Attachment F
Real Property ConveyanceQuestionnaire
for Newport Dunes Lease Amendment
1.What property interest is being considered for conveyance?
This is a modification of a lease and option agreement approved August 25, 2009.
a)Why is this propertyleasebeing considered foramendmentlease, license, sale or other conveyance?
The proposed amendment allows the construction of up to two hotel structures and extends the option period to complete the contemplated hotel(s).
b)How and who initiated the amendmentidentified this property as a potential conveyance?
The tenant initiated the request in connection with tenant’s negotiations with the hotel developer.
c)What factors are key in recommending thisamendmentproperty for conveyance?
Option extension period and two hotel structures will incentivize hotel development on the premises.
d)How does the proposal proposed conveyancefit into the County’s/District’s strategic or general plan?
The existing lease currently allows construction of a hotel on the leasehold premises. The amendment merely allows for construction of up to two structures without a change in the maximum number of rooms, thus the potential development remains a fit in County plans.
e)What are the short and long term anticipated uses of the property?
Leasehold premises will continue to be used as a public recreation area. Long term plans call for development of up to two hotel structures on the property.
f)Are there any limitations on the use of the property in the conveyance documents?
Lease amendment will allow development of two hotel structures on the premises, whereas under the existing terms only one structure is allowed. There will be no change in the total number of guest rooms allowed, which is currently limited to 275 rooms.
2.What analysis has been performed as to whether to allow the proposed developmentconvey the proposed real property interest?
The proposed developer provided financial projections for the two-hotel concept
a)Have there been any internally or externally prepared reports regarding this property conveyance?
Developer has provided a portfolio of its hotels and its experience.
b)Who performed the analysis?
CEO/Real Estate reviewed the portfolio and financial projections.
c)Provide details about the analysis and cost/benefit comparison.
No cost/benefit comparison made since there is currently no hotel on the premises and no construction/development costs will be borne by County.
3.How was the conveyance price, or lease/license rent, determined?
No change in rental terms.
a)Who performed the appraisal or market study and what certifications do they possess?
No appraisal or market study required as the proposed amendment does not affect the existing rental structure.
b)How does the price/rent compare with comparable properties?
No change in rent or payment structure, thus no comparison conducted.
c)Does the setting of the price/rent follow industry standards and best practices?
Yes
d)What are the specific maintenance requirements and other costs within the agreement and who is
responsible? Provide an estimate of the costs to the County/District if applicable.
The amendment does not change any existing maintenance or other costs responsibilities.
4.What additional post-conveyance remodeling or upgrade costs will be needed for theproperty to meet its
intended use?
Although anticipated, proposed hotel development is in very early conceptual-plan stage. Thus, associated costs unknown at this time.
a)Will any of the upgrades be required to meet County, ADA, or other standards andrequirements?
Unknown at this time
b)Include estimates of the costs.
Unknown at this time
c)What entity will be responsible for the costs?
Tenant or hotel developer
5.Can the County terminate lease?
Yes, if tenant is in default of lease.
a)What would be necessary to terminate the agreement and when can it be terminated?
Written notice of an uncured default.
b)Are there penalties to terminate the lease?
No, but tenant must be given an opportunity to cure the default that would lead to termination of the lease.
6.What entity will be responsible for the payment(s)?
Tenant is responsible for all terms and conditions of the Lease. The lease amendment does not include any changes to the rent or payment thereof.
a)How will the funds received be used or applied?
Funds will continue to be used to operate Newport Bay Tidelands Fund 106.
b)What fund number will the funds from the conveyance ultimately be deposited into?
Funds will continue to be deposited into Newport Bay Tidelands Fund 106
c)If restricted funds might be created or supplemented,check with the Auditor Controller’s General
Accounting Unit and Counsel if you have questions about whether restricted funds are involved.
N/A
d)If restricted funds might be created or supplemented, has County Counsel advised that the destination fund
for the payment(s) is properly restricted?
N/A
7.Does the proposedlease amendment comply with the CEOReal Estate standard language?
Yes
a)List any modified clauses and reasons for modification.
- Clause 2 (Definitions) - Clarify/define terms used in the lease
- Clause 18 (Hotel Development Option) - Extends hotel development option period by five years to allow new hotel developer to develop plans and obtain requisite governmental approvals.
- Clause 19 (Hotel Development Plans) - Allows development of two hotel buildings as opposed to one.
- Clause 40 (Attachments to Lease) - Includes conceptual plans for a two-structure hotel
8. If this is a lease, is it a straight lease, an operating lease, a lease with an option to purchase, or a capital lease?
Operating lease
Newport Dunes Ls Modification1Conveyance Questionnaire 12-23-14 CEO RE