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HomeMy WebLinkAbout06/07/99t. 11 , a.. i., AGENDA ADJOURNED REGULAR MEETING HERMOSA BEACH CITY COUNCIL Monday, June 7, 1999 - Council Chambers, City Hall 7:10 p.m. MAYOR CITY CLERK Robert Benz Elaine Doerfling MAYOR PRO TEM CITY TREASURER Julie Oakes John M. Workman COUNCIL MEMBERS CITY MANAGER John Bowler Stephen R. Burrell Sam Y. Edgerton CITY ATTORNEY J. R. Reviczky Michael Jenkins CALL TO ORDER PLEDGE OF ALLEGIANCE ROLL CALL PUBLIC PARTICIPATION: Although the City Council values your comments, the Brown Act generally prohibits the Council from taking action on any matter not listed on the posted agenda. 1. REVIEW OF CITY APPRAISAL BY JEFFREY NAGASAKI OF LEA ASSOCIATES. 2. DEVELOPMENT TEAM PRESENTATIONS: 7:30pm GANGI DEVELOPMENT 8:00pm PEHA ASSOCIATES/TRIWELL PROPERTIES 8:30pm ROGER BACON CITIZEN COMMENTS ADJOURNMENT NOTE: THIS MEETING WILL BE TELEVISED LIVE ON CENTURY CABLE 1 • • June 1, 1999 Honorable Mayor and Members Special Meeting of of the Hermosa Beach City Council June 7, 1999 SUBJECT: EVALUATION OF REQUEST FOR PROPOSAL AND QUALIFICATION STATEMENT (RFP/RFQ) SUBMITTALS TO DEVELOP RETAIL/OFFICE BUILDING IN CONNECTION WITH DOWNTOWN PARKING STRUCTURE Recommendation: That the City Council: 1. Select the development team of Peha & Associates & Triwell Properties for the property ground lease. 2. Direct staff to negotiate terms for ground lease with selected development team. 3. Require a ground lease term of 50 years. 4. Require a ground lease value commensurate with the fair market appraisal for the property. 5. Require that the public sidewalk adjacent the project site be improved with special paving and landscaping consistent with the Lower Pier Avenue streetscape. 6. Require reimbursement of $2,500 for a lateral sewer line serving the subject property, currently being installed in connection with parking structure construction. 7. Require exterior of the east wall of the project be contiguous with the exterior of the parking structure and finished and painted to match the parking structure interior. Background: On March 23, 1999, the City Council directed staff to proceed with issuance of an RFP/RFQ for the retail building at the North Pier Parking Structure. On May 3, 1999 senior staff conducted interviews and evaluated proposals from prospective developers. On May 11, 1999 the City Council set a special meeting for Thursday, June 7, 1999 to review the project proposals and conduct interviews to select a development team.. Analysis: Staff issued the RFP/RFQ to 34 development companies and two marketing services, Hawkins/Martel and Construction Market Data, for distribution over the internet. The City received three proposals (submitted to City Council on Monday, May 24, 1999). Most of the firms contacted were interested in developing larger sites and in owning the property rather than a ground lease. The City commissioned a fair market ground lease appraisal from Lea Associates. (Please See Attachment No. 2) Site Characteristics The site is approximately 2,280 square feet with a 24 foot depth and 95 foot length. Three stories of building area over the entire site provides up to 6,840 square feet of gross floor area. All parking is provided in the City's parking structure and no additional parking is required if the project only contains retail and office uses pursuant to the City's Coastal and local development permits and project EIR. The project is proposed to be a ,1. • turn -key development with the selected developer designing, constructing, leasing and operating the building for the term of the lease. The City Council has indicated a preference for retail and office tenants and also recognized snack shops as possible tenants in the proposed project. Each of the submittals contain office or service related tenants and a snack shop use and none contain restaurant tenants. Evaluation of Project Proposals The City needs to select a qualified developer to develop, manage and operate the project. Although the City's risks are minimized by the fact that the City owns the property, if the developer defaults during construction, (because of poor design or inaccurate cost estimates) it will be incumbent on the City to complete the project by leasing the property to another developer. This will delay project completion. If the developer defaults on the loan because the project cannot command the rents shown in the project proforma, the lender will take the first position and there may be a protracted period where the building is either partially or completely vacant. Neither outcome is desirable for the downtown revitalization. Thus it is important that the project presented in the proforma is a project that can be constructed, leased and operated. Once the City selects a developer, it will be necessary to draft the ground lease. The value of the ground lease is related to the value of the property. 8% to 10% is typically considered a good return on investment for rental property. The ground lease terms can range from fixed rent with CPI adjustments to percentage rents. Fixed ground leases are most common and provide a consistent annual rent. Percentage ground leases are keyed to gross receipts of the building tenants and fluctuate with the profitability of tenants. Percentage ground leases require accurate tenant sales information which is often difficult to obtain and creates additional accounting tasks for the City. The submittals include both fixed rent and percentage ground leases. The City's appraisal prepared by Lea Associates concludes that the fair market rent for the property is $28,000. Fair market rental value is described in the appraisal as: "A rental income that the property would most probably command in the open market." The analysis reflects consideration of the benefits of parking rights in the City's parking structure and triple net leases (tenant reimbursement of expenses for maintenance, property taxes and insurance) and assumes a building "hard" cost of $550,000, building shell costs of $90.00 a square foot, average tenant lease rates at $2.12 per square foot and a return on investment of 10% for the project. The City's appraisal recommends a higher annual ground lease value than any of the proposals. The following provides a description of the submittals. Staff has also prepared a table summarizing the project proposals for reference. (Please see attached table.) F JeCt.. Peha Associates is a local architectural firm which has designed and built commercial and residential projects in the City. Triwell Properties is a property management and development company based in El Segundo and has participated in the renovation and 2 • . management of the Bilowit (Club Sushi) Building on Hermosa Avenue. (Please see developer's proposal for company details.) The project design is intended to reflect the adjacent Bijou Theater building with similar building fenestration, color, materials and detailing. The building is three stories and contains ground floor retail consisting of a Coffee Bean and Tea, Robek's Juice and a third retail tenant which is proposed to be a newsstand. Both Coffee Bean and Robek's Juice have submitted letters of interest in leasing the property, however there is no commitment from a newstand tenant. Retail spaces open onto the pedestrian plaza and Hermosa Avenue street frontage. The upper floors are proposed to be professional offices. The developer indicates that there is interest in leasing the 2na and 3rd floor spaces although no other letter of interest have been submitted. The Coffee Bean (northerly ground floor tenant) utilize the adjacent public sidewalk area for outdoor seating with placement of tables and chairs. The building is proposed to be steel frame construction permitting an open, flexible plan and to minimize the number of building columns. The proposed project schedule is compatible with the City's timeframe for occupancy of the parking structure by January 2000. The design provides a cantilever over the first floor level increasing leasable floor area and building articulation. The project architect indicates the added 2'-0" in depth will facilitate layout of the office spaces which are only 24 feet deep and help make the building more interesting architecturally. The developer is proposing construction costs of $586,000 (hard costs) which is consistent with the appraisal construction values estimated by Lea Associates. Proposed tenant lease rates are triple net (including maintenance, taxes and insurance expenses) and vary from 2.75 per square foot for retail space to $2.00 per square foot for office space. The developer is proposing an annual fixed ground lease of $18,000 with five year CPI adjustments. Project Issues: The proposed building cantilevers over the public right of way by approximately 2'-0" which would require an encroachment permit. The City may not want to permit this building extension. Elimination of this feature would reduce floor area and effect the project proforma. The developer has submitted a plan which includes use of the right of way for seating but does not indicate whether the space would be leased from the City. The developer is proposing a 50 year ground lease because of lender reluctance to commit to a project with a 30 year lease term. According to the developer after the first 20 years the building will be fully depreciated and if the City chooses to not to renew the ground lease at completion of the term, there is little value left for the bank for the duration of the ground lease term. For this reason, a lender will be unlikely to lend on a ground leased property for more than 20 years. Thus, the developer's debt service costs will be higher (amortized over 20 years rather than 30 years), there will be less net cash flow for the project and it will not make economic sense for the bank to lend on the property. The developer has also indicated that most ground leases are typically established for a 50 year term, however a longer term generally applies to larger projects with substantial capital investment according to the City's appraisal. (Please see Lea Associates, Appraisal Report, Land Lease Practices table). The lease values are higher for office and retail tenants than the lease estimates used in the City's appraisal. The proposed average tenant lease values and ground lease is higher than the Bacon proposal 3 • • and lower than the Gangi proposal (a percentage ground lease). It is also lower than the City's own appraised fair market rent value for the property. (Please refer to summary table.) . igFA .: Itag r actor Roger Bacon developed and operates the Ralph's Shopping Center where his office is based and participated_ in development of MacDonald'Restaurant on Pacific Coast Highway in Hermosa Beach. (Please refer to developer's proposal for company details.) The project design is intended to reflect the City parking structure relative to color, materials and detailing according the project architect. The project is a modern building shell constructed of precast panels and containing relief of dolphins on the building frontage. The building is proposed to be steel frame construction permitting an open, flexible plan and to minimize the number of building columns. The proposed project schedule is compatible with the City's timeframe for occupancy of the parking structure by January 2000. The three story building contains ground floor retail consisting of a Starbuck's Coffee and Hawthorn Savings. Both Starbuck's Coffee and Hawthorn Savings have submitted letters of interest in leasing the property. Retail spaces open onto the pedestrian plaza and Hermosa Avenue street frontage. The upper floors are proposed to be professional offices and Allstate Insurance has committed to a portion of the office space. The developer has also requested a 50 year ground lease but would accept a 30 year ground lease. Unlike other proposals, the developer has indicated that he can fund project development without a loan, although the project spreadsheet also includes loan debt service as an option. The developer is proposing to have a radio station occupy a portion of the office space area and cantilever the radio booth over the right of way, however the details for the station were not submitted for staff review. The developer is also proposing to have outdoor seating with placement of tables and chairs along sidewalk areas in connection with Starbuck's coffee. The developer is proposing construction costs of $1,000,000 (hard costs) which is inconsistent with the appraisal construction values estimated by Lea Associates. Proposed average tenant lease rates are $2.00 per square foot and triple net. Project Issues: The developer has submitted a plan and project model which includes use of the right of way for seating but does not indicated whether the space would be leased from the City. The proposed building cantilevers over the public right of way which would require an encroachment permit and the City may not want to permit this building extension. The City's RFP/RFQ required submittal of a 20 year proforma in order to evaluate annual project cash flow, expenditures and rent increases and the developer has only provided an average cost for one year. The proposed average tenant lease values and ground lease are below the two other submittals and the City's own appraised fair market rent value for the property. The developer has indicated that the building hard costs are $1,000,000 with a shell cost of $166.00 per square foot. This is a very high construction cost and may reflect high tenant improvement costs particularly for office tenants. These T.I. costs are charges passed on to tenants, but charged as an expenditure in the proforma. Such improvement 9- costs would be consistent with "Class A" office space but inconsistent with professional office costs expected in this market. The average lease values are higher for office and retail tenants than the lease estimates used in the City's appraisal. The average tenant lease values are lower than the Peha/Triwell and Gangi proposals and the ground lease value is lower than the City's own appraised fair market rent value for the property. (Please refer to summary table.) ::.... Gangi Development is a development company involved in residential and commercial projects and is based in Glendale. The company includes design and construction management as part of its services. (Please refer to developer's proposal for details on company projects.) The project design is a modern building shell incorporating concrete or concrete block construction and plaster finish and standing seam metal roof. The building is proposed to have a central elevator corridor and stairway. The proposed project schedule is compatible with the City's timeframe for occupancy of the parking structure by January 2000, although an exclusive negotiation period and development agreement are also included in the project schedule, which could suggest an extended period of negotiation with the City. A two story building is proposed containing ground floor retail. Coffee Bean and Tea is a suggested tenant although the proposal did not contain a letter of interest. A flower vender and beach related retailer were also suggested. Other potential tenants have submitted letters of interest and the construction financing is proposed through East West Bank. (Please see attached.) Retail spaces open onto a pedestrian plaza and Hermosa Avenue street frontage. The upper floors are proposed to be professional offices. The developer has also requested a 50 year ground lease. The developer is also proposing to have outdoor seating with placement of tables and chairs or sidewalk vending carts along sidewalk areas in connection with retail tenants. The developer is proposing construction costs of $800,000 (hard costs) with a shell cost of $90.00 per square foot. Proposed average tenant lease rates are triple net at $3.25 per square foot for retail and $2.00 per square foot for office. The proposed ground lease is $18,000 year one and $29,316 year two. Thereafter it increases with CPI adjustments of 2%. The ground lease is based upon a percentage lease of 20% gross sales and the minimum annual base ground lease $24,000. Project Issues: The developer has submitted a plan which includes use of the right of way for seating and outdoor selling but does not indicated whether the space would be leased from the City. The proposed building will require additional exiting stairs to meet eggress requirements under the Building Code and this decrease in leaseable area effects the project proforma. The City may not wish to include outdoor sales as part of the project. The proposed average tenant leases and ground lease values are higher than the Peha/Triwell and Bacon proposals and the ground lease value is equivalent to the City's own appraised fair market rent value for the property. (Please refer to summary table.) The project construction costs and ground lease terms are consistent with the City's appraisal, however, there was not much attention to the building design presented in the proposal. The tenant lease costs may be high which means that the proforma revenues may be overstated . This is a potential problem relative to the proposed percentage ground lease for the City. In S • • addition use of a percentage ground lease may severely under value the property over the coming years if the City's downtown revitalization continues and land values continue to escalate. (Property values can exceed CPI adjustment and gross tenant sales percentages if the area is a major pedestrian attraction which is the case in areas such as the Santa Monica Promenade). Thus the City may want to require a fixed ground lease or if a percentage ground lease is to be used it should include rent resetting provisions. Conclusions: Evaluating the annual gross rental for the projects and the annual net income after expenses provides one method to analyze the three submittals financially. The Bacon proposal is lowest on both gross income and net income estimates. For each $1.00 of rent received, the City receives $0.06 of gross revenue or $0.07 per net $1.00 of rent received (excluding debt service.) The Gangi proposal provides $0.17 for each $1.00 of rent received and $0.18 for the net. The Peha proposal provides $0.13 for every $1.00 of gross income. But $0.19 for the net (due to higher expected operating costs.) The City's appraisal shows $0.21 per $1.00 of gross rental income. The ground lease value is higher for Gangi, however, it is based on a percentage ground lease which fluctuates and requires disclosure of tenant sales and auditing by the City. For this reason a fixed ground lease or a variation of a fixed lease is recommended. The Peha/Triwell proposal has the next highest fixed lease value and provides a reasonable and consistent return to the City. The Bacon proposal has the lowest fixed lease value. Staff evaluated the project proposals and interviewed prospective development teams. The strengths and weaknesses of the team proposals were evaluated on: team experience, lease value, project design, and conformance with RFP/RFQ objectives. Based upon the project proposals and interviews staff rated the teams as follows: • Peha Associates/Triwell Properties No. 1 • Gangi Development No. 2 • Roger Bacon No. 3 Staff believes that the details of the lease terms should be negotiated with the development team and presented at a subsequent meeting for City Council approval. Sol Blumen Community Concur: eld Director Development Department Stephen R. Bu j el City Manager Attachments: 1. Project proposals 2. Appraisal 3. Summary Table 6 H:/rfprfq5 RFP/ RFQ Retail Building Submittal Summary Summary Team Hard Costs Shell Retail Lease Office Lease Assumed Rates Annual Ground Lease ROI Loan Major Tenant Interest Design Concept/ Potential Letter of Staff Costs Rates Land Value Rates @ Yr. 5 Value Bldg. Const. Uses Intent/ Score Peha $655,520 $75.00 $2.75 per sq. ft. $2.00 per sq. ft. $79.00 $18,000* (50 yrs.)10% Interest per sq. ft. $630,000 Coffee Bean & Tea Leaf A Coffee/Juices, Yes 1 per sq. ft. Robeks Juice Offices/Specialty Retail, Bacon $1,000,000 $166.00 $2.00 per sq. ft. $2.00 per sq. ft. $55.00 $8,778** (30 yrs.)7% Newsstand per sq.ft. (average) $0 Starbucks Coffee B Coffee/Bank, Yes 3 (average) per sq. ft. (50 yrs. pref.) Hawthorne Savings Offices/Insurance, Gangi $800,000 $90.00 $3.25 per sq. ft. $2.60 per sq. ft. $128.57 $18,000yr. 1*** 11.2% Radio Station per sq. ft. $820,000 Coffee Bean & Tea Leaf C Coffee Shop, Yes 2 per $29,316 yr. 2 (30 yrs.) sq. ft•**** (50 yrs. pref.) Flower Vendor, Beach Apparel, Other $24,000 min. base City $550,000 $90.00 $2.75 per sq. ft. $1.50 per sq. ft. $130.00 $28,000 10% Appraisal per sq. ft. per sq. ft. Retail/Office Notes * Adjustment for CPI every 5 years with maximum of 15% each adjustment. Based on a 7,124 sq. ft. building. ** Adjustment for CPI every 5 years no maximum. Based on a 6,000 sq. ft. building. *** Adjustments for CPI 2% annually. Based on a 4,560 sq. ft. building. * * * * Imputed Land Value = Ground Lease/10% Return / Land Area = $29,316/.10 / 2280 sq. ft. = $293,160/2280 sq. ft. = $128.57 per sq. ft. A. Steel frame construction maximizes clear span for minimum column fall. Increase flexibility of interior spaces. Smooth plaster finish columns and architectural details. Design independent from parking structure reflecting surrounding historic architecture. 2nd and 3rd floor cantilever to increasing building massing and increase gross leasable area and interior layout flexibility. Coffee uses to locate a south end of bldg. adjacent "plaza" B. Steel frame construction maximizes clear span for minimum column fall. Increases flexibility of interior spaces. Precast panels to match parking structure. Design as extension of parking structure. Design concept includes local radio station with cantilever over R.O.W. Design includes tables/chairs in R.O.W. C. Poured in place concrete or block construction with central stairway and elevator. Design with vendor/coffee use of sidewalk plaza areas. Ground Lease To Revenue Comparison Team Ground Lease Peha Bacon Total Net Operating Revenue $18,000/$136,435 = 13.2% $8,778/$136,800 = 6.4 % Gangi $24,000/$128,150 = 18.7% City Appraisal $28,000/$132,788 = 21.0% 6-03-1999 8.29AM FRO.NGI DEVELOPMENT 81824772SP GANGI GSEVELOPMEIIVT April 14, 1999 To: City of Hermosa Beach Community Development Department 1315 Valley Drive Hermosa Beach, CA 90254 Attn: Director Re: Proposal and Qualifications Hermosa Beach Commercial Building I Please find the enclosed response to your RFP! RFQ for the commercial building for the North Pier Parking Structure_ Gangi Development is focusing its efforts to redevelop and revitalize downtown areas. We are very interested in working with the City of Hermosa Beach on this very exiling project. We look forward to meeting to further discuss our proposal. Sincerely, ank Gangi President Jnr Enclosures: P. 2 6252 HONOLULU AVENUE • SUITE 200 • GLENDALE, CA 91214 • TEL: 818 • 247 • 2414 • FAX: 818 • 247 • 7259 06/03/99 09:28 TX/RX NO.6175 P.002 U 6-03-1999 8.29AM FROMONGI DEVELOPMENT 8182477259 • Statement of Qualifications A) Please refer to the corporate brochure for an overview of the firm. The corporate officers and roles that they play in the company are also included in the brochure. Frank Gangi would be the main contact person and act as the project manager. Mark Gangi, AIA would act as the design architect and Frank Gallo, AIA would act as the project architect. Robert Gangi, Esquire would handle the leasing documentation/ negotiations for the project for the firm. Michael Wrenn, PE, would act as the resident engineer. Outside consultants would include Zachery Vorgias of Vorgias Engineering who would act as the electrical engineer, Dick Gilbert of California Energy Design as the mechanical engineer, and Larry Tison of Tison Landscape Architects. B) The resume describing the experience related to the services required to develop and manage the project are also contained in the corporate brochure. The developer has ample experience in managing similar projects. C) The company has recently completed a 12,000 square foot commercial office building in Glendale and a mixed-use retail/ office/ residential project in Burbank. D) The project manager and contact person would be Frank Gang! (818) 247- 2414. E) The information on the team members can again be found in the brochure. The good part of Gangi Development is that all of the main development functions are handled under one roof. Frank Gangi has an MBA In real estate finance, and structures the capital and financing required for the projects. He also is a licensed general contractor. Mark Gangi is a licensed architect who has completed a 30 million dollar mixed-use project. Robert Gangi is in house counsel for the firm and whose legal focus was in land use. 06/03/99 09:28 TX/RX NO.6175 P.003 P_ 3 6-03-1999 8-29AM FROMIWNGI DEVELOPMENT 8182477259 • F) Gangi Development sees the project as an important role in the continued revitalization of Hermosa Beach, as the project can help screen the parking garage now under construction, but most importantly be a project that is based around the pedestrian. The project concept is thus from the pedestrian's perspective. Examination of the site plan shows relief from Thirteenth Street with a plaza along with a water element. The ground floor retail can utilize this outdoor space and it works out well for some outdoor seating, A *Coffee Bean" type tenant is envisioned for the lower retail space along with a potential beach apparel retailer. At the center of the project is a lobby that includes the access way to the second floor office space. The center of the project also features an outdoor patio which lends itself again for outside seating and takes advantage of Hermosa Beach's climate_ The office space envisioned works out well for graphic artists and designers. The project as proposed can begin right away and the time frame for completion is as follows: Exclusive negotiation period 3 months. Approval of ODA 1 month. Completion of plans / engineering / permits 3 months_ Obtaining of financing 3 months. Completion of construction 6 months. The two projects that the firm has recently been involved with the design and construction of would be the Honolulu Office building in Glendale, a 12,000 square foot commercial office building, and a mixed-use project in Burbank that features a 500 car subterranean parking structure (300 spaces of which are for public parking) 60,000 square feet of retail and office space, and 146 units of senior housing on top of the commercial. This mixed-use project was a public-private partnership with the Burbank Redevelopment Agency. We have also worked and completed projects with the Glendale Redevelopment Agency, Culver City Redevelopment Agency, Lancaster Redevelopment Agency and the Los Angeles Community Development Commission. We own and operate the above projects mentioned. We prefer the long term hold on real estate investments. The company has the knowledge of the issues related to the project but is willing to accommodate the desires of the City to reach everyone's goals for the project. Our company prides itself on working closely with Cities to make the projects happen in a timely manner. 06/03/99 09:28 TX/RX NO.6175 P.004 P.4 N 6-03-1999 8:30AM FR GI DEVELOPMENT 81824777E • P_ S The firm has the financial capacity to undertake the project. Confidential financials are enclosed under separate cover. As for the status of ongoing development projects, we are still working on tenant improvements for some of the retail space for the Burbank project. New projects that we are working on include a car wash deal with the Edison company and a public storageproject with the Edison company. (Both of these projects involve a participating ground lease.) We are currently looking for additional new projects to begin.. We have enclosed a conceptual site plan and elevation. This is conceptual only and we are open to discuss and modify the concept to meet the City's requirements. We believe that due to the relative small size of the project, that the leasing will be completed before construction is completed. We are able to construct the project without any pre -leasing requirements_ Construction financing will be through East West Bank, the same, lender who financed the Burbank project. We have a relationship with them and they will finance ground lease projects. Proposed Ground Lease: Please review the enclosed financial pro forma. The details of the ground lease are included in the pro forma. The lease will be personally guaranteed by Salvatore Gangi, the CEO of Gangi Development. The financial pro forma contains a construction cost estimate, operating cash flow and cash flow analysis for a 20 year period. The assumptions are clearly noted and they are tested in the sensitivity analysis section of the report. The sensitivity analysis varies some of the assumptions and views the resultant effect on project yield all thing ceteris paribus. Enclosed you will also find the requested sample tenant lease that we are using with our other commercial projects. 06/03/99 09:28 TX/RX NO.6175 P.005 a 4 • igglIS LITUgglIP-11 Parking Structure 1 Project Site Partial Plan at 1 Parking Structure Hermosa Avenue Commercial Building North Pier Parking Structure Hermosa Beach, California Preliminary Pro Forma Construction Costs Land (leased) 0 Hard Costs Building Shell 4,560 Sq. Ft @ 90 410,400 Tenant Improvements Retail . 2,280 Sq. Ft @ 110 250,800 Office 1,848 Sq. Ft @ 35 64,680 Offsite Improvements 50,000 Landscaping 25.000 Total Direct Costs 800,880 Indirect Costs Architectural and Engineering Permits and Fees Commissions Financing/ Capital Taxs/ Insurance Total Indirect Developer Fee 6%. 6% 48,053 48,053 30,960 72,079 24.026 223,171 102,405 Total Project Costs 1,126,456 Hard Costs (51.2%) M Building Shell ® Retail Improvements MN Office Improvements [� Omaites EES Landscaping Indirect Costs (13.9%) (21.5%) (32.3%) Architectural and Engineering EMI Permits and Fees IMO Commissions 0 Financing/ Capital E• Taro/ Insurance • • • • Land Lease Assumptions Participating Lease Percent of Gross 20% Minimum Annual Base $24,000 Term in Years 30 Year 1 lease amount $18,000 Stabilized Operating Analysis Revenue Monthly Annual Retail $3.25 per sq. ft. NNN 7,410 88,920 Less Expenses 5% reserves (371) (4,446) Less Vacancy 5% (371) (4.446) Net Operating Income 6,669 80,028 Office Less Expenses Less Vacancy Net Operating Income $2.60 per sq. ft. FSG 4,805 57,658 $0.30 per sq. ft. (554) (6,653) 5% (240) (2.883) 4,010 48,122 Total Net Operating Income 10,679 128,1501 Less ground lease (2,443) (29,316) Available for Debt Service Less Available Debt Service OCR - 8,236 98,834 1.3 (6,336) (76,026) Cash Flow 1,901 22,808 Return on Investment (Contributed Developer Fee) 0.94% 11.22% Implied Loan Analysis Assumed Payment Interest Rate Amortization 6,336 8.0% 25 Loan Amount 820,861 Capital Requirement Total Costs 1,126,456 less contributed Developer Fee (102.4051 Subtotal 1,024,051 Less Loan Amount (820,861) [Required Capital 203,1901 Cash Flow Analysis Assumptions Vacancy Year 1 80%, Year 2 stabilized CPI adjustments assumed to be 2% Year 1 debt service paid by interest reserve Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Revenue Retail 88,920 88,920 90,698 92,512 94,363 96,250 98,175 100,138 102,141 104,184 106,268 108,393 110,561 112,772 115,028 Less Expenses (4,446) (4,446) (4,535) (4,626) (4,718) (4,812) (4,909) (5,007) (5,107) (5,209) (5,313) (5,420) (5,528) (5,639) (5,751) Less Vacancy (71.136) (4.4461 (4.4461 (4.4461 14.446) (4.4461 14.446) (4.4461 (4.446) (4.446) (4.4461 (4.446) (4.4461 14.4461 (4.4461 Net Operating Income 13,338 80,028 81,717 83,441 85,198 86,991 88,820 90,685 92,588 94,529 96,508 98,527 100,587 102,687 104,830 Office 57,658 57,658 58,811 59,987 61,187 62,410 63,659 64,932 66,230 67,555 68,906 70,284 71,690 73,124 74,586 Less Expenses (6,653) (6,653) (6,786) (6,922) (7,060) (7,201) (7,345) (7,492) (7,642) (7,795) (7,951) (8,110) (8,272) (8,437) (8,606) Less Vacancy 146.1261 (2.883) 12.8831 (2.883) (2.883) (2.8831 (2.883) (2.883) (2 883) (2.8831 (2.883) (2.883) 12.8831 (2.883) (2.8831 Net Operating Income 4,879 48,122 49,142 50,183 51,244 52,326 53,431 54,557 55,706 56,877 58,073 59,292 60,535 61,804 63,097 Total Net Operating Income 18,217 128,150 130,859 133,623 136,442 139,318 142,251 145,242 148,294 151,406 154,581 157,819 161,122 164,491 167,927 Less ground lease (18,000) (29,316) (29,902) (30,500) (31,110) (31,732) (32,367) (33,014) (33,674) (34,348) (35,035) (35,735) (36,450) (37,179) (37,923) Available for Debt Service • 217 98,834 100,958 103,123 105,332 107,586 109,884 112,228 114,619 117,058 119,546 122,084 124,672 127,312 130,005 Less Debt Service 0 (76,026) (76,026) (76,026) (76,026) (76,026) (76,026) (76,026) (76,026) (76,026) (76,026) (76,026) (76,026) (76,026) (76,026) Cash Flow 217 22,808 24,931 27,097 29,306 31,559 33,857 36,202 38,593 41,032 43,520 46,057 48,645 51,285 53,978 Return on Investment (Contributed Developer Fee) 0% 11% 12% 13% 14% 16% 17% 18% 19% 20% 21% 23% 24% 25% 27% 0% 6% 8% 9% 10% 11% 12% 13% 13% 14% 15% 15% 16% 17% 17% L� otal Annualized Return on Investment 150 100 50 0 -50 100 NM Retail NOI ® Office NOI EM Grout Lease O Debt Service - Cash Row Cash Flow Analysis Year 1 Year 2 Year 3 Year 4 Years Year6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 18 Year 17 X-° ds Year 16 Year 17 Year 18 Year 19 Year 20 117,328 119,875 122,068 124,509 127,000 (5,866) (5,984) (6,103) (6,225) (6,350) (4.4461 (4.4461 (4.446) (4.4461 (4.446) 107,016 109,245 111,519 113,838 116,204 76,078 77,600 79,152 80,735 82,349 (8,778) (8,954) (9,133) (9,316) (9,502) (28831 (2.8831 (2 8831 (2.8831 (2.883) 64,417 65,763 67,136 68,536 69,965 171,433 175,008 178,654 182,374 186,168 (38,681) (39,455) (40,244) (41,049) (41,870) 132,751 135,553 .138,411 141,325 144,298 (78,026) (76,026) (76,026) (76,026) (76,026) 56,725 59,526 62,384 65,299 68,272 28% 29% 31% 32% 34% 18% 19% 19% 20% 21% 1 Year 19 Year 19 Year 20 • • Sensitivity Anlaysis Retail Lease Rate Cash Flow Annual Lease Annualized Year 2 Year 2 ROI Year 2 0.50 921 24,000 0.60 1,910 24,000 0.70 2,900 24,000 0.80 3,889 24,000 0.90 4,878 24,000 1.00 5,867 24,000 1.10 6,856 24,000 120 7,845 24,000 1.30 8,835 24,000 1.40 9,824 24,000 1.50 10,813 24,000 1.60 11,802 24,000 1.70 12,791 24,000 1.80 13,781 24,000 1.90 14,770 24,000 2.00 15,759 24,000 2.10 16,748 24,000 220 17,737 24,000 2.30 18,609 24,117 2.40 19,051 24,664 2.50 19,493 25,212 2.60 19,935 25,759 2.70 20,377 26,306 2.80 20,819 26,853 2.90 21,261 27,400 3.00 21,703 27,948 3.10 22,145 28,495 320 22,587 29,042 3.30 23,029 29,589 3.40 23,471 30,136 3.50 23,913 30,684 3.60 24,355 31,231 3.70 24,797 31,778 3.80 25,239 32,325 3.90 25,681 32,872 4.00 26,123 33,420 - 0.79% -0.70% - 0.60% - 0.50% - 0.39% - 028% - 0.16% -0.03% 0.10% 0.25% 0.40% 0.56% 0.74% 0.93% 1.13% 1.35% 1.59% 1.84% 2.11% 2.33% 2.58% 2.85% 3.15% 3.49% 3.87% 4.30% 4.79% 5.35% 6.01% 6.78% 7.70% 8.82% 10.20% 11.98% 14.31% 17.53% Annualized ROI Year 5 0.01% 0.16% 0.32% 0.49% 0.66% 0.85% 1.05% 1.25% 1.48% 1.71% 1.96% 223% 2.52% 2.83% 3.16% 3.51% 3.88% 424% 4.59% 4.95% 5.34% 5.78% 626% 6.80% 7.41% 8.09% 8.87% 9.77% 10.81% 12.04% 13.51% 15.30% 17.52% 20.35% 24.08% 29.22% Annualized ROI Year 10 0.71% 0.91% 1.12% 1.34% 1.57% 1.82% 2.08% 2.35% 2.64% 2.95% 329% 3.64% 4.01% 4.39% 4.78% 5.17% 5.59% 6.02% 6.47% 6.95% 7.48% 8.06% 8.70% 9.42% 1023% 11.14% 12.19% 13.39% 14.78% 16.42% 18.38% 20.77% 23.73% 27.51% 32.48% 39.35% Annualized ROI Year 20 1.97% 225% 2.55% 2.87% 320% 3.55% 3.90% 4.27% 4.65% 5.05% 5.46% 5.88% 6.33% 6.80% 7.30% 7.83% 8.39% 8.99% 9.64% 10.33% 11.10% 11.95% 12.89% 13.94% 15.12% 16.46% 17.98% 19.72% 21.76% 24.15% 27.02% 30.49% 34.81% 40.32% 47.58% 57.60% • • Office Lease Rate Cash Flow Annual Lease Annualized Year 2 Year 2 ROI Year 2 0.50 10,749 24,000 0.60 11,577 24,000 0.70 12,404 24,000 0.80 13,231 24,000 0.90 14,059 24,000 1.00 14,886 24,000 1.10 15,713 24,000 1.20 16,541 24,000 1.30 17,368 24,000 1.40 18,195 24,000 1.50 18,586 24,437 1.60 18,970 24,880 1.70 19,354 25,324 1.80 19,737 25,767 1.90 20,121 26,211 2.00 20,505 26,654 2.10 20,889 27,098 220 21,273 27,541 2.30 21,656 27,985 2.40 22,040 28,428 2.50 22,424 28,872 2.60 22,808 29,316 2.70 23,192 29,759 2.80 23,576 30,203 2.90 23,959 30,646 3.00 24,343 31,090 3.10 24,727 31,533 320 25,111 31,977 3.30 25,495 32,420 3.40 25,878 32,864 3.50 26,262 33,307 3.60 26,646 33,751 3.70 27,030 34,194 3.80 27,414 34,638 3.90 27,798 35,081 4.00 28,181 35,525 0.17% 0.30% 0.45% 0.60% 0.77% 0.94% 1.13% 1.33% 1.54% 1.77% 1.96% 2.16% 2.38% 2.61% 2.87% 3.16% 3.47% 3.81% 4.20% 4.63% 5.11% 5.67% 6.30% 7.03% 7.88% 8.90% 10.13% 11.63% 13.53% 15.99% 19.32% 24.06% 31.35% 44.02% 71.53% 176.56% Annualized ROI Year 5 1.81% 2.03% 227% 2.51% 2.78% 3.06% 3.35% 3.65% 3.94% 423% 4.52% 4.83% 5.17% 5.53% 5.94% 6.38% 6.86% 7.40% 7.99% 8.66% 9.42% 10.27% 1125% 12.39% 13.72% 15.30% 1720% 19.54% 22.48% 26.31% 31.47% 38.83% 50.15% 69.84% 112.55% 275.67% Annualized ROI Year 10 3.14% 3.43% 3.72% 4.03% 4.34% 4.65% 4.98% 5.32% 5.67% 6.04% 6.42% 6.83% 7.28% 7.77% 8.30% 8.89% 9.53% 10.24% 11.03% 11.92% 12.92% 14.06% 15.36% 16.86% 18.63% 20.72% 2325% 26.35% 3026% 35.34% 42.19% 51.95% 66.98% 93.10% 149.78% 36623% Annualized ROI Year 20 522% 5.57% 5.93% 6.31% 6.70% 7.12% 7.56% 8.02% 8.51% 9.03% 9.59% 10.19% 10.84% 11.55% 12.33% 13.18% 14.11% 15.15% 16.30% 17.59% 19.05% 20.70% 22.60% 24.79% 27.36% 30.40% 34.07% 38.59% 4428% 51.67% 61.64% 75.84% 97.71 % 135.71% 218.19% 533.15% Participating Lease Rate 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% 10.00% 11.00% 12.00% 13.00% 14.00% 15.00% 16.00% 17.00% 18.00% 19.00% 20.00% 21.00% 22.00% 23.00% 24.00% 25.00% • • Cash Flow Annual Lease Annualized Year 2 Year 2 28,123 24,000 28,123 24,000 28,123 24,000 28,123 24,000 28,123 24,000 28,123 24,000 28,123 24,000 28,123 24,000 28,123 24,000 28,123 24,000 28,123 24,000 28,123 24,000 28,123 24,000 28,123 24,000 28,123 24,000 28,123 24,000 27,205 24,918 25,739 26,384 24,274 27,850 22,808 29,316 21,342 30,781 19,876 32,247 18,411 33,713 16,945 35,179 15,479 36,644 ROI Year 2 6.97% 6.97% 6.97% 6.97% 6.97% 6.97% 6.97% 6.97% 6.97% 6.97% 6.97% 6.97% 6.97% 6.97% 6.97% 6.97% 6.75% 6.39% 6.03% 5.67% 5.31% 4.94% 4.58% 4.22% 3.86% Annualized ROI Year 5 12.72% 12.72% 12.72% 12.72% 12.72% 12.72% 12.72% 12.72% 12.72% 12.72% 12.72% 12.72% 12.72% 12.72% 12.72% 12.59% 12.06% 11.46% 10.87% 1027% 9.68% 9.08% 8.49% 7.89% 7.30% Annualized ROI Year 10 17.50% 17.50% 17.50% 17.50% 17.50% 17.50% 17.50% 17.50% 17.50% 17.50% 17.50% 17.50% 17.50% 17.50% 17.30% 16.84% 16.17% 15.46% 14.76% 14.06% 13.35% 12.65% 11.94% 1124% 10.54% Annualized ROI Year 20 25.96% 25.96% 25.96% 25.96% 25.96% 25.96% 25.96% 25.96% 25.96% 25.96% 25.96% 25.91% 25.67% 2525% 24.68% 23.98% 23.17% 22.35% 21.53% 20.70% 19.88% 19.05% 1823% 17.41% 16.58% Loan Interest Rate 5.75% 6.00% 6.25% 6.50% 6.75% 7.00% 7.25% 7.50% 7.75% 8.00% 8.25% 8.50% 8.75% 9.00% 9.25% 9.50% 9.75% 10.00% 10.25% 10.50% 10.75% 11.00% 11.25% 11.50% 11.75% 12.00% 12.25% 12.50% • • Annualized Annualized Annualized Annualized ROI Year 2 ROI Year 5 ROI Year 10 ROI Year 20 67.79% 122.91% 168.18% 247.71% 28.26% 51.24% 70.12% 103.27% 18.09% 32.80% 44.88% 66.10% 13.43% 24.34% 33.31% 49.06% 10.75% 19.49% 26.67% 39.29% 9.02% 16.35% 22.37% 32.95% 7.80% 14.15% 19.36% 28.51% 6.90% 12.52% 17.13% 25.23% 6.21% 11.27% 15.42% 22.70% 5.67% 10.27% 14.06% 20.70% 5.22% 9.47% 12.95% 19.08% 4.85% 8.80% 12.04% 17.73% 4.54% 8.24% 11.27% 16.60% 4.28% 7.76% 10.61% 15.63% 4.05% 7.34% 10.05% 14.80% 3.85% 6.98% 9.55% 14.07% 3.68% 6.67% 9.12% 13.43% 3.52% 6.39% 8.74% 12.87% 3.38% 6.14% 8.40% 12.37% 3.26% 5.91% 8.09% 11.91% 3.15% 5.71% 7.81% 11.51% 3.05% 5.53% 7.56% 11.14% 2.96% 5.36% 7.33% 10.80% 2.87% 5.21% 7.13% 10.50% 2.80% 5.07% 6.94% 10.21% 2.72% 4.94% 6.76% 9.96% 2.66% 4.82% 6.60% 9.72% 2.60% 4.71% 6.45% 9.50% = Wednesday, June 02, 1999 3:11 PM • MARK GANGI ARCHITECT 818+957+2729 • p.02 96/02/88 14:58 FAX 818 238 5174 BURBANK REDEVEL.DEPT. burb3nk re;dc've cp ifl.'nt agency 0002 275 east olive avenue • p.o. box 5459 • burbank • calitomia • 91510-6459 • (818) 238-5180 May 28, 1999 SUPPLEMENTAL INFORMATION TION P/ECEEIVEID JUN 0 2 1998 Gum. UEV. DEPT. To whom it may concern: Gangi Development has constructed a mixed use retail project in the City of Burbank that includes 144 units of senior housing, retail and parking. The complexity of this project was enormous and staff found that Gangi Development has been able to effectively address the many issues that have arisen. The project is now open and tenant improvements are underway. This project is unique and has attracted the attention of newspapers and cable television. I have found Gangi Development to be honest and forthright in their dealings with the City and I would recommend them for other projects. Sincerely. obert M. Tague Asst Executive Director towbar, 06/02/99 15:15 TX/RX NO.6170 P.002 Thursday, May 27, 1999 12:36 PM 4DMARK GANG! ARCHITECT 818+957+2729 • ** 26'd 11:110i ** EASTWEST BANK May 26, 1999 Frank Gangi Gangi Development 6252 Honolulu Avenue Suite 200 Glendale, CA 91214 RE: Hermosa Beach Redevelopment Project Dear Franc; p.02 SUPPt..UILNTAL INFORMATION 10N :�2ECEOV111) MAY 2 7 1998 WM. U V. DEPT. Thank you for considering the Bank for possible financing for the above mentioned project. The Bank is very much interested in pursuing the subject matter. Please provide us with all the necessary information on the proposed project for our due diligence and analysis. We enjoyed a successful experience with you on your Burbank project and are confident that you will be mod to the success of this proposed project. We look forward to working with you. Sincerely, Kathleen T. Kwan Vice President Office. 475 Huntington Drive, San Marino. CA 91108. M.626.7995700 20/20'd F.CP' ozet8t of sem TOP 929 WW1 1531 ISIS 84 L£ :60 6661 92 AW 05/27/99 12:40 TX/RX NO.6134 P.002 111 Thursday, May 27, 1999 12:36 PM ARK GANGI ARCHITECT 818+957+2729 • May-25-99 04;19P The Pacific Bank, N.A. P.O2 The Pacific Bank Nags VA {ww urKw May 26, 1999 Mr. Frank Gangi Ganga Development 16252 Honolulu Avenue Glendale, Ca. 91202 Dear Frank, p.03 SUPPLE INIAL INFORMATION :4ECEBVE© MAY .271998 WM. UhV. DEPT. Based on the long term banking relationship and most satisfactory way in which financing of your company's previous projects has been handled, The Pacific Bank would most definitely be Interested in considering the approximately one million dollar ($1,000,000) redevelopment retaiUcommercial project in the Hermosa Beach area. Please give us a call when you have all of your information together on the project. Sincerely, eau nal Vice President 550 No. Brand Boulevard • Suite 100 • Glendale. California 91203 • (818) 247-9140 • Fax: (818) 247-6420 05/27/99 12:40 TX/RX NO.6134 P.003 • Thursday, May 27, 1999 12:36 PM 4ARK GANGI ARCHITECT 818+957+2729 • 5-27-1999 10:01AM FROM CITY OF PACIFICA 415 359 6038 May 27, I999 CITY HALL 170 Santa Maria Avenue • Pacifica. California 94044-2506 Telephone (650) 738-7300 • Fax (650) 359-6038 www. ci . pacif i c a . ca . us Sot Blumenfeld Director of Community Development City of Hermosa Beach 1315 Valley Drive Hermosa Beach, CA 90254 Dear Mr. Blumenfeld: p.04 P_ 2 MAYOR Calvin Minton MAYOR PRO TEM Peter DeJarnau Covxca Barbara A. Carr Maxine Gonsalves Jamie Vreeland 5 ECEaV Er MAY 2 7 1998 (.0M. uta. DEPT. SUPPLEr EUT_gL INr 1 iJN Architect Mark Gangi phoned yesterday and asked if 1 would be willing to write a letter of recvaarnendation. I an honored to do so. For the past several menthe Mark Gangi, Gangi Development, has been working diligently and aestively on a site plan for the Pacifica quarry property. The 87 -nacre site is located on the coast in a redevelopment project area. As you may surmise, the planning issues on such a site have been the subject of intense community scrutiny and debate. Mark has worked quite closely with community members to produce a site plan, and model, that reflects community desires good planning principles. He listens, he's sincere, and his plan are inspired. I recommend him highly_ Wmeerely, David Carniany City Manger Pam of Pogo a 1789 • San Francisca Day Discovery Site 0 Printed an Recycled Paper 05/27/99 12:40 TX/RX NO.6134 P.004 Thursday, May 27, 1999 12:36 PM *MARK GANGI ARCHITECT 818+957+2729 • 05/27/99 11:01 FAX 810 758 3176 $OFFIQA..NN Iefleerusssees P.O. BOX 387 — 15503 EL CAMINO REAL — RANCHO SANTA FE, CA 92067 Phone 619-756-2812 — Fax 619-756-3176 Date: May 27, 1999 To: Gangi Development Attn: Mark Gangi From: Chris Hoffmann Dear Mark, p.05 ®002 RECEIVED MAY '27 1998 L OM• DEV. DEPT. SUPPLEMENTAL INFORMATION iTION I was very pleased with your building and it's surroundings. The location is just what I am looking for. Thank you for taking the time to show it to me and please let me know what will be happening in the near future. Sincerely, e4'UV15 Chris Hoffmann 05/27/99 12:40 TX/RX NO.6134 P.005 • Friday, May 28, 1999 11:31 AM 0 MARK GANG! ARCHITECT 818+957+2729 • May -27-99 04:OOP copymax 3108365025 KALAN, INC. 2220 SCREENLAND AVENUE, BURBANK, CA 91505 TEL: (818) 558-3555' FAX (818) 558-5155 Date: May 2Ont 1999 From: Paul & Suzanne Kalandjian To: Gangi Development Attn: Mark Gangi Dear Mark, p.02 P_01 Ileceiva® JUN i11998 C'tjM. UEV. DEPT SUPPLEMENTgL INFORMATION Thank you for showing us your project in Hermosa Beach. We are extremely excited_ We have been looking for a South Bay location for some time now but never found a building we liked so much. We especially liked the atmosphere with the high ding. Please keep us informed as the project progresses. We are anxiously waiting for your reply. Thank You, Sincerey, Cq Paul & Suzanne Katandjian 05/28/99 11:35 TX/RX NO.6146 P.002 • Friday, May 28, 1999 11:31 AM •MARK GANGI ARCHITECT 818+957+2729 MAY -27-99 09:47 PM Scott Roth catering & events May 19, 1999 Mr. Mark Gangi Gangi Development 6252 Honolulu Avenue Suite 200 Glendale, California 91214 Dear Mark: Thank you so much for taking the time to show us your exciting project in Hermosa. We were so thrilled to find just what we were looking for. Everything seems perfect. Keep us apprised of all progress. Looking forward to hearing from you soon. Best regards, Scott Roth • p.03 P-04 SUPPLEMENTAL I JFOL PA: !t'i JUN 011998 . QM. DEV. DEPT. 11718 nerrington Court • 4412. [i An8etes. Cat&fornla 90049. Phone (310)472-3552 . Fa (310) 471-8797 05/28/99 11:35 TX/RX NO.6146 P.003 • Friday, May 28, 1999 11:31 AM •MARK GANGI ARCHITECT 818+957+2729 • FROM : REEUES'1. LIBEL PHONE NO. : 310 476 7632 TO: Mark Gangi COMPANY: Gangi Builders FAX#: 818.957.2729 DATE: Friday, May 28, 1999 TIME: 1:17 AM FROM: FAX#: Steve Wrubel Steve Wrubel Photography 310-823-6384 310-476-7632 TOTAL PAGES: 1 INCL. COVER NOTES: Mark= May. 28 1999 01:26AM P1 SUPPLEMENTAL fax ..would leve to hQdu a mc_ting hyoto talkGtr a� mhouL our.Hegnnsprf ct- The fifteen oaLceijings, nett' •ght and loft nt work- 1 have speQtiya .�3—.� photographer in a downtown...cfudAn w to re at fQ„tbe beach, What is so special allot* your project, isihat it would nifer ne the gallery l have atwayalofor on the first floor, nrdp room for a (audio and I am sincerely intere,i in hearing ahntd hob► ang. d_hopst hat 3mui�erill keep me in mind shnuld you Aver begin bolding for tennants I cook forward jo hearing fwm . Steva- p.04 RECEIVED JUN 0 1 1998 WM. UhV. DEPT. 05/28/99 11:35 TX/RX NO.6146 P.004 1 Friday, May 28, 1999 11:31 AM MARK GANGI ARCHITECT 818+957+2729 • MAY -27-99 69:47 PM I5 Haute Stuff P_02 SUPPLEMENThL miA May 15, 1999 y y i n 12 1.:, Mr. Mark Gangi GANGI DEVELOPMENT Via facsimile: 818.957.2729 JUN u 1s98 LOM. UtV. DEPT. Dear Mr. Ganga: It was a pleasure meeting with you the other day. We absolutely love your work. We fed the space you have created suits our persona perfectly. We have not seen anything like it in Hermosa! Please coli us at your earliest convenience, looking forward to your call. Regards, Stephanie Layne 05/28/99 11:35 p.05 TX/RX NO.6146 P.005 • P EH A & ASSOCIATES ARCHITECTURE PLANNING April 14, 1999 City of Hermosa Beach Community Development Department Attention: Sol Blumenfeld 1315 Valley Drive Hermosa Beach, CA 90254 Dear Sol, Thank you for the opportunity to present our vision for the proposed downtown commercial building. We feel the combination of an Architect and Property Management Company is the perfect marriage for this particular project. The contacts are as follows: Peha & Associates Larry Peha 67 14th Street Hermosa Beach, CA 90254 Triwell Properties Jim Wellbaum 108 Standard Street El Segundo, CA 90245 Again thank you, we look forward to working with you in the near future. Sincerely, Larry Peha & Jim Wellbaum 67 14th STREET HERMOSA BCH., CA 90254 (310) 372-1755 FAX (310) 376-6837. Aletotteven APR 1999 LOM. DEV. DEPT. aj tr • • This proposal to the City of Hermosa Beach is being submitted by a joint venture between Peha and Associates, and Triwell Properties Inc. This proposal is for the design, construction, leasing, maintenance and operation of a commercial building to be constructed on City owned land located at the east end of the north parking structure on Hermosa Avenue. THE TEAM The primary members of the project team are Larry Peha and Jim Wellbaum. Additional staff from each of their companies will be involved as needed to provide support and special services. The project will be formally organized as a Limited Liability Company with Peha and Associates and Triwell Properties Inc as the managing joint venture partners. Additional investor partners may be included at a later date, if desired. The roll of the partners is detailed as follows: Larry Peha - Provide planning, architectural design and construction administration. Larry Peha's local knowledge and experience in the downtown area for over 10 years is a valuable asset and will contribute to the project's design fitting into the revitalized business district. Peha's attention to detail and experience with construction administration will insure the project is built as planned and in a timely fashion. Jim Wellbaum - Assist with planning and provide leasing, asset management, operations and maintenance management. Wellbaum's experience in Hermosa Beach, Santa Monica, Alhambra and other "downtown revitalization" areas, plus extensive redevelopment, management and leasing of retail and office projects, is a good background for the proposed project. In addition, Triwell has a staff which includes accounting, property management and leasing specialists. THE PROJECT - AN OVERVIEW A feasibility analysis of this site development was made to provide the team with direction in the design and use of the property. The result is a 7,124 square foot building which has a mixed use of retail on the ground level and office on the second and third floors. Due to the wide yet shallow footprint of the site, it was determined that each floor should be "clear span" to provide maximum flexibility for leasing now as well as to future users. GROUND FLOOR -RETAIL The south portion of the ground floor will be the most desirable for retail tenants as it faces most of the vehicular and pedestrian traffic entering and leaving the parking structure. This tenant needs to be a convenience or impulse retailer selling products such as coffee, bagels or other quick take-out products. The north end section of the retail space offers excellent visibility towards southbound traffic on Hermosa Avenue and should be more of a destination type of tenant such as a hair salon, clothing boutique or specialty shop. The center section, if there is one, could be a combination of it's neighbors. An example may be a newspaper - magazine - ticket outlet. With these uses in mind, we have approached prospective tenants who meet this criteria and received varying degrees of interest from most of them. Coffee Bean and Tea Leaf, a regional chain of coffee_ shops is very interested in the south end and is sending us a letter of interest in the next few days. We have included more information on their operation in the Addendum. ti • • UPPER FLOORS - OFFICES We approached the office space using several different concepts. First we investigated an executive suite operation with a receptionist, conference room, fax and copy services, with individual small offices leased to one or two person users at high rent on a monthly basis. Second we considered leasing to one or two tenants per floor with longer lease terms and custom buildouts. The third concept was to complete improvements offering a mix of small and medium size offices with flexibility to combine them into larger multiple room suites, with leases ranging from 1 to 3 years. The last concept is what our research indicates will be the most efficient, useful and desirable. All offices will be very light with large windows, secure with controlled access after hours and easy access to the parking structure with an elevator in the main lobby. A tenant only entrance door directly to the second floor of the parking structure would be convenient and help distribute cars in the parking structure away from the busy street level entrance; The target tenants will be professional businesses such as accountants, brokers and attorneys. The nicely finished offices will be well maintained and should lease quickly. I 1 1 j J 1 I • • • P E H A & ASSOCIATES ARCHITECTURE P L A N N I N G 6 714ih STREET HERMOSA CHCA90 3 1 ) E37 .2. 1 72_54 5 'a .5, 0J -•"/f/ - k - "...mi."... • 1 t.: t1T1 INTI ES L 1e 1' -� - ILO o ,JIcr✓ 1 r-RJE F — 22'99399 Fie, RETAIL SPACES spA S FLOC/6<N.- TO 1 -1444rT 1 U1i -ME-NTS GROUND FLOOR PLAN / SITE PLAN boss AZZA — 2 2 S0 S9• FT FL12. A1Z - 1 j Co9r s TOTAL c-120SS FL4Z. A( A (3 FLoors) - 7 I Z4 SQ. FT. 'TOTAL L.1:AE. Fid. MZ!A(RETAIL) - 1 095 59. FF.TG'I - I- . SAt�l-t.: f-L�. X4 4 OFFI CES -35,4- 3Co 562. FT. P E H A & ASSOCIATES ARCHITECTURE PLANNING 67 14.1h STREET HERMOSA BCH CA 90254 (310) 372.1755 • • • 1 / 111111111 1111111m1 11111111 EX IT Ga12g..1 rog_ JAN. OFFICE SPACE PLL- 0 PrIC-- 5Ur_s 51111-A8LP__ Fog. SI 1 -461 -Lt.- MULTIPLE, Tr-NANT-5 14A141716AF it? AcoEss To °Eric -E. TIES (1srT.) - SECOND FLOOR PLAN _ c-tizoss PL:001Z /64z-e.A - 2, .422 sz2 • VT; F1.12 "12E". - I, ( 74- 36. FT. P E H . A & ASSOCIATES ARCHITECTURE PLANNIN"G 67 14th STREET HERMOSA BCH., CA 90254 (10) 372•1755 • • • I CIT"P-I VE1,011-161- DI }- MAc.+-I111E coFres 5U4. JAiJ GLST, OFFICE SPACE FIS- 151E oftILE- sUritS 'MULTI TFJ4 4TS Ac.GEsS 1-0 or -Pi C surrEs (.) THIRD FLOOR PLAN 6t' .DSS FLODr- fi,I2-E.4 - 2, 4 -ZZ SQ. FT LEAS_ Fly. A1? -.EA - 1, 762- se- . FT; /� ' /ii= t 1. O n 1 P E H - A & ASSOCIATES ARCHITECTURE PLANNING 67 141h STREET HERMOSA BCH.. CA 90254 (310) 372-1755 SUMMARY OF PROPOSED TENANT LEASES 1 RETAIL LEASES All retail leases shall be on a form similar to the copy provided in the Addendum marked "Retail Lease". The lease is a multi -tenant Net, Net Net form with the tenant obligated to reimburse the Landlord for all expenses including taxes, insurance and all repairs and maintenance costs. Lease terms shall be 5 to 10 years with annual rent increases tied to the increase in the Consumer Price Index or a fixed amount. 2 OFFICE LEASES All office leases shall be on a form similar to the copy provided in the Addendum marked "Office Lease". The lease is a multi -tenant Gross lease form with the Landlord paying for all operating expenses including utilities. Lease term shall be 3 to 5 years with annual rent increases tied to the increase in the Consumer Price Index or a fixed amount. • • SUMMARY OF PROPOSED GROUND LEASE The proposed ground lease commences at the monthly rate of $1,500.00. This rate is subject to adjustment every five (5) years, based on the increase in the Consumer Price Index, with a maximum of 15% each adjustment. The initial rate equals $.66 per square foot per month for raw land, and creates a value of 79.00/square foot for the parcel assuming the rent the rent equals a 10% return on equity. We believe this is a very good value for this small parcel. This proposal indicates that the ground lease is for a term of 50 years. This is quite important for securing financing and long term tenants who are willing to invest large amounts of money and develope their business at the property. 4, • • Anticipated project schedule Contract awarded May 11, 1999 Design and Construction Document preparation June 25, 1999 City plan check process August 9, 1999 Construction February 9, 2000 Tenant leasing During construction Tenant occupancy immediately after construction L , e � • a a t s s 1 i DEVELOPMENT PROFORMA DEBIT CREDIT BALANCE 1 FORMATION OF LLC - CAPITAL $120,000 $120,000 $120,000 2 EXECUTION/RECORDING $120,000 GROUND LEASE (LEGAL/TITLE) $2,500 $117,500 $117,500 3 ARCH. DESIGN & APPROVALS $117,500 ARCH/ENG - IN HOUSE $4,000 $113,500 PLAN CHECK + COSTS $5,000 $108,500 $108,500 4 CONSTRUCTION FINANCING $108,500 • LOAN PROCEEDS $630,000 $738,500 COSTS/FEES/POINTS $18,250 $720,250 INTEREST -1 YEAR $31,500 $688,750 $688,750 5 CONSTRUCTION COSTS $688,750 ON SITE - SHELL $534,300 $154,450 T.I. ALLOWANCES - RETAIL $45,000 $109,450 OFFICE BUILDOUTS $68,720 $40,730 • OFF SITE $7,5Q0 $33,230 $33,230 6 MARKETING / LEASING $5,000 $28,230 COMMISSIONS $15,000 $13,230 $13,230 $13,230 BALANCE (CONTINGENCY) $13,230 $736,770 $750,000 TOTAL DEVELOPMENT COSTS $736,770 TOTAL FUNDING $750,000 -1 • - MIN AI - - - 1 A A d - - i al )i >I AI dpi MI ANNUAL OPERATING BUDGET 1ST YEAR INCOME: BASE RENTAL INCOME -RETAIL EXPENSE REIMBURSEMENTS-RETAII GROSS INCOME LESS VACANCY (5%) NET INCOME - RETAIL RENTAL INCOME -OFFICE 2ND FLOOF RENTAL INCOME -OFFICE 3RD FLOOF GROSS INCOME LESS VACANCY (7%) NET INCOME - OFFICE NET INCOME -.TOTAL EXPENSES: ADMIN. / ACCTG. / LICENSE / MISC. ELEVATOR REPAIR/MAINTENANCE ELECTRICITY GENERAL REPAIR/MAINTENANCE INSURANCE LANDSCAPE / PLANT MAINT. JANITORIAL MANAGEMENT FEE CARPET CLEANING SUPPLIES PROPERTY TAXES RESERVES ROOF REPAIR / MAINTENANCE STORE FRONT / WINDOW CLEANING SECURITY SYSTEM / PHONE TRASH WATER/SEWER TOTAL OPERATING EXPENSES NET OPERATING INCOME LAND LEASE PAYMENT LOAN PAYMENT NET CASH FLOW JAN. FEB. MAR. APR. $4,661: $4,661 $579 $579 $5,241 $5,241 ($262) ($262) $4,979 $4,979 $3,348 $3,348 $3,524 $3,524 $6,872 $6,872 ($481) ($481) $6,391 $6,391 MAY JUN. JUL. AUG. SEP. OCT. NOV. DEC. TOTALS $4,661 $4,661 $4,661 $4,661 $4,661 $4,661 $4,661 $4,661 $4,661 $579 $579 $579 $579 $579 $579 $579 $579 $579 $5,241 $5,241 $5,241 $5,241 $5,241 $5,241 $5,241 $5,241 $5,241 ($262) ($262) ($262) ($262) ($262) ($262) ($262) ($262) ($262) $4,979 $4,979 $4,979 $4,979 $4,979 $4,979 $4,979 $4,979 $4,979 $3,348 $3,348 $3,348 $3,348 $3,348 $3,348 $3,348 $3,348 $3,348 $3,524 $3,524 $3,524 $3,524 $3,524 $3,524 $3,524 $3,524 $3,524 $6,872 $6,872 $6,872 $6,872 $6,872 $6,872 $6,872 $6,872 $6,872 ($481) ($481) ($481) ($481) ($481) ($481) ($481) ($481) ($481) $6,391 $6,391 $6,391 $6,391 $6,391 $6,391 $6,391 $6,391 $6,391 $4,661 $579 $5,241 ($262) $4,979 $3,348 $3,524 $6,872 ($481) $6,391 $55,935 $6,953 $62,888 ($3,144) $59,743 $40,176 $42,288 $82,464 ($5,772) $76,692 $11,370 $11,370 $11,370 $11,370 $11,370 $11,370 $11,370 $11,370 $11,370 $11,370 $11,370 $11,370 $136,435 JAN. FEB. MAR. $25 $25 $25 $125 $125 $125 $400 $400 $400 $250 $250 $250 $250 $250 $250 $50 $50 $50 $300 $300 $300 $455 $455 $455 $50 $50 $50 $35 $35 $35 $0 $0 $0 $100 $100 $100 $50 $50 $50 $75 $75 $75 $50 $50 $50 $200 $200 $200 $150 $150 $150 $2,565 $2,565 $2,565 APR. MAY JUN. $25 $25 $25 $125 $125 $125 $400 $400 $400 $250 $250 $250 $250 $250 $250 $50 $50 $50 $300 $300 $300 $455 $455 $455 $50 $50 $50 $35 $35 $35 $4,675 $0 $0 $100 $100 $100 $50 $50 $50 $75 $75 $75 $50 $50 $50 $200 $200 $200 $150 $150 $150 $7,240 $2,565 $2,565 JUL. AUG. SEP. OCT. NOV. DEC. $25 $25 $25 $25 $25 $25 $125 $125 $125 $125 $125 $125 $400 $400 $400 $400 $400 $400 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $50 $50 $50 $50 $50 $50 $300 $300 $300 $300 $300 $300 $455 $455 $455 $455 $455 $455 $50 $50 $50 $50 $50 $50 $35 $35 $35 $35 $35 $35 $0 $0 $0 $0 $0 $4,768 $100 $100 $100 $100 $100 $100 $50 $50 $50 $50 $50 $50 $75 $75 $75 $75 $75 $75 $50 $50 $50 $50 $50 $50 $200 $200 $200 $200 $200 $200 $150 $150 $150 $150 $150 $150 $2,565 $2,565 $2,565 $2,565 $2,565 $7,333 TOTALS $300 $1,500 $4,800 $3,000 $3,000 $600 $3,600 $5,457 $600 $420 $9,443 $1,200 $600 $900 $600 $2,400 $1,800 $40,220 $8,805 $8,805 $8,805 $4,130 $8,805 $8,805 $8,805 $8,805 $8,805 $8,805 $8,805 $4,037 $96,215 $1,500 $5,467 $1,838 $1,500 $5,467 $1,838 $1,500 $5,467 $1,838 $1,500 $5,467 ($2,837) $1,500 $5,467 $1,838 $1,500 $5,467 $1,838 $1,500 $5,467 $1,838 $1,500 $5467 $1,838 $1,500 $5,467 $1,838 $1,500 $5,467 $1,838 $1,500 $1,500 $18,000 $5,467 $5,467 $65,607 $1,838 ($2,930) $12,607 ANNUAL OPERATING BUDGET 1-10 YEAR CASHFLOW 2000 2001 2002 RENTS AND EXPENSES RISE 3%/YEAR 2003 2004 2005 2006 2007 2008 2009 2010 INCOME: BASE RENTAL INCOME -RETAIL EXPENSE REIMBURSEMENTS-RETAII GROSS INCOME LESS VACANCY (5%) NET INCOME - RETAIL RENTAL INCOME -OFFICE 2ND FLOOF RENTAL INCOME -OFFICE 3RD FLOOF GROSS INCOME LESS VACANCY (7%) NET INCOME - OFFICE NET INCOME - TOTAL EXPENSES: ADMIN. / ACCTG. / LICENSE / MISC. ELEVATOR REPAIR/MAINTENANCE ELECTRICITY GENERAL REPAIR/MAINTENANCE INSURANCE LANDSCAPE / PLANT MAINT. JANITORIAL MANAGEMENT FEE CARPET CLEANING SUPPLIES PROPERTY TAXES RESERVES ROOF REPAIR / MAINTENANCE STORE FRONT / WINDOW CLEANING SECURITY SYSTEM / PHONE TRASH WATER/SEWER TOTAL OPERATING EXPENSES NET OPERATING INCOME LAND LEASE PAYMENT LOAN PAYMENT NET CASH FLOW $55,935 $6,953 $62,888 ($3,144) $59,743 $40,176 $42,288 $82,464 ($5,772) $76,692 $57,613 $7,161 $64,774 ($3,239) $61,536 $41,381 $43,557 $84,938 ($5,946) $78,992 $59,341 $61,122 $62,955 $7,376 $7,597 $7,825 $66,718 $68,719 $70,781 ($3,336) ($3,436) ($3,539) $63,382 $65,283 $67,242 $42,623 $43,901 $45,218 $44,863 $46,209 $47,596 $87,486 $90,111 $92,814 ($6,124) ($6,308) ($6,497) $81,362 $83,803 $86,317 $64,844 $66,789 $68,793 $70,857 $72,982 $75,172 $8,060 $8,302 $8,551 $8,807 $9,072 $9,344 $72,904 $75,091 $77,344 $79,664 $82,054 $84,516 ($3,645) ($3,755) ($3,867) ($3,983) ($4,103) ($4,226) $69,259 $71,337 $73,477 $75,681 $77,951 $80,290 $46,575 $47,972 $49,411 $50,894 $52,421 $53,993 $49,023 $50,494 $52,009 $53,569 $55,176 $56,832 $95,598 $98,466 $101,420 $104,463 $107,597 $110,825 ($6,692) ($6,893) ($7,099) ($7,312) ($7,532) ($7,758) $88,906 $91,574 $94,321 $97,151 $100,065 $103,067 $136,435 $140,528 $144,744 $149,086 $153,559 $158,165 $162,910 $167,798 $172,832 $178,017 $183,357 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 $300 $309 $318 $328 $338 $348 $358 $369 $380 $391 $403 $1,500 $1,545 $1,591 $1,639 $1,688 $1,739 $1,791 $1,845 $1,900 $1,957 $2,016 $4,800 $4,944 $5,092 $5,245 $5,402 $5,565 $5,731 $5,903 $6,080 $6,263 $6,451 $3,000 $3,090 $3,183 $3,278 $3,377 $3,478 $3,582 $3,690 $3,800 $3,914 $4,032 $3,000 $3,090 $3,183 $3,278 $3,377 $3,478 $3,582 $3,690 $3,800 $3,914 $4,032 $600 $618 $637 $656 $675 $696 $716 $738 $760 $783 $806 $3,600 $3,708 $3,819 $3,934 $4,052 $4,173 $4,299 $4,428 $4,560 $4,697 $4,838 $5,457 $5,621 $5,790 $5,963 $6,142 $6,327 $6,516 $6,712 $6,913 $7,121 $7,334 $600 $618 $637 $656 $675 $696 $716 $738 $760 $783 $806 $420 $433 $446 $459 $473 $487 $502 $517 $532 $548 $564 $9,444 $9,727 $10,019 $10,319 $10,629 $10,948 $11,276 $11,614 $11,963 $12,322 $12,691 $1,200 $1,236 $1,273 $1,311 $1,351 $1,391 $1,433 . $1,476 $1,520 $1,566 $1,613 $600 $618 $637 $656 $675 $696 $716 $738 $760 $783 $806 $900 $927 $955 $983 $1,013 $1,043 $1,075 $1,107 $1,140 $1,174 $1,210 $600 $618 $637 $656 $675 $696 $716 $738 $760 $783 $806 $2,400 $2,472 $2,546 $2,623 $2,701 $2,782 $2,866 $2,952 $3,040 $3,131 $3,225 $1,800 $1,854 $1,910 $1,967 $2,026 $2,087 $2,149 $2,214 $2,280 $2,349 $2,419 $40,221 $41,428 $42,670 $43,950 $45,269 $46,627 $48,026 $49,467 $50,951 $52,479 $54,054 $96,214 $99,100 $102,073 $105,136 $108,290 $111,538 $114,884 $118,331 $121,881 $125,537 $129,303 $18,000 $65,607 $12,606 $18,000 $65,607 $15,493 $18,000 $65,607 $18,466 $18,000 $65,607 $21,528 $18,000 $65,607 $24,682 $20,700 $65,607 $25,231 $20,700 $65,607 $28,577 $20,700 $20,700 $65,607 $65,607 $32,024 $35,573 $20,700 $20,700 $65,607 $65,607 $39,230 $42,996 RENTS AND EXPENSES RISE 3%!YEAR ANNUAL. OPERATING BUDGET 11 - 20TH YEAR CASHFLOW 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 INCOME: BASE RENTAL INCOME -RETAIL $77,427 $79,750 $82,142 $84,607 $87,145 $89,759 $92,452 $95,226 $98,082 $101,025 $104,056 t-%' EXPENSE REIMBURSEMENTS-RETAII $9,624 $9,913 $10,210 $10,516 $10,832 $11,157 $11,491 $11,836 $12,191 $12,557 $12,934 GROSS INCOME $87,051 $89,663 $92,352 $95,123 $97,977 $100,916 $103,944 $107,062 $110,274 $113,582 $116,989 LESS VACANCY (5%) ($4,353) ($4,483) ($4,618) ($4,756) ($4,899) ($5,046) ($5,197) ($5,353) ($5,514) ($5,679) ($5,849) NET INCOME - RETAIL $82,699 $85,179 $87,735 $90,367 $93,078 $95,870 $98,746 $101,709 $104,760 $107,903 $111,140 RENTAL INCOME -OFFICE 2ND FLOOF $55,613 $57,281 $59,000 $60,770 $62,593 $64,470 $66,405 $68,397 $70,449 $72,562 $74,739 RENTAL INCOME -OFFICE 3RD FLOOF $58,537 $60,293 $62,102 $63,965 $65,884 $67,860 $69,896 $71,993 $74,153 $76,377 $78,669 GROSS INCOME $114,150 $117,574 $121,101 $124,735 $128,477 $132,331 $136,301 $140,390 $144,601 $148,940 $153,408 LESS VACANCY (7%) ($7,990) ($8,230) ($8,477) ($8,731) ($8,993) ($9,263) ($9,541) ($9,827) ($10,122) ($10,426) ($10,739) NET INCOME - OFFICE $106,159 $109,344 $112,624 $116,003 $119,483 $123,068 $126,760 $130,563 $134,479 $138,514 $142,669 NET INCOME - TOTAL $188,858 $194,524 $200,359 $206,370 $212,561 $218,938 $225,506 $232,271 $239,239 $246,417 $253,809 EXPENSES: 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 ADMIN. / ACCTG. / LICENSE / MISC. $415 $428 $440 $454 $467 $481 $496 $511 $526 $542 $558 ELEVATOR REPAIR/MAINTENANCE $2,076 $2,139 $2,203 $2,269 $2,337 $2,407 $2,479 $2,554 $2,630 $2,709 $2,791 ELECTRICITY $6,645 $6,844 $7,049 $7,261 $7,478 $7,703 $7,934 $8,172 $8,417 $8,670 $8,930 GENERAL REPAIR/MAINTENANCE $4,153 $4,278 $4,406 $4,538 $4,674 $4,814 $4,959 $5,108 $5,261 $5,419 $5,581 INSURANCE $4,153 $4,278 $4,406 $4,538 $4,674 $4,814 $4,959 $5,108 $5,261 $5,419 $5,581 LANDSCAPE / PLANT MAINT. $830 $855 $881 $907 $934 $962 $991 $1,021 $1,052 $1,083 $1,116 JANITORIAL $4,983 $5,133 $5,287 $5,445 $5,609 $5,777 $5,950 $6,129 $6,312 $6,502 $6,697 MANAGEMENT FEE $7,554 $7,781 $8,014 $8,254 $8,502 $8,757 $9,020 $9,290 $9,569 $9,856 $10,152 CARPET CLEANING $830 $855 $881 $907 $934 $962 $991 $1,021 $1,052 $1,083 $1,116 SUPPLIES $581 $598 $616 $635 $654 $673 $694 $714 $736 $758 $781 PROPERTY TAXES $13,072 $13,464 $13,868 $14,284 $14,712 $15,154 $15,608 $16,077 $16,559 $17,056 $17,567 RESERVES $1,661 $1,711 $1,763 $1,815 $1,870 $1,926 $1,984 $2,043 $2,105 $2,168 $2,233 ROOF REPAIR/MAINTENANCE $830 $855 $881 $907 $934 $962 $991 $1,021 $1,052 $1,083 $1,116 STORE FRONT / WINDOW CLEANING $1,246 $1,284 $1,322 $1,362 $1,403 $1,445 $1,488 $1,533 $1,579 $1,626 $1,675 SECURITY SYSTEM / PHONE $830 $855 $881 $907 $934 $962 $991 $1,021 $1,052 $1,083 $1,116 TRASH $3,322 $3,421 $3,524 $3,630 $3,739 $3,851 $3,966 $4,085 $4,208 $4,334 $4,464 WATER/SEWER $2,492 $2,566 $2,643 $2,723 $2,804 $2,888 $2,975 $3,064 $3,156 $3,251 $3,348 TOTAL OPERATING EXPENSES $55,674 $57,344 $59,064 $60,836 $62,661 $64,541 $66,477 $68,471 $70,526 $72,641 $74,821 NET OPERATING INCOME $133,184 $137,180 $141,295 $145,534 $149,900 $154,397 $159,029 $163,800 $168,714 $173,775 $178,988 LAND LEASE PAYMENT LOAN PAYMENT NET CASH FLOW $23,805 $23,805 $23,805 $23,805 $23,805 $27,376 $27,376 $27,376 $27,376 $27,376 $27,376 $65,607 $65,607 $65,607 $65,607 $65,607 $65,607 $65,607 $65,607 $65,607 $65,607 $65,607 $43,772 $47,767 $51,883 $56,122 $60,488 $61,414 $66,046 $70,817 $75,731 $80,792 $86,005 • • INII) XX Triwell Properties Inc. TRIWELL PROPERTIES INC Triwell Properties Inc was established in March 1991 by James G. Wellbaum. Triwell operates as an asset manager, property manager and as a broker/partner in the development, operation and sale ofinvestment real estate. Triwell Properties Inc. is the successor to Welarc, Inc. which was formed in 1983 by Mr. Wellbaum and a partner. Triwell Properties Inc. has its own office building at 108 Standard Street, in El Segundo, California and presently employs 23 people. The company currently operates 33 properties. Following is a summary of some of the more recent projects. MAJOR COMMERCIAL PROJECTS Pier Avenue, Hermosa Beach This multi -story building is at the north-east corner of Pier Avenue and Hermosa Avenue in Hermosa Beach. It consists of approximately 16,000 square feet of office and retail space. In addition to leasing and management of the property over for 7 years, Triwell acted as project manager/developer for its complete remodel. The project included full seismic retrofit, architectural redesign, improvement to all mechanical, electrical, plumbing and other systems, and leasing all of the rentable space. Triwell also acted as the broker in the recent sale of this property to a local investor. Artesia/Aviation Shopping Center, Redondo Beach Triwell represented the buyer of this center when they purchased the property in June 1989. This 20 year old center includes a full size Rite Aid and other tenants such as Giuliano's Delicatessen, Hertz Rentals, Denny's and Radio Shack. The center consists of 36,840 square feet including an 108 Standard Street • P.O. Box 2248 • El Segundo, CA 90245 • (310) 322-7400 Fax (31 0) 322-7469 • expansion of 3,250 square feet which was designed and developed by Triwell. Mission Hills Shopping Center, Mission Hills In 1984, Triwell sold this 80,000 square foot center to a Trust and has since provided leasing and management services. An expansion was completed in 1989 under the design and supervision of Triwell adding two stores to the west side of the center. The center is fully leased and includes tenants such as Vons, Rite Aid, Hollywood Video, Goodyear Tire Center and Enterprise Rent-A-Car. Plans for a major remodel in the year 2000 are underway with the architectural work being provided by Peha and Associates and the development, financing and leasing services being provided by Triwell. La Tijera Property Trust In 1985, Triwell (Welarc) was retained by the La Tijera Property Trust to provide management services for this 11,600 square foot portion of a larger Von's shopping center located in Ladera Heights at the corner of Centinela and La Tijera Boulevards. Improvements have been completed over the past 11 years and the complex is fully leased. Recently, Triwell has taken over management of another portion of the center that contains approximately 10,000 square feet. In addition to the management, Triwell has coordinated environmental clean up of a dry cleaner and is coordinating efforts to remodel the entire center in several years. El Monte Shopping Center In early 1987, Triwell represented a Trust in the purchase of the El Monte Plaza Shopping Center located at the corner of Peck Road and Ramona Avenue in El Monte. This center contains 60,000 square feet and is anchored by a Lucky's supermarket, Blockbuster Video, Carl's Jr. with other national tenants such as H&R Block and Enterprise Rent-A-Car. Since its acquisition, the Lucky's store has been substantially remodeled and the whole center has undergone extensive improvements. In addition to property management, Triwell provided leasing and redevelopment services for the center. In 1995-96 Triwell coordinated an expansion to accommodate a new Blockbuster Video store. Peha and Associates j completed the design and assisted with the administration of this difficult construction project. The property was recently sold. Northstar Plaza This shopping center is in a prime area of Thousand Oaks and consists of 28,000 square feet of retail space and a 30,000 square foot office complex. Purchased in January of 1990 from an out of state seller who suffered financial difficulties, this property has been upgraded and leased by Triwell. Triwell provides property management services and coordination of additional leasing with a local broker. Occupancy has increased from 50% to 100% today. The Grove Shopping Center - Laguna Niguel This property consists of 44,965 square feet of retail space. Since January 1990, Triwell has provided property management services, property rehabilitation and leasing coordination. Triwell recently negotiated a lease with Blockbuster Video, and coordinated the remodel design with Peha and Associates Woodland Hills Shopping Center Located in a prime location in Woodland Hills at 20929 Ventura Boulevard, this center contains 70,573 square feet, primarily retail with some office space. The owner acquired this property from an out of state seller, and the property had been poorly maintained. Triwell coordinated a major rehabilitation in 1990. Triwell provides property management services and is supervising the leasing through a local brokerage office. Torrance Medical Arts Building This 40,000 square foot medical project is located on Lomita Boulevard near Torrance Hospital. Triwell operated this property for over a year as manager for an active Receivership. While managing the property, Triwell completed a major renovation. The property was sold in early 1998. Carmel Mountain Gateway Plaza In June 1998, Triwell represented a family Trust in the purchase of the Carmel Mountain Gateway Plaza located at Interstate 15 and Carmel Mountain Road in San Diego. This center has over 44,000 square feet of rentable space and is anchored by Good Guys!, Blockbuster, Party City, Beverages and More!, and Baskin Robbins. In addition to property • • management, Triwell is now providing coordination of improvements to the center. Criterion Apartment and Theater Building, Santa Monica In 1986, Triwell was retained to provide property management, leasing and brokerage services for this property. It was comprised of 34 apartments, four retail shops and a large movie theater located at the southeast corner of Arizona and the Third Street Promenade in Santa Monica. Presently, the property is under a master lease with Mann Theaters/Westar, who constructed a new six-plex cinema which opened in 1990. Triwell supervised and coordinated a complete asbestos abatement project in 1988 which involved the relocation of all tenants for a 6 week period. Triwell is presently retained as a consultant and also manages the master lease for the owners of the land. Villa Santa Fe - Santa Fe Springs Triwell provides complete management services for this 200 unit apartment complex located at Florence and Pioneer Boulevards in Santa Fe Springs. Within 8 months of managing this property, the vacancy factor was reduced from 50% to less than 10%, and numerous improvements are still being made to the complex. Triwell manages the project with a full time on-site staff including maintenance and leasing personnel. Information on other projects including properties that required extensive rehabilitation, seismic retrofit, environmental clean-up, brokerage and changes of use, is available upon request. • • James G. Wellbaum Personal Information Education: Graduated Washington State University -1976 BA Business Administration Graduated University of Southern California -1977 Masters of Business Administration -Entrepreneur & Venture Management Experience: 1972-1976 Real Estate Sales/Research -Wallace & Wheeler Inc., Bellevue, Washington 1976-1983 Vistar Financial Inc., Marina Del Rey, California Vice President, Acquisition and Asset Manager of over 250 projects 1983-1991 Welarc, Inc.- President & Co -Owner. 1985 -present State Court Receiver, Superior Court of the State of California 1991 -present Triwell Properties Inc., President and Owner Licenses/ State of Washington Real Estate License 1974 - Present Affiliations California - Real Estate License -1976- Present Charter Member - California Receiver's Forum Member - Apartments Owners Association Member ICSC-International Council of Shopping Centers Council Member-Torrance/South Bay YMCA Personal Resident of Manhattan Beach, California since 1979 Married with two children PE H A & ASSOCIATES ARCHITECTURE PLANNING 67 14th STREET HERMOSA BCH., CA 90254 1 (310) 372-1755 FAX (310) 376-6837 LARRY PEHA, ARCHITECT EDUCATION - California Polytechnic State University San Luis Obispo, California B. S. Architecture - El Camino College Torrance, California A.A. Architecture REGISTRATION - Licensed Architect - State of California AFFILIATIONS - American Institute of Architects - International Conference of Building Officials BACKGROUND Larry Peha has been in the field of Architecture for over 20 years. His experiences cover a wide variety of building types including office, commercial, industrial and residential facilities. His responsibilities have included the complete production of architectural drawings and specifications, including feasibility studies, conceptual design, design development, final design, construction documents, structural, mechanical, electrical and other outside consultant interface and coordination, specification writing, Building Code analysis, cost analysis, and in-depth construction administration. Peha & Associates opened their doors in 1986 with the philosophy that 'quality design is paramount, yet complete detailed construction documents must follow in order for a design to be executed.' Mr. Peha is closely involved in every project which Peha & Associates is commissioned. SAMPLE PROJECTS UNDER THE DIRECTION OF LARRY PEHA COMMERCIAL Seymour Bilowit Building Hermosa Beach 16,000 SF Multi -use structure Seismic retrofit and exterior facade facelift Saga International Rancho Dominguez 73,000 SF Office & Warehouse Included tenant imporvements for 15,000 sf of office Airport Plaza Shopping Center Torrance Multiple Store, Strip mall with satellite Buildings Adelante Partners Irwindale Five Building Industrial Park 84,000 SF Metropolitan Stevedore Wilmington Headquarters which included 32,000 SF Fully developed tenant improvement offices 18,000 SF Maintenance shop 12,000 SF Warehouse Hobie Sports 3rd Street Promenade Santa Monica Retail Store (L.A. Business Council Award Winner) Interior Design & Seismic Retrofit 10:..10 .arta—Ylwa—'. die Coffee `Beam, `Pof e ✓jean,6"&;a / has been import- ing, roasting and retailing gourmet coffee since 1963. We import all our coffees directly from coffee growing countries around the world includ- ing tropical and exotic places such as Brazil, Costa Rica, Colombia, Kenya and Sumatra. Importing plantation direct enables us to obtain the finest quality coffees available from each origin country. The Coffee Bean's first store, in Brentwood, California, Circa 1968. Regardless of what country the coffee comes from, there are two factors that determine the quality: the altitude at which the coffee is grown and the preparation of the beans after they are picked. We offer only the finest grades of coffee from specially selected estates. These estate coffees are grown at the highest altitudes and arc specially prepared European Style, hand-picked and double - polished to ensure that only the best beans make it to your cup. "Fresh Roasts Daily" has been our motto since our founders Herbert and Mona Hyman roasted coffee in the back rootn of C�/re �o�e'eMan:, s first store, in Brentwood, California. Today we roast both Southern European dark roasts and Northern European medium roasts of Mona's native Sweden. Because we are strictly a local op- eration we roast coffee daily to meet our needs, ensuring we sell only fresh -roasted coffee. We roast small batches daily at our roasting plant located in Camarillo, one hour north of Los Angeles. We then rush the fresh roasted coffee to our stores in our fleet of delivery trucks, ensuring the freshest, most delicious coffee possible. 111D2W7M--11170081201111-11M:.. Serving You Southern :. Throughout California Beverly Hills - N. Beverly Santa Ana - Main Place 445 N. Beverly Drive 2800 N. Main St., 1704 310-278-1865 714-542-6990 Beverly Hills - S. Beverly Santa Barbara - Paseo Nuevo 237 S. Beverly Drive 811-A State Street 310-274-7801 805-966.2442 Brentwood - San Vicente Santa Monica - 2nd Street San Vicente & Barrington 200 Santa Monica Blvd. 310-442-1019 310-260-0044 Burbank - San Fernando Bivd. Santa Monica - Main Street 340 N. San Fernando Blvd. 2901 Main Street 818.842-2394 310-392-1406 Camarillo Santa Monica - Montana Ave. 4580 Calle Alto 1426 Montana Ave., 15 805-484-7924 .310-453.2093 Costa Mesa Sherman Oaks Fashion Square 1835 Newport Blvd., 08122 14006 Riverside Dr., 1259 714-722-9673 818.906-0504 Encino Place South Coast Plaza 16101 Ventura Blvd. 3333 Bristol, 1182, Costa Mesa 818-386-0935 714-549-1766 W. Hollywood - Sunset Plaza Studio City - Laurel Promenade 8591 Sunset Blvd. 12050 Ventura Blvd., C-104 310-659-1890 818-506-4620 Larchmont Village Thousand Oaks 135 N. Larchmonl The Oaks Mall 213-469-4984 805-497-1211 Long Beach The Plaza at West Covina Pacific Coast Hwy. & Westminster 112 Fashion Plaza Dr.. 11000 310-598-2198 310-814-2240 Malibu Country Mart Ventura - Buenaventura Mall 3835 Crosscreek Rd. 363 S. Mille Road, 11553 310-456-5771 805-642-7217 Manhattan Beach Westwood - Gayley Avenue 321 Manhattan Beach Blvd. 1001 Gayley Ave. 310-545-2827 310-208-1991 Manhattan Village Westwood - Weyburn Avenue Sepulveda & Rosecrans 950 Westwood Bivd. 310-546-3359 310-208-8018 Marina del Rey Woodland Hills Promenade 13420 Maxella, Suite C20 AMC, Woodland Hills 310-823-0858 818-888-6321 Old Town Pasadena O 18 S. Fair Oaks Blvd. 818-449-5499 Office Coffee Program 818-244-6905 Pasadena - The Commons 146 S. Lake Ave, 1107 Mall Order 818-440-9744 800 -TEA -LEAF Dedicated to Fine Coffee & Tea Since 1963 was 11 Ems ma czt4 The Bean Guide is designed to give you ` specific information about our current selection of beans as well as brewing, storing and filter information gathered from our thirty plus years in coffee importing, roasting and retailing experience. We hope that this Guide will be helpful and a good resource when making bean selections or when you have any -- other questions. drooffee fee NDp ��a Est. 1963 ii TRADITIONAL ROAST OFFEE Brazilian Santos: From the Cerrado region this coffee has a full, earthy body, nutty aroma and mild taste. Aroma Body Acidity Decal Nutty Medium Light Yes Colombian: Our Colombian Supremo has the creamy body and full, rich aroma that made it famous. Aroma Body Acidity Decaf Full Creamy Medium Yes Costa Rican: This extremely fragrant high -grown coffee has a wonderfully rich aroma that complements its bold, lively flavor. The only coffee that tastes identical to its aroma. Aroma Body Acidity Decal Rich Medium Very Lively Yes Guatemalan: From the Antigua region, this coffee has a uniquely spicy and striking taste that starts at its peak and levels off. Aroma Body Acidity Decaf Spicy Light Lively No House Blend: A century -old gourmet blend featuring the highest grown Central and South American coffees. Nicely rounded, good both morning and evening. Aroma Body Acidity Decaf Lively Full Medium Yes Java: A thick, heavy body, pungent aroma and low acididty characterize this unique Indonesian coffee. Aroma Body Acidity Decaf Pungent Thick Low Yes Kenya: Our Kenya AA has a very complex aroma, hearty body and gutsy, winey flavor. It's the European professional coffee taster's choice. Aroma Body Acidity Decaf Winey Rich Very Lively No Ethiopian Mocha: This rare Ethiopian Yirgachcffe coffee has a floral bouquet, creamy body and sweet bright flavor. The name "Mocha" comes from the shipping port in Yemen through which the coffee travels. Aroma Body Acidity Decal Floral Smooth Lively Yes Mocha Java: An exotic blend capturing both the sweet lively flavor of Mocha and pungent strength and deep body of Java. Aroma Body Acidity Decaf Sweet Full Medium Yes Papua New Guinea: Thi; Sigri AA is extremely aromatic and flavorful. Known as an "Echo Coffee;' you taste it twice, first when you begin drinking, second when you swallow. Aroma Body Acidity Decaf Chocolatey Deep Medium No Sumatra: This Indonesian island produces coffees with a deep aroma, malty flavor and low acidity. This Mandeling Estate coffee is quickly becoming a favorite of many. Aroma Body Acidity Decaf Deep Malty Low No 15 ARK ' OAST COFFEES Colombian Dark: The dark roast adds an extra pronounced flavor to the smooth body of this coffee. Aroma Body Acidity Decaf Strong Full Low No Viennese: Our best seller, we over -roast this coffee slightly to bring out the dark, rich aroma and bold full flavor typical of European roasts. Aroma Body Acidity Decaf Strong Rich Low Yes Espresso: A true Italian roast that brings all the oils inside the bean to the surface for a sharper, dark roast flavor. Aroma Body Acidity Decaf Strong Medium Low Yes French: This is our darkest roast available, it has an extremely strong taste and burnt aroma. Aroma Body Acidity Decaf Burnt Light Low Yes CZ''' For orders larger than 3 pounds we suggest that you call ahead and we will have your order ready for pick-up. FLAVORED COFFEES These coffees are ground before they are flavored to ensure there is none of the bitterness that results from grinding flavored coffee in home grinders. Vacuum sealed in 12 az pkgs Chocolate Hazelnut Cinnamon Hazelnut Raspberry Irish Cream Rum Butter Liqueur French Vanilla Macadamia Nut All these coffees are available decaffeinated. HBH COFFEE EXTRACT Herbert B. Hyman's Secret Recipe ^- The "Only way to make iced = _ coffee." This 100% coffee extract = _ is created through a special process ''- which neutralizes unpleasant acids, yielding an exceptionally smooth and refreshing coffee concentrate. ¢p Regular or Decaffeinated $10.50 o� Must be refrigerated. 32 oz. '4E4'' The Original Ice Blended° IZECIf E Fill an &oz. glass with ice, add • 2oz. HBH Coffee Extract • 2oz. Milk • 2 rounded Tbsp. of HON Hot Chocolate Mix or s. 2 rounded Tbsp. of HBH Hot Vanilla Mix Pour Into blender and blend until smooth COFFEE PRICES WORLD COFFEES FLAVORED COFFEES 1/2 POUND $5.15 EACH 1 - 4 POUNDS $9.75 EACH 5 OR MORE POUNDS $8.75 EACH 1 - 4 PACKAGES $9.75 EACH 5 OR MORE PACKAGES $8.75 EACH PACKAGES AXE VACUUM PACKED, Au. PURPOSE GRIND, I2oz. EACH Purchases of 1 pound or more include free coffee filters. die Coffee `Beam,&'Tea `Leaf BREWING INSTRUCTIONS 1. Begin with your favorite freshly roasted Coffee Bean coffee. 2. Determine the correct grind for your coffee maker and filter system. If your water backs up in the filter and the coffee is muddy, your grind is too fine. Thin weak coffee means your grind is too coarse. 3. Use our free filters! Our coffees are very high grown and require a heavy paper filter to get the best extraction. 4. Use one (1) tablespoon of ground coffee for every six (6) ounces of water. 5. Begin with fresh cold water in your coffeemaker. Good water quality is imperative since coffee is 98% water. If your coffee tastes inferior, you may need to use filtered water. 6. For Melitta type filter systems, heat water just to a boil and pour into the filter slowly and steadily. Enjoy when ready! STORING INSTRUCTIONS Coffee must be stored in an airtight container or it will absorb foreign aromas and tastes. (Stale coffee indicates you may not be storing it in an airtight container.) We recommend that you store your airtight container in a dark, cool place or in the freezer. Remember not to leave your airtight container out when you remove it from the freezer as moisture will condensate causing deterioration of the beans' flavor. For maximum longevity of flavor, scoop out your coffee and put your container back in the freezer before it begins to warm. Coffee keeps very well in the freezer up to six months, and stores best in its original bag with moisture proof freezer over -wrap. But beware, once the freezer wrap has been removed, the coffee bag is no longer an airtight storage container. IMPORTANCE OF OUR FREE FILTERS To ensure the best -tasting cup of coffee at home, we provide free filters with every pound of coffee we sell. Our filters are made with 32 lb. cotton paper that is oxygen whitened, not chlorine bleached. Our coffees are high - grown, requiring a heavy paper filter free of brown paper impurities to get the best extraction. We understand the importance of using the best filters for your coffee, so we give them free with every pound purchased. This is the same filter paper we use in our stores. • International Coffee & Tea, LLC 4580 Calle Alto, Camarillo, California 93012 805-484-7924 Fax 805484-1255 April 30, 1999 Mr. James Wellbaum Triwell Properties, Inc. P.O. Box 2248 El Segundo, CA 90245 ffee CriM `.j 17ca CLe't%� ToSa 1963 RE: NWC Hermosa Ave. & 13th St. Hermosa Beach, CA Dear Jim: We are pleased to submit the following Letter of Intent outlining terms and conditions regarding the above referenced Premises: 1. Landlord Please advise as to entity name holding title to property. 2. Tenant International Coffee & Tea, LLC, a Delaware limited liability company, d.b.a. The Coffee Bean & Tea Leaf, a.k.a. The Coffee Bean. 3. Premises 1,000 square feet of rentable space (per BOMA standards) at the referenced location (see attached site plan). 4. Term 10 years with (3) five-year options to renew. The Lease Term shall commence upon the date of Rent Commencement. Tenant shall not be obligated to accept possession of the Premises on or between the dates of November 25 and January 5. In the event the term of the Lease expires on or between the dates of September 1 and January 30, the expiration of the Term shall be extended to the following January 31. 5. Rent $ 3,850.00 per month; $3.85 psf (NNN basis). No security deposit or advanced rent shall be payable. 6. Rent Adjustments Fixed 10% increase every 5 years (including option terms). 7. Percentage Rent None. S International Coffee & Tea, LLC April 30, 1999 Page Two 8. Rent/Net Charges 120 days after receipt of Premises with Landlord's Work completed and Commencement building permits received. Tenant shall not be obligated to accept possession of Premises earlier than 75 days following the date of Lease execution. 9. Real Estate Taxes Tenant's prorated share. In the event of a change of ownership, Tenant shall not incur a tax increase greater than 25% above the prior year's assessment. Estimate of real estate tax is psf per month. 10. Insurance 11. Common Area Maintenance Tenant's prorated share. Estimate of insurance cost is per month. Tenant's prorated share. Tenant shall not reimburse Landlord for any capital improvements. All structural elements including foundations, walls, roof and roof coverings not to be included in CAM and are responsibility of Landlord. Landlord to warrant building systems for a period of one (1) year and HVAC system for the term of lease. Estimate of CAM expense (excluding taxes and insurance) is psf per month. 12. Management/ The aggregate fees for Management and Administration of the Administration Fee shopping center/property, whether or not by Landlord or a third party, shall not exceed 10% of CAM expense (excluding taxes and insurance). 13. Utilities Tenant to pay their own utilities. Landlord to provide Tenant with metered, separate utilities. 14. Completion of Landlord Work In the event Landlord's Work has not been completed and turnover of Premises has not occurred by March 1, 2000, Tenant shall have right to terminate. 15. Delivery Conditions Per attached Exhibit "C" -Landlord's Work. 16. Tenant Allowance $17.50 psf payable 90% within 10 days after Landlord's receipt of Tenant's certificate of occupancy and the remaining 10% within 10 days after Landlord's receipt of all lien releases. Lien releases shall only be required for contractor labor and/or materials in excess of $5,000.00 per vendor. • International Coffee & Tea, LLC April 30, 1999 Page Three 17. Tenant Tenant to complete all interior improvements. Tenant shall utilize Improvements contractors licensed to conduct business in the State of California. 18. Assignment & Tenant may assign or sublease the Premises subject to Landlord's Subletting reasonable approval. In the event of a sublease, Tenant shall remain liable to Landlord for performance under the Lease. Tenant shall have the right to assign or sublease to a related entity (as defined in lease) upon written notification to Landlord. All transfers and or sale of Corporate stock or assets to be exempt from assignment restrictions. 19. Permitted Use 20. Exclusive Use Tenant shall use the Premises for: (i) the retail sale of packaged and bulk coffee, coffee beans, tea, hot chocolate and hot vanilla drink mix; hot and cold coffee, tea, and espresso drinks; hot and cold chocolate and vanilla drinks; bakery and desert items for on-site and off-site consumption; coffee and tea accessories and all other items as are typically sold in The Coffee Bean & Tea Leaf stores and (ii) any other lawful use that does not conflict with the primary use of another tenant operating its business at the shopping center or violate an exclusive use restriction at the shopping center. Landlord shall provide, at its expense, any required change of zoning or use restriction to allow for Tenant's Permitted Use in Premises. Excepting other food -service tenants that may sell incidental and non- branded brewed coffee and brewed tea, Tenant shall have the exclusive right to sell gourmet coffee, tea and espresso. Landlord to prohibit any other tenant from selling espresso drinks, whole bean coffee, loose leaf tea or any drink similar to the Tenant's trademark "Ice Blended" frozen beverage. 21. Outside Seating Landlord shall include, as a part of the development application, provisions to allow for sidewalk seating on the south and eastern sidewalk areas adjacent to Premises to provide for affixed tables (chairs to be brought in at night). Outside seating area to be furnished and maintained by Tenant in a first-class manner. 22. Parking None. However, Landlord shall include, as a part of the development application, provisions that the on -street parking on the Hermosa Avenue frontage of the building shall be 30 -minute maximum metered parking from 7:00" AM to 6:00 PM and taxi parking area in the evening. • • International Coffee & Tea, LLC April 30, 1999 Page Four 23. Building Plans/ As soon as available, Landlord shall provide to Tenant copies of complete Covenants "as -built" architectural blueprints of Premises including elevations and overall site plans, sign criteria, CC&R's, REA's, preliminary title report, environmental reports and any other documentation to which Landlord has access. Landlord shall further provide any documentation the Landlord has knowledge of affecting, controlling or restricting Tenant's occupancy. 24. Hazardous Materials Landlord warrants, to the best of its knowledge, that Premises are free of asbestos and other hazardous materials. Landlord shall remove all hazardous materials at its sole cost and expense. 25. Building Tenant shall be able to modify the interior of the building to meet Tenant's Modifications needs subject to Landlord's approval, which shall not be unreasonably withheld. Modifications of non-structural nature less than $10,000.00 shall not require Landlord's approval. 26. Signage Landlord shall allow Tenant, at Tenant's expense, the right to install Tenant's standard sign package, including its proprietary awning package, as permitted by local jurisdictional authorities. 27. Lease Form Tenant's lease form. 28. Offer Expiration May 28, 1999. 29. Conditions to Lease The Lease is contingent upon the following: (a) Tenant obtaining all governmental approvals including a building permit from the local jurisdictional authorities for the Tenant to construct and operate as a typical Coffee Bean & Tea Leaf store. (b) Tenant's review and approval of all items in section titled "Building Plans/Covenants". 30. Broker Brokerage representation is as follows: Representation Landlord N/A Tenant N/A • • International Coffee & Tea, LLC April 30, 1999 Page Five The above terms are the basic conditions under which International Coffee & Tea, LLC may enter into a lease for the above referenced premises. Only a lease fully executed by all parties will create a binding agreement. Landlord and Tenant confirm that this offer is subject to final review and approval by Tenant Executive Committee and legal counsel. Additionally, Tenant may be making offers on multiple sites within the same trade area. The parties hereto do not intend this letter to be a contract or to be bound in any way by this letter. A binding agreement will not exist unless and until the parties have agreed to and executed a form of lease agreement which has been approved by the respective counsel, if any, regarding the subject matter of this letter, which lease agreement shall contain all other essential terms of the transaction. All parties acknowledge that employees of International Coffee & Tea, LLC are holders of valid California Department of Real Estate licenses including Rick Chancellor and that International Coffee & Tea, LLC reserves the right to act as or have employees act as its broker. Broker makes no representation to Landlord or Tenant that acceptance of this proposal will guarantee the execution of a contract for the lease of the premises. The parties further acknowledge that it would be imprudent and unreasonable to rely upon the expectation of entering into a lease based upon the subject matter of this letter. Efforts by either party to complete due diligence, negotiate, obtain financing or prepare a lease contract shall not be considered as evidence of intent by either party to be bound by this letter. The performance by either party prior to the execution of a lease of any of the obligations which will be included in such lease when negotiations are completed shall not be considered as evidence of intent by other party to be bound by this letter. Even though the foregoing provisions of this letter do not create a contract or any enforceable agreements, any controversy, dispute or claim arising out of, or in connection with, this letter and/or any acts of the parties relating to or in furtherance of the Lease described in this letter shall be resolved, at the request of either party, by a general reference conducted by a retired judge from the panel of Judicial Arbitration and Mediation Services, LW (1.A.M.S.), appointed pursuant to the provision of California Code of Civil Procedure Section 638 (1) et. seq. The parties intend this general reference provision to be specifically enforceable in accordance with said Section 638(1). If the parties cannot agree upon a member of the J.A.M.S. panel, one shall be appointed by the Presiding Judge in the County in which the matter is to be heard. The provision of this paragraph shall automatically terminate and be of no further force or affect upon the execution of a lease between the parties with respect to the subject premises and shall not apply to any controversy, dispute or claim arising out of or in connection with, any such executed Lease. LANDLORD AND TENANT acknowledge that this Proposal is not a lease contract and it is intended as the basis for the preparation of a lease contract by Landlord. The contract shall be subject to Landlord's and Tenant's approval and only a fully executed contract shall constitute a lease for the Premises. Broker makes no warranty or representation to Landlord or Tenant that acceptance of this proposal will guarantee the execution of a contract for the lease of this premise. Sincerely, 1�Chancellor Director of Store bevelopment AGREED AND ACCEPTED: Landlord: Date: By: Print Name: Title: R • AIL • AC S vIvu p-Qcs� DEXA TO 'E=NTS fi- t- 'P141111111111 ur hii.iiiii.illl GROUND FLOOR. PLAN / SITE PLAN 110.1 1-EASASL£- FLf2 AfGEA — 1 ,(o9S 5C, Fr TO AL LEAS E54-goSe�FLC. MZEA RETAIL) - 1,(95 Q. FT. 'r 1 A1- 1— FLg. Aerzek tOFFIC.Er) - 5i 43Co 562, FT G{OSS FIS AGFA — 2 2 8 0 SO. FT PEN1 A 8 ASSOCIATES ARCH1TECTURE P l A PINI H G 67 1415 SIREET HERMOSA eat. CA 90254 (310) 3721755 EXHIBIT "C" LANDLORD'S WORK VANILLA SHELL Landlord agrees to construct for the Tenant the area designated as Demised Premises on Exhibits "A" and "B". Landlord shall prepare at its sole cost and expense plans and specifications (the "Plans") for the site work at the Shopping Center, the improvements comprising the Shopping Center and Landlord's Work. Landlord's Work shall be subject to the approval of Tenant, which approval shall not be unreasonably withheld. Landlord's Work shall be done at Landlord's sole cost and expense. Landlord's Work shall be completed in accordance with all applicable governing codes, in a good and workmanlike manner, utilizing first quality new materials. To the extent that certain portions of Landlord's Work have already been completed, Landlord's obligations shall be deemed satisfied, provided: 1. All improvements are in good condition subject to reasonable wear and tear and are in compliance with all existing code requirements and Tenant's Plans and specifications. 2. All existing electrical and mechanical systems shall be in good working order at the time of "Delivery" and Landlord warrants same for a period of at least one (1) year or more if specified. 3. Tenant has notified Landlord in writing that Tenant has accepted the new or existing improvements as specified in Landlord's Work. If Landlord's existing improvements are not in accordance with the above, they shall be brought into compliance within twenty (20) days after written notice from Tenant of such non-compliance, after which time Tenant shall have the option to complete this work and offset costs from rent. Landlord and Tenant shall inspect the space prior to turnover and shall determine any discrepancies, and any items that are not completed in accordance with Tenant's Plans and specifications. Whenever Landlord or Tenant approvals are required of plans, Landlord's work or Tenant's work, such approvals shall be limited to 10 days from receipt of the items to be approved. Exhibit "C", Page 1 L T International Coffee & Tea, LLC Vanilla Shell April. 30, 1999 • LANDLORD'S WORK All of the following work shall be provided to meet governing codes and regulations. The term "provide" as used herein means furnish and install. A. Building Shell: Building Shell to include but not be limited to: 1. Complete roofing system, including roofing membrane, insulation, roof deck, and structure, weathertight and insulated to conform to the local energy code requirements. 2. Complete structural system, columns, beams and/or rafters (exposed construction); determined by the approved plans and specifications of an Architect and/or Structural Engineer. Structure shall have a minimum of 13 feet clear A.F.F. throughout. 3. Building and site shall be free of all hazardous materials (including but not limited to asbestos, underground storage tanks, etc.). Hazardous materials shall be properly handled (i.e., encapsulated or removed) as required by governing codes and regulations. 4. Exterior insulated wall surfaces of structure shall be architectural concrete, cement plaster/stucco, synthetic stucco, brick, stone or other veneer. Interior wall surfaces shall be drywall finished, taped and ready for paint. 5. Secondary access/exit door(s) with frame and all required hardware and specifications. 6. Entire building shell shall be designed and constructed to conform to all governing codes and regulations including but not limited to energy code requirements and ADA criteria. B. Utilities: Shall be approved to Demised Premises and located in accordance with Tenant's approved plans, and sufficient for Tenant's use. All utility services shall be stubbed into Demised Premises, metered and separate for Tenant's sole use. 1. Water Service: Per local code requirements, 13/4" minimum. Shall include a shut-off valve within premises, anti -backflow valves and all pressure reduction valves to a maximum of 70 p.s.i. water pressure. 2. Sewer Service: 4" minimum sewer line. 3. Natural Gas Service: 3/4" gas line suitable to supply the required,BTU/Hr. 4. Phone Service: Minimum 3 -line capability. Exhibit "C", Page 2 •L T International Coffee & Tea, LLC Vanilla Shell April 30, 1999 • i C. Floor Slab: A smooth and level concrete floor slab ready for Tenant -specified floor coverings. In the event concrete floor slab has not been poured upon the effective date of the, Landlord shall allow Tenant to install underground utilities prior to pouring the concrete floor slab. D. Walls: Demising walls, if any, shall be metal or wood studs erected per applicable governing codes and finished with drywall (taped and ready for paint). An interior wall or walls and door shall be provided separating Tenant's customer area from a storeroom area per Tenant's specifications. The interior portion of all wall surfaces shall include sound attenuating insulation (minimum of R-13 for 6' wall and R-11 for 4" wall) per Tenant's requirements. In the event walls have not been finished with drywall upon the effective date of the, Landlord shall allow Tenant to install utilities prior to finishing drywall. Existing interior walls, if any, shall be removed as indicated on Tenant's plans. E. Electrical: Provide to Demised Premises of one (1) 208/120 volt, 3-phase, 4 -wire, 42 -circuit, 400 -amp panel, with one (1) meter and located per Tenant's specifications. F. Air Conditioning and Heating: 1. Minimum combined capacity of 1.0 ton per 150 square feet contained in Demised Premises. 2. Each unit should be fully functional and capable of maintaining 78 degrees Fahrenheit in cooling mode (summer) and 72 degrees Fahrenheit in heating mode (winter). Each unit should be fitted with an economizer to provide cooling in winter months. 3. HVAC system to include disconnect, weather disconnect to HVAC units, conduit, power wiring, thermostat, gas piping (where required), smoke detectors (if required) and condensation lines. Air conditioning and heating units to be equipped with "Lightstat: model automatic set back thermostats — one (1) per unit. 4. Compressors to have five (5) year extended warranties. 5. All HVAC equipment to comply with Clean Air Act requirements. Exhibit "C", Page 3 L T International Coffee & Tea, LLC Vanilla Shell April 30, 1999 • • G. Storefront: 1. Clear glass storefront per building elevations. 2. For each customer entry point: Two (2) single-action 36" doors or one (1) single-action 42" door (at Tenant's option) with exterior and interior cylinder locks, self -closures per Tenant's design. Door height to be 8'. H. Restroom: Provide (1) restroom including an exhaust fan, light, walls finished and painted and all fixtures and hardware to handicap code. Restroom location shall be to Tenant's specifications and may, at Tenant's option, include a vestibule entry. I. Fire Sprinkler System: Provide a complete fire sprinkler system according to code, if and only if, required by code. Additional drops for any vestibule, counter and perimeter soffit areas, workroom, restrooms, and other necessary rooms or locations. Any system monitoring, alarms, specialty items or alarm fees shall be included as required by code. J. Site Development: 1. Parking areas shall be hard -surfaced with concrete, asphalt or other material and properly striped. Provide per industry and local codes and standards proper and adequate sub -base preparation prior to installation. In addition, time-limited parking areas, if any, should be clearly designated as such, per approved plans. 2. All ADA requirements and all other governing codes must be adhered to in total site and building development. 3. Walks shall be surfaced with concrete, stone, brick pavers or other hard surfaced material. 4. Soils issues with regard to contamination and stability should be addressed and corrected to levels acceptable to local and national governing agencies when applicable. Necessary tests are at Landlord's sole cost and expense. L T Exhibit "C", Page 4 International Coffee & Tea, LLC Vanilla Shell April 30, 1999 • 5. All parking areas and walks must be provided with energy efficient artificial lighting provided by light standards with adequate illumination to provide for an overall minimum ambient light level at all points of the site, of one (1) foot candle of illumination per square foot at the parking lot surface. 6. Landscaping and sprinkler irrigation system shall be installed. 7. Dumpster pad and enclosure in a location and/or a design to be mutually approved by Tenant and Landlord. 8. Site drainage/catch basins through parking and planted areas K. Miscellaneous: 1. Any permits, fees, licenses, Architectural drawings, Engineering consulting services or anything of the sort necessary for the foregoing shall be provided by Landlord at his sole cost and expense. 2. Landlord to secure from City or Local governing body final signoffs for Landlord's Work. Tenant shall obtain a Final Certificate of Occupancy or the local equivalent, granted to Tenant and providing for Tenant's right to do business in that respective location. Final signoffs for Landlord's Work to be provided to Tenant's on-site representative or as specified by Tenant. 3. To the extent the foregoing is not sufficient to meet applicable governing standards, the foregoing shall be modified with Tenant's consent to meet such applicable governmental standards at Landlord's sole cost and expense. L. General: 1. Within thirty (30) days after the date of this Lease, Landlord shall deliver to Tenant complete and accurate plans, surveys, plot plans, diagrams, schedules, specifications of the project and other data reasonably required by Tenant, of the existing or proposed development and/or buildings to be erected on the Demised Premises. Landlord's plans shall be sufficiently complete in Tenant's reasonable opinion to prepare its interior plans. Exhibit "C", Page 5 L T International Coffee & Tea, LLC Vanilla Shell April 30, 1999 • 2. Tenant shall have forty-five (45) days after receipt of Landlord's plans prepared pursuant to the preceding paragraph, in which to submit to Landlord its interior plans and exterior signage specifications sufficiently complete to obtain a building permit. Should Tenant require any variation in the storefront said variation shall be incorporated in the aforesaid plans to be fumished by Tenant, and Landlord agrees to provide to Tenant at Landlord's expense that part of the modified storefront as Tenant shall require, provided storefront has not been installed. 3. Both Landlord and Tenant's plans shall be subject to the reasonable approval of the other party and no work shall be performed until such approval has been granted in writing. Failure to respond to a request for approval within ten (10) days after receipt of plans shall be deemed an approval. Landlord and Tenant both agree to build strictly in accordance with local codes and the approved plans and either party shall be allowed to review the work of the other to verify compliance. 4. All work undertaken by Tenant shall be at Tenant's expense and shall not damage the building or any part thereof without prior written approval from the Landlord. 5. Although no variations are permitted, upon completion of Tenant's Work, the amount of square footage in the Demised Premises as set forth herein shall be measured and recomputed. This Lease may be adjusted in order to conform to any minor variations in actual square footage and a corresponding adjustment shall also be made in the amount of minimum guaranteed rental and other pro rata charges and assessments. If adjustments are necessary, such will be shown as an amendment to this Lease, which Landlord and Tenant agree to execute within ten (10) days after preparation thereof. Exhibit "C", Page 6 L T International Coffee & Tea, LLC Raw Shell April 30, 1999 WHAT EVERY BODY NEEDS! Thf ROBEKS JUICE CORPORATE OFFICE 2736 MAIN STREET SANTA MONICA, CA 90405 PH: 310381.0700 FX: 310.581.0660 ROBEKS@AOLCOM • • April 30, 1999 Mr. James Wellbaum Triwell Properties, Inc. P.O. Box 2248 El Segundo, CA 90245 RE: NWC Hermosa Ave. & 13th St. Hermosa Beach, CA Dear Jim: We are pleased to submit the following Letter of Intent outlining terms and conditions regarding the above referenced Premises: 1. Landlord 2. Tenant 3. Premises 4. Term Please advise as to entity name holding title to property. Robeks Corporation, a California Corporation. 695 square feet of rentable space (per BOMA standards) at the referenced location (see attached plan). 5 years with (4) five-year options to renew. The Lease Term shall commence upon the date of Rent Commencement. Tenant shall not be obligated to accept possession of the Premises on or between the dates of November 25 and January 5. In the event the term of the Lease expires on or between the dates of November 1 and January 30, the expiration of the Term shall be extended to the following January 31. 5. Rent $ 2,085.00 per month; $3.00 psf (NNN basis). No security deposit or advanced rent shall be payable. 6. Rent Adjustments 10% increase every 5 years (including option terms). 7. Percentage Rent None. Mr. James Wellbaum April 30, 1999 Page 2 8. Rent/Net Charges 120 days after receipt of Premises with Landlord's Work Commencement completed and building permits received. Tenant shall not be obligated to accept possession of Premises earlier than 75 days following the date of Lease execution. 9. Real Estate Taxes Tenant's prorated share. In the event of a change of ownership, Tenant shall not incur a tax increase greater than 25% above the prior year's assessment. Estimate of real estate tax is psf per month. 10. Insurance Tenant's prorated share. Estimate of insurance cost is per month. 11. Common Area Tenant's prorated share. Tenant shall not reimburse Landlord for any Maintenance capital improvements. All structural elements including foundations, walls, roof and roof coverings not to be included in CAM and are responsibility of Landlord. Landlord to warrant building systems for a period of one (1) year and HVAC system for the term of lease. Estimate of CAM expense (excluding taxes and insurance) is psf per month. 12. Management/ The aggregate fees for Management and Administration of the Administration Fee shopping center/property, whether or not by Landlord or a third party, shall not exceed 10% of CAM expense (excluding taxes and insurance). 13. Utilities Tenant to pay their own utilities. Landlord to provide Tenant with metered, separate utilities. 14. Completion of In the event Landlord's Work has not been completed and turnover of Landlord Work Premises has not occurred by March 1, 2000, Tenant shall have right to terminate. 15. Delivery Conditions Per attached Exhibit "C" -Landlord's Work. 16. Tenant Allowance $17.50 psf payable 90% within 10 days after Landlord's receipt of Tenant's certificate of occupancy and the remaining 10% within 10 days after Landlord's receipt of all lien releases. Lien releases shall only be required for contractor labor and/or materials in excess of $5,000.00 per vendor. • • Mr. James Wellbaum April 30, 1999 Page 3 17. Tenant Tenant to complete all interior improvements. Tenant shall utilize Improvements contractors licensed to conduct business in the State of California. 18. Assignment & Tenant may assign or sublease the Premises subject to Landlord's Subletting reasonable approval. In the event of a sublease, Tenant shall remain liable to Landlord for performance under the Lease. Tenant shall have the right to assign or sublease to a related entity (as defined in lease) upon written notification to Landlord. All transfers and or sale of Corporate stock or assets to be exempt from assignment restrictions. 19. Permitted Use Tenant shall use the Premises for: (i) the retail sale of juices, blended drinks (including, but not limited to, smoothies) and other hot and cold non-alcoholic beverages; baked goods, sandwiches, soups, salads and health and nutritional products (including, but not limited to, health - oriented foods and books); health and nutritional supplements (including, but not limited to, vitamins, minerals and herbs); juicing equipment and supplies; pottery and gift items; and other incidental items typically sold in Tenant's locations and (ii) any other lawful use that does not conflict with the primary use of another tenant operating its business or violate an exclusive use restriction at the shopping center/building. Landlord shall provide, at its expense, any required change of zoning or use restriction to allow for Tenant's Permitted Use in Premises. 20. Exclusive Use Excepting other food -service tenants that may sell incidental, non -blended juice, Tenant shall have the exclusive right to sell blended juice products, wheatgrass, juice freshly squeezed on -premises, frozen desserts and nutritional supplements. Furthermore, Landlord shall not lease to or allow another tenant to primarily operate (more than 10% of business) in the shopping center/building as a health -products business. 21. Outside Seating Landlord shall include, as a part of the development application, provisions to allow for sidewalk seating on the south and eastern sidewalk areas adjacent to Premises to provide for affixed tables (chairs to be brought in at night). Outside seating area to be furnished and maintained by Tenant in a first-class manner. 22. Parking None. However, Landlord shall include, as a part of the development application, provisions that the on -street parking on the Hermosa Avenue frontage of the building shall be 30 -minute maximum metered parking from 7:00 AM to 6:00 PM and taxi parking area in the evening. i • Mr. James Wellbaum April 30, 1999 Page 4 23. Building Plans/ As soon as available, Landlord shall provide to Tenant copies of all Covenants available "as -built" architectural blueprints of Premises including elevations and overall site plans, sign criteria, CC&R's, REA's, preliminary title report, environmental reports and any other relevant documentation to which Landlord has access affecting, controlling or restricting Tenant's occupancy. 24. Hazardous Materials Landlord warrants, to the best of its knowledge, that Premises are free of asbestos and other hazardous materials. Landlord shall remove all hazardous materials, if any, at its sole cost and expense. 25. Building Tenant shall be able to modify the interior of the building to meet Tenant's Modifications needs subject to Landlord's approval, which shall not be unreasonably withheld. Modifications of non-structural nature less than $10,000.00 shall not require Landlord's approval. 26. Signage Landlord shall allow Tenant, at Tenant's expense, the right to install Tenant's standard sign package, including its proprietary awning package, as permitted by local jurisdictional authorities. 27. Lease Form Tenant's lease form. 28. Offer Expiration May 28, 1999 29. Conditions Precedent Contingencies shall be as follows: (a) The Lease shall be contingent upon Tenant obtaining all governmental approvals including a building permit from the local jurisdictional authorities for the Tenant to construct and operate as a typical Robeks Juice store. (b) Tenant's review and approval of all items in section titled `Building Plans/Covenants" prior to Lease execution. 30. Broker Brokerage representation is as follows: Representation Landlord N/A Tenant N/A • • • Mr. James Wellbaum April 30, 1999 Page 5 The above terms are the basic conditions under which Robeks Corporation may enter into a lease for the above referenced premises. Only a lease fully executed by all parties will create a binding agreement. Landlord and Tenant confirm that this offer is subject to final review and approval by Tenant Executive Committee and legal counsel. Additionally, Tenant may be making offers on multiple sites within the same trade area. The parties hereto do not intend this letter to be a contract or to be bound in any way by this letter. A binding agreement will not exist unless and until the parties have agreed to and executed a form of lease agreement which has been approved by the respective counsel, if any, regarding the subject matter of this letter, which lease agreement shall contain all other essential terms of the transaction. All parties acknowledge that employees of Robeks Corporation are holders of valid California Department of Real Estate licenses including Rick Chancellor and that Robeks Corporation reserves the right to act as or have employees act as its broker. Broker makes no representation to Landlord or Tenant that acceptance of this proposal will guarantee the execution of a contract for the lease of the premises. The parties further acknowledge that it would be imprudent and unreasonable to rely upon the expectation of entering into a lease based upon the subject matter of this letter. Efforts by either party to complete due diligence, negotiate, obtain financing or prepare a lease contract shall not be considered as evidence of intent by either party to be bound by this letter. The performance by either party prior to the execution of a lease of any of the obligations which will be included in such lease when negotiations are completed shall not be considered as evidence of intent by other party to be bound by this letter. Even though the foregoing provisions of this letter do not create a contract or any enforceable agreements, any controversy, dispute or claim arising out of, or in connection with, this letter and/or any acts of the parties relating to or in furtherance of the Lease described in this letter shall be resolved, at the request of either party, by a general reference conducted by a retired judge from the panel of Judicial Arbitration and Mediation Services, LLC (J.A.M.S.), appointed pursuant to the provision of California Code of Civil Procedure Section 638 (1) et. seq. The parties intend this general reference provision to be specifically enforceable in accordance with said Section 638(1). If the parties cannot agree upon a member of the J.A.M.S. panel, one shall be appointed by the Presiding Judge in the County in which the matter is to be heard. The provision of this paragraph shall automatically terminate and be of no further force or affect upon the execution of a lease between the parties with respect to the subject premises and shall not apply to any controversy, dispute or claim arising out of or in connection with, any such executed Lease. LANDLORD AND TENANT acknowledge that this Proposal is not a lease contract and it is intended as the basis for the preparation of a lease contract by Landlord. The contract shall be subject to Landlord's and Tenant's approval and only a fully executed contract shall constitute a lease for the Premises. Broker makes no warranty or representation to Landlord or Tenant that acceptance of this proposal will guarantee the execution of a contract for the lease of this premise. Sincerely, ROBEKS Ric ancellor Director of Real Estate AGREED AND ACCEPTED: Landlord: By: Print Name: Title: Date: mums ur 1111L1i RETAIL SPAC GROUND FLOOR. PLAN / SITE PLAN Goss FI -‘4"C Ar -EA - 2,2 60 So. IT LEASABLE- Fie AMA - I /4,95 SQ. Fr. TOTAL CiaOSS FL2. AQ -EA (3 FLOORS - 7, i SQ. FT TOTAL LEAS6-13LE_ F. M2EARETAIL - 14,95 SQ. FT, TOTALAcY.FA, OFFICES) - .3/1-3(0 Q. FT P E H A 8 ASSOCIATES ARCHITECTURE P L A N NING 17 lint STREET HER1OSA ICH, CA WS( DTII 377•I/S5 • • • • EXHIBIT "C" LANDLORD'S WORK VANILLA SHELL Landlord agrees to construct for the Tenant the area designated as Demised Premises on Exhibits "A" and "B". Landlord shall prepare at its sole cost and expense plans and specifications (the "Plans") for the site work at the Shopping Center, the improvements comprising the Shopping Center and Landlord's Work. Landlord's Work shall be subject to the approval of Tenant, which approval shall not be unreasonably withheld. Landlord's Work shall be done at Landlord's sole cost and expense. Landlord's Work shall be completed in accordance with all applicable governing codes, in a good and workmanlike manner, utilizing first quality new materials. To the extent that certain portions of Landlord's Work have already been completed, Landlord's obligations shall be deemed satisfied, provided: 1. All improvements are in good condition subject to reasonable wear and tear and are in compliance with all existing code requirements and Tenant's Plans and specifications. 2. All existing electrical and mechanical systems shall be in good working order at the time of "Delivery" and Landlord warrants same for a period of at least one (1) year or more if specified. 3. Tenant has notified Landlord in writing that Tenant has accepted the new or existing improvements as specified in Landlord's Work. If Landlord's existing improvements are not in accordance with the above, they shall be brought into compliance within twenty (20) days after written notice from Tenant of such non-compliance, after which time Tenant shall have the option to complete this work and offset costs from rent. Landlord and Tenant shall inspect the space prior to turnover and shall determine any discrepancies, and any items that are not completed in accordance with Tenant's Plans and specifications. Whenever Landlord or Tenant approvals are required of plans, Landlord's work or Tenant's work, such approvals shall be limited to 10 days from receipt of the items to be approved. Exhibit "C", Page 1 L T Robeks Corporation - Vanilla Shell Revised: April 27, 1999 • • LANDLORD'S WORK All of the following work shall be provided to meet governing codes and regulations. The term "provide" as used herein means furnish and install. A. Building Shell: Building Shell to include but not be limited to: 1. Complete roofing system, including roofing membrane, insulation, roof deck, and structure, weathertight and insulated to conform to the local energy code requirements. 2. Complete structural system, columns, beams and/or rafters (exposed construction); determined by the approved plans and specifications of an Architect and/or Structural Engineer. Structure shall have a minimum of 13 feet clear A.F.F. throughout. 3. Building and site shall be free of all hazardous materials (including but not limited to asbestos, underground storage tanks, etc.). Hazardous materials shall be properly handled (i.e., encapsulated or removed) as required by governing codes and regulations. 4. Exterior insulated wall surfaces of structure shall be architectural concrete, cement plaster/stucco, synthetic stucco, brick, stone or other veneer. Interior wall surfaces shall be drywall finished, taped and ready for paint. 5. Secondary access/exit door(s) with frame and all required hardware and specifications. 6. Entire building shell shall be designed and constructed to conform to all governing codes and regulations including but not limited to energy code requirements and ADA criteria. B. Utilities: Shall be approved to Demised Premises and located in accordance with Tenant's approved plans, and sufficient for Tenant's use. All utility services shall be stubbed into Demised Premises, metered and separate for Tenant's sole use. 1. Water Service: Per local code requirements, 11/4" minimum. Shall include a shut-off valve within premises, anti -backflow valves and all pressure reduction valves to a maximum of 70 p.s.i. water pressure. 2. Sewer Service: 4" minimum sewer line. 3. Natural Gas Service: 3/4" gas line suitable to supply the required BTU/Hr. 4. Phone Service: Minimum 3 -line capability. • Exhibit "C", Page 2 L T Robeks Corporation - Vanilla Shell Revised: April 27, 1999 • • C. Floor Slab: A smooth and level concrete floor slab ready for Tenant -specified floor coverings. In the event concrete floor slab has not been poured upon the effective date of the, Landlord shall allow Tenant to install underground utilities prior to pouring the concrete floor slab. D. Walls: Demising walls, if any, shall be metal or wood studs erected per applicable governing codes and finished with drywall (taped and ready for paint). An interior wall or walls and door shall be provided separating Tenant's customer area from a storeroom area per Tenant's specifications. The interior portion of all wall surfaces shall include sound attenuating insulation (minimum of R-13 for 6' wall and R-11 for 4" wall) per Tenant's requirements. In the event walls have not been finished with drywall upon the effective date of the, Landlord shall allow Tenant to install utilities prior to finishing drywall. Existing interior walls, if any, shall be removed as indicated on Tenant's plans. E. Electrical: Provide to Demised Premises of one (1) 208/120 volt, 3-phase, 4 -wire, 42 -circuit, 400 -amp panel, with one (1) meter and located per Tenant's specifications. F. Air Conditioning and Heating: 1. Minimum combined capacity of 1.0 ton per 150 square feet contained in Demised Premises. 2. Each unit should be fully functional and capable of maintaining 78 degrees Fahrenheit in cooling mode (summer) and 72 degrees Fahrenheit in heating mode (winter). Each unit should be fitted with an economizer to provide cooling in winter months. 3. HVAC system to include disconnect, weather disconnect to HVAC units, conduit, power wiring, thermostat, gas piping (where required), smoke detectors (if required) and condensation lines. Air conditioning and heating units to be equipped with "Lightstat: model automatic set back thermostats — one (1) per unit. 4. Compressors to have five (5) year extended warranties. 5. All HVAC equipment to comply with Clean Air Act requirements. Exhibit "C", Page 3 L T Robeks Corporation - Vanilla Shell Revised: April 27, 1999 • i G. Storefront: 1. Clear glass storefront per building elevations. 2. For each customer entry point: Two (2) single-action 36" doors or one (1) single-action 42" door (at Tenant's option) with exterior and interior cylinder locks, self -closures per Tenant's design. Door height to be 8'. H. Restroom: Provide (1) restroom including an exhaust fan, light, walls finished and painted and all fixtures and hardware to handicap code. Restroom location shall be to Tenant's specifications and may, at Tenant's option, include a vestibule entry. I. Fire Sprinkler System: Provide a complete fire sprinkler system according to code, if and only if, required by code. Additional drops for any vestibule, counter and perimeter soffit areas, workroom, restrooms, and other necessary rooms or locations. Any system monitoring, alarms, specialty items or alarm fees shall be included as required by code. J. Site Development: 1. Parking areas shall be hard -surfaced with concrete, asphalt or other material and properly striped. Provide per industry and local codes and standards proper and adequate sub -base preparation prior to installation. In addition, time-limited parking areas, if any, should be clearly designated as such, per approved plans. 2. All ADA requirements and all other governing codes must be adhered to in total site and building development. 3. Walks shall be surfaced with concrete, stone, brick pavers or other hard surfaced material. 4. Soils issues with regard to contamination and stability should be addressed and corrected to levels acceptable to local and national governing agencies when applicable. Necessary tests are at Landlord's sole cost and expense. Exhibit "C", Page 4 L T Robeks Corporation - Vanilla Shell Revised: April 27, 1999 • u N • 5. All parking areas and walks must be provided with energy efficient artificial lighting provided by light standards with adequate illumination to provide for an overall minimum ambient light level at all points of the site, of one (1) foot candle of illumination per square foot at the parking lot surface. 6. Landscaping and sprinkler irrigation system shall be installed. 7. Dumpster pad and enclosure in a location and/or a design to be mutually approved by Tenant and Landlord. 8. Site drainage/catch basins through parking and planted areas K. Miscellaneous: 1. Any permits, fees, licenses, Architectural drawings, Engineering consulting services or anything of the sort necessary for the foregoing shall be provided by Landlord at his sole cost and expense. 2. Landlord to secure from City or Local goveming body final signoffs for Landlord's Work. Tenant shall obtain a Final Certificate of Occupancy or the local equivalent, granted to Tenant and providing for Tenant's right to do business in that respective location. Final signoffs for Landlord's Work to be provided to Tenant's on-site representative or as specified by Tenant. 3. To the extent the foregoing is not sufficient to meet applicable goveming standards, the foregoing shall be modified with Tenant's consent to meet such applicable govemmental standards at Landlord's sole cost and expense. L. General: 1. Within thirty (30) days after the date of this Lease, Landlord shall deliver to Tenant complete and accurate plans, surveys, plot plans, diagrams, schedules, specifications of the project and other data reasonably required by Tenant, of the existing or proposed development and/or buildings to be erected on the Demised Premises. Landlord's plans shall be sufficiently complete in Tenant's reasonable opinion to prepare its interior plans. Exhibit "C", Page 5 L T Robeks Corporation - Vanilla Shell Revised: April 27, 1999 2. Tenant shall have forty-five (45) days after receipt of Landlord's plans prepared pursuant to the preceding paragraph, in which to submit to Landlord its interior plans and exterior signage specifications sufficiently complete to obtain a building permit. Should Tenant require any variation in the storefront said variation shall be incorporated in the aforesaid plans to be furnished by Tenant, and Landlord agrees to provide to Tenant at Landlord's expense that part of the modified storefront as Tenant shall require, provided storefront has not been installed. 3. Both Landlord and Tenant's plans shall be subject to the reasonable approval of the other party and no work shall be performed until such approval has been granted in writing. Failure to respond to a request for approval within ten (10) days after receipt of plans shall be deemed an approval. Landlord and Tenant both agree to build strictly in accordance with local codes and the approved plans and either party shall be allowed to review the work of the other to verify compliance. 4. All work undertaken by Tenant shall be at Tenant's expense and shall not damage the building or any part thereof without prior written approval from the Landlord. 5. Although no variations are permitted, upon completion of Tenant's Work, the amount of square footage in the Demised Premises as set forth herein shall be measured and recomputed. This Lease may be adjusted in order to conform to any minor variations in actual square footage and a corresponding adjustment shall also be made in the amount of minimum guaranteed rental and other pro rata charges and assessments. If adjustments are necessary, such will be shown as an amendment to this Lease, which Landlord and Tenant agree to execute within ten (10) days after preparation thereof. Exhibit "C", Page 6 L T Robeks Corporation • Raw Shell Revised April 27, 1999 Mr. Roger Bacon Via Facsimile Dear Roger, �1 As I mentioned on our phone conversation, I am Roy Laughlin, President and General Manager of KIIS-FM, XTRA Sports 1150 and The New Channel 103.1. All three of our stations will in someway focus promotionally around the Southern California Beach areas this summer. Last year brought Southern California the introduction of the KJIS-FM Beach house in Venice Beach. This summer we are looking to continue with the Beach house and expand our seaside reach with all three stations along the entire coast, especially in Hermosa Beach at your locations, We will need support In multiple areas, but the events will be of mutual benefit to us all. I look forward to meeting you in the near future upon the conclusion of our summer concert on June t. Please feel free to call me directly at 818-295- 8405 to set up a mee ' • ti e. rely, Ro Laughlin 3400 Riverside Dr, Suite 800, Burbank, CA 91505 6 (818) 845.1027 • • L �AL1_P1-Ls Si -LOPPING CENTER APRIL 6, 1999 MR. SOL BLUMENFELD, DIRECTOR CITY OF HERMOSA BEACH COMMUNITY DEVELOPMENT DEPARTMENT 1315 VALLEY DRIVE HERMOSA BEACH, CA. 90254 RE: PROPOSAL FOR COMMERCIAL BUILDING NORTH PIER PARKING STRUCTURE Dear Sol: Please be advised that I carefully read over. the proposal requested information for the said project and I believe I have answered the information completely, honestly and with assiduous manner.. I am requesting that sometime between the submittal date of 4/14/99 and final selection date of 4/27/99 for the closing of the interview and selection date, that you will inform me by FAX (310) 374-8997, the date and time of my project team interview with you and your staff, so that I can bring my six member.project team to meet at said interview. Please notify me in advance so that I can make arrangements.with my project team members to meet with you.and your staff. I am therefore requesting that none of my information herein content dealing with the proposed project will not be discussed or disclosed to anyone other than the City of Hermosa Beach principals dealing with this:project. All discussions with your staff must remain confidential: and .must not be disclosed to anyone outside the City of Hermosa Beach staff. Sincerely, Ralph's • Starbuck's • Bank of America (Kiosk) • Union Bank • McDonald's First Federal Bank • El Pollo Inka • Allstate • Fox Photo 1100 Pacific Coast Highway • Hermosa Beach • California 90254 • (310) 374-8991 � �A L1_2 1_zS S1; O1?121NC_ CENTER. APRIL 6, 1999 TO: FROM: • • CITY OF HERMOSA BEACH SOL BLUMENFELD, DIRECTOR COMMUNITY DEVELOPMENT DEPARTMENT 1315 VALLEY DRIVE HERMOSA BEACH, CA. 90254 ROGER ELDON BACON RALPHS SHOPPING CENTER 1100 PACIFIC COAST HIGHWAY, SUITE E HERMOSA BEACH, CA. 90254 SUBJECT: PROPOSAL FOR COMMERCIAL BUILDING NORTH PIER PARKING STRUCTURE The following proposal format reflects the sections as stated in the Request For Proposal & Qualifications Statement, dated March 24, 1999. IV. A. PROPOSAL CONTENT Overview of the firm; identify members of.the project team that will be performing the requested services, describe the role of each member of the team and provide a table of organ- ization delineating'the responsibilities of each member. ROGER ELDON BACON - Primary role will be developer o€;the project, handling the construction portion, the financing, (use of his own cash funds), also the leasing of the property. STEPHEN F. BACON - He will be with all above activities and Manager, daily overseeing the maintenance, tenant relations responsible for assisting me will be full-time On-site entire project, relating to and leasing. .ROBIN GEISSLER - She will be overseeing the interior decor- rating, landscaping and will be in charge of Public Relations. HENRY FRIEL - My architect will beresponsibie•for design:'and engineering of the proposed project and has.agreed to super- vise the planning and overseeing as a supervisor, the const- ruction of said project. Henry Friel has been my only architect. .He has been the Redondo Beach Planning Chairman and Planning Commissioner for over 20 years. (Continued) Ralph's • Starbuck's • Bank of America (Kiosk) • Union Bank • McDonald's First Federal Bank • El Pollo Inka • Allstate • Fox Photo 1100 Pacific. Coast Highway • Hermosa Beach • California 90254 • (310) 374-8991 1dn7Tt_w A AA.... ...., 1-1" n.. .. non - T1 ..A__A.. T1__/1.7f e_ --f_ n",1.7;7 L��LL.LL SL-LOL2PLNG CE'N'TER APRIL 6, 1999 TO: PAGE 2 CITY OF HERMOSA BEACH SOL BLUMENFELD, DIRECTOR COMMUNITY DEVELOPMENT DEPARTMENT FROM: ROGER ELDON BACON RALPHS SHOPPING CENTER SUBJECT: PROPOSAL FOR COMMERCIAL BUILDING NORTH PIER PARKING STRUCTURE (Continued) IV. PROPOSAL CONTENT A. Continued Henry's projects are: - Palos Verdes City Hall Redondo Beach Pier Buildings, Restaurants - Oceania Luxury Apartments (28 luxury units) 721 Esplanade, Redondo Beach, California - Ralphs Shopping Center, including Starbucks Coffee Company with drive through. The first drive through for Starbucks in California. 1100 Pacific Coast Highway, Hermosa Beach, California. Architect for Anderson.Engineering System, Saudia Arabia: 2,000 homes, Saudia Arabia, precast concrete buildings - 1,500 Villas in Abudhabu, precast concrete buildings - 16 -Story High Rise Building, South Korea 4 -Story Apartment Building, Oahu, Hawaii - 1,000 Housing Units for the 11th Naval District, Oceanside, California. - El Cerrito Shopping Center, Riverside, California. ARTHUR P. GARCIA - Formerly Executive Vice.President of Real Estate for Ralphs Grocery Company for 23 years. He was in charge of new store developments, responsible for over 100 new store locations and in charge of store Property Management. Lifetime award member of International.Confer- ence of Shopping Centers. He will assist in leasing, poss- ible financing and general overseeing of said project. SANDY ALLEGAN - My Secretary and .Assistant Manager of the Ralphs Shopping Center, will assist the project team on an as needed basis, (formerly with Security Pacific Bank, 22 years and Bank ofAmerica as a Financial Relationship Manager), living locally. (Continued) Ralph's • Starbuck's • Bank of America (Kiosk) • Union Bank • McDonald's First Federal Bank • El Polio Inka • Allstate • Fox Photo 1100 Pacific Coast Highway • Hermosa Beach • California 90254 • (310) 374-8991 SL -LOPPING CLNThR • APRIL 6, 1999 TO: • PAGE 3 CITY OF HERMOSA BEACH SOL BLUMENFELD, DIRECTOR COMMUNITY DEVELOPMENT DEPARTMENT FROM: ROGER ELDON. BACON RALPHS SHOPPING CENTER • SUBJECT: PROPOSAL FOR COMMERCIAL BUILDING NORTH PIER PARKING STRUCTURE (Continued) IV. PROPOSAL CONTENT B. & C. Provide a resume describing experience related to the services required to develop and manage the project. Name of others assigned to key project team members similar to the proposed project. ROGER ELDON BACON - He will be responsible forthe entire project from design, construction, financial responsibility and leasing. D. Name of Project Manager and point of contact for the City. E. ROGER ELDON BACON - PROJECT MANAGER & MAJOR CONTACT ROGER ELDON BACON RALPHS SHOPPING CENTER • 1100.PACIFIC COAST HIGHWAY, SUITE E HERMOSA BEACH, CALIFORNIA 90254 310-374-8991 - OFFICE. 310-374-8997 - FAX Description of services in firm to be performed: 'Design, construction, financial responsibility and leasing. Firms experience in providing the service: • Roger Eldon Bacon.has been in business in Hermosa Beach since 1949. Some of the businesses are: ROGER BACON IMPORTED CARS - Owner/Operator 700 PACIFIC COAST HIGHWAY HERMOSA BEACH, CALIFORNIA 90254 1951 - 1954 SELLING THE BELOW AUTOMOBILES VOLKSWAGEN ) Ralph's • Starbuck's • Bank of America (Kiosk) • Union Bank • McDonald's First Federal Bank • El Polio Inka • Allstate • Fox Photo 1100 Pacific Coast Highway. • Hermosa Beach • California 90254 • (310) 374-8991 1 /..1\7.. .. A.7 Tl/1 x'1__..1ni-T_—a__J_n___.e r_ _ L\ --,1 L2L; S SLi 0L-L-1.NL L1=1_ 9121_x. . APRIL 6, 1999 TO: PAGE 4 CITY OF HERMOSA BEACH SOL BLUMENFELD, DIRECTOR COMMUNITY DEVELOPMENT DEPARTMENT FROM: ROGER ELDON BACON RALPHS SHOPPING CENTER SUBJECT: PROPOSAL FOR COMMERCIAL BUILDING NORTH PIER (Continued) IV. PROPOSAL CONTENT (Continued) E. (Continued) 1951 - 1954 SELLING THE AUTOMOBILES BELOW: PORSCHE MG MORRIS MINOR AUSTIN HEALEY ROOTES GROUP ALLARD RACING AUTOMOBILES LES BACON & SONS FORD 1100 PACIFIC COAST HIGHWAY HERMOSA BEACH, CALIFORNIA Roger E. Bacon, Vice President & Gen.. Mgr. ROGER ELDON BACON BUILDING PROJECTS: PARKING STRUCTURE ROCKY COLA CAFE 1025 PACIFIC COAST HIGHWAY HERMOSA BEACH, CALIFORNIA LEAD LEASE NEGOTIATOR & PART. OWNER OF REAL ESTATE. SOUTH BAY AUTO BODY 1401 AVIATION BLVD. REDONDO BEACH, CALIFORNIA LEAD LEASE NEGOTIATOR & PART OWNER OF REAL ESTATE. 4 - OCEANIA LUXURY APARTMENTS - 721 Esplanade, Redondo Beach, California, 46,000 square feet. Designed, sub -contracted and financed 6 -Story, Type 3 construction, 28 -luxury units. - RALPHS SHOPPING CENTER - 1100 Pacific Coast Highway, Hermosa Beach, California. Ralphs Shopping Center. is approximately 50,000 square feet. Designed, constructed, supervised and leased said shopping center,with additions for Fox Photo., Inc., Mc Donald's and Starbucks, featuring the first drive through for Starbucks Coffee Company in California. Bank of America KIOSK, high volume usage. - THE EL CERRITO.SHOPPING CENTER - Currently developing a 6 -Acre Shop- ping Center, approximately 100,000 square feet, at the Northeast Corner of El Cerrito Road & I-15 Freeway, Riverside County, California. Present tenants are Adams Advertising Company, Sprint and Nextel. Future prospective tenants are Stater. Brothers Supermarket, Mc Donald's 'and Rite Aid Drug Stores. (Continued) Ralph's • Starbuck's • Bank of America (Kiosk) • Union Bank • McDonald's First Federal Bank • El Pollo Inka .• Allstate . Fox Photo 1100 Pacific Coast Highway • Hermosa Beach • California 90254 • (310) 374-8991 11_1_, L1S SL -LOP -LNC C1 N'rER APRIL 6, 1999 PAGE 5 TO: CITY OF HERMOSA BEACH SOL BLUMENFELD, DIRECTOR COMMUNITY DEVELOPMENT DEPARTMENT FROM: ROGER ELDON BACON RALPHS SHOPPING CENTER SUBJECT: PROPOSAL FOR COMMERCIAL BUILDING NORTH PIER PARKING STRUCTURE (Continued) IV. PROPOSAL CONTENT E. Continued ROGER ELDON BACON BUILDING -PROJECTS: (Continued) - PRIVATE RESIDENCE - Roger Eldon Bacon sub -contracted and constructed his residence at 445 Paseo De La Playa, a 7,000 square foot, 7 bedrooms, 7 bathrooms on Torrance Beach. Roger Bacon. has extensive experience in remodeling residential and commercial buildings, for example, the Alpha Beta, Ralphs Grocery Company. Every residential and commercial project has been successful in his lifetime. He has never had a • failed business in his entire life. Every business exper- ience has been successful. F. Firm's Project Approach: 1. Narative description of proposed project including functional uses, relationship between tenants, surrounding land uses and project design. I have specialized in many commercial projects that require extensive creativity and architectural and engineering exper- tise. Ralphs Shopping Center, 110 soldier piles retaining soil behind Ralphs Shopping Center. The Starbucks Coffee Company building designed into a triangle, with the first drive through in Southern California, all functional and profitable. I envision a 30', 3 -Story, if possible steel frame building, matching and blending in with the surrounding land uses. However, a 2 -Story building may be acceptable. (Continued) Ralph's • Starbuck's • Bank of America (Kiosk) • Union Bank • McDonald's First Federal Bank • El Pollo Inka • Allstate • Fox Photo 1100 Pacific Coast Highway • Hermosa Beach • California 90254 • (310) 374-8991 A J,J_„__. f1 I% T _ __ nein _ �. w R_Allal;S SRO 1N LNG CEN'll_R APRIL 6, 1999 • • PAGE 6 TO: CITY OF HERMOSA BEACH SOL BLUMENFELD, DIRECTOR COMMUNITY DEVELOPMENT DEPARTMENT FROM: ROGER ELDON BACON RALPHS SHOPPING CENTER SUBJECT: PROPOSAL FOR COMMERCIAL BUILDING NORTH PIER PARKING STRUCTURE (Continued) IV. PROPOSAL CONTENT F. Firm's Project Approach: (Continued) 2. Project schedule from design through construction and occupancy. - 3 MONTHS - Planning and specification completion - 1-2 MONTHS - Plan check approval and bidding 4-6 MONTHS - Approximate timing for construction The said project commercial building has already been 100% leased with signed letters of intent from our. anchor tenant Starbucks Coffee Company and the other. tenant is Hawthorne Savings Bank. 3. .List projects where the. firm has been.engaged in similar design, construction, leasing and management. See above. 4. List of other projects assigned to key project team members during the design through construction phases of the project. See above.. 5. Background.and experience of the firm with public and private sector. See above. (Continued) Ralph's • Starbuck's • Bank of America (Kiosk) • Union Bank • McDonald's First Federal Bank • El Pollo Inka • Allstate • Fox Photo 1100 Pacific Coast Highway • Hermosa Beach • California 90254 • (310) 374-8991 1f -f1!__ •'a _••••• w ..nom .. .. _.� L L -L 121-1 S SL -LOPPING APRIL 6, 1999 • • PAGE 7 TO: CITY OF HERMOSA BEACH SOL BLUMENFELD, DIRECTOR COMMUNITY DEVELOPMENT DEPARTMENT FROM: ROGER ELDON BACON RALPHS SHOPPING CENTER SUBJECT: PROPOSAL FOR COMMERCIAL BUILDING NORTH PIER PARKING STRUCTURE (Continued) IV. PROPOSAL CONTENT F. Firm's Project Approach: (Continued) 6. Background in leasing and managing of similar retail/office space. Highly successful at Ralphs Shopping Center, including Mc Donald's, no vacancies, no single tenant space vacant for no more than 2 months in the past, it has only occurred twice since 1977. 7. Knowledge of issues related to project. I have studied the last 2 years, Pier Avenue and Hermosa Avenue development and promenade improvement and the present Hermosa Beach Pier refurbishing. I have studied -all aspects of the demographics, in order to be successful and harmoniously blending the commercial development. 8. . Financial Statement covering the last five years of the firm. See_ attached Financial Statement. 9. Financial capability tocarry out the project. I have the cash funds that will cover the complete project, no financing is necessary. 10. Status of on-going development projects. See above.. 11. Site plan indicating.access, adjacent uses, ingress,' relation R.O.W. See attached Site Plan. (Continued) Ralph's • Starbuck's • Bank of America (Kiosk) • Union Bank• McDonald's First Federal Bank • El Polio Inka • Allstate • Fox Photo 1100 Pacific Coast Highway • Hermosa Beach • California. 90254 • (310) 374-8991 wd..11:-w A /•• T_ ,.r., T _ .•. • PAGE 8 SHOPPING C N'11:1 APRIL 6, 1999 TO: .CITY OF HERMOSA BEACH SOL BLUMENFELD, DIRECTOR COMMUNITY DEVELOPMENT DEPARTMENT FROM: ROGER ELDON BACON RALPHS SHOPPING CENTER SUBJECT: PROPOSAL FOR COMMERCIAL BUILDING NORTH PIER PARKING STRUCTURE (Continued) IV. PROPOSAL CONTENT F. Firm's'Project Approach: (Continued) 12. Floor plan indicating tenant space, mezzanines, .(if any). See attached Floor Plan. 13. Rendering of completed project or model of completed project. 14. 15. V. I will display at the Community Development Department interview of proposal session for the commercial building North Pier Parking Structure. Tabulation of gross floor area. Approximately 6,000 square feet. Project schedule for construction, tenant leasing and occupancy. See above. PROPOSER'S RESPONSIBILITIES The selected firm will be responsible for all costs and expenses incurred in connection with the project including, but not limited to: costs associated with securing necessary entitlements and environmental documentation, site preparation construction, main- tenance, utilities, insurance, taxes, permits, architectural and engineering studies, preparation of,concept and construction plans and brokerage fees, if any. Respondent agrees. VI. DEVELOPMENT PROCESS & EXECUTION OF GROUND LEASE The City will ground lease the property to the selected firm for r(c ' Ralph's • Starbucks • Bank of Ameantin P i (KiousiC9• • Union Bank .• McDonald's First Federal Bank • El Pollo Inka • Allstate • Fox Photo 1100 Pacific Coast Highway • Hermosa Beach • California 90254 • (310) 374-8991 • 0 PAGE 9 SL{ OL'-1_'-LNL CN EL` APRIL 6, 1999 TO: CITY OF HERMOSA BEACH SOL BLUMENFELD, DIRECTOR COMMUNITY DEVELOPMENT DEPARTMENT FROM: ROGER ELDON BACON RALPHS SHOPPING CENTER SUBJECT: PROPOSAL FOR COMMERCIAL BUILDING NORTH PIER PARKING STRUCTURE (Continued) VI. DEVELOPMENT PROCESS & EXECUTION OF GROUND LEASE (Continued) a thirty (30) year term. It is the City's intent to receive the fair market lease value.for the property. The process for project development will involve selection of the.most.qualified bidder with the best project proposal, execution of ground lease, processing of any entitlements if required, preparation of con- struction plans, project construction and occupancy. The City has processed all local development permits and an EIR in connection with the North Pier Parking Structure which includes the project site. Copies of the development•permits and EIR are available at the City's Community Development Department. All zoning and development questions should be directed to the City's Community Development Department. Respondent agrees, but would prefer a ground.lease for fifty (50) year term. . VII. RFP/RFQ SCHEDULE RFP ISSUED MARCH 24, 1999 - SUMITTAL DUE DATE APRIL 14, 1999 INTERVIEW & SELECTION APRIL 27, 1999 - CONTRACT AWARD MAY 11, 1999 Respondent agrees to meet all deadlines. VIII. PROPOSED GROUND LEASE. A. Provide ground lease rate. Negotiable. (Continued) Ralph's • Starbuck's • Bank of America (Kiosk) • Union Bank • McDonald's First Federal Bank • El Pollo Inka • Allstate • Fox Photo 1100 Pacific Coast Highway • Hermosa Beach • California 90254 • (310) 374-8991 • • PAGE 9 RA1 121; S CEN'] L'R APRIL 6, 1999 TO: CITY OF HERMOSA BEACH SOL BLUMENFELD, DIRECTOR COMMUNITY DEVELOPMENT DEPARTMENT FROM: ROGER ELDON BACON RALPHS SHOPPING CENTER SUBJECT: PROPOSAL FOR COMMERCIAL BUILDING NORTH PIER PARKING STRUCTURE (Continued) VI. DEVELOPMENT PROCESS & EXECUTION OF GROUND LEASE (Continued) a thirty (30) year term. It is the City's intent to receive the fair market lease value.for the property. The process for project development will involve selection of the -most .qualified. bidder with the best project proposal, execution of ground lease, processing of any entitlements if required, preparation of con- struction plans, project construction and occupancy. The City has processed all local development permits and an EIR in connection with the North Pier' Parking Structure which includes the project site. Copies of the development permits and EIR are available at the City's Community Development Department. All zoning and development questions should be directed to the City's Community Development Department. Respondent agrees, but would prefer a ground.lease for fifty (50) year term. . VII. RFP/RFQ SCHEDULE RFP ISSUED MARCH 24, 1999 - SUMITTAL DUE DATE APRIL 14, 1999 INTERVIEW & SELECTION APRIL 27, 1999 - CONTRACT AWARD MAY 11, 1999 Respondent agrees to meet all deadlines. VIII. PROPOSED GROUND LEASE. A. Provide ground lease rate. Negotiable. (Continued) Ralph's • Starbuck's • Bank of America (Kiosk) • Union Bank • McDonald's • First Federal Bank • El Polio Inka • Allstate • Fox Photo 1100 Pacific Coast Highway • Hermosa Beach • California 90254 • (310) 374-8991 lujL SL-LOPPLNL CENTER APRIL 6, 1999 PAGE 10 TO: CITY OF HERMOSA BEACH SOL BLUMENFELD, DIRECTOR COMMUNITY DEVELOPMENT DEPARTMENT FROM: ROGER ELDON BACON RALPHS SHOPPING CENTER SUBJECT: PROPOSAL FOR COMMERCIAL BUILDING NORTH PIER PARKING STRUCTURE (Continued) VIII. PROPOSED GROUND LEASE (Continued) B. Provide proforma describing proposed ground lease terms, lease rates, tenant leases, breakdown of total operating and common area maintenance expenses and extend out over five years from the project completion date. See attached breakdown. C. Specify legal entity which will execute the ground lease. ROGER ELDON BACON. D. Identify guarantor for ground lease andassets behind the guarantee. Roger Eldon Bacon - $25 Million in Net Assets. E. Annual minimum guaranteed rental increase and formula for determining same. • Standard Consumer Price Increase with a minimum and computed every 5 years. F. Provide spreadsheet for the first 20 years of project containing the following information: ARCHITECTURE & ENGINEERING COSTS $60,000.00 DEVELOPMENT FEES $20,000.00 MARKETING COSTS $45,000.00 FINANCING COSTS - ROGER E. BACON MAY USE HIS OWN FUNDS. TOTAL SITE COSTS $125,000.00 NET LEASEABLE AREA APPROX. 6,000 square feet TOTAL POSSIBLE FIXED RENTS - ESTIMATED AT APPROX. $72,000.00 per month TOTAL POSSIBLE PERCENTAGE RENTS % CPI - SEE ABOVE VIII E. (Continued) Ralph's • Starbuck's • Bank of America (Kiosk) • Union Bank • McDonald's First Federal Bank • El Pollo Inka • Allstate • Fox Photo 1100 Pacific Coast Highway • Hermosa Beach • California 90254 • (310) 374-8991 1L1;` S1-1 0121,1 NC L1, -,N 11_1` APRIL 6, 1999 TO: PAGE 11 CORRECTED MAY 3, 1999 CITY OF HERMOSA BEACH SOL BLUMENFELD, DIRECTOR COMMUNITY DEVELOPMENT DEPARTMENT FROM: ROGER ELDON BACON RALPHS SHOPPING CENTER SUBJECT: PROPOSAL FOR COMMERCIAL BUILDING NORTH PIER PARKING STRUCTURE (Continued) VIII. PROPOSED GROUND LEASE (Continued) F. G. Spreadsheet - Continued GROSS POSSIBLE INCOME $12,000.00 LESS VACANCY (5% - $600.00) $11,400.00 EFFECTIVE GROSS INCOME ($11,400.00 X 12) $136,800.00 LESS OPERATING EXPENSES NET NET NET LESS GROUND LEASE TO CITY $8,778.00 (Approximately 2,280 Square Feet X $55.00 per square foot= $125 ($125,400.00 X 7% = $8,778.00 annually.) LESS MANAGEMENT EXPENSES (APPROXIMATELY 6% OF GROSS) $8,208.00 NET OPERATING INCOME $119,814.00 TOTAL COST OF BUILDING, INCLUDING MARKETING COSTS($1,125.000.00 (70% LOAN $787,500 WITH 30% DOWN = $337,500) DEBT SERVICE $76,151.00 ESTIMATED NET INCOMSE $41,064.00 PERCENTAGE. RETURN ON INVESTMENT IF ROGER E. BACON 12.16% LOANS $1,125,000.00 INTEREST ONLY AT 7% THE ANNUAL PAY BACK WOULD BE $108,787.00 NET PROFIT WOULD BE $11,026.50 Provide sample tenant lease. See attached sample of lease. per month per month annually LEASES annually ,400.00) annually Ralph's • Starbuck's • Bank of America (Kiosk) • Union Bank • McDonald's First Federal Bank • El Pollo Inka • Allstate • Fox Photo 1100 Pacific Coast Highway • Hermosa Beach • California 90254 • (310) 374-8991 • • • PAGE 12 RAJ -L H s. SL -LO 21_21NC CEN'1,1_R APRIL 6, 1999 TO: CITY OF HERMOSA BEACH SOL'BLUMENFELD, DIRECTOR COMMUNITY DEVELOPMENT DEPARTMENT FROM: ROGER ELDON BACON RALPHS SHOPPING CENTER SUBJECT: PROPOSAL FOR COMMERCIAL BUILDING NORTH PIER PARKING STRUCTURE (Continued) I have resided and been educated in the South Bay. The majority of my life in.my.business interest investments have been and still are in Hermosa Beach. This above Retail/Commercial Building garage will stay in and be maintained Robin and granddaughter Lauren, (Four in front of the 480 car parking by myself, my son Steve, daughter generations of the Bacon Family). steel framed Class A,.Type.1, with complimenting the above parking The envisioned said building will be a an elevator, the building matching and garage and surrounding areas. We believe Starbucks Coffee Company,. our letter of intent tenant will produce more sales tax revenue for the City of Hermosa Beach, than . any other potential tenant. This.has been demonstrated'by our Hermosa Beach Starbucks Coffee'Company Store at the Ralphs Shopping Center, which .is Number One Starbucks Store in the South Bay. The Bacon Family loves and respects Hermosa Beach and we will continue -to enhance.the beauty, environment protection, historical significance, pride and economy of this unique beach town. Roger Eldon Bacon, Stephen Fleming Bacon, Robin Bailey Geissler and Lauren Elise Geissler Ralph's • Starbuck's • Bank of America (Kiosk) • Union Bank • McDonald's First Federal Bank • El Pollo Inka • Allstate • Fox Photo 1100 Pacific Coast Highway • Hermosa Beach • California 90254 • (310) 374-8991 -. .. n.. _ .. . . v - -1- - _7 . e- --f-' A Ai1,701 FRIEL & THOMAS P.O. Box 7000-23 Redondo Beach, CA 90277 310.543.1808 IIE F!VED architects APR 1 3 1999 FAX 310.543.1164 40M. Dtv. UtPT. PROFESSIONAL EXPERIENCE OF HENRY J. FRIEL, ARCHITECT Mr. Firel is a graduate of the USC School of Architecture. He has had his own business as an architect in Redondo Beach since 1950. He has been senior partner of Firel & Linde, Architects, and currently withFirel & Thomas, Architects. He has served a Planning Commissioner for the City of Redondo Beach for 22 years. Presently he is serving on the Codes and Appeal Board. Mr. Friel has been licensed.as an architect by the State Board of Architectural Examiners in California, Nevada, New Mexico and Hawaii. Some of the major projects on which Mr. Friel was principal architect are as follows: 1. Six story condominium at 721 W. Esplanade, Redondo Beach, California constructed of steel superstructure with concrete block and steel studs. 2. Four story medical building with steel frame and brick masonry construction at 1711 Via El Prado, Redondo Beach, California. 3. One thousand single family.dwelling and duplex development for servicemen for the llth Naval District at Camp Pendleton, California. 4. 30,000 square foot concrete lift slab auto center at Deep Valley Road, Rolling Hills Estates, California. 5. Architectural and engineering consultant for 20 years for Anderson Building Systems in developing a concrete precasting system known as ASI. 6. Architectural consultant for ASI for the construction of 2,000 single family dwellings in Abu Dhabi, the Arab Emirates, using the Anderson System. 7. Architectural consultant for ASI for the construction of 1,200 precast concrete villas in Jiddah, Saudi Arabia. 8. Architectural consultant for DaeWoo Construction in South Korea for a twelve -story, 152 unit, precast concrete'apartmenr buildin the Anderson System. 9. Ralphs Shopping Center, including Starbucks Coffee Company with drive through. The first drive through for Starbucks in Cali- fornia. 1100 Pacific Coast Highway, Hermosa Beach, California. 10. Currently architectural consultant for Abrego Construction in Nevada using Anderson System for various housing projects in Nigeria. 11. Currently architectural consultant for The El Cerrito Shopping WORK EXPERIENCE: Present: Previous: EDUCATION: MILITARY EXPERIENCE: SERVICE; ORGANIZATIONS: PROFESSIONAL ORGANIZATIONS/ AFFILIATIONS: OUTSIDE ACTIVITIES: i/VORAPHY ARTHUR P. GARCIA APG Commercial, Real Estate Development and Consulting P.O. Box 45157 Westchester, California 90045 Phone: (310) 641-7335 • Vice President'Real Estate, 23 years, Ralphs Grocery Company/Federated Department Stores (Retired In 1995) • Senior Real Estate Negotiator, Montgomery Wards • Real Estate Negotiator, Safeway Stores • Real Estate Appraiser and Staff Real Estate Lender, Security Pacific Nacional Bank Bachelor of Arts Degree, Business Administration University of Southern California Master Business Administration University of Southern California United States Marine Corps Officer • • • • 0 • Go Board Member Ramona Convent High School (Catholic Girls School), Alhambra, CA Active Member University Southern California Mexican American Alumni Association Former Board Member, Community Enhancement Corporation, City of Commerce, CA. CEC is a non-profit organization providing interim housing and vocational counseling for "At Risk Youths" ICSC (International Council of Shopper Centers) ACRE (Association of Corporate Real Estate Executives) Howard Drollinger Development Company, Board Member, Westchester, CA If and Racquet Ball, Spectrum Health Club, 'Manhattan Beach, CA February 1998 STEPHEN F. BACON 11162 Camarillo Street, #403 West Toluca Lake, Ca. 91602 (818)762-7692 EMPLOYMENT HISTORY 1988 - PRESENT WILLIAM MORRIS AGENCY, INC. Contracts Administrator Responsible for upkeep andsecurity of all legal documents; review of all contracts issued by the agency; all renewal and authorization documents for agency clients. 1985 - 1988 MAYDAY TEMPORARY SERVICES Interviewer Interviewed candidates for temporary job assignments; heavy telephone contact with client companies; screening and testing of job applicants; also functioned as.a sales representative for MAYDAY'S services. 1980 - 1984 ACADEMY'S BEST LIMOUSINE SERVICE Driver/Office Manager PRIOR TO 1980 EDUCATION REFERENCES Drove celebrities and executives throughout the Los Angeles area; screened and hired new drivers; performed administrative functions for company owner. Worked as supermarket checker while attending college. Associate of Arts degree, Pierce College Major: Psychology Additional references will be furnished upon request. ROBIN B. GEISSLER 21720 Cheswold Lane Home Phone: (661) 2962670 Santa Clarita, CA 91350 Business Phone: (661) 250-0022 X 623 FAX: (661) 252-3326 Email: rgeissl@mail.hart.k12.ca.us EDUCATION M.Ed., Administration, California Lutheran University June 1999, including Administrative Credential M.A., Education, California Lutheran University Curriculum and Instruction, research on training new teachers and cooperative learning strategies Credentials in Secondary Education, California Lutheran University English and Psychology B.A., Literature, Pepperdine University PROFESSIONAL EXPERIENCE La Mesa Junior High School (1994 to present) • Member of original staff responsible for setting vision, policies, and standards for a brand new school • Mentor teacher assisting over sixty new teachers for five years and planning all staff inservice days • PQR steering committee • English department chair for three years • GATE coordinator for two years • SIP; Leadership Team ; Technology Committee; Scheduling Committee • Developed content and performance standards • English and creative writing teacher Sierra Vista Junior High School (1992-94) • English teacher • GATE coordinator • Interdisciplinary teaming • Differentiated Curriculum; staff inservices Hart High School (1992) • Long term substitute English teacher with four preps • School Restructuring and Reform Committee Castaic Middle School (1985-1990) • Substitute teacher in all content areas, including special day class • Substitute Teaching Training Video, UCLA Chadwick School (1979-81) • English, journalism, and creative wiritng • Admissions and Scholarship Committee • • ROBIN B. GEISSLER Page 2 CURRICULUM & ADMINISTRATIVE EXPERIENCE • Hart District Curriculum Council- approve all new and revised course and textbook adoptions for grades 7-12; School -to —Career Grant; ninth grade transition and class size reduction; BTSA; GATE survey ; state content and performance standards; STAR testing • Hart District Language Arts Curriculum Committee- chairperson responsible for planning, organizing, and leading seventh grade summer language arts curriculum committee; aligned district standards with state content and performance standards and with STAR testing standards; reviewed , budgeted, and ordered textbooks, novels, and supplementary materials for four junior high schools; published Language Arts Curriculum notebook for district • Hart District Mentor Teacher- La Mesa Junior High School; for five years have trained over 60 new teachers; observations; plan all staff inservices; New Teacher Orientation Day; provide monthly, on-site training, including interdisciplinary curriculum, multi- cultural diversity, classroom management, brain research, STAR testing, credential renewal, grading policies, and writing across the curriculum • Hart District Staff Inservice Training- designed and presented successful district "Teacher Power" training sessions for over 300 teachers and administrators on student motivation, cooperative learning, lesson planning, and assessment strategies • Differentiated Curriculum Presentations- reform strategies presented for over 200 middle and high school teachers and administrators; received a certification for teaching differentiated curriculum from the California Association of Gifted Education • PQR Steering Committee Member- La Mesa Junior High; organized staff inservices, data collection and analysis; community and parent survey; classroom visitations; implementing recommendations, alignment with SIP • SIP Committee Member- La Mesa Junior High; aligning budget with PQR, STAR testing, and state performance standards • Distinguished School Application- chaired La Mesa's writing team • Digital High School Grant- assisted Canyon High School on data collection , surveys, and editing • Administrative Intern at La Mesa Junior High and Canyon High- experience with discipline, supervision, scheduling, teacher observations , parent conferencing, Saturday School, technology, and IEP's • • ROBIN B. GEISSLER Page 3 HONORS • California League of Middle Schools Educator of the Year Nominee - 1998 • Who's Who Among America's Teachers- 1998 • Teacher of the Year, La Mesa Junior High- 1997 • State of California Legislature Assembly_ Certificate of Recognition for "Excellence in Education" Mentor Teacher Award- 1995-98 • Chamber Education Foundation of Santa Clarita Valley Teacher Tribute Award- 1995-98 • The Love and Help for Children Special Teacher Award- 1996 PROFESSIONAL California League of Middle Schools ORGANIZATIONS Association for Supervision and Curriculum Development Association of California School Administrators National Teachers of English Association Phi Delta Kappa COMMUNITY Santa Clarita Homeless Shelter SERVICE Hathaway House Alateen Sponsor REFERENCES Available upon request APR I 'f ! UOM. DEV. • • SANDRA L. F. ALLEGAN 418 South Meadows Ave. Manhattan Beach, CA 90266 (310) 937-0131 FAX (310) 937-0141 E-mail: allegan©jps.net CAREER SUMMARY SUPPEEMEN 1 Twenty years of management, operations and human resource experience, making a direct contribution to customer service, staff development and profitability. Excellent leadership, diplomacy, communication, facilitation, team building, contract negotiation and interpersonal skills. PC literate, including MS Windows 3.1, Windows 95, MS Office products and Excel. PROFESSIONAL EXPERIENCE BANK OF AMERICA, GARDENA, CA. Assistant Vice President/Financial Relationship Manager Westside District Clients 1998 to 1999 • Provided personalized/private banking services to 800 clients in the Banks' high net -worth Portfolio. • Serviced clients with all banking, financial and investment products, based on the clients Individual financial goals and objectives. • Provided analysis and developed financial plans to meet the clients goals and objectives. IMPERIAL BANK, REDONDO BEACH, CA. 1994 to 1998 Assistant Vice President. Merchant Bankcard Services Division. 1997 to present Customer Service and Chargeback/Retrieval Departments • Provided service to approximately 17,000 middle market -merchants throughout the U.S. • Consolidated staff from 15 to 12 FTE, resulting in a $65M reduction in compensation, while improving customer service levels, as transaction volumes nearly tripled. • Directed personnel administration for 41 staff of the Merchant Bankcard Services Division in the areas of salary administration, employee relations, training and development, job analysis/job description development and organizational development. • Developed and implemented a Staff Appreciation Program, designed to reward for outstanding customer service, productivity and good staff relations. These are staff members who contributed to the bottom line and promoted an outstanding image that directly benefited the company. • Negotiated and implemented a 71% cost reduction for specialized checks for the Cash & Win product. • Developed and implemented an after-hours servicing compensation plan for Point of Sale Technical Support Staff. • • SANDRA L. F. ALLEGAN 418 South Meadows Ave. Manhattan Beach, CA 90266 (310) 937-0131 FAX: (310) 937-0141 E-mail: allegangips.net Operations Manager/Team Leader, Corporate Cash Management, 1994 to 1997 Safe Checks — Secured Business Checks Division • Provided service to approximately 5,000 middle -market customers throughout the U.S. for secured business checks. • Developed product costing to ensure competitive sales edge for laser check products. • Streamlined the operation by developing an invoicing and customer tracking process. • Developed the contract and participated in contract negotiation to license the operation beginning in February, 1997. • Implemented customer calling and customer service program and tracking. EDWARDS ALLEGAN CONSULTING, MANHATTAN BEACH, CA. 1991 to 1994 Founding Partner • Advised companies on issues dealing with employee relations, training and development, compensation/incentive plans and management and organizational development. • Designed, developed and conducted management and human resource development seminars for companies regarding HIV/AIDS in the Workplace, and Preventing Sexual Harassment in the Workplace. SECURITY PACIFIC CORPORATION, LOS ANGELES. CA 1988 to 1991 First Vice President — Distribution Services & Corporate Publications Departments • Reduced staffing from 170 to 80 FTE and improved process flow in the internal Mail and Distribution Centers and the internal/external transportation network of armored and non - armored couriers. Internal distribution was reduced from two days to same-day delivery. • Re -negotiated the bank's $14MM transportation contracts budget to $10MM, resulting in $4M annual savings. • Eliminated redundancy by consolidating the multi -state Corporate Publications Department from 95 to 60 FTE, resulting in a $2.3MM annual reduction of expenses. • Developed and established interstate consistency of published material for the corporation, with a focus on customer service and reduction of unnecessary costs. Emphasis was in rewarding employees for contributing to the service and cost reduction goals. • Streamlined corporation's policies and procedures and designed marketing and training materials to complement new product development. -2- to • SANDRA L. F. ALLEGAN 418 South Meadows Ave. Manhattan Beach, CA 90266 (310) 937-0131 FAX: (310) 937-0141 E-mail: allegan@ips.net ADDITIONAL EXPERIENCE SECURITY PACIFIC NATIONAL BANK, LOS ANGELES, CA. 1980 to 1988 Project Leader, Vice President, Operations Department and Training & Development Department • Designed and conducted management development programs for supervisors and managers. • Designed and implemented employee incentive pians. EDUCATION UCLA Graduate School of Management - December 1984 PROFESSIONAL ASSOCIATIONS AMERICAN MANAGEMENT ASSOCIATION — AMA NATIONAL ASSOCIATION OF FEMALE EXECUTIVES — NAFE PROJECT MANAGEMENT INSTITUTE — PMI VISA & MASTER CARD ASSOCIATIONS AIDS PROJECT LOS ANGELES — APLA PEDIATRIC AIDS FOUNDATION -3- • • Starbucks Coffee Company Southwest Zone Office 17700 Newhope Street, Suite 200 Fountain Valley, CA 92708 714/424-1900 Fax: 714/424-1919 Fax: 714/424-1920 Store Development October 26, 1998 Mr. Roger Bacon P.O. Box 282 Redondo Beach, CA 90277 Dear Mr. Bacon, This letter confirms our interest to locate a Starbucks Coffee store at the NorthWest corner of Hermosa and 13th Street. We are interested in leasing approximately 1,700 square feet of space. We appreciate your continued interest in working with Starbucks and look forward to discussing this matter with you in greater detail. Sincerely, Steve Ganalon Director of Development Starbucks Coffee Company . • 'yj • • • Hawthorne Savings, F.S.B. 2381 Rosecrans Avenue El Segundo, California 90245 Telephone 310-725-5000 www.hawthomesavings.com rn California 1951 October 15, 1998 Roger E. Bacon Ralph's Shopping Center 100 Pacific Coast Highway, Suite E Hermosa Beach, CA 90254 Dear Roger, This letter confirms Hawthorne Savings' interest in participating with you in your development project near the Bijou Theater site in Hermosa Beach. Our interest is in a retail branch site on the ground floor complete with a full service ATM, building signage and possibly participating in providing financing for the project. Our interest in having a branch site in Hermosa is extremely strong given our high level of community participation and the numerous number of customers that already bank with us and live in Hermosa Beach. Best regards, 1.07 David Hardin, Jr. Executive Vice President • APRIL 30, 1999 MR. ROGER ELDON BACON RALPHS SHOPPING CENTER 1100 PACIFIC COAST HIGHWAY, SUITE E HERMOSA BEACH, CA 90254 • Allstate' You're in good hands. RE: PROPOSED COMMERCIAL BUILDING NORTH PIER PARKING STRUCTURE Dear Roger: My father has been an Allstate Insurance Senior Agent with Allstate Insurance for thirty-four years and has been at the Ralphs Shopping Center, 1100 Pacific Coast Highway, Hermosa Beach for twenty-one years. I plan to open an Allstate Insurance office in the new proposed commercial building (above), and I will need approximately 700 square feet in said proposed building. I am asking you to reserve office space for myself, contingent on our mutual lease negotiation approvals. Our family represents, three generations in business and living in the South Bay. I am looking forward to our new association. Sincerely, Scott Herman, Agent ALLSTATE INSURANCE G52-1 • • R-:1 12121 `1;0121211NL MAY 24, 1999 MR. SOL BLUMENFELD, DIRECTOR CITY OF HERMOSA BEACH COMMUNITY DEVELOPMENT DEPARTMENT 1315 VALLEY DRIVE HERMOSA BEACH, CA 90254 RE: SUMMARY DEMOGRAPHIC REPORT Dear Sol: SIP P1,00 At our meeting on May 3, 1999, at 11:00 AM, wherein my development team was interviewed by you and your staff, including Vicky Copeland, Pete Bano, Fire Chief, at said meeting, you requested a copy of my Demographic Report dealing with the city of Hermosa Beach. Please be advised that herewith said Summary Demographic Report attached hereto. Please be advised, I am requesting that said Demographic Report is the exclusive property of Roger Eldon Bacon, and shall not be duplicated in form and shall be used only for my project for the retail building project at 13th Street and Hermosa Avenue in Hermosa Beach. Sincerely, ATTACHMENT - SUMMARY DEMOGRAPHIC REPORT Ralph's • Starbuck's • Bank of America (Kiosk) • Union Bank • McDonald's First Federal Bank • El Pollo Inka • Allstate • Fox Photo 1100 Pacific Coast Highway • Hermosa Beach • California 90254 • (310) 374-8991 Mailing Address: P.O. Box 282 • Redondo Beach • California 90277 Summary Demographic Report by Block Groups Site: 1100 Pacific Coast Hwy Hermosa Beach, CA 90254 S Site Coordinates: Longftude/X: -118.391885 Latitude/': 33.863045 SUPPI_FMF.NTL INFORMATION 1.00 MILE 20o MILE _ 3.00 MILE RING RING RING 3.14 sq/mi 12.56 sq/mi 28,28 sq/ml Number of F4laione 0 0 1 Number of Ralphalone 1 1 3 Number of Grocery! 5 9 17 POPULATION 2003 Population 33,717 94,456 174,444 1998 Population 32,197 90,209 167,222 1990 Population 30.636 85,816 160,416 % Change in Pop 1998 to 2003 4.72% 4.71% 4.32% % Change In Pop 1990 to 1998 5.09% 5.12% 4.24% 1998 Median Age Total Population POPULATION (Non -Hispanic) 1998 .% White 81.97% 79.02% 72.75% 1998 % Black 1.33% 1.33% 1.79% 1998 % Indian/Eskimo/Aleut .39% .39% .35% 1998 %Asian/Paciflc Islander 7.16% 9.00% 11.83% 1998 % Other .14% .14% .16% 1998 % Hispanic 9.00% 10.12% 13.12% 1990 % White 83.63% 81.49% 76.73% 1990 % Black 1.26% 1.25% 1.68% 1990 % Indian/Eskimo/Aleut .43% .42% . .39% 11190 %Asian/Pecific islander 5.64% 7.16% 9.48% 1990 % Other .11% .11% .13% 1990 % Hispanic 8.94% 9.56% 11.58% HOUSEHOLDS 2003 Households 15,371 40,998 73,204 1998 Households 14,672 39,097 70,091 1990 Households 14,133 37,562 67,941 Percent Change In HH 1998 to 2003 4.77% 4.86% 4.44% 1998 Avg HH Bite (Est) 1998 Median HH Income 1998 Average HH Income 2.2 2.3 2.4 $76,076 374,064 569,646 $90,297 589,591 584,660 This report is the exclusive property of Roger Eldon Bacon, and shall not de duplicated in any form. 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