The URL can be used to link to this page

Home My WebLink AboutConsultation Report - CBRECONSULTATION REPORT RICKENBACKER AND MARINE STADIUM MARINAS 3301, 331 1, 3501, 351 1 & 3605 Rickenbacker Causeway Key Biscayne, Dade County, Florida 33149 CBRE File No. 16-397M1-181 1-1 Daniel Rotenberg, Director CITY OF MIAMI, DEPARTMENT OF REAL ESTATE AND ASSET MANAGEMENT 444 S.W. 2nd Avenue, 3rd Floor Miami, Florida 33130 www.thre.com/valuation -40##-# ##'# sir _Al CBRE VALUATION & ADVISORY SERVICES CBRE Valuation & Advisory Services Orlando, FL 32801 T 386-672-3339 F 407-839.3132 www.cbre.com October 20, 2016 Daniel Rotenberg, Director CITY OF MIAMI, DEPARTMENT OF REAL ESTATE AND ASSET MANAGEMENT 444 S.W. 2nd Avenue, 3rd Floor Miami, Florida 33130 RE: Consultation Report Rickenbacker and Marine Stadium Marinas 3301, 3311, 3501, 3511 & 3605 Rickenbacker Causeway Key Biscayne, Dade County, Florida CBRE File: 16-397MI-181 1-1 Dear Mr. Rotenberg: Based on your authorization letter dated August 15, 2016, CBRE has prepared a Consultation Report of the above referenced subject property. The subject property includes five real estate parcels as follows: • 3301 Rickenbacker is the main marina parcel • 331 1 Rickenbacker is the four-story office/restaurant, DBA Whisky Joes • 3605 Rickenbacker is the bathhouse, located on the north shore of the marina basin • 3501 includes a submerged land parcel in the Marine Stadium Marina, (MSM) basin and • 3511 includes the upland areas of the MSM portion of the subject. In addition to the submerged land, the 3501 parcel also includes upland area that is generally known as the Marine Stadium, which is not part of this analysis. In addition to the MSM uplands, the 3511 parcel also includes a portion of the parking lot for the Marine Stadium, which is also not part of this analysis. The reader is directed to the Aerial Photograph of the subject for a graphic description of the subject. According to Miami RFP No. 12-14-077, dated June 15, 2015, the subject property includes 53.49 gross acres and approximately 43 acres of submerged land. The purpose of this report is to identify and analyze the physical, legal and financial characteristics of the subject as they relate to its potential redevelopment, by either the City of Miami or the private sector. The format of this report will be in two parts, which are presentation a=70/ h C5RE, h� Daniel Rotenberg October 20, 2016 Page 2 of baseline data and the second will be the analysis of that data. The analysis section will be an itemized presentation of redevelopment concerns as outlined in the Letter of Engagement Page 5, (Due Diligence and Feasibility Modeling). For the client's reference, we have included the Letter of Engagement in the Addenda of this report. The first major goal of the analysis portion of this report is to discuss and analyze each of the Due Diligence items as well as citing the data sources that were used for each Due Diligence item. The second major goal is to fully vet each of the Feasibility Modeling concerns that are located on Page 5 of the letter including the sources of data used to support each analysis. These two major goals will focus on the quantitative aspects of the redevelopment plan as well as safety and efficiency. We will not deal with the aesthetics or qualitative aspects such as architecture, etc. After the two major goals have been fully vetted, the final analysis will identify if the redeveloper/operator of the subject should be an experienced private sector developer/operator or a municipal governmental body. The two major components of this analysis are: 1. An analysis of anticipated redevelopment cost and timing as well as 2. An estimate of the stabilized Net Operating Income, (NOI) from the operation of the redeveloped property. The report, in its entirety, including all assumptions and limiting conditions, is an integral part of, and inseparable from, this letter. We realize that this document will be a matter of public record, and as such, accessible to the public. However, no one but our client, The City of Miami may rely on the contents, analyses and conclusions contained in this report. The intended use and user of our report are specifically identified in our report as agreed upon in our contract for services and/or reliance language found in the report. No other use or user of the report is permitted by any other party for any other purpose. Dissemination of this report by any party to any non -intended users does not extend reliance to any such party, and CBRE will not be responsible for any unauthorized use of or reliance upon the report, its conclusions or contents (or any portion thereof). CBRE Daniel Rotenberg October 20, 2016 Page 3 It has been a pleasure to assist you in this assignment. If you have any questions concerning the analysis, or if CBRE can be of further service, please contact us. Respectfully submitted, CBRE - VALUATION & ADVISORY SERVICES Jeff H. Carson, MAI, MRICS Vice President Cert Gen RZ 1612 Phone: Fax: Email: (386) 672-3339 (407) 839-3132 Jeff.Carson@CBRE.com /41::::#-#4.-a-- Brian L. Finnell, MAI, CCIM Managing Director— Orlando/Jacksonville Cert Gen R7 914 Phone: Fax: Email: (407) 839-3117 (407) 839-3132 Brian. L. Fi nnellacbre.com CBRE 20[6 CVE. ��. Certification Certification We certify to the best of our knowledge and belief: 1. The statements of fad contained in this report are true and correct. 2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are our personal, impartial and unbiased professional analyses, opinions, and conclusions. 3. We have no present or prospective interest in or bias with respect to the property that is the subject of this report and have no personal interest in or bias with respell to the parties involved with this assignment. 4. Our engagement in this assignment was not contingent upon developing or reporting predetermined results. 5. Our compensation for completing this assignment is not contingent upon the development or reporting of any predetermined results that favors the cause of the client, the opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this report. 6. This consulting assignment was not based upon a requested result. 7. Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice, as well as the requirements of the State of Florida. 8. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. 9. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. 10. As of the date of this report, Jeff Carson, MAI and Brian Finnell, MAI have completed the continuing education program for Designated Members of the Appraisal institute. 1 1. Jeff Carson, MAI has and Brian Finnell, MAI has not made a personal inspection of the property that is the subject of this report. 12. No one provided significant real property analysis assistance to the persons signing this report. 1 3.Valuation & Advisory Services operates as an independent economic entity within CBRE, Inc. Although employees of other CBRE, Inc. divisions may be contacted as a part of our routine market research investigations, absolute client confidentiality and privacy were maintained at all times with regard to this assignment without conflict of interest. 14. Jeff Corson, MAI and Brian Finnell, MAI have not provided any services, in any capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. AL -a Jeff H. Carson, MAI, MRJCS Brian L. Finnell, MAI, CCIM Cert Gen RZ 1612 Cert Gen RZ 9 ] 4 CBRE �'.:alc CERE Inc.. Executive Summary Executive Summary Property Name Location Rickenbacker and Marine Stadium Marinas 3301, 3311, 3501, 3511 & 3605 Rickenbacker Causeway, Key Biscayne, Dade County, Florida 33149 Date of Report October 20, 2016 Date of Inspection August 24, 2016 Land Area 53.49 AC Zoning CS - Civic Space Highest and Best Use As If Vacant As Improved Mixed Use Waterfront Development Mixed Use Waterfront Redevelopment The above Highest and Best Use conclusion As Improved is best supported by private sector redevelopment and operation. Below, we have summarized some of the key advantages of private sector redevelopment to the city: o Construction Cost Savings: $67,000,000 to $100,000,000 o Additional City savings of $3,450,000 for parking garage o Long term land rents including base and percentage rent o Baywalk and Boat Rarnp paid for by private operator o Avoidance of potentially extensive seagrass mitigation cost o Private operator pays real estate tax, insurance and all expenses o Increase financial returns to the City o Minimize the threat of risk to the City Comments In our opinion, there is an unacceptable down -side risk to the City associated with permitting the project, unknown costs of seagrass mitigation, potentially high cost over -runs, etc. There are also several significant financial benefits to a private sector waterfront specialist developing and operating the project as identified r. hnvn Our recommendation to the City, is to put this project back out for bid and request guarenteed annual incomes and not base rent plus percentage rents. That way, the highest guarenteed net rent bid should win the contract. ii CBRE r;70 aCARE, rw, Subject Photographs Subject Photographs Aerial View - Combined Rickenbacker/MSM Redevelopment Parcel 1 CBRE Subject Photographs Rickenbacker Causewa Looking SE Permit Only Parking Area Uncovered Dry Sli. Stora.e iv Sub'ect NE From Rickenbacker Causewa Public Parking, Not Part of Subject Fork Lift Launch Ram. CBRE 117016 CDEF, ir,. Subject Photographs Uncovered Jet Ski Dry Sli. Storage Fairway SW of B Dock A Dock, Concrete Decking Section v Jet Ski Launch Ramp Fairway Between Docks A and B A Dock, Wood Decking Section CBRE Subject Photographs B Dock, Concrete Decking Section trit •ems-Wir 1,7," ��. C Dock, All Concrete Decking Fixed Wood Sto.in. Sli.s VI B Dock, Wood Deckin. Section lme D Dock, All Concrete Decking Rental Boat Dock CBRE 0 2016 CHRF. tar. Subject Photographs Fuel Dock Four -Story Office/Restaurant Ship's Store Interior vii Fuel Dock Office Elevated & Covered Outdoor Bar Seating Bathhouse CBRE Subject Photographs Perimeter Fencing Guard House D Stack Electrical Outlets I RUST). PEUC.AN r WHISKEY Ail K i Ii11A'T'Y11R4 Pro'ect Si • na • e Typical Utility Pedestal Downtown Miami From S ub'ect vIie CBRE Subject Photographs MSM Uncovered Dry Sli. Stora•e MSM Covered dry Slip Storage MSM Under -Utilized Surface Storage ix MSM Uncovered Dry Sli • Stora • e MSM Under -Utilized Paved Area MSM Fuelin. Station CBRE Subject Photographs MSM In/Out Staging Area MSM Masonry Utility Building TIRWINNIM MSM Sta. ing Slip #10 Fire Rescue Vessel MSM Office/Bait Sho • MSM Restaurant MSM North Basin and Miami Sk -Line CBRE 201d CdRE, Inc. Table of Contents Table of Contents Certification Executive Summary Subject Photographs Table of Contents xi Market/Subject Data 1 Area Analysis 4 Site Analysis 12 Subject Improvements 13 Data Analysis 14 Due Diligence 15 Redevelopment Feasibility Modeling 50 Assumptions and Limiting Conditions 58 xi CBRE Introduction Market/Subject Data PROPERTY HISTORY Title to all five of the subject components are owned by the City of Miami. Street addresses 3301, 3311 and 3605 Rickenbacker Causeway are currently leased to Rickenbacker Marina, Inc, while 3501 and 3511 Rickenbacker Causeway are owned and operated by the city. The following is a leasing chronology of the three Rickenbacker parcels. The City of Miami leased the Rickenbacker Marina including Whiskey Joes and the bathhouse to Martin Rabin and Henry Grady, dba Marina Biscayne Inc., on July 81h, 1977. The initial term was 20 years, with two, optional 5 year extensions. Phase I of the development included 95 wet slips among other things. Phase II included the acquisition of 50 boat cradles, et al. Phase III added 50 dry rack storage slips. Phase IV added an additional 105 wet slips, bringing the wet slip total up to approximately 200. Phase IV also included an additional 50 dry storage slips, bringing the dry storage capacity up to 150 dry slips. The initial base rent was set at 10% of the receipts of the wet and dry storage, excluding taxes. Percentage rent was charged based on all other sales at; 2% to 3% of gross receipts, depending on monthly volume, plus 2.5 cents per gallon on all fuel sales. This was a NNN lease with the tenant being responsible for all taxes, insurance and operating expenses. The property area was cited as 20.975 acres. Marina Biscayne, Inc., assigned the original lease to Michael Brandon on January 31, 1983. On June 25'h, 1986, the previous Lessee transferred its interest to Rickenbacker Marina, Inc. On January 8, 2009, the City Commission agreed to extend the existing ground lease which was to expire on January 7, 2009, to July 7'h, 2016 for all of the non -dry stack areas. However, the dry stack areas were only extended to July 7'h, 2013, with three one year options to renew at the City's discretion. The minimum annual rent was set at $360,000 per year. The percentage rent was set at 15% of the gross receipts from wet slips plus 12% of the dry slip revenue plus 40% of any third party subleases or licenses plus 5% of any other related services plus 5% of the gross revenues at the fuel dock. This First Amendment is a NNN lease with the tenant being responsible for real estate taxes, insurance and all operating expenses. On July 30, 2009, a revocable License Agreement was signed between the City of Miami and Rickenbacker Marina, Inc, and superseded the previous agreement dated August 5, 1985. This license allows the licensee to the non-exclusive use of the parking area adjacent to the Rusty Pelican. The use fee was $500 per month, increasing by 3% per year. According to the legal description, the lease area contains 20,594 SF. On February 23, 2011, a Second Amendment was signed, changing the renewal options on the dry stack area from three, one-year options to, one, three-year option, which was exercised immediately upon acceptance of the amendment. Therefore, the entire lease for the subject was scheduled to expire on July 7, 2016, which was about two months prior to the date of this writing. CBRE ,.201d CUE. ?nr. Introduction On May 4'h, 2011, the parties entered into a Third Lease Amendment. The effect of this modification was to exclude 522.72 SF of submerged land from the Rickenbacker lease and transfer the use of that property to the Rusty Pelican operator. INTENDED USE OF REPORT This report is to be used by the client, The City of Miami for internal decisions regarding the potential redevelopment of the subject. No other use is permitted. INTENDED USER OF REPORT We realize that this document will be a matter of public record, and as such, accessible to the public. However, no one but our client, The City of Miami may rely on the contents, analyses and conclusions contained in this report. Intended Users - the intended user is the person (or entity) who the consulting analyst intends will use the results of this report. The client may provide the consulting analyst with information about other potential users of the report, but the consulting analyst ultimately determines who the appropriate users are given the consulting problem to be solved. Identifying the intended users is necessary so that the consulting analyst can report the opinions and conclusions developed in the report in a manner that is clear and understandable to the intended users. Parties who receive or might receive a copy of this report are not necessarily intended users. It is the responsibility of the consulting analyst to the intended users identified in the report, not to all readers of the report. PURPOSE OF THE REPORT The purpose of this report is to aid the client with internal asset management decisions. SCOPE OF WORK This Report is intended to comply with the Ethics Rule and the Competency Rule, as set forth in the Uniform Standards of professional Practice, (USPAP). The scope of the assignment relates to the extent and manner in which research is conducted, data is gathered and analysis is applied. CBRE, Inc. completed the following steps for this assignment: Extent to Which the Property is Identified The property is identified through the following sources: • postal address • assessor's records • legal description Extent to Which the Property is Inspected CBRE inspected the surface of the land parcel as well as the interior and exterior of the subject buildings. We did not inspect the roofing, plumbing, electrical, air-conditioning or mechanical 2 CBRE ,, 2016 CPRE, L.% Introduction systems. We have assumed that these systems are compliant with local codes and are in good working condition. We also inspected the surface of the watersheet, or basin. However, we did not inspect the submerged land or any improvements below the waterline. We have assumed that these systems are compliant with local codes and are in good working condition. We have assumed that the submerged land is free of contamination and free of any organisms that might inhibit normal maintenance dredging throughout the basin. We have also assumed that all improvements below the waterline are in good working condition. Type and Extent of the Data Researched CBRE reviewed the following: • area data • subject data including; • zoning • flood zone status ▪ demographics • water depths, etc. 3 CBRE 201,, Luc. Inc Market Data Area Analysis Moody's Economy.com provides the following Miami -Dade County metro economic summary as of July 2016. The full Moody's Economy.com report is presented in the Addenda. 4 CBRE Market Data M1AMI-MIAMI BEACH-KENDALL, FL - ECONOMIC INDICATORS Indicators 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Gross Metro Product (C$B) 104.2 164.4 106.4 108.5 111.1 114.7 118.7 123.8 128.7 132.3 1 35.2 138.7 % Change .0.5 0.2 1.8 2.0 2.4 3.3 3.5 4.3 4.0 2.8 2,2 2.5 Total Employment (Ths) 985.1 1,007.3 1,031.3 1,056.7 1,089.4 1,1 23.4 1,1 40.8 1,168.1 1,196.3 1,216.3 1,222.6 1,225 7 %Change -0.3 2.2 2.4 2.5 3.1 3.1 1.6 2.4 2.4 1,7 0.5 0.3 Unemployment Rate (%) 11.1 9.4 8.4 7.6 6.9 6.1 5.4 4.6 3.6 3.4 3.7 4.1 Personal Income Growth (%) 7.7 4.5 3.8 0.4 5.0 5.7 5.0 6 6 84 6.8 4.9 4.9 Median Household Income ($ Ths) 41.7 41.4 41.6 42.2 42.9 44.7 46.0 47.8 50.3 52.3 53.7 55.2 Population )Ths) 2,508.2 2,580.1 2,611.2 2,641.9 2,668.9 2,693.1 2,728.7 2,767.0 2,8068 2,847.1 2,887.5 2,926.6 % Change 1 .8 2.9 1.2 1.2 1.0 0.9 1.3 1 4 1 4 1.4 1.4 1.4 Net Migration (000) 30.6 58.8 17.9 17.4 16.2 11.1 24.7 27.6 29.1 29-7 29.9 28.8 Single -Family Permits 941.0 962.0 1,819.0 2,266.0 2,077.0 2,800.0 3,154.1 5,954.7 7,584.7 7,819.6 7,2877 7,3576 Multifamily Permits 2,262.0 1,656.0 3,250.0 8,050.0 5,654.0 9,817.0 8,160.0 11,181.4 11,562.8 8,973.3 8,292.8 8,684.8 Fhfa House Price (1995Q1 -100) 195.9 183.1 186.1 207.9 233.6 257.9 284.0 304.1 309.1 301.2 292.2 286.9 Source, Moody'sEconomy.com Recent Performance Economic growth in Miami -Miami Beach -Kendall is slowing. Though the area's jobless rate has dipped to 5.4%, the lowest since 2008, total employment has grown by just 1.6%, about half the statewide pace. After expanding at an above -average pace since the Great Recession, Miami has added fewer than 3,000 jobs in leisure and hospitality over the last year, which is below the area's 10-year average for a 1 2-month period. Hourly earnings have barely increased over the last year, and house prices are growing at the slowest rate since 2012. Tourism Jobs in leisure and hospitality, which make up 12% of the area's workforce, are contributing to Miami's job growth, but warning signs have emerged. Economic turmoil in Europe, political upheaval in Latin America, and warmer winters in the U.S. and Canada represent threats to tourism in South Florida. The industry may already be feeling the impact of these events as evidenced by the slower job growth and the recent decision of the massive Marriot Marquis Miami Worldcenter, which is under development near downtown, to trim 100 rooms from its planned hotel. Population growth Miami added residents last year at the slowest pace since 2008, but gains will accelerate over the next five years. Faster growth is likely because it is originating with Hispanic residents, who make up the nation's fastest -growing ethnic group. From 2013 to 2015, Miami added more Hispanic residents than during any three-year period since 2000-2002, and the area's total population would have declined in each of the last three years if not for growth in its Latino population. Across the nation, Latinos constitute 18% of the population, but they accounted for 48% of U.S. population growth last year. Miami will sustain above -average population gains because the area will remain attractive to this fastest -growing segment of the U.S. population. 5 CBRE c,20116Caee,!Pc. Market Data Manufacturing Headwinds including a strong dollar, rising energy prices, and a maturing economic recovery will cut jobs in manufacturing nationally, but factories in Miami enjoy local advantages that will grow factory employment in the short term. Port Miami is already one of eight Post-Panamax harbors in the U.S., and another is being dredged at Port Everglades in nearby Fort Lauderdale. These deepwater ports are capable of handling the largest vessels that can navigate through the recently expanded Panama Canal, ships that can ferry 21/2 times more cargo than Panamax vessels. Over the next several years, these South Florida harbors will attract manufacturers seeking to reduce logistics costs by locating their plants in proximity to shipments from foreign suppliers and to international markets. Producers in Miami will also benefit from the state's recently approved tax exemption for industrial machinery and equipment. The law gives a permanent tax break to manufacturers by extending a provision that was enacted in 2014 but is set to expire next year. Because the original tax exemption was scheduled to sunset after only three years, it had no significant effect on manufacturing in the state. Florida still has the smallest share of jobs in manufacturing. The now -permanent tax cut should encourage more factory owners to expand production in the state's metro areas. Conclusion In the near term, job growth in the Miami MSA will accelerate thanks in part to its large port, which is attracting jobs in trade, manufacturing and tourism. Over the forecast horizon, Miami's international character, combined with its high -skilled, bilingual workforce, will help the metro area outperform the nation in household income growth. 6 CBRE Subject Data NOAA CHART 11465-VESSEL APPROACH DEPTHS 6 6 '6 16ft a , Pile 6 - 4 . -(I files F�.. G . a, ▪ 0 Dols • 0 9 01 rky s!r Maven._ _ 13 r, T ruin 6 it) EI G 2.5s 16 t 5M "59' 1 f 4 9 Sh 9 1 0 1 0 1 U: 2 S 1 1 • • • • • DOME 3/ 19 7 CBRE Subject Data 8 CBRE Subject Data FLOOD MAP 9 CBRE ZONING MAP 10 Subject Data CBRE 20;6 GIRL Inc. Subject Data 11 CBRE Subject Data Site Analysis The following chart summarizes the salient characteristics of the subject site. SITE SUMMARY AND ANALYSIS Physical Description Gross Land Area Primary Road Frontage Secondary Road Frontage Water Frontage Water Frontage Shape Topography Zoning District Flood Map Panel No. & Date Flood Zone Adjacent Land Uses Comparative Analysis Visibility Functional Utility Traffic Volume Adequacy of Utilities Landscaping Drainage Utilities Water Sewer Electricity 53.49 Acres 2,330,024 SF Rickenbacker Cswy 2,040 Feet Unnamed Road 1,660 Feet South Basin 1,800 Feet North Basin 1,530 Feet Irregular Approximately 9 feet above sea level CS - Civic Space 1208-6C04-81L 11-Sep-09 AE-9 Marine Stadium Rating Average Average Average Assumed adequate Average Assumed adequate Provider Miami Dade Water and Sewer Department Miami Dade Water and Sewer Department Florida Power and Light Source: Various sources compiled by CBRE DATA SOURCES The data sources used for the above includes the existing ground lease with amendments, FEMA flood maps, NOAA Chart 11465, the City of Miami GIS web site and our inspection of the subject. The road frontages and water frontages were estimated using the measuring tool on Google Earth Pro. 12 CBRE £ 2016 CERE Mc. Subject Data Subject Improvements The following chart shows a summary of the improvements. IMPROVEMENTS SUMMARY AND ANALYSIS Property Type Mixed Use Waterfront Subject Buildings Rickenbacker Four -Story Office/Restaurant 17,883 SF Rickenbacker Restaurant/Bar Patio Sealing 4,500 SF Rickenbacker Ship's Store 1,000 SF Rickenbacker Bathhouse 900 SF MSM Office/Bait Shop/Warehouse 2,600 SF MSM Restaurant 4,000 SF MSM Utility Building 4,000 SF Gross Building/Patio Area 34,883 SF Vessel Storage Wet Slips 190 Slips Dry Rack Slips 648 Slips Total Vessel Storage Slips 838 Slips Year Built 1980, 1983, 1985, and 2006 Actual Age 32 Years Effective Age 25 Years Total Economic Life 35 Years Remaining Economic Life 10Years Age/Life Depreciation 71.4% Source: Various sources compiled by CBRE DATA SOURCES The building size for the four-story office/restaurant was provided from the Miami -Dade County Property Appraiser's web page. The remaining Rickenbacker building/patio sizes were provided by the operator. The vessel storage inventory was provided in the Marine operating permits for Rickenbacker and MSM. The sizes of the three MSM buildings were estimated based on the measuring tool in Google Earth Pro. No building plans or reports were provided for this analysis. COMMENTS Because the purpose of this report is to analyze the potential redevelopment of the site, the existing buildings and site improvements have not be discussed in detail. 13 CBRE 201e CORE, Inc, Data Analysis Data Analysis In this section of the report, we have analyzed several physical, legal and financial characteristics of the subject and its potential redevelopment. We have reviewed a large volume of data for this analysis. Due to size restrictions we have not included the data in the addenda of this report. DUE DILIGENCE The due diligence section of this report includes the following sections: 1. Known Environmental Issues 2. Ingress/Egress 3. Known Geological and Topographical Issues 4. Review of the Virginia Key Master Plan S. Zoning 6. Approach and Dock Depths 7. Demand for Boat Slips 8. Existing Use Analysis 9. Current Wet/Dry Slip Configuration 10. Feasibility of Expanding Wet Slips into the North Basin FEASIBILITY MODELING 1. Wet Slip/dry Slip matrix 2. Amenities and Services 3. Fuel 4. Marina Office/Support Facilities CONCLUSION 14 CBRE 201 CER.E. irv;. Data Analysis Due Diligence 1. KNOWN ENVIRONMENTAL ISSUES Data Sources: • Florida Department of Environmental Protection • Miami -Dade County List of Contaminated Sites — Subject Not Listed • Miami -Dade County Department of Regulatory & Economic Resources • URS Phase I Environmental Site Assessment Rickenbacker Marina Parcels • URS Phase II Environmental Site Assessment Rickenbacker Marina Parcels The subject was not identified as contaminated by any of the above County or State resources. However, Page iv of the URS Phase II report identified a previous fuel spill that has been completely remediated with no further use restrictions. There was also an observation of potential petroleum stains at the entrance of the waste oil storage shed. A copy of the Soil Borings map is included below. 15 CBRE :Olb'J ERE. M, Data Analysis Parcel 2 SB-1!GW-1 Parcel 3 As indicated above, two of the three soil Boring/Ground Water sampling sites are located on the MSM site and SB-1 /GW-1 is located on the Rickenbacker site. The conclusions to the Phase II Environmental Site Assessment are included below. 16 CBRE I,. CV Data Analysis 5.2 Conclusions / Objectives Met. The results of the laboratory analyses of soil and groundwater samples have indicated that there are areas of the City of Miami Rickenbacker Marina that have been affected by the activities at the marina. The horizontal and vertical extent of the detected parameters needs to be established_ in order to design proper remediation actions as needed. The affected soils in the vicinity of SB-1 . GW-1 should be evaluated to establish the extent of the arsenic in the soil. It is recommended that soil borings be stepped out from the area of SB-1 GW- 1. It is recommended that these borings be a minimum of ten (10) feet from SB-1 GW -1, Samples should be retained for analyses from the 0-2 foot and 2-4 foot depth intervals. A second set of samples should be collected from a distance of twenty (20) feet and analyzed as needed, The groundwater quality in the vicinity of SB-2. GW-2 and SB-3 Gib'-3 should be evaluated. Permanent monitoring arells for con iiniisation of the results presented in this report should be installed at the location of SB-2 Gib'-? and SB-3'GW-3. Additional shallow monitor wells should be installed a minimum of twenty (20) feet from the locations of SB-? Get'-? and SB- 3 GW-3. in order to establish the horizontal extent of the affected area. Depending on the results, additional shallow monitoring wells may be required. The z•otnidwater in the area of SB-2 GW-2 would be evaluated for arsenic. The ¢round+rater in the area of SB-3 `GW-3 would be evaluated for arsenic. benzene and trichloruethene. 2. INGRESS / EGRESS Vehicular and pedestrian access to the MSM property is via a signalized driveway entrance on Rickenbacker Causeway. This driveway entrance functions as a shared access point for the Marine Stadium property, (which is not part of this analysis), and the MSM component of the subject. Vehicular and pedestrian access to the Rickenbacker component is provided by an unnamed, publicly owned and maintained two-lane, asphalt paved right-of-way, (ROW), which extends from the north side of West Bound Rickenbacker Causeway, through the subject and terminating at the Rusty Pelican Restaurant. For the remainder of this report, we will refer to this unnamed road as the "ROW". The fact that the ROW divides the Rickenbacker component and also serves as the only access to the Rusty Pelican Restaurant is problematic. The primary areas of concern are safety, efficiency and security. Since the Rickenbacker dry storage racks are on one side of the public driveway and the dry slip launch area is on the other side, each time a vessel is launched or retrieved, the fork lift operator must cross this road, potentially damaging vehicles or injuring people. Since the fork lift drivers must constantly be on the lookout for and yield the right of way to pedestrians and vehicles, the entire dry stack operation is compromised in terms of both safety 17 CBRE 2016 GIVE, Inc. Data Analysis and efficiency. However, both of these two concerns are completely mitigated by the assemblage of the Rickenbacker component and the MSM component. One negative aspect of the ROW that cannot be mitigated is the reduced level of security caused by the ability of unregulated pedestrians and vehicles to use the ROW 24 hours a day. 3. KNOWN GEOLOGICAL AND TOPOGRAPHIC ISSUES We are not aware of any geological or topographical issues that would interfere with the redevelopment of the subject. A copy of the soils map from the VKMP is included below. As indicated above, the subject soils include Urban Land soils. 4. THE VIRGINIA KEY MASTER PLAN The Virginia Key Master Plan, (VKMP), is a report of the current conditions and a conceptual master plan for a 1,000 acre barrier island known as Virginia Key. Virginia Key is located East of Downtown Miami and north of Key Biscayne. The three guiding themes are diversity of recreation, waterfront access and use and celebration of natural and cultural history. The intended design criteria include public access to the waterfront, to protect the natural resources and to implement sustainable development. A summary of the chronology of the process is included below. 18 CBRE Data Analysis VIRGINIA KEY MASTER PLAN Chronology (present to past) • July 22, 2010- Adopted by the City Commission • July 21, 2010- Approved by the Planning, Zoning and Appeals Board • July 15, 2010- Presentation to the Parks Advisory Board with no quorum • July 13, 2010- Approved by the Waterfront Advisory Board • March 27, 2010- Dade Heritage Trust and Virginia Ivey Public Planning Coalition presentations at Rusty Pelican & design workshop at Virginia Key Beach Park Trust offices • October 8, 2009- Deferred by the City Commission • October 5, 2009- Approved with conditions by Waterfront Advisory Board • September 27, 2009- Urban Environmental League Design Workshop • June 17, 2009- Denied by the Planning Advisory Board • June 9, 2009- Denied by the Waterfront Advisory Board • May 20, 2009- Public Meeting #4 at Museum of Science • August 26, 2008- Public Meeting #3 at City Hail • June 20, 2007- Public Meeting #2: Community Workshop at La Salle HS. • March 29, 2007- Public Meeting #1: Presentation of Site Inventory & Analysis at Rosenstiel School of Marine & Atmospheric Science The proposed land use map below identifies the subject portions of the VKMP as "Areas to be improved and revitalized for public access and recreation". 19 CBRE 7016 CAE, In . Data Analysis COONTTICOUNTT. AND A*DS* L LAMDA• MOT TO DR ALTEERD NIATOAIC AND ERYI *READ- TO DE IRESEIVED^CCMAENVED TO If IMPROVED AMC REYITALIEEO FOR SYELIC ACCESS INC ■ECREATIOR IOADAAT ANT PEDLRTRIRNIRIRE CIRCDLATIDC IMPROYAMEMTE The following is an exhibit from the VKMP showing the existing conditions of the subject and surrounding areas. 20 CBRE Data Analysis 5.7 Marine Stadium and Basin Area Properties . Existing Conditions Rickenbacker Marina Rusty PelicanDry-Stack Boat Restaurant Storage Miami Marine Stadium & Parking Miami Rowing Club and Swim Gym Mast Academy The conceptual plan for the subject and the surrounding area is included below. Legend 1. Lookout point 2. Rusty Pelican 3. Parking Garden 4. Existing Rickenbacker Marina 5. Proposed new Marina expansion 6. Rickenbacker Causeway 7. Fresh Market 8. Fishing Charter Dock 9. FountaM 10. Rusty Pelican bridge 11, Horacio's restaurant 12. Parking structure with retail liner 13. Pedestrian walkway 14. Dry stack storage 15. Marine Exhibition Center 16. Miami Marine Stadium 17. Marine Stadium entrance plaza 1$. Hobie beach 19. Open green field 20. Swim Gym 21. Rowing Cub 22. Mast Academy. 21 CBRE 0 20i0 CN C I�.c Data Analysis 5. ZONING The following chart summarizes the subiect's zoning requirements. ZONING SUMMARY Current Zoning Uses Allowed By Right, Warrant or Exception CS - Civic Space Food Service, General Commercial, Marine Related Commercial, Open Air Retail, Recreational Facility, Infrastructure, Utilities and Marina. Zoning Change Not likely Category Zoning Requirement Source: Planning & Zoning Dept. Miami 21 was enacted by Ordnance 13114 on October 22, 2009. According to the current zoning map for the City of Miami, the subject is zoned CS, Civil Space. CS is a zoning designation that is used to identify City owned property that is leased to tenant -operators. "CS is a zone with mainly outdoor area dedicated for functioning for community purposes." The use of this space is intended to provide land and businesses that serve the needs of the public and cannot be used for any use that is not open to the public such as private condominiums. The following is an excerpt from Article 6, Table 13. MIAMI 21 ARTICLE 6. TABLE 13 SUPPLEMENTAL REGULATIONS (CONTINUED) AS ADOPTED - MAY 2015 C • CIVIC i.; - cons SPH.Ct CI -CMG etsimisnoN CI HT_ -VAC NSTTITIT]ON HEALTH IltS1RICT DENSITY DtPA1 WA DENSITY OF AIMING ZONE 150 UNITS PER ACRE BOATS HOUSE BARGE Otxatpanry W private pleasure crafts and houseboats a Wyse se beiges WA;hall be allowed exoepl ratthose spe:Mealy grandladlered and regmlated by Ordinance of 3532. adopted October 24, 1991 Occupancy of pnvale *nun vats and housebeatc m barges shall nal be except for thew es ha*vied spedficaly wendlatered and *ciliated by Ondlnance 810932, adopted October 24, 199t. Occupancy of prvate pleasure crafts and harcabdats Melba e bargee snail nx be allowed except for those specifically grandelhered and regulated by Ordnance 010932. adopted October 24, 1991. DOCKS P Exterraon of duds arrd Piers eno Biscayne Bay are tatted to 35 fart Hgyever by Exception a 600 feet madman exsersdn of docks and Piers into Biscayne Bay maybe allowed Extension of Pucks and Piers Into times *dewlap is wired 1d 10 feet c I0', OM y8ddt di the waterawy, whichever is less However. by Extepticn further cxictik m may be appieved. suoJec1 a approvaltrap all applicable agendec Extencto of docks and Pies tato Biscayne Bay art knifed to 35 feel However by Exception a 603 fed maxintsn extmsim 9f does and piers MMb Blayne Bay relay be aimed. Extension of *Oa ,arid Piers risk titre* waterway: ro 1ryted to 19 Peet Cr 10'6 of the width of He waterway. whichever is less. However. by Exoephon further edericion may be appeared, svteectoapproval from al applicable agencies- Extension ol docks and Pies into Biscayne Bay ere WOW a 36 kct However. by Excepban a 600 tees merbrxm extenam al docks and piers MID &stare Bay maybe alloyed ERtenocn 41 dx!o and Pies No other warmer; is Moiled to ID k®I or 107 of the earth of the waterway. whichever rs less however. by Exception scanner exlerisxn may be approved. snpecl to approved Iran all &palable agencies_ According to the land lease from the City of Miami to the Company, the permitted uses include a very wide variety of public commercial uses including restaurant, retail, marina and many others. A complete list can be found in the land lease document. The following are the uses permitted by R-Right, E-Exception and W-Warrant or Administrative Process. 22 CBRE Data Analysis MIAMI 21 AS ADOPTED - MAY 2015 CENSRY (MIS PER ACRE) RFOICEll DAL SSLE;MO' ;ES :•nJCE C iw a i-+' RoceiCE ANC _LARs JMT I&..T FAV:4Y POLL NC CORI/TORY FYJAAE DFE CE LYE. VOA{ WORK• r'.E LODGING MD& BREAKFAST 11� OFFICE LtE COMMERCIAL ALITORELATE37 CzJ 11 CIA.. ESTA3. EiTERTA BENT Ei AML&EVENT EEI rAWdE.T ES"Aa. •AQIRT FX'D ERRPCS ESTA3JS,VEN- ALCLINO- 3EVERACEE SERVCE ESTAE MARINE RELATED COVrEKIAL ESTAB OMB AIR RE,A,L RACE COF ASSEV3LY RECREATCRAL ESTABUZAtENP gYIG COWuMr'Y FACAJTT FaCREAXIONAL FACJLTF RELIGIOUS FAC.JTY REGO**. AC II/ITY COMPLEX CrA aNFFORT CCAMAPIN SUPPORT FAC&ifT' VCRASTRUCILRE ANDUTILITES T3 SLE-UREA\ 6 111 R R R R R R E E 6`J w w TI JRBAN aamEP,A. L i1 A R R R R R R R R R R R R E R R R AY R R w E R VI Y! w PI NSIORFADIJIT IJI ONA BEIGE Y 55IdY TRANSIT FACIL6TEs VI w w w w ARTICLE 4. TABLE 3 BUILDING FUNCTION: USES 1] T6 RHhY CEWER ,.:.SAY C^C-RE R L 0 65 65 55 R R R R R R tt R R R E R E E R w w R VI w E R E R R VJ w w w w E w e w r 0 15r 153' 15r c C5 CI 0110 RA At^ ISr R R R R R R R R R R R R R R F R R R 4 --- - —IIIIII® =EINE —©© =®® —El MIMEMMIE R F R E R E R R F R P, E w AY E W ail E R E Al E E fi R E E E R E 0 £TR CH ➢2 ➢3 Y'A #YI R R �Y R R F E E E fi 7r 6t R R 71 R R R F 77 R R Fi R R R E P. R R 4N Section 4.8 of the VKMP is included below for reference. 23 CBRE Data Analysis 4.8 Zoning The City or Miami new Code (Miami 211 includes the folloMng zone designations to the City owned areas on Virginia Key. T I - Natural Transact Zones (II) A Natural Transact (T1) Zone is a zone for environmental conservation a. A T1 Zone 6 10 be left in an essentially natural slate Modification of the natural conditions shall be according 10 Local. State and Federal guidelines. Public access to T1 areas may be limited if 1 presents a threat to mime and plant iite within me areas. b. In a T1 Zone. improvements shall serve solely to protect natural elements Any paved, graveled. muicned, boardwalk or otherwise improved surface or any habitable. enclosed or air conditioned space shall be kept to the minimum scale necessary to fulfill its purpose. Such improvements including but not limited to' screened or glassed enclosures pathways. tenting. gatehouses. lighting, toilet facilities. panting areas. etc may be alloowed by process of Exception. Only activities and improvement which reinforce the natural character shaft be allowed and upon a finding that there is no negative effect to the environment based on a study of potential environmental Impacts to be provided by Inc appkcnl. CS - 5.7.1 Civic Space Zones (CS) 5.7.1.1 Development In a Civic Space Zone should have a minimum of fifty percent (50%) of its perimeter enfronting a Thoroughfare Civic space sites shall be entered directly from a Thoroughfare 5.7.1.2 Development in Civic Space Zones shall be consistent with the standards In Article 4, Tables 3. 4, and 7 5.7.1.3 One or more Buildings may be built In each Civic Space. Building floor area shall not exceed twenty-five percent (25ro) of the lot area or the Civic Space, and shall support the pnncipaf use o1 me Civic Space 5.7.1.4 to Civic Spaces, Buildings shall conform to regulations of the most restrictive Abutting Transecl Zone, except as shown by City of Miami's Parks and Public Spaces Master Plan. Other adjustments to Me regulations ,hall be approved by process of Exception 5.7,1.5 All Community fa0ility and Recreational Facility Uses shall be government owned or operated only VovaAa Key Zoning eN in. ARC V'•ri WIFE u C, �+Glibx,lA,e.. t CI • 5.7.2 Civic Institution Zones -ICI) 5.7.2.1 Development in a Civic institution Zone shall have a minimum of one 11) Frontage enfronting a Ttwrotagniare and should have its plumy entrance from a Thoroughfare 5.7.2.2 Development in Civic Institution Zones shall be consistent with the standards in Article 4. Tables 3 and 4. 5.7,2.3 A Civic Institution Lot may have one (I) or more Buildings. 5.7.2.4 Civic Institution Development shall be permitted by process of Exception. 24 CBRE x 0i CST. Data Analysis 6. SUBMERGED LAND DEPTHS A bathymetry survey showing the south basin water depths is included below. As indicated above, the controlling depth into the Rickenbacker basin is about 8 feet of depth as depicted by the blue shaded areas west of the south basin. The current basin depths range from 7 to 8 feet in the west opening to about 5 feet under the slips near the north and east sides of the basin, where alluvial deposits build up. A typical dockside depth requirement for most power vessels in the 30 to 80 foot range would be 5 to 8 feet deep, However, most boaters prefer dockside depths of at least 7 feet deep or more. In our opinion, the existing depths in the south basin are adequate for vessels in the 80 LF range. However, the redevelopment of the south basin would likely benefit from some maintenance dredging along the north and east sides of the south basin. A colored survey of the water depths in the north basin are depicted in the following exhibit. The blue shaded areas are 8 to 9 feet deep and the green shaded areas are 5 to 6 feet deep. 25 CBRE 201n CdYE fr!r Data Analysis Assuming that this drawing is correct, the limiting depth for the portion of the north basin adjacent to the subject would be about seven feet deep, which would be an adequate dockside depth for vessels in the 70 Lineal Feet, (LF) range. Waterward access from the subject, out to the Atlantic Ocean is provided by the Intracoastal Waterway, (ICW). South of the subject, the ICW is maintained at an average depth of 10 to 11 feet out to the nearest inlet, which is Bear Cut, (which can be a bit tricky due to the fact that the deepest part of the channel meanders and is poorly marked). Bear Cut is located between Virginia Key to the north and Key Biscayne to the south. The preferred ocean access is the ICW, north of the subject, where easy access out to the Atlantic Ocean is provided by the ICW, north to the Port of Miami and out Government Cut. It is our opinion that waterward access to the subject is good. 7. MARINA MARKET STUDY The market analysis forms a basis for assessing market area boundaries, supply and demand factors, and indications of financial feasibility. Primary data sources utilized for this analysis include: • National Marine Manufacturers Association, "Recreational Boating Statistical Abstract" • US Coast Guard • Department of Highway Safety and Motor Vehicles • Association of Marina Industries • Marine Dock Age Industry Trends, 26 CBRE 20.16 ONE Inc.. Data Analysis • Rental Surveys of Competitive Properties • Dozier's Waterway Guide • Marinas.com • Claritas Demographic Data • Interviews With Local Market Participants • The County Property Appraiser • Subject Property Data NATIONAL MARINE MARKET According to the most recent edition of the National Marine Manufacturers Association, (NMMA), Recreational Boating Statistical Abstract, the NMMA Statistical Abstract and the Recreational Boating Economic Study, recreational boating continues to be a very important factor to the U.S. economy. The following is a snapshot of the current market position and trends in the boating industry. • U.S. expenditures on boats. engines, accessories, and related costs totaled rt 31.4 htllt.•,n in 201 t- • Annual retail sales of new boats. engines & marine accessories in the L 2t:'»I4 • New boat sales wcre rap is 51, to -5.34,51,10 utnns in 21114 • New traditional powerboat sates Anriase_d 6.4' to 171, ;tri) units in 24a 1+ • New sailboats sold at retail tract -eased 1101, , to 7,500 units_ • New personal watercraft sales increased 21.6% to 47,400 urns. • New hti-lcat imports totaled S2.3 billion. it 7.2% to 2014: units a were. 1Ap 17. i '-1:. to 794.174 • New ia.-at exports totaled S2.1 hrlltk n. down t?_kw% in 2014: units were down 2i..18.512. • Total engine sales. includtnit t.-ipltn . outboard, inboard and sterndnvc engines. were 2+120 units, tat` I 't Ara 214 • Outboard engines sales were up 4 `o% lit 218,400 mitts, ret_-ul sales reached S2. ; 1aillton. • 2lftetmarket accessory sales totaled S5.rt billion in 2014. an increase of 14.71 • Americans -}i_, are taking to the water: .7'a of the Lt adult po7pt,laiion-87 '; mil ion Atnertcans— ]i. rticipated to re.creafk.,rial boating at kits oche to 01—I-. • Boats are uniquely made in America- 04.(f"a> of powert-.voats, sold in the LI S. are made An the t_j • 1Pltcre were an estimated 12 million registered boats An the 1.1.S. to 2014 • 05' , of boats on the water e,powenco.ats.. personal watercraft, and sailboats) ui the ti S. are less than 2o t -.t • An csumateed 040.500 pre -owned boats t powerboats, per emit watercraft. and sailboat s v.-crc Rohl in 'tot Boating is primarily a middle -lass lifestyle as 71 i"t, „ I Amencari hitat owners a household income less than Si010.000_ Below, we hove presented several tables, charts and exhibits depicting the boating industry in the United States. 27 CBRE 20]6 CPRf, V��. Data Analysis 1.2.1 Recreational boating participation F;o2iipg panicipa0 n In ?Di 414as relativery uncrianged from 2013. In 2014. 35 7% a1 respondenis went boating corresponding ID 87 3 rntti:on adult Americans `iUA[' e.7FE`'":F� ct KFIaiC TABLE 1.2.1 Recreational boating participation 2000 200G 2007 2000 2000 2010 2011 2012 2013 2014 G,:m nt oparl tM1 u p #mil 7). '6 F 2i 2% 10 A 23.1% 12.4% a Cv. 17 35.2% Ctat!ng ]1 i — n +n panl marreh:; rmt r`ariciron[ IT pared n lenabni} 2i 7n 33 % ' 5 ra add! but nut n 1a 1 17 mmd sj 77 2501 % 24 Y 71 1%, 21 E% 21 4% . + % ,< 202% Nnn.1s!rticipa[i Ohs no panmge:ed in recreatrM Nlll:ng uf an adult) TOTAL 403% 31 /% 423% 44.b% 4ue% 31:6% 41.41/4 40 3% 4; 74, 43.5% i00.0% 100.0% 100,0% 100.0% 100.0% 100.0% 100.0% 100,0% 100.0% 100.0% CHART 1.2.1 Recreational boating participation 100% 10% - ?e% 10% Os '06 '01 ®NON PARtiCPAN1 r'flti l PNl Iic Mt 1 CU10 LNT ^A11I0 WANT '10 t '12 13 The data table above shows that nationally, the current participation in recreational boating at 35.7% is well above the 2006 percentage, which was only 26.0%. Therefore, the popularity of and demand for boating has increased significantly over the past several years. 28 CBRE 2015 aloe. Inc. Data Analysis 1,4 Boating participatlon by region h rgII 4 10 9%. Of tumor t.iparrs lbeed1n 1f i Ne s Jd idi: rNirn, f'aRu vFJ cia dy 6y roc kitar.3 r€-q1 i' r12 2 %1311t re.3 i. d4c5 rags, rl r%-9 ;f e i!kittw. came ku5d in o Ih11ae. TABLE 1.4 Boating pis 100 TOTAL 2035 2743 20li7 ZOOG 2000 1310 2011 0,112 20t3 21111. Household rosiden}€ by regiiou ti,e ! ak s ' LA '.9A ,a.3%. `a.3k ?. IA ;g Ig 14 1 :r': .17.1% howl t92%. :i".9.0% r,;34k. q.4°e ;93rt. 14 % 1r.R°13.5% 1'3 7% 162%. ,5zedi► L55% +3 3% • L 1? ', t,; s:3 I% 1S.1A 16.B% 1:,.'1'.S 151% rrAt aiti -,'.;°9116,11/4 162e; ,:'1fe. ?:?ax Ir1t[!4. 1:1iik 92 10... $ 91119L Yerin.+4lxr., ..q .'6.% _'A_ '51k :: ,2„;% 1:'2k , Jk 1's.'.'% ITS% bl.iAmok: 1 e1x 10 6% ' 1 '`:. '6 dh 'et% g-"m 9�1fli a ? .' `s r4Q% 7A,"Air NI Fur,' : i% .. 1.% lc:.a: .ti.Z% 16.7% `6.15, 1:.:L_'?t it.Q1,, 11. n tS.3% TOTAL 106.R1: 100,0% 100.Og. 100.04. 196.111lq 10P.0' 1AAOIM4 NNW : 110i.Gr": 111GUM't, CURRENT PARTICIPANT its 2000 7 3111& 2'209 20111 71 { 1112 e 01:} 2;11,1 Household residue:* 69 regikm y 3% 21 d% 216 a ?16% :3 1$ n.2 r;t ' ) :. a :.. 161%. n#0 ,a.3 'in% 16.0'.4. "81% 91,11% 17.1i', ._.. 11.2% male: •3N14 t.?. ':1 As r1.2% .2.L 4 11 dk 16- ; Imo, .. 11►Sq, t t. C:r7 11024 r1r314 g.9. 6.4% 9, r1E 11 ?'e 8.2% l i ;. 7.51 idrrll anvil^ 13-+ ' . 21% ':.0% '1 A 1? 6% 16._t:F. 11111% {,. .. 1/1% Mid Atia=lir N 1 DX 36% 11.1% 4.2%, 9.2?i 9.A & I' 41% q2%, °,oath Ada-tzr '3B! t t3A vi0% 1,4,5%, 1: A i4.VA 45.I1, 15.2k. I ":. 15.4% TOTAL 11XLCRA 100_0% 410.0% t00if% WI% NU% 100111 1,010% liNattk NOON. PAST PARTICIPANT n r .0% 2,3gi" 2000 2NR 2010 2011 i012 Z212 231 a Household resider>exl by region I:s-.4 i aki,, Fil`,. :1.?( gIlk '.5K 23.1-% 17.5% 13.4 21.A 181% tO21t its ii ;0.21c 2'L2? 21.6%. .22,RIA. 14 dl 2:.?$: ?1-, s 22:11% 2Y4 1 Ponte.. `3:g% ?5.2% t2EN 12.11K 12 14&' 1T.t'' 1511t 152°5 •tris6 Gtif Ci3a2Z 113l3!4 r 1.?+11 1.31'' 1: Q I . ) % 8"k7,i. I :0 'g 41!, 7,5°1: herh Mane +1 11-5• g.'.ti 'J.'is 11.2% 10:g°ti 11E% On 11.4 1 Pk tao& `i1.3% r0 i "'t.7ty. 315; 92% ?ti c' A 121C. ciyeso!i n: :5% '?.ilk 't14 16:14, 1a.t% 16.122-.6.1, 16,2°1. i5,1% TOTAL len% 1OO.6!1. 100.0°. t00.LA4 11O.116 14111% t0FBOr!. 1110. 10010%, 1tti1!% MUN•PAtt1 KlIr,4NT c)i00 2000 20111 2011 2012 i*111 Mid Hci told residerce by ropy! Kam Plsk GINGINO Wish Mootot. hMi3 Y,uut Prim: TOTAL '2:5 . 16.2. $7.6% 181. 16.'4 ir'@tr 1.61.r'4 IL.;r"._ 5 § 18,A 19.2% 1,,2'14 16IT1 16.d% 13.1°5 1 ",. f% • .' A '16 drr. 1?.4% 1'4;. 13.9's. 16.: % 1A.r' 1 .: % .0 :'‘ 113fF4 'b% 4.4% Q.i% 9:P4 113vi 117.,_F i 1i, 134i'< 16.1% lkdkr 11:*I 1-, 13.:'rti. 1s to, I.:A 11 ;i. 11.04 112% air; 1:: I,,. ,! 1`. 114,A r3:E14 1:2 'A id 26; 161% t601.1 1'..., 16 , 110.Gr,, 100.0N 100.CY toe CO 11X10%. fllfttr!. 111IGe oci.i?. 100131!. As indicated above, boating participation by region is led by the North Atlantic Region. Occupancies and rental rates in the North Atlantic region are among the strongest in United States as evidenced by prepaid annual contracts, waiting lists and relatively high transient rental rates. 29 CBRE �€. 2016 CBRE, Inc. Data Analysis 1.9 Boating activities Fishing remained the most popular on -board activity among current participants. In 2014, 55.2% of current participants fished while beating, 42.6% swam, and 34 G% entertained family and friends. CCLE.CE EORe `u11T RE::E:E.CHRiRC TABLE 1.9 Activities current participants engaged in while boating CURRENT PARTICIPANT 20E03 ;Nall; 2007 20110 2009 21E10 2911 2012 2013 2014 FBInr y Swimming Evinr ll➢Mi Li' Aloud rk I,ruselg Sightrt rrlr 1 1untr3001g Nairn: etc:lobar' T1lvrlg Canoeing Eaaing.related specel ewes Keyeieng Water -swing Sodding Wake+tuarang 0444 Weer padding Viewing Sleeping ahanrd 11snt1ng 8ustr)^si relaled entertainment Scuba riving Pacing W1Om-ale rattle Other RePdelletiJrtk@r Rut 43.5% 3G.2% 51.7% 54.2% 51.7% 59.5% 01.7% 62.9% 5/8% 55.2% 36,18 43 7% 40.3% 39.0% 41.38 43 68 44 (% 42.6% 31.6% 25,28 20.9`K 3688 32.78 20.98 3208 34.88 341% 34.680 51.08 32.4% 34.3% 3148 32.7% 32.6% 37.78 3658 35.54 32,9% 31.18 22.0% 3048 20.2% 29.5% 28.6% 31.78 32.0% 30.48 29.5% 2/.48 10.48 28.3% 31.78 31.10% 214% 234% 2.9.08 29.4% 29.4% 24.G% 18.4% 2108. 25 I% 23.4% 260% 283% 2938 2714 22.1% ._ _ - _. 20 t% 17 64 18,8% - 3.4% 14.0%. 159% 15.5% 17.5% 20.9% 21.4% 19.34% 15.8% - 12.2% 1148 10.5% 1218 15.2% 14.08 13 74 14.8 % 2.6% 7.9% 9.2% 10.1% 11.2% 12.9% 152% 12-7% 14.3% 17 48 3.9% 16.58 16 7% 15.9% 15,38 10.68 16 8% 14.64 13.3% 69% 3.88 7.4% 84% 6.0% 8.3% 9.2% 11.4% 11.1% 11.8% 6.6% 5. I % 8 6% 10 6% 1 14% 7.9% 9 0% 9 4% 6,8% 9.9% 6.5% 9.5% 12 3% 11 4%, 11 74. 174% Ili 5% 10-9% 914% - 4.0% 8./8 5.6% 8 6% 0.2% 130% 9.4% 9.4% 2.3% 9.5% 107a 3.4% 84% 105% 1l6% 8 7% 9A% 0.4% 1.4% 2,0% 4,6% 2,1% 5.9% 5,i%. 71% 6.4% 7.0% 1 4'% 2,6% 2 9% . 4 21 3.4'% 4.08 6. 5% 4 9% 6 098 7.0% 2.8% 2.89E 2.8% 5.0% 3.8% 4.8% 8 4% 6.iI% 5 7% 6.4% 2.9% 9.8% 2.2% 3 5% 2.1 % 3.4% 2 5% 4.9% 3.6% 3.5% 18% 2.8% 3.6% 3.8% 28% 2.8% 31% 2.14 2.1% 11 1%, A,9% 1.5% 46% 4<% 51% 109E 18% 72% 1.9% 1.5% 08% ?- % 1.9% 1.6% 1.2% 2.6% 211% 1.38 1.1% Fishing remains the most popular activity. Therefore, in most regions, those marinas that are located proximate to fishing and the other top 5 activities will enjoy a natural competitive advantage over other area marinas without such proximity. From 2005 to 2012, the average number of boating days declined from a national average of 33 days per year down to 20 days per year. This steady decline can be attributed to the recession. However, the most recent data shows that in 2013 the average number of boating days took an upturn for the first time in eight years. 30 CBRE Data Analysis 3.1 Key economic indicators RM GDP grew 2.4% m 2171 a. alter gracing 2.2% In 2013 the incrtme twiotarly reflerifarl gaga in Inventor/ trygestrnent. Persona! sp s1ding and pelts orintIntee to grow In 2014The tiled 5w of cA prl- essimo t➢roeost2•r5 precict GDP to wow 32% n2t11a. Cap:ity uZitrratton ticked up in 2014. avaraging 7g.1' and capping the iNar at an fear high pi 79.5% Awmge tut* awnings t{br prssate seti]r 1116 to 2014 w(z up SG 381r We 2013 an E-Ided the WI at S20.72 thil 12 -month mirage Orange tn. Ci]Ii 1Wa10t pr€ca s toss bed a(rd imergy was l)p 0.1 % In 2014_ 'W. actual car in1l u ram mmrnplt 1 i, "S in 31JI 1 .ri l n= rat trio F?G s ortactt40s. torkornl pr{dixtFin gilded 2l average 0 4%. with IMh 1`.4 /0 cit12 rrinallral in 20! 4 Producer pnroson all proltrJctz less to01 aid phergy a1 €40 a 0.1 On trr 2014. mi9000 4uurn w price older_ 1100Mr4loyment dropped to a s&-war lost' of fi.Ii% at the end of 2014. wit 3. i Intl/ion added to P.39tadfrl 0 i S 50LACZ usDcm . a u31.se TABLE 3.1a Gross Domestic Product (t change) 2001 200? 2003 2004 2005 2000 2007 2000 2009 2010 2011 2012 2913 2014 11 -1 1% _i.T% 2.1% 2 3'>: 4 3% 4.0 02% : '% b.4% 1 e , t -'i . :b%• 2 r" -2:1% ti < r% 21 % 38"k. 1 21% 12R 2.1•? 1, 0% -05% 3 31 2fIN a S'9 16% U% 03 13% 2.0% b 3 {1i 2.4%. 04% 2 7% 21; 1 3% 2 ?% i. 5% 4 .% S.0% 04 ! r1i 0:% 48 354: 73% a4t::, 97 9e 7`.,% 4E% ? I"ti ; .L 22% CHART 3.1a Gross Domestic Product (% chantle) S O% 4.0% 2.(214 00% 20% o, 6 0% -6 00% aR ic.0% 07 - 3 '(9 10 '11 12 17 Wallteg: 111110'5 {JEWt1E.R ■ ar.:011U t t1A1•s170 IIII We WAXER ■TO/PTA t d.RIi0 The above key economic indicators provide an indication of the direction and velocity of American disposable income. As indicated above, the national GDP has been positive since Q2 of 2011. This is a very positive indication of potentially increasing disposable income, especially in the light of the growing popularity of boating in the United States region. 31 CBRE 2016 ceRE. Inc. Data Analysis TABLE 3.1c U.S. average hourly earnings 2002 2003 2004 200$ 2006 2007 2006 7009 2(110 2011 2012 2013 2(111 January 814.16 11522 11b.1.:0 115.91 11642 S1/09 81175 5184E $18.89 519.30 1195( 119.94 $20.40 1ttbrvaty 511.R $11.419 31511.E 115i.93 3(6.48 11716 11190 31845 318.91 5193E 319.50 110.99 $20.48 March Si f P2 115.29 115.56 115.97 SIG 54 11(22 S 1(87 518 50 316,92 319.31 519.65 320 02 $20.50 Atnl 114_04 511,.77 311,,59 116.01 516.64 117.28 11(92 518.51 $1896 $19.36 $10.70 120.04 $20.52 May 114.88 $15.32 515.64 118.04 3I6-65 S1/34 31r'90 11852 11901 11942 S19 ro.06 ;20.55 June 11404 115.36 345.67 116.08 31672 517.41 118.04 318.51 51904 119.42 1111 i2 320.12 $20.59 July 314-98 315.40 515.10 516.15 316.78 317 46 118,11 118-60 S19.06 119.50 119,76 32OE14 $20,03 harm 31502 115A2 115.74 S16.17 3I663 3175E 318.18 S18(G $191E 119.49 310.75 3019 $20.68 5evembel Sit Of 115,42 115.18 116.19 516.87 11757 318.21 318.71 5(58 14 319.51 $1079 12(572 1120.68 prtcber 3(512 111,42 115_81 316.29 516.94 117.56 S18.27 518.75 119.22 519.5E 119.81 320.2E $2072 Nrn'embcs 51515 315.47 115,84 516.31 51698 51164 118.32 518.81 319.22 319.57 $1985 320.31 ;20.77 D in1-.rr 3152E 115_47 51,9i 51635 517055 51(10 11838 51801 519.20 319.57 11991 3.207E $20.72 CHART 3.1c U.S. average hourly ear1Ii(Iys S74 120 S18 516 114 Si2 US. average hatrlyearnngs '02 '03 0 Of, 07 '08 '10 '11 '12 13 t4 SCLIFSSE user The above data show that while the popularity of boating is increasing, the average hourly earnings data supports the ability of the average hourly wage earner to afford a boating lifestyle. 32 CBRE Data Analysis TABLE 3.1 d Core Consumer Price Index (` _, change) 2002 MI 2004 zoos 21:05 200; loos 2009 2010 ion aunt 2013 2014 .iNusy 3 2% 0.2% ON 0" e.2% 0.2% 0 3°4 33:7% {e i % 02% J 24 f, .% SI% waxy 0�''% 0.1% 02% 0 % 0:% 01% 0I% 02' D11% f..0% 011 :41.L1: I.kedt 011%, 00% 03v 04'A ll3 U1% 02 02% LIA 011 0;fie 011L 02% kr..1 0.3 00% 0.2% 0 0% 02% 0.7% 0 =% 0.2% C 13% 0 7% 0 2% 0 0S 112% thy 0:" 01% 9.7% 0 I% 0.3% O 1% 0: ii I% n 1% 07% 0':.A% 3 I% 02% Joe Tk 11. D.1$ 0 7v:. 0 0% 112% O A 00 1 % 8 15. 0 A, 0.2% .1 2• 0.11% Jul,, 0.2% 0. 0.1% 011e 02% 0.2% 0.3% 01% U_r% 02% 0I% 02.% L.4% Auqu�i 0 3% 0.1% 01 % 0 1% DA 0.7% 0.2% 3 1 % 0 r % 113% 019 ^3 fi 0.1% aerrbrr 01% 0.1% 0.31m 0 1% (12" 07% 01% RA E r% i, 14 `J2% 0 1% O. i Darter 01% 02% 02% 021. 02% 0.7% 0314 3% C_r% 0.2% 02% 31'9 l lkwembe, 02% 0.00% 0.7% 0 2% e. r% 0:3% 01% 8 1'9 0-.1' 0.7 3 17 0 2% al% December 0.1% Cr.1% 12' 01 o 0.1% 0.2% 0.0% 01% C,1% 02% 01% 37% 0.1% CHART 3.ld Core Consumer Price Index I% change) a 4% Care Consumer Nice index CK. 4r C13 .34 G:, 'el(, 03 09 10 11 13 '11 _ _•JR uE' USCi As identified by the consumer Price Index, the relative cost of goods has increased at about one to two tenths of one percent per month for the past few years. TABLE 3.2b Retail unit sales: annual rale of change TOTAL. TRADITIONAL 10V9 BOATS r'0WERROATS 11411A TART S PWCs SALBOATS 1.%6 1.7% 4 7r 4 A% 4 i% 1037 0.f% 97% 96% /9a '4l; 1918 139% 133% `_,1% 2Ts1% .38.::% 1999 7.7X {DA% 5,.,% 103% 30.0% 2030 0.7x 09% 41° - 13.2% 231% 2031 8.49 10 2% 9 346 1714, 16,11% 2002 aft • 3 3• 2_23 - -20% 15 5% 2003 &O% a R% .2 5% 16% 41% 2004 101 2 g% 4 1% 3 B% i 4% '3 .1% 2085 1.1% 0.4% 01% 4.77% 0.9% 2006 26% 44% 41% 166% .25% 101% :1111 (1.1% 1:,L� 1% 17 I' 2 4' 8:% 2C1 :6..2'% 274% 242% 37. 711! 31.+% 2009 74.2% 75 6% 74 4* 713% 78 0" 3( 7N 2010 414$ 71% .94s 120% .65'6 204a 2011 4 T% 0b 04% •12% 31% /0% 012 T2% FYr. 101% 104% 103% 's'°,- 2013 18.1% 1 7g 24% 1.9% 2 3. 2014 10A% .115% CA% 4.0% 2l!% WI% The final component in our national marine market supply and demand analysis is an annual review of marine retail sales. The effects of the 2007 recession can clearly be seen as the percentage of new boat sales went negative from 2005 to 2010. It can also be seen that the demand for Total Boats in the United States has returned to positive and growing levels 33 CBRE c 2016 C84E• r��. Data Analysis immediately after 2010. The increase in total boat sales in 2014 increased by nearly 10% in 2014 over the previous year. 7.4 U.S. stale recreational hosh registrations U.S. bolt rear taxis d {lwri 9 i n 2013 regally trni iimtp rat at 12 me n the a.0 1ry0 .3120,N tat UnaI iegetralons 1n :111? weft t4Rt63ged tiert 2011'. WM 040 mtorgba0 ,t 1:,90,6r97, whe Roma^ Fite the :smond spot hula taint'. Huai vorps1alirai Fi ;1i0!lm 1n7Fased ?% tram 2012 10 2013 ant, plotted Manesota into Tard ton FiKond anti I6rIvaan n1!with horn Ihrd. Illoosttatxtc in both Minoo ot1 and also ;rgan daclimd appraanna,hy m 2013 compared to ?OM. Om In ITI9 1,4, Al :;17tv5 13 2111 A was A:kafs9a: 1'rhtr li lumped if OM 73r11 t0 1 tilh WIIh ,T 199, 44C10 010 t1 riglsIrahr415 waived to 21112 30Ntt:1- u3t0 TABLE 7.4 U.S. 14late recreational host registrations 2013 % CRAKE M0KI80 STATE 2004 2005 2006 2807 280E 2009 2940 2011 2012 2013 13 9112 1 1kr44 448DT! '1T'd.101 4R4 5,' '191f'F!1 '+19i3 449t111 9145.- 869.Ii1S d;-,!r•'i 970.749 0.1% Caelom.: KO 34 931 3 993 92.8 UM EEO 0I8.853 000,068 at0.U06 6E6,243 •'7a Sal 320,400 61% tA,16,96 851 63 953 484 sk,. 437 t3541696 Pfl44E1 841,115 813176 Winn Etr4.t, 909,744 1 114. 4 2ii_ir.lrn 944 3:f' 914.1l3 r,.a::,1 a a '4: :'K, 311 ATE, 40f66 aY13.'41 87AM, 71663 I0% W1€anrr en iF) 1i.19.198 --30 626,20d df5.2% ea/42 S27563 613.11 Ia% E rex 615:*^9 614€166 ?•it' •,1i.:' •:i'1 6'':,104 596.t1C 5,7,17a 40306! S75.402 35n i 5urrsr.me," _Li/450 41_60)03 41,015 442.041], 116.844 415.528 439.491 0),145 86;r.561 466,899 13% 1 NA%165t 513:9E6 534110 49791i men 165,64' 411316' 475589 a6l.t'8 463'.K 1 456909 1411. 0 11140 41993E 412.215 4'2.2111E 4152.'8 416.5% 024,017 e10/40 i32.6116 60.737 440111 1.0!. r0 Nor ei,x1e3 3`b300 102784 3/029' 215.015 374,ET4 485.04O 1500.04E 302,596 391,/51 315.$4 in. t1 Der41q{- '.+art) 349150 34414k 342427 T33.316 311,141 101,872 eat OD 311d31 37DA71 0916 r:' l6'7‘9,3 1,2_ �2 318.242 776,.:.1. 34059/ 3504/9 32.066 1.29Er .0'2.146 322 115 319991 104. 1, 36-w4 MACS 193E65 353611 379.654.. 378231 375,89 37457., 371.30,5 3E01224 340,163 labs. 14 1.awec1'a 329.950 338.104 396306 331249 3V,153 342.l11 112141 332,974 300.061 387a1 03% 15 65.01,1, 320711 32$.749 32452e 324.1Ei 322.252 214,121 701191 33227• 307714 2 IAt I6 A1. rarti 34026 2651 t2 2;1:0a8 ?id 11F, 2,17 558 27207.E 271 3r? 2e7321 ME 374 2IS41 S i DI, 1? 197,i544? 204d 207567 271.1107 27d314 74475 209361 66100 251.90A 25063 258467 0030 11. Wrgrva )4 .64? AS .'do.E!2i K,1 d40 '49.?1:' 244.-.Y35. 245.940 ?42.47:1 211A711 231361 •I,UI. 19 114Mrla* 21Fa145 205414 599169 %i16.195 /99.104 19E,81b 205.02a 200,0s1 189.46 237A81 14.0% 29 Vharortlm 261050 201193 219027 215.169 260393 209,845 237,021 234.543 2371444 72%.33 O.E0. 21 lmlio ?133PJ9 2rdE06 5640/6 ;aIA74 211,al, 2%,42,4 31.9CC'..rusi 2id 46/ 211,11p 07i; On .^:2e.I1i. 243.Lod :l&.' . 213.Tri7 21131 241.190 319.060 225743 2'1i4F_1i, MIS 1313 tlleanrlw 1110:704 316.913 210j50 721156 100.052 205.479 209457 199.3231i1.069 191,41 11% 21 1/6y1aro 206i681 2c5012 2721217 202.897 199.14141 19640E 193.250 t 673 1%526 111544 220. 1 Kmxm7 174..463 11625) 411951 1/6116 113.991 176.53E t15. ' 571,936 175286 174211 13611. 26 ,}; 106110 187660 '96./91 I0,1,1 1 109,943 1030.657 117E24 171.91 101.40E 18,144 I a% Ors. a ,brei 23371i78 109102 2a5.1387 t89403 ter,eso 12oA1 165/50 t66.4717 160145 1S4r371 3151. r/atvclirA.? 150,ern 1r,O(VG 'aFAG 14t5496 11E.117 1Q10, 111699 t39.991 129.173 was 10% 74 P/4•troupe 2204716 2738 44E rig 333 10.358 141 312 194 716 10 216 1158 743 132155E 130161 1901 Antra 147 4 1ag243 '45.'33 406510 140.''91 t3E.469 135.1226 431.666 1292'1 175� 2.% I1a.i, 944.,E 1t11- 11116 !fait! :01.6_r mote) 111.873 105.979 a1697; 107,211 1A ':? :.ar.'.w r11 447. toll'% tOs701 109,a39 11060 10542:3 'rum 1(11 tr,007 1@rj/ ?tit 3"1 N_g114r,'rioXi:e '01n?E I',22E; 101291 10031 96.20ra iii.40F 94Tri 91,9Ii} w.g76 WIN 10L 34 44Drag a Ti 636 57921 83.213 53,22 also 32.963 43,832 84.41' 13,748 17O1 1001 35 Idat4 K 630 050E2 Pared 91.612 39.02E ''^G,3.501 87,r RUT RS.149 46,711 0:0% 26 Ca Oa1; 910/0 485A 12 9606/ 98.i65 05.330 .822 01424 8022' 87225 18548 4.230 Kamm 83 512 07 744 45677 93.900 01 367 90.52'2 89.315 88,64 t 31,114J t 2 830 '93 W.-o'r ota 5 9E1 1d498 49630 53519 66061 54.1401 50125 0/531 62./00 18$1 10.5% n O18r 74.21+2 i5615 16,461 76.0/t 73A39 1.419 74,321 014427 76.145 46442 9.93 % Ame 53 211 31616 81.93 79.641 63,966 83,394 52. 1f6 42.9E6 S4.64? 83,E 16.1 % W i Vixna 63554 50.061 57,422 61,064 49.930 5i 476 64,5412 61,142 57,761 41481 6.601 Iiosena 51 Ni 32119 591197 01,569 56.660 61,523 67.9133 57.1131 14511 66.1IIE 115. ",:'.0Daiwa 5r.137r4 ;].4J38 51430 43510 9i,fN 6 f04 5.674 56.01a 49460 67s 21% ka 4? 225 49 t2 T 44,332 41.5 0 47.5734 118,53' 68.801 50219 92.147 43A31 0.45, , 57.552 5777E 59.052 51,095 51519 55,052 53.464 54.864 56493 18.327 8.3% 43671 4363 43.37' 03,885 42524 12.511 06,930 61989 024.51 18.2 71% 33439 38862 89 794 3100 33.334 36.544 37,2,62 37460 36,64E 34,142 al% 4' , aa1 32.401 327;0 321220 3142 30,429 82.480 30.215 71003 29.991 301X 355. 11437 2,-.273 3206 25.960 21245 ?7.9ES 28.249 28,1E4 25022 1 1911. ',II '32'5302 *1409 15204 I5404 15,109 11.989 11379 1409e 14,751 119. ., ; .fi1:i3 2 IX ) 629 ?'.,t 2 rii7 7 9?: ° 'W1 3 D1; 7.1474 : 1x 2412 228% ... 'Er, '.d .'1 F,).+4'' ',1,2;. "'.7! ,, ,... 250% tet4t U.S. 12.781476 12 912414 12.746.125 12.979568 12492192 t2.72l4e1 1213992E 12.173.935 12191.936 12.01 PERCENT CHANGE .0,1% 12% -15% i99 44% 02 -22'.. -2.1 -0,6% -0.70 The above data table shows the total number of boating registrations by state. Florida remains at the top of the chart, followed this year by California, Minnesota, Michigan, and Wisconsin to round out the top five. 34 CBRE :01 a, C611. �.,.. Data Analysis National Marine Manufacturers Association TOTAL ANNUAL ECONOMIC IMPACT 0 g OF RECREA1 IONAL 130ATINc: $ 1 2 1• 5 BILLION ECONOMIC SIGNIFICANCE OF RECREATIONAL BOATING IN THE UNITED STATES RECREA.TIONAM_ TOTAL BOATS' RE6tSTERFD IONS Power boats I+WL Sailboats Other Boats BMUSEiIOLDS PER DOAT BOATS IN THE USA 12,182,157 u,lu,1i1 9,926,23 1,2aI,t24 2A9,13C3 P{tWER Bi &T` 137,5t1 9.4 •taalboat, .ire Prole iedtuts . icretin! 'Lyslits IIheILSS6 RECREATIONAL BOATING CREATES JOBS IN -HE USA TOTAL BOATING JOBS 603I Biiiiking Molt i Engine Ng. kiesorY f SupPTles Megr. ['Hies IWha alers Bral5wvaes 33B,526 31,485 118K 18,412 45,71 diait 82"% Humber of Recreational Boars` Boating indusay Businesses Total Jobs Annual Recaeajonal Boating -Related Spending 10% 2% • MAT BUI€D IZ • DlICARKSALERS • loCaRintG MFG% • 8i14i atlas ARJSUFWEJES i!I ESTIMATED JOBS IMPACT OF RECREATIONAL BOATING-PELATED SPENDING IN THE USA 313.809 EST. TOTAL JOBS 953,818 illEnr,D.11X 539,9 I"1b.3 1r�9. EST. TOTAL LABOR INCOME Es1. Drr.I Inrrlr_ EA. Ind roilincome EA. induced Income 177,421 14)iREiT JOBS 472,594 35 RFCRFATIONAI BUSINESSES IN OMER BCJ14.15 BOATING -RELATED THE USA TOTAL BUSINESSES Boat Br,i `:i Not t ( Efigine Mtge Aoaswry JSupplies NI Dealers? 11tholesalea Beat Seriit 34,833 Biii 141 3.654 5A63 24,44 RECREATIONAL BOATING INDUSTRY SALES IN THE USA el Wed Beat Budding r4o4or? Engine Mgt. Au.e<s ryiSilppliesMfg. TOTAL MFGR. SALES Dealers 1 Wh0lsalers E6at S en, (ft TOTAL RETAIL & SERVICES SALES $613 • mamma • DIF.",ANTR SALEF • IIE7TOPJEN i Ca • BOATSER4iCES A D`2PLIES KKR 12,182,157 34,833 963,818 $51.4 J_e_Ur.a 5i • ItestI Al.cL+O • fIEYSA ESKEE • II✓vGR.'fHb.Mf & • 1sfiJ5ERWt • AEtfSLI Et E MFiA 1 1 11111 Sag BILk:td 043.1 aa.0 n 416.2 B&1JDN $20.6 auirw ..7 EttLiOtr i.Nca OKA Otto oS[aceAdgk te:Wkr4110»R oM1T ieaI4 IK! ',lyeal+Mly CBRE Data Analysis NATIONAL MARINE MARKET - CONCLUSION The marine industry has a profound effect on the US economy with $51.4 billion in total boating related sales. New boats, engines and accessories accounted for $30.9 billion. The popularity of boating has increased from 2006 to the present. At the same time, the average annual hourly wage has increased modestly. All of the data sets indicate that the American family is recovering from the recession of 2007 and that many have re-entered boating after a three to five year hiatus. Based on the above data and analysis, it is our opinion that nationally the boating industry will strengthen steadily throughout the foreseeable future. 36 CBRE � 7GIo rpAf. i,. Data Analysis STATE AND LOCAL MARINE MARKET ANALYSIS National Marine Manufacturers Association TOTAL ANNUAL ECONOMIC IMPACT OF DLOPLAFIONAL BOATING- $10.35 .L.,ON ECONOMIC SIGNIFICANCE OF RECREATIONAL BOATING IN FLORIDA PFCREATIONAl BOATS IN FLOP(DA EOTALBOATS" BfirISTERfI) BOAS Ro& boats pwCs 5ailt.nals Olhet Bnats i•L1521+0UJS PER DOM keal tome reeMerug Wes RFC REATIONAL CREATES JOBS TOTAL BOATING JOBS E IBuilcing Motor 1 Enginttlgr. Aaessory / `<uppie (maks/Whoiasalers Boat SePrirn 865,281 66i.28T T22,2 973Ts 23,04 FiraYFE P+IA7" PWCs 21,76E 84` 11 6,4 as more/ r stems A +ne 1.5( BOATING IN FLORIDA 43,859 Mlor. 4,T71 6.154 22,618- • B90.3JI01% • DLAVSYH[rti AL!R • ••TWE1G. Ira • 01 SLQylfs • 4LUSMPPUE. MFGR. ESTIMATED JOBS IMPACT OF RECREATIONAL BOATING -PP LATE SPENDING IN FLORIDA 27,015 EST. TOTAL 085 62,152 MIKE) FAS. xu mu EST. TBTAt LIBOR!NCOMI 53,431.1 E t.Oired[ncurne t$Al2.4 Est.ln1w 1 Income 18331 L�. induced frame 11,182.5 �C. 15,104 INDIRECT JOBS 40.63E oikra JOBS Number of Recreational Boats" Recreational Boating Indus in Businesses Total Jobs Annual RerreationaI Boating-Reiatei Spending ;MOWS ORO BOATS 2% PFCPFATIONAL BOATING -RELATED SUSINESSES IN FLORIDA TOTAL BUSINESSES 5.534 Bat d;ii irg Motor/ Engine4gr. Accasarp /Supplies Micr. Dealers1WnalVIers 132 Baal S rice °ij RECREv IONAI_ BOATING INDUSTRY SALES IN PLOP!DA S B.A.T $1603 18§T9 $3,Q 1.1 t3.3s1.i 1.6; OBui S98193 Bowl Betting Motor) Engine AV. TOTAL MF68- ALE L�rluls1tWi <31trs TOTAL RETAIL 8 SERVICES SALES • BOAT EOM M • DiMgt`18RE;At&g • VORA-kb. • s, ssatue • AIiJSUPIi1rBMrtiR 8E35,287 5,539 82,752 84.3r 1 • BOK NOW • ilartiMIWIRS • Ml IMI+tz. CA • B N SINK • ALCM P11F3rIFiR. r .vol. ,• 81.954.7 Mrulora S160.5 mulct, 61807.9 wIUJON 3.381.7 1 ILLION 0 HnlrN ,. dma -so we Sotto MhnMs 1100 d hlcwp1j4. 4e,-cal,,rll!XE1: iapeakh CPrN1 it MaluprarAt tl9F46Yry 37 CBRE u 201.6 CAPE, hic. Data Analysis LOCAL DEMOGRAPHIC ANALYSIS The subject is located in the Miami -Dade market. In its current condition, the subject is a likely candidate for redevelopment due to the older, sub -optimal improvements that are situated on such an excellent location. A baseline analysis for marinas and mixed use waterfront properties can be determined based on demographic data including population shifts and income patterns. Below, we have included a radius map and demographic data for the subject. Radius Map I-lialeah Gardens Hialeah ft7) 953 Miami Springs (948) L6) �41 Westchester (0'0 Coral Gabl South Miami Pinecrest Palmetto Bay Google North Miami (i) Miami Shores 38 Bal Harbour Surfside (A 12), 9:34 Map data ©201 G Google CBRE Data Analysis Demographic Data CBRE 3301 RICKENBACKR Cs'vY t} POPULATION tvllio r 1 ot35y 2018 Population Cur rent Yt!tIr Eatrmalr* 2021 Population F,veYew P:oleetruh 2010 Pnpulrt non Census 2000 Poputntiar* . Census 5 5 5 11 2010 2016 Annual Potty#atron Growth Rai, 0 004 2016-2021 Arinuar P;i(atztn G•a.:-tip dale et* HOUSEHOLDS 0.00%. 90 149 99863 73 I7,. 50 183 320 138 343,'793 259.42C 249.852 3 32it, I niaN. 207t 14a^ 2016 Households Current Veal Estimate 0 45 540 t 44,297 2021 Houooholes Five Year Projection 0 51 190 155.478 2010 HnuuehWdc Ce s. s 0 lii 357 120.805 2000 Households Cets..rs 0 72 432 106.84E 7010 2016 Annual Houoe5ord Growth Rate 2016 2021 Annual Household Gi(mth. H%Ce i?9I1, liver eyC 1'1rnrn lvnlrl Size • 1— HOUSEHOLD INCOME 000% 381w t 83", 0, 009: 2 113 1 50%. 000 1 92 217 2016 Average Hnusenolu Irt om,i v0 381 711 68,19.1 2021 Average Household Income S0 S59 578 $1. 551 2016 Median Hnuscihnici Inrnme S0 551 760 539.33C, 2021 Median Household Income S0 S59 009 544.748 2016 Per Capita Cnc»nk 539,405 342 138 531.309 2021 Pei Copula Income 539,405 546 353 $34.253 * — HOUSING UNITS 20t8 Housing Units 2016 Vacant Housing Units 2018 Occupied Housing Units 2016 Owner Orxupied Homing Umis 2016 Homer Occupied Hot,sinj Units '! r— EDUCATION O 57,714 176.411 O NaN it ?9.1 70... ,. 32,114 182t 0 isoN .-,i-,:i 9 r 144.291 d1 Bk O NaN 1 1 810 20 51b 38.649 21 9'1 O N6N 2.1 1 1 9 59 1 +, 105.648 59 9 2018 Population 23 and Over 4 70,491 241 .748 -05 and A1ts-oon:es Degrees 3 75 0% 74.345 54 54 104. 140 43 1,- Bn1* or'a Decree iv Hlghp' 1 25.04, 35 156 50 7". 8 0325 36 35: • r• PLACE OF WORK. 2016 Busurenses Sfi 4 798 2.: 196 2016 Employers 1 04 31 P 263.722 The current 2016 population for the 5-mile radius surrounding the subject provides a population estimate of 320,138 people. The historic population growth rate was 1.63% and the projected growth rate is estimated to be 1.44%. Considering the percentage of water area in the 5-mile radius, the population data suggests a relatively dense population that continues to grow at a healthy rate. 39 CBRE 4.7016 Ca9F, Inc. Data Analysis The current number of households in the 5-mile radius is 144,297. The historic growth rate was 1.83% and the projected growth rate for households is estimated at 1.50%. The current average household income in the 5-mile radius is $68,181 and the per capita income is $31,309, suggesting two or more income earners per household. The estimated current vacancy rate for housing units in the 5-mile radius is 18.2% and the corresponding occupancy rate is 81 .8%. The percentage of owner -occupied housing units was 21.9% and the percentage of renter occupied housing units was 59.9%. Demographic Conclusion Based on the foregoing demographic data, the 5-mile radius surrounding the subject is described as a densely developed middle income urban and suburban area that reflects healthy growth in population and households. These characteristics are expected to continue over the foreseeable future. Barriers to Entry The primary barrier to entry into the local marina market is a lack of good vacant waterfront development sites. Over the past 3 years wet slip occupancies have increased and many marinas are at full capacity with waiting lists. All of the marina operators that we interviewed told us that they have long waiting lists, especially for vessels in the 40 foot to 80 foot range. With increasing financial feasibility, but a lack of good waterfront locations, many existing marina operators are looking at the benefits of renovating or replacing existing marina facilities or increasing their existing storage capacity in order to take full advantage of the increasing demand for wet and dry boat storage. Therefore, the primary barrier to entry is lack of good waterfront land. Demand Generators Vessel storage options include covered and uncovered wet slips, wet slip lifts, enclosed dry slips, covered and uncovered outdoor dry slip storage, surface storage and on -trailer storage. The demand for these boat storage options within the market is a function of the demographics discussed earlier. The demand for a specific location includes many convenience aspects such as proximity of the marina to one's household, proximity to popular fishing and family destinations, proximity to the nearest inlet, the pricing of wet versus dry storage, quality of the facility, fuel prices, etc. In summary, vessel slip tenants in the Miami marine marketplace are demanding convenience and service. Full service marinas with on -site restaurants, night life, family recreational amenities and retail components have a significant competitive advantage over limited service or no service marinas. Current marina design calls for an "All Inclusive" mixed use waterfront boating experience. Our interviews with local dock masters, general managers and owners indicated that customer demand was almost equally split between fishermen, pleasure cruisers and family pleasure boaters. 40 CBRE e. i0 i n r RF, in- Data Analysis VESSEL REGISTRATION ANALYSIS The following discussion illustrates some specific details regarding the demand for boating in Florida as measured in vessel registrations. In this analysis the larger market area is defined as Palm Beach County, Broward County and Miami -Dade County. On the date of this writing, the most recent data available was 2015. State and County Vessel Registration The following data was gathered from the Florida Department of Highway Safety and Motor Vehicles. STATE AND COUNTY VESSEL REGISTRATION Year Florida Palm Beach Broward Miami -Dade 2004 982,907 44,560 49,470 57,256 2005 1,010,370 45,350 51,105 58,894 2006 1,024,375 44,964 51,375 60,763 2007 1,027,043 44,416 50,823 63,324 2008 1,010,359 45,294 40,227 58,880 2009 982,470 42,517 45,373 63,161 2010 946,579 41,158 42,976 61,357 2011 922,491 39,512 42,687 60,458 2012 901,969 38,363 42,131 60,572 2013 896,632 38,142 41,657 61,537 2014 899,635 37,780 42,072 63,319 2015 915,713 38,276 42,671 65,322 Source: Florida Dept of Highway Safety and Motor Vehicles From 2013 through 2015 vessel registration increased at the state level. However, the Miami - Dade submarket has been steadily increasing since 2011. 41 CBRE Data Analysis Occupancies for wet slips and dry racks in the tri-county area started increasing again about four years ago. This is due in part to vessels that are registered out of the state and many times out of the country. Many of these vessels are owned by "Snow Birds" that live in Florida from October through April and then return to their homes up north or overseas during the summer months. Miami -Dade Segregated Vessel Length Analysis CBRE has provided the following segregated demand/trend analysis for the local market. The data was provided by the Florida Department of Highway Safety & Motor Vehicles. Miami -Dade County Segregated Vessel Registration 2014 2015 % Change Class A-1: Under 12 ft. 13,032 13,869 6.4% Class A-2: 12 to 16 ft. 5,999 5,957 -.7% Class 1: 16 to 26 ft. 28,372 28,840 1.6% Class 2: 26 to 40 ft. 10,433 10,851 4.0 Class 3: 40 to 65 ft. 2,056 2,234 8.7% Class 4: 65 to 110 ft. 432 491 13.7% Class 5: 1 10 ft. Plus 37 42 13.5% Canoes 352 361 2.6% Dealer Boats 738 763 3.4% Commercial Vessels 1 ,868 1,914 2.5% Total 63,319 65,322 3.2% The total vessel registrations for Miami -Dade County increased by 3.2% from 2014 to 2015. However, the astounding components of this data set are the percentage increases in vessels from 40 LF up to 65 LF as well as the 65 LF to 110 LF and the longest length category, which is 110 LF and above. These are the three largest vessel categories and yet, they also reflect the 42 CBRE Data Analysis highest percentage increases of any size category. This is a clear indication that within the Miami -Dade County market, there is definitely a substantial influx of larger vessels, As indicated above, the vessel registrations for 2014 and 2015 suggest that approximately one half of the total registrations are for vessels that are 16 to 26 LF in length. Many of these boats that used to be stored in wet slips, now can be stored in dry slips due to the larger fork lifts and longer dry slips. Biscayne Bay Marina Submarket We have personally inspected all of the comparables used in this analysis and interviewed the owner, operator, general manager or the dock master for each property. Those marinas selected for this analysis are included on the map and data table below. 43 CBRE 2016 CaeE Inc, Data Analysis SUMMARY OF MARINA RENTALS Camp. Wet Slip No. Pre.erl. Name locotioa Wet SR.. We15r.. Rents Ocar•an D . Surface Sli• Renls D SF 0m-on 1 Haulovr Park Morino 15000 Collins Avenue, 0 NA NA 250 523433 100% Miami Beach 2 Keystone Point Marina 1950 NE 135th Streak 20 520.00 100% 300 51600 100% Miami, FL 3 Sea rake Morino 1635 N Boysham Drive. 220 520.535 96% 0 NA NA Miami. FL 4 Miomarina 401 Biscayne Boulevard, 130 518-534 100% 0 NA NA Miami, FL 5 Miami Beach Marina 300 Alton Rood, Miami 400 528-565 100% NA NA NA Beady, FL 6 Rickenbodter Marina 3301 Rickenbedaer C.wy, 190 535-540 10096 378 530.00 100% Key Biscayne, FL 7 Marine Stadium Marina 3501 Rickenbacker C...y, 0 NA NA 296 51725-519.50 95% Kay Biscayne, FL 8 Prim.Marina Miami 25505. 8ayshore, Drive, 87 528-550 100% 0 NA NA Coconut Grove, FL 9 Grove Harbour Merino 2640 South Boyshore Drive, 60 536 00 90% 266 535.545 95% Coconut Grove, FL 10 Dinner Key Marina 3500 Pan American Drier. 582 519.536 10096 0 NA NA miorni. FL Subiect Rickenbod r and MSM 3301 and 3501 Rickenbodrr 190 535.540 100% 674 517.25.530.00 98% Cswy, Key Biscayne, FL Compiled by C5RE Within this data set, all of the marinas were reported to be at or very near 100% occupancy and all of the marinas had a waiting list that was organized by slip size. The highest demand in this submarket is for wet slips in the 40 LF to 110 LF range and dry slips in the 30 to 50 LF range. Marina Market Conclusion The demographics of the subject neighborhood are very positive, suggesting steady growth over the next five years. The vessel registration data for the state and the county showed increasing vessel registrations over the past 2 years and this trend is expected to continue. For the Miami market, most marinas have seen increases in rental rates and occupancies for most slip sizes and types over the past three years. We expect the existing pent up demand to be met with development of additional wet slip and dry slip inventory over the next few years. We expect occupancy rates to remain at near capacity. Finally, we also expect waiting lists to remain the norm for most public access marinas. 8. COMPARATIVE ANALYSIS OF THE SUBJECT AS IMPROVED The Rickenbacker and MSM marinas currently operate at a competitive disadvantage due the size, design, age and condition of the subject improvements. Wet Slips As discussed in the Miami -Dade Segregated Vessel Length Analysis, the largest increases in vessel registrations in Miami -Dade County are occurring in vessel from 40 LF and above. Therefore, 44 CBRE r 4�1. Data Analysis marinas with slips smaller than 40 LF are not optimally designed to take advantage of the trends in the current market. South Basin The south basin is currently improved with 190 under -sized wet slips. The water depths in this basin range from 5 feet deep up to 8 feet deep. The optimal redevelopment of this component would require removal of most of the improvements from the basin and maintenance dredging down to a uniform depth of 8 or 9 feet, which is consistent with the approach depth from the west. According to the RFP, the successful bidder will maintain a wet slip inventory of 190 wet slips within the south basin. Based on the design and slip lengths used, this requirement will likely require the south basin to be extended to the west. For reference, the Client is directed to the depth chart for the south basin that was included in a prior section of this report. In our opinion, reducing the slip number combined with increasing the slip length/width in order to accommodate increasing demand for larger vessels is supported by the market. The probability of successful permitting as well as the cost of dredging and mitigation is a permitting and engineering challenge and not within our area of expertise. In our opinion, this question should be fully vetted by experienced professionals prior to taking any action regarding the redevelopment of the subject. Dry Slips Demand for dry slips has also changed in the south Florida market over the past few years. Due to advances in technology, fork lift operators now have the opportunity to lift heavier and longer vessels and store them in large conventional boat houses that meet or exceed high wind requirements. Vessels can also be stored in automated boat houses. This technology is not widely used in the industry as of yet. However, we are aware of several operating examples of automated boat houses. This automated storage option appears to offer several advantages over traditional boat houses that are served by fork lifts. Among these potential advantages are safety, convenience, reduced labor and equipment cost, efficiency and vessel density. This storage option functions much like a vending machine, where a boat owner can retrieve his vessel 24 hours a day based on a secure retrieval code. In our opinion, the optimal development of this component would include a state of the art automated boat house. However, because this technology is relatively new, delivery and installation of an automated boat house by a proven and experienced manufacturer should be carefully considered. 45 CBRE 2016 CORE, Inc. Data Analysis 9. DESCRIPTION OF THE CURRENT WET AND DRY SLIPS BOUNDARY SURVEY TlflN I it, CCa:iEfrpa Fixed Cont. Docks Fixed Conc. Docks Fuel Dock Fixed Wood Docks f ILt i±; N%JClI Ctrs C .t&P, The existing wet slips at the Rickenbacker property include a combination of concrete fixed piers as well as fixed wooden docks. The concrete docks are old and in below average condition for this market. The date of construction is estimated at about 1977, which is consistent with the original lease. Based on our inspections, it is our opinion, that an additional section was added onto Docks A and B at some later date. The foundation of Docks A, B, C and D includes a system of prestressed concrete pilings, supporting concrete, or concrete/wood decking. The decking improvements include electric utility connections that are well out of date as well as water spigots, fire suppression systems and mooring hardware. Most of the vessels back into their slips. Access to these vessels is provided by individual gangways, which are not favored by the market. A much more typical vessel access is via finger piers extending down the sides of each vessel. The construction components of the fuel dock appear to be similar in age and construction to Docks A, B, C and D. Based on the data available, these docks are about 40 years old and, in our opinion have reached the end of their economic life. The fixed wood docks in the Rickenbacker basin are much newer and are in good condition. However, these docks are very minor when compared to the redevelopment of the entire assembled Rickenbacker and MSM site. Therefore, they would likely be removed as part of the redevelopment. In order to achieve an optimal wet slip docking system, the existing wet slips should be replaced by a system of floating concrete docks with high quality deck fixtures such as 46 CBRE saleCORE rnc. Data Analysis metered utility pedestals, metered water spigots, night lighting, security equipment, WiFi and pumpout facilities. The existing dry slips on the combined property include a variety of 2, 3, and 4 level covered and uncovered dry rack systems. The age of these rack systems is unknown. However, based on our inspection, these racks appeared to be between 20 and 30 years old. On the MSM property, we noted sagging support beams, corrosion and footings that have been raised or lowered over time. As far as storage efficiency is concerned, these older racks do not represent the highest and best method of vessel dry storage. In our opinion the open dry racks have reached the end of their economic life. In order to achieve an optimal dry slip storage and retrieval system, the existing dry racks should be replaced by an automated boat house that is capable of housing 600 to 900 vessels under one roof. This boat house would be capable of servicing vessels up to 45 LF. 10. WET SLIP EXPANSION FEASIBILITY Below, we have presented the wet slip expansion issues that would affect the feasibility of developing at least 300 additional wet slips in the north basin. Based on the three RFP responses, it is physically possible to locate 300 wet slips above the 26.25 acres of submerged land within the north basin. The north basin as identified in the RFP contains 26.25 acres and is currently unimproved. According to the RFP, this 26.25 acre submerged land parcel is proposed for at least 300 additional wet slips. The water depths in this area are predominantly 8 feet deep. The optimal development of this component would include wave attenuation, floating wet slips and dry slip staging areas for the automated boat house. Dredging down to a uniform depth of 8 or 9 feet, which is consistent with the approach depth from the west would also be warranted. However, there is an abundance of sea grasses in this area as indicated in the exhibit below. 47 CBRE x-201p C& LVii�_ Data Analysis Due to the heavy concentrations of seagrasses in the existing south basin, the submerged area west of the south basin and in the north basin, it is our opinion that public outcry will make permitting in this areas verty difficult. Environmental issues are very contentious and can stall or kill a new development. Based on the number of public hearings that have already been held, any potential developer can expect significant opposition to any sea grass disturbance. In addition to long delays in permitting, especially in the the north basin, the risk of extreemly high dredging and mitigation costs suggest that development of the north basin may not be permittable or financially feasible. Based on the sea grasses located in the existing south basin, it is our opinion that it will not be feasible to develop the north basin. Even the redevelopment of the south basin will be lengthy and very expensive. The probability of successful permitting as well as the cost of dredging and the requirement of mitigation are permitting and engineering problems that have not been undertaken. Without knowing if the redevelopment of the north or south basins is permitable, no financial analysis can be conducted. The ability to assess if permitting is possible and an estimate of the costs associated with such permitting and mitigation and dredging are not within our area of expertise. In our opinion, this question should be fully vetted by experienced professionals prior to taking any action regarding the redevelopment of the subject. 48 CBRE Data Analysis Conclusion and Risk Assessment In our opinion, there is a very high risk of financial loss to the City associated with hidden costs and a very lengthy permitting process associated with the redevelopment of the south basin and the development of the north basin. Based on these risk factors alone, it is our opinion that the City should not undertake the risks and unknown costs associated with attempting to develop and operate the subject. Rather, the private sector is better suited to redevelop based upon their marina specific experience and expertise. 49 CBRE 6 2016 CORE, Inc. Assumptions and Limiting Conditions Redevelopment Feasibility Modeling 1 WET AND DRY SLIP DESIGN We have reviewed all three of the RFP responses. The diagrams are included below. Suntex li i I�ii' i hii`11�i I! iilfli`I �y i,1 _ It 1,M, li WA, Fiji, 1 1t 11 W 11 i,1 i IlM 11 M ill Y 1 1 1 1 1 1 1 As depicted above, the Suntex design incorporates the following featrures: South Basin North Basin Traditional Boat House Total Planned Slips 1 90 wet slips provided, 1 90 slips required 364 wet slips provided, 300 slips required 820 dry slips provided, 648 slips required 1,374 slips provided, 1,138 slips required 50 CBRE Assumptions and Limiting Conditions RCI • k �Yea•+,se pQf* & f y , As depicted above, the RCI design incorporates the following vessel storage quantities: South Basin North Basin Automated Boat House Total Planned Slips 162 wet slips provided, 190 slips required 151 wet slips provided, 300 slips required 973 dry slips provided, 648 slips required 1,286 slips provided, 1,138 slips required 51 CBRE .. 701 iTf, ��•. Assumptions and Limiting Conditions Rickenbacker/Tifon I I i �i { i L-�- PliMf 7- FX,51IMG 11h.51N Slla As depicted above, the Rickenbocker design incorporates the following vessel storage quantities: South Basin North Basin Automated Boat House Total Planned Slips 139 wet slips provided, 190 slips required 310 wet slips provided, 300 required 1,000 dry slips provided, 648 slips required 1500 slips provided, 1,138 slips required 2 AMENITIES AND SERVICES The potential amenities and services that would be optimal for a world class facility at the subject would include the following: • Wet slips in the 40 LF to 110 LF range • An automated boat house • High speed digital fueling facilities, dispensing REC 90 gasoline and diesel fuel • Dock mounted utility pedestals offering metered 30, 50 or 100 amp electric and water • WiFi service throughout the facility 52 CBRE ceg Assumptions and limiting Conditions • Sewage f umpout facilities • Clean marina certification • Clean air conditioned restrooms, • Showers and laundry facilities • An adult pool with swim -up bar and a family oriented pool • 24 hour security personnel as well as security cameras • One or more restaurants • Tiki bar • Maintenance and repair services 3 FUEL As indicated above, a world class facility would include two fueling stations capable of dispensing REC 90 gasoline and diesel from multiple high speed dispensers. One fueling station would be placed prominently at the west end of the south basin in order to attract area boaters as well as tenants of the marina. The second station would be placed adjacent to the boat house launch area so as to efficiently service the boat house tenants. 4 MARINA OFFICE AND SUPPORT FACILITIES An administrative office will be required to accommodate the management and marina staff. This should be a multi -story building that is centrally located relative to the south basin and the boat house. The ship's store should be located on the first floor. A Captain's Lounge could be located on the second floor and the General Manager's office on the top floor. The general manager's office would have 360 degree views of the entire marina. 53 CBRE fi 265 GINE, fnr. Assumptions and Limiting Conditions CAPITAL REQUIREMENTS Based on the three RFP responses, the capital requirements for the redevelopment of the subject are summarized below: • Suntex $85,342,590 • RCI $98,850,000 • Rickenbacker $67,470,000 As indicated above, the three bids generally range from $67,000,000 to $100,000,000. FINANCIAL ANALYSIS Based on the RFP requirements, the 10 year base rent plus percentage rent that were provided for the three projects are summarized below. • Suntex $34,847,030 • RCI $24,740,367 • Rickenbacker/Tifon $41,529,515 The greatest return as provided by the respondents is the Rickenbacker bid at $41,529,515. It is interesting to note that the Rickenbacker development supported the lowest capital obligation and yet the highest 10 year return. As an extension of the above, the gross rents that were provided for the full 45-year initial term as summarized below. • SunTex $341,145,025 • RCI $284,225,018 • Rickenbacker $379,598,116 Based on these estimates, a reasonable return to the city should be $285,000,000 to $380,000,000 over the initial 45 year lease term. As a test of reasonableness, we have conducted an analysis of the project, assuming City development and management. Our assumptions for the stabilized revenue analysis are consistent with the RFP requirements as revised and dated February 1, 2016 and are included below: 490 wet slips, average length 60 LF, average rent $40.00 per LF/Mo. = $14,1 12,000 648 dry slips, average length 30 LF, average rent $35.00 per LF/Mo. = $8,164,800 40,000 SF of retail space at $35.00 per LF, NNN = $1,400,000 10,000 SF restaurant space at $55.00 per SF = $550,000 54 CBRE Assumptions and Limiting Conditions Total Rental Income Total Rental Income is estimated at $24,226,800. Net Fuel Sales Income Net fuel sales income is estimated at 60,000 gallons per month, at $0.50 per gallon. Potential Gross Income — Public Sector Operator Based on the above assumptions, the Potential Gross income for the project as a public sector project could expect to generate a potential gross income of $24,586,800 at stabilization. Vacancy and Collection Loss The average occupancy rate at the comparable marina projects was reported to be 95% to 100% with a waiting list. In actual practice, all marinas experience some seasonal or specific lag vacancy between seasonal contracts or individual tenants. It is our opinion that a reasonable vacancy and collection loss for the wet and dry slip revenue would be 5%. There is no vacancy and collection loss deducted from fuel sales profit. There is currently no retail space available for rent on Virginia Island. The average retail vacancy in the Biscayne Corridor is 4.3% and the average vacancy in Coconut Grove submarket is 4.5%. We have estimated the vacancy and collection loss to be subtracted from the Potential Gross Income from retail and restaurant operation is 5%. The total vacancy and collection Toss is $1,21 1,340 Effective Gross Income Affective Gross Income is summarized below: Potential Gross Income $24,586,800 Vacancy and Collection $1,21 1,340 Effective Gross Income $23,375,460 Operating Expenses The operating expenses for a mixed use waterfront property similar to the subject typically run between 45% and 60%. We would expect the operating expense ratio for a new facility to be at the lower and of the range. Therefore, stabilized operating expenses have been estimated at 50% of effective Gross income, which is equal; to an operating expense estimate of $1 1,687,730. Net Operating Income The stabilized net operating income for the project is estimated at $11,687,730 per year, increasing at 3.00% per year, after the first three years. 55 CBRE 20 i 6 CBRE, Inc, Assumptions and Limiting Conditions Stabilized Income and Expense Summary DIRECT CAPITALIZATION SUMMARY - AS IS Revenue Wet Slips Dry Slips Retail Space Restaurant Space Total Rental Revenue Net Fuel Sales Net Revenue Vacancy - Rental Revenue Only Effective Gross Income Operating Expense Ratio Net Operating Income Slips or SF 490 Slips 648 Slips 40,000 SF 10,000 SF Size Rent/LF/Mo % of Revenue 60 LF $40.00 58.2% 30 LF $35.00 33.7% $35,00 5.8% $55.00 2.3% 60,000 Gal/Mo 5.00% $0.50 Total $14,112,000 $ 8,164,800 $1,400,000 $550,000 100.0%® $24,226,800 $360,000 $24,586,800 -$1,211,340 $23,375,460 50.0% $11,687,730 Compiled by CBRE Ten -Year Cash Flow Analysis The 10-year cash flow model for the subject including appreciation after stabilization and two and one half years of income loss at the beginning of the 10 year term. In the cash flow model below, the Year 1 Revenue Loss is the construction cost. The Year 3 Revenue Loss is the Rent Loss during Year 3. Our calculations are summarized below. 10-YEAR CASH FLOW MODEL Year Base Year NOI 1 $0 2 $0 3 $11,687,730 4 $11,687,730 5 $12,038,362 6 $12,399,513 7 $12,771,498 8 $13,154,643 9 $13,549,282 10 $13,955,761 Appreciation 0.00% 0.00% 0.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Current Year NOI $0 $0 $11,687,730 $12,038,362 $12,399,513 $12,771,498 $13,154,643 $13,549,282 $13,955,761 $14,374,434 Revenue Loss ($67,000,000) $0 ($5,843,865) $0 $0 $0 $0 $0 $0 $0 Total ($67,000,000) $0 $5,843,865 $12,038,362 $12,399,513 $12,771,498 $13,154,643 $13,549,282 $13,955,761 $14,374,434 $31,087,358 Compiled by CBRE 56 CBRE Assumptions and Limiting Conditions Based on the foregoing, the 10 year cash flow from the three private sector marina specialists ranged from $24,740,367 up to $41,529,515. Due to the cost of construction, the 10-year cash flow for the City is $31,087,358. In our opinion, the following discussion of downside risk provides sufficient evidence to preclude the City from being the developer/operator of the project. DOWNSIDE RISK The winning bidder also assumes all risks with respect to construction cost over -runs. One example of a potentially significant cost over -run combined with the very real probability of permit denial, is the development of the north basin. Based on very little data, we have learned that the mitigation cost for the 26+/- acre north basin could cost between $26,250,000 up to $39,375,000. We would not suggest that the city incur the risk of this potential downside risk. CONCLUSION Based on the foregoing data and analysis, it is our opinion that the three bidders are all very experienced marina developer/operators. Due to the competitive nature of the bidding process, the quantities of improvements, capital costs and revenues within the three RFP responses varied significantly. It is our conclusion that the initial capital costs combined with the significant downside risk of construction cost over -runs pose an unacceptable level of risk for the City. Therefore, we recommend that the City reissue an amended RFP, limiting participation to the above bidders. 57 CBRE G.G—exe, i��r Assumptions and Limiting Conditions Assumptions and Limiting Conditions 1. CBRE, Inc. through its analyst (collectively, "CBRE") has inspected through reasonable observation the subject properly, However, it is not possible or reasonably practicable to personally inspect conditions beneath the soil, under the water and the entire interior and exterior of the improvements on the subject property. Therefore, no representation is made as to such matters. 2. Unless otherwise expressly noted in the Report, CBRE has assumed that; (i) Title to the subject property is clear and marketable and that there are no recorded or unrecorded matters or exceptions to title that would adversely affect marketability or value. CBRE has not examined title records (including without limitation liens, encumbrances, easements, deed restrictions, and other conditions that may affect the title or use of the subject property) and makes no representations regarding title or its limitations on the use of the subject property. Insurance against financial loss that may arise out of defects in title should be sought from a qualified title insurance company. (ii) Existing improvements on the subject property conform to applicable local, state, and federal building codes and ordinances, are structurally sound and seismically safe, and have been built and repaired in a workmanlike manner according to standard practices; all building systems (mechanical/electrical, HVAC, elevator, plumbing, etc.) are in good working order with no major deferred maintenance or repair required; and the roof and exterior are in good condition and free from intrusion by the elements. CBRE has not retained independent structural, mechanical, electrical, or civil engineers in connection with this report and, therefore, makes no representations relative to the condition of improvements. CBRE analysts are not engineers and are not qualified to judge matters of an engineering nature, and furthermore structural problems or building system problems may not be visible. It is expressly assumed that any owner or operator would obtain a satisfactory engineering report relative to the structural integrity of she property and the integrity of building systems. (iii) Any proposed improvements, on or off -site, as well as any alterations or repairs considered will be completed in a workmanlike manner according to standard practices. (iv) Hazardous materials are not present on the subject property. CBRE is not qualified to detect such substances. The presence of substances such as asbestos, urea formaldehyde foam insulation, contaminated groundwater, mold, or other potentially hazardous materials may affect the value of the property. (v) No mineral deposit or subsurface rights of value exist with respect to the subject property, whether gas, liquid, or solid, and no air or development rights of value may be transferred. CBRE has not considered any rights associated with extraction or exploration of any resources, unless otherwise expressly noted in the Report. (vi) There are no contemplated public initiatives, governmental development controls, rent controls, or changes in the present zoning ordinances or regulations governing use, density, or shape that would significantly affect the value of the subject property. (vii) All required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state, nor national government or private entity or organization have been or can be readily obtained or renewed for any use on which the Report is based. (viii) The subject property is managed and operated in a prudent and competent manner, neither inefficiently or super -efficiently. (ix) The subject property and its use, management, and operation are in full compliance with all applicable federal, state, and local regulations, laws, and restrictions, including without limitation environmental laws, seismic hazards, flight patterns, decibel levels/noise envelopes, fire hazards, hillside ordinances, density, allowable uses, building codes, permits, and licenses. (x) The subject property is in full compliance with the Americans with Disabilities Act (ADA). CBRE is not qualified to assess the subject property's compliance with the ADA, notwithstanding any discussion of possible readily achievable barrier removal construction items in the Report. (xi) All information regarding the areas and dimensions of the subject property furnished to CBRE are correct, and no encroachments exist. CBRE has neither undertaken any survey of the boundaries of the subject property nor reviewed or confirmed the accuracy of any legal description of the subject property. Unless otherwise expressly noted in the Report, no issues regarding the foregoing were brought to CBRE's attention, and CBRE has no knowledge of any such facts affecting the subject property. If any information inconsistent with any of the foregoing assumptions is discovered, such information could have a substantial negative impact on the Report. Accordingly, if any such information is subsequently made known to CBRE, CBRE reserves the right to amend the Report, which may include the conclusions of the Report. CBRE assumes no responsibility for any conditions regarding the foregoing, or for any expertise or knowledge required to discover 58 CBRE Assumptions and Limiting Conditions them. Any user of the Report is urged to retain an expert in the applicable field(s) for information regarding such conditions. 3. CBRE has assumed that all documents, data and information furnished by or behalf of the client, property owner, or owner's representative are accurate and correct, unless otherwise expressly noted in the Report. Such data and information include, without limitation, numerical street addresses, lot and block numbers, Assessor's Parcel Numbers, land dimensions, square footage area of the land, dimensions of the improvements, gross building areas, net rentable areas, usable areas, unit count, room count, rent schedules, income data, historical operating expenses, budgets, and related data. Any error in any of the above could have a substantial impact on the Report. Accordingly, if any such errors are subsequently made known to CBRE, CBRE reserves the right to amend the Report, which may include the conclusions of the Report. The client and intended user should carefully review all assumptions, data, relevant calculations, and conclusions of the Report and should immediately notify CBRE of any questions or errors within 30 days after the date of delivery of the Report. 4. CBRE assumes no responsibility (including any obligation to procure the same) for any documents, data or information not provided to CBRE, including without limitation any termite inspection, survey or occupancy permit. 5. All furnishings, equipment and business operations have been disregarded with only real property being considered in the Report, except as otherwise expressly stated and typically considered part of real property. 6. Any cash flows included in the analysis are forecasts of estimated future operating characteristics based upon the information and assumptions contained within the Report. Any projections of income, expenses and economic conditions utilized in the Report, including such cash flows, should be considered as only estimates of the expectations of future income and expenses as of the date of the Report and not predictions of the future. Actual results are affected by a number of factors outside the control of CBRE, including without limitation fluctuating economic, market, and property conditions. Actual results may ultimately differ from these projections, and CBRE does not warrant any such projections. 7. The Report contains professional opinions and is expressly not intended to serve as any warranty, assurance or guarantee of any particular value of the subject property. Other appraisers may reach different conclusions as to the value of the subject property. Furthermore, market value is highly related to exposure time, promotion effort, terms, motivation, and conclusions surrounding the offering of the subject property. The Report is for the sole purpose of providing the intended user with CBRE's independent professional opinion of the value of the subject property as of the date of the Report. Accordingly, CBRE shall not be liable for any losses that arise from any investment or lending decisions based upon the Report that the client, intended user, or any buyer, seller, investor, or lending institution may undertake related to the subject property, and CBRE has not been compensated to assume any of these risks. Nothing contained in the Report shall be construed as any direct or indirect recommendation of CBRE to buy, sell, hold, or finance the subject property. 8. No opinion is expressed on matters which may require legal expertise or specialized investigation or knowledge beyond that customarily employed by real estate appraisers. Any user of the Report is advised to retain experts in areas that fall outside the scope of the real estate appraisal profession for such matters. 9. CBRE assumes no responsibility for any costs or consequences arising due to the need, or the lack of need, for flood hazard insurance. An agent for the Federal Flood Insurance Program should be contacted to determine the actual need for Flood Hazard Insurance. 10. Acceptance or use of the Report constitutes full acceptance of these Assumptions and Limiting Conditions and any special assumptions set forth in the Report. It is the responsibility of the user of the Report to read in full, comprehend and thus become aware of all such assumptions and limiting conditions. CBRE assumes no responsibility for any situation arising out of the user's failure to become familiar with and understand the same. 11. The Report applies to the property as a whole only, and any pro ration or division of the title into fractional interests will invalidate such conclusions, unless the Report expressly assumes such pro ration or division of interests. 12. The allocations of the total value estimate in the Report between land and improvements apply only to the existing use of the subject property. The allocations of values for each of the land and improvements are not intended to be used with any other property or appraisal and are not valid for any such use. 13. The maps, plats, sketches, graphs, photographs, and exhibits included in this Report are for illustration purposes only and shall be utilized only to assist in visualizing matters discussed in the Report. No such items shall be removed, reproduced, or used apart from the Report. 14. The Report shall not be duplicated or provided to any unintended users in whole or in part without the written consent of CBRE, which consent CBRE may withhold in its sole discretion. Exempt from this restriction is duplication for the internal use of the intended user and its attorneys, accountants, or advisors for the sole benefit of the intended user. Also exempt from this restriction is transmission of the Report pursuant to any requirement of 59 CBRE 701 6 CBRE, Inc Assumptions and Limiting Conditions any court, governmental authority, or regulatory agency having jurisdiction over the intended user, provided that the Report and its contents shall not be published, in whole or in part, in any public document without the written consent of CBRE, which consent CBRE may withhold in its sole discretion. Finally, the Report shall not be made available to the public or otherwise used in any offering of the property or any security, as defined by applicable law. Any unintended user who may possess the Report is advised that it shall not rely upon the Report or its conclusions and that it should rely on its own appraisers, advisors and other consultants for any decision in connection with the subject property. CBRE shall have no liability or responsibility to any such unintended user. 60 CBRE ;GIB CFNF.