recirculated final environmental report for the flanders mansion property

7/30/2019 Recirculated Final Environmental Report for the Flanders Mansion Property

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CITY OF CARMEL-BY-THE-SEA

DEPARTMENT OF COMMUNITY PLANNING AND BUILDING

STAFF REPORT

TO: MAYOR BURNETT AND CITY COUNCIL MEMBERS

THROUGH: JASON STILWELL, CITY ADMINISTRATOR

FROM: MARC WIENER, ACTING PLANNING SERVICES MANAGER AND

BRIAN ROSETH, PLANNING CONSULTANT

DATE: 8 JANUARY 2013

SUBJECT: CONSIDERATION OF PLANNING ISSUES RELATED TO THE

RECIRCULATED FINAL ENVIRONMENTAL IMPACT REPORT

AND THE SALE OF THE FLANDERS MANSION PROPERTY

I. EXECUTIVE SUMMARYTo act on the Sale of Flanders Mansion project the City Council must respond to the

questions below. In taking action, it is important to state the reasons for each decision.

This will assist staff in preparing legally-defensible findings for approval at the

Council meeting on March 5, 2013. The decisions will not be final until findings and

implementing resolutions are approved.

1.) Is the EIR adequate for decision-making?

o Does it identify the impacts of a sale or lease?o Does it provide appropriate mitigation measures to reduce the impacts?o Does it provide a reasonable range of alternatives that could reduce the

impacts?

o Does it respond adequately to public comments received on the Draft EIR?2.) Would a sale or lease conform to the General Plan? What land uses would be in

conformity with the General Plan (single-family residential, public/quasi-public,

etc.)

3.) Should the original project or any of the alternatives be selected for

implementation? If a lease or sale is selected, which parcel boundary shouldapply?

4.) Should the mitigation measures be adopted? If not, why not?

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Staff Report

Sale of Flanders Mansion Project

8 January 2013

Page 3

The Court upheld the Citys determination that the approved project was in conformity

with the General Plan but found that the City lacked sufficient economic evidence tosupport its finding that the environmentally superior alternative, the lease alternative, was

infeasible. The Court ordered the City to set aside its certification of the Final EIR and its

approval of selling the Flanders Mansion.

The 2009 Environmental Impact ReportPursuant to the Courts determination, the City prepared a Recirculated Draft EIR in 2009.

That EIR revised the project purpose to eliminate fund raising for capital improvement

projects. The EIR defined the project purpose and secondary objectives as follows:

Primary purpose: To divest the City of the Flanders Mansion property which is in need of

significant short-term and long-term repair and rehabilitation.

Secondary objectives:

1) To ensure that the Flanders Mansion is preserved as an historic resource;2) To ensure that the Flanders Mansion building and property are put to productive use;3) To ensure that future use of the Flanders Mansion and property will not cause

significant traffic, parking or noise impacts on the surrounding neighborhood;

4) To ensure that future use will not significantly disrupt the publics enjoyment of theMission Trail Nature Preserve or the Lester Rowntree Native Plant Garden;

5) To ensure that environmental resources of the park are protected; and6) To ensure that the Flanders Mansion parcel continues to provide the public with as

many park benefits as are practical.

Also in response to the Court's decision, in 2009 the City retained CBRE, an experienced

real estate economics firm, to prepare a thorough economic study to compare sale and lease

alternatives. Based on this study, and a number of other factors, the City Council

determined that the environmentally superior alternative identified in the 2009 EIR (Lease

Alternative) was not feasible. Instead, the City Council adopted an alternative to sell the

Mansion property (1.252 acres) with easements and mitigation measures to address

environmental impacts identified in the EIR. The City Council adopted extensive findings

to justify its actions. The City Council's decision was again challenged in Superior Courtby the Flanders Foundation.

Since the City Council's decision involved the sale of parkland, the California Surplus

Lands Act required additional public review and a majority vote of the electorate on a

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ballot measure for final approval. The City Council decided to implement the Surplus

Lands Act process while also fighting the lawsuit in Superior Court. The Court issued amixed decision with both parties losing on some issues. Both parties appealed the Superior

Court decision to the California Court of Appeals. The City prevailed in the lawsuit on all

challenges except one: its failure to respond adequately to a public comment suggesting

that the City should consider smaller parcel sizes as a means of reducing the significant

impact of selling parkland.

The 2012 Environmental Impact ReportThe Court of Appeal reasoned that since the project's significant environmental impact is

the loss of parkland, this impact might be reduced by selling less parkland. The 2012 EIR

incorporates by reference all prior EIRs and focuses on reduced parcel sizes. When these

alternatives were studied in the new EIR, it was found that altering some of the boundaries

of the Flanders Mansion parcel could improve public access to trailheads, views and other

park benefits. Based on public comments received, the Final EIR also responded to some

new issues.

IV. EIR ADEQUACYAn EIR must be adequate to enable informed decision-making and effective public

participation. An EIR must provide a sufficient analysis of impacts, mitigations and

alternatives. The Final EIR also must provide a reasonable response to all public

comments received.

Staff has determined that the 2012 EIR contains all the content and substantive elements

required by CEQA and meets the standards for adequacy in Section 15151 of the CEQA

Guidelines. The Forest and Beach Commission, Historic Resources Board and Planning

Commission all concluded that the EIR is adequate.2

Staff recommends that the City

Council find the 2012 EIR to be adequate. However, given that the sole reason for failure

of the 2009 EIR was lack of adequacy, staff encourages City Council members to review

the EIR carefully.

V. GENERAL PLAN CONFORMITY

2See Attachment #1: Flanders Update: Recommendations from Advisory Bodies

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California statutes require a determination of General Plan conformity whenever a City

property or building is proposed to be sold3

. The proposed land use for the property alsomust conform to the General Plan. Carmels General Plan does not contain decisive

policies on the issue of whether to sell Flanders Mansion, lease it, or keep it for Municipal

uses. However, the General Plan does include policies that anticipate a sale of the Flanders

Mansion property. (In the policies below, the Flanders Mansion is referred to by its

historical name: Outlands)

P5-141 If retained by the City, preserve the Outlands property and grounds at Mission

Trail Nature Preserve consistent with its status as a nationally registered historical

resource.

P5-142 If retained by the City, utilize the Outlands property at Mission Trail Nature

Preserve in a manner beneficial to the residents of Carmel-by-the-Sea while

minimizing its expense to the City.

P5-143 If retained by the City, support uses at the Outlands property that are compatible

with its location in Mission Trail Nature Preserve and adjacent to the Rowntree

Native Plant Garden and Hatton Road neighborhood.

Each policy has two clauses. The first clause makes the second clause apply if the City

does not sell the Mansion. Each of the second clauses contains a specific mandate. The

implication of the first clause is that there is a choice to be made, and that the General Plan

allows this choice--it does not prohibit it. This language is included in the General Plan in

spite of other policies that appear to oppose a sale. By law, a General Plan must be

internally consistent. Therefore, staff concludes that, with appropriate mitigations, a sale

of the Mansion can conform to the General Plan. Staff's recommendation on this question

also is influenced by the Planning Commission and City Council decisions in 2005 and

2009, and the passage of the 2009 ballot measure. Current Planning Commission

recommendations will be reported orally to the City Council at the January 8 meeting.

The counterargument to the analysis above derives from other General Plan policies that

apply to parks and natural resources throughout the City. The 2009 EIR identified 37

policies in the General Plan that have relevance to selling the Mansion4

. These policiessupport the preservation of natural resources, parks and open space, enhanced use of parks

3The lease alternative is assumed to be consistent with the General Plan and requires no special determination.

4See Pages 4.4-10 through 4.4-15 of the 2009 Draft EIR.

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8 January 2013

Page 6

by the public and acquisition of additional parkland. Many of these policies have a clear

application to the Flanders Mansion property and would be most effectively implementedby not selling the Mansion.

5For nearly all of the policies, the EIR concludes that General

Plan consistency will be achieved if the proposed mitigation measures are adopted. The

EIR identified just four policies classified as "potentially inconsistent" with a sale of

Flanders Mansion, due to the loss of public parkland:

Goal: G5-6: Preserve and acquire open space and parks.

ObjectiveO5-21: Optimize public use of City parks.

PolicyP5-46: Preserve and protect areas within the Citys jurisdiction, which due

to their outstanding aesthetic quality, historical value, wildlife habitats or scenicviewsheds, should be maintained in permanent open space to enhance the quality

of life. Such acquired areas would be left in a natural state or restored for

aesthetic and/or wildlife purposes.

Policy P5-107: Provide for public access and passive enjoyment of City parks and

open space.

So, three policy statements anticipate a sale, yet four policy statements appear to conflict

with a sale. The EIR classifies these policies as potentially inconsistent with selling the

Mansion. Only the City Council can make a final determination on the meaning of the

General Plan.A General Plan analysis must assume that policies appearing to be in conflict can be

harmonized. If the policies are viewed within a City-wide context, the various policies in

the Citys General Plan may not necessarily be in conflict. The Plan can support parks,

conservation and recreation in general terms while permitting a sale of parkland at a

specific site.

The Flanders Mansion property is an important site. Although it represents just 2% of

Carmels total parkland, it provides a disproportionally large number of benefits and is an

integral part of the Mission Trails Nature Preserve. If the property is sold, mitigation

measures and alternatives should be adopted to lessen impacts on views, aesthetics, historicpreservation and trail access; this will reduce potential conflicts among General Plan

policies.

5Representatives of the Flanders Foundation have argued that selling the Mansion conflicts with the General Plan.

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Ultimately, the City Council must balance the competing policy objectives to reach a

determination regarding General Plan consistency. In 2005 and 2009, both the PlanningCommission and the City Council determined that selling the Flanders Mansion property

was not inconsistent with the General Plan. The Superior Court upheld this determination

and stated The City is entitled to deference in its determination of conformity with the

General Plan.

Regardless of whether the property is sold or leased, a determination also must be made

regarding allowed land uses. The EIR studied residential, commercial and public/quasi-

public uses. The Planning Commission recommends that occupancy of the Mansion be

limited to single-family residential use. The building was designed for residential dwelling

purposes and its location inside a park, adjacent to a residential neighborhood, argue for a

low-impact use. Staff concurs with the Commission's recommendation.

VI. PROJECT SELECTION AND MITIGATION MEASURES

There are three criteria that apply to selection of a project:

1.) Does the alternative satisfy the project purpose (divestment) and the secondary project

objectives to a reasonable degree? This criterion can be used to eliminate alternatives.

The City Council also is free to adopt an alternative that does not satisfy the project

purpose.

2.) Does the alternative conform to the General Plan? This is a requirement.

3.) Is the alternative one of the environmentally superior options identified in the EIR? If

not, the City Council will be required to justify its action by adopting "findings of

overriding consideration". Failure to achieve the project purpose can be one finding.

Additional findings explaining how the environmentally superior alternative is

infeasible due to specific economic, legal, social, technical, or other considerations are

needed. Failure to adopt such findings will violate CEQA and would be grounds for a

legal challenge. Additional findings explaining why project benefits outweigh the

environmental impacts are helpful in defending a decision not to adopt an

environmentally superior alternative.

The following summary applies these three criteria to the alternatives:

Original Proposed Project (Sell 1.252 acre parcel with no mitigations and several allowed

uses)

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Purpose: Satisfies the project purpose, but may conflict with four of the secondaryobjectives.

General Plan: May be consistent with the General Plan. This requires a City Council

judgment on whether a sale is consistent with the General Plan.

Environmental: This is the least environmentally sensitive alternative studied.

No Project Alternative

Purpose: Fails to satisfy the project purpose and two of the six secondary objectives.

General Plan: Inconsistent with the General Plan (Policies P5-141, P5-141 and P5-143).

Environmental: This is the most environmentally superior alternative. CEQA allows a

No Project alternative to be rejected if it fails to satisfy the project purpose, even if it is

the most environmentally superior alternative.

Lease Alternatives with all Proposed Mitigation Measures--This alternative can be

limited to single-family residential use or can include public/quasi-public uses. A parcel

size needs to be specified.

Purpose: Fails to satisfy the project purpose (divestment), but could satisfy all six ofthe secondary objectives depending on the terms of the lease and assuming a reduced

parcel size boundary. If the primary goal of divestment is to avoid rehabilitation and

maintenance costs, the City could achieve most of the project purpose (except a change

of ownership) if it is feasible to find a lessee willing to cover these costs.

General Plan: A lease is consistent with the General Plan only if all of the mandates in

Policies P5-141, P5-142 and P5-143 are achieved (see page 4 of this Staff Report.)

Environmental: This is the second-most environmentally superior alternative, after the

No Project alternative.

Sale with Reduced Parcel Boundary Alternatives and with all Mitigation Measures.This alternative is really a group of boundary options identified in the EIR as 6.6, 6.7 and

6.7A.

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Purpose: Satisfies the project purpose (divestment) and could achieve all six secondary

objectives, depending on the parcel boundary. Larger parcel boundaries have greaterimpact on public access to trailheads, views and other resources of the park. Most of

these impacts can be mitigated.

General Plan: Alternatives 6.6 and 6.7 may be consistent with the General Plan. This

requires a City Council judgment on whether a sale is consistent with the General Plan.

Alternative 6.7A conflicts with General Plan policies related to historic preservation.

Environmental: Alternatives 6.6 and 6.7 are the next most environmentally superior

alternatives after the Lease Alternatives. Approval of these alternatives will require

adoption of findings of overriding consideration showing why the lease alternatives are

not feasible. Alternative 6.7A conflicts with environmental standards related to historicpreservation.

Sale with Conservation Easements and Mitigation Measures (from the 2009 EIR)

This alternative includes two variations. Alternative 6.5 would establish conservation

easements over approximately one-half acre of the parcel to address environmental and

public access issues. Alternative 6.5A would reduce the parcel size by subtracting most of

the area contained within those easements from the parcel boundary.

Purpose: Satisfies the project purpose and all six of the secondary objectives.

General Plan: May be consistent with the General Plan. This requires a Counciljudgment on whether a sale is consistent with the General Plan.

Environmental: These alternatives are the next most environmentally superior, after the

other Reduced Parcel Boundary alternatives. Approval of alternatives 6.5 or 6.5A will

require adoption of findings of overriding consideration showing why the lease

alternatives andthe reduced parcel alternatives are not feasible.

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VII. RECOMMENDATIONS

Staff recommends the following actions:

1. Determine that the EIR is adequate.2. Determine that a sale, with mitigations, is consistent with the General Plan.3. Approve either a lease or a sale.4. Limit future occupancy to a single-family residence.5. Select Alternatives 6.7 or 6.5A for the boundary for the sale or lease.66. Determine that all proposed mitigation measures should be adopted.77. Direct staff and legal counsel to prepare written findings and implementing

resolutions for final action at the Council's 5 March 2013 meeting.

6The other boundaries are either impractical (6.6), violate the General Plan and CEQA (6.7A), or involve the

complications inherent in easements and require more difficult CEQA findings (6.5).

7This should include the edits to mitigation measure 4.3-1 as recommended by the Historic Resources Board and the

Planning Commission--see Attachment #1.

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CITY OF CARMEL-BY-THE-SEA

DEPARTMENT OF COMMUNITY PLANNING AND BUILDING

STAFF REPORT: ADDENDUM

TO: MAYOR BURNETT AND CITY COUNCIL MEMBERS

THROUGH: JASON STILWELL, CITY ADMINISTRATOR

FROM: MARC WIENER, ACTING PLANNING SERVICES MANAGER AND

BRIAN ROSETH, PLANNING CONSULTANT

DATE: 8 JANUARY 2013

SUBJECT: CONSIDERATION OF PLANNING ISSUES RELATED TO THE

RECIRCULATED FINAL ENVIRONMENTAL IMPACT REPORT AND THE

SALE OF THE FLANDERS MANSION PROPERTY

I. INTRODUCTION

This Staff Report addendum provides new information not covered in the original Staff Reportdistributed to the City Council on 21 December 2012.

II. SUMMARY OF ACTIONS OF ADVISORY BODIES

Three advisory bodies reviewed the EIR and each provided conclusions and recommendations

regarding their areas of expertise, as follows:

Forest and Beach CommissionOn 10 December 2012 the Forest and Beach Commission reviewed the 2012 FEIR for adequacy.

The Commission found the document to be legally adequate and recommended certification.

Historic Resources Board

On 10 December 2012 the Historic Resources Board reviewed the FEIR for adequacy. TheBoard found the document to be legally adequate but forwarded to the Planning Commission arecommended amendment to mitigation measure 4.3-1 (shown in Attachment #1).

Planning Commission

On 12 December 2012 the Planning Commission reviewed the FEIR for adequacy. TheCommission found the document to be legally adequate. Pursuant to its responsibilities under

Section 65402 of the California Government Code, the Commission also considered whether asale of the Flanders Mansion property is consistent with the City's General Plan. The

Commission did not reach a definite conclusion on this question but recommended a residential

lease as the best option for the City. The Commission also concurred with the Historic

Resources Board and supported amending Mitigation Measure 4.3-1 as recommended by theBoard.

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Staff Report Addendum


8 January 2013

Page 2

On 3 January 2013 the Planning Commission reconsidered the issue of General Plan conformity.

The results of this meeting will be reported to the City Council orally.

III. ECONOMIC REPORT

Attachment #2 is an update to the economic report developed by CBRE in 2009 comparing lease

and sale alternatives. The update provides revised sale and lease values that reflect the newalternatives appearing in the 2012 EIR, including the reduced parcel alternatives. As background

to the updated material, the conclusions of the 2009 report are attached as well. The detailed

analysis from CBRE that support these conclusions is available at City Hall.

IV. RESPONSE TO NEW PUBLIC COMMENTS

The following comments were received during the public hearings held by the Forest and Beach

Commission, Historic Resources Board, Planning Commission and in correspondence receivedsince publication of the Final EIR. Staff has provided a response to each comment related to

adequacy of the EIR or the Staff Report.

Comment: The Staff Report states that even though the City eliminated financial return as a

project purpose in 2009, the City Council is still justified in considering economics when itmakes decisions about Flanders Mansion because the City Council has a fiduciary responsibility

to manage City assets for the benefit of the public. The commenter argued that the City

Council's fiduciary responsibility is not just monetary and extends to managing the MissionTrails Nature Preserve as one of the City's important assets. Therefore, the decision must take

into account what is good for the park as a whole.

Response: Staff concurs.

Comment: The EIR does not provide sufficient coverage of a Life Estate or a Curatorship.

These would allow the City to retain the Mansion in City ownership while providing a lease thatwas long enough for a lessee to be willing to expend sufficient funds to rehabilitate the Mansion.

Response: The purpose of the EIR is to expose potential environmental impacts of a project anddefine alternatives and mitigation measures to offset those impacts. The EIR is not required to

address economic or ownership issues. The EIR provides more than adequate coverage of the

potential environmental impacts of "lease alternatives" as a general category. Extending the term

of a lease does not raise new impacts relevant to an EIR. The 2012 Final EIR addresses thistopic in response 3b. The 2009 Final EIR addresses this topic in its response to comment letter

CC. A Resident Curator or Life Estate lease would result in substantially the same level of

impacts as the single-family lease alternative. Impacts to parkland would continue to occurunder this alternative, contingent upon the nature of the agreement. Impacts to parkland,

however, would be limited to the term of the agreement.

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Staff Report AddendumSale of Flanders Mansion Project

8 January 2013

Page

ATTACHMENT #1

RECOMMENDED AMENDMENTS TO MITIGATION 4.3-1Recommended by the Historic Resources Board and Planning Commission

Mitigation 4.3-1

The terms of any sale or lease shall be subject to Conditions of Sale requiring recordation of

a deed restriction, recordation of a historic preservation easement, or similar legally-

binding document which shall run with the land and be binding upon all owners and

successive owners, requiring the adherence to a comprehensive Preservation Plan for the

Flanders Mansion historic resource consistent with the Secretarys Standards and the

Carmel-by-the-Sea Municipal Code historic preservation provisions. The easement shall

encompass the entirety of the historic resource as documented in the National Register ofHistoric Places nomination papers and shall apply to all owners and lessees of the property

contained therein. The Preservation Plan shall require approval by the City's Historic

Resources Board. In general, the Preservation Plan shall identify changes to the property

that could reasonably be expected to occur and make recommendations so that the changes

would not disrupt the historic integrity of the resource. The Preservation Plan shall be

prepared by a qualified professional and would shall provide practical guidance to the new

all owners and lessees of the Flanders Mansion historic resource. Said Preservation Plan

shall include: 1) a history of the Flanders Mansion; 2) an assessment of the current

condition of the property (building and grounds) and detailed descriptions of the

character-defining features; and 3) recommendations following the Secretarys Standards

for the appropriate treatment of these features. Specific standards and requirements of the

plan follow:

A qualified specialist who meets the Secretary of the Interiors Professional Qualification

Standards should shall prepare the preservation plan that shall, at a minimum, include the

following information:

A detailed history of the Flanders Mansion;

A discussion of its historical significance (i.e. why the building resource is listed in

the National Register);

A comprehensive list of the features of the building and grounds that contribute to

its historical significance;

A detailed description of the current condition of the building and grounds and its

integrity relative to the National Register criteria;

A discussion of the Secretary of the Interior's Standards for the Treatment of

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Staff Report AddendumSale of Flanders Mansion Project

8 January 2013

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Historic Properties;

Specific standards and recommendations for the care and treatment of the Flanders

Mansion building and grounds. These standards in this section of the plan should bebased on the identified character-defining features and include relevant standards

outlined by the Secretary of the Interior, and the Secretarys guidelines in applying

these standards.

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January 3, 2013

Mayor Jason Burnett andCity Council MembersCity HallCarmel-by-the-SeaCarmel, CA.

Re: Market Value Impact of Reduced Parcel Size EIR Alternatives,

Flanders Mansion property, Carmel-by-the-Sea, CA

Dear Mayor Burnett and Members of the City Council:

As requested by the City of Carmel-by-the-Sea , Sedway Consulting has evaluated the impactof a number of reduced-parcel EIR alternatives on the market value of the Flanders Mansionproperty in Carmel-by-the-Sea, California. This letter represents an amplification of thereport prepared by CBRE Consulting for the City of Carmel-by-the-Sea dated February 23,2009. Lynn M. Sedway, CRE, was the primary author of that report, which included anappraisal of the property prepared by CB Richard Ellis Valuation and Advisory Services.That 2009 appraisal estimated a value of the City-owned property as a private single-familyresidence at $4.0 million, assuming completion of significant restoration costs estimated at$1.157 million provided by Architectural Resources Group as of January 15, 2009. It shouldbe noted that the restoration cost estimates addressed primarily safety and some historicaland interior restoration.

REDUCED PARCEL ALTERNATIVES

The potential reduced-parcel alternatives at the property were provided by Denise Duffy &Associates. The following table summarizes the alternatives and the resulting lot sizes:

Summary of Potential Reduced-Parcel Alternatives

Proposed

Project

Home Size (SF) 6,019 6,019 6,019 6,019 6,019 6,019

Lot Size - SF 54,537 54,537 33,628 10,019 36,154 21,780

in Acres 1.25 1.25 0.77 0.23 0.83 0.50

Easement-SF - 20,909 - - 3,049 -

in Acres - 0.48 - - 0.07 -

Net Lot Size-SF 54,537 33,628 33,628 10,019 33,105 21,780in Acres 1.25 0.77 0.77 0.23 0.76 0.50

Alternative 6.7a

Revised Design

Reduced Parcel

Alternative 6.5

With Easement

Alternative 6.5a

Easement Areas

Removed

Alternative 6.6

Building Only

Alternative 6.7

Reduced Parcel

Sources: Denise Duffy & Associates; and Sedway Consulting.

As shown, the alternatives indicate a reduced net parcel size ranging from 0.23-acre to .77-acre. As a percentage of the parcel size indicated in the 2009 report, the reduction in parcel

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Mayor Jason Burnett and City Council Members

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size ranges from 38 percent in Alternatives 6.5 With Easement and 6.5A Easement AreasRemoved to 82 percent in the 6.6 Building Only Alternative. The City has indicated thatproperty boundaries have been drawn to maximize park benefits, including maximum

public access to trails and full retention of the Lester Roundtree Arboretum. Thesealternatives are illustrated in Figures 6.1 through 6.4 of the REIR under Discussion ofReduced Parcel Alternatives.

There are several aspects of the Flanders Mansion property that already pose a significantmarketing challenge. Specifically, marketing of the home with its historic status and theassociated renovation limitations, the significant cost of required renovation, and thelocation in the park requires a unique buyer. The potential to successfully market theFlanders Mansion property is limited to an even greater extent with the constraint of asmaller parcel size as specifically depicted in the EIR alternatives. Burdening the marketingwith a reduced parcel size raises many challenges, including the following:

Limiting the parcel size as depicted in the alternatives greatly impacts the privacy of themansion because the trails pass very close to its windows.

The reduced parcel sizes are not created in an effort to enhance the Flanders Mansionproperty as a private residence, but rather to enhance park benefits and public access.

The outright reduction in parcel size versus the use of easements is considered to have asimilar impact on value because both diminish the utility of the parcel in terms ofprivacy and security.

The mansion is further burdened by being isolated, so there are security issues due tothe potential for homelessness and crime, a common occurrence in park settings.

It is anticipated that the reduced parcel size will lessen the potential to gain approvalsfor additional construction of even a deck or renovation of the garage, for example.

The aforementioned factors also are anticipated to increase the time necessary tomarket the property, further negatively impacting value.

The above considerations all reduce the utility, desirability, and thus the value of theproperty as a potential private single-family home.

ESTIMATED VALUE IMPACT OF REDUCED PARCEL ALTERNATIVES

In estimating the value impact of the reduced parcel alternatives, the unique nature of theproperty and the overall Carmel-by-the-Sea location increase the difficulty of such a task.

Therefore, Sedway Consulting believes that identifying a reasonable range of value impact isan appropriate approach to estimating the impact on value. In terms of estimating theimpact of the reduced parcel size on value given the above constraints, there were severalconsiderations:

The scope of the assignment does not encompass an updated appraised value of theproperty based on current market conditions.

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3

Based on the methodology presented in the residential home comparison adjustmentgrid, the 2009 appraisal utilized an approximate $10.50 per square foot of landadjustment for parcel size differences.

It is estimated that land represents about 50 percent of the home value in the Carmelarea, due to the desirability and uniqueness of the location.

The various added constraints on the property and the added marketing challenges areestimated to decrease its value by 25 to 35 percent, reducing the value to $2.6 million to

$3 million, assuming completion of the restoration. Subtracting the estimated costofrenovation of $1,157,000 results in an estimated as-is value range of $1,443,000 to$1,843,000 for four of the five alternatives (except Alternative 6.6 Building Only), asopposed to the as is value of $2,843,000 for the property estimated in 2009 prior tothe reduced parcel size analysis.

The Building Only Alternative 6.6 scenario essentially results in the property having noland except for a small rectangle encompassing the building footprint. This severereduction in parcel size (by 82 percent from the original 1.25 acres), combined with therestoration challenges, is considered to render the property virtually non-marketable.

The following table summarizes the estimated as-is value ranges and impact of the reduced-parcel EIR Alternatives. As shown, the value impact ranges from $1.0 to $1.4 million, withthe exception of the Building Only Alternative 6.6 scenario, where the alternative isconsidered to be not marketable.

Summary of Value Impact of Reduced-Parcel Alternatives

Proposed

Project

Home Size (SF) 6,019 6,019 6,019 6,019 6,019 6,019

Net Lot Size-SF 54,537 33,628 33,628 10,019 33,105 21,780

in Acres 1.25 0.77 0.77 0.23 0.76 0.50

Actual Size Reduction - -38% -38% -82% -39% -60%

Value Reduction Range - -25% to -30% -25% to -30% Not Marketable -25% to -30% -30% to -35%

Estimated As Is Value $2,843,000 $1,643,000 $1,643,000 Not Marketable $1,643,000 $1,443,000

$1,843,000 $1,843,000 $1,843,000 $1,643,000

Value Impact - ($1,200,000) ($1,200,000) ($1,200,000) ($1,400,000)($1,000,000) ($1,000,000) ($1,000,000) ($1,200,000)

Alternative 6.7a

Revised Design

Reduced Parcel

Alternative 6.5

With Easement

Alternative 6.5a

Easement Areas

Removed

Alternative 6.6

Building Only

Alternative 6.7

Reduced Parcel

Sources: Denise Duffy & Associates; and Sedway Consulting.

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The contents of this letter are subject to the attached assumptions and general limitingconditions. Specifically for this assignment, Sedway Consulting includes a special limitingcondition to the analysis in that the subject property is a very unique property with no

really good comparables. This is especially the case in the reduced parcel alternatives withthe lack of privacy.

Sincerely,

Lynn M. Sedway, CRE

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A S S U M P T I O N S A N D L I M I T I N G C O N D I T I O N S

Sedway Consulting has made extensive efforts to confirm the accuracy and timeliness of theinformation contained in this study. Such information was compiled from a variety ofsources, including interviews with government officials, review of City and Countydocuments, and other third parties deemed to be reliable. Although Sedway Consultingbelieves all information in this study is correct, it does not warrant the accuracy of suchinformation and assumes no responsibility for inaccuracies in the information by thirdparties. We have no responsibility to update this report for events and circumstancesoccurring after the date of this report. Further, no guarantee is made as to the possibleeffect on development of present or future federal, state or local legislation, including any

regarding environmental or ecological matters.

The accompanying projections and analyses are based on estimates and assumptionsdeveloped in connection with the study. In turn, these assumptions, and their relation to theprojections, were developed using currently available economic data and other relevantinformation. It is the nature of forecasting, however, that some assumptions may notmaterialize, and unanticipated events and circumstances may occur. Therefore, actualresults achieved during the projection period will likely vary from the projections, and someof the variations may be material to the conclusions of the analysis.

Contractual obligations do not include access to or ownership transfer of any electronicdata processing files, programs or models completed directly for or as by-products of this

research effort, unless explicitly so agreed as part of the contract.

This report may not be used for any purpose other than that for which it is prepared.

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CBRE CONSULTING, INC.

To: City of Carmel-by-the-Sea and City Councilc/o Rich Guillen, City Administrator

From: Lynn Sedway, Executive Managing DirectorJonathan Kuperman, Director

Date: February 23, 2009

Re: Flanders Mansion Property Economic Feasibility Analysis

At the request of the City of Carmel-by-the-Sea (Carmel or City), CBRE Consultingperformed an economic analysis of the City-owned Flanders Mansion Property(Flanders Mansion or Property), a 6,0191-square-foot house built in 1924 andsituated on approximately 1.25 acres in Carmel.

STUDYBACKGROUND AND PURPOSECarmel purchased the Flanders Mansion Property in 1973. The property is listed onthe National Register of Historic Places as well as similar state and local registries. Itslocation is within the Mission Trails Nature Preserve (Preserve or Park), whichincludes the adjacent Lester Rowntree Native Plant Garden.

The City has proposed disposition of the Flanders Mansion Property, which needssignificant rehabilitation and ongoing maintenance. In addition to the primaryobjective of divestment to avert these expenses and potential liability, the City hasseveral secondary objectives:

1 The livable area is based on calculations from plans, provided by the City,dated November 1984. A 2005 appraisal of the Flanders Mansion Property estimatesa livable area of 5,577-square-feet.

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City of Carmel-by-the-Sea -- Flanders Mansion Property Economic AnalysisFebruary 23, 2009

1. To ensure that the Flanders Mansion Property is preserved as a historicresource;

2. To ensure that the Flanders Mansion building and property are put to

productive use;3. To ensure that future use of the Flanders Mansion Property will not cause

significant traffic, parking, or noise impacts on the surrounding neighborhood;

4. To ensure that future use will not significantly disrupt the publics enjoyment ofthe Mission Trails Nature Preserve and the Lester Rowntree Native PlantGarden;

5. To ensure that environmental resources of the park are protected; and

6. To ensure that the Flanders Mansion Property continues to provide the publicwith as many park benefits as are practical, given the proposed use.

DISPOSITIONALTERNATIVES

Multiple alternatives to retaining the Flanders Mansion Property are evaluated in thisreport:

Alternative 1 Sale as a single-family residence, with the City or the buyerresponsible for rehabilitation;

Alternative 2 Lease by the City as a single-family residence, with the City or thelessee responsible for rehabilitation;

Alternative 3 Sale as a low-usage non-residential property, with the City or thebuyer responsible for rehabilitation;

Alternative 4 Lease by the City as a low-usage non-residential property, with theCity or the lessee responsible for rehabilitation.

STUDYTASKS

CBRE Consulting performed several tasks in the course of this study, including thefollowing:

Reviewed pertinent information regarding the site, including the previousEnvironmental Impact Report (EIR), the cost estimate report prepared byArchitectural Resources Group2, the 2005 Mitigation Monitoring and ReportingProgram ("MMRP"), the 2005 Conditions of Sale, and other relevant codes,standards, and restrictions;

2 The Flanders Mansion Cost Estimate report prepared by Architectural ResourcesGroup can be found in Addendum C of the Appendix.

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Performed local reconnaissance to develop an understanding of the site and itsenvirons;

Inspected the site to determine potential and assess existing conditions related

to access, parking, visibility, topography, and views; Observed adjacent properties and surrounding neighborhoods to further our

understanding of potential value and use;

Developed case studies involving comparable properties, to provide addedperspective on the Citys aforementioned alternatives;

Analyzed key local property-market statistics and trends affecting the value ofthe Property;

Conducted an appraisal of the market value of the Flanders Mansion Property,through CBREs Valuation & Advisory Services group;

Evaluated the feasibility and likely value outcome of each dispositionalternative.

STUDYRESOURCES

CBRE Consulting relied upon myriad sources of information for this economic analysis,including but not limited to (i) Denise Duffy & Associates, (ii) City of Carmel by-the-Seastaff and records, (iii) the cost estimate report prepared by Architectural ResourcesGroup, dated January 15, 2009, (iv) the Multiple Listing Service for the Monterey Bayarea, (v) summary appraisal report prepared by CBRE Valuation & Advisory Services,dated October 24, 2008, and (vi) other documents and sources, including those notedin the Case Studies section of this report.

APPROACH TO ESTIMATINGVALUE

In estimating the value of the Flanders Mansion Property for each alternative involvinga sale of the property, CBRE Consulting judged the sales comparison approach mostappropriate. Briefly, this standard valuation method uses data from the sale ofcomparable properties to indicate a value for the subject. For the lease alternatives,CBRE estimated the propertys income-producing potential.

CBRE Consulting understands that the economic analysis of the Flanders MansionProperty performed for the prior EIR utilized the summary appraisal report prepared byMark S. Askew and dated June 24, 2005. We regarded that appraisal as obsolete forthe purpose of our study and conducted a new appraisal through CBREs Valuation &Advisory Services group. The resulting summary appraisal report, including thespecific comparables and assumptions relied upon in this analysis, can be found in theAppendix of this study.

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SUMMARY OFVALUE ESTIMATES

The City requested CBRE to analyze two types of alternatives, sale and lease, and toconsider two types of occupancy, single-family residential and nonresidential. A

summary of the estimated value of these combinations is presented below.

CBREs appraisal report (accompanying this report as an Appendix) estimates thefollowing values associated with sale of the Flanders property. In our opinion,estimates of market values for the Flanders Mansion Property are not affectedsignificantly by whether the City or another party completes the restoration.

The budgeted rehabilitation cost3 was deducted to estimate the as-is value in each

scenario. The major components of the rehabilitation costs and estimates relate to sitework, the buildings exterior, and the buildings interior. The largest line items are forre-roofing the building and for shoring the southeast corner of the house andinstalling a perimeter foundation wall.

In the following table, the difference between the as-rehabilitated value of $2,040,000for sale as non-residential property and the as-is value of $890,000 is $1,157,000 forrestoration. In all scenarios, CBRE Consulting used the restoration budget estimatepertaining to residential use, recognizing that adaptive reuse of the Property as anonresidential property may incur higher restoration costs. The restoration cost for anonresidential use would likely fall between the amount budgeted for residential use

and use by the City itself as a public facility, which Architectural Resources Groupestimated at $1,409,716.

Sale as a Single-Family Residence to Owner/OccupantAs-Rehabilitated (Restored) $4,000,000As-Is (Unrestored) $2,843,000

Sale as Non-Residential Property for Owner's UseAs-Rehabilitated $2,040,000As-Is $890,000

3 The January 15, 2009 report prepared by Architectural Resources Groupconcludes that the restoration cost to a purchaser or the City would amount to$1,157,000 if the property is leased or sold to an owner-user.

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As an alternative to a sale, the City may lease the Flanders Mansion Property as ahome or non-residential property. CBREs appraisal report estimates the annual netoperating income associated with the two scenarios. We used these figures toillustrate approximately how long would be needed for the City to recover the full costof restoration.

A dynamic model employing rental rate and operating expense adjustments over time,as well as net present value calculations, could be constructed. However, such ananalysis would rely on necessarily imprecise assumptions and forecasts and wouldultimately, in our opinion, make a similar demonstration of the economics of thesealternatives.

It is also important to note that the market for comparable single-family rentals isexceedingly thin in the vicinity of the Flanders Mansion Property and, in fact, non-existent where lessees are responsible for rehabilitating a property. Similarly, in thePropertys immediate area, CBRE Consulting found a very limited market forcomparable non-residential rentals, and here again, a non-existent market for non-residential rentals when the lessee is required to rehabilitate the property.

Lease as Single-FamilyResidence

Lease as Non-Residential Property

Potential Rental Income $102,000 $144,456Vacancy & Credit Loss (5.00%) (5,100) (7,223)

96,900 137,233

Expense Reimbursements 0 45,579Vacancy & Credit Loss (5.00%) 0 (2,279)

96,900 180,533

(28,691) (47,686)

Estimated Cost of Restoration ($1,157,000) ($1,157,000)

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At present, the Property has shared public street access. The appraised valuespresume that a perpetual easement, providing site access from Hatton Road, isgranted prior to sale or lease. Without such access, achievable disposition valueswould be significantly lower.4

Moreover, the restoration budget does not include costs of certain interiorimprovements likely desired by a buyer or lessee, such as floor plan modifications thatwould make the Property more usable and more competitive with comparable homesor non-residential properties in the market.

ECONOMIC FEASIBILITYFINDINGS

The purpose of this study is to analyze the economic feasibility of the Citys dispositionalternatives for the Flanders Mansion Property. It is our understanding that for an

alternative to be judged economically infeasible, it must be impractical either due tosufficiently severe additional cost or lost profitability, or by virtue of a severely limitedor non-existent market for that alternative. An evaluation of the feasibility of eachdisposition alternative for the Flanders Mansion Property follows.

, provided the Property issold to an owner/occupant. CBRE Consulting determined a market for the FlandersMansion Property as a single-family home and estimated sale proceeds to the City, netof restoration costs, of $2,843,000. Whether the City did the restoration or the buyerdid it would not change the economic outcome.

CBRE Consulting considers. In the vicinity of the Property, the market for comparable single-

family rentals is exceedingly thin and, in fact, non-existent where lessees areresponsible for rehabilitating a property. Additionally, with the estimated incomestream from this alternative, the City would not recover its restoration costs forapproximately 17 years.

It is our opinion that, on balance,. In the Monterey Bay area, the sale market for non-residential properties

comparable to the Flanders Mansion Property is highly limited. Indeed nocomparables were identified in Carmel. Furthermore, no market was found forcomparable properties requiring restoration.

In thePropertys immediate area, CBRE Consulting found a very limited market for

4 CBRE Consulting presumes that the City would provide a perpetual accesseasement to a private owner since the Property would have limited value without suchaccess.

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comparable non-residential rentals, and here again, a non-existent market for non-residential rentals when the lessee is required to rehabilitate the property.Furthermore, with the estimated income stream from this alternative, the City wouldnot recover its restoration costs for approximately nine years.

CONCLUSIONS

CBRE Consulting found that use of the Property as a single-family residence is mostcompatible with surrounding land uses, location attributes, legal restrictions, and otherfactors. Furthermore, our estimates of potential sale proceeds, lease income, andmarketability support the conclusion that

USE RESTRICTIONS AND POLITICAL ISSUES

The Flanders Mansion Property is subject to numerous restrictions. Its current zoning isP-2 (Improved Parkland). Allowable uses in this zoning district include park andrecreation, single-family residential, municipal offices, small meeting or event space,and assorted cultural facilities.

Other restrictions result from the adjacency of the Flanders Mansion Property to theLester Rowntree Native Plant Garden and its location within the Preserveboth ofwhich contain Environmentally Sensitive Habitat Areas (ESHAs). Moreover, the Cityand the Property are within the California Coastal Commissions jurisdiction and are

recognized as sensitive habitats for a variety of animal and plant species.

The Flanders Mansion Property is designated a historic landmark on the NationalRegister of Historic Places5, and it is listed on the City of Carmel-by-the-Seas HistoricInventory. The City is obligated to ensure that it is preserved.

Although the Mitigation Monitoring and Reporting Program (MMRP) and Conditions ofSale for the current analysis and proposed project have not yet been finalized oradopted, it is expected that the same or substantially similar conditions as approved in2005 will be imposed when the City ultimately selects a project following completion

5 It is our understanding that there are no federal historic property designationsthat place federal restrictions on private property owners. Listing in the NationalRegister only confers honor. Under federal law, private property owners can doanything they wish with their National Register-listed property, provided that no federallicense, permit, or funding is involved. Under the federal standards, owners have noobligation to open their properties to the public, to restore them, or even to maintainthem, if they choose not to do so. (Federal Regulation Title 36, Chapter 1, Section60.2)

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of the current environmental analysis and public review process. Any owner of TheThe Flanders Mansion Property must comply with the Flanders Mansion MMRP, and issubject to detailed Conditions of Sale. The Conditions of Sale and MMRP wereadopted as a mitigation measure for many of the issues raised in the prior EIR. TheConditions of Sale will be recorded as covenants or conditions and will run with theland.

The restrictions described above significantly affect ownership costs and possible usesof the Flanders Mansion Property. Those factors in turn affect the Citys dispositionalternatives.

From a buyer or tenant perspective, the historic status of theFlanders Mansion Property may be viewed as desirable, due to the associatedprestige. However, the historic designations limit significantly the potential use of theProperty, given that certain alterations must meet rigorous federal, state, and local

standards.

In like manner, the parkland surrounding the Flanders Mansion Property on balancecontributes positively to its setting. At the same time, owners and occupants mustensure that use of the Property does not disturb sensitive habits or public enjoyment ofthe park. Past experience with other properties indicates that allowing public access tothe grounds would not have a major negative impact on the ability to achieve the saleof the property at the value as appraised by CBRE. Furthermore, retention of theability of the public to access the Flanders Mansion Property as part of the park isconsistent with the desires of the neighborhood. Given these competing forces, nopremium or discount related to the use restrictions of the Flanders Mansion Property is

factored into comparable sales and rentals. However, the various use restrictions doaffect potential disposition alternatives and values.

CASE STUDIES

CBRE Consulting developed case studies of three comparable properties to help theCity evaluate its disposition alternatives for the Flanders Mansion Property. Wesearched for significant historic homes meeting at least the following criteria:

Located in a residential neighborhood, with an affluent population and close toa park or other public open space;

Recently restored or repaired;

Currently or formerly publicly owned.

The following three cases possess a range of characteristics shared by the FlandersMansion Property. Information was obtained by interviewing personnel from the City

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of San Juan Capistrano, the National Trust for Historic Preservation, and the DorisDuke Charitable Foundation. Additional information was gathered from news articlespublished byThe New York Times and Los Angeles Times. Other sources includedwebsites for the National Trust for Historic Preservation, the Ennis House Foundation,the Doris Duke Foundation for Islamic Art, the Doris Duke Charitable Foundation, andthe California Office of Historic Preservation.

The following case studies range considerably in their comparability to the FlandersMansion Property case. However, they help to inform the following observationsabout the historic reuse of single-family residences with similar characteristics andneighborhood settings:

Some non-residential uses involve little or no significant public access oractivity. However, if there is some level of access activity, extensive publicoutreach has been successful in mitigating neighborhood concerns. The publicprocess may also aid in fundraising efforts.

For a non-residential use traffic and parking impacts may be addressedthrough detailed conditional use permit requirements, mitigation measuresand/or conditions of sale drafted to take into account the comments of thecommunity. These conditions may limit the volume and timing of visits.Transporting visitors to the property from a remote location may be a possiblesolution.

Visitor fees cannot be expected

to cover costs associated with repairs and rehabilitation, or even ongoingmaintenance. In one case study, we found that residential rental income mightalmost offset the Citys ongoing maintenance responsibilities; however, it isessential to note that rehabilitation has already occurred, and at a smallfraction of the cost currently estimated for the Flanders Mansion Property.

2655 Glendower Avenue, Los Angeles, California

The Ennis House is the largest of four concrete block homesdesigned by Frank Lloyd Wright. The house was built for Mabel and Charles Ennis in1924, and held by other private owners after the Ennis family until the death of its lastprivate owner, Gus Brown, in 2002. Brown bestowed the property to the Trust forPreservation of Cultural Heritage, a non-profit organization that he founded to raisefunds for rehabilitation of the house. The house is now owned by the Ennis HouseFoundation, a renamed and re-organized legacy of Gus Browns original non-profit.The property is listed on the National Register of Historic Places, was declared a

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Cultural Heritage Monument by the City of Los Angeles, and was designated aCalifornia State Landmark.

The Ennis House suffered severe damage during the1994 Northridge earthquake, then again in 2005 when the Los Angeles areaexperienced an unprecedented volume of rainfall. Following these incidents, theNational Trust for Historic Preservation listed the site as one of Americas 11 mostendangered places in 2005. In 2004 and 2006, the World Monuments Foundationalso listed it as one of the worlds 100 most endangered places.

The first rehabilitation of the house was completed between 2005 and 2007 and costapproximately $6 million. It addressed major structural repairs required to keep theproperty from further deteriorating, including stabilization of the motor court and a35-foot tall concrete block retaining wall. The remaining restoration involves

stabilizing the house, replacing the roof, and conserving the stained glass windows.This may require as much as $10 million.

The Federal Emergency Management Agency (FEMA) approved a$3.1 million grant following the Northridge earthquake, contingent on Brownmatching the grant through fundraising, which was unsuccessful. FEMA only granted$1 million.

The major repairs commencing in 2005 were made possible through more successfulfundraising by the Ennis House Foundation. FEMA granted the remaining $2.1 millionin relief funding once the Foundation raised matching funds from the Getty

Foundation, the Parsons Foundation, Save Americas Treasures, Friends of HeritagePreservation, the National Trust for Historic Preservation, and American Express.Finally, a $4 million construction loan was obtained for the project.

The Ennis House is located in an affluentresidential neighborhood overlooking downtown Los Angeles. Even though theproperty is zoned for single-family residential use, Gus Brown raised funds forongoing maintenance by offering tours, selling souvenirs, and renting the landmarkfor Hollywood film productions. But after Brown died, neighbors complained thatthese activities were conducted illegally, and voiced their opinion that the house shouldbe sold for residential use only. The Ennis House Foundation would like the propertyto be available to the public for tours once construction work is complete. Reportedly,they have gained support from neighbors by engaging in ongoing public outreachefforts. Encouraging, positive press has helped fundraising efforts and gained publicsupport. Some neighbors now accept public tours as a use for the property if they arefree of charge and limited in size so that traffic impacts are mitigated.

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4055 Papu Circle, Honolulu, Hawaii

Shangri-La is a five-acre property overlooking the Pacific Oceanin the exclusive Black Point residential neighborhood near Diamond Head, Honolulu,Hawaii. The Islamic-style mansion was constructed in 1937 for Doris Duke, incollaboration with architect Marion Simms Wyeth. It houses Dukes extensivecollection of Islamic art, artifacts, and furniture.

Rehabilitation, modification, and restoration of theproperty were ongoing throughout Doris Dukes life, as she continued to modify themansion to accommodate her growing collection of art and furniture. Consistent withDukes will, upon her death in 1993 Shangri-La was transferred to the Doris DukeFoundation for Islamic Art (DDFIA), a charitable foundation whose mission is to

promote the study and understanding of Islamic arts and cultures. After Dukes death,a multi-year master plan was developed for Shangri-La to address the preservationand adaptive use of the historic residence and grounds. The plan is currently in itsfourth year and includes such challenges as refurbishing corroded bronze window anddoorframes, restoring original light fixtures, extensive repairing of concrete and plasterwalls and roofs, removing hazardous materials, painting, rewiring, and other work.From 2001-2002, the public rooms of the estate were restored to reflect theirappearance during Doris Dukes lifetime. Preservation efforts are currently focused onthe landscape and Playhouse in support of diversified, on-site future programming.

Public tours commenced in November 2002. Although these

tours provide some revenues, the vast majority of the operating budget and capitalimprovements are funded through the Doris Duke Charitable Foundation, which wasset up in Dukes will and has current assets exceeding $1 billion. The DDFIA iscurrently working to increase revenues from commercial activities, through twodifferent programs in nascent stages. The first is a lecture series put on by aprospective artist-in-residence or scholar-in-residence. The second program wouldoffer specific tours, targeted towards second- and third- time visitors interested in amore in-depth examination of the property and its artifacts. Neither the in-residenceprogram nor the specific tours program currently generates revenues.

In 2002, the City and County of Honolulu issueda conditional use permit that allows Shangri-La to engage in commercial activitieswithin the residential neighborhood of Diamond Head. The terms of commercial useare highly restrictive. Parking for Shangri-La is unavailable on the property andforbidden in the surrounding neighborhood, so visitors are transported via minivanfrom the Honolulu Academy of Arts museum 15 minutes away; public tours of theproperty are limited to 96 visitors per day and 12 people per tour.

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29991 Camino Capistrano, San Juan Capistrano, California

The Roger Williams House was constructed in 1923 for JudgeRoger Williams and his family, on 32 acres of land. The Williams property issurrounded by another 38 acres of open space and orchards. The vacant house andsurrounding land is owned by the City of San Juan Capistrano. In 2007, the housewas listed on the National Register of Historic Places.

The City of San Juan Capistrano is in the conceptual planning stages of converting theland surrounding the Roger Williams House into a public park. Once the park isplanned, the house may become a park building, event facility, museum, or bed andbreakfast.

Lead paint abatement, re-painting, and exteriorrepairs were performed in 2005. Interior repairs and re-painting were performed in2007. These projects cost approximately $100,000, including administration and Citystaff time.

For the rehabilitation performed between 2005 and 2007,monies were allocated from a City account that receives income from the sale oforanges grown on the Roger Williams House property.

Potential future revenues from the property will depend on its use. Two commercialusers expressed interest in the house, one as an animal care facility and the other as a

wine tasting room. However, these negotiations never resulted in an agreement. Inthe interim, before the park is planned, the City plans to lease the home as aresidential unit, and already has approximately 10 interested tenants. The CityCouncil is expected to execute a contract soon with a property management companythat will manage the property during its residential use. Under the agreement, thetenant will be responsible for day-to-day maintenance and cleaning of the property(which will exclude the open space and orchards), while the city will pay for structuralrepairs and major maintenance items. It is expected that a market rate rent ofapproximately $2,500 per month will easily cover the Citys costs.

If the City leases the building to a non-profit organization once the park is planned, itdoes not expect to generate significant income, as the City has a policy of renting tonon-profits for little or no rent.

The Williams House is isolated by virtue of itslocation adjacent to the open space corridor and Interstate 5, so neighborhoodconcerns about its future use have not been an issue. However, the City expects thatparking, traffic, lighting, and signage concerns would be voiced by neighbors if thehouse were to be used commercially.

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ASSUMPTIONSANDGENERALLIMITINGCONDITIONS

CBRE Consulting has made extensive efforts to confirm the accuracy and timeliness ofthe information contained in this study. Such information was compiled from a varietyof sources, including interviews with government officials, review of City and Countydocuments, and other third parties deemed to be reliable. Although CBRE Consultingbelieves all information in this study is correct, it does not warrant the accuracy of suchinformation and assumes no responsibility for inaccuracies in the information providedby third parties. We have no responsibility to update this report for events andcircumstances occurring after the date of this report. Further, no guarantee is made asto the possible effect on development of present or future federal, state or locallegislation, including any regarding environmental or ecological matters.

The accompanying projections and analyses are based on estimates and assumptionsdeveloped in connection with the study. In turn, these assumptions, and their relationto the projections, were developed using currently available economic data and otherrelevant information. It is the nature of forecasting, however, that some assumptionsmay not materialize, and unanticipated events and circumstances may occur.Therefore, actual results achieved during the projection period will likely vary from theprojections, and some of the variations may be material to the conclusions of theanalysis.

Contractual obligations do not include access to or ownership transfer of any

electronic data processing files, programs or models completed directly for or as by-products of this research effort, unless explicitly so agreed as part of the contract.

This report may not be used for any purpose other than that for which it is prepared.Neither all nor any part of the contents of this study shall be disseminated to the publicthrough publication advertising media, public relations, news media, sales media, orany other public means of communication without prior written consent and approvalof CBRE Consulting.

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recirculated final environmental report for the flanders mansion property

Documents