Paula Gutierrez Baeza, Esq. Richards, Watson & Gershon Amer Attar, P.E., MBA City of Temecula Joyce L. Riggs, MAI, SR/WA Riggs & Riggs, Inc.

PROJECT DESCRIPTION  Purpose of Project  Road is a Major Arterial  Realign and Widen Road to Ultimate Configuration  Connect Road to a Proposed Major Arterial Consistent with General Plan  Road Before Project  Center Dual Left Turn Lane  Dead-Ends at a Bank Building South of Project

PROJECT DESCRIPTION  Road After Project  Two Lanes in Each Direction  Landscaped Median  Ability to Connect to Future Major Road  Full Street improvements

PROPERTY DESCRIPTION  Industrial Building  Light Industrial Zoning  Business Park General Plan  Low Building Coverage Ratio  Access From One Driveway  Need for Small Area of Fee and Temporary Construction Easement for Project

IMPACTS TO PROPERTY  Acquired Property and TCE  Landscaping & Internal Circulation Road Impacts  Widen Driveway  New Raised Median – Restrict Left Turns  Travel Distance for Truck from Freeway - Before vs. After Condition

Driveway Before No Raised Median Driveway After Raised Median

Original Truck Route from Freeway 3800 Ft ~ ¾ Mile New Truck Routes from Freeway 9500 Ft ~ 1 ¾ Miles Ft ~ 2 Miles

NEGOTIATIONS WITH OWNER  Attempts to Acquire Property with Owner by Negotiated Agreement  No Success  Council Adopted Resolution of Necessity  Complaint Filed

APPRAISAL VALUATION  Valuation of Larger Parcel – Entire Property  Income Capitalization  Sales Comparison Approach  Valuation of Land Value – As Acquisition Area Included Land and Only Site Improvements  Value of Fee Part Acquired (Land & Site Improvements)  Value of Remainder After Acquisition  Value of Temporary Construction Easement

VALUATION OF THE PART ACQUIRED Land Area$/SF % Rights AcquiredIndicated Value 13,363 SFx$7.50x100% $100,223 Value of the Land - Fee Part Acquired $100,223 SITE IMPROVEMENST/COMPONENT SUNITUNIT PRICECOST  Asphalt Paving5,850 SF$2.50 PSF$14,625  Total Site Improvements$14,625  Indirect Costs (13.0% of Direct Costs) $1,901  Total Direct and Indirect Costs$16,526  Entrepreneurial Profit (15.0% of Total) $2,479  Replacement Cost New of Hardscape Improvements$19,005  Less: Depreciation (50.0%)$ 9,503  Depreciated Replacement Cost New of Hardscape$ 9,503  Landscaping:  Grass with Sprinklers7,513 SF$2.50 PSF $18,783  Trees2$ EA$ 700  Total Landscaping Costs$19,483  Indirect Costs (13.0% of Direct Costs) $2,533  Total Direct and Indirect Costs$22,015  Entrepreneurial Profit (15.0% of Total) $3,302  Replacement Costs New of Landscaping$25,318 Estimated Value in Place of the Improvements$34,821

Summary of Part Acquired Valuation Value of the Land to be Acquired in Fee$100,223 Plus: Value of the Improvements to be Acquired 34,821 Total Value of the Fee Part Acquired$135,044 * * * AreaRate Percentage TermValue 9,360 SFx$7.50/SFx10%x 1.25 Year =$8,775 Value of Land Area in Temporary Construction Easement$8,775 All site improvements within the temporary construction easement area will be replaced in kind as part of the project.

SUMMARY OF VALUE CONCLUSIONS Value of the Whole Before Acquisition$2,780, ,804 SF - site (fee) + improvements Value of the Part Acquired as Part of the Whole $135,044 (Fee) 13,363 SF of Land$100,223 Site Improvements$ 34,821 Value of the Remainder as Part of the Whole$2,644,956 Value of the Remainder After Acquisition, Disregarding Benefits $2,644,956 Severance Damages $ -0- Value of the Remainder After Acquisition, Considering Benefits $2,644,956 Less: Benefits $ -0- Net Severance Damages$ -0- Estimated Just Compensation$135,044 Value of Temporary Construction Easement Part Acquired: TCE9,360 SF of land$ 8,775 Just Compensation for Temporary Construction Easement$ 8,775 Total Estimated Just Compensation$143,819 Rounded To:$145,000

LEGAL PROCESS  Resolution of Necessity  Filing of Complaint in Eminent Domain  Answers Filed by Property Owner and Lessee  Meetings on Site with Property Owner and Lessee  Deposition of Lessee  Mediation to Narrow Issues  Exchange of Expert Valuation Data  Settlement with Lessee  Mediation on Valuation Issues  No Settlement with Owner  Deposition of Experts

DEFENDANT’S APPRAISER’S VALUATION  Value of the Larger Parcel $3,600,000  Value of Fee Part Acquired$ 286,240  Land Value 13,363 $13.55/SF$181,100  Improvements in Fee Area:  Three Mature Trees$50,000  Grass & Sprinkler System$41,535  Chain Link Fencing w/Barb Wire$ 1,875  Asphalt Paving$11,730  Total Improvements$105,140  Temporary Construction Easement - 0-  Cost to Cure Damages (15% of $3,600,000)$ 540,000  Severance Damages (20% of $3,600,000)$ 720,000  Total Just Compensation$1,546,140

DEPOSITION OF EXPERTS  Appraisal – Weakness in Property Owner’s Appraisal  Errors Found  Methodology Problems  Architect  Appraiser – 2 nd Day Follow Up Questions  Traffic Engineer  Weakness in Analysis  Different Scale Used for Drawings  Truck Turning Radius Different than Scale Used for Underlying Architectural Site Drawings

Truck Path Turning In Truck Path Turning Out

FURTHER SETTLEMENT TALKS  After Depositions  Identified Strengths and Weaknesses of Case  Prepared Motions  Consideration of Trial Costs  Legal  Expert Fees  Exhibits  Stronger Negotiating Position After Depositions  Owner Settled for Less Than Original Offer

WRAP UP  Owner’s Purpose in Challenging Acquisition – Rezone Property Light Industrial vs. Service Commercial