CTR054962_Contractor_Proposal.pdf

Procurement

OFFER AND ACCEPTANCE

Solicitation No: BPM002912 Available online at https://app.az.gov

Rev 04/2020

OFFER

TO THE STATE OF ARIZONA:

The undersigned hereby offers and agrees to perform in compliance with all terms, conditions, specifications and amendments of this solicitation and any written exceptions in the offer. Signature also acknowledges receipt of all pages indicated in the Table of Contents.

Appraisal Technology, LLC

Offeror (Company) Name Signature of Person Authorized to Sign Offer

220 South River Drive Zach Sinay 11/03/2020

Address Printed Name Date Tempe, AZ 85024

Partner

City State Zip Title

ZSinay@atiaaz.com 480-285-3868

Email Address Phone Number ZSinay@atiaz.com

N/A

Company Email Address Fax Number

By signature in the Offer section above, the Offeror certifies that the submission of the Offer did not involve collusion or other anticompetitive practices.

ACCEPTANCE OF OFFER (FOR DEPARTMENT USE ONLY)

The Contractor is now bound to perform based upon Contract Number ____________________________including all terms, conditions, specifications, amendments, etc., and the Contractor's offer as accepted by the state.

The Contractor is hereby cautioned not to commence any billable work or provide any material, service or construction under this contract until contractor receives a purchase order document.

State of Arizona

Effective this day of 20

Procurement Officer Awarded Date

PARTICIPATION IN BOYCOTT OF ISRAEL

SPO Form 205 (rev 10-2019)

Boycott of Israel Disclosure Please note that if any of the following apply to this Solicitation, Contract, or Contractor, then the Offeror shall select the

“Exempt Solicitation, Contract, or Contractor” option below:

The Solicitation or Contract has an estimated value of less than $100,000;

Contractor is a sole proprietorship;

Contractor has fewer than ten (10) employees; OR

Contractor is a non-profit organization.

Pursuant to A.R.S. §35-393.01, public entities are prohibited from entering into contracts “unless the contract includes a written certification that the company is not currently engaged in, and agrees for the duration of the contract to not engage in, a boycott of goods or services from Israel.”

Under A.R.S. §35-393:

1. "Boycott" means engaging in a refusal to deal, terminating business activities or performing other actions that are intended to limit commercial relations with entities doing business in Israel or in territories controlled by Israel, if those actions are taken either:

(a) Based in part on the fact that the entity does business in Israel or in territories controlled by Israel.

(b) In a manner that discriminates on the basis of nationality, national origin or religion and that is not based on a valid business reason.

2. "Company" means an organization, association, corporation, partnership, joint venture, limited partnership, limited liability partnership, limited liability company or other entity or business association, including a wholly owned subsidiary, majority-owned subsidiary, parent company or affiliate, that engages in for-profit activity and that has ten or more full-time employees.

5. "Public entity" means this State, a political subdivision of this State or an agency, board, commission or department of this State or a political subdivision of this State.

The certification below does not include boycotts prohibited by 50 United States Code Section 4842 or a regulation issued pursuant to that section. See A.R.S. §35-393.03.

In compliance with A.R.S. §§35-393 et seq., all offerors must select one of the following:

The Company submitting this Offer does not participate in, and agrees not to participate in during the term of the contract, a boycott of Israel in accordance with A.R.S. §§35-393 et seq. I understand that my entire response will become public record in accordance with A.A.C. R2-7-C317.

☐ The Company submitting this Offer does participate in a boycott of Israel as described in A.R.S. §§35-393 et seq.

Exempt Solicitation, Contract, or Contractor.

Indicate which of the following statements applies to this Contract:

☐ Solicitation or Contract has an estimated value of less than $100,000;

☐ Contractor is a sole proprietorship;

☐ Contractor has fewer than ten (10) employees; and/or

☐ Contractor is a non-profit organization.

Company Name Signature of Person Authorized to Sign

220 South River Drive

Zach Sinay Address Printed Name

Tempe, AZ 85281

Partner

City State Zip Title

ADOT CONFIDENTIALITY AND TRADE SECRETS

Rev 04/2020

All materials submitted as part of a response to a solicitation are subject to Arizona public records law and will be disclosed if there is an appropriate public records request at the time of or after the award of the contract.

Recognizing there may be materials included in a solicitation response that is proprietary or a trade secret, a process is set out in A.A.C. R2-7-103 (attached) that will allow qualifying materials to be designated as confidential and excluded from disclosure. For purposes of this process the definition of “trade secret” will be the same as that set out in A.A.C. R2-7-101(52).

This form must be completed and returned with the response to the solicitation and any supporting information to assist the State in making its determination as to whether any of the materials submitted as part of the solicitation response should be designated confidential because the material is proprietary or a trade secret and therefore not subject to disclosure.

All offerors must select one of the following:

X My response does not contain proprietary or trade secret information. I understand that my entire response will become public record in accordance with A.A.C. R2-7-C317.

My response does contain trade secret information because it contains information that:

1. Is a formula, pattern, compilation, program, device, method, technique or process, AND

2. Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; AND

3. Is the subject of efforts by myself or my organization that are reasonable under the circumstances to maintain its secrecy.

Please note that failure to attach an explanation may result in a determination that the information does not meet the statutory trade secret definition. All information that does not meet the definition of trade secret as defined by A.A.C. R2-7-101(52) will become public in accordance with A.A.C. R2-7-C317. The State reserves the right to make its own determination of Proposer’s trade secret materials through a written determination in accordance with A.A.C. R2-7-103.

If the State agrees with the proposer’s designation of trade secret or confidentiality and the determination is challenged, the undersigned hereby agrees to cooperate and support the defense of the determination with all interested parties, including legal counsel or other necessary assistance.

By submitting this response, proposer agrees that the entire offer, including confidential, trade secret and proprietary information may be shared with an evaluation committee and technical advisors during the evaluation process. Proposer agrees to indemnify and hold the State, its agents and employees, harmless from any claims or causes of action relating to the State’s withholding of information based upon reliance on the above representations, including the payment of all costs and attorney fees incurred by the State in defending such an action.

Appraisal Technology, LLC Signature of Person Authorized to Sign

220 South River Drive Zach Sinay

Tempe AZ 85281 Partner

ADOT CONFIDENTIALITY AND TRADE SECRETS

Rev 04/2020

R2-7-103. Confidential Information

A. If a person wants to assert that a person's offer, specification, or protest contains a trade secret or other proprietary information, a person shall include with the submission a statement supporting this assertion. A person shall clearly designate any trade secret and other proprietary information, using the term "confidential". Contract terms and conditions, pricing, and information generally available to the public are not considered confidential information under this Section.

B. Until a final determination is made under subsection (C), an agency chief procurement officer shall not disclose information designated as confidential under subsection (A) except to those individuals deemed by an agency chief procurement officer to have a legitimate state interest.

C. Upon receipt of a submission, an agency chief procurement officer shall make one of the following written determinations:

1. The designated information is confidential and the agency chief procurement officer shall not disclose the information except to those individuals deemed by the agency chief procurement officer to have a legitimate state interest;

2. The designated information is not confidential; or

3. Additional information is required before a final confidentiality determination can be made.

D. If an agency chief procurement officer determines that information submitted is not confidential, a person who made the submission shall be notified in writing. The notice shall include a time period for requesting a review of the determination by the state procurement administrator.

E. An agency chief procurement officer may release information designated as confidential under subsection (A) if:

1. A request for review is not received by the state procurement administrator within the time period specified in the notice; or

2. The state procurement administrator, after review, makes a written determination that the designated information is not confidential.

ADOT LOBBYING CERTIFICATE

SOLICITATION NO: BPM002912 Available online at https://appstate.az.gov/

ARIZONA DEPARTMENT OF TRANSPORTATION

LOBBYING CERTIFICATION

CERTIFICATION FOR FEDERAL AID CONTRACTS

Applies to: Federal-aid contractors, and consultants, as well as lower tier sub-contractors and sub-consultants

The prospective participant certifies, by signing and submitting this bid or proposal, to the best of his or her knowledge and belief, that:

(1) No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of any Federal agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement.

(2) If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any Federal agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and submit Standard Form-LLL, “Disclosure Form to Report Lobbying,” in accordance with its instructions.

This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by Section 1352, Title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.

The prospective participant also agrees by submitting his or her bid or proposal that he or she shall require that the language of this certification be included in all lower tier subcontracts, which exceed $100,000, and that all such sub recipients shall certify and disclose accordingly.

11/03/2020

SIGNATURE DATE

Appraiser

TITLE

DISCLOSURE OF LOBBYING ACTIVITIES

Complete this form to disclose lobbying activities pursuant to 31 U.S.C. 1352

(See next page for public burden disclosure.)

1. Type of Federal Action:

2. Status of Federal Action:

3. Report type:

a. Contract

b. Grant

c. Cooperative agreement

d. Loan

e. loan guarantee

f. loan insurance

a. bid/offer/application

b. initial award

c. post-award

a. initial filing

b. material change

For Material Change Only:

year quarter date of last report

4. Name and Address of Reporting Entity:

Prime Subawardee

5. If Reporting in No. 4 is a Subawardee, Enter Name and

Address of Prime:

Congressional District, if known: Congressional District, if known:

6. Federal Department Agency:

7. Federal Program Name/Description:

CDFA Number, if applicable:

8. Federal Action Number, if known:

9. Award Amount, if known:

10.a. Name and Address of Lobbying Entity

(if individual, last name, first name, MI):

b. Individuals Performing Services

(including address if different from No. 10a)

(last name, first name, MI):

11. Amount of Payment (check all that apply):

13. Type of Payment (check all that apply):

actual planned

a. retainer

b. one-time fee

c. commission

d. contingent fee

e. deferred

f. other, specify

12. Form of Payment (check all that apply):

a. cash

b. in-kind; specify nature value

14. Brief Description of Services Performed or to be Performed and Date(s) of Service, including officer(s), employee(s), or Member(s) contacted, for Payment indicated in Item 11:

(attach Continuation Sheet(s) SF-LLL-A, if necessary)

15. Continuations Sheet(s) SF-LLL-A attached Yes No

16, Information requested through this form is authorized by title 31 U..S.C. section

1352. This disclosure of lobbying activities is a material representation of fact upon which reliance was placed by the ties above when this transaction was made or entered into. This disclosure is required pursuant to 31 U.S.C. 1352.

This information will be reported to the Congress semi-annually and will be available for public inspection. Any person who fails to file the required disclosure shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.

Signature:

Print Name:

Title:

Telephone No.:

Date:

Federal Use Only

Authorized for Local Reproduction

Standard Form - LLL

INSTRUCTIONS FOR COMPLETION OF SF-LLL, DISCLOSURE OF LOBBYING ACTIVITIES

This disclosure form shall be completed by the reporting entity, whether subawardee or prime Federal recipient, at the initiation or receipt of a covered Federal action, or a material change to a previous filing, pursuant to title 31 U.S.C. section 1352. The filing of a form is required for each payment or agreement to make payment to any lobbying entity for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with a covered Federal action. Use the SF-LLL-A Continuation Sheet for additional information if the space on the form is inadequate. Complete all items that apply for both the initial filing and material change report. Refer to the implementing guidance published by the Office of Management and Budget for additional information.

1. Identify the type of covered Federal action for which lobbying activity is and/or has been secured to influence the outcome of a covered Federal action.

2. Identify the status of the covered Federal action.

3. Identify the appropriate classification of this report. This is a follow-up report caused by a material change to the information previously reported, enter the year and quarter in which the change occurred. Enter the date of the last previously submitted report by this reporting entity for this covered Federal action.

4. Enter the full name, address, city, state and zip code of the reporting entity. Include Congressional District, if known. Check the appropriate classification of the reporting entity that designates if it is, or expects to be, a prime or subaward recipient. Identify the tier of the subawardee, e.g., the first subawardee of the prime is the 1st tier. Subawards include but are not limited to subcontracts, subgrants and contract awards under grants.

5. If the organization filing the report in item 4 checks "Subawardee", then enter the full name, address, city, state and zip code of the prime Federal recipient. Include

Congressional District, if known.

6. Enter the name of the Federal agency making the award or loan commitment. Include at least one organizational level below agency name, if known. For example, Department of Transportation, United States Coast Guard.

7. Enter the Federal program name or description for the covered Federal action (item 1). If known, enter the full Catalog of Federal Domestic Assistance (CFDA) number for grants, cooperative agreements, bans, and loan commitments.

8. Enter the most appropriate Federal identifying number available for the Federal action identified in hem 1 (e.g., Request for Proposal (RFP) number; Invitation for Bid

(IFB) number; grant announcement number; the contract, grant, or ban award number; the application/proposal control number assigned by the Federal agency).

Include prefixes, e.g., "RFP-DE-90-001".

9. For a covered Federal action where there has been an award or loan commitment by the Federal agency, enter the Federal amount of the award/loan commitment for the prime entity identified in item 4 or 5.

10. (a) Enter the full name, address, city, state and zip code of the lobbying entity engaged by the reporting entity identified in hem 4 to influence the covered

Federal action.

(b) Enter the full names of the individual(s) performing services, and include full address if different from 10 (a). Enter Last Name, First Name, and Middle Initial (Ml).

11. Enter the amount of compensation paid or reasonably expected to be paid by the reporting entity (item 4) to the lobbying entity (item 10). Indicate whether the payment has been made (actual) or will be made (planned). Check all boxes that apply. If this is a material change report, enter the cumulative amount of payment made or planned to be made.

12. Check the appropriate box(es). Check all boxes that apply. If payment is made through an in-kind contribution, specify the nature and value of the in-kind payment.

13. Check the appropriate box(es). Check all boxes that apply. If other, specify nature.

14. Provide a specific and detailed description of the services that the lobbyist has performed, or will be expected to perform, and the date(s) of any services rendered.

Include all preparatory and related activity, not just time spent in actual contact with Federal officials. Identify the Federal official(s) or employee(s) contacted or the officer(s), employee(s), or Member(s) of Congress that were contacted.

15. Check whether or not a SF-LLL-A Continuation Sheet (s) is attached.

16. The certifying official shall sign and date the form, print his/her name, title, and telephone number.

Public reporting burden for this collection of information is estimated to average 30 minutes per response, including time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding the burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to the Office of Management and Budget. Paperwork Reduction Project (0348~046), Washington, D.C. 20503.

DISCLOSURE OF LOBBYING ACTIVITIES

CONTINUATION SHEET

Reporting Entity:

Page of

ECS - Form 90-3

BUY AMERICA CERTIFICATION - FHWA

A bidder or offeror must submit the appropriate Buy America certification (below) with all bids or offers on FHWA funded contracts, except those subject to a general waiver. Bids or offers that are not accompanied by a completed Buy America certification must be rejected as nonresponsive. This requirement applies to lower tier subcontractors.

Certification requirement for procurement of steel, iron, or manufactured products.

Certificate of Compliance with 23 U.S.C 313 - The bidder or offeror hereby certifies that it will meet the requirements of 23 USC 313 and the applicable regulations in 23 CFR 635.410

Signature________________________________________________ Date __11/03/2020__________ Company Name___Appraisal Technology LLC_____________________________________________

Title _____Partner___________________________________________________________________

PRICE INCREASE PERCENTAGES

Rev. 04/2020

The offeror should use the space below to identify the maximum price increase percentage that they may want to request at the time of renewal if ADOT exercises its option per the applicable provisions under any resultant contract(s).

1st Renewal Period _______0___________% Maximum Increase

2nd Renewal Period _______0___________% Maximum Increase

3rd Renewal Period ________0__________% Maximum Increase

4th Renewal Period _______0___________% Maximum Increase

The offeror is cautioned that each renewal period’s increase percentage shall be computed against the ORIGINAL contract price. If information is not provided in the space above, prices shall remain the same as the original contract term. Please see the following example for further clarification.

Example: If the offeror anticipates requesting a 2% increase at each renewal period per Special Terms and Conditions, they should enter 2%, 4%, 6%, and 8% in the attachment. Each percentage increase is calculated using the original contract price.

See example in table below.

Renewal Period

% Maximum Increase from Attachment

Original Contract Price

Maximum Increase Allowed

Maximum Contract Price

1 2% $100.00 $2.00 $102.00

2 4% $100.00 $4.00 $104.00

3 6% $100.00 $6.00 $106.00

4 8% $100.00 $8.00 $108.00

Furthermore, the offeror is advised that the State of Arizona does not automatically grant any increase when renewing the contract. If an increase is requested, documentation of need must be provided at the time of renewal.

Zach Sinay

From: ADOT Business Engagement and Compliance Office To: Lorrie Lambert Cc: ContractorCompliance@azdot.gov Subject: RESENT: (COPY of) Bidders List for Appraisal Technology, LLC Date: Tuesday, November 3, 2020 8:47:54 AM

Appraisal Technology, LLC, AZUTRACS Number: 15599 has submitted a Bidder/Proposer list for BPM002912 on 10/22/2020 at 8:44 AM MST (UTC - 07:00).

This project has no subcontracting opportunities, so no bids were submitted.

mailto:BECO@azdot.gov mailto:llambert@atiaz.com mailto:ContractorCompliance@azdot.gov http://utracs.azdot.gov/FirmProfile?bidderId=15599

APPRAISAL TECHNOLOGY

220 South River Drive Tempe, Arizona 85281 (480) 446-9600 Fax: (480) 446-9615

November 3, 2020

I, Zach Sinay, performed the primary appraisal analyses and determined the final valuation and compensation conclusions in the submitted appraisal report.

Sincerely, Zach Sinay, MAI, R/W-AC

Certified General Real Estate Appraiser No. 31199

AN APPRAISAL REPORT OF THE VACANT THREE-STORY 126 ROOM LIMITED

SERVICE/ECONOMY HOTEL LOCATED AT 1241 NORTH 53RD AVENUE IN

PHOENIX, MARICOPA COUNTY, ARIZONA.

PREPARED FOR

ARIZONA DEPARTMENT OF TRANSPORTATION

205 SOUTH 17TH AVENUE, MD 612E

PHOENIX, ARIZONA 85007

ATTENTION

MR. JIM WALCUTT

APPRAISAL ASSIGNMENT #: JW-17-004

PROJECT: H882701R

HIGHWAY: SOUTH MOUNTAIN FREEWAY

SECTION: SALT RIVER – JCT. I-10 PAPAGO FREEWAY

ADOT PARCEL: L-C-021

PARCEL NUMBER: 103-27-029B & 103-30-291

A.T. I. FILE NO.: VEE41806O

DATE OF REPORT

FEBRUARY 14, 2017

EFFECTIVE DATE OF VALUATION

DECEMBER 29, 2016

PREPARED BY

ZACH SINAY, R/W-AC

CERTIFIED GENERAL REAL ESTATE APPRAISER CERTIFICATE NO. 31199

APPRAISAL TECHNOLOGY, INC.

February 14, 2017

A.T.I. File No.: VEE41806O

TO: Arizona Department of Transportation

205 South 17th Avenue, MD 612E

Phoenix, Arizona 85007

ATTN: Mr. Jim Walcutt

Right of Way Operations Section

RE: An Appraisal Report of the vacant three-story 126 room Limited Service/Economy Hotel located at 1241 North 53rd Avenue in Phoenix, Maricopa County, Arizona.

Dear Mr. Walcutt:

As requested, I have appraised the “As Is” Market Value of the aforementioned property. The value estimate is supported by market analysis which is communicated through a summation appraisal format plus exhibits, which describes and identifies methods of approach and valuation.

The subject consists of a 126 room hotel formally known as the Days Inn Phoenix West Hotel. Due to the fact that the subject property has been vacant for over a year and nearly all of the first floor rooms, and many of the rooms on the second and third floors have been vandalized to various degrees, it was determined that all of the units would require various degrees of remodeling including, but not limited to, new carpet, new paint, new sink vanities and mirrors, and new hinged closet doors. The working order and condition of the air conditioning units, bathroom flooring, shower/tub inserts, toilets, and bathroom fixtures are unknown and it is expected that at least half of the units would require replacement of these items as well. Additionally approximately 50% of the rooms would require new front doors, 25% of the rooms would require new windows, and all of the rooms would require new key card entry systems.

I have performed no services, as an appraiser, or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. It is noted that this appraisal is a revised version of a previous report completed on

January 12, 2017.

The intended users of this report are Arizona Department of Transportation, Federal Highway

Administration (FHWA), and their affiliates, successors, nominees and/or assigns. The intended use of the appraisal report is financial decisions to be made by the client. This report is not intended for any other use or any other users.

APPRAISAL TECHNOLOGY, INC.

Appraisal Technology, Inc. 2

This report was prepared under the Appraisal Report option of Standards Rule 2-2(a) of the 2016-

2017 edition of USPAP. As USPAP gives appraisers the flexibility to vary the level of information in an Appraisal Report depending on the intended use and intended users of the appraisal, I adhere to the Appraisal Technology, Inc. internal standards for an Appraisal Report- Standard Format.

This type of report has a moderate level of detail. It summarizes the information analyzed, the appraisal methods employed, and the reasoning that supports the analyses, opinion, and conclusions. It meets or exceeds the former Summary Appraisal Report requirements that were contained in the 2012-2013 edition of USPAP. For additional information, please refer to

Addendum USPAP Reporting Options.

An environmental study has not been provided. The appraiser has not identified any toxic waste and/or possible hazardous contaminant on the site; however, it does not mean that such materials do not exist. The appraiser is without the expertise to identify and/or detect such substances. Because of the liability generated if toxic wastes and/or contaminants are found on the proposed site, it is strongly recommended that a specialist in the detection of toxic waste be retained to investigate for possible contamination.

This appraisal assignment was drafted to adhere to the standards and practices of the Appraisal

Institute, plus the guidelines and recommendations set forth in the Uniform Standards of Professional

Appraisal Practice (USPAP) by the Appraisal Foundation and to conform with the appraisal standards required by ADOT.

The market value estimate reported in this appraisal assignment incorporates all ownership rights included in the Fee Simple Estate. The value estimate is based upon the assumption the subject property is unencumbered by any other interest/estate and is "free and clear" of all liens, subject to only the limitations of the four powers of government.

Appraisal Technology, Inc. 3

Based on the information found in my investigation, I am of the opinion that the As Is Market Value of the subject, as of December 29, 2016, is:

ONE MILLION NINE HUNDRED TEN THOUSAND DOLLARS

($2,260,000.00)

VALUATION SUMMARY:

Hotel Value Conclusion $1,910,000

Building Value $1,122,200

Land Value $ 750,000

FF & E $ 37,800

Business Value $ 0

Billboard Site Value $ 350,000

Total Value $2,260,000

Respectfully submitted, Zach Sinay, R/W-AC

Certified General Real Estate Appraiser No. 31199

480.285.3868 zsinay@atiaz.com

Appraisal Technology, Inc. 4

TABLE OF CONTENTS

FACTS AND CONCLUSIONS

SCOPE OF WORK

AREA MAP

REGIONAL AND CITY DATA

NEIGHBORHOOD DATA ANALYSIS

PLAT MAP

AERIAL VIEW

SITE DATA ANALYSIS

ZONING MAP

SUBJECT PHOTOGRAPHS

IMPROVEMENT DESCRIPTION

HIGHEST AND BEST USE

VALUATION PROCESS

COST APPROACH

SALES COMPARISON APPROACH

INCOME CAPITALIZATION APPROACH

BILLBOARD VAUATION

RECONCILIATION

CERTIFICATION

ADDENDA

Engagement Letter ..........................................................................................................EXHIBIT 1

Zoning Designation .........................................................................................................EXHIBIT 2

Partial Cost Budget .........................................................................................................EXHIBIT 3

Title Report .....................................................................................................................EXHIBIT 4

PwC Hotel Lodging Report ............................................................................................EXHIBIT 5

Billboard Lease ...............................................................................................................EXHIBIT 6

USPAP Reporting Options .............................................................................................EXHIBIT 7

Contingent and Limiting Conditions ..............................................................................EXHIBIT 8

Appraisal Technology, Inc. 5

FACTS AND CONCLUSIONS

TYPE OF PROPERTY: Vacant three-story 126 room Limited

Service/Economy Hotel

LOCATION: The subject is located at 1241 North 53rd Avenue in Phoenix, Maricopa County, Arizona.

REPORT PURPOSE: The purpose of this appraisal is to estimate the

"As Is" Market Value of the subject property.

TAX PARCEL NUMBER (S): 103-27-029B & 103-30-291

SITE AREA: According to Maricopa County records, the subject site totals 2.34 acres or 102,033 square feet. It is noted that this site area includes a 30 foot by 52 foot billboard site that is leased by Clear

Channel. Therefore, the total site area associated with the subject improvements equates to 2.31 acres or 100,473 square feet.

ZONING: A-1, Light Industrial; City of Phoenix

FLOOD ZONE: The location is within an area denoted as being in an "X" Flood Hazard Area, as found on Federal

Emergency Management Agency Flood

Insurance Rate Map number 04013C2185L based on the October 16, 2013 flood data.

IMPROVEMENTS: The subject is a vacant three-story 126 room

Limited Service/Economy Hotel totaling 43,770 square feet of building area. The property is in fair condition and was constructed in 1986. The hotel consists of two exterior corridor buildings with amenities including a small breakfast area, small conference room, and an outdoor swimming pool.

Room mix breakdown is as follows:

57 – Single King Rooms*

69 – Double Rooms

126 – Total Rooms

*It is noted that one of the single king rooms is

ADA compliant (Room 106) located on the first floor of the northern building.

Appraisal Technology, Inc. 6

It is noted that a billboard owned by Clear

Channel is located on the subject site. Clear

Channel is leasing the site area, estimated to be approximately 30 foot by 52 foot. The monopole billboard is designed to accommodate angled back to back 14 foot by 48 foot sign panel faces.

The billboard is approximately 15 years old and consists of one static face and one digital face.

The west facing static panel is Clear Channel sign number 003859 and the east facing digital panel is sign number 003866. The billboard has permits from both the City of Phoenix (183085) and

ADOT (05600). The billboard will be valued separate from the hotel valuation at the end of this appraisal report.

PARKING: The subject has 135 open parking spaces. The subject’s parking ratio is 1.07 spaces per room.

HIGHEST & BEST USE: As Vacant: Hold for future industrial or hotel development as demand warrants.

As Improved: Current Use

EFFECTIVE DATE OF VALUATION:

December 29, 2016

MARKET VALUE CONCLUSIONS:

Cost Approach $1,765,000

Sales Comparison Approach $1,870,000

Income Approach $1,910,000

Building Value Conclusion $1,910,000

Improvement Value $1,122,200

Land Value $ 750,000

FF & E $ 37,800

Business Value $ 0

Billboard Site Value $ 350,000

Total Value $2,260,000

Appraisal Technology, Inc. 7

SCOPE OF WORK

The practice of appraisal can be considered to be less of a science dictated by strict rules and more of an art, in which rules guide the appraiser towards a trustworthy, responsible and credible valuation. The Uniform Standards of Professional Appraisal Practice (USPAP) provides guidelines for this process to be undertaken through the Scope of Work Rule, to which all appraisal professionals must adhere.

The USPAP 2016-2017 SCOPE OF WORK RULE states:

For each appraisal and appraisal review assignment, an appraiser must:

1. identify the problem to be solved;

2. determine and perform the scope of work necessary to develop credible assignment results;

and

3. disclose the scope of work in the report.

An appraiser must properly identify the problem to be solved in order to determine the appropriate scope of work. The appraiser must be prepared to demonstrate that the scope of work is sufficient to produce credible assignment results.

(The Appraisal Foundation, USPAP 2016-2017 edition, Pg. U-13)

Comment: Scope of work includes, but is not limited to:

the extent to which the property is identified;

the extent to which tangible property is inspected;

the type and extent of data researched; and the type and extent of analyses applied to arrive at opinions or conclusions.

Appraisers have broad flexibility and significant responsibility in determining the appropriate scope of work for an appraisal and appraisal review.

Credible assignment results require support by relevant evidence and logic. The credibility of assignment results is always measured in the context of the intended use.

For this individual assignment, the appraiser shall address the three aspects of the Scope of Work

Rule; Problem Identification, Scope of Work Acceptability and Disclosure Obligations.

PROBLEM IDENTIFICATION (PURPOSE):

An appraiser must gather and analyze information about those assignment elements that are necessary to properly identify the appraisal or appraisal review problem to be solved. (The Appraisal

Foundation, USPAP 2016-2017 edition, Pg. U-13)

The purpose of this appraisal is to estimate the "As Is" Market Value of the subject property.

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INTENDED USE/USERS:

The use of this appraisal report is for financial decisions to be made by the client. The intended users of this report are Arizona Department of Transportation, Federal Highway Administration (FHWA), and their affiliates, successors, assigns, and/or its clients. This report is not intended for any other use or any other users.

The value reported is based upon cash or its equivalent. This appraisal assignment was drafted to adhere to the Code of Professional Ethics, Bylaws, Regulations and Standards of Professional

Appraisal Practice of the Appraisal Institute, plus the Uniform Standards of Professional Appraisal

Practice promulgated by the Appraisal Standards Board of the Appraisal Foundation as well as

FIRREA Regulations.

EFFECTIVE DATE OF VALUE:

DATE OF INSPECTION:

INTEREST VALUED:

The subject hotel is currently vacant with no long term leases, thus, the Fee Simple Estate is considered in this report. The Fee Simple Estate is defined as:

“Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat.” (The Dictionary of Real Estate, 6th Ed. (Chicago: Appraisal Institute, 2015)

The subject billboard is located on leased land and the income generated from this ground lease will be valued, thus a Leased Fee Estate will be considered for the billboard ground lease. The

Leased Fee Estate is defined as follows:

A freehold (ownership interest) where the possessory interest has been granted to another party by creation of a contractual landlord-tenant relationship (i.e., a lease). (The Dictionary of Real Estate, 6th Ed. (Chicago: Appraisal Institute, 2015)

In the estimate of value, typically four interdependent factors must be considered as follows:

• Utility - the ability of a product to satisfy a human want, need or desire.

• Scarcity - the present or anticipated supply of an item relative to the demand for it.

• Desire - a purchaser's wish for an item to satisfy human needs (e.g., shelter, clothing, food, companionship) or individual wants beyond the essentials to support life.

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• Effective Purchasing Power - the ability of an individual or group to participate in a market, i.e., to acquire goods and services with cash or its equivalent.

MARKET VALUE DEFINITION:

Following is the definition of market value as provided by the client.

Market value as utilized in this report is defined as "the most probable price estimated in terms of cash in United States dollars or comparable market financial arrangements which the property would bring if exposed for sale in the open market, with reasonable time allowed in which to find a purchaser, buying with knowledge of all the uses and purposes to which it was adapted and for which it was capable."(Arizona Revised Statute 28-7091).

VALUE “AS IS” DEFINITION:

The value of specific ownership rights to an identified parcel of real estate as of the effective date of the appraisal; relates to what physically exists and is legally permissible and excludes all assumptions concerning hypothetical market conditions or possible rezoning. (The

Dictionary of Real Estate, 6th Ed. (Chicago: Appraisal Institute, 2015)

EXTRAORDINARY ASSUMPTION: an assumption, directly related to a specific assignment, as of the effective date of the assignment results, which, if found to be false, could alter the appraiser’s opinions or conclusions.

Comment: Extraordinary assumptions presume as fact otherwise uncertain information about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis.

(The Appraisal Foundation, USPAP 2016-2017 edition. U-3)

It is noted that the use of an Extraordinary Assumption might have affected the assignment results.

The windows to all but two of the subject rooms were open and were inspected visually from outside. Only four of the rooms were able to be inspected fully. It is an Extraordinary Assumption that the interior of bathroom areas and the two non-visible rooms were in similar condition to the other rooms and bathrooms that were inspected.

HYPOTHETICAL CONDITION: a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis.

Comment: Hypothetical conditions are contrary to known facts about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis.

(The Appraisal Foundation, USPAP 2016-2017 edition. U-3)

It is noted that the use of a Hypothetical Condition might have affected the assignment results.

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No Hypothetical Conditions were used in this report.

SCOPE OF WORK ACCEPTABILITY:

The scope of work must include the research and analyses that are necessary to develop credible assignment results.

An appraiser must not allow assignment conditions to limit the scope of work to such a degree that the assignment results are not credible in the context of the intended use.

An appraiser must not allow the intended use of an assignment or a client’s objectives to cause the assignment results to be biased. (The Appraisal Foundation, USPAP 2016-2017 edition. U-14)

The client has requested that the appraiser estimate the “As Is” Market Value of the subject property.

In order to credibly perform this task, the appraiser has followed these general guidelines:

- determination of problem and applicable Hypothetical Conditions or Extraordinary

Assumptions

- research on the subject property, including but not limited to: ownership history, applicable leans and easements, physical characteristics (i.e. size, topography), relevant subject data (i.e. leases and financial statements for income producing properties)

- selection of, research on and collection of market data for the subject neighborhood

- site inspection

- analysis and synthesis of Highest and Best Use of the subject property

- selection of valuation methodology, subsequent research as is applicable, including market participant and market expert research (i.e. Sales Comparison Approach, Cost

Approach, Income Approach, sales or rent comparable properties)

- analysis and conclusion of valuation methodology(ies)

- reconciliation of valuation methodology results

- conclusion of probable estimated market value

DISCLOSURE OBLIGATIONS:

The report must contain sufficient information to allow intended users to understand the scope of work performed. (The Appraisal Foundation, USPAP 2016-2017 edition. U-14)

AREA ANALYSIS DATA SOURCES:

As part of this appraisal assignment, the appraiser made a number of independent investigations and analyses. Data retained in office files, which are updated regularly, was relied on. Affidavits of Property Value were checked to verify information. Maps, aerials and zoning obtained from

Maricopa County and the City of Phoenix were checked and also information provided by the client.

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The Arizona State and Phoenix Metro area data was taken from many sources including without limitation Arizona State University, Arizona State Department of Economic Security and the U.S.

Census Bureau.

All market data was confirmed from one or more of the following sources as indicated on the individual sales: Maricopa County Assessor's Office (www.maricopa.gov), Affidavit of Property

Value, Real Quest (www.realquest.com), CoStar Realty Information (www.costar.com), FLEXMLS Data Systems (www.flexmls.com), owners or their representatives, and/or Real Estate

Brokers and/or Agents.

NEIGHBORHOOD AND ANALYSIS:

The neighborhood was observed and the contents of this report express my opinions of what was found and observed.

SITE DESCRIPTION AND ANALYSIS:

The site description and analysis was based on my personal physical inspection, information obtained from the client, and from information obtained from the City of Phoenix and Maricopa

County Engineering, Planning and Zoning Departments.

LEGAL DESCRIPTION AND OWNERSHIP:

A full legal description and ownership is included within the Title Report in the addenda of this appraisal report.

Based on the title report provided by the client, it does not appear that there are any adverse restrictions or easements which would affect the utility or marketability of the property.

HISTORY:

The State of Arizona acquired the subject via condemnation for an undisclosed price in August of

2015 as shown in Docket #2015-0595892. The intent of the acquisition was to utilize the land for a proposed freeway. Since the time of purchase, the freeway alignment has changed and the subject land is no longer needed for the freeway expansion. This transaction was considered to be non-arm’s length and will not be considered. The last market transaction of the subject was in October of 2013. JMD Hospitality, LLC purchased the property from Very Fine Motels, Inc. for $2,600,000 as shown in Docket #2013-0955812. The subject was on the market for 57 days prior to the sale.

Although it has not been confirmed by the prior ownership, it was reported that subsequent to the purchase of the subject in October of 2013, approximately $500,000 was spent on renovations to the building. These renovations included roof and plumbing repairs, replacement of FF & E and various other updates to the subject property, indicating that the property was in average to good condition when acquired by the State of Arizona in 2015.

Since being acquired by ADOT for the freeway expansion, the subject property has been vacant for over a year and nearly all of the first floor rooms, and many of the rooms on the second and third http://www.realquest.com/ http://www.costar.com/ http://www.flexmls.com/

Appraisal Technology, Inc. 12 floors have been vandalized to various degrees, it was determined that all of the units would require various degrees of remodeling including, but not limited to, new carpet, new paint, new sink vanities and mirrors, and new hinged closet doors. The working order and condition of the air conditioning units, bathroom flooring, shower/tub inserts, toilets, and bathroom fixtures are unknown and it is expected that at least half of the units would require replacement of these items as well. Additionally approximately 50% of the rooms would require new front doors, 25% of the rooms would require new windows, and all of the rooms would require new key card entry systems.

None of the rooms had air conditioning units installed, however, there were units on the property in what appeared to be various states of condition and age. Many units were vandalized or stripped of valuable parts while other units appeared to be untouched. It is estimated that the cost of installation and replacement of unusable units is approximately $88,000.

In addition to the interior of each room needing repairs, there were various areas of the exterior that would require some stucco and paint work, however the majority of the exterior building was in average condition.

The appraiser was unable to inspect the roof, however, upon inspection each of the 3rd floor rooms, there were several that showed signs of water damage to their ceilings indicating that there were indeed roof leaks on both buildings. It is likely that the entire roof would require replacement.

The office and reception area was entirely vandalized, with interior walls being damaged and/or broken and this entire area would also require remodeling.

The pool appeared to be in fair condition and there were no noticeable cracks within the plaster. The condition of the pool equipment and pump machinery is unknown and assumed to be in working order. However it is likely that some work would need to be considered to bring the pool to a working condition.

The appraiser was provided with a Cost Estimate for several, but not all, deferred maintenance items.

These estimates covered material, labor and equipment to install new doors (10), window glass (18), drywall (5) locations, and reinstall air conditioning units (126).

The total cost to install or repair these items was $122,915 as of September 7, 2016. This Cost

Estimate was taken into consideration, however it did not cover many other repair issues needed to the property.

A list of deferred maintenance items and their estimated cost is summarized below.

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The total cost to remedy these items is estimated to be $709,009.

The appraiser is unaware of any other transactions over the previous three years and the property has not been reported as being listed for sale previously.

SCOPE OF VALUATION METHODOLOGY:

The valuation process is an orderly program in which data used to estimate value of the subject property is acquired, classified, analyzed, and presented. The first step in the process is to define the appraisal problem, i.e., identify the real estate, the effective date of the value estimate, the property rights being appraised, and the type of value sought. Once this has been accomplished, the appraiser collects and analyzes the factors that affect the fair market value of the subject property. These factors are addressed in the area and neighborhood analysis, the site and improvement analysis, and the highest and best use analysis. They are then applied to the subject property in the discussion of the three approaches to value.

The Sales Comparison, Cost, and Income Capitalization Approaches are widely accepted methods of estimating value of an income producing property. Each approach is described briefly here and discussed in detail in the analysis of each.

To apply the Cost Approach, the depreciated replacement cost of the improvements is added to the value of the land as though vacant, derived through sales comparison, to arrive at a value estimate for the subject property. This approach is most reliable when the improvements are new or nearly new and represent the highest and best use of the site. It is noted that due to the significant amount of deferred maintenance and the older age of the property making depreciation difficult to estimate, this approach was given little weight within the Reconciliation.

The Sales Comparison Approach is an approach through which an appraiser derives a value indication by comparing the property being appraised to similar properties that have been sold recently, applying appropriate units of comparison and making adjustments, based on the elements of comparison, to the sale prices of the comparable sales. The Sales Comparison Approach will be utilized in valuation of the subject property. Although I was unable to locate vacant hotel sales in similar condition to the subject, I was able to value the subject as if in a typical condition and deducted the deferred

Building Site

Room Remodel (not including furniture) $2,500 per room x 126 rooms 315,000$

Air conditioning units (install) $698 per room x 126 rooms 88,000$

Front Door Repair/Replacement $2,500 per door x 61 rooms 152,500$

Office/Lobby cabinetry/fixtures 25,000$

Windows in Hotel Room and Lobby $409 per window x…