be acquired for a public project, such as the appraisal being obtained
by the Acquiring Agency, are very specialized appraisals. It is imperative that the appraiser you
choose be familiar with this particular type of appraisal.
Once you have chosen an appraiser, it is requested that you submit your reimbursement
request in writing to the Acquiring Agency's acquisition representative, Overland, Pacific &
Cutler, Inc. at the address listed on the front page within ninety (90) days of the earliest of the
following dates: (1) the date the selected appraiser requests payment from you for the
appraisal; or (2) the date upon which you, or someone on your behalf, remits full payment to
the selected appraiser for the appraisal. Copies of the contract (if a contract is made) and
invoice for completed work by the appraiser must be provided to the Acquiring Agency
concurrent with submission of the appraisal cost reimbursement request. The cost must be
reasonable and justifiable.
i. How Soon Will The Acquiring Agency Give Me A Written Purchase Offer?
Generally, this will depend on the amount of work required to appraise your property. In the
case of a typical single-family house, it is usually possible for the Acquiring Agency to make a
written purchase offer within ninety (90) days of the date it first notifies the owner of its intent
to appraise the property. Appraisal of commercial and industrial property may take somewhat
longer.
The Acquiring Agency must give you a written offer to acquire your property for the full amount
it determines to be just compensation, and it must do so promptly after it determines that
amount. Along with the offer, you will receive a written statement explaining the basis for the
Acquiring Agency's determination of just compensation.
S. What Is The Acquiring Agency Basis For Its Statement Of Just Compensation?
The Acquiring Agency's statement of the basis for its determination of just compensation must
be provided to you with the written purchase offer. Among other things, this statement must
include:
• The date of valuation, highest and best use, and applicable zoning of property.
• The principal transactions, reproduction or replacement cost analysis, or capitalization
analysis, supporting the determination of value.
1255315.1
• Where appropriate, the just compensation for the real property acquired and for
damages to the remaining real property shall be separately stated and shall include the
calculations and narrative explanation supporting the compensation, including any
offsetting benefits.
9. Must I Accept The Acquiring Agency's Offer?
No. You are entitled to present your evidence as to the amount you believe is the value of your
property and to make suggestions for changing the terms and conditions of the offer. The
Acquiring Agency must make reasonable efforts to consider and respond to your evidence and
suggestions.
10. May I Have Someone Represent Me During Negotiations?
Yes. If you would like an attorney or anyone else to represent you during negotiations, please
so inform the Acquiring Agency in writing. However, state law does not require the Acquiring
Agency to pay the costs of any such representation.
11. If I Agree To Accept The Acquiring Agency's Offer, How Soon Will I Be Paid?
If you reach a voluntary agreement to sell your property and your ownership (title) is clear,
payment will be made at a mutually acceptable time. Generally, this should be possible within
30 to 60 days after you sign a purchase contract. The Acquiring Agency may choose to use an
escrow to facilitate payment and the signing and recording of deeds. If the title evidence
obtained by the Acquiring Agency indicates that further action is necessary to show your
ownership is clear, you may be able to accelerate the payment by helping the Acquiring Agency
obtain the necessary proof. (Title evidence is basically a legal. record of the ownership of the
property. It identifies the owners of record and lists the restrictive deed covenants and
recorded mortgages, liens, and other instruments affecting your ownership of the property.)
12. What Happens If I Don't Agree To The Final Offer By The Acquiring Agency?
If you are unable to reach a voluntary agreement through negotiations, the Acquiring Agency
may request that its governing body adopt a resolution of necessity at a public hearing. You
will receive notice of the hearing and given an opportunity to appear at the hearing. If a
resolution of necessity is adopted, the Acquiring Agency is authorized to file a suit in court to
acquire your property through an eminent domain proceeding. An eminent domain proceeding
is often referred to as condemnation.
13. What Happens After The Acquiring Agency Condemns My Property?
You will be notified of the condemnation suit. In the event the Acquiring Agency requires
possession of your property prior to the completion of the condemnation action, the Acquiring
Agency will seek a court order for possession prior to completion of the condemnation action
and deposit with the California State Treasurer's Office an amount not less than its appraisal of
the fair market value of the property. Ordinarily, the owner is then permitted to withdraw this
amount, less any amounts necessary to pay off any mortgage or other liens on the property and
to resolve any special ownership problems. Your early withdrawal of your share of the money
will not affect your right to seek additional compensation for your property.
1255315.1
During the condemnation proceeding, you will be provided an opportunity to introduce your
evidence as to the value of your property. Of course, the Acquiring Agency will have the same
right. After hearing the evidence of all parties, a jury will determine the amount of just
compensation. If that amount exceeds the amount deposited by the Acquiring Agency, you will
be paid the difference, plus any interest that may be provided under state law.
To help you in presenting your case, in a condemnation proceeding, you may wish to consider
employing an attorney and an appraiser. However, as a general rule, the costs of these
professional services and other costs which an owner incurs in presenting his case to the court
must be paid by the owner.
14. What Can I Do If I Am Not Satisfied With The Court's Determination?
If you are not satisfied with the court judgment, you may file an appeal with the appropriate
appellate court for the area in which your property is located. The Acquiring Agency may also
file an appeal if it believes the amount of the judgment is too high.
15. Will I Have To Pay Any Settlement Costs?
You will be responsible for the payment of the balance on any mortgage on your property. Also,
if your ownership is not clear, you may have to pay the cost of clearing it. But the Acquiring
Agency will not charge you any sales commission. And the Acquiring Agency is responsible for
all reasonable and necessary costs for typical services required to complete the sale, including
recording fees, revenue stamps, transfer taxes and any similar expenses which are incidental to
transferring ownership to the Acquiring Agency.
The Acquiring Agency will identify these items in a settlement cost statement to be given to you
at the time of settlement or soon after the court award of compensation, if the property is
acquired by condemnation. Ordinarily, if you have paid any of these expenses yourself, you will
be repaid at that time. If you later discover other costs for which you should be repaid, you
should request repayment from the Acquiring Agency within six (6) months after the
acquisition. The Acquiring Agency will assist you in filing a claim for these costs.
16. May I Keep Any Of The Buildings Or Other Improvements On My Property?
Very often, many or all of the improvements on a property are not required by the Acquiring
Agency. This might include such items as a fireplace mantel, your favorite shrubbery, or even
the entire house. If you wish to keep any improvements, please let the Acquiring Agency know
as soon as possible.
If you do arrange to keep any improvements, the Acquiring Agency will deduct only its salvage
value from the price you would otherwise receive. (The salvage value of an item is its probable
selling price if offered for sale on the condition that the buyer will remove it at his own
expense.) Of course, if you arrange to keep any real property improvement (such as a fireplace
mantel or a shrub), you will not be entitled to receive a relocation payment for the cost of
moving it to a new location.
17. Can The Acquiring Agency Take Only A Part Of My Property?
Yes. If the Acquiring Agency acquires a portion of your property leaving you with an
uneconomic remnant (a portion of land not capable of an economic development or use), the
1255315.1
Acquiring Agency will offer to acquire the uneconomic remnant if you so desire. Whether an
uneconomic remnant remains after the Acquiring Agency's acquisition will be determined by the
Acquiring Agency's appraiser and attorney as well as by negotiations with the property owner.
18. Will I Have To Pay Rent To The Agency After My Property Is Acquired?
If arrangements are made to rent acquired property to an owner or his tenant for a short term
or for a period subject to termination by the Acquiring Agency on short notice, the rental will
not exceed the lesser of the fair rental of the property to the short term occupier, or the
pro -rated portion of the fair market value for a typical rental period. If the owner or tenant is
an occupant of a dwelling, the rental for the dwelling shall be within his financial means in
accordance with state or federal law, as applicable.
19. How Soon Must I Move?
You will likely not be required to relocate from your property. However, in the event that you
are required to relocate from your property, every reasonable effort will be made to give you
ample time to relocate after the acquisition of your property. In most cases, a mutually
satisfactory arrangement can be worked out. Also, except in an unusual instance where there is
an urgent need for your property, you cannot be required to move from your residence or to
move your business or farm operation without at least a ninety (90) day advance written notice
of the date by which your move is required.
If you reach a voluntary agreement to sell your property, you cannot be required to move
before you receive the agreed purchase price. In the case of a condemnation, you cannot be
required to move before the estimated fair market value of the property has been deposited
with the California State Treasurer's Office so that you can withdraw your share.
If you are being displaced from your residence, decent, safe and sanitary replacement housing
must be available before you can be required to move.
20. Will I Be Compensated For The Loss Of Goodwill For My Business?
If the owner of real property is also the owner of a business conducted on the real property to
be acquired, the owner may have a right to compensation for loss of goodwill. Pertinent
provisions of the California Code of Civil Procedure addressing compensation for "loss of
goodwill" are provided below.
CODE OF CIVIL PROCEDURE - ARTICLE 6 (SECTIONS 1263.510 -1263.530)
COMPENSATION FOR LOSS OF GOODWILL
In the event you are the owner of a business conducted on the property being acquired by the Acquiring Agency, you
may be entitled to compensation for loss of goodwill, if any, if you are able to make a showing of such loss pursuant
to the requirements of California Code of Civil Procedure Section 1263.510 as follows:
a. The owner of a business conducted on the property taken, or on the remainder if such property is part of a
larger parcel, shall be compensated for loss of goodwill if the owner proves all of the following:
1) The loss is caused by the taking of the property or the injury to the remainder.
2) The loss cannot reasonably be prevented by relocation of the business or by taking steps and adopting
procedures that a reasonably prudent person would take and adopt in preserving the goodwill.
3) Compensation for the loss will not be included in payments under Section 7262 of the Government Code.
4) Compensation for the loss will not be duplicated in the compensation otherwise awarded to the owner.
1255315.1
b. Within the meaning of this article, 'yoodwi0" consists of the benefits that accrue to a business as a result of its
location, reputation for dependability, skill or quality, and any other circumstances resulting in probable retention
of old or acquisition of new patronage. "
21. My Property Is Worth More Now Than When I Bought It. Do I Pay Capital Gains
Tax On The Increase?
Internal Revenue Service (IRS) Publication 544, "Sales and Other Dispositions of Assets" is
available from the IRS. It explains how the federal income tax would apply to a gain or loss
resulting from a condemnation for public purposes. In most cases, the owner of property
acquired for public purposes may postpone the gain and associated taxes if certain conditions
are met within a defined period. If you have any questions about the IRS rules, you should
discuss your particular circumstances with your personal tax advisor or your local IRS office.
22. Will My Property Taxes Increase Substantially When I Move Because Of The
Proposition 13 Reassessment Formula?
No. Not as long as the replacement property's purchase price does not exceed 120 percent of
the sales price for the acquired property. Section 2(d) of Article XIIIA of the California
Constitution and the Revenue and Taxation Code Section 68 generally provides that property tax
relief shall be granted to any real property owner who acquires comparable replacement
property after having been displaced by governmental acquisition or eminent domain
proceedings.
If the full cash value of the comparable replacement property does not exceed 120 percent of
the award or purchase price of the property taken or acquired, then the adjusted base year
value of the property taken or acquired shall be transferred to the comparable replacement
property. For example:
Purchase
Price
120% Allowable
Transfer Basis
Replacement
Property Price
Subject Property
Tax Basis
Replacement
Tax Basis
$100,000
$120,000
$130,000
$50,000
$60,000
Calculated as follows: *$50,000 + ($130,000 - $120,000) = $60,000
In the event that the replacement property price is greater than the replacement tax basis, the
difference will be added to the subject property tax basis to represent the replacement tax
basis.
23. Is It Possible To Donate Property To The Acquiring Agency?
Yes. However, prior to accepting any donation of real property, the Acquiring Agency must
inform the owner in writing of the amount it believes to be just compensation for the property.
The property owner must indicate in writing that, although he understands that he cannot be
required to sell his property for less than just compensation, he voluntarily agrees to do so.
24. What Are The Advantages Of Selling My Property To The Acquiring Agency?
• Acquiring Agency pays full cash value for property as determined by an independent
appraiser. Seller does not have to provide financing to sell the property.
1255315.1
• Seller does not have to pay real estate sales commission. Sales commissions typically
equal six percent (6%) of the sales price in a private transaction.
• Acquiring Agency pays virtually all closing costs (i.e., escrow fees, recording fees,
mortgage prepayment penalties).
• Seller may receive favorable capital gains tax treatment and can transfer his existing
property tax basis to the replacement property.
• If you are required to relocate, the Acquiring Agency provides relocation benefits
including referral assistance and cash payments.
• If you are required to relocate, the Acquiring Agency pays for moving expenses.
25. Additional Information
If you have further questions after reading this brochure, please contact the Acquiring Agency's
representative at Overland, Pacific & Cutler, Inc. at the address and phone number listed
on the front page.
1255315.1
ATTACHMENT 2
AGREEMENT FOR ACQUISITION OF REAL PROPERTY
Project: Simon Ranch Reservoir Replacement Project
Parcel No: 104611-30
Escrow #:
Title Company: Commonwealth Land Title Company
Date of Preliminary Title Report: 12/30/2016
Grantors: Chong Sang Kim and Cho Hea Kim, Trustees of
The Kim Trust, dated October 3, 1990
Grantee: CITY OF TUSTIN, a municipal corporation of the State of California
AGREEMENT FOR ACQUISITION OF REAL PROPERTY
WHEREAS, the above-named Grantors own that certain real property located at 2061 Valhalla Drive in the
County of Orange, State of California legally described in the Legal Description identified as Exhibit "A"
and depicted on the Plat Map identified as Exhibit "B", attached hereto and made a part hereof ("Property");
and
WHEREAS, Grantors intend to convey to City of Tustin ("City") and City intends to acquire from Grantors
the Property, as described and depicted in the Grant Deed identified as Exhibit "C" for the purpose of
constructing the Simon Ranch Reservoir Replacement Project ("Project") pursuant to the terms and
conditions set forth herein; and
NOW, THEREFORE, in consideration of the payment and other obligations set forth below; Grantors and
City mutually agree as follows:
1. Full and Complete Agreement
The parties have herein set forth the whole of their agreement ("Agreement"). The performance of
this Agreement constitutes the entire consideration for the Property and shall relieve the City of all
further obligations or claims on this account, or on account of the location, grade or construction of
the proposed public improvement.
The City requires the Property for the Project, a public use for which the City has the authority to
exercise the power of eminent domain. Grantors are conveying the Property under the threat of
eminent domain.
2. Payment
A. Purchase Price.
The parties agree that the amount of One Million Nine Hundred Fifty Thousand and No/100
Dollars ($1,950,000.00) ("Purchase Price") is the full amount of compensation due and owing
to Grantors for conveyance of the Property to City.
3. Execution and Delivery to Escrow
City shall open an escrow with the title company identified above ("Escrow Holder") by delivery of
a fully executed copy of this Agreement. Upon full execution of this Agreement by the parties
("Effective Date"), Grantors shall execute and notarize the Grant Deed, in the form of Exhibit "C",
attached hereto and made a part hereof. City shall tender the Purchase Price to the Escrow Holder,
which shall be paid when title to the Property vests in the City free and clear of all liens, deeds of
trust, encumbrances, assessments, easements and leases (recorded and/or unrecorded).
Page 1 of 12
1346811,1
A. Close of Escrow
Unless extended by the mutual agreement of the parties, the escrow shall close within sixty
(60) days after the Effective Date of this Agreement and shall be the date the Grant Deed is
recorded in the Recorder's Office for Orange County ("Close of Escrow").
B. Escrow Holder's Right to Discharge Liens
The Escrow Holder may expend any or all monies payable under this Agreement and
deposited into escrow to discharge any obligations which are liens upon the Property,
including, but not limited to, those arising from judgments, assessments, delinquent taxes for
other than the fiscal year in which the escrow closes, or debts secured by deeds of trust or
mortgages, and/or to defray any other incidental costs other than those specified in Section 2
hereof to be borne by the City. The Escrow Holder shall release payment to Grantors, return
any credited amounts to City, and record the Grant Deed in the Recorder's Office for Orange
County upon the Close of Escrow.
C. Escrow Instructions
This Agreement may serve in whole or in part as escrow instructions. The issuance of any
further escrow instructions shall be the sole responsibility of City. The Grantors agree to
execute such additional documents as may be reasonably necessary to consummate the
purchase and sale herein contemplated.
D. Fees
The City shall pay all Grantors' and City's usual escrow, recording, and title insurance fees
incurred in this transaction.
E. Taxes
Taxes for the fiscal year in which the escrow closes shall be cleared and paid for in the
manner required by Section 5086 of the Revenue and Taxation Code. As a deduction from
the amount shown in Section 2A, above, City shall be authorized to pay any delinquent taxes
due in any fiscal year, except the fiscal year in which this escrow closes, together with
penalties and interest thereon.
F. Assessments
The City is not assuming responsibility for payment or subsequent cancellation of unpaid
assessments on the Property acquired under this transaction. The assessments remain the
obligation of Grantors. Payment for the Property acquired under this transaction is made upon
the basis that the Grantors retain their obligation to the levying body respecting said
assessments.
G. Mortgages or Deeds of Trust
Any monies payable under this Agreement up to and including the total amount of unpaid
principal and interest on note(s) secured by mortgage(s) or deed(s) of trust, if any, and all
other amounts due and payable in accordance with the terms and conditions of said deed(s) of
trust or mortgage(s), shall upon demand(s) be made payable to the mortgagee(s) or
beneficiary(ies) entitled thereunder; said mortgagee(s) or beneficiary(ies) are to furnish
Page 2 of 12
1346811.1
Grantors with good and sufficient receipt showing said monies credited against the
indebtedness secured by said mortgage(s) or deed(s) of trust.
4. Just Compensation; Waiver and Release
A. Grantors agree that performance of this Agreement by City, including the payment recited in
Section 2A, above, shall constitute full and fair compensation and consideration for any and
all claims that Grantors, and their successors and assigns, may have against City by reason of
the acquisition, improvement, possession, use and/or occupancy of the Property, and Grantors,
on behalf of themselves and their successors and assigns, hereby knowingly and voluntarily
waive, and expressly release and discharge City, and any and all of City's employees, agents,
officers, servants, representatives, contractors, attorneys and assigns, from liability in regard
to, any and all such claims, including claims for severance or taking compensation or damages
to the remainder not taken on account of the acquisition of the Property or the location,
establishment, construction and/or operation of the above-named Project. This waiver and
release shall survive the Close of Escrow.
B. The foregoing waiver and release shall include the waiver and release of any and all rights or
claims that Grantors have, may have had or may in the future have under Article 1, Section 19
of the California Constitution, the Eminent Domain Law, or any other law or regulation;
except as provided herein. Grantors, on behalf of themselves and their successors and assigns,
further knowingly and voluntarily waive and expressly release and discharge City, and any
and all of City's employees, agents, officers, servants, representatives, contractors, attorneys
and assigns, from liability in regard to any claims for the following: precondemnation
damages, inverse condemnation, lost business goodwill, lost profits, lost rents, severance
damages, mitigation damages, compensation for the construction and use of the Project in the
manner proposed, damage to or loss of improvements pertaining to the realty, machinery,
fixtures, inventory, equipment and/or personal property, interest, any right to repurchase,
leaseback from City, or receive any financial gain from, City's sale of any portion of the
Property, any right to challenge City's adoption of a resolution of necessity, pursuant to Code
of Civil Procedure sections 1245.245, any right to receive any notices pursuant to Code of
Civil Procedure section 1245.245, any right to enforce any other obligation placed upon City
pursuant to Code of Civil Procedure sections 1245.245 and 1263.615, any other rights
conferred upon Grantors pursuant to Code of Civil Procedure sections 1245.245 and 1263.615
and 1263.025, and claims for litigation expenses, attorney's fees and/or costs. This waiver
and release shall survive the Close of Escrow. Grantors are aware of and understand all
potential benefits to which they are otherwise entitled and have had the opportunity to discuss
potential benefits with representatives of the City and with legal counsel of their choice.
5. Waiver under Section 1542
The parties intend that this Agreement will result in a full, complete, and final resolution and
settlement of any and all claims, causes of action or disputes which exist, or may exist, between
them as to the acquisition, possession and/or use of the Property by the City, except as expressly
provided herein. It is therefore understood that the waiver, under this Agreement, of any rights,
damages, compensation or benefits to which a party is, or may be, entitled is intended to be full
and complete. Accordingly,
A. Grantors hereby waive any and all rights or benefits arising from and/or related to the City's
acquisition, possession and/or use of the Property that it may have under section 1542 of the
Civil Code of the State of California which provides:
Page 3 of 12
1346811,1
"a general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if known by
him must have materially affected his settlement with the debtor."
B. The Grantors represent and warrant that they understand the effect of this waiver of section
1542 and have had the opportunity to discuss the effect of this waiver with counsel of their
choice.
6. Title Insurance
City may obtain a CLTA extended coverage policy of title insurance in the amount of the Purchase
Price insuring that clear title to the Property is vested in City upon recording of the Grant Deed.
7. Possession and Use of the Property Pending Close of Escrow
It is agreed and confirmed by the parties hereto that notwithstanding other provisions in the
Agreement, the right of possession and use of the Property by City, including the right to remove
and dispose of improvements, shall commence on the date the amount of funds as specified in
Clause 2A of the Agreement are deposited into the escrow controlling this transaction. The amount
shown in Clause 2A of the Agreement includes, but is not limited to, full payment for such
possession and use, including damages, if any, from said date. It is further agreed that,
notwithstanding the City's right of possession and use of the Property set forth in this paragraph, the
single-family residence will be protected in place until the Close of Escrow. However, City makes
no representation that the Project shall be constructed, and no liability or obligation whatsoever shall
be incurred by City by reason of any failure to construct the Project for any reason. If, after City
takes possession, the Property subsequently is not acquired by City for any reason, City shall restore
the Property to the condition existing prior to the City's possession or use hereunder, unless
otherwise agreed by the parties.
8. Eminent Domain
A. It is mutually understood that the acquisition of the Property by City is for a public purpose,
and therefore, the Property is otherwise subject to taking by the power of eminent domain.
The acquisition by and through this Agreement is in lieu of City's exercise of the power of
eminent domain.
B. If any eminent domain action that includes the Property, or any portion thereof, has been filed
by City and after said filing the Grantors subsequently agree and consent to the dismissal of
said action, then the Grantors hereby waive any and all claims to any money that may have
been deposited in any Court or with the State Treasurer in any such action and waive any and
all claims for damages, costs, or litigation expenses, including attorney's fees, arising by
virtue of the abandonment of the action pursuant to Section 1268.510 of the California Code
of Civil Procedure.
9. Amendment
This agreement may be modified, changed, or rescinded only by an instrument in writing executed
by the parties hereto.
10. No Leases
A. Grantors warrant that there are no leases on all or any portion of the Property exceeding a
period of one month, and the Grantors further agree to defend and indemnify and hold the
City harmless and reimburse the City for any and all of its losses and expenses occasioned by
Page 4 of 12
1346811,1
reason of any tenant, lease or occupant of all or a portion of the Property for a period
exceeding one month. A general release or quitclaim deed will be required from any lessee
that has a lease term exceeding one month. Said general releases or quitclaim deeds are to be
provided to Escrow Holder or the City prior to the Close of Escrow.
Grantors agree not to assign, transfer or sell to any third party any right, title or interest
Grantors have in the Property.
11. Grantors' Representations
A. Grantors make the following representations and warranties:
L Grantors certify that they own full legal title to the Property, and have full power and
authority to convey all property rights described herein to City.
ii. This Agreement constitutes a legal, valid, and binding obligation of Grantors enforceable
in accordance with its terms.
iii. To the best of Grantors' knowledge there is no suit, action, arbitration, legal,
administrative or other proceeding or inquiry pending or threatened against the
Property, or any portion thereof, or pending or threatened against Grantors which could
(i.) affect Grantors' title to the Property, or any portion thereof., (ii.) affect the value of
the Property, or any portion thereof, or (iii.) subject Grantors to liability.
iv. To the best of Grantors' knowledge, there are no uncured notices, which have been
served upon Grantors from any governmental agency notifying Grantors of any
violations of law, ordinance, rule, or regulation, which would affect the Property, or any
portion thereof.
v. There are no Hazardous Substances (as defined in Paragraph 14 below), or storage tanks
containing Hazardous Substances, in, on, under, or about the Properly.
vi. To the best of Grantors' knowledge, there has been no production, storage, disposal,
presence, observance, or release of any Hazardous Substances in, on, under, or about
the Property.
vii. The Grantors and the Property are not in violation of any federal, state, or local law,
ordinance, regulation, order, decree, or judgment relating to Hazardous Substances
and/or environmental conditions in, on, under, or about the Property.
viii.To the best of Grantors' knowledge, there are no notices or other information giving
Grantors reason to believe that any conditions existing on the Property or in the vicinity
of the Property subject or could subject any Grantors of the Property to potential
liabilities under any federal, state or local law, statute, ordinance, regulation, rule, order,
decree, or other governmental requirement that pertains to the regulation of Hazardous
Substances and/or the protection of public health and safety and/or the environment,
including, but not limited to, the ambient air, soil, soil vapor, groundwater, surface
water or land use.
ix. To the best of Grantors' knowledge, there are no violations of any federal, state or local
law, statute, ordinance, regulation, rule, order, decree, or other governmental
requirement that pertains to the regulation of Hazardous Substances and/or the
protection of public health and safety or the environment, including, but not limited to,
the ambient air, soil, soil vapor, groundwater, surface water or land use, not of any
Page 5 of 12
1346811.1
legal, administrative or other action or proceeding, pending or threatened, affecting the
Property and relating to Hazardous Substances and/or environmental compliance.
x. To the best of Grantors' knowledge, there is no license, permit, option, right of first
refusal, or other agreement, written or oral, which affects the Property or any portion
thereof. Grantors will defend and indemnify the City, its successor and/or assigns
against any and all claims, demands, causes of action filed against the City, its
successors/or assigns by someone claiming a legal interest in or right to the Property, or
any portion thereof.
xi. To the best of Grantors' knowledge conveyance of the property rights described herein
will not constitute a breach or default under any agreement to which Grantors are bound
and/or to which the Property is subject.
B. Each of the above warranties and representations is material and is relied upon by City
separately and collectively. Each of the above representations shall be deemed to have been
made as of the date that the Grant Deed is recorded. If, before the recording of the Grant
Deed, Grantors discover any information or facts that would materially change any of these
warranties and representations, Grantors shall immediately give notice in writing to City of
such facts and information. If any of the foregoing warranties and representations cease to
be true before the recording of the Grant Deed, the City may, at its unfettered discretion,
either cancel and terminate this Agreement or give the Grantors the option to remedy the
problem before the recording of the Grant Deed or deduct from the payments required by
Section 2, above, as a credit to City, in an amount as determined by the City reasonably
required to remedy the problem.
12. Hazardous Substances
A. Liability for Hazardous Substance
The parties acknowledge, understand, and agree that any liability associated with the
presence of any Hazardous Substances, as -defined-below, on- or--adjacent-to any portion of
the Property shall be governed by the provisions of Section 15 below, regardless of whether
any inspection, examination, sampling, testing, assessment, or other investigation is
conducted by City.
"Hazardous Substance(s)" includes, but is not limited to, any hazardous or toxic
substance, material or waste, or any solid waste, pollutant, or contaminant that is:
(i) Regulated by any local governmental agency, the State of California or the United States
Government; (ii) defined as such in any federal, State, or local statute, ordinance, rule, or
regulation applicable to the property, including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended (Title 42
United States Code sections 9601-9675), the Resource Conservation and Recovery Act
(Title 42 United States Code sections 6901-6992k), the Carpenter -Presley -Tanner
Hazardous Substance Account .Act (California Health and Safety Code sections 25330-
25395), and the Hazardous Waste Control Law (California Health and Safety Code sections
25100-25250.25); (iii) listed in the United States Department of Transportation Table (49
CFR § 172.101) or by the Environmental Protection Agency, or listed as hazardous
substances by any equivalent State of California or local governmental agency, or any
successor agency (40 CFR Part 302); (iv) asbestos or asbestos containing material; (v) radon
gas; (vi.) petroleum or petroleum fractions; (vii) any explosive substances (viii)
polychlorinated biphenyl; (ix) a radioactive material, and (x) per chlorate.
Page 6 of 12
t34681 1.1
13. Indemnification
A. Grantors agree and covenant to indemnify, defend (with counsel acceptable to the City) and
hold the City and its officers, employees and agents, harmless from and against any and all
liabilities, penalties, losses, damages, costs, expenses (including reasonable attorneys' fees,
whether for outside counsel or the City Attorney), causes of action, claims, or judgments
that arise by reason of any death, bodily injury, personal injury, property or economic
damage, or violation of any law or regulation, or damage to the environment, including
ambient air, soil, soil vapor, groundwater, or surface water, and resulting from or in any way
connected with:
i. any acts or omissions related to the performance of this Agreement;(ii) any breach of
this Agreement, or; (iii.) the occupancy or use of the Property (including, but not limited
to, the use, storage, treatment, transportation, release, or disposal of Hazardous
Substances on or about any portion of the Property), by the Grantors, their officers,
employees, agents, engineers, contractors or subcontractors, or any other person or
entity employed by or acting on their behalf.
B. The parties further agree and understand as follows: a party does not, and shall not be
deemed to, waive any rights against the other party which it may have by reason of the
aforesaid indemnity and hold harmless agreement because of any insurance coverage
available; the scope of the aforesaid indemnity and hold harmless agreements are to be
construed broadly and liberally to provide the maximum coverage in accordance with their
terms; no specific term or word contained in this Section shall be construed as a limitation
on the scope of the indemnification and defense rights and obligations of the parties unless
specifically so provided. The provisions of this Section shall survive the recording of any
deeds hereunder.
14. Notices
Any notice that either party may or is required to give the other shall be in writing, and shall be
either personally .delivered or sent by registered or certified mail, return receipt requested. If by
mail, service shall be deemed to have been received by such party at the time the notice is delivered,
to the following address:
To City:
City of Tustin
300 Centennial Way
Tustin, CA 92780
Attention: Public Works Director
With a copy to:
Woodruff, Spradlin & Smart
555 Anton Boulevard, Suite 1200
Costa Mesa, CA 92626
Attention: David Kendig, City
Attorney
15. Recording
1346811,1
To Grantors:
Chong Sang Kim and Cho Hea Kim, Trustees of
The Kim Trust, dated October 3, 1990
2061 Valhalla Drive
Santa Ana, CA 92705
The fully executed Grant Deed will be recorded in the Recorder's Office for the County of Orange.
Page 7 of 12
16. Binding on Successors
This Agreement shall be binding on and shall inure to the benefit of the City and Grantors, and their
respective heirs, personal representatives, successors, assigns, and transferees, and their past, present
and future officers, employees and agents. The City may freely assign any or all of its interests or
rights under this Agreement.
17. Brokers
Grantors and City each warrant to the other that no person or entity can properly claim a right to a
commission, finder's fee, or other compensation with respect to the transaction contemplated by this
Agreement, If any broker or finder makes any claim for a commission or finder's fee, the party
through which the broker or finder makes such claim shall indemnify, defend and hold the other
party harmless from all liabilities, expenses, losses, damages or claims (including the indemnified
party's reasonable attorneys' fees) arising out of such broker's or finder's claims.
18. Time of Essence
Time is of the essence for each condition, term, and provision in this Agreement.
19. Waivers
No waiver of any breach of any covenant or provision in this Agreement shall be deemed a waiver
of any other covenant or provision in this Agreement and no waiver shall be valid unless in writing
and executed by the waiving party.
20. Severability
If any term or provision of this Agreement shall, to any.extent, be held invalid or unenforceable, the
remainder of this Agreement shall not be affected, so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner adverse to either party. Upon such
determination that any term or provision is illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties
as closely as possible in an acceptable manner to the end that transactions contemplated hereby are
fulfilled to the greatest extent possible.
21. Construction
Section headings are solely for the convenience of the parties and are not a part of and shall not be
used to interpret this Agreement. The singular form shall include the plural and vice versa. This
Agreement shall not be construed as if it had been prepared by one of the parties, but rather as if
both parties have prepared it. Unless otherwise indicated, all references to Sections are to this
Agreement.
22. Governing Law
This Agreement shall be construed in accordance with and governed by the laws of the State of
California. Any legal action arising under or related to this Agreement shall be brought and
prosecuted in the Orange County Superior Court.
23. Enure Agreement
The parties have herein set forth the whole of their Agreement. All prior oral discussions,
representations, and/or agreements, if any, are specifically superseded by this Agreement, which is
Page 8 of 12
1346811.1
intended by the parties to contain all of the terms and conditions agreed to by thein with regards to
acquisition of the Property by City,
24. Signatures on Behalf of an Entity
Each individual executing this Agreement on behalf of all entity represents and warrants, that he or
she has been authorized to do so by the entity on whose behalf he or she executes this. Agreement
and that said entity will thereby be obligated to perform the terins of this Agreement.
25, Counterparts
This Agreement i -nay be executed in counterparts, including by facsimile or Q-.Ina'il, each. of which so
executed shall, irrespective of the date of its execution, and delivery, be deemed all original, and all
such counterparts together shall constitute one and, the same insft-urnerit,
26., City Council Approval
This Agreement may be subject to approval by the City's governing City Council.
IN WITNESS WHEREOF, the parties have executed this Agreement on the dates set forth below.
GRANTORS:
Chong Sang Kim and Cho Ilea Mm, Trustees of
The JQm Trust, dated October 3, 1990
GRANTEE:
CITY OF TUSTIN, a municipal
corporation of the State of California
Date:
0
Mine.:
Its:
APPROVED AS TO FORM:
By:
'City Attorney
Date:
ATTEST.
By:
Name,
Title:'
Date,
Page 9 of 12
1�,46811,1
EXMBI T «All9.
Legal Description of Property
THE LAID REFERRED TO HEREIN.IS SITUATED IN COUNTY OF ORANGE, STATE OF CALIFORNIA, ANTI)I
DESCRIBED AS FOLLOWS:
LOT 80 OF TRACT NO. 389 , IN THE COUNTY OF ORANGE, STATE OF CALIFOM' , AS PER MAP RECORDED
IN BOOK 166 PAGES 5 TO 11, INCLUSIVE OF, MISCELLANEOUS MAPS, Ili THE OFF, ICE OF THE. COUNTY
RECORDER OF SAID COUNTY.
Page 10 of 12
1346811.1
EXHIBIT "B"
Plat Map
In
Page 11 of 12
1346811.1
EXHIBIT "C"
Grant Deed
Page 12 of 12
1346811.1
City of Tustin
300 Centennial Way
Tustin,,, CA 92780,
Attn: City Clerk
APN: 104-611-30
No, recording fee required: SPACE ABOVE THIS LINE FOR
Exempt pursuant to Code 27383
Chong Sang Kim and Gho Hea Kim, Trustees of The Kim Trust, dated October 3, 1990
(hereinafter, individually and collectively, "Grantor"), Is the owner of that certain real property
located in the County of Orange, State of California, designated as Assessor's Parcel Number 104-
611-30 ("Grantor's Property"),
FOR VALUABLE CONSIDERATION, receipt, of Which Is,. hereby acknowledged, Grantor
hereby grants to the CITY OF I TUSTIN, a municipal corporation, ("Grantee"), all that real,
property more particularly described in Exhibit "A' and depicted in Exhibit "B"' attached hereto,
which are incorporated herein by this reference.
5r, 2- 9>/,A-
4
1346134.1
Chong Sang Kim and Cho Hea Kim, Trustees
of The Kim Trust, dated October 3, 1990
414�elo-44,
Uhong011ng On, Trustee
(Lo, 4
C4 k
Cho Hea 'Kim, `Trustee
ACKNOWLEDGEMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who
signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of
that document.
STATE OF
COUNTYOF
X g
On A before me Notary Public, personally
appeared 7kA7 X7
o proved to
me on the basis Wsitisfactry evidence to be the person(s.) whose name(s) /are subscribed to the within
instrument and acknowledged to me that.h6fsVe/they.executed the same in hid/h,grltheir authorizedcapacity(les), and
that by Vs/h,6r/their signature(s) on the instrument the person(s), or the entity upon behalf of which the',person(s)
acted,, executed the instrument,
I certify. under PENALTY OF PERJURY under the laws of the State Of California that the foregoing paragraph I is true
and correct.
WITNESS, my hand and official sea].
(Seal)
"
Signa ure
1346134A
CERTIFICATE OF ACCEPTANCE
THIS IS TO CERTIFY, that the City of Tustin, a municipal corporation, hereby accepts for public
purposes the real property described in the within deed and consents to the recordation thereof.
DATED:
By:
Name:
Its:
1346134.1
EXHIBIT "A"
LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN IS SITUATED IN COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS
DESCRIBED AS, FOLLOWS:
LOT 80 OF TRACT NO. 398, ISI THE COUNTY OF ORANGE, STATE OF -CALIFORNIA, AS PER MAP RECORDED
IN 1300K 166 PAGES 5 TO 11, INCLUSIVE OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY
RECORDER OF SAID COUNTY.
1346134.1
1346134.1
EXHIBIT "B"
PLAT MAP
I
ATTACHMENT 3
RESIDENTIAL LEASE AGREEMENT
RESIDENTIAL LEASE AGREEMENT
In consideration of the covenants herein, the City of Tustin, a municipal corporation of the State of
California ("LANDLORD") hereby leases to Chong Sang Kim and Cho Hea Kim, Trustees of The
Kim Trust, dated October 3, 1990 (collectively referred to hereinafter as "TENANT") the property
located at 2061 Valhalla Drive, Santa Ana, California 92705 (the "PROPERTY").
LANDLORD and TENANT now covenant and agree that the following terms and conditions
shall govern this Lease.
1. TERM & RENT. The, term begins on close of escrow between the parties, and shall continue
until TENANT vacates the PROPERTY but no later than January 31, 2019. TENANT shall be permitted
to occupy the PROPERTY without the payment of rent on the condition that TENANT complies with the
terms and conditions set forth in this Residential Lease. Agreement ("AGREEMENT"),
2. UTILITIES. TENANT shall pay for all water, gas, heat, light, power, telephone, trash disposal,
and other utilities and services provided to the PROPERTY during the term of the Lease until TENANT
vacates the PROPERTY. TENANT will terminate any and all accounts for said services when TENANT
vacates the PROPERTY.
3. USE OF THE PROPERTY. LANDLORD recognizes that TENANT has been in possession of
the PROPERTY as the prior owner. TENANT shall continue its use of the PROPERTY as a residential
property. TENANT shall not permit any use of the PROPERTY which will adversely affect or make
voidable any insurance on the PROPERTY, or on the contents of said PROPERTY, or which shall be
contrary to any law, regulation or recommendation made by the Insurance Services Office (or successor
organization), state fire prevention agency, local fire department, LANDLORD's insurer or any similar
entity, TENANT shall on demand reimburse LANDLORD for all extra insurance premiums caused by
any change in TENANT's use of the PROPERTY from its present use.
4. COMPLIANCE WITH LAWS. LANDLORD and, TENANT contemplate and agree that
TENANT will continue to use the PROPERTY in the same manner as it has been used by TENANT prior
to the execution of this Lease for the duration of this Lease. TENANT shall continue to be responsible
for the PROPERTY.
5. ASSIGNMENT OR SUBLEASE. In no case may TENANT assign this Lease or sublet the
PROPERTY to any other persons or entities without first obtaining written permission from
LANDLORD.
6. MAINTENANCE OF PROPERTY. TENANT shall continue to maintain the PROPERTY
including electrical, plumbing and water systems, if any, and keep glass, windows, and doors in an
operable and safe condition. TENANT shall keep the PROPERTY free of trash and debris and shall
comply with all applicable laws and regulations concerning the use of the PROPERTY. If TENANT fails
to maintain the PROPERTY, LANDLORD may contract for or perform such maintenance, and charge
TENANT for the cost.
7. ALTERATIONS. TENANT shall not make structural alterations, additions or improvements of
any kind to the PROPERTY, but may make nonstructural alterations, additions or improvements with
LANDLORD'S prior written consent. All such allowed alterations, additions and improvements shall be
at TENANT's expense and shall conform with LANDLORD's building standards and construction
specifications. If LANDLORD or its agent provides any services or maintenance for TENANT in
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connection with such alterations, additions and improvements or otherwise under this Lease, TENANT
will promptly pay any just invoice. Any alterations, additions and improvements added hereafter shall
become part of the PROPERTY of LANDLORD.
8. MECHANICS LIENS. TENANT shall keep property free from any liens arising out of any work
performed, material furnished, or obligations incurred by TENANT.
TENANT shall obtain a lien waiver from any contractor it employs prior to commencement of any work.
TENANT shall not permit any mechanics' liens, or similar liens, to remain upon the PROPERTY in
connection with any work performed or claimed to have been performed at the direction of TENANT and
shall cause any such lien to be released or removed forthwith without cost to LANDLORD.
TENANT shall indemnify, defend with counsel selected by LANDLORD, protect and hold LANDLORD,
its officers, directors, employees, agents, successors and assigns, and any successor or successors to
LANDLORD'S interest harmless from and against all claims, actual damages (including, but not limited
to, special and consequential damages), punitive damages, injuries, costs, response costs, losses,
demands, debts, liens, liabilities, causes of action, suits, legal or administrative proceedings, interest,
fines,. charges, penalties, and expenses (including, but not limited to, attorneys' and expert witness fees
and costs incurred in connection with defending against any of the foregoing or in enforcing this
indemnity) of any kind whatsoever paid, incurred or suffered by, or asserted against, the PROPERTY, or
any indemnified party directly or indirectly arising from or attributable to any work performed, material
furnished, or obligations incurred by TENANT.
9. FIRE PREVENTION. TENANT agrees to use every reasonable precaution against fire, to
provide and maintain approved, labeled fire extinguishers as required or recommended by the local fire
department, LANDLORD'S insurer or any similar entity.
10, INSURANCE. TENANT shall obtain .and keep in force a Residential General Liability policy of
insurance protecting TENANT and naming LANDLORD as an additional insured against claims for
bodily injury, personal injury and property damage based upon or arising out of the ownership, use,
occupancy or maintenance of the PROPERTY, and all areas appurtenant thereto. Such insurance shall be
on an occurrence basis providing single limit coverage in an amount not less than $1,000,000 per
occurrence with an annual aggregate of not less than $2,000,000, an "Additional Insured -Managers or
Lessors of Premises Endorsement" and contain the "Amendment of the Pollution Endorsement" for
damage caused by heat, smoke, or fumes from a hostile fire. The policy shall not contain any intra -
insured exclusions as between insured persons or organizations, but shall include coverage for liability
assumed under this Lease as an "insured contract" for the performance of TENANT's indemnity
obligations under this Lease. The limits of said insurance shall not, however, limit the liability of
TENANT nor relieve TENANT of any obligation hereunder. All insurance carried by TENANT shall be
primary and not contributory with a similar insurance carried by LANDLORD, whose insurance shall be
considered excess insurance only. TENANT shall provide LANDLORD with a certificate of insurance
evidencing such insurance.
11. SECURITY MEASURES. TENANT hereby acknowledges that LANDLORD is not responsible
to provide any security measures during the term of this Lease and that LANDLORD shall have no
obligation whatsoever to provide same. TENANT assumes all responsibility for the protection of the
PROPERTY, TENANT, its agents and invitees to the PROPERTY from the acts of third parties.
12. HAZARDOUS MATERIALS. Hazardous materials are those substances listed in California
Code of Regulations, Title 22, or those which meet the toxicity, reactivity, corrosivity or flammability
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1346132,1
criteria of Title 22 of the above Code, as well as any other substance which poses a hazard to health or
environment.
Except as otherwise permitted in this Agreement, TENANT shall not use, create, store or allow any such
substances on the premises. Fuel stored in a motor vehicle for the exclusive use in such vehicle is
excepted.
In no case shall TENANT cause or allow the deposit or disposal of any such substance on the property
described in the Preamble. However, household products necessary for routine cleaning and maintenance
of the property may be kept in quantities reasonable for current needs.
LANDLORD, or its agents or contractors shall at all times have the right to go upon and inspect the
property and the operations conducted thereon to assure compliance with the requirements herein stated.
This inspection may include taking samples of substances and materials present for testing, and/or testing
soils or underground tanks on the premises.
13. INDEMNIFICATION OF LANDLORD. Except for LANDLORD'S gross negligence or willful
misconduct, TENANT shall indemnify, defend, and hold harmless, the PROPERTY, LANDLORD, its
officers, directors, employees, agents, successors and assigns, from and against any and all loss of rents
and/or damages, liabilities, judgments, claims, expenses, penalties, and attorney's fees and consultants'
fees arising out of, involving, or in connection with the use and/or occupancy of the PROPERTY by
TENANT. If any action or proceeding is brought against LANDLORD by reason of any of the foregoing
matters, TENANT shall upon notice defend the same at TENANT's expense by counsel reasonably
satisfactory to LANDLORD. LANDLORD need not have first paid any such claim in order to be
defended or indemnified.
14. EXEMPTION OF LANDLORD FROM LIABILITY. LANDLORD shall not be liable for injury
or damage to the person or goods, wares, merchandise or other property of TENANT, TENANT's
employees, contractors, invitees, customers or any other person in or about the PROPERTY, whether
such damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, or from the
breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing,
HVAC or lighting fixtures, or from any other cause, whether the said injury or damage results from
conditions arising upon the PROPERTY or from other sources or places. This exemption does not apply
to LANDLORD'S active negligence. or willful misconduct.
15. ASSUMPTION OF RISK AND INDEMNITY. TENANT assumes all risk of loss to itself, which
in any manner may arise out of the use of the PROPERTY under this Lease. Further, TENANT, its
successors and assigns, shall indemnify and defend LANDLORD and its officers, directors, employees,
agents, successors and assigns against any liability and expenses, including the reasonable expense of
legal representation whether by special counsel or by LANDLORD's City Attorney's Office, resulting
from injury to or death of TENANT, its successor and assigns, and invitees, and any person who
otherwise is lawfully on the PROPERTY; or damage to any property, including property of
LANDLORD, or damage to any other interest of LANDLORD, including but not limited to suit alleging
noncompliance with any statute or regulation which in any manner may arise out of the issuing of this
Lease; or use by TENANT of the PROPERTY. This assumption is not intended to apply to
LANDLORD'S gross negligence or willful misconduct.
16. WAIVER. The waiver by LANDLORD of any breach of any term, covenant, or condition herein
contained shall not be deemed to be a waiver of such term, covenant, or condition, or of any subsequent
breach of the same or any other term, covenant, or condition herein contained.
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1346132,1
17. LANDLORD'S RIGHT OF ENTRY. LANDLORD may enter and inspect the PROPERTY upon
reasonable advance notice of at least 24 hours to TENANT.
18, BROKERAGE. TENANT warrants and represents to LANDLORD that TENANT has dealt with
no broker or third person with respect to this Lease, and TENANT agrees to indemnify LANDLORD
against any brokerage claims arising out of this Lease. LANDLORD warrants and represents to
TENANT that LANDLORD has employed no exclusive broker or agent in connection with this Lease. If
either party introduces a broker or third person on its behalf for any extension, renewal or expansion of
this Lease, any fees or commissions shall be the sole responsibility of the party engaging such broker or
third person.
19. NOTICE. Any notice that either party may or is required to give the other shall be in writing, and
shall be either personally delivered or sent by regular U.S. Mail, to the following addresses:
To TENANT:
Chomg Sang Kim and Cho He Kim, Trustees
of The Kim Trust, dated October 3, 1990
2061 Valhalla Drive
Santa Ana, CA 92705
To LANDLORD:
City of Tustin
300 Centennial Way
Tustin, CA 92780
With a copy to:
David Kendig
City Attorney
Woodruff, Spradlin & Smart
555 Anton Boulevard, Suite 1200
Costa Mesa, CA 92626
In the event either address changes, notice shall be given to the other party.
20. SURRENDER. On or before the termination of this Lease, TENANT shall remove all of
TENANT's goods and effects from the leased premises, and shall deliver to LANDLORD actual and
exclusive possession of the PROPERTY and all keys and locks thereto. Any of TENANT's property that
remains on the PROPERTY upon termination of the Lease shall be deemed abandoned and shall be
disposed of as LANDLORD sees fit, with no liability to TENANT for loss or damage thereto, and at the
sole risk of TENANT. LANDLORD may remove and store any such property at TENANT's expense;
retain same under LANDLORD's control; sell same at public or private sale (without notice) and apply
the net proceeds of such sale to the payment of any sum due hereunder; or destroy same.
21. VALIDITY/SEVERABILITY. If any provision of this Lease is held to be invalid, such invalidity
shall not affect the validity or enforceability of any other provision of this Lease.
22. ATTORNEYS' FEES. In the event action is brought by any party to enforce the terms of this
Lease or to recover possession of the PROPERTY, the prevailing party shall be entitled to recover from
the other party reasonable attorneys' fees and costs associated therewith.
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1346132.1
23, AMENDMENT. The terns of this Lease may not be modified or amended except by an
instrument in writing executed by each of the parties hereto.
24. TIME OF ESSENCE. Time is of the essence of each and every term, condition, obligation, and
provision hereof.
25, ENTIRE AGREEMENT. This Lease and the Agreement ri
ent for Acquisition of Real Property
entered into between the parties constitute the entire agreement between the patties with respect to the
terms of the Lease and`' the purchase and, sale of the PROPERTY and supersede any oral or written
representations or agreements that may have been made by either patty.
IN WITNESS WHEREOF, the parties, have executed this Agreement the dates" set forth below.
TENANT:
Chong Sang Kim and Cho Rea Mm, Trustees of
The Kim Trust, dated October 3,,1990
Date,- 0
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1346132A
LANDLORD:
CITY OF TUSTIN, a municipal,
corporation of the State of California
By:
Name:
Its:
Date:
APPROVED AS TO FORM:
By:
City Attorney
Date:
ATTEST:
M
Name;
Title:
Date: