Sheraton Hotel Redding At Sundial Bridge - Redding Record ...

Pertinent Dates
Ownership, Franchise,
and Management
Assumptions
The Sheraton Hotel Redding At Sundial Bridge is appraised as a going concern (i.e.,
an open and operating facility).
The effective date of the “as is” market value conclusion is February 9, 2011. The
effective date of the “when complete” prospective market value conclusion is June
1, 2012. The effective date of the "when stabilized" prospective market value
conclusion is June 1, 2016. All projections are expressed in inflated dollars. The
subject site was inspected by Jaime Law on February 9, 2011. Elaine Sahlins
inspected the subject site on May 6, 2010, during the course of a previous market
study. Suzanne R Mellen, MAI, CRE, FRICS participated in the analysis and
reviewed the findings, but did not personally inspect the property.
The developer of the proposed subject property is a partnership composed of the
McConnel Foundation, KBK Foundation, Turtle Bay Exploration Park, and Azul
Hospitality Group, which will also be the hotel operator. Turtle Bay is contributing
the existing visitor center, which will be adjacent to the hotel improvements. The
City of Redding owns the land by which Turtle Bay (the tenant) subleases a portion
for the development of the hotel. No other transfers of the property have
reportedly occurred within the last three years. The site is not currently under
contract for sale nor is it listed for sale.
The City of Redding (landlord) and the Turtle Bay Exploration Park (tenant)
entered into a ground lease agreement dated January 7, 1992. The term of the
ground lease is 55 years with an additional term of 55 years. The agreement was
amended several times. The last amendment to the agreement, dated November
23, 2010, allows Turtle Bay to sublease a portion of the premises to a third party
(the hotel developer) and to permit the third party to develop a portion of the
premises with a hotel, restaurant, and related hospitality facilities and necessary
improvements. Although not specified in the lease documents, according to the
developer, the ground rent payable to the sublessor (Turtle Bay Exploration Park)
equals 5% of total revenue. The ground rent is waived in the first and second years
of operation. We forecast ground lease payments to the sublessor in this amount
for the duration of our projection period.
The subject property is assumed to be operated by a professional third-party
operator. A market-rate management fee of 3.0% of total revenue has been
included in the forecast of income and expense. As part of the development
planning for the hotel, Turtle Bay is working with Azul Hospitality Group as the
potential management and development group. The proposed subject property
will operate under a franchise agreement with Starwood Hotels and Resorts as a
Sheraton Hotel. The franchise fees are based on the executed license agreement,
dated December 15, 2010, and are forecast as a percentage of rooms revenue on
February-2011 Nature of the Assignment
Sheraton Hotel Redding At Sundial Bridge – Redding, California 10