Agreement - Valbridge Property Advisors - Contract No. 23ADM1279 - Appraisal of Gilroy Gardens - Signed 2023-03-13
VALBRIDGE PROPERTY ADVISORS: AKRON ● ATLANTA ● BAKERSFIELD, CA ● BATON ROUGE ● BOISE ● BOSTON ● BOTHELL, WA ● BOULDER ● BROOKFIELD, WI ● CARBONDALE (ASPEN) ● CENTRAL VALLEY
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HARTFORD ● HILTON HEAD ● HOUSTON ● INDIANAPOLIS ● JACKSONVILLE ● KANSAS CITY ● KNOXVILLE● LAS VEGAS ● LOS ANGELES ● LOUISVILLE ● LUBBOCK ● MEMPHIS ● MILWAUKEE ● MINNEAPOLIS ●
MONTGOMERY ● NAPLES ● NASHVILLE ● NEW ORLEANS ● NEW YORK CITY (MANHATTAN) ● NORFOLK/VIRGINIA BEACH ● NORTH JERSEY● NORWALK/STAMFORD ● OLYMPIA ● ORANGE COUNTY ● ORLANDO ●
PHILADELPHIA ● PITTSBURGH ● RALEIGH ● RICHMOND ● ROANOKE ● SACRAMENTO ● SALT LAKE CITY ● SAN ANTONIO ● SAN DIEGO ● SAN FRANCISCO BAY AREA/EAST BAY ● SAN FRANCISCO BAY
AREA/SILICON VALLEY ● SEATTLE ● SHREVEPORT ● SPOKANE ● SOUTH JERSEY ● SOUTHERN UTAH ● TAMPA/ST. PETERSBURG ● TULSA ● TUCSON ● WASHINGTON DC/BALTIMORE ●
WEST CHESTER, OH ● WEST PALM BEACH
San Francisco Bay Area/Silicon Valley
1530 The Alameda, Suite 100
San Jose, CA 95126
408-279-1520 phone
408-279-3428 fax
valbridge.com
March 6, 2023
Norman C. Hulberg, MAI
408-279-1520, ext. 7142
nhulberg@valbridge.com
Jimmy Forbis
Bryce Atkins
City of Gilroy
7351 Rosanna Street
Gilroy, CA 95020
Re: Appraisal of Gilroy Gardens
3050 Hecker Pass Highway
Gilroy, CA
Dear Jimmy & Bryce,
At your request, we are pleased to submit a proposal to appraise Gilroy Gardens. The legal description of the
property to be appraised is attached. Per your request of February 27, 2023, this will replace the proposal
dated February 3, 2022, incorporating a rental rate for both valuation scenarios. There is no change to the fee
quoted in the February 3 letter.
Valbridge Property Advisors is the nation’s largest independent appraisal company, with over 80 offices. We
have extensive experience in valuing all property types in the region. I am quite familiar with Gilroy Gardens
and the neighborhood: I have had a home in Gilroy for the past 43 years. My personal resume is attached,
along with the resume of Chrisoula Kantiotou, PhD, Senior Appraiser.
We have extensive experience in valuing land and open space. Most of the open space agencies are among
our clients as are most local cities. Some of our past local assignments include:
Property City/Municipality County Acres (±) Property Use
Kammerer Ranch San Jose Santa Clara 1,758 Agricultural Undeveloped Land
Horstmeyer Ranch San Jose Santa Clara 327 Agricultural Undeveloped Land
Rancho Paradiso San Jose Santa Clara 664 Land Other
Sargent Ranch San Jose Santa Clara 2,750 Agricultural Undeveloped Land
Hurner Ranch Mt. Hamilton Santa Clara 2,954 Agricultural Undeveloped Land
Mallison Ranch Mt. Hamilton Santa Clara 423 Land Other
Gonzalez Ranch Gilroy Santa Clara 156 Land Other
Carilli Property Los Gatos Santa Clara 117 Land Other
Northern California
Jimmy Forbis
Bryce Atkins
City of Gilroy
March 6, 2023
Page 2 of 18
Valbridge Property Advisors | Northern California
Property City/Municipality County Acres (±) Property Use
Nolan Ranch Mt. Hamilton Santa Clara 1,157 Park, Open Space
Castro Valley Ranch Gilroy Santa Clara 8,386 Agricultural Undeveloped Land
Sea View Ranch Morgan Hill Santa Clara 382 Agricultural Undeveloped Land
Rancho San Vicente San Jose Santa Clara 964 Agricultural Undeveloped Land
Willson Ranch Gilroy Santa Clara 2,457 Agricultural Undeveloped Land
Sierra Skyline Ranch San Jose Santa Clara 747 Agricultural Undeveloped Land
Isabel Valley Ranch Mt. Hamilton Santa Clara 11,189 Agricultural Undeveloped Land
San Felipe Ranch San Jose Santa Clara 28,329 Agricultural Undeveloped Land
Lakeside Ranch Morgan Hill Santa Clara 3,415 Agricultural Undeveloped Land
Vasona Park Los Gatos Santa Clara 20 Park, Open Space
Jackson Ranch Morgan Hill Santa Clara 1,832 Agricultural Undeveloped Land
Metcalf Properties Coyote Valley Santa Clara 5,133 Land Other
Hawley Ranch Milpitas Santa Clara 3,350 Land Other
Blue Oaks Ranch San Jose Santa Clara 3,258 Agricultural Undeveloped Land
Silacci Ranch Gilroy Santa Clara 1,388 Agricultural Undeveloped Land
Santa Clara Lakes
Ranch Morgan Hill Santa Clara 2,341 Agricultural Undeveloped Land
Richmond Ranch Mt. Hamilton Santa Clara 3,642 Agricultural Undeveloped Land
UTC Properties Coyote Valley Santa Clara 1,831 Land Other
Sobrato Coyote Coyote Valley Santa Clara 100 Land Other
Sobrato Campus Park Coyote Valley Santa Clara 238 Land Other
Tavern Owners Coyote Valley Santa Clara 66 Land Other
Melchor Property Morgan Hill Santa Clara 276 Park, Open Space
In addition to the above, we have twice valued the Great America theme park land, leased to Cedar
Fair. Our client was the Cedar Fair. Additional information on our local offices can be reviewed at the
following link: Valbridge Property Advisors | San Francisco Bay Area.
You (City of Gilroy) are our client in this assignment, and you will be the sole intended user of the
appraisal.
Scope 1: land only
The proposed scope of work is:
• Value all of the land, for sale to a private or public agency. The rides and Gilroy Gardens
physical improvements will not be valued. Later in this letter we will provide an option for the
City to have the rides and improvements valued.
• Fair market rental. We assume the City’s main interest is in making property available for
public recreation, for example to Imagine That! or Select Contracts of Canada. .
Jimmy Forbis
Bryce Atkins
City of Gilroy
March 6, 2023
Page 3 of 18
Valbridge Property Advisors | Northern California
Regarding the fair market rental (FMR) component, commercial land is most often ground leased
based on a fair rate of return times the land value. A simple example might be a ground lease, to be
developed with a McDonalds, where rent might be:
50,000 sf site x $50/sf x 6% rate of return = $150,000 annual rent
However, such a formula would not likely work for a public recreation use where much of the land
would effectively contribute no income to the business operation.
More likely, such a lease would have to be based on a percentage of gross revenue or perhaps a fair
rate of return times just a portion of the property. The proposed scope of work includes an
investigation of relevant rentals.
The intended use of the appraisal is for making decisions regarding a long-term lease of the property.
The property will be valued as of the current date.
Our fee for the scope outlined on page 2 will be $19,000, plus any incidental expenses (limited to
$250), such as mileage. The fee quoted covers the completion of our appraisal. At times clients in
similar assignments desire additional services, such as updates, conferences, and meetings. If
requested, such work would be charged on a time and expense basis (Appraisers: $370-520/hour).
Unusual property characteristics that are discovered during the assignment may also necessitate an
additional charge (for example contamination, structural, defects, multiple clients).
The estimated completion date of the appraisal is 90 days from receipt of authorization to proceed,
depending on our schedule at the time you authorize us to proceed.
Scope 2: Rides and Improvements
You also asked that we provide an valuation in the event that the City leases to an operator who can
use the rides and physical improvements. This quote is based on the ride list you provided on January
31, 2023. As in Scope 1, we will provide a fair market rental for the rides, improvements and land.
The rides would be valued “in place,” meaning that they are valued in their existing location, as
opposed to salvage value. The rides will be valued by Valbridge’s machinery and equipment specialist,
who does have past experience in valuing rides.
The improvements (buildings) would be valued based on depreciated cost.
Our fee for Scope 2 is $25,500. Of course, this is in addition to the fee for Scope 1. Thus, the total fee
is $44,500.
This quote presumes we will have access to all receipts, service records and associated expenses. This
information actually provides for the best value to City, since if the rides were overhauled or underwent
restoration/improvement the useful life extends beyond installation date.
Jimmy Forbis
Bryce Atkins
City of Gilroy
March 6, 2023
Page 4 of 18
Valbridge Property Advisors | Northern California
If this proposal is acceptable, please have the party able to authorize us to proceed with the appraisal
by signing below. A copy of Valbridge Property Advisors | Northern California’s Standard Terms of
Appraisal Agreement, which will be an integral part of this agreement, is attached.
We are looking forward to working with you on this interesting assignment.
Sincerely,
Norman C. Hulberg, MAI
Senior Managing Director
California Certified-General Appraiser #AG003542
Attachment
{{_es_:signer1:signature }}
Accepted by: ____________________________________________________
(Signature)
{{_es_:signer1:fullname }}
____________________________________________________
(Please Print)
{{_es_:signer1:date }}
Date: ______________________
Bryce Atkins
Mar 13, 2023
Jimmy Forbis
Bryce Atkins
City of Gilroy
March 6, 2023
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Valbridge Property Advisors | Northern California
Jimmy Forbis
Bryce Atkins
City of Gilroy
March 6, 2023
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Bryce Atkins
City of Gilroy
March 6, 2023
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Bryce Atkins
City of Gilroy
March 6, 2023
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City of Gilroy
March 6, 2023
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Bryce Atkins
City of Gilroy
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City of Gilroy
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City of Gilroy
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City of Gilroy
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City of Gilroy
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City of Gilroy
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Valbridge Property Advisors | Northern California
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City of Gilroy
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Valbridge Property Advisors | Northern California
STANDARD TERMS OF APPRAISAL ASSIGNMENT
1. Acceptance of this agreement assumes that our client will provide all necessary information
needed for the appraisal on a timely and truthful basis and assumes that the client will provide
sufficient access to the property to be appraised. A delay in receipt of information may delay
completion of the assignment.
2. Appraiser shall have no responsibility for legal matters, questions of survey or title, soil or
subsoil conditions, engineering, or other similar technical matters. The appraisal report will not
constitute a survey of the property appraised. This appraisal does not guarantee compliance
with building code and life safety code requirements of the local jurisdiction. Nor does it certify
that tenants have complied with all requirements necessary to obtain use and occupancy
permits.
3. Unless otherwise noted, the appraisal will value the property as though free of contamination.
Valbridge Property Advisors | Northern California will conduct no hazardous materials or
contamination inspection of any kind. It is recommended that the client hire an expert if the
presence of hazardous materials or contamination poses any concern.
4. The fee quoted is based on our understanding of the assignment as outlined in the scope of
work. Changes in scope will be billed at our normal hourly rates. If any employee of Valbridge
Property Advisors | Northern California is asked or required to appear and/or testify at any
meeting, deposition, trial, or other proceeding about the preparation, conclusions, or
agreement, client shall compensate appraiser for the time spent in appearing and/or testifying
and travelling and in preparing to testify according to the appraiser's then current hourly rate,
plus expenses.
5. The fee and estimated completion time are subject to change if the property is not as outlined
in our proposal, or if issues become known during our investigation which, in our opinion,
necessitates such change. If the client places an assignment “on hold,” then reactivates the
appraisal, an additional charge may apply due to inefficiency created.
6. The Valbridge Property Advisors office responsible for the preparation of this report is
independently owned and operated by Hulberg & Associates, Inc. Neither Valbridge Property
Advisors, Inc. nor any of its affiliates has been engaged to provide this report. Valbridge
Property Advisors, Inc. does not provide valuation services, and has taken no part in the
preparation of this report. The rights and protections in this document ascribed to Valbridge
Property Advisors | Northern California shall apply to Hulberg & Associates, Inc.
7. If any claim is filed against any of Valbridge Property Advisors, Inc. a Florida Corporation, its
affiliates, officers or employees, or the firm providing this report, in connection with, or in any
way arising out of, or relating to, this report, or the engagement of the firm providing this
report, then (1) under no circumstances shall such claimant be entitled to consequential,
special or other damages, except only for direct compensatory damages and (2) the maximum
amount of such compensatory damages recoverable by such claimant shall be the amount
actually received by the firm engaged to provide this report.
Jimmy Forbis
Bryce Atkins
City of Gilroy
March 6, 2023
Page 17 of 18
Valbridge Property Advisors | Northern California
8. This report and any associated work files may be subject to evaluation by Valbridge Property
Advisors, Inc. for quality control purposes. Valbridge Property Advisors, Inc., will maintain the
confidentiality of the report and associated work files.
9. Our standard payment policy is as follows: the balance is due upon presentation of the invoice;
if payment is not made within 30 days of due date, interest at the rate of 1.5% per month will be
added to the principal from the due date to date payment is received, and you shall pay all
expenses of collection, including court costs and attorney fees. If the client requests a draft, the
fee is due upon delivery of the draft. Valbridge Property Advisors | Northern California shall be
under no obligation to continue work on an assignment that is not paid current. The fee for this
appraisal is not contingent upon the valuation of the property, the funding of any loan or
outcome of litigation. Any opinions we may have expressed about the outcome of your matter
or case are expressions of our opinions only and do not constitute any guarantee about the
outcome.
10. Should the assignment be terminated prior to completion, you agree to pay for time and
costs incurred prior to our receipt of written notice of cancellation.
11. If this assignment includes a provision for work performed on an hourly billing basis, such work
is subject to periodic adjustment to our then-current rates. Valbridge Property Advisors |
Northern California shall provide 30 days’ notice to client prior to any rate increase. If client
chooses not to consent to the increased rates, client may terminate Valbridge Property
Advisors | Northern California’s services by written notice effective when received by Valbridge
| Northern California.
12. If this assignment includes a provision for work on an hourly billing basis, client acknowledges
that Valbridge Property Advisors | Northern California has not committed to any total fee
amount to be incurred by client under this agreement.
13. You and Valbridge Property Advisors | Northern California both agree that any dispute over
matters more than $5,000 will be submitted for resolution by arbitration. This includes fee
disputes and any claim of malpractice. The arbitrator shall be mutually selected. If Valbridge
Property Advisors | Northern California and the client cannot agree on the arbitrator, the
presiding head of the Santa Clara County Mediation & Arbitration panel shall select the
arbitrator. Such arbitration shall be binding and final. In agreeing to arbitration, we both
acknowledge that, by agreeing to binding arbitration, each of us is giving up the right to have
the dispute decided in a court of law before a judge or jury. In the event that the client, or any
other party, makes a claim against Valbridge Property Advisors | Northern California or any of
its employees in connection with or in any way relating to this assignment, the maximum
damages recoverable from Valbridge Property Advisors | Northern California or its employees
shall be the amount of monies actually collected by Valbridge Property Advisors | Northern
California for this assignment, and under no circumstances shall any claim for consequential
damages be made.
Jimmy Forbis
Bryce Atkins
City of Gilroy
March 6, 2023
Page 18 of 18
Valbridge Property Advisors | Northern California
14. Valbridge Property Advisors | Northern California shall have no obligation, liability, or
accountability to any third party. Any party who is not the "client" or intended user identified
in the appraisal report or in the engagement letter is not entitled to rely upon the contents of
the appraisal without the express written consent of Valbridge Property Advisors | Northern
California . “Client” shall not include partners, affiliates or relatives of the party named in the
engagement letter. Client shall hold Valbridge Property Advisors | Northern California and its
employees harmless in the event of any lawsuit brought by any third party, lender, partner or
part owner in any form of ownership or any other party because of this assignment. The client
also agrees that in case of lawsuit arising from or in any way involving these appraisal services,
client will hold Valbridge Property Advisors | Northern California harmless from and against
any liability, loss, cost or expense incurred or suffered by Valbridge | Northern California in
such action, regardless of its outcome.
15. Distribution of this report is at the sole discretion of the client, but third parties not listed as
an intended user in the appraisal report or engagement letter may not rely upon the contents
of the appraisal. In no event shall client give a third party a partial copy of the appraisal report.
We will make no distribution of the report without the specific direction of the client.
16. This agreement contains the entire agreement of the parties. No other agreement, statement
or promise made on or before the effective date of this agreement will be binding on the
parties. This agreement may only be modified by subsequent agreement of the parties.
17. All the rights and protections in this letter ascribed to Valbridge Property Advisors | Northern
California, aka Hulberg & Associates, shall apply to all appraisal offices participating in this
assignment.
Valbridge Property Advisors | Northern California
Valbridge Property Advisors | Northern California
Valbridge Property Advisors | Northern California
NORMAN C. HULBERG, MAI
SENIOR MANAGING DIRECTOR
Norm Hulberg has decades of experience in appraisals and consulting services in all
types of properties. A member of Appraisal Institute (MAI), Mr. Hulberg’s commitment
to excellence in valuation and advisory services has earned the respect and trust of
clients throughout Northern California and beyond.
VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA
1530 The Alameda, Ste. 100 San Jose, CA 95126 (408) 279-1520 ∙ www.valbridge.com
COMPREHENSIVE VALUATION
AND ADVISORY SERVICES
Valbridge Property Advisors | Northern
California specializes in appraising all types of
property and land. We produce custom,
consistent appraisal reports across the U.S.
market for:
• Office buildings
• Industrial buildings
• Retail buildings
• Apartments, multifamily, senior living
buildings
• Hotel, lodging, hospitality, recreational
buildings
• Special purpose buildings
• Business and partnership valuation and advisory services
• Litigation support, including expert witness testimony
• Valuations for right-of-way, eminent domain, easements
• Property tax assessment review, property tax appeals
• Real estate market and feasibility analysis, including rent and
demand studies
• Site analysis and selection
• Property and lease comparables, including lease review
• Due diligence
• REO and foreclosure
• Valuation of property for financial reporting, including goodwill
impairment, impairment or disposal of long-lived assets, fair
value and leasehold valuation
• Valuation for insurance, estate planning and trusteeship,
including fractional interest valuation for gifting and IRS
purposes
SPECIALTY SERVICES
Valbridge Property Advisors is the nation’s largest independent appraisal firm, with 74 offices. Valbridge Property
Advisors | Northern California has local offices in San Jose, San Ramon, Modesto, and Sacramento. We provide property
valuation and consulting services, advising clients on real estate business and investment decisions.
Engagement letter-3050 Hecker Pass Highway
Final Audit Report 2023-03-13
Created:2023-03-06
By:Norman Hulberg (nhulberg@valbridge.com)
Status:Signed
Transaction ID:CBJCHBCAABAANBJt2V0D1XwRUlO-WXzci2c1dSCky31h
"Engagement letter-3050 Hecker Pass Highway" History
Document created by Norman Hulberg (nhulberg@valbridge.com)
2023-03-06 - 6:47:54 PM GMT- IP address: 96.72.180.1
Document emailed to Bryce Atkins (bryce.atkins@ci.gilroy.ca.us) for signature
2023-03-06 - 6:47:58 PM GMT
Email viewed by Bryce Atkins (bryce.atkins@ci.gilroy.ca.us)
2023-03-06 - 6:48:01 PM GMT- IP address: 52.206.70.14
Email viewed by Bryce Atkins (bryce.atkins@ci.gilroy.ca.us)
2023-03-13 - 5:53:48 PM GMT- IP address: 52.206.70.14
Document e-signed by Bryce Atkins (bryce.atkins@ci.gilroy.ca.us)
Signature Date: 2023-03-13 - 6:21:02 PM GMT - Time Source: server- IP address: 66.189.161.134
Agreement completed.
2023-03-13 - 6:21:02 PM GMT