W E L C O M E to the SB 1022 Real Estate Due Diligence Training SB 1022 Real Estate Due Diligence...

W E L C O M E to W E L C O M E to thethe

SB 1022SB 1022Real EstateReal Estate

DueDue DiligenceDiligence TrainingTraining

SB 1022SB 1022Real EstateReal Estate

DueDue DiligenceDiligence TrainingTraining

State of CaliforniaState of California

Real Estate Due DiligenceReal Estate Due DiligenceState of CaliforniaState of California

Real Estate Due DiligenceReal Estate Due Diligence

The California Environmental The California Environmental Quality ActQuality Act

The California Environmental The California Environmental Quality ActQuality Act

C.E.Q.A.C.E.Q.A.

BSCC Training – Environmental BSCC Training – Environmental ComponentsComponents

Environmental Due Diligence Documentation

Preliminary Site Assessments

Compliance with California Environmental Quality Act (CEQA)

Standard vs. Exception Mitigation Costs

Environmental Due Diligence Environmental Due Diligence DocumentationDocumentation

Distinct from “Real Estate Due Diligence”

Historical Uses of Property

Disclosure of Known and Unknown Hazards

Standard Documentation Required by PWB

Preliminary Site AssessmentsPreliminary Site Assessments

Objective and Purpose of Reports

Standard Protocols – ASTM Guidelines

Phase I, II, and III; Smart Field Work

Must be Contemporary – One Year or Less

No Assumption of Risk to Bond Holders or PWB

Resources to Prepare Assessments

Environmental Documentation for Environmental Documentation for FinancingFinancing

California Environmental Quality Act

Accuracy of Project Description

Disclosure of Potential Adverse Effects

Agency that Prepares Documentation

Types of CEQA Documents

Evidence of Completion – Notice of Determination

Community Issues

Mitigation Measures – No Carpet!

Resources: CDCR Environmental Services Branch

Questions?Questions?


Real Estate Real Estate Due DiligenceDue Diligence

For theFor the

SB 1022SB 1022

Local Jail ConstructionLocal Jail Construction

Financing ProgramsFinancing Programs

For theFor the

SB 1022SB 1022

Local Jail ConstructionLocal Jail Construction

Financing ProgramsFinancing Programs




The investigation and The investigation and analysis of the status and analysis of the status and condition of title as it may condition of title as it may impact the financing, use, impact the financing, use, or occupancy of a proposed or occupancy of a proposed project property.project property.

The investigation and The investigation and analysis of the status and analysis of the status and condition of title as it may condition of title as it may impact the financing, use, impact the financing, use, or occupancy of a proposed or occupancy of a proposed project property.project property.




What Projects Require Due Diligence?What Projects Require Due Diligence?

All Capital Outlay ProjectsAll Capital Outlay Projects Projects that increase real property assetsProjects that increase real property assets Projects that change functionality of propertyProjects that change functionality of property SB 1022, AB 900, and SB 81 Local Jail SB 1022, AB 900, and SB 81 Local Jail

Construction Financing Program Project Construction Financing Program Project Proposals

– Examples: acquisitions, development projects, gifts,

foreclosures, offers to dedicate, judicial settlements, etc.

What Projects Require Due Diligence?What Projects Require Due Diligence?

All Capital Outlay ProjectsAll Capital Outlay Projects Projects that increase real property assetsProjects that increase real property assets Projects that change functionality of propertyProjects that change functionality of property SB 1022, AB 900, and SB 81 Local Jail SB 1022, AB 900, and SB 81 Local Jail

Construction Financing Program Project Construction Financing Program Project Proposals

– Examples: acquisitions, development projects, gifts,

foreclosures, offers to dedicate, judicial settlements, etc.




When is Due Diligence When is Due Diligence Conducted?Conducted?

During site acquisition phaseDuring site acquisition phase During the preliminary plan phase of projects During the preliminary plan phase of projects

on state landon state land As part of SPWB reviewAs part of SPWB review Before pursuing lease revenue bond financingBefore pursuing lease revenue bond financing For SB 1022, AB 900, and SB 81, prior to For SB 1022, AB 900, and SB 81, prior to

Project Establishment by the State Public Project Establishment by the State Public Works BoardWorks Board

When is Due Diligence When is Due Diligence Conducted?Conducted?

During site acquisition phaseDuring site acquisition phase During the preliminary plan phase of projects During the preliminary plan phase of projects

on state landon state land As part of SPWB reviewAs part of SPWB review Before pursuing lease revenue bond financingBefore pursuing lease revenue bond financing For SB 1022, AB 900, and SB 81, prior to For SB 1022, AB 900, and SB 81, prior to

Project Establishment by the State Public Project Establishment by the State Public Works BoardWorks Board




The Due Diligence Interdependent Work The Due Diligence Interdependent Work GroupGroup

DGSDGS Real Estate OfficersReal Estate Officers Legal CounselLegal Counsel

CDCRCDCR Environmental SpecialistEnvironmental Specialist

BSCCBSCC Project DirectorsProject Directors

DOFDOF Capital Outlay AnalystCapital Outlay Analyst Legal CounselLegal Counsel

County StaffCounty Staff

The Due Diligence Interdependent Work The Due Diligence Interdependent Work GroupGroup

DGSDGS Real Estate OfficersReal Estate Officers Legal CounselLegal Counsel

CDCRCDCR Environmental SpecialistEnvironmental Specialist

BSCCBSCC Project DirectorsProject Directors

DOFDOF Capital Outlay AnalystCapital Outlay Analyst Legal CounselLegal Counsel

County StaffCounty Staff




BSCC – FSO CDCR - ESS

BSCC

County

DGS - OLS

DOF Analyst DGS - RPSS

DOF – OLS

Typical Due Diligence Process Typical Due Diligence Process InterdependenceInterdependence




The Real Estate Due DiligenceThe Real Estate Due DiligenceReview Submission PackageReview Submission Package

What are the county’s responsibilities?What are the county’s responsibilities?

What are the county’s minimum submission What are the county’s minimum submission requirements?requirements?

Initial due diligence package submission Initial due diligence package submission documentsdocuments

Additional county deliverables after DGS’ initial Additional county deliverables after DGS’ initial reviewreview

Future county deliverables prior to the bond saleFuture county deliverables prior to the bond sale

The Real Estate Due DiligenceThe Real Estate Due DiligenceReview Submission PackageReview Submission Package

What are the county’s responsibilities?What are the county’s responsibilities?

What are the county’s minimum submission What are the county’s minimum submission requirements?requirements?

Initial due diligence package submission Initial due diligence package submission documentsdocuments

Additional county deliverables after DGS’ initial Additional county deliverables after DGS’ initial reviewreview

Future county deliverables prior to the bond saleFuture county deliverables prior to the bond sale




County Due Diligence ResponsibilitiesCounty Due Diligence Responsibilities

Appraisal of Proposed Project Site (land-only)Appraisal of Proposed Project Site (land-only) Real estate title due diligence submissionsReal estate title due diligence submissions

Preliminary reportPreliminary report Real property recordsReal property records Unrecorded rights certificationsUnrecorded rights certifications Legal description, legal description plat map & title Legal description, legal description plat map & title

exceptions mapexceptions map Facilitate site inspections by the StateFacilitate site inspections by the State Support or perform mitigation of “issues”Support or perform mitigation of “issues” Support update at time of bond saleSupport update at time of bond sale

County Due Diligence ResponsibilitiesCounty Due Diligence Responsibilities

Appraisal of Proposed Project Site (land-only)Appraisal of Proposed Project Site (land-only) Real estate title due diligence submissionsReal estate title due diligence submissions

Preliminary reportPreliminary report Real property recordsReal property records Unrecorded rights certificationsUnrecorded rights certifications Legal description, legal description plat map & title Legal description, legal description plat map & title

exceptions mapexceptions map Facilitate site inspections by the StateFacilitate site inspections by the State Support or perform mitigation of “issues”Support or perform mitigation of “issues” Support update at time of bond saleSupport update at time of bond sale




Initial County Package Submission Requirements Initial County Package Submission Requirements Proposed Project Site Land AppraisalProposed Project Site Land Appraisal

Provide an independent real estate appraisal identifying the Proposed Provide an independent real estate appraisal identifying the Proposed Project’s Site land-only valueProject’s Site land-only value

Completed by an appraiser with a valid Certified General License Completed by an appraiser with a valid Certified General License issued by the State of California Bureau of Real Estate Appraisers issued by the State of California Bureau of Real Estate Appraisers (BREA)(BREA)

Conforming to DGS Appraisal SpecificationsConforming to DGS Appraisal Specifications http://www.documents.dgs.ca.gov/resd/psb/RPSS/Appraisal_Specifications.pdf

Submit independent appraisal prepared for RFA/RFP responseSubmit independent appraisal prepared for RFA/RFP response No prior independent appraisal – provide a new appraisal utilizing an No prior independent appraisal – provide a new appraisal utilizing an

October 24, 2013 effective date of valueOctober 24, 2013 effective date of value A DGS approved appraisal is required to maintain eligibility in the A DGS approved appraisal is required to maintain eligibility in the

SB 1022, AB 900, and SB 81 Local Jail Construction Financing SB 1022, AB 900, and SB 81 Local Jail Construction Financing ProgramsPrograms

Initial County Package Submission Requirements Initial County Package Submission Requirements Proposed Project Site Land AppraisalProposed Project Site Land Appraisal

Provide an independent real estate appraisal identifying the Proposed Provide an independent real estate appraisal identifying the Proposed Project’s Site land-only valueProject’s Site land-only value

Completed by an appraiser with a valid Certified General License Completed by an appraiser with a valid Certified General License issued by the State of California Bureau of Real Estate Appraisers issued by the State of California Bureau of Real Estate Appraisers (BREA)(BREA)

Conforming to DGS Appraisal SpecificationsConforming to DGS Appraisal Specifications http://www.documents.dgs.ca.gov/resd/psb/RPSS/Appraisal_Specifications.pdf

Submit independent appraisal prepared for RFA/RFP responseSubmit independent appraisal prepared for RFA/RFP response No prior independent appraisal – provide a new appraisal utilizing an No prior independent appraisal – provide a new appraisal utilizing an

October 24, 2013 effective date of valueOctober 24, 2013 effective date of value A DGS approved appraisal is required to maintain eligibility in the A DGS approved appraisal is required to maintain eligibility in the

SB 1022, AB 900, and SB 81 Local Jail Construction Financing SB 1022, AB 900, and SB 81 Local Jail Construction Financing ProgramsPrograms




Initial County Package Submission RequirementsInitial County Package Submission RequirementsReal Estate Title Due Diligence ReviewReal Estate Title Due Diligence Review

Preliminary ReportPreliminary Report Provided by a title company authorized to issue title Provided by a title company authorized to issue title

insuranceinsurancewithin the State of California is requiredwithin the State of California is required

Dated within three (3) months of submissionDated within three (3) months of submission Real property referred to (covered) in the reportReal property referred to (covered) in the report

Proposed Project SiteProposed Project Site Greater Parcel AreaGreater Parcel Area

Preliminary report updates may be necessaryPreliminary report updates may be necessary When correcting an error or resolving an issueWhen correcting an error or resolving an issue Prior to the project’s lease-revenue bond salePrior to the project’s lease-revenue bond sale


Preliminary ReportPreliminary Report Provided by a title company authorized to issue title Provided by a title company authorized to issue title

insuranceinsurancewithin the State of California is requiredwithin the State of California is required

Dated within three (3) months of submissionDated within three (3) months of submission Real property referred to (covered) in the reportReal property referred to (covered) in the report

Proposed Project SiteProposed Project Site Greater Parcel AreaGreater Parcel Area

Preliminary report updates may be necessaryPreliminary report updates may be necessary When correcting an error or resolving an issueWhen correcting an error or resolving an issue Prior to the project’s lease-revenue bond salePrior to the project’s lease-revenue bond sale





Real Property RecordsReal Property Records

Provide copies of all recorded or unrecorded vesting documents, mineral Provide copies of all recorded or unrecorded vesting documents, mineral interests, deeds, quit claims, purchase contracts, real estate agreements, title interests, deeds, quit claims, purchase contracts, real estate agreements, title insurance policies, maps, legal descriptions, leases, memorandums of lease, lease insurance policies, maps, legal descriptions, leases, memorandums of lease, lease termination statements, contracts, UCC filings, and other legal documents termination statements, contracts, UCC filings, and other legal documents affecting the Greater Parcel Area from sources such as:affecting the Greater Parcel Area from sources such as:

The title company for documents filed with the County RecorderThe title company for documents filed with the County Recorder

County files (county facility headquarters, local jail facility office, county County files (county facility headquarters, local jail facility office, county archives, pending/active/closed project files, etc.)archives, pending/active/closed project files, etc.)

Provide recorded documents found outside of and in-addition to those recorded Provide recorded documents found outside of and in-addition to those recorded documents provided by the title companydocuments provided by the title company

Assessor’s Parcel Map(s)Assessor’s Parcel Map(s)


Real Property RecordsReal Property Records

Provide copies of all recorded or unrecorded vesting documents, mineral Provide copies of all recorded or unrecorded vesting documents, mineral interests, deeds, quit claims, purchase contracts, real estate agreements, title interests, deeds, quit claims, purchase contracts, real estate agreements, title insurance policies, maps, legal descriptions, leases, memorandums of lease, lease insurance policies, maps, legal descriptions, leases, memorandums of lease, lease termination statements, contracts, UCC filings, and other legal documents termination statements, contracts, UCC filings, and other legal documents affecting the Greater Parcel Area from sources such as:affecting the Greater Parcel Area from sources such as:

The title company for documents filed with the County RecorderThe title company for documents filed with the County Recorder

County files (county facility headquarters, local jail facility office, county County files (county facility headquarters, local jail facility office, county archives, pending/active/closed project files, etc.)archives, pending/active/closed project files, etc.)

Provide recorded documents found outside of and in-addition to those recorded Provide recorded documents found outside of and in-addition to those recorded documents provided by the title companydocuments provided by the title company

Assessor’s Parcel Map(s)Assessor’s Parcel Map(s)




Initial County Package Submission RequirementsInitial County Package Submission Requirements Real Estate Title Due Diligence ReviewReal Estate Title Due Diligence Review Unrecorded Rights Certification LettersUnrecorded Rights Certification Letters

Identify the existence, or lack thereof, of any and all unrecorded rights that Identify the existence, or lack thereof, of any and all unrecorded rights that potentially impact the Greater Parcel Areapotentially impact the Greater Parcel Area

Examples of Unrecorded RightsExamples of Unrecorded Rights Contracts, leases, licenses, agreements, memorandums of understanding with Contracts, leases, licenses, agreements, memorandums of understanding with

public or private entities or persons that affect the use and/or occupancy of the public or private entities or persons that affect the use and/or occupancy of the Greater Parcel Area.Greater Parcel Area.

Any potentially enforceable right another entity or person mayAny potentially enforceable right another entity or person may claim allows for claim allows for use, occupancy, or passage over the Greater Parcel Areause, occupancy, or passage over the Greater Parcel Area

Two (2) letters are requiredTwo (2) letters are required One (1) letter prepared and signed by the local facility property managerOne (1) letter prepared and signed by the local facility property manager One (1) letter prepared and signed by the county property managerOne (1) letter prepared and signed by the county property manager

Site inspections of the Greater Parcel Area must be performed and certified-to by Site inspections of the Greater Parcel Area must be performed and certified-to by each county staff member authorized to sign the letterseach county staff member authorized to sign the letters

Initial County Package Submission RequirementsInitial County Package Submission Requirements Real Estate Title Due Diligence ReviewReal Estate Title Due Diligence Review Unrecorded Rights Certification LettersUnrecorded Rights Certification Letters

Identify the existence, or lack thereof, of any and all unrecorded rights that Identify the existence, or lack thereof, of any and all unrecorded rights that potentially impact the Greater Parcel Areapotentially impact the Greater Parcel Area

Examples of Unrecorded RightsExamples of Unrecorded Rights Contracts, leases, licenses, agreements, memorandums of understanding with Contracts, leases, licenses, agreements, memorandums of understanding with

public or private entities or persons that affect the use and/or occupancy of the public or private entities or persons that affect the use and/or occupancy of the Greater Parcel Area.Greater Parcel Area.

Any potentially enforceable right another entity or person mayAny potentially enforceable right another entity or person may claim allows for claim allows for use, occupancy, or passage over the Greater Parcel Areause, occupancy, or passage over the Greater Parcel Area

Two (2) letters are requiredTwo (2) letters are required One (1) letter prepared and signed by the local facility property managerOne (1) letter prepared and signed by the local facility property manager One (1) letter prepared and signed by the county property managerOne (1) letter prepared and signed by the county property manager

Site inspections of the Greater Parcel Area must be performed and certified-to by Site inspections of the Greater Parcel Area must be performed and certified-to by each county staff member authorized to sign the letterseach county staff member authorized to sign the letters




Initial County Package Submission Initial County Package Submission RequirementsRequirements

Real Estate Title Due Diligence ReviewReal Estate Title Due Diligence Review

Title Exceptions MapTitle Exceptions Map Identifies the Greater Parcel AreaIdentifies the Greater Parcel Area

Plots and Labels all geographically locatable exceptions Plots and Labels all geographically locatable exceptions reflected on the preliminary report and encumbrances reflected on the preliminary report and encumbrances discovered during the on-site inspectiondiscovered during the on-site inspection

Subject to specific production standardsSubject to specific production standards

Initial County Package Submission Initial County Package Submission RequirementsRequirements

Real Estate Title Due Diligence ReviewReal Estate Title Due Diligence Review

Title Exceptions MapTitle Exceptions Map Identifies the Greater Parcel AreaIdentifies the Greater Parcel Area

Plots and Labels all geographically locatable exceptions Plots and Labels all geographically locatable exceptions reflected on the preliminary report and encumbrances reflected on the preliminary report and encumbrances discovered during the on-site inspectiondiscovered during the on-site inspection

Subject to specific production standardsSubject to specific production standards

Sample Title Exceptions MapSample Title Exceptions Map




Additional County Deliverable RequirementsAdditional County Deliverable RequirementsAfter The DGS’ Initial ReviewAfter The DGS’ Initial Review

Legal Description & Accompanying Legal Legal Description & Accompanying Legal Description Plat MapDescription Plat Map

Identifies the proposed project site for facility constructionIdentifies the proposed project site for facility construction Included as exhibits within multiple lease-revenue bond Included as exhibits within multiple lease-revenue bond

documentsdocuments Final determination of the project site is subject to SPWB Final determination of the project site is subject to SPWB

staff approvalstaff approval Subject to specific production standardsSubject to specific production standards

Additional County Deliverable RequirementsAdditional County Deliverable RequirementsAfter The DGS’ Initial ReviewAfter The DGS’ Initial Review

Legal Description & Accompanying Legal Legal Description & Accompanying Legal Description Plat MapDescription Plat Map

Identifies the proposed project site for facility constructionIdentifies the proposed project site for facility construction Included as exhibits within multiple lease-revenue bond Included as exhibits within multiple lease-revenue bond

documentsdocuments Final determination of the project site is subject to SPWB Final determination of the project site is subject to SPWB

staff approvalstaff approval Subject to specific production standardsSubject to specific production standards

Sample Legal DescriptionSample Legal Description

Sample Legal Description Plat Sample Legal Description Plat

MapMap




Future County Deliverables And Additional Future County Deliverables And Additional ProcessesProcesses

State to perform site-inspectionsState to perform site-inspections

Mitigation of due diligence “issues”Mitigation of due diligence “issues”

As part of SPWB reviewAs part of SPWB review On a case-by-case basis as an Outstanding Issue on the due On a case-by-case basis as an Outstanding Issue on the due

diligencediligencereport to SPWBreport to SPWB

Real estate title due diligence update at bond saleReal estate title due diligence update at bond sale

Timing directed by SPWB staffTiming directed by SPWB staff Updated preliminary report covering the Greater Parcel AreaUpdated preliminary report covering the Greater Parcel Area Updated Unrecorded Rights lettersUpdated Unrecorded Rights letters Construction location certification letter.Construction location certification letter.

Interim management of the project siteInterim management of the project site

Open & honest communication Open & honest communication

Future County Deliverables And Additional Future County Deliverables And Additional ProcessesProcesses

State to perform site-inspectionsState to perform site-inspections

Mitigation of due diligence “issues”Mitigation of due diligence “issues”

As part of SPWB reviewAs part of SPWB review On a case-by-case basis as an Outstanding Issue on the due On a case-by-case basis as an Outstanding Issue on the due

diligencediligencereport to SPWBreport to SPWB

Real estate title due diligence update at bond saleReal estate title due diligence update at bond sale

Timing directed by SPWB staffTiming directed by SPWB staff Updated preliminary report covering the Greater Parcel AreaUpdated preliminary report covering the Greater Parcel Area Updated Unrecorded Rights lettersUpdated Unrecorded Rights letters Construction location certification letter.Construction location certification letter.

Interim management of the project siteInterim management of the project site

Open & honest communication Open & honest communication




Getting StartedGetting Started The CRUISE Request For DGS The CRUISE Request For DGS

ServicesServices Coordinated by BSCC StaffCoordinated by BSCC Staff Assignment or Update of DGS Assignment or Update of DGS

Customer Account Number (CAN)Customer Account Number (CAN)– DGS Customer Service ManagersDGS Customer Service Managers

Michael Cacciari (916) 376-1796Michael Cacciari (916) 376-1796

Danielle Hand (916) 376-1820Danielle Hand (916) 376-1820

Getting StartedGetting Started The CRUISE Request For DGS The CRUISE Request For DGS

ServicesServices Coordinated by BSCC StaffCoordinated by BSCC Staff Assignment or Update of DGS Assignment or Update of DGS

Customer Account Number (CAN)Customer Account Number (CAN)– DGS Customer Service ManagersDGS Customer Service Managers

Michael Cacciari (916) 376-1796Michael Cacciari (916) 376-1796

Danielle Hand (916) 376-1820Danielle Hand (916) 376-1820




Que

stio

ns

Quest

ions

Que

stio

ns

Quest

ions

Answers

Answers

Answers

Answers

&&

W E L C O M E to the SB 1022 Real Estate Due Diligence Training SB 1022 Real Estate Due Diligence...

Documents

Transcript of W E L C O M E to the SB 1022 Real Estate Due Diligence Training SB 1022 Real Estate Due Diligence...