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Consultation Report - CBRE
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'1 VALUATION & ADVISORY SERVICES Valuation & Advisory Services Orlando, FL 32801 T 386-672-3339 F 407-839.3132 www. cb re.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-1811-1 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 • 3311 Rickenbacker is the four-story office/restaurant, DBA Whisky Joes a 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 351 1 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 142016 c5Rf' i- 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 A l f (.:". 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: (386) 672-3339 Fax: (407) 839-3132 Email: Jeff.Carson a CBRE.com +•2018 (-Vf.i- Brian L. Finnell, MAI, COM Managing Director— Orlando/Jacksonville Cert Gen RZ 914 Phone: (407) 839-3117 Fax: (407) 839-3132 Email: Brian. L.Finnellacbre.com CBRE Certification Certification We certify to the best of our knowledge and belief: 1. The statements of fact 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 respect 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. 11. 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. 13.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 Carson, 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. Jeff H. Carson, MAI, MRICS Cert Gen RZ 1612 ,, :Dlc caE Inc.. Brian L. Finnell, MAI, CCIM Cert Gen RZ 914 CBRE Executive Summary Executive Summary Property Name Location Date of Report Date of Inspection Land Area Zoning Highest and Best Use As If Vacant Rickenbacker and Marine Stadium Marinas 3301, 3311, 3501, 3511 & 3605 Rickenbacker Causeway, Key Biscayne, Dade County, Florida 33149 October 20, 2016 August 24, 2016 53.49 AC CS - Civic Space Mixed Use Waterfront Development As Improved 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: Comments I Ma a CBFE, mr. 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 Ramp 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 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 nk^vn 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. CBRE Google Earth ®M* Aerial View - Combined Rickenbacker/MSM Redevelopment Parcel � A 1\ Rickenbacker Causeway Lookinq SE AiWW &Iin� Permit Only Parking Area t► •!�� i I ......tee Subiect NE From Rickenbacker Ca Public Parkina. Not Part of Subiect I�y Uncovered Dry Slip Storaqe M Fork Lift Launch Ra Subject Photographs A Dock, Wood Decking Section CBRE Subject Photographs D Dock, All Concrete Docking v 9 ?016 CHRf, ter. Subject Photographs i Bathhouse I Vil CBRE Subject Photographs Perimeter Fencing I ,.A or-- 44 4 V`" CBRE Subject Photographs � + _z` ;de40 .� ,w C BR E Subject Photographs E2 MSM Office/Bait Shop p e, 4016 CORE, 1-. x 17 Table of Contents Table of Contents Certification......................................................................................................................... i ExecutiveSummary............................................................................................................. ii Subject Photographs ................. ... ...........................................................................................Ili Tableof Contents................................................................................................................xi Market/Subject Data...........................................................................................................1 AreaAnalysis......................................................................................................................4 SiteAnalysis... ................................................................................................................... 12 SubjectImprovements....................................................................................................... 13 DataAnalysis.................................................................................................................... 14 DueDiligence................................................................................................................... 15 Redevelopment Feasibility Modeling .......................... ........................ 50 Assumptions and Limiting Conditions ...... ................................. .... 58 X1 CBRE Introduction Market/Subject Data PROPER'L'Y 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 8", 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 r. 201d CUE. ?.r. Introduction On May 4", 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 ,xIRcPRE, 1, 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. 1 POI,, CUE. Inc 3 ' - = 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 ;. „a,. Market Data MIAMI -MIAMI BEACH-KENDALL, FL - ECONOMIC INDICATORS Indicators 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Gross Metro Product (C$B) 104.2 104.4 106.4 108.5 111.1 114.7 118.7 123.8 128.7 132.3 1352 1381 % Change .0.5 0.2 1.8 2.0 2.4 3.3 3.5 4.3 4.0 2.8 2,2 25 Total Employment (Ths) 985.1 1,007.3 1,031.3 1,056.7 1,089.4 1,123.4 1,140.8 1,168.1 1,196.3 1,216.3 1,2226 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 66 84 6.8 4.9 4.9 Median Household Income IS 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 1A 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 7,5843 7,819.6 7,287 7 7,357 1. 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 8,202.8 8,604.8 Fhfa House Price {1995Q1 =100} 195.9 183.1 186.F 207.9 233.6 257.9 284.0 304.1 309.1 301.2 292.2 286,9 Source, Moody's Economy. corn 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. CBRE C 2016 CBR6 lrvc. 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. CBRE Subject Data NOAA CHART 11465 -VESSEL APPROACH DEPTHS G ,o Piles 7 bols t'eo �^ Y Pile h Haven 13 l `Y tillm;n61.0 ' •YY Y � FI G 2.55 16ft 5M "691. ..._ `1 ',' • ` ' , '`,,�. Sh 10 10 DOME �. 3'lz k,l•�, 19 d 1 y F •' Y i10.. • 2 Priv . . `O 7 CBRE 7 i ry' 1 ► � � ` - l .�; t _ s G ,o Piles 7 bols t'eo �^ Y Pile h Haven 13 l `Y tillm;n61.0 ' •YY Y � FI G 2.55 16ft 5M "691. ..._ `1 ',' • ` ' , '`,,�. Sh 10 10 DOME �. 3'lz k,l•�, 19 d 1 y F •' Y i10.. • 2 Priv . . `O 7 CBRE Subject Data RICKENBACKER BASIN DEPTHS 8 CBRE FLOOD MAP I Subject Data CBRE Subject Data ZONING MAP i 20; 6 CARL 1- Subject Date Subject Data Site Analysis The following chart summarizes the salient characteristics of the subject site. SITE SUMMARY AND ANALYSIS Rating Physical Description Average Functional Utility Gross Land Area 53.49 Acres 2,330,024 SF Primary Road Frontage Rickenbacker Cswy 2,040 Feet Secondary Road Frontage Unnamed Road 1,660 Feet Water Frontage South Basin 1,800 Feet Water Frontage North Basin 1,530 Feet Shape Irregular Topography Approximately 9 feet above sea level Zoning District CS - Civic Space Flood Map Panel No, & Date 1208-6CO4-81L 11 -Sep -09 Flood Zone AE -9 Adjacent Land Uses Marine Stadium Comparative Analysis Rating Visibility Average Functional Utility Average Traffic Volume Average Adequacy of Utilities Assumed adequate Landscaping Average Drainage Assumed adequate Utilities Provider Water Miami Dade Water and Sewer Department Sewer Miami Dade Water and Sewer Department Electricity 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, NOAH 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 £- 2W6 C84r. 6, CBRE 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 Seating 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 Rock 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 10 Years 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 Gaogle 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 �D 7016 CBF[, Inc, CBRE 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 20)..C&IE n:. 14 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. 5 CBRE :Olb CME.?- Parcel 1 '4*7 A -N ` Parcell SB4fGW-1 Parcel 3 Parcels 4 and S SS-21GW-2 — parcel 6 Data Analysis SB-3/GW-3 600 300 0 600 Feet 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 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 die City of Miami Rickenback-er Marina dint have been affected by the activities at the inarina. The horizontal and vertical extent of the detected parameters needs to be established_ in order to design proper remediation actions as heeded. The affected soils in the vicinity of SB -1 GIV-1 should be evaluated to establish the extent of the arsenic iii the soil. It is recommended that soil borings be stepped Qut from the arca of SB -1 Gita" - 1. It is recommended that these borines be a minimum of ten (19) feet from SB -1 &W-1, Samples should be retained for analyses Som the 0-2 foot and 2-4 foot depth intervals. A second set of samples should be collected from a distance of twenty (?Q) feet andanalyzed as needed, The grotiindwater quality- in the vicinity of SB-' GNY-2 and SB -3 Gni'-3 should be evaluated, Permanent rnouitoiin2 arells for confirmation of the results presented in this report should be installed at the location of SB-? Gni'-? and SB -3 ,GrW' 3 . Additional shallots- monitor wells should be installed a ii-itnimutu of twenty (ZO) feet frarn the locations of SB-? GIN--` kind SB - 3 �GIV-3. in order to establish the Horizontal extent of the affected arca. Depending on the results. additional shallow monitoring wells may be required. The groundwater In the area of SB -2 Gtif-2 would be evaluated for arsenic. The ground -water in the area of S13-3 `Gtir-3 would be evaluated for arsenic. benzene and trichloroethene. 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 t' CBRE & 2016 CORE, 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. kEk.M) k,� 6R111Eh'TS'14A lER C CaNlLE7 UARM LAND BF.rS:MEs CAlNP LL SANG KESWk WOCK"91UL low 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 :0 -.AWf CBRE Data Analysis VIRGINIA KEY MASTER PIAN 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 e 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 9 May 20, 2009- Public Meeting #4 at Museum of Science • AugUst 26, 2008- Public Meeting #3 at City Hall • lune 20, 2007- Public Meeting #2: Community Workshop at La Salle HS. • March 29, 2001- 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". c 19, "16 CSE, Inc CBRE Data Analysis COOETTICOUNTT-19.1.9: AND A 949RAL LANDS. NOT Td •9 A...... N19741IC ... 9..I...... T.LLT Af9Af- TO 99 PR91.91V9D^C:R1.911V90 AR9A9 TO iE INFROV9D AMD RE YITlL IY2O FON RUf LiC ACCT 35 PNO ■FCR 9ATIO. RGA D WAY AND REDLETRIRNIf IRL CINC ULATIO. IRIRtl YENlNTE The following is an exhibit from the VKMP showing the existing conditions of the subject and surrounding areas. 20 = Data Analysis 5.7 Marine Stadium and Basin Area Properties . Existing Conditions Rickenbacker Marina Miami Marine Rusty Pel -scan Dry -Stack Boat Stadium & Parkin; Restaurant Storage Miami Rowing stub and Swims Gym Mast Academy LAI r' -max. �r The conceptual plan for the subject and the surrounding area is included below. CBRE 0 20iA CNE, 1 - is 4 762 14 WINw Legend I. Lookout point 9. Fountain 17. Marine Stadium entrance plaza 2. Rusty Pelican 10. Rusty Pelican bridge 1R. Hobie beach 3. Parking Garden 11, Horacio's restaurant 19. Espen green field 4. Existing Rickenbacker Marina 12. Parkin; structure with retail liner 20. Swim Gym 5. Proposed nese Marina expansion 13. Pedestrian walkway 21. Rowing i_iuh G. RickenliackeF Causeway 14. Dry stack storage 22. Mast academy 7. Fresh Market 15. Marine Exhibition Center- enter8. 8. Fishing Charter Dock 16. Miami Marine Stadium CBRE 0 20iA CNE, 1 - 5. ZONING Data Analysis The following chart summarizes the subject's zoning requirements. ZONING SUMMARY Current Zoning CS - Civic Space Uses Allowed By Right, Food Service, General Commercial, Marine Warrant or Exception Related Commercial, Open Air Retail, Recreational Facility, Infrastructure, Utilities and Marina. Zoning Change Not likely _ Category T 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 iTENsfrY iITPAI WA UENSTY OF AMONG ZONE 150 UNITS PER AGNS BOATS OcLupariry of itnvale pleasure craft; and har-ebcats Cxaq-cy of private plemm oafs and hmebmu OoM ney of prvale crafts and houcenoals W)USEBOAT or hws-baryes shall mill in allowed mepl rot thou or ham baryes that rel be ~ exeepl for Viae oe house bargee ,naa not be allowed except for ihw specifiraly grandfathered and regr/aled by 04ma ce sped6clilly grandladiemd and fegriated by Oldlnance Wofficaly grane@adiered and u*Aated by Ordnanwa HOUSE BARGE mitP32. adopted OaDber ?b, 1991 #10932 a4Dpkd October 24, 195t 814933. adapted October 24, 1951. DOLN5 Edwo m of d,6z and Pias uto BWrp* Bay are Edw.O s of oxkg and pies Into Biscayne Bay are ExferrsWn of dodos and Piers nti Blsxayne Bay aye rafted to 35 IM Hamm by Etoephon a 6o4 tcet WroW to 35 feet Hamm by ExcW m a SW fed k"ed 10 35 feat Ho�. by ExOPW a 6W bet P m uirmn exseudri of docks and Piero into Biscayne mm*un extmsim of duds and pkrs inla Msayne matbnunr exteoam of dads wd piers lrto Bdiia7ne Bay msy b-- alk„ged Bay may be aAaaed, Bay may be allayed Extensron Oi dock. acid Prays Into otne nkerway¢ is Ei tiroon 9f dDckx mW Prays rAD of" waterway; rs Etlmaoo o! dx!kE and Fws into die walrw)-. is mited 19 10 feet ff l4'a of the YM of the watriM, Fvryted to 14 kket or V.; of me waft of IN waleray. HAled to 14 feel er 101. of Me with of the watetway. Yfific hevu is less However. by ExceoRn fv ?w whiehevee is less. HDwayer. by Exceptluh Rater itmotiaver is less H w w by ExcWwn fu ll%eY cx[ms+sn maybe approved sued W approyal lhym all edznsio^r gray be appmwed, vtd}ed fo appt wal fmh al exlens`on my be appm"d. sabred to approval tram apphcab�: agen, o ap*Awe agenpes- all aplwrabk agenues_ 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 Xi LpL Data Analysis MIAMI 21 ARTICLE 4. TABLE 3 BUILDING FUNCTION: USES AS ADOPTED - MAY 2015 0ENSfry (usirTS PfR ISCRf] L7M aUPPORT LUUYI AVY SkP'P= FACB.T' PFFAS1111=7M ANiUTILMES U%MFAOUIT IVWA P:wr PARKW. 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IIIIIIII�IIIIIIIIIIIIIIIII, � IIIIIII,IIIIIII,111� IIIIIII�IIIIIII,IIIIIII, I�VVfi7VV� III-®® IIID©® VV®VV©ViVV� ©11111© IIIII�®® ®®© IIIII�©1111■ ©ID®i ViV�1�rViV® VV®©� VV©®® -11111111,11111111■i IIIIIIII,IIIIIIIIIE© VIII.©rIIID 11111._ VVV■IIII.IVVV■' ,IVVV♦IVVV♦IVVVV■. VVV■IIIIII■II� I�ViVIMViVV� MEN MI VVV■IIIIIII1VVVV♦ VVVVI,VVVVI,VVVVVV■ VVV■©© IIIIIi©® VV©®© ©IIIIY�IIIIIIJi 11111111,iV©Viii ViV�VV©VV® === ■ om= IAI�1"M M== ©m© ®=0 i•®� I®®® Section 4.8 of the VKMP is included below for reference. 23 CBRE 4.8 Zoning The City or Miami new Code (hbaml 211 Includes the following zone designations to the City owned areas on Virginia Key. T I - Natural Transact Zones (TI) A Natural Transect (Ti) Zone is a zone for environmental conservation a. A Tl Zone r, to be left in an essentially natural state 1%WIRrcatlon of the natural conditions shall be according to Local. Sate and Federal guidelines. Public access to TI areas may be limited if d presextts a threat to wllailte and plant life within me areas. b. In a T1 Zone. Improvements shall serve solely to protect natural elements Any paved, graveled. mulched, boardwalk or otherwise Improved surface or any llabllable, enclosed or air conditioned space shall be kept to the mutlmum scale necessary to fulfill ds. purpose. Such Improvements Including but not hilted to: screened or glassed enclosures pathways. fencing. gatehnitses, fighting, Collet hcifiiies. parting areas. etc may oe alloowed by process of Exception. Only activities and improvements which reinforce the natural character shah be allowed and upon a finding that there is no negative effect to the environment lbased on i study of potential environmental Impacts to be provided by the applicant. 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°fi) 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 -Ave percent (25%) of the lot area or Ine Clvlc Space, and shah support the principal use at the 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. Otter adjustments ro the regulations ,hall lite approved by process of Exception 5.7.1.5 All Community facility and Recreational Faclllty Uses shall be government owned or operated only c -01 n. CWE. irt,:, Data Analysis 4w,t— Cl • 5.7.2 Civic Institution ZonesiCI) r� 5.7.2.1 Development in a Civic Institution Zone shall have a minimum of one 11) Frontage enfro» ling a Tlxxoughlaie and sriuuld have Its primary entrance from a Thoroughfare 6.7.2.2 Development in Civic Institution Zones shall be consistent with the standards in Article 4. Tables 3 and 4. 6.7,2.3 A Civic Institution Lot may have one (1) or more Buildings. 5.7.2.4 Civic Institution Developmept ;hall be permined by process of Exception. 24 CBRE 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 y e'0l0 Cue, Ice. 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 .�, 2016 CRE Inc.. [41111111111*] = 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 totaied 5i 1,. 4 halls.,n to 2e3]+ • Annual retail sales of neve boats. engines & ntarine accessories to the LIS. utIAcd Sio.4 hilum to D.14 • New boat sales were tap is 51 to :P 34,=itV unns ttt 214 • News traditional powerboat sales anLrc-A-wd 6 4'� to 171_-,00 units to 20 14 • New sailboats sold at retail in reaslct 131.01, to 7_5iV tanats_ • New personal watercraft sales imreased 21.(:'4X, (o 47 WX) units- • New haat imports te- wled 52.3 hilkon. ftp 7.2% to Ii7 i 4: unit4 vccae tal) 17 . i "', to 714.174 • �";,Ow %e at eXl'aort5 € 1aled \2.1 hillion. do%+ m ilia % in 2014: units Aw re i1vTmm 6.71,k. to tai+ z :rte. • Total engine sales. includeni! toplin . outboard, inhoord m-hd stern(In e enti1riff. MXPe 2+ }_2A N RanttS, tat` in 014 • ChAtboard engines sates were uta 4 `A, to 218,4CO itnttk; ret_-ttl Kdcl . reset -lied 5,2,; 61l4t.an. up 8.bIX, • Aftermarket accessory sales wtaled 5y.6 billion in 201 4.Ln increase of 14.7X • Americans are taking to the tiwater� _}i{_,. TV of the I i '�. iduh population -47 '; x: tritUx)n AnnEans parttctpated to nicta'.ational Ix+,attng at Ltatq on,,e'' tit 20 4. • fRolts _trc nIlVicly shade in Anterica- Q4.u"4> fit powerNmifs 3r=1d in the Li ti. are made an the i_- S. • Thcre wcre in esttniated 12 million registered buts in the U.S. in 2014 • 05,XI (A heats on the water �po%WnKXIK ltCrsonal twatMMIt, and-naltkmts) in the I ire tTss than 20 P.co •asci c- um.ved u41).500 pre -owned boats a v_i werboats. per enal ti,aterrraft. and a;itloat s w• rc R1,Irl in • Main,* is prantarttw a middle-class lite -tyle ;as 71 Yr. „ I American o-tarnt7rs lmvc° i hottwhold income less than SILl4l.000 Below, we hove presented several tables, charts and exhibits depicting the boating industry in the United States. 27 c, 2016 CBRE, I�,. Data Analysis 1.2.1 Remeational boating patticipalion RMling pricipallc+n rn ?1}14 r4as retallvehr unetraRged from 2013. In Ml 4. 35 7% at rig&pndeZ went boaling rnaE:pin(ing to 87 3 mtfiuin adult Armdrans .`4JACr `,Pt3O4*7 Rt,"AX; Kflm TABLE 1.2.1 Recreational boatirtq pdrticipalier4 CHART 1.2.1 fl"reationat boating participation 11110% ix% 60% rC!�, ,a a a!�6 I os, ,� a� � �� 'to •rI '12 I1 !A ® WN rfSR?pa} M1 a P0 PN{IGIRM11 ■CUI -ANT PARIVVANT 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 i 2016 C&f.1— 2005 2006 2007 2009 2009 2010 2011 2012 2413 2014 G,:m nt !linopa iF it p #tel r6c,.+„„al r,) b 6 Fk N?A 16 ?; ?g 3'4 P.A% a 0. 37 at, "k.6 35.7%, wot!ng at :W moo ,n pn:u 1, maijilc Nat Parrutont !ear opwod m bwbno 2, i,i 3,121% °; ra 7, }?a t< Y 31 + t 9 "14% S i "< 202% add! but not.,) 1,[ 12 matdtsj IJ n.6 et cipa i Ohs xt panage:ed in revrae�ne�l �llt,nq �° � adu!ri 403% i 7% 4's •14.b% 4 ESQ 434% 40 9% 4 /4' 4&5% TOTAL 100.0% 100.0% 10110% loom 100.0?; 100.0% 100.056 100.056 100.01 100.0Y: CHART 1.2.1 fl"reationat boating participation 11110% ix% 60% rC!�, ,a a a!�6 I os, ,� a� � �� 'to •rI '12 I1 !A ® WN rfSR?pa} M1 a P0 PN{IGIRM11 ■CUI -ANT PARIVVANT 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 i 2016 C&f.1— Data Analysis 11.4 Boathig parttuipatfm by region kl rk°�114 6L 9� � cut�ra'�t i1=1 f +€11t� NtrtlFt s't1��0'. rs��iria, i"aii�iv�J �:i�dy trey Cts �1L�ra3 t+xr1 a aC,f 3f.t 3rr:sL 1.�c5 ragl, rl ; I t:� F=.;1 r tom, ;f u !iti*idia ray` to w7d in m khAx FCE' V1 -g2"Wa rr R4Z111-47WFf TABLE 1.4 gr3aTin41 participation by region 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 0.2016 C&PE, Inc. r63TAL 2035 k0A M? 2M ZtiUB ?910 2011 AW 21B 2014 flamehold msid -tx, by regkn. 3'e..' -12kB " k 9A l -13k `9 d4 13% aFI.- IgIt4 I. 17.4 ht9Rd ""9�' c 'pails; 7S14z.�. V4.941: ;9 3 'i9 ,•`k 1 �:� 1n -A 11.. 1 . ' Iti.9 1 ,. 4 i51. a'0 1;3.iti: -C;"z 4UM!y 2k 1024'. UK YiyeMAflY'1P= ... ,•n!� __'A_ "Si :t: k +ii3.'A i`t IA M%11,1A1ttrrll. 1 e14 '13 =i " : 4 Y.''r� a-i4G Ckft `x.05, IL.:2?i 11.4% i..-, TOT&L 100.Ok 100.[14. tUO.Ug. 4t1D,0% 19d.Q1lg. 140.1% 1iUkg& W-91. 14](01, t110 n QMRENT PAP.T1CtPMT 2J(45 2f10fi 2179:+ 314& M 1010 1,11 w 201111' 211)i .1 HIMAthhid residen:* by regm ?a kl8'! 03 ?t ;T� 5h.4'4 "�11Tk 4d*s 17 A rxn 38& >2A 1 x1.25 s! 1144 �a�, 1eTS°i GJtC'C.'T 111174 (03% 9-q% 5.4% 4,t% 11 lk I1 ;.'. 245, tli_riil 41:131 ^ 5',3 -A9 -IS. 1.14% ':.U!i "1:M 1? 4% 1`:.P• P. 14" {,. WAnarar 11274. 3S 112A 93% 1"1& SIA $.fa4' 914 hAd3tx- '38k "J4 'j #K 9,5!$ 12Qp 19 -SV. 45.E 15?T ':" 154i� MTAL 100.04. 100_Q41 IOU.U% 100.1'.% tU9it II&A i1901n "@1D°+4 lix( ?4 IMM, PASTRAW41 T nrXI klX6 Z110T 21+1414 2" 2MG 20fl Mit 011# 2.114 Haw"Id msWeron by regamn Sa fi asK•, FA 415 ty ? *TA ?3.1 % CAL. is. -OF. 71.5 it, -r k t2''4 9 Ya&i ;"".� :rL2% ."'1.f%112.9% 2.9% 1144"N T4 A '1 - :�'i. 72:24 ?1 -11% t re�1>e 3:916 ?5.2x4 S20% z2.15. 12A 1444 ffl% is a% is itn+496 Wr C'M; x,13!7!4. F 1."A `"O i -V.' '�A 9.iX 1 �`. 8,Ck 74% •a P, 7S% WJMMMWIV +1-A "1-A 97-.1. 13.17% 11.234. 131A 11F:K 9Et% 11.4% t Aft TNTAL 1AU.4My: 11660. 100.019. 1 OQ-M twift M@"4 tft(Y . VIM i IN% fUi1A'!e HUN-PNr'1KIPANT e+ Eib t%lU"n ZDW 2[149 2M] ?{lit 22012 M 1 M 4 Homdi,ld residuce by reginn 1.624 tC ti 14 i8, 19.324 i,.?34 1a-14 16 A 91.11N Ila ` i+EM Gktt ti ll 113 F% T �T% 9.4% fi7.14 9:..W. 113 gS '11_ .A 1m NIM . tsf 4 139% t6-14 4l4 Il.N 1-11 11. 3.,'R, Ir to, i13m tdiit _ 1i ii 3i,+, ta.iR'.+. 11 Y&I 4A 1''. a 4 %3% YteMAI§rt; 1:.'.t� 113% 14,434 tir.f4 1'.., y5;' i tR: �UTI� 2 011'r x, 100.4". INT. MM M iT1(1w1 IMP; t9(IQr° 1'tF , T; MIA t1> ft 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 0.2016 C&PE, Inc. Data Analysis 1.9 Boating activities Wi ng remairwJ the most p"r 1x1 -hoard activity anvag currant partkipallls. In 2914, 55.2% of current participants fished vAide Waling. 42.6% swam, and 34 6% entertained family and friends. CCLRCE FORES�F.HTRELEAACHfURC TABLE 1.9 Activities current participants engaged in while baafing 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 2UrYi 2001; 1007 210 CURRENT PARTICIPANT 2008 2010 2011 2012 2013 21114 Tmlur9 43.'"% 3[1.29. 51.T% 54.2% 51.7% 60.5% 61.7% 62.9% 678% 55.2% Svtimel8 35 7% 431% 40.3% JAR 41.3% 436% 4.1 1' 42.G% Euterteotmx,}6airulrlirllaxle 31.6% 25,2% 25.A 368% 32.7% 29.9% 320% 34.8% 34$111, 34.6% 1,nmsuli 61.0% 32.4%, 34.3% 374% 32.1% 32.6% 37.19 365%, 35.5% 32,9% St9ht et H;1 31.14. 22A. 314% 20.2% 29.5'% 28.6% 31.7% 32.0% 304% 29.5% W WRIN 21.4'% 16.4% 28.3°% 31.1% 30.€% 214% 234% 29.0% 29.4 29A% Wtureolurawl 24.6'% 18.4% 21(R. 25 79; 73.4% 260% 283% 29 396 211 % 22.1% Tulvrl) - .- _ _ _ _. 20 M 179% 181% Cane nq - 3.4% 14.0% 15,94% 15.5% 17.5% 20,9% 21.4% 19.3% 15.8% F img-related speW ~is - - 12.2% 114°% 10.5% 12.1" 15.2% uk.0% 13 79: 14.8 Kgekrng - 2.6% 1.9% 9.2% 10.1% 11.2% 12.9% 1519x, 12-1%, ik.3% Water -swing 174% a.9% 16.5% 16 7% 15.9% 15,3% 16.6% 168% 14.G% 13.3% Srtmirlg G.95. 3.0% 7.4% 84% 6.0% 8.3% 0.2% 11.4% 11.191 iiB% Wak±iaoardrlp G.6% 5.1% 86% 10 61K 11,4% 7.9% 90% 94% 6,8% 9.9% OuurltvalrrpadAIIq 6.5% 7.5% 12 3% 114% 11 N. 174% 1R5% 10.04 911W Rema - - 4.0% 81% 56% 86% 0.2% 130% 9A% 9A% 51o€4sing ahoard 2.3% %5% 10 7:% 14% 84% IDA t I rr% 8 T M 9A96 Nuntirp QA% 1.49x, 2.0% 4,6% 2,1% 5 "4 5.194. 1 t% 64% 7.0% Uusito.C$'rdaw-inladamir t 111% pk% 2.0% 4;/.91 3.4% 4 U% 4a 6% 4 A 6 0% 7.0% Scuba [Wng 2.8% 24% 2.8% 5.0% 3.8% 49% 8 A 6.7% 5 791 6A% Racing 11.9% OA% 2.2% 351% 2.1% 3.4% 2 591, 4.9% 3.8'9 3.5% Milevrele raheul -- t 8% 2.8% 3.6% 3.9% ? 8% 2$% 31% 2.11: 2.1% Mx+5 11 19„ 1.9% 7.5% 46% a<%, 5 1% 1 096 14% ?n 1.9% Pe,de:.naisipAer not 1.4%, 118% ?_ % 1.9% 1.6% 1.2% 2.6% 2 6% 13%, 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 mnomic indicators RM CDP qrm 2.4% m 2014. after wig 2.2% In 2013 the Irnrease Osrrarly teNcod gaM in In'PAto1Y fGlal'st1110,11. Fera! W WMg aid �pctis+�ntflnrue0 t'o grw in 201 u. Rv latest 531rYeW of professlrx6 t➢retaisi2.1s predcts GDF' t0 4•'tT'hr 3.291 n2015. incl ity u'8,zatm ticked up in 2014, a�wagiarg 79A % and capping the N, -a' of in t1&—I ON -ft (p 79,6%- Aw.gp huL rF vamings V pwate so[u]r jzbs A 2014 wrrz yap SG 38 tncrn 1013 31a1-3r&d the ywar at S20 72 6 12 mrnrA aha cts3raip to 1st pt€ca s focld aril lag f avis up {1.1 to 2U14- fta? t0at+ar piths ca[z aw e 1 i, "S in °!1 14 .ri lkte tottr Me Fad s rtpctt40s. ✓a1r u.�ttRd ffodwtVin 981nd m 8Y+?fagk) 0 4K with •gW046i..I 100f 12 ri Wt,03 In ?tat 4- Prw wev pmeson all t oawt3 wss MW a€+a energya1 ea a 0.11% pn pr 2x)14. dfrftiq tiro? cm awl price odwa- IJOWV jInmt drtlpped to a sz7t y4ar biiv of Ea.4 % at Me tdst! of 2014. )Mth 2.1 1 nfflM �C1Ck. 8('d 94 10 PuSf2 m Oarr]f'is 1lerICE IJSDZ m A u OL USM TABLE 3.1a Gross Domestic Product (% change) CHART 3.14 Gross Domestie Product (`trQ ctaarrge) 5" 60% 4.0% 70% 00% 2( o, 60% { 00% �a -W. (Q `rig 3i 101, 0i; 107 [F3 Irs Sot 'f1 12 1? 14 ■S r(A1ttLt10'rt3ER ■fid r7WI-F'9 ■3iit.�`ttf r N'MTR 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 z: 2016 CME. Ise. 1.041 20W 2003 2004 M M 2007 MINI ?am 2010 2011 2012 2013 2014 G1 11W, 117% 2.1'x, 2 A 4.5% 4,S% 52% 11.1% bA I eN t'i�.t'A." 2 r"% -z194 �7 r'rw, M 38"k. IM 7fS 12`1 ?1? ?0% 45% 29% 2A C. 161% G3 I -A 20% b 31% S4% 04% 27% 1 090 13% 2 ?% A 11% A A S694 54 ! r% IJA 48% 3 A 2 3% 3 11% a 417� 8 7% 114% 2 `sIt. 1 C% 3 01v ; .k, 2.2% CHART 3.14 Gross Domestie Product (`trQ ctaarrge) 5" 60% 4.0% 70% 00% 2( o, 60% { 00% �a -W. (Q `rig 3i 101, 0i; 107 [F3 Irs Sot 'f1 12 1? 14 ■S r(A1ttLt10'rt3ER ■fid r7WI-F'9 ■3iit.�`ttf r N'MTR 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 z: 2016 CME. Ise. Date Analysis TABLE 3.1c U.S. averarle hourly earftillgs CHART 3.1c U.S. average hourly earl illys $?4 E Q SIB d x 316 Cn S:14 1 w Or, 103 iso `Ori Of, 07 'Oft i)<3 itl 11 12 13 14 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 701 ,. L- ME Inc. 2402 2003 2804 2005 2006 2007 2009 7009 2010 2011 2012 2413 2M.1 Januar Si°.It 515112 sb.ba 51 91 $1642 $1109 $1175 $1841 SILL89 $19.30 $19'01 $19.9A $20,40 tobrmy S'1/ "8 $I t, 219 $15{x.1 $6,93 111348 $1716 $11 8t7 SIM 518.91 Sit -31 $10.;4 $10.913 SM4$ March Siff:? st!4.29 515.`16 $15.91 M1 A 11(22 $1191 51850 mg? $18.31 $19.81 $2002 ;20.80 April $14-L4 $1=,.21 $11,,59 $16.01 $16.64 $17.23 $1(92 `?1[3.51 $1(s136 $19.36 $19.10 520.04 $20.52 May $14.88 $15.33 515.64 5113.04 $16-6a $1134 $1190 51953 $1901 $1942 $1968 VO.W $20.55 Jurat, SM tut $15.$6 34167 $16,0.8 $16 i2 S17At 31-9.04 $18.51 $1901 S19.42 VD 7'f TO $20,69 Jury $1.1-98 $1 SAO $t5.To 516.15 '516.78 $17 46 $18,11 $18 GC 519.013 $19.50 619,76 ra.IA MN Augm 31502 115.42 515.14 5113.17 31663 31151 sintoMck S191t M49 $19-75 VOIa #'Lf0.6$ -i'vembel $1°,O1 511542 $15.79 St6.19 $18.87 $1151 $1821 $18.7f s1914 $!RhI $1079 Sm.?? sma Omixr 31{, 1' SI' A? Si5-81 316.29 516.94 St1.15 518.27 $18.75 '119.72. $19.513 $19.81 $2O.2f 01.72 Na'MbM $1515 115.47 $1584 $1631 31692 $1164 $18.32 $18.81 519.2' $19.57 $1985 320.31 520.77 Da- mt.m 911) 21 114-.17 615 97 816 35 317 O5 S 117a $1838 318.84 519.23 $19.57 $141`11 320 ^E X0,72 CHART 3.1c U.S. average hourly earl illys $?4 E Q SIB d x 316 Cn S:14 1 w Or, 103 iso `Ori Of, 07 'Oft i)<3 itl 11 12 13 14 The above data show that while the popularity of boating is increasing, the average hourly earnings data supports the ability of the average hourly wage earner to afford a boating lifestyle. 32 CBRE 701 ,. L- ME Inc. Data Analysis TABLE 3. t d' Care Consurner Price Index (` _, chuage.) CHART 3.1d Care Cons1nner Prime Index I'% charlue) 14% i x m ffi s U 12 4r CO '34 G:+ !lfi 0l 1;23 94 10 11 13 '14 _ _•JR M" U`X'i As identified by the consumer Price Index, the relative cost of goods has increased at about one to two tenths of one percent per month for the past few years. TABLE 3.211 Relail unit sales: annual rale of change 240:1 M 2WS 2UO6 20�Qn; 2pp8 2�QIJ] 2iJtO loll 2012 MGs SAa4.MTS 1LYi3E}' G2% G 2% 0. V 13 ii 311% Q2i (J b Q � 3 A t i % CIA � 2% r201L3 CIA ^Y i'2011 /4 M% i wry 02% (t1% 02% 3A 0:% 01% ai'$ 0A UA ? % 01% Q111% &11% vwe.A 0i% 00% 933 04% 1?A 01% OA OA Lu% X11% 0.1;% 31% M rr,nl 11.E O.Y., {4.2% 00% 0 7% lJ_11% 01% i A r,1% C+ 7'6 02% OA M LOW 91% oA 07% 01C; 03% 111% n:% 31% n tt .12% 0 A� Q 1% M Ai 31% @.1% 0N, 60% L12% O"A 01114 0146 L1% RA h'A IM RA, 02% 0.22% 01% .0,14. 0A 0.416 4. 01% u_ r % 0 EC6 01'% 01^% W% hAu3t 0 3'0 0.1% 01% 0 M 02% 02% 0-2% 01% 01 % 03% 0 M Q ?° M% icmbrr 016 11ie6 0.1m 01% 04fo U,71 09". QA 11.T% f)1% 02% A IM tkt W 6196 02% rx 0294 0.?'K 0.74 031k 339e 0_f% 0..% 0.% U1'% OX 145vembel 07'L.' 0.0% 0.2% 07"6 0.1% O''4 0.11% 01'% U.T% 0.2'Po 01% '0^2% &1 Dec-Mber a, !% CO % ru?% 01 0 0..1% 0,'4 01% 01% C,1% 02% 011x: 'J?% ILVX CHART 3.1d Care Cons1nner Prime Index I'% charlue) 14% i x m ffi s U 12 4r CO '34 G:+ !lfi 0l 1;23 94 10 11 13 '14 _ _•JR M" U`X'i 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 3.211 Relail unit sales: annual rale of change 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 c 2016 CaRe, 1- CBRE IOTAL TRARITONAI 11449 BOATS 13MIERRIATS MRATAWS MGs SAa4.MTS 1!G 1.3% 4i% 41% 4A .. _ 19:11 ft 91% A6% 19% T;.. 1998 13" 63% E, '40 261% .'k.'N 19.4J 1.N PA1% 56°ir M516 710.(K 2M) 0.1% 09% 41% - 13214 23494 1 84% 142" 921% 123% 164% ? 8.f 11 111% 2'3'4 - M. "55% 2003 &0% S fi b 25% 16% 4.3% 4004 149% ?R% 41% 36% 11% 3196 74x66 1.1% 0'4% 0?xh 4.1% 0.9% 7CIilf� 26% 44% 4 l% 1UN ?.51W 1O 1%, 2G% :6.2% ?4 7°b 'iJw. 'l1 1% 31. i '11M E4I% 7`t 0% 4 414 23-3% "D T° 36 ?% 7010 a 11% •94% i?0% E5% X124 2011 4 r% U% rjA% -1216 31%, lq% Eine 174 65'!0 101% 10444 103% IT13 Ii1 % 11% 24% 1.9% 21% 2014 10uAh M G^ 4M 2106 3'1496 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 c 2016 CaRe, 1- CBRE 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. state tPet 1ntintial horst regNtrations U.S. LOU regls9a9urI5 a { if¢4 0 r3- In fat at 12 78191!,171 the LT twf -Mis tot ring fegOmInu as in A13 me uxhuo)d hom 101;% With tib da4cmhorl ,A C,1,1lr7rra. whKh rivmd ntc the :-"Ma sprx harp lwwh. Wal lcrpskatrrnt it �rlif!mt; in�easva '� f961nrr12O12IQ 11113 antl plr�tlea Mdlne�l n10 1h1n1 Iran :�rtrid arxt trirh•�s1 Fta math hrxn Ih!rd. 1Ff�>�stranrd,c In 1� 1.91rvx1t;11ta and Mhlxirgan aaclir��i ag}xattma�H t'� Nt ; 0 # „2 i Orl�aTtd is ?fl# tl. 14nw to the iqE ?n :;13tos ri A11:i erts,4tkair to IAllttt Ion (>RO 171)m 73rd Ip 1 [lh twlh s 1 1W, nuar a m reglshahrns 13ar11arM to ?111;° 4G�1t:� aero TAM f 7.4 U.S. ,Hate reacatignal host registratimm 2013 % CNd410E MKIk0 STATE 2001 2806 3804 3007 2809 2009 2018 2011 2812 2043 '13 t!& 't2 f mmJ3 WWIN':'0I.KIA LN -.h? 99112'111 '+715„'1 4419,iM 914531 55'9Ji6 d:-, !T 1 970.714 .I. CastrmL 6334 ?R4 973 71x3 ."9:1 °..18 11!616EI Gti8.P.5;s 906,968 310.006 855,243 17 . v' 820,490 V% rb re�a &I L49 K3,499 W 437 W, 486 466 46. 811,175 813476 87%),7-7 111713St, 999,741 i s% 'Ib'_'hR3En Q44 V. 9!3.1311 a x -1-. .:'S.% 3111;'1' d12f66 a m.'�41 KIM- 7111SV9 10% 1 Wi€atrr I;j5,4F.7 40)198 b ti 6131)! df5:M 820,143 71M%1 813519 ,b'4 F. rew 616.:^9 6116;6 d• a' Ji:e:' i'L y:1?,t8A 596,11:1( So7l.0 516!,05' MAN 138% i '>,sOlAram4 '111459 dt6116i 1b,9i5 042.6 0 1161.544 1.35.5..113 113'x491 447,145 dfC1.661 MAN IA ° 1414+„wt 111)W! 4t ale d9Fgli 191= U36.51' AN 16, 18 EW 4ti1,1r'8 flet :1 19M 1Ar 9 01114 4141138/ it., 374 3'2."£ 415 .^0 d16.L86 4'4,8TY MIT CIA* 141,5'? 119#+11 1.0% W Nw CAdowa 366946 3�i84 3"8:41 3E'3,815 -1:1.974 d0.106 i MME 392,EBS 391,i11 g11iM t?1 tt 1/4ragV" 'a,-lim 349110 ,141127 34242Y 335.316 331,141 395,517 311544 33:431 INA' 096 C., lutea 'i?_ L-' -"18 .'-1? :77.1.7. '.4.-111 ?-4414 :W." I:A%r :MIA6 31 11!i 9 ARI 1714. 1'• We; MING 390F64 7!361!5 379.61. Will+Ya 175zTi 3141 2 IiI.'..�5 3657?4 3105963 156% 14 ! Pylae 3)9.950 308.1114 306 3'11, 3M 249 3,11.163 30).116 3E2 141 3}3.971 316.09f 8WAU 0,91E It' Wow 328'ie -1ifi,709 3?t u6 :14.19: 10.1x:: 314,131 ?97144 30??F• 30?.714 26WX2 1 A 16 AM" 764.006 4S t 7e 271:fs 274 17r, 2r^ 568 27(.1'6 2; 13 f' es,5"5 ME 374 2Wm 10% II IeToA* 261.4 76156Y ;."•1.6H7 :rd914 ;11470 59.36! *61If, 251.901 ,W.63: 20,%7 88% IH 114grva )4:.64: :'45!313 .'d8.!I}I 'A, dAO 1!9.317 144. 15 2d5.440 ?5'1.471 2' IMd 7VA61 10% Ifo A* ffw e'1Fa 135 Z`.5414 f%iff) 1'616.105 199.184 19E,616 M -M, ?00 I% 194.545 WAS 140% e'a Ydrry nj1on &f 850 ; 793 ?r0 627 217.784 iPd 333 69.845 X37,4 1 :'34.54? " ESI =4M OEL 21 181:7: ?133119 :14 E% 661.1319 :1i'd74 ?11,5» M. 4."4 11 ;41.29i 21d481 211,4Mt1 O.A im ^,'?.1711 T43'k?d ?l4.' 213.177 ?31Irb 241.190 'V4.6G[' 1MU43 2"11141_$, 2VAN 131% 0leenrlw 105.049 216.913 :16566 :2?,156 196.059 735:379 :09457 IR33F 3nt.069 jum 31% ;1 Y,sryln: 20MI 2[.581? %M Y1 202M 149.857 145,1)06 I432&3 Y88m iffielb 161,-14 2:1. Ku" 4. t76$7 1719,111 116.176 173.991 176.536 175.)'1 f71,9"A 176786 171211 0.61 199119 187640 X86.491 184.141 1W,ab� t�,,w 1116 I'M 1TI.9p i%jW 166},661 IS% lirajscsey x341679 IW 1% :t35,{187 itM.J41 Id'i.3W 17?_Q91 16917543 116.4717 14 LA5 1111,17111 11199E ±7f Ilakwloi>, 1561,878 110 WG 'ddki[1 1;1;!96, 145113 !4'.875 III 95P t30941 139.173 fume iD% 24 PA -anp 204•?16 ?fdr eM r,'4 0 18C.356 141 317 193.016 $5921 ^.50143 t';?!568 13O, N 19% Analro 141 4 138;14? "15.t�t� 16!510 #41.'91 13E.�,9 135.3.'6 431.665 1,'9,9_.1 185168 :A1S Ply, "'W 1641'.-3 'y1.16 11.,619 IW.61-i 18).160 11197 MA%4 11950; Wall Q% eIIIr. f0971" t897a1 10esp ItOGW 1013,211 174.878 fKSm 11=437 1O1A1117 ?m 33 N-"oxmw,-e '019-6 Imo,_?269 t01291 100,31 96,x: 95.4w 94 Tr- 91,9630 W-976 IR" 10% 34 hL Dra 4d Tr' 636 i.1921 83.313 413,/27 83 280 80. 9 H,a r. 84.17' 86,248 Won 101 5 dtx 93639 86C432 69.',181 9t.611, 39.T1% ll50' 971K, 84?90 %.749 64,760 O.O!0 36 �aaa1 98:Ji9 985",? 9111167 98.11x5 95.330 96.8_': 91114 39.3<" 87.715 119641 4244 rs r 9861" 47 749 45.677 93.9011 91 06), 90.5?7 89.31§ KGd I 85.wl am 29% 8 hi 7th 3ydata 11216+ 44495 4961 53519 98067 SIXDD 58,125 117537 0.709 63,:6! 101% n U18t 74.243 r�935 76,481 76.01 73.019 7?,419 74!,21M %417 1[',114 18412 J19% 14!!x9 X214 1+].616 81.935 19641 d4,96b 33,331 5?.t4 42,961, 54.642 am 1814: WEE I4-wa 635:+4 %06t 51.0:;" bl'M 49,9190 5 4% 64,5iG 51A2 571317 OW 9£16 Uomra Y .'171 12119 Sy 1% 61,569 56.064 64,5:3 67M 51.07 'aE,Sdt 601196 1 1% "5: ton 0duna Y.a'C>d 51038 531d?Aa 53 510 %0114 O i -!M 56.6% 56.6 * 'A A44 VAR 210 4- 46.12{ 49176 49, i' 41918 41.04 !9.598' 48.89t 5:,219 4-.141 NA81 0,496 51.51? 577;6 W%7 53,095 57X19 56.13(3 53.41;3 471464 51'491 40,721' 8.,39E 41671 4361E 43 WE 41%k V524 V.514 4x,,93G 4r?0851 Gu 061 3W ?I% h !':, 33 dip 3889: �8 hN 38104 33.334 4.544 37,310 3' Am 36,646 84,142 914% 4 rear 314% 321% 32,rA_C, 31483' 30,429 31.490 371?I5 AK27M ST 8113006 :161 Y an":'62N 1&196 e2161356 Y7 43 ?1.95- 28.5^19 ?8.161 &60) so 19% d 1'1206 '5302 is tip 461134 15404 45,700 109`x: 11375 14098 A= 11% • 'r ;:nal i 9".i 1629 2'.,? ; rkf. 747;' 1 1% ,:ti; '.717)1 !x gd22 :181 ' TRAIL U.S. 1 . 12.942113 12.7496.1'25' i1M + 1�cM1°f 1 , Q 926 12.173. MOO 1 AR PEKATCUNGE 414 11% •15% 1D% -IA% ar -22°: -2.7 -O.6ra 47% 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 roi cele. [ERE Data Analysis ECONOMIC SIGNIFICANCE OF RECREATIONAL BOATING IN THE UNITED STATES TOTAL ANNUAL Number of Recreational Boats` 12,182,157 ECONOMIC IMPACT R- Boating aldasuyBusinesses 34,833 OP PILC:RE.41IONAL BOA]IN& iOl;al lobs 983,51$ fl9 If $ 121.5 BILLION Annual RecTeajonal Boating -Related Spending $51.4....e_ Ur.a RECPEATIONA1- BOATS IN THE USA TOTALBI)ATS' 12,182,157 XM Boat Bl, r:ir+ viii T �� Ai6KrEAE610Ar5 11,1111,ti3 Powerboats 9,92Ey22r Aaiezm I %Mws117. Qealers?YA•aule�ka ,• -r PNNCs 1,24A24 Vffmft 2AA4 S6_6 B9.Lrm Moror I Enpirti M19r. 183 sailbuats mAcl POWER BaAT` DOE-rhats 73759.4 82% P'+1`.: 10% I AILBL!a.?`_ 2% OTHER Bclfid5 6% P NOUSFiIIILQS PER BOAT g,# TOTAL MFGB. SALES $309 DealerslWwlsalers 120.E ' Will We air eparetedbw m loved ty "es fop 16% $16.2 BLL" ?A '' @t 1r1.. 1y2K PE!—PFATI0NA1 BOATING CREATES JOBS fN -HE USA 10TALB0MIN6JOBS 338,526 RIM 341dmg 32X rsrilDr l Enke hggr. k,,@fx1 AUA:totyJSop?llasMtgt. 78,412 [reale6 jWirsleSalers dill IiralSarNas=e '.64�A PFCPFATIONAI. BOATING -RI BUSINESSES IN TNF USA TOTAL BUSINESSES XM Boat Bl, r:ir+ viii WQi / Ef4w Mlgr. +41 Aaiezm I %Mws117. Qealers?YA•aule�ka 5.463 Beal Snr*es 2AA4 • FAkTM,WG 0 DIR:JA4WSALEAN • N6TDR ox MFd% • Bw 5}1e"Nl(Fs 41 ARJSLffUE3KQ ESTIMATED JOBS IMPACT OF PECPEATIONAL BOA''IN-G-P.FLATED SPENDING IN THE USA 313,809 Urjr EST.TOTALJDBS 953,818 AW D146a 1ST. TOTAL LABOR INCOME $39.9 177,421 0.blroIn.:Irrro t16.6 NNIZEiTJOBS FA .Incl lum2 V.9 ElAnWced Inrome 113? 472.584 Lr01€ TJUBS IR WTkl"I% • DE),fMf E16 • M1TW'Ik.�fNb. Wa • lsfiUSERN G � dEt?SLWIIEitiF6l; PECPEATIQNAL BOATING INDUSTRY SALES IN THE USA eWreu BoatBtnitlirg jT 6 S6_6 B9.Lrm Moror I Enpirti M19r. 183 Rutsm I SUPNE5 Mfg. 516.2 88.1 B TOTAL MFGB. SALES $309 DealerslWwlsalers 120.E $16.2 BLL" ?A '' @t 1r1.. T0TAERETARETAILdSERYiCE55AlE5 $fi13 S20.6 auirw WT610mr, • DIF_,I HAESALM • ME7IL)KNE tfFA. • [ +iSFR4i E; .7 BiL on A ACEJ`�[tfSMFGR d ! E D 6 f 1/1c9 MiIKP2 [aMae uS[acraeiq� 4eCayia91M3f� R�ortT;ea1H J 11l�',lyeal+Mly 35 CBI -+ E 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 some 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 � 7GIo rpAf. i,. STATE AND LOCAL MARINE MARKET ANALYSIS Data Analysis ECONOMIC SIGNIFICANCE OF RECREATIONAL BOATING IN FLOPI DA TOTAL ANNUAL ECONOMIC IMPACT OF PLCRILAfICNAL BOATIN& $10.35 L1-L!0N PFi:PFATIONAI BOATS It,. FLORIDA IDTAL BOATS, 865,287 iffil' LRfDBOA15 86i.28T Row brals TIN q411" PWCs 37375 40 Wt,nals 21AD4 KIWIF P+IAr PN(, quer Bnats AN $4 � 11 xoasafows PER Bou 8.1 !ul tatts:rA re4hrrnx l as Mewg tv roves Nit! i.FC. ESTIMATED JOBS IMPACT OF PECMR ATIONAL r3OATING-PPI-ATPD SPFt4DING 1N FLORIDA 27,015 EST. TOTAL JOBS 821752 1wLli Ej1OP�s isi, i07iU LABOR IN{ONT SARI 15,304 Bt. kedlnum TTA12.4 INDIC7 JOE: Est..idi d Incorrne 10331 E1.;.wuced income 11401.5 40,833 — DIRTCT 1O135 dos a6 Number of Recreational Boats" 865,287 Rweational Boating IndusR�1 Businesses 5,539 Total lobs 82,752 Annual Retreadonal Basting-Reia:ed Spending $4.31—L - :ABBr747 o"[146 BOATS 3*4 2% Ire PF%PFAT10NAt BOATING -PI SUSINESSES W4 FLORIDA MAL BUSINESSES 5.534 Bcat d ii ing No r I I rvfi w4, gr• A rcessap /Supplies Mlgr. 431 DeAersl'Atndtzm 732 PFOPI v €ONAL BOATING INDUSTRY SALES IN FLORIDA wxuroa Baal B�!(6tIG S �..4.T Mptnrl ErrgitleMilgr. 116OS A!;zs==x; ! suepll � Mfgr. 18§79 TOTALMF6R-SALES mi L i1=rs 1 ,,III :fS 1x,381.7 Bxt sevices 16,5880 TOTALRETAILASEWI[ESSALES 598843 • MlfiffYl k(L MFG. t pw s;Wlm- 4 Aft iSl OE&Nfik s Bul NOW 0 �rv�totssru��s A MI61OR1E* *GR. • m Stwo • AffAIPtUMP. kua MW d W.g1j4. at cA.W 'PW ai MAr, ARAtl WWW 37 CBRE mum II51.954.7 III I X160.5 �+rufcxa `s8J'7.9 wr�ra•+ 83.381.7 muicN 86,548.0 mum kua MW d W.g1j4. at cA.W 'PW ai MAr, ARAtl WWW 37 CBRE 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 Hialeah Gardens Hialeah 182G? _ Miami Springs gas �-1t Westchester (zo) Coral Ga South Miami Pinecrest Palmetto Bay oea 1�2016QMF.h. Nor-th Miami Bal Harbolkr Surfside Miami Shores ate 9:34 93,1 ( 441 —`" 5 "piles 3 miles Miami Bei r ;at 1 ",Iles Mini, Fisher k nci am lrr�i ra Key Key Biscayne 38 Map clata @2016 Google CBRE Data Analysis Demographic Data CBRE 3301 RECKEN6ACOR CSV/Y t} — POPULATION aa.rr�.mrn M110 -1 Moe 2021 Houooholus Frvs' Year PrupatztL r 0 51 t 90 419 POPul;ahnn Cur rent Ytylr Eavmalr* 5 90 10 12C.. 138 2021 Papula€1nr, VwYeaar P:olectruli 5 991863 343.793 2010Pr1Putr,tnn" Census 5 '3.17!; 2841.42,1 2000 FnPrllnlrnr . Census 1 1 50 183 2,19.882 201Q 2016 Anmu ai PacWAllan Growth Rai, 0 ODS $ 321^ 1 0% 2016.x.021 Annual P�*afatrw Rale 0.00. 2 07't 1 44n;. Itt#f� HOUSEHOLDS 2016 Households Current Yeel Estnnaie vO 4!: ysG 144-1911 2021 Houooholus Frvs' Year PrupatztL r 0 51 t 90 151.478 2010 Hnulxaholds Cens.s 0 Ni 367 126.805 ?COO Households Ce7s..es 0 224x2 106.84E 8010 2016 Annual Ham.nhold Growth Rate 0 00''4 3811, F 83`§ 2016 2021 Annexal Hourehold Grav11- Rate 0 Mi, 2 19°, 1 50-t 11016 AY&dy(+. M,avnciu w Slee U 00 1 y_z ? 17 s ti— HOUSEHOLD INCOME 2O I1i Average Hguscrsolu Intxlslstl vO ;•,81 7ti'. 58.,1 P. t 2021 Average Hauselwkl income <0 589 57fs 57•:.551 1018 Median Hrn sehn6d Inrtnme 50 ;51 no 538.d11C, 2021 Me-9san Houuehudd Incame s0 S59009 944,748 2013 Per Capita t/la01tk 339,405 1,42 138 :31.309 2021 Pe, Ca pia Income ;39.405 546 333 $34.253 HOUSING UNITS 20th Housing Units 0 37,714 176.411 2016 Yaca,n Housmg Ur,ts 0 NA 1 1 10.1 20 ,: ,. 32, I d 4 182+ 2016 Occupied Hnusrttg Unas 0 1141IN .. 0 ;+ t. 144.291 til 8'c 2016 Omier OCCUP)ed Hants:np Urals 0 NaN 11 810 20 5'0 38.649 2t W- 2016 Hental Occujued Hovsing Un,ts 0 NaN I'll 1 1 9 S9 t 1. 105.648 59 914 !+— EDUCATION 2016 Population 23 and Over Ha and Alasoco.ei Deg,epi Bnrk>«3a�rs Drzcplae,v H,ghe- 1— PLACE OF WORK 2016 suslrxellses 2016 Emplaya,s 4 70,481 241,749 3 750% 24.345 $A S4 104.140 43 1'- 1 1.5 0`~ 35 156 50 I, +31.826 3i 3x Sfi 4 298 2-� 19£ 104 318 263.7,27 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 E: 7016 CMF, Inc. CBRE 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°/x. 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 ore 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. e. nJi :MF� in- 40 CBRE 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 A9., LWF.P„ 14A =3 :14 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: 110 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 1 10 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 < Ai?. Epf. Imo: 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. — ;_ : Itt— � 7 rlsq:uw d .«r. 9,IMxMw M Y�. uML -__'.`_� F t � I` 4Si•.5^ter. '� a� _ 111111 F f IYIu11A1iw� 43 CBRE � 2016 C8FE" 1- Data Analysis SUMMARY Of MARINA RENTAL$ camp Wer slip Na. Properly Nome Locollon Wet SNp. Wt Slip Rene 0carpancy Dry a Sanaa Slip. Cry Rerrls Dry Slip 0—p—.y 1 Haul—Park Manna 15000 Callon. Avanae, 0 NA NA 0 NA Miami Basch NA NA NA 2 Keyslane Paim Manua 1950 NE 135t6 $trew, 20 $20.00 100% 0 NA Miami, FL 266 $35.545 95% 3 Sao Silo Marino 1635 N Bay:ham Dd-. 220 $20-535 96% Miami, €L 4 M'r—d— 401 Biscayne 6-6—d, 130 418-S34 100% Miami, FL 5 Miami B -ch Marina 300 Allan Road, Miomi 400 $28-465 100% Beady, FL 6 Rickenbarker Marina 3301 Rickeabadrer C. y, 190 S35 -S40 700% Key Bismyne, FL 7 Marine Slodiam Marina 3501 Rickenbaaker Crory, 0 NA NA Key Biscayne, FL 8 Prima Marino Miami 2550 S. Bayshore, Mi—, 87 $28-$50 100% C«coal Grove, FL 9 Grove Harbaar Mi.. 2640 South Boyshore Drive, 60 $3600 90% C«Doul Grow, FL 10 Dinner Key Marina 3500 Pan American Drim. 582 519.536 100% Mia i, FL Subject Rickanbader and MSM 3301 and 3501 Rickenbadrr 190 $35.540 100% Cs y, Key 86.yne, FL Campiled by CBRE 300 $1600 100% 0 NA NA 0 NA NA NA NA NA 378 $30.00 100% 296 $17 25-$19.50 95% 0 NA NA 266 $35.545 95% 0 NA NA 674 $17.25.530.00 98% 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. S. 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 P0I- CFkf.W: 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 S 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 'c: 201 G CME';- Data Analysis 9. DESCRIPTION OF THE CURRENT WET AND DRY SLIPS 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 n 2016 CRE, l— 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. 1 2010 CBR[,d- 47 CBRE Data Analysis WMM.-- 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 gross 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 6 2016 LBRf,r- L44:1V= 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 As depicted above, the Suntex design incorporates the following featrures: South Basin 190 wet slips provided, 190 slips required North Basin 364 wet slips provided, 300 slips required Traditional Boat Nouse 820 dry slips provided, 648 slips required Total Planned Slips 1,374 slips provided, 1,138 slips required 50 CBRE Assumptions and Limiting Conditions RCI As depicted above, the RCI design incorporates the following vessel storage quantities: South Basin 162 wet slips provided, 190 slips required North Basin 151 wet slips provided, 300 slips required Automated Boat House 973 dry slips provided, 648 slips required Total Planned Slips 1,286 slips provided, 1,138 slips required 51 roto 17Nf Assumptions and Limiting Conditions Rickenbacker/Tifon w As depicted above, the Rickenbacker design incorporates the following vessel storage quantities: South Basin 139 wet slips provided, 190 slips required North Basin 310 wet slips provided, 300 required Automated Boat House 1,000 dry slips provided, 648 slips required Total Planned Slips 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 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 R 2016 CBRE, f.. Assumptions and Limiting Conditions CAPITAL REQUIREMENTS Based on the three RFI•' 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. _ $14,112,000 648 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 loss is $1,211,340 Effective Gross Income Affective Gross Income is summarized below: Potential Gross Income $24,586,800 Vacancy and Collection $1,211,340 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 $11,687,730. Net Operating Income The stabilized net operating income for the project is estimated at $11,687,730 per year, increasing at 3.00%Q per year, after the first three years. 55 CBRE G 2016 CB E, Inc, Assumptions and Limiting Conditions Stabilized Income and Expense Summary DIRECT CAPITALIZATION SUMMARY - AS IS Revenue Slips or SF Size Rent/LF/Mo % of Revenue Total Wet Slips 490 Slips 60 LF $40.00 58.2% $14,112,000 Dry Slips 648 Slips 30 LF $35.00 33.7% $8,164,800 Retail Space 40,000 SF $35.00 5.8% $1,400,000 Restaurant Space 10,000 SF $55.00 2.3% $550,000 Total Rental Revenue 3.00%4 $12,038,362 100.0% $24,226,800 Net Fuel Sales Net Revenue Vacancy - Rental Revenue Only Effective Gross Income Operating Expense Ratio Net Operating Income Compiled by CBRE Ten -Year Cash Flow Analysis 60,000 Gal/Mo $0.50 $360,000 $24,586,800 5.00% -$1,211,340 $23,375,460 50.0% $11,687,730 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. I 0 -YEAR CASH FLOW MODEL Year Base Year NOI Appreciation Current Year NOI Revenue Loss Total 1 $0 0.00% $0 ($67,000,000) ($67,000,000) 2 $0 0.00% $0 $0 $0 3 $11,687,730 0.00% $11,687,730 ($5,843,865) $5,843,865 4 $11,687,730 3.00%4 $12,038,362 $0 $12,038,362 5 $12,038,362 3.00% $12,399,513 $0 $12,399,513 6 $12,399,513 3.00% $12,771,498 $0 $12,771,498 7 $12,771,498 3.00% $13,154,643 $0 $13,154,643 8 $13,154,643 3.00% $13,549,282 $0 $13,549,282 9 $13,549,282 3.00%® $13,955,761 $0 $13,955,761 10 $13,955,761 3.00% $14,374,434 $0 $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 $31,087,35$. 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 1 2011 1,W, 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 property. 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 tide 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 the 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 ore 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 hove 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 :X!, tERE. ,=. 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. b. 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 0 2016 CBRF, 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 low. 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 x I � W. I---. CBRE