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

can have markedly different assessed values, depending upon when the last sales
transaction occurred. For this reason, we have not researched the assessed values
of comparable hotels to assess the reasonableness of the subject’s assessed value.
The following table details the subject property's assessment history.
Note that the calculated tax burden for properties in California is based on the
market value of the fee simple interest. The market value of the fee simple interest
in the subject property, as of the date of completion, was estimated without the
ground lease payments. Tax rates are based on the city and county budgets, which
change annually. The most recent tax rate in this jurisdiction was reported at
1.10120%. Based on state law and the current tax rate, the proposed subject
property’s projected property tax expense levels are calculated as follows.
FIGURE 10-6 SUBJECT PROPERTY TAX CALCULATION
Estimated Market Value of
Fee Simple Interest Tax Rate
First Year's
Tax Burden
$20,628,881 x 1.1012%
$227,165
Tax payments are due twice yearly in Shasta County. We estimate that property
taxes for the Sheraton Redding At Sundial Bridge will equal approximately
$227,165 in the first forecast year of our projection period, increasing by 2.0%
annually thereafter, the maximum allowed by state law
Based on comparable data and the structural attributes of the proposed subject
hotel, we project the proposed subject property's insurance expense at $611 per
available room by the stabilized year (positioned at $500 on a per-available-room
basis in base-year dollars). This forecast equates to 1.0% of total revenue on a
stabilized basis. In subsequent years, this amount is assumed to increase in
tandem with inflation.
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. According to the developer, the ground rent payable to the
sublessor (Turtle Bay Exploration Park) equals 5% of total revenue. The ground
February-2011 Income Capitalization Approach
Sheraton Hotel Redding At Sundial Bridge – Redding, California 80