|(Feb. 5, 2019, 11:00 a.m.) -- Ninth district Councilman Rex Richardson posted on the North Long Beach News Facebook page in or about the midnight hour today (Feb. 5), and in the public interest we re-publish below, answers that he indicates city staff provided to questions he asked that were posed by his constituents over the past 24 hours.
- The City's independent appraisal was conducted by Hawran & Malm, LLC., subject to the reporting requirements defined by the Uniform Standards of Professional Appraisal Practice (USPAP), in accordance with the Appraisal Institute Code of Ethics.
- The appraisal utilizes Sales Comparison, Cost, and Income Capitalization approaches to establish the total value of the property.
- The land and improvement fair market value is $7,540,000 including the income-generating potential of the industrial, residential, and retail (liquor store) buildings, parking areas, undeveloped areas of the property, furniture and equipment.
- The appraisal indicates that the property was purchased for $3 million by the Long Beach Rescue Mission Foundation but sold to the current ownership in 2013 for a below-market sales price of $2 million due to undisclosed, extenuating circumstances. The below-market sale was not considered "arms length" which likely impacted the below-market assessed value recorded by the Assessor.
- The appraisal indicates that demand in the submarket for industrial properties in North Long Beach (driven by adjacency major freeways and the busiest ports in the United States), is extremely high with a vacancy average between 3-4 percent.
- Additionally, the 2018 City ordinance allowing for marijuana-related businesses in the Subject area significantly increased the regional value of the property. As an example, the property owner had recently executed a lease with a marijuana business valued at $40,000 per month, which dramatically increased the income-based valuation of the property.
- The City intends to release the appraisal May 31st, after the closing of escrow, to protect the negotiating process. Technically, the negotiating process is considered active until due diligence by both parties is complete. The appraisal will not be made available until acquisition and due diligence of all of the property is completed pursuant to California Government Code 6254(h).
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