Loading...
HomeMy WebLinkAboutACHA 2020 FMV note appraisal addendum packageCITY OF AUBURN WASHINGTON October 14, 2019 Auburn Condo Hangars Association 1402 Auburn Way North #280 Auburn, WA 98002 Nancy Backus, Mayor 25 West Main Street* Auburn WA 98001-4998 * www.auburnwa.gov * 253-931-3000 RE: 2020 Fair Market Value appraised rate & step increase addendum Greetings Auburn Condo Hangars Association Per the requirements of your lease for land at the Auburn Municipal Airport the City of Auburn ("City") has commissioned an MAI Appraisal to determine the current Fair Market Value ("FMV") representation of your leasehold. Attached to this letter is the executive summary from that appraisal dated September 30, 2019. If you would like to view the appraisal in its entirety you may do so by downloading it from the under the forms tab of the Auburn Airport website at www.auburnmunicipalairport.com/forms. The City acknowledges that the FMV of $0.825/ft as determined by the appraisal is substantially higher then what your current lease rate is. In an effort to help mitigate some of the financial impact the City would like to propose the following step increase to your lease rate: calendar year 2020 = $0.715/ft, calendar year 2021= $0.825/ft, this would replace the scheduled Consumer Price Index ("CPI") increase for the 2021 calendar year. Regularly scheduled CPI and FMV rate adjustments would return to their regular schedule following the 2021 calendar year. If you would wish to participate in the afore mentioned step increase please execute, date and notarize the two copies of the enclosed addendum and return them both to me at the address stated below no later than November 15, 2019. In an effort to accommodate the quick turnaround needed to receive the executed addendum back from you, either myself or the Airport Management would be happy to meet with you in person to execute the addendum either at City Hall or the Airport Office. Addendums returned later than the November 151h deadline will not be eligible for the step increase and therefore will be assessed the full FMV beginning January 1, 2020 as described in your lease. No exceptions will be made due to the requirement to get these addendums through the City Council approval process! If you have any questions about this letter, the appraisal, the enclosed lease addendum or to schedule a time to meet in person to execute the addendum please contact me at 253.288.4325 or email Jarndt@auburnwa.gov or Airport Manager — Tim Mensonides at 253.288.4332 or email Tmensonides@auburnwa.gov Return address if by mail: City of Auburn, Attn: Josh Arndt. 25 W Main, Auburn, WA 98001 KOn-, Jrndt Real Property Analyst/Sr. Economic Development Officer City of Auburn AUBURN *MORE THAN YOU IMAGINED Corporate Office Va I b r i dae Smith Tower 506 2nd Avenue + Suite 3200 PROPERTY ADVISORS Seattle. WA 98104 Puget Sound 206-209-3016 phone 425-949-7109fax 2927 Colby Avenue 18728 Bothell Way NE 419 Berkeley Avenue Suite 100 Suite B Suite A Everett, WA 98201 Bothell, WA 98011 Fircrest. WA 98466 425-258-2611 phone 425-450-4040 phone 253-274-0099 phone 425-252-1210fax 425-949-7109fax 425-949-7109fax valbridge.com September 30, 2019 Mr. Josh Arndt Senior Economic Development Officer City of Auburn 25 W. Main Street Auburn, WA 98001 Via e-mail (iarndt@auburnwa.gov) RE: AUBURN AIRPORT LAND RENT RE -VALUATION (Our File #19-0103) Dear Mr. Arndt: At your request, we have completed a Narrative Appraisal Report containing our opinion of current market rent for the land underlying the representative parcel provided to us, which is a portion of Assessor's Parcel Number S14320-0070 at Auburn Municipal Airport, in Auburn, Washington. This report is intended to review the land with respect to current market activity, and to assist in land rent renewal negotiations between the City of Auburn and its tenants. The conclusions have been generated through an analysis of comparable land sales activity, as well as activity at other regional airports, and our inspection of the subject property. This report includes descriptions, comparable analysis, and an opinion of market rent for the land owned by the City of Auburn identified as a portion of APN No. 514320-0070 in order to assist in ground lease negotiations for the airport in its entirety. The analysis is intended to provide an opinion of market rent for the land only (excluding improvements and any potential leasehold interest in the land). This is a Narrative Appraisal Report, intended to comply with the reporting requirements of the Code of Ethics and Standards of Professional Appraisal Practice, which include Uniform Standards of Professional Appraisal Practice (USPAP) of the Appraisal Institute. As such, it presents no discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraisers' opinion of value. Supporting documentation concerning the data, reasoning, and analyses is retained in the appraisers' file. The depth of discussion contained in this report is specific to the needs of the client and for the intended use previously stated. The appraisers are not responsible for unauthorized use of this report. Use of this report by a third party is not intended. The value conclusions herein are given subject to the specific assumptions and limiting conditions stated immediately following this transmittal letter, as well as others identified in the report. —_ 19-0103mbU— © 2019 Valbridge Property Advisors I Puget Sound Based on our investigation and analysis of all relevant data, our opinion of market rent for the subject property, as of September 11, 2019, is: Conclusion of Value Auburn Municipal Airport $0.825 If you have further questions not answered in the accompanying report, please do not hesitate to call. Sincerely, VALBRIDGE PROPERTY ADVISORS I PUGET SOUND S. Murray Brackett, MAI Senior Managing Director Washington License #27011-1100853 11/22/2019 kr Enclosures Christina J. Lovell, Associate Washington License #27011-1001951 04/18/2020 19-0103mbU— © 2019 Valbridge Property Advisors I Puget Sound Page 2 FOURTH AMENDMENT TO THE LEASE AGREEMENT BETWEEN THE CITY OF AUBURN AND AVIATION PROPERTIES, INC. THIS AMENDMENT is made and entered into this day of 2019, by and between the CITY OF AUBURN, a municipal corporation of the State of Washington (hereinafter referred to as the "CITY"), and Auburn Condo Hangars Association (hereinafter referred to as Lessee), as an addendum to the Lease Agreement between the parties for land located on the Auburn Municipal Airport ("Airport") executed on the 8th day of June, 2001. WITNESSETH: WHEREAS, the City of Auburn ("CITY"), and Aviation Properties, Inc. ("API") entered into a Lease Agreement dated June 8, 2001, a memorandum of which was recorded with the Auditor of King County, Washington, under Auditor's File No. 20020627002407 on the 271h day of June, 2002; and WHEREAS, Pursuant to Paragraph 12 of the Lease Agreement between API and the CITY, API had the right to create a Condominium Association which was created and recorded with the Auditor of King County, Washington, under Auditor's File No. 20030415000674; and WHEREAS, Pursuant to Paragraph 12(b) of the Lease Agreement between API and the CITY, the Lease was automatically assigned to the Auburn Condo Hangars Association ("ACHA") for the assumption of all responsibilities under this Lease Agreement; and WHEREAS, The Lease Agreement has twice been amended; The first dated November 19, 2002 and the second dated August 3, 2016; and WHEREAS, Sections 5(a) and 5(d) provide for annual periodic rent adjustments including adjustments based upon "fair market rental value" (FMV) of the Premises, WHEREAS, Resolution 5457 amended the FMV adjustment schedule; NOW THEREFORE in consideration of their mutual covenants, conditions and promises, the Parties agree as follows: The following Paragraph 5(e) is hereby added to the Lease Agreement: 5(e) The 2020 FMV adjustment as defined in Section 5 of this Lease Agreement as amended will be implemented over two years in the following manner: i For Tie 2020 ca en ar year term Me F adjus mmeeni—Wil1`6e charged at a per square foot rate of $0.715. Fourth Amendment to Lease Agreement between COA & Aviation Properties, Inc. Original Lease approved under Resolution NO. 3353 (ii) For the 2021 calendar year tenn a rate of $0.825 per square foot will be charged in place of the scheduled CPI adjustment. All other teens and conditions of this Lease Agreement as amended shall remain the same. [SIGNATURES ON THE FOLLOWING PAGES] Fourth Amendment to Lease Agreement between COA & Aviation Properties, Inc. Original Lease approved under Resolution NO. 3353 Dated and Signed on this day of , 2019 Auburn Condo Hangars Association Name: STATE OF WASHINGTON ss. County of Title: The undersigned Notary Public hereby certifies: That on this day of 20 , personally appeared before me (name), (title), to me known to be the individual(s) described in and who executed the within instrument, and acknowledged that he/she signed and sealed the same as his/her free and voluntary act and deed, for the purposes and uses therein mentioned, and on oath stated that he/she was duly authorized to execute said document on behalf of In Witness Whereof I have hereunto set my hand and affixed my official seal the day and year first above written. Notary Public in and for the State of Washington, Residing at My commission expires Fourth Amendment to Lease Agreement between COA & Aviation Properties, Inc. Original Lease approved under Resolution NO. 3353 Dated and Signed on this day of 52019 City of Auburn Mayor: Nancy Backus Approved as to form: City Attorney: Steven L. Gross STATE OF WASHINGTON ) ss. County of ) The undersigned Notary Public hereby certifies: That on this day of , 20 , personally appeared before me (name), (title), to me known to be the individual(s) described in and who executed the within instrument, and acknowledged that he/she signed and sealed the same as his/her free and voluntary act and deed, for the purposes and uses therein mentioned, and on oath stated that he/she was duly authorized to execute said document on behalf of In Witness Whereof I have hereunto set my hand and affixed my official seal the day and year first above written. Notary Public in and for the State of Washington, Residing at My commission expires Fourth Amendment to Lease Agreement between COA & Aviation Properties, Inc. Original Lease approved under Resolution NO. 3353