Ball Field Land Acquisition Due Diligence Report

Where We’ve Been Competitive Solicitation Issued Spring 2012 With the following requirements and preferences: Requirements - To be considered, a location must meet the minimum ‘Sports Field Site Requirements’ listed immediately below. – A minimum of 20 acres in size – Land location, configuration, and topography provides opportunity for a minimum of six (6) youth and adult sized baseball/softball fields with restrooms, concession building, and onsite, off-street parking. – Located within Morgan Hill or within one mile of the city limits – Minimal, if any, impact on existing neighborhoods – Can be delivered clear of hazardous materials or conditions – Can be delivered free of legal or use restrictions on use of property for ball field purposes, such as federal or state restrictions, access or restrictive easements, leases or contracts, or other contractual restrictions on use (local zoning designation may not apply, but you will be asked to provide zoning information as part of your proposal) – Can be delivered clear of substantial physical or environmental impediments to use of property for ball field purposes, such as large buildings, topography, residential uses, hazardous materials or contamination wetland designation

Where We’ve Been Preferences – Sites that also meet the ‘Sports Field Preferences’ may be even more desirable to the City. – 25+ acres – Good access from Highway 101 and/or Monterey Road – Complements existing city facilities including parks or trail network – Ability for sanitary sewer and City water connections

Where We’ve Been Responses Received and Evaluated Site Chosen at Tennant and 101 (met all requirements and some of the preferences) Letter of Intent Signed Summer of 2013 City Conducting Due Diligence – Preliminary Site Planning – Environmental Hazard Evaluation – Initiating Discussions on Purchase Agreement

Where We Are – December 2013 Due Diligence Results Environmental Hazard Evaluation Results – Contamination present but at very low levels below human health action levels – Additional analysis of barn suggested – “No Further Action” letter should be received before entering into purchase agreement

Where We Are – December 2013 Due Diligence Results Preliminary Site Planning – Three design options developed with community and regional tournament focus – Six fields – Remainder parcel on north end of site – All supporting features included – 450 parking stall minimum

Where We Are – December 2013 Due Diligence Results Preliminary Site Planning Done To: – Ensure that six fields would fit – Determine size of remainder parcel – Evaluate overall feasibility of the project The City Isn’t Making Final Design Decisions Currently.

Concept A 23.1 Acres 3.4 Acre Residual Parcel Large Fields at Bottom Parking Directly off Fisher

Concept B 23.6 Acres 2.9 Acre Residual Parcel Large Fields at Top Double-Aisled Parking

Concept C 23.1 Acres 3.4 Acre Residual Parcel Large Fields at Bottom Multi-use Fields Parking Directly off Fisher

Where We Are – December 2013 Due Diligence Results Potential Issues Identified in Preliminary Site Planning – Size of remainder parcel for potential supporting retail development (<3.5 acres) – Parking requirement – Development costs – Operational costs / property taxes – Traffic circulation

Parcel Size Proposed Layouts Utilize 23.1 – 23.6 Acres Remaining Parcel Available is 2.9 – 3.4 Acres Larger Layout = Increased Land Costs Property Owner Believes 3.5 Acres is Minimum Size Needed to Ensure Practical Commercial Viability Parking Requires Substantial Acreage

Parking Older Plans Envisioned 478 Spots for Total Development (Including Those Needed to Support 43,000 Square Foot Retail Development) Current Plans Specify 450 Spots for Ball Fields Alone Difference Relates to Tournament vs Local Use Tournament Attendees Frequently Linger at Facility to Watch Others Play or Wait for Additional Games

Offsite Parking? Potential Exists to Rely on Parking at Other Nearby Lots (Aquatics, High School) and Walk to Facility Past Experience at Outdoor Sports Center and Aquatics Center Shows That Simultaneous “Big Weekends” Are Likely Parking is Already an Issue in the Area Recommendation is to Build Adequate Parking Onsite

Development Cost Current Estimate is $21 - $22 Million for Almost Everything Additional Offsite Costs Will Likely Be Incurred (road widening, utility connections, etc.) Some Value Engineering Possible…..But At What Cost + Escalation is Likely City Experience With Some Value Engineering Is That It Leads To Required Future Investments Park Impact Fund at $8 Million

Property Taxes Property Taxes Will Need to be Paid as Long as Parcel Remains in Unincorporated Area At 1% Rate – Initial Year Taxes = $55,000 + Additional Assessments If Center is Developed in Unincorporated Area, Substantially Increased Taxes Would Occur as Property is Reassessed No Property Taxes If Annexation Occurs

Circulation Study Condit/Tennant Intersection – To be included in Draft EIR for SEQ – Program Level – Proximity to 101 Interchange Signal and Proposed Signal at Murphy Necessitates Closer Review Further Circulation Study to Assess: – Overall Site Ingress/Egress Requirements – Feasibility of Traffic Signal – Potential Need for Additional Access Point to Site – Pedestrian Access to Site From Nearby Lodging and Remote Parking

Where We Are Going Alternatives for Consideration Alternative 1 - Proceed With Site Acquisition Process at Chosen Site Approve resolution authorizing the City Manager to negotiate and execute a 120-day extension of the due diligence period; Provide additional guidance to staff on site design issues; Direct staff to conduct additional site assessments as recommended by the City's environmental consultant and additional site planning work related to traffic circulation; and Direct staff to return to the City Council before the end of the due diligence period with recommendations and a potential option agreement to purchase the property.

Where We Are Going Alternatives for Consideration Alternative 2 - Re-evaluate Other Sites Within the City's Boundaries for an Alternative Site Suitable to Host Tournaments Direct staff to suspend property acquisition efforts for the Tennant property; and Direct staff to evaluate the Butterfield/Monterey sites and any other sites within the City and report back to the City Council in 120 days with recommendations.

9.8 Acres 8.9 Acres 2.8 Acres (City) 7.9 Acres (City) 19.6 Acres (Unincorporated)

Where We Are Going Alternatives for Consideration Alternative 3 - Refocus the Effort to Develop Fields Primarily Suited to Meet Local Needs Direct staff to suspend property acquisition efforts for the Tennant property; and Direct staff to collaborate with the local baseball and softball community on a Ball Field Improvement Plan and report back to the City Council in 120 days with recommendations on moving forward. – Concept would be to improve fields at many existing locations (parks, schools, etc.) and potentially create a new small (1 or 2 field) site rather than develop a single large new center with six fields. – This would not easily facilitate tournament play. – Park Impact fee usage would need to be carefully evaluated and limited.

Where We Are Going Alternatives for Consideration Alternative 4 - Suspend Ball Field Property Acquisition Activities and Take No Action At This Time

Recommendation Alternative 1 - Proceed With Site Acquisition Process at Chosen Site Additional analyses will allow Council to make a better informed decision. Proximity to existing recreational developments creates great potential for synergy and sharing.

Anticipated Timeline Extend LOI – December 2013 Continue Due Diligence Analyses – December 2013 – February 2014 Return to City Council – March 2014 Execute Option to Purchase Agreement – April 2014 Complete SEQ EIR and Project CEQA Analysis – TBD Finalize Property Purchase – 40 days after Project CEQA Analysis Finalized Develop Ball Field Center - TBD