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Hans Ottinot, City Attorney February 7,2008 Page 2 highly credible expert real estate appraisal analysis and an opinion to a twelve (12) person jury that the fee simple market value of Parcell is not $12,000,000,00 but $3,750,000.00. This $3,750,000.00 amount represents "full compensation" to Respondents for the taking of Parcel 1. Please be reminded that this amount onlY refers to the value of Parcel 1 and specifically does not include prejudgment interest, attorneys fees or the Respondent's costs incurred in connection with this lawsuit. The amounts associated with these elements of full compensation would be added to the amount established for the value of Parcell. Given the above, kindly find for your review and information the following assessment of the legal and economic risks facing the City as a result of the instant valuation dispute with the Respondent, 18100 Collins Avenue ShoppingCenter, LTD, based upon the following facts: PROCEDURAL FACTUAL BACKGROUND' The City of Sunny Isles Beach, due to resident population growth and a con:esponding need for increased City services, detetmined that it needed to acquire property to develop its planned public works facility. In or around 2003, the City undertook appropriate action to identify and acquire suitable property and ultimately determined that the property immediately adjacent to the northern boundaty of its new City Hall property was the most preferred site. The site, which is also known as ''Parcell'' was owned at the time by Mitsubishi Corporation of America, whose United States corporate offices is located in the State of California. Parcell has about 100 feet of frontage along the western side of Collins Avenue and is about 450 feet in depth, which equates to about 40,000 square feet or .93 acres. At all times relevant, Parcell was improved with a 300 square foot building that was being used by Alamo Rent A Ca1:, the then current tenant, who held a 20 year lease to Pa1:cel 1. Alamo's leasehold interest was later acquired by Vangua1:d Car Rental. At all times relevant, however both Alamo and/Vangua1:d were in full compliance with the terms and conditions of their Lease with Mitsubishi Corp. In June 2003, the City tendered an offer to purchase Parcell from Mitsubishi Cmp. for $1,570,000; however the City learned almost immediately that Mitsubishi Corp. had sold Pa1:cel 1 to the Respondent for $1,900,000. Consequendy, the City tendered the same offer amount to Respondent, who rejected the same. The City filed its Petition in Circuit Court to acquire Parcel 1 in its entirety ("total take") pursuant to its statutOlY eminent domain powers. The Court ultimately granted th~ ' City's Motion for an Order of Taking as to Parcel 1. On or about April 1, the City ratified its tide and interest in Parcell by depositing $2,250,000 in the Court Regisuy. In January, 2007, the Court issued its Order, which among other things placed this case on its two week trial docket beginning May 7, 2007. ' LEGAL AND RISK ANALYSIS The core factual dispute between the parties concerns the issue of the value of Parcel 1. At the present time, the City maintains that the fair market value of the fee simple interest in Parcel 1 is $3,750,000. Respondent, on the other hand claims that fair market value of the subject parcel ranges FTLDOCS 5289886 1 MIAMI FORT LAUDERDALE SHUTIS & BOWEN LLP WEST PALM BEACH ORLANDO TAMPA TALLAHASSEE AMSTERDAM LONDON