The URL can be used to link to this page

Home My WebLink About2008/11/17 Additional Information ./ GAYLORD ENTERTAINMENT' Bennett Westbrook. SCllirr I.'i(( PrcsidclIl, DCI'dol'lI!('JlI. Dni.~n & C{>1I5In/oiNI November 15, 2008 The Honorable Cheryl Cox, Mayor City Council Members City of Chula Vista 276 Fourth Avenue Chula Vista, CA 91910 The Honorable Sylvia C. Rios, Chairperson Board of Port Commissioners Port of San Diego P.O. Box 102488 San Diego, CA 92112-0488 Dear Mayor Cox, City Council Members, Chairperson Rios and Port Commissioners, It is with great disappointment that I write this letter to inform you that Gaylord is discontinuing its plans to develop a resort and convention center project on the Chula Vista bayfront. This has been a complex and challenging project which started with our joint efforts to overcome a complicated regulatory and legal structure, as well as conflicting community interests. While we have made many strides on these fronts, we have been unable to overcome perhaps the biggest hurdle of the project - funding the enormous infrastructure costs associated with the bayfront redevelopment in a manner that will generate adequate financial returns for Gaylord, the Port, and the City. From the outset, we knew that overcoming this obstacle was a tall order. As we have jointly dedicated significant internal and external resources to analyze all possible alternatives, we have concluded that there is no workable solution despite our collective best efforts. This conclusion is amplified all the more by the current tumultuous economic environment. We are profoundly disappointed at this ultimate result, as we have no doubt that a Gaylord facility would operate very successfully in Chula Vista. However, we are confident today that this is the correct decision for our company and shareholders. I want to express our sincere appreciation for the hard work that you and your teams have contributed in leading this effort. We have developed great respect for Mayor Cheryl Cox, Bruce Hollingsworth and their respective leadership boards and staff. This Gaylord Emertainmem Company One Gavlord Drive, Nashville. TN 37214 Telephone 61'5-316-6436 Facsimile 615-3]6-6557 Em;]i]; bwestbrook@gaylordemertJimnem.com ('!1' r Letter to Port and City November 14, 2008 Page 2 unfortunate outcome is notwithstanding the best efforts of all parties involved to make this project a reality. On a personal note, I have truly enjoyed getting to know each of you and regret that this decision marks the conclusion of our work together on this project. Bennett Westbrook cc: Randa Coniglio Denny Stone , n,." . (;A'y LOR!..' F.'t-ffEk'rA(NMlS!'-~T-' EMBARGOED RELEASE: 6:00 p.m. CST GAYLORDENTERT~ENTTERNITNATESPLANSTODEVELOPA RESORT AND CONVENTION HOTEL IN CHULA VISTA, CALIFORNIA NASHVILLE, Tenn. - November 17, 2008 - Gaylord Entertainment (NYSE: GET) today announced the tennination of its plans to develop a resort and convention hotel in Chula Vista, California Prolonged planning and approval processes, a complicated regulatory and legal structure, and excessive off-site infrastructure costs contributed to this decision. "We are very disappointed to have made this decision since the greater San Diego region is such an important convention market," said Colin V. Reed, chairman and chief executive officer of Gaylord Entertainment. "However, over the last year to J 8 months, this project has become much more complicated and risky as infrastructure costs escalated and the time line for the hotel was extended by the very complicated and prolonged approval process. While many will likely attribute this announcement to the rapidly deteriorating economy, the fact is that the compiexity and costs of the project were the main drivers of this decision." "Through this process, we have come to know and respect the leadership ofChula Vista and the Port and thank them for their efforts and support," said Reed. The decision regarding the COOla Vista project today has no bearing on Gaylord's other announced development initiatives. Gaylord will be taking a non-cash impairment charge of approximately $5 million in the fourth quarter for costs incurred to-date on the Chula Vista project. About Gaylord Eutertainment Gaylord Entertainment (NYSE: GET), a leading hospitality and entertainment company based in Nashville, Tenn., owns and operates Gaylord Hotels (www.gaylordhotels.com). its network of upscale, meetings-focused resorts and the Grand Ole Opry (www.opry.com). the weekly showcase of country music's finest performers for more than 80 consecutive years. The Company's entertainment brands and properties include the Radisson Hotel Opryland, Ryman Auditorium, General Jackson Showboat, Gaylord Springs Golf Links, Wildhorse Saloon, and WSM-AM. For more information about the Company, visit www.GavlordEntertainment.com. I ,.., .';0.., :<': ')<:.' :- ,:!~ / This press release contains statements as to the Company's beliefs and expectations of the outcome of future events that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. These include the risks and uncertainties associated with economic conditions affecting the hospitality business generally, the timing of the opening of new hotel facilities, increased costs and other risks associated with building and developing new hotel facilities, the geographic concentration of our hotel properties, business levels at the Company's hotels, our ability to successfully operate our hotels and our ability to obtain financing for new developments. Other factors that could cause operating and financial results to differ are described in the filings made from time to time by the Company with the Securities and Exchange Commission and include the risk factors described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2007. The Company does not undertake any obligation to release publicly any revisions to forward-looking statements made by it to reflect events or circumstances occurring after the date hereof or the occurrence of unanticipated events. ### Im'e8tor Relations Contacts: lrfetlia Contacts: Mark Fioravanti, Senior Vice President and Brian Abrahamson, Vice President of Corp. Treasurer Communications Gaylord Entertainment Gaylord Entertainment (615) 316-6588 (615) 316-6302 mfioravantir7iJp"aylordentertainment. com babrahamson@"avlordentertainment.com .....or- -or""' Rob Tanner, Director Investor Relations Josh Hochberg Gaylord Entertainment Sloane & Comoany (615) 316-6572 (212) 446-1892 )1annerr7iJ"av lordentertainment. com ihochberq@sloanenr.com 2 ~-e""'~'i>3"'\'C> ~D\.\C- ~~,""f'''~ ,-\;17/08 San Diego-Imperial Counties Labor Council AFL-CJO For Immediate Release Media Contact: Evan McLaughlin, Political Director 619-850-2790 cell Statement on Gaylord Decision to Withdraw from (hula Vista (Monday, Nov. 17, 2008) -- Lorena Gonzalez, secretary-treasurer/CEO of the San Diego and Imperial Counties Labor Council, AFL -C/O, released the fal/owing statement today regarding the decision by Gaylord Entertainment to withdraw its plans for the Chula Vista bayfrant. NOTE: Please view the attached letter from Gaylord Entertainment, which is referenced in the statement by Ms. Gonzalez. "It is unfortunate Gaylord Entertainment will not be pursuing its proposed development of a convention center and resort on the Chula Vista bayfront. "Despite several heated moments throughout the course of negotiations, we were pleased with the progress of negotiations related to the project's construction, operation and environmental standards. Before today's news, the Labor Council was very optimistic that Gaylord's proposal was on its way to becoming a world class destination, save for the financing. Judging from the comments in the company's letter to me today, it seems as if Gaylord agrees: This project failed for reasons related to the larger national financial crisis, not because of labor negotiations. "The Labor Council and its affiliated unions continue to maintain that all communities should expect companies to make real commitments to job quality and environmental preservation and sustainability in exchange for large investments of tax dollars and prime public-owned land. "If there is a silver lining in this experience, it's that Gaylord recognized this and ultimately made a good-faith effort to pursue agreements that would have resulted in a project that would have made the community proud. "Should Gaylord want to re-entertain its proposal at any time in the future, or should the Port District or the City of Chula Vista look to continue the proposal with another developer, organized labor would be happy to build on the progress we've made to turn the Chula Vista bayfront into a winning solution for workers in the community." The San Diego-Imperial Counties Labor Council, AFL-C/O, is a coalition of 124 locol unions that represent 120,000 working families in the region. The Labor Council strives to ensure that 01/ workers in the region earn a fair wage and health core for their families. LORENA GONZALEZ, Secretary- Treasurer MICKEY KASPARIAN, President 4305 University Ave., Ste. 340. San Diego, CA 92105. (619) 283-541 I . Fax (619) 283-2782 . www.unionyes.org @~665 , '. \ '\ I" ,,~ :::,"\l- I ~,. GAYLORD ENTERTAiNMENT' ~1'\.' ') J' . ,( " Bennett Weubroolc. Sr.lior I.'if.. I'r('Jiol!'rll. Otllr/"P"'''''I. Dtt~~" & CO"HfI!(lioll November 15, 2008 Lorena Gonzalez Secretary - Treasurer San Diego - Imperial Counties Labor Council 3717 Camino Del Rio South San Diego, CA 92105 Tom Lemmon Business Manager San Diego County Building and Construction Trades Council 3737 Camino Del Rio South Suite 202 San Diego, CA 92108 Dear Lorena and Tom, It is with great disappointment that I write this letter to inform you that Gaylord is discontinuing its plans to develop a resort and convention center project on the Chula Vista bayfront The Chula Vista project has proven to be very complex and challenging and we have made many strides in addressing the major obstacles before us, Unfortunately, we have been unable to overcome perhaps the biggest hurdle of the project - funding the enormous infrastructure costs associated with the bayfront redevelopment in a manner that will generate adequate financial retums for Gaylord, the Port, and the City of Chula Vista. From the outset, we knew that finding a mutually beneficial way to fund the infrastructure was a tall order. The Port, City and Gaylord committed significant internal and external resources to analyze possible solutions. Nevertheless, we have concluded that there is no workable solution despite our collective best efforts, This is amplified all the more by the current tumultuous economic environment. We are disappointed at this ultimate outcome today, as we have no doubt that a Gaylord facility would operate very successfully in Chula Vista. We do take satisfaction in knowing that Gaylord and your respective organizations collectively resolved our major differences and were down to the final steps of documenting our mutual G;lylord Enten~illmcllt Comr~lIY One G.lvlonl Drive, N;l~h\'ille, TN 37214 Telephone 61.5~J]6-6436 Fa<:~jlllilc 6IS~3IG-0557 Email: bWe5tbrook@~'1ylordemertOlilllllent.colll ...~ Letter to Lorena Gonzalez and Tom Lemmon November 15, 2008 Page 2 agreements. There will likely be people who would like to place the blame for the failed project at the door of organized labor but that simply is not the case. Yes, we had our differences and things got a little heated. At the end of the day, though, we were able to come together and find common ground, and for that we thank you. We regret that we are not going to have the opportunity to work with you to launch the Chula Vista project and realize its significant benefits. We wish you the best of luck in your future endeavors. Bennett Westbrook '. . Regional Economy . Housing Market . Chula Vista Property Assessed Values . Fiscal Year 2008-09 Quarterly Report . Fiscal Year 2009-10 General Fund Overview . 5-Year General Fund Projections . Development Services Fund Budget . Redevelopment Agency Budget . Budget Balancing Options 1 ~ . Declining Sales and Property Tax revenues . Rising labor costs . $5.5 million revenue shortfall in General Fund projected in current fiscal year offset by $1.6 million in expenditures savings - projected gap totals $3.9 million . $19 million General Fund gap projected for FY 2009-10 . Shortfalls also exist in DSF and RDA . Long term solution will require permanent expenditure reductions and/or revenue enhancements ./ Labor and employee briefings ./ Employee focus group ./ Employee suggestions and involvement . November 17 Workshop - Budget overview and balancing options . Community and labor briefings . December 4 Workshop - City Manager's Proposed Budget Reduction Plan . December 9 and 16 Council Meetings . January 6 Workshop - Council approval of Budget Reduction Plan 2 Interfund Reimb. 6% Transfers In 8% Franchise Fees 7% Utility Users Tax 5% TOT 2% Charges for Svcs __________ 5% Other Revenu~ Other Local Tax 9% 2% [?)J~@@@ 3 -Cli;~' ~~~~~<ftW","-"~~i'-~r:'~' :L"fi"2'",'I~~ ~;~,,~ 'J~jT~~~"-~,,,; .~ ' ';ii'ste~Dfe~m;I~S"stss~e~l~~~1 :. ;'~;z-t~1Jt-;-;~~1t:~~~;#AG0~;'"i-- b:~,~~.7,: i)"':::l;~::~;'~r~,:tr;: ;;--, ~ f4'c',."-~:,; ~fjnual;:Percei1tage(}hah'ge',:';' ~ -' " ;'t~:IT2(,;)(Anm;Jl~ki;;:?ti,At-' ,.~:;i&~;tc't:';~~3i:h;(;;d%,:;ijHj;;ti!KltN~\N?!im;LijjH!t,j,i City versus County Overall 25% 20<'>/<.> "Bad,'ee' . :;::"b;J;:~~;~i;:<~';~Jr~4#~ 'pj~rbCol!htY~;;!t2.~ol.ol! ,,>,,...-;; 15% 5% -.-.---- 10% 0% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 -a- Chula Vista ........ County Overall [?):7~@:ID@ FY 2007-08 vs. FY 2008-09 8% ;IBlftrd!~t'as's(lm" - Hbns~:':'- '3. ",:Z'\,,,~J 1,~:"~sr,.: . ~~ '~,0WA;?h ".: . ;R~~~jf~:p"~pj~'cti~~'''- 12% 10% 6% 4% 2% 0% . -2% " 0 0 <n z <n m m r '" '" 3" < " r '" 0 " <n " 0 ~ 0 ~, . 0 " . . " '" 0 ro 0 ~ . a .- 0 0 0 " 0 " " ro 3 0 0 0 " '" 0 0 5 0 m 0 ~ . 0 J1:, .- 0 0 0 " 0 ro 0 ~ " ~ . . . "- .' &' 0 . ro 0 !!I ;;: 0 0 < ,~ 0 '" . 0 0 0 ~ " 0 '" " G) ~ [?):7~_ ro Q 0 0 <': ro a . ro 0 <': . < 0 0 ro 0 4 /" 2'd Qtr Calendar Year (April - June) 15% 20% 10% 5% -5% 1lI.'(: 0% I' ft.nnDT.T~ u~~'=~_ j rit' I' - I ___ _________ __ ________________ ____ ____ -10% -15% -20% Source: MuniServices z r 0 " <n :;:' r <n '" m <n " " <n < <n 3 0 " ~ . "- ~ ~ . 0 0 . ~ 0 ~ . . 0 0 3 0 " .- " 0 0 c .- 0 ~ . a 0 g " . " 0 0 .., 5' 0 .- .- 0 0 . 0 ~ 0 ~ . 0 ~. . rr 1[ 0 0 ~ ~ . ~ . < . .' " . " " 0: . rn 0 ~ .' ~ ~ 0: ~ $ a 0 . 0 0 rn . 0 ~ . ~ . < 0 " . . 0 g 0 0 0 [fl7~@@@ " 2'd Qtr Calendar Year (April - June) Food Products 17% Construction 7% Business to Business 4% [fl7~@@@ 5 State 6.00% State Fiscal Recovery Fund 0.25% *City/Local Government 0.75% Local Transportation Fund 0.25% Local TransNet Funding 0.50% .~~iW~~~;~.ffilOOJ!f,{K'~)}3r!A~'i~:{~~i~.l~~JZ:5~o 'The remaining 0.25% is allocated to Local Govt. by the County. ~~@@@ r#'""'qk"''i'~1'l11'''''iY-ii!~'.'"~-:v.~;I''<UV:~''1-~;:':;'''-''''t';'''l'''lIl'W;h'~' r :'r~~fifpl~~tlwIS'al~s>,~' .'. L","1;::tEilill;';'.,J":,%i3ii<~5'~Y':;"S'fi:<f~~;/*jf~Jcl'l:t;;':jl~p,,~':' :~ l\,.'l:'l'\li"'!'~'d."'___I'_' Q;l'1kw !,.i!i;il^,.,-'n"t"*-,''''''J;M'+/~J.';;;'' w~"" t 'tUlUa Yryen::ell at:le . ".a I a . . ...."..",.'"'.~. ....",.""")fhs.-_~,.;.-..~.-~~..," ~~.. ,.t:.".v;", ,"0 '. . -,.,,'!'- !fu.J~_:t O:--,_~'1;';;._ A~~ ,~.=t'.k.,,:z.:w:...;;_ .:,~-.__:s:;'l,_,'::... 14% - 12% 10% 8% 6% 4% 2% 0% . -2% -4% -6% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008' * The last two sales quarters for 2008 have been estimated ~~@@@ 6 . o .~ :;; $20.0 $15.0 $10.0 $5.0 $0.0 FY 04-05 FY 05-06 FY 06-07 FY 07-08 FY 08-09 mil MVLF-in-Lieu 0 MVLF [?)J~@@@ . $12.0 0 .~ :ii $10.0 $8.0 $6.0 $4.0 $2.0 $- 2005 liD Trash/Cable 2006 2007 2008 2009 (3 Energy - Consumer EI Energy ~ Power Plant [?)J~@@@ 7 ~~:iK1\:'t~~r~l1lllilll?1l.~mr.~nt:j::';;:~~ft?j!'Jl~;;'taW!,N'lt~,;_ :rm::\i,jf(~~1;~;!'-~;~lTIfmf~l;;f10l~~ Sales Tax Property Tax Motor Vehicle License Franchise Fees Public Safely Sales Tx Interest Earnings Development Related Rev Staff Time Reimbursements From +2% to -5% S From +3.9%> to 2.2% S From +2.9% to 2.2% $ Based on FY 08 actuals $ Public Safety STx. $ Reduced cash flow assumptions & interest rates S Zoning Fees, Perm its S PFDIF and Sewer Fund $ Revenue Adjustments $ Departmental Exp Savings Public Liability Expenses Administrative Freeze Higher than normal expenses Expenditure Savings Estimated Deficit FY 2008-09 $ $ $ (2,788,000) (300,000) (82.000) 931,000 (148,000) (368,000) (701,000) (2,078,000) (5,534,000) 2,800,000 (1,200.000) 1,600,000 $ (3,934,000) ~~@@@ 'p'ectea Jll;"YM/_.;4i. .. illi9il~) 9.3 137.3 (141.3) $ (4.0) Projected Fund Balance as of June 30, 2009 Percentage of Operating Budget $ lGeneral Fund impact assumes no mid year corrections. 5.3 3.5% ~~@@@ 8 30% 15% iff t'i 10% ',J 5;;' ~ fl ~ 'iit 'J~' 5% Wi' 1:::! k~ 'it 0%-, !ill- Ii,,; ;.~ ~i ~ )~iI~ ~ :il ~ ~ 8% llif ;;: ;'l( ~;f ~ 0/, >,., ,t ) ffil" 0!' ~!i ~ ,~; 'l~ .1 ! 1m "": !~ "~' ~; ~ ~.j ~8 r'<: fI: .,., ~,~~)Kt 0J,' i'!: 'lill ,t. i"~ ':m ~, ~, ~j g!{ "" j 25% 20% 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 Council 8% Reserve Policy approved in 1996 [fU~@@@ ":..,pn.;;;;FI,"""c"R,-"c,'1l"':2."''''-'_'Y-il;''-'",' "~.\\"-11- ~~ ~7~47" = .' '~T "'~~ ea'sl:i:~es\'f9;,f ,4t_ ,,, Ir'e _4 -'~ :':l1i"~r:eh'tl :"'1Iir-":";-,";';""i:'\.,.)"r1:"_,;f,'^,,.,,kr"'!-,,-;~,wi",,;. . _" u ;; i ,nS;!d1z?'ili)l':.-;"g ;')m0h;~; ,'- 0{t1<'V3id;,',' , "'" 'bh;'l :', -"--(~,,,11'"~0'~''' '" 1~+';''';)---'- , ,"",' '~"""",' " #I" '1 e'alin)efic-i:t1:i~\ _ __" .... :-"-,r~:~>t",,,:-_-'~l b-.''';';.;::J;' ":~,",,-;,,,,~,it~.~:!_ . Hiring freeze . Freeze budgets for training, travel, membership dues, and miscellaneous supplies and services accounts . Scale back vehicle replacement . Early implementation of FY 2009/10 budget reduction plan [fU~@@@ 9 Revenues Expenditures Deficit Projected Deficit $ 135.25 $ 154.22 $ (1897) [fW~@~@ 10 General Fund Revenue Summary In Thousands (000) 1;<:.j\j;J""'"""'.I".>I,....\~~~5il;t~j{jlj.:>>:rmr;'f;1'i'5L~AiU':Ji"'''jiTol;'''''~1'-l..,r;pnrPr~..",r.III'~ Property' Sales MVLF Franchise Fee Other Local Taxes Charges for Services Transfer In Other Re\enue Use of Money & Prop Fines, Forfeitures & Penalties Revfrom Other Agencies Licenses & Permits Total General Fund 30,232 29,678 20,216 8,732 12,039 7,963 12,272 11,617 2,421 1,494 5,376 801 142,842 'Property Tax revenues include delinquerl\ taxes, projection basis for Propeny Taxes is -2% -1.8% -2.0% -1,8% 1.0% 0.2% 4.0% 2.0% -7.4% -9.5% -1.7% -10.4% 17.1% -1.5% [p)J~@~@ General Fund Expenditure Summary by Category In Thousands (000) Personnel Services Supplies and Services Other Expenses Operating Capital Debt ServiceITransfers Out Utilities Total Operating Budget 7% g% -38% 0% 31% 5% 8% [p)J~@~@ 11 . Personnel Services +$8.1 M Includes funding for all Council approved positions $3.0 M increase related to scheduled salary adjustments $3.4 M increase to reflect the elimination of salary savings $0.9 M increase to reflect higher flex/insurance costs $0.8 M increase due to the transfer of Planning & Building Administration from the Development Services Fund (net impact to General Fund totals $550 k) [f'\7?2@~@ w $160 c Q ~ S140 $120 S100 S80 S60 $40 S20 FY 04 Actual FY 05 Actual FY 06 Actual FY 07 Actual FY 08 Actual FY09 FY10 Budget Budget [f'\7~@~@ 12 85% 80(% 75% 70% 60% FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 ~~@~@ January 2007 2% 3% 3% July 2007 2% July 2008 4% 4% January 2009 4% 4% January 2010 4% 4% 4% Compounded Salary Increase 19.3% 10.3% ~~@~@ 13 Compounded Percent Increase 30% 15% 27.4% POA 26.4% IAFF 25% 20% 10% 10.3% Mgmt 5% 4.1% Discretionary Revenues 0% . FY06-07 FY 07-08 FY08-09 FY 09-10 FY 10-11 Discretionary Revenue -POA -IAFF -CVEA, WCE, Conf -Mgmt ln1?2@~@ Relative to Assumed Investment Return of 7.75% 0.00% 23.25% 15.50% 7.75% -7.75% -15.50% -23.25% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 est ln12;@~@ 14 Miscellaneous Employees 40% 35% 30% o D G---O--O 25% 20% 15% 10% 5% 0% FY 02-03 FY 03-04 FY 04-05 FY 05-06 FY 06-07 FY 07 -08 FY 08-09 --+- Employer -0- Employee ~Tolal 1?l7~@~ @ ~ $30 c ~ $25 ~ $20 $15 $10 $5 $0 -----0---<>----<>--<> .,,-....--.............--.--.-- .........."___..n~O......_....._.._.n.n___.____......,.._'...n._..n_________n..'.'..,..,..,.___........,_,...____,,___._.._____....'...m,..,...,.."",. ~- -----/---------------------------------- <;I' FY 03-04 FY 04-05 FY 05-06 FY 06-07 FY 07 -08 FY 08-09 FY 09-1 0 1?l7~@~@ 15 15.4% 11.0% 13.2% 0.1% 10.9% 5.5% 19.9% 8.4% 14.2% January 2006 6.9% 10.0% 8.5% 2007 8.5% 16.4% 12.5% January 2008 5.0% -2.8% 1.1% 2009 8.9% 0.5% 4.7% 2002 - 2009 Avg Increase 8.9% 8.8% 8.9% January 2010 (Estimate) 10.0% 10.0% 10.0% Note: Aetna replaces PacifiCare in January 2009. 1?W?2@~@ City of Chula Vista Staffing (FTEs) Compared to FTE's per Thousand Residents. 500 6.5 1,500 1,250 6.0 "1,000 o 5.5 ~t ~ LiJ 5.0 tL '" tt:: 750 250 4.5 (f 4.0 FY 2003-04 FY 2004-05 FY 2005-06 FY 2006-07 FY 2007-08 FY 2008-09 8 Total FTE's -+- FTE's/1 000 I?W~@~@ 16 Workload Measures FY 2003/04 - FY 2008-09 FY 2003/04 FY 2008/09 % Change FTE Employees' 306.50 294.00 -4.1% Storm Drain Miles 196 256 30.6% Sewer Miles 428 481 12.4% Street Lane Miles 959 1,181 23.1% Park Acres 412 492 19.4% . FTE ::: Full Time EquiVclfent !ro~@~@ ~ CVEA POA IAFF WCE CONFIDENTIAL PROFESSIONAL MANAGEMENT' 31.00 81.50 146.00 04'20~. oi. qtANGE, 510.50 (17.87) 240.00 16.00 111.00 29.00 30.00 (11.00) 26.00 (9.00) 70.50 3.00 114.00 (15.75) --------------------------- 1,102.00 (5.62) TOTAL 1,107.62 1,263.76 MANAGEMENT RATIO 1:8 1:8 1:9 "Management includes: Executives, Senior Managers and Mid Managers !ro~@~@ 17 <J> $2.5 " .2 ~ $2.0 $1.5 $1.0 $05 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 1?tI?2@~@ ~ $6.0 " ~ ~ $5.0 $3.0 $4.0 $2.0 $1.0 $- FYOO FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 1?tI?2@~@ 18 " 52.00 c ~ ~ 51.75 ..0" 51.50 51.25 51.00 $0.75 50.50 $0.25 50.00 FY 03-04 FY 04-05 FY 05-06 FY 06-07 FY07-08 [fl(?2@~@ 19 Revenue Category Actual Projected Forecast Forecast Forecast Forecast Forecast 2007 -08 2008-09 2009-10 2010-11 .2011-12 2012-13 2013-14 Sales Tax -1.8% -5.0% -2.0% 2.0% 2.0% 2.0% 2.0% Property Tax 9.9% 2.1% -2.0% 2.0% 2.1% 1.8% 2.1% Franchise Fees 9.6% 0.0% 1.0% 1.0% 1.0% 1.0% 1.0% MVLF 12.0% 1.7% -2.0% 2.0% 2.0% 2.0% 2.0% Utility Users Tax 5.7% -3.5% 0.0% 1.0% 1.0% 1.0% 1.0% TOT 5.7% 2.0% 0.0% 2.0% 2.0% 2.0% 3.0% Average 6.9% -0.5% -0.8% 1.6% 1.7% 1.7% 1.9% "':::LY1:nl"~i .,dY:'Ii:T .,.,.,<:<V:";.: ~.":.~"1jTk'."..T"- 'l '"""5- '*"'~0ll!i;""'"ll '0"'''' '''''t''''I'\.' i~~:'J0, ..,;k_' -j-~~/-".hf i" . '", -- J'. '" "",lear,,' Ul 00 ' '- ,:-r-'~':,;i~~~1:J:;~~,::,::",":,:~~,~:",~~ >~~~" " . ~r.--~fa:~;t'- .,~~, ,~~{, ~\~ l~t~l~j;~J~,~,!:J mPtIQ@~l;i;Tlli~P~!:tttJl~M";~l ,u... .'~._'''''.' .;....__.~, , "0"+';1.,.-.-_." ..w,;(;>"'; ,...,,_Z';t~::Jh. ",,"," ',.'" """,:.!-", _~.l.k~_""_W'W .,--_, ,__ -'I. _jl~_ . PFDIF debt restructured or interfund loan approved . All scheduled MOU increases are included for all bargaining groups and management employees . Assumes no raises after FY 2009-10 (Step increases are budgeted) . No salary savings assumed (100% staffing levels are fully funded) . Health care cost increases of 10% . CalPERS rate increase of 3% in FY 2011-12 due to anticipated investment losses and early retirement incentive program 20 Relative to Assumed Investment Return of 7.75% 23.25% 7.75% 15.50% 0.00% -7.75% -15.50% -23.25% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 est CalPERS % Funded 160% 140% "7~-"-Ql " ~ '\ OJ "U__."."" "...__"__"_._."U__."__....".._."._ 8 ::---0 .". "'".. ">.0--'" .. .." . @o__G- 120% 100% 80% 60%, ----~-----~ -----_._____._. _n_______ __..____ 40% 20% 0% 1993 1994 1995 1996 1997 1998 199920002001 20022003 2004 2005 2006 2007 '-+- Safety Employees -6- Miscellaneous Employees 21 _t~~ Revenues $ 137.30 $ 135.25 $ 136.04 $ 138.55 $141.21 $143.88 Expenditures $ 141.30 $ 154.22 $157.90 $161.31 $160.18 $163.63 Deficit $ (4.00) $ (1897) $ (21.86) $ (22.76) $ (18.97) $ (19.76) Note: Correcting structural deficit will not add to reserves. .~:~n~tt<~~t:- ,:tJJ~;:~;7~'ff~ ,:~.;;:~~:; ,~. ~,. ;e~fii~~f; fu~~J'N~~ijtj1is ,'",:!~r~'{jj~,:~~~~1~1;:i1~:L:~ . .:~t:~:L,~cl~~rl . Economy continues to slide beyond current assumptions . Continued housing market decline and foreclosures . Continued risk to UUT . State budget crisis 22 . ERAF I & II Cumulative Loss $46.9M since 1992. . ERAF III $3.6M in return for Supporting Prop 1A. . MVLF Gap FY 2003/04 $3.5M - Represents June-Oct 2003 Payments. - Repaid in August 2006. . State MVLF Revenue Shortfall - Estimated November Receipts ($100k) . Booking Fees $40k . Library Grant $40k . FY 2008/09 RDA ERAF shift $859,852. - FY 2004/05 $743,358. - FY 2005/06 $900,367. . $1.8M Gas Tax payments delayed. - For months April to August 2008. - Paid in September 2008. - Loss of Investment Earnings to Fund. 23 , . ~C~T'T-"''j' -'W0GW\ry>" ,'- -.~'lU""i:Z'YV7"~~;>m" "~.' __:-'''-:;~l'r;;''~,.,:,_,?'''*, ~'~e~elo";&me'm~~Sel&i'ele , ."" l>.,v-~A>1.:y~ ," cl'~~,","""""^,"" "" j'--"'''''- ...d, -"'" --" .' .,,_.'___~_W '. 'r_. ,*,.':0", ,~. '0 .~- 'l~-JXi:_i(C".::i;;.' 'J":t.;:;'0f>';";>-:":'V<'~';:"4t,~ "~;S:'" :0.,-,,' .' ~ .'.' Ji"1li/ ':',,;lo\,\l(j'0wn'i~~fAffti\liitf,~ " _, ,;;~t(t~f:ni.:JtfA)fFdi~.i._.JtC"0:'ii8,t;ti.t.,. "",L"~\.tj;Q;;i;wn;ffu7:Jc:-",,,~\:s:.:.' In the last 5 years: . Residential permits annually . Total permits annually . Total inspections annually . Annual billable hours . Development related staffing* 'refiects FY2008,09 midyear staffing reductions. -88% -59% -63% -40% -40% 24 500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 o Single Family l3 Multi-Family Reclassifications $ (73,000) Service and Supply savings $ (65,000) Associate Planner $ (83,000) (1.00) Building Inspector II $ (161,000) (2.00) Development Services Technician l! $ (204,000) (3.50) Development Services Counter Manager $ (79,000) (1.00) Plans Examiner $ (104,000) (1.00) Assistant Director of Planning $ (130,000) (1.00) Associate Planner $ (82,000) (1.00) Citywide Overhead (Estimated) $ (142,000) TOTAL REDUCTIONS $ (1,123,000) (10.50) 25 . Additional budget shortfall of $1.3 million projected in current fiscal year . Fee update: - Include Planning, Building, Engineering, Public Works, and Fire services - Balance development related workload with staffing levels - Adjust fees to offset cost of services - Shift General Fund portion of Admin costs out of Development Services Fund (approx $550K) - Anticipate February 2009 presentation to Council 26 AS 1389 ERAF Shift Due by May 1, 2009 ($859,852) Mid-Year Deductions ($859,852) State ERAF Shift (Due by 5/1/09) GiP Funding Postponed Storefront Renovation Program SW Specific Plan Consultant Balance from Completed Projects ($859,852) $270,386 S 65,000 S 50,000 $155,386 Projects Postponed $222,500 Scripps OPA ($ 15,000) Small Business Promotion($ 6,000) Developer Broker Forum($ 9,000) Appraisals ($ 20,000) H 51. Corridor ($120,OOO)Project Area Expansion ($ 25,000) As~needed Financial Consultation($ 27,500) Cut 3 RDA vacant positions Project Coordinator 1111 Senior Secretary 6 mos. of Principal Project Coordinator $249,378 Subtotal 08-09 Savings Remaining Gap Inlertund Loan from Low/Mod $742,264 ($117,588) $117,588 27 . Renegotiate MOUs . Continue hiring freeze . Early retirement incentive (layoff avoidance) . Further program and staffing reductions . Tax and fee increases 28 Scheduled salary increases: January 2010. 4% 4% 4% 4% . Cost of scheduled salary increases: Fiscal Year 2009-10 Fiscal Year 2010-11 S4.6 million S6.4 million Miscellaneous Safety Combined ~ $670,900 $431,800 1$1,102,700 29 San Diego Region Vista Del Mar Imperial Beach Encinitas Solana Beach Oceanside Carls bad Escondido Lemon Grove National City Chula Vista 8% 8% 6% 5% 2% 2% 1% 1% 1% 1% 0% 8% 5% 0% 0% 2% 0% 1% 0% 0% 0% 0% IBarqainioW;l!Jnit~i>:rotal~Mem5ersnipi'; ,Vai;'a'nf ~ositioI1$i~/';~"aca nt'l;i CVEA 510,5 33,0 6,5% POA 240,0 4,0 1,7% Management 114,0 13,0 11A% IAFF 111,0 0,0 0,0% Professional 70,5 5,0 7,1% WCE 30,0 1,0 3,3% Confidential 26,0 2,0 7,7% Total Citywide 1102,0 58,0 5,3% 30 Department Vacancies Mayor & Council 1.0 City Clerk 1.0 City Attorney 3.0 Administration 2.0 Human Resources 2.5 Finance 2.0 Engineering 2.0 Police 11.0 Public Works 15.5 Recreation 2.0 Library 6.0 Total General Fund 48.0 Fund Police Grants(CBAG} Transit Wastewater Redevelopment Agency Total Other Funds Vacancies 3.0 10 20 40 10.0 :mota'I~~ac~nci~~~58Y6{I7'1j;E~1~ ' ;," . "~'\~:~"!;;ji;li.l;a:liat.i:i;;:ii;.;lt+,..0="j"^..J1J.t.\k!,,,,,,,,-1; ~ S160 $16 ~ 0 0 g S140 S14 ~ "- :;; :E $120 $12 $100 $10 S80 S8 $60 $6 $40 S4 $20 $2 $0 $0 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 EEJ Budgeted Salary Savings 13 Actual Salary Savings ....- Personnel Services Budget 31 '~:rm~i ' ".. ~,>i'~'C'~~;;':;"~'~:;;'" I "If., ~<" f~'i0~!i-:i'~~;'~-'~ J,t.., ...~~-C'" . ".:iN' it.i""11 V. 41""'-?d'4t".!"'-(?~ ,s'r:e"""'eD:\, ".' ,""'~'e'''''' ,llt'De --' ,I:; ,111;11 ,19U;!'O' 'BfB.'-' ' )U~Ui ' ,\V"' -!;l,. ,:,~~",,1~~___1:A4i;..?:E'_ '-;G, yO" ;~ - ~,iw@'<'"!<",:,~,_;:'V,:,~';^<"_::J %..::.. Two Previous Retirement Incentive Programs: . 80 employees retired . 55 positions eliminated . 25 positions filled . Estimated on going savings of $6,2 million i.:.aJ:\;;q""~';:--!0? '''':W-',' ?'" 'l!>~; 7'x';;-;:)~Y":'1'd.,"i*$,n~-1;"Y411;r.r," ,";"/''',r ;t~eaj; ij~,_", "k,Ft"~"'B-';:;t'ZI'"'!.4'lS;;' .,p,;'; .,:!;f\:,,\,~.. ~'fP(1)""Ia::'\lI' ';,., _";'irA;;(';~.~> , , 'e ' .. 'a 'an""'lrig" " p. I'O""S i l '1o. , Xii" 'J; -":~ il~': *:1,'/" ~ 'J. Itl' . .~: -; '- ' _ " ':'>~:' ~~~~,?,~,,'t ,.''t ,_ ',i,.-,,'V"~':_;_ ..:~. ;:~':'~. ,_~~ r._'_'~""".,;*::.~:=~..'!~~ ':~;iREiti~f:fle'rn~thl'm'~ef:(ti!~e ;'~ ,<n:1JW;;!1:~.G::"~' '...~.'mx::;::.-:,.,"::.,t::irL.i0i::":+';dt~~1~'tS':J;\I4.'" ~j~>. Recent Survey: . 280 employees are eligible . 19% would consider early retirement with a medical incentive . Approximately 55 employees . Estimated annual savings - $4 to $5 million 32 . Significant reductions to date due to the downturn in the economy and slowdown in development - As part of development of fiscal year 2007-08 . budget 34.25 vacant positions were eliminated - As part of FY 2008-09 budget development eliminated 145.00 positions - During FY 2008-09 eliminated 10.5 positions in Development Services Fund =" ,. General Fund Planning & Building (includes DSF) S (2,377,757) -30% (16.50) Finance $ (79S,S82) -22% (6.00) Administration $ (1,135,394) -22% (100) City Clerk $ (249,429) -20% (1.00) City Attorney $ . (55B,712) -20% (200) Human Resources $ (1,085,652) -19% (4.50) ITS S (868.401) -18% (5.00) Library $ (1,B10,367) -18% (12.50) Recreation $ (1,051,800) -16% (4.00) Eng & Gen Svcs (includes DSF and Fleet) $ (3,165.481) -16% (22.00) Nature Center $ (192.454) -15% (1.00) City Council $ (216,861) -14% Fire $ (3,392,917) -14% (18.00) Public Works (includes DSF) $ (2,340,699) -11% (20.50) Police $ (4,508,903) -9% (30.00) Redevelopment Agency (Fund 651) S (394,311) -8% (1.00) Other Reductions $ (1,944,348) TOTAL REDUCTIONS CITYVVlDE $ (26,089,068) (145.00) 33 CVEA POA IAFF WCE CONFIDENTIAL MANAGEMENTI PROFESSIONAL -14.9% -4.4% -0.9% -12.5% ~9.71% 224.00 (36.50) -16.7% TOTAL 1,248.5 (145.00) ~11.6% *Management includes: Executives. Senior Managers and Mid Managers Recreation S3.7M /""~% ~ibrary S6.0M 6% Planning & Building SO.8M 1% Engineering -SOAM 0% 34 . General Purpose or Special Purpose - General Purpose Tax . 2/3rd City Council approval and . Simple majority electorate approval (50% + 1) - Special Purpose Tax . 2/3rd City Council approval and . 2/3rd electorate approval B'iliilQ~I{"IfEMEfii[~lYi:~sO:@t~~1Jli._J;j~~l?:.I[4t~",,~~~,~l'L~i8 General Sales Tax (50% + 1) 14 5 74% Special Purpose Sales Tax (213 vote) 4 7 36% UUT - Expand what is taxed & reduce rate 8 0 100% UUT - Expand what is taxed & maintain rate 6 0 100% UUT - New or increase 3 6 33% TOT 8 2 80% TOTAL 43 20 68% 35 EI Cajon 0.50% 04/01/2005 10 Years Special Purpose 68.92% National City 1.00% 10/01/2006 10 Years General 59.01% VIsta 0.50% 04/01/2007 30 Years General 53.97% NOVEMBER 4, 2008 ELECTION EI Cajon 0.50% 04/01/2009 20 Years General 51.10% La Mesa 0.75% 04/01/2009 20 Years General 55.30% . Increments of 0.25% up to maximum of 9.25% . Each additional 0.25% = approx $6.4M 0.5% INCREASE SCENARIO (MILLIONS) FY2009 Estimated Revenue $26.9 Estimated Additional Revenue' $12.8 i@~~s:mflVi~li€Rr~~~]l~2tj *Additional revenue estimate applies increase to 50% of vehicle sales sector. 36 2.0% INCREASE SCENARIO (MILLIONS) FY2009 Estimated Revenue $ 2.8 Estimated Additional Revenue $ 0.6 ~]m~.ikf~~'f[liYl~T@2t[s~ti~fIt$l~~ NOVEMBER 4,2008 ELECTION RESULTS - SAN DIEGO COUNTY 4"1. X;j' '~A! '. &'" ~," H;j'q..~ .,," .",1" il!~UR_I$.Dlq}j!ql\l . ~DES~~J!:;:T10:Ndi,q::.J Encinitas +2% on vacation rentals -beach maintenance funding Council authority to increase from 10.5% up to 13%- Del Mar general purpose 55.30% CaTisbad General 11,510,097 S 10,504,353 Cororlado 8.00% General $ 8,624,351 $ 8,910,953 San Diego-Counly 8,00% General $ 3,180,427 S 3,387,032 r.f..iml~Yj~i1.iffi'~'~o:QO~,.~Ui~':iG$ncr.almr~_J.,~~$Ji2;3,3;:;;21J4~slk~55t;:g6R Oceanside 10,00% General $ 2,185,114 S 2.351,759 DelMar 10.50% Gene~al $ 1.564,617 S 1,679,854 Escondido 10,00% General $ 1,221,365 $ 1,318,644 EICajon 10,00% General $ 1,098,769 $ 1,105,546 Encinitas 10.00% 8%General+2%Dedicated $ 1,100,000 S 1,102,623 'Solana Beach 12.00% 10% General + 2% Dedicated $ 919,636 987,246 La Mesa 10.00% General , 872,341 914,629 NatiorlalCity 10.00% General 829,869 837,944 Vis:a 10.00% General , 404,545 , 400,670 San Marcos 10,00% General 327,632 , 363.885 Imperial Beacl1 10,00% General , 240,000 292,411 p-, 10,00% General , 190,097 , 202,767 SSrltee 6,00% General , 118,669 , 128.811 LemorlGrove 6.00% Gerleral 31,810 31,525 37 ../ Labor and employee briefings ../ Employee focus group ../ Employee suggestions and involvement ../ November 17 Workshop - Budget overview and balancing options . Community and labor briefings . December 4 Workshop - City Manager's Proposed Budget Reduction Plan . December 9 and 16 Council Meetings . January 6 Workshop - Council approval of Budget Reduction Plan 38 l ~ ~i ~ ~ ~f~f(Y @ 0 ~ ~ c; @o 00 (Q~~ C=:=l @ C9 ~ ~,O P ~~ @) ~:! @ @ ~ ~ ~ ~ @) ~ ~ ~ @ ii o~ @ ~ ~(g) ~ @) ~ ~ ~ ~ ~ < (Q ~ ;; ~ ~ ~ ~ ~ s\ D ~o I ~ ~ , ~o '=:n [~O @ R [-e3 ~ ((B @ ~ h~ <&0 I~ f:=;-1 '--;;:!J <d e.9- , :::::J ,~ f 1 I~l E9, I~~ S ~l ~ ['0 ~ ~ ((B ~> ~ t~ ~ ~= 1=' I ((B S : ~f r / ..~ l:.. /,...'" " , '. o 0 o@~< 1.~~.1 ~ Itr~a~ ,I. @ f] ~' "j , ~, D ~ <9 ,I ' 0 0 (O~' i ,0 ~ ... ~i ~ I ~o.~ I ~o: . @' D I' s. , . . , .@:9 '" '~"~" D .' . ~O ~,'. '.~ "~o ...~.. I ~. ~ @T I :~ " ('.,' ~},--I m ~. @ D~ ~ O~ ~ ~ @ @ ~ ~ ~ w i~1 itl ~o: ~ ,~ .~ c= @ ~. I ra;a "', w@ . ~o ~o ~ ~ ~ @@ @ ---::::1 ~ ~ f--r1 ...-::::;1 -::Sl 1_:0 \@ <:;J ~J ~1 @ l~~ j~J ~l @ feJ @ ~ ~'~ r}'''l- ~ ~l I~' l~ .~ i~ I@' I .W':\ I.,..............~.-/...' .....~.,.., b:3':' ~. ~ ~ ~ ~ ~ IB i bel r ~ ~ ~ ~ ~ 1'- '\ < l' 1_,0 ~ ~ W ~ ~ ~ ~ @ @ ~ c::> ~ c::> @ <;=;). I ~ ~ ~ ~ @;@ @ ~ ~ ~ ~ ~ ~ ~ ~ ~ f-r1 i ~ ~ ~ ~ ~ ~ ~ 1}0 ~l @ ~ w ~ @;@ ~ ~ -Qj I 0 0 0 0 0 0 0 ~ ~ @ w ~ ~ ~ @;@ ~ @;@ ~ <8 ~ ~ ~ ~ r-~ '@ ~ ~ ~ ~ @;@ c::::TI I ~ I~ ~ ~ ~ ~ ~ ~ ~ @j I~ W ~ W ~ ~ ~ ~ IB ~ ~ 0 0 0 0 0 0 ~ ~ ~ "=:::J] ~ ~ ~ ~ ~ @ ~ ~ ~ @;@ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ @j @j @j @j @j @j @j e ~ @ bL1 ~ ~ ~ ~ ~ ~ ~ i 1- ..~ ~ ~ ~ ~ ~ I ~l ~J '.w ~ ~ ~ @;@ ~ . 0 0 0 ~ ..~ ~ ~ ~ ~ ~ t I 1 ~ ~ ~ @;@ ( 1 ~ ~ ~ ~ ~ ~ ~ ~ ~ ,::::J .~ ,~ ~ ~ ~ ~ @;@ ~ 0 ~ 0 0 0 0 0 0 ~~ i~ ! ~ ~ @;@ w w ~ !,',~,., '",,~ //":,.:r,":,,::"-~j @;@ ~ ~ ~ w ~ w [ . ",;};,~:;.~,p ~ @;@ ~ ~ ~ ~ @;@ @;@ ," 'e- f-1o ~ ~ f 1 f 1 ~ ~ ~ ~ ~ w ~ 1':0 0 0 0 0 0 0 0 @ I ~ ~ ~ <9 ~ W ~ ~ ~ @;@ ~ ~ ~ ~ ~ ~ 1- @j @j @j @j @j @j ~ ~ ~ ~~I ~ @ ~ @ ~ ~ eo ce ~ D r I @ @ @ @ B ~ @ 'I~ ~ @e) f J 8 ~ I~ 1- ~ ~1 @ ~ ~ 1- G=;> eJ\\ ~ ~ ~ @ @ ~ c=:::a 'j ~ = ~ ~~ ~ ~ ~1 ~~ ~ [1:2) 0 D ~ OD ~ ~ ~. ~ e ~ @ ~ @ ~ Q:2) ~ c=:::a 0 0 0 ~ 0 ~ ~ ~ ~ €N ~ €9 ~ ~ ~ ~ ~ ~ i e e e e e """ = I I , 0 ,I I ,.1 I o t:::::I 0 .~ ~ 0 I . ~ r ~ =~ . ~o ~ o~ . ~ 0 (@ ~ iill 0 "'!1" @ll " :: · i ~" ~ ;" ~ i: ~ ~ · 0 " ~ili ~ ~ ~ Q~ ': ~ lli~f~"~ ~j!>' ~ ~ ~@ ~~~" ~ -:; ~"~ ~ I <! .,J] · if "=" ~ ~ fi' ~ " "~ /01" 0 @ ~ r i 0 r ~ @F; ~ . @\ ~ ~ o~ i I o ~ gg I 1 ,~') ''-T1 (1 I~ ,:=1 r.::::::.. f 1 ,(pJ GG f=1 ~~) j:=:) ~l G=;> ~. . ~l [ ;] L 10 k;;1 ~ t:=:; ~~> PLl t.~ f 10 :L-- @ 1;70) \~ '~~. t _ ~q,S'; k;> ("~ c::::::.. ,,,"" e'J ~,-- f=:1 I 1 ;rl r] ~21 ~~ ~ G=;::' \~ t G=;) @ I~'l ------ ~ ~ t '--r~ l 1 ~ -(~> -, c5J- -~ ~ <OJ g (2) l:=e I ~o G~ f--:r! ~ ~ ~ \,..- @ ~ @ @ @ @ ~ ~ ~ c=::a (p) IB r I i ~l (p) ;~l fl:1 ~o -~ I (p) G=;~ G~ 1=,0 t , <@ ,,..- -~ 9 r ':;l ~ ~l @ ~ ~] GG) f 1 ,,..- " 1 --1 81 I- f 1 " 1 f' 10 .... ~ (p) (p) ~ -~ i @ ~ C?) @N ~ ~ G=;> ~ ~ ~ @;@ r ~~ . @N @;@ ~ b> ~ @;@ @> @ 51 ~ 1'0 f=eJ @ ~ I~ f--:r! @ ig~ <<E> 1 ~ ~ i 0 .~ ~ ~ ~ ~~ I,-~ 0 0 ~ 0 t~ <::;:JJ I ~ ~- ~ ~I ~! ~ ~ ~ @ @ ~o B ~ A."c.. f ~ ~'2) ~ ~ ~ ~ ~ ~ I ~ ~ ~ ~ 00 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ m ~ ~ ~ ~ ~ ~ 00 [}0) 00 w 00 ~ ~ ~ t~ (0b ~ W e:::.Io ~ 'lD ~ 'lD =.... ~ ~ Q @) ~~ @ ~ ~. Is:. W 00 ~ ~ ~ i @) ~ ~ I s I ~ i ~ lSs f-B G~ ~~ ,,- ~ [A) e @)fB L./'l @) t~l fL:~ @) c-> GG) 1=10 ,,- @) I:::r! ~3 ~l ~l~ \~G \8 ,;::J I_J 1 1 Ie)] eJ e 1 I-J .0 @) @) [A) C-i> G=;> h> @ I~ @ ~ ~~ ! \~:- i ~ '~J I~ ::r '-3 I'B f ~ ~'2J , 0 0 0 ~ ~'~, ~O'~ ~.', ~ ~ , 0' ~l ~)t;.. · r t; ~, ~. . ~ ~<i& ~. ~. r; ~ i ... ~o 0 ~o ~ s@ Wi'~~1 .1 ~~~ ~ "~ ~o~~ ~lll ~ ~ ! ~" D ,~ C9 ,',,' I ~ @2) ~' r '@2) .. "~o ~o <;=:;? S @ ,,~.' '~ ~' ~ ~ ~ @@ ~ "--:2J G~r \,.- ~'~ l~ --:'l In '--:1 b-O) " ~.. ' 'bLJ' \- ( 1.. L 1 (2), , .~~ . -10 ' ,@I,.: i;::::3 ! , , . , '8" bl=-'<Yi ,c".l.,,,,,,,, ~tj<~i Xi -!::=l !::=l !::=l !::=l !::=l -<>J" c~ ~O ~ ~O ~ . ~ .., ~ 0 ~ - 0 0 0 :i ~~~~~ lEI' !~ .;.~ .:e..'.: " R~~~& .~@ ~ ~ @N W~C9\\~~ - ~~~!::=l .~ ~ @e) ~ ~.~ ~.~ ~ ~...~ @ ~ ~ "R,,~"'" IlD ~ IlD ~!::=l@e) ~ !::=l .~ !::=l .., @e) @e) @e) @e) ~ @e) i ~~ !::=l!::=l !::=l ....~~~ ;~ .._@\\-@ ~ 0 @ @\\ @;e) ~ ~ ~~~~~ !=~!=@ .., ~ 0 ~-I'l ~ ~~~@e)= ~~ IlD .0 @e)&~~~ ~&!::=l@ ~!::=l@@" 'El = !::=l Cl0 ~~~~~ ~~~~@ ~~ ~ W@N~@ ~ i -I ~ ~ '8" !::=l~ ~ ~~ ~ OD :t @N ~ ~~ ~ ~ ~ ~ ~ ~ !::=l~ !::=l !::=l !::=l ~ (8 ~ ~ !::=l ~ ~ !::=l ~@N~ ~ f=B ~1 @ I~J €e ~ ~ I~ ,,~ ~ IL- I;~J \::,~ h"L'] I~J I~O ~ b> e ~1 ~1 fl9 CB~ ~ ~) ~ :, ~ f-r~ @ ; @ @ e=::;l .. @ i ol~ e 10 ~ ~ ~ '. i .: ((E) ~ ~ (R) i ht' o ~ · ~ .. 1-0 ~ ~ ~O @ @ .1.. 1 ~ ~~ f ~ J~' i 1- ~ @ ~i 10 q'b I~ ~.. 'l~ ~, , ~ l~ ~ ~ ~ 00 ((E) '1::::::::? ~ ~ ~ ~ - ~~~ ~ ((E) - - - - - ~ ~ bL1 \- (!dID .....---:::1 ~ ~ ~ ~ ~o~ ~ .......... e=::;l o ~ e=::;l (!dID ~ e=::;l ~l ~ @@ @<::::J]@ ~ G~ Il!) !=!!! e=::;l e=::;l \,...- .,I-} ~~ ===== ~ ( 1 o~ ===== 'J 1 ~~ )=!!) ~ ((E) .. .~ ===== @@ ~o ===== ~ ~ ~ ~ ~ :=] i::2J I=~,;) l02l fB [@ @,~ @ r--~ @) Eii?l \;--,:- l'---J.:l :~ ~~ ~ l~ G=i~ I-I.;} @ ,:=;~ 19 ~ ,-, 1""--') ~ ~' )::::=:J @ 15) I~ ,,,1 ..... .(:' r,,'l/!'/'"W. Q) T" CLl M"'-___________ W -, o fD L- a .L .JJ K'iI ~" "oN ~ e ~ C'\ ~~J OJ Q I '- .,g ~ ('!"J (9 'i >. a e () (J) I :;.. ..:,. l:!~ 0 I 0 I I- .. ,m ~ :;;: t'" I C I C'" "i; C" ;; I a. 0 0) o C") I L- ~~ I 180 , Annualized 30-year Conventional I ' Mortgage Fixed Rate - rig"t axis I \ " Mean Real Household Income (1976=100) - left axis '~ . - . 0'" ~ -,......0lI " ~ to. 0# ./, -113 -'14 12 10 = '" ~ ill B 0.. I 160. / = , = " = ~ 140 , = ~ ~ <U = = 120 , \t9--"'''~ , , . . . , '- i'~ ~ ~ t) ~ . . . Re<ll Home Price Index (1976=100) -left <lxis --4 100 M' ') '- SD o '1~i713 It'80 1984 11:IBe. 1~!tI2 .1~(H:; 2DOO 200'4 I I if. I "i r"'l I (J i - () W Q 'wi ('1 ~ w <f 1 - - ,. i'~ . . . . . . I , - - r r eJ eJ rn\: t: f " - '" C .i - " ..If' '" , ~ * - . TI - Uj .II "" ) IS - 1 :- - <.: 'I r: !li8i4t ... I ~ ~ - "" I' > c I 'C '" t .. c~. t:- , f c 0- C. ! j ~ a ~ I '- ! - r a :r j =. '") - ... I x,~ I ~ I ,lI , f l? , ~ I I c i 0 ~ C I r= I << I 11 i "') i I t I .i e - 'I - t h IJ ~ If 0 '" Q t c: 1 f l ~ f .~ f :J ,II l'!: i i :i .- :I I 1 - .. 1 ;a C i 0 ! ~ .. J; j C - J ri ~ ~ Ii I :'J ) I ;1 - .. f '" I .Ii ~) I (~ - c , ~I - 1 , .:! - ~ I . J ;j JJ T ;a . i ~ - {~ 17- Q :A ~) r... ~ l,'"l - {i\ ~ , I - .. . ~ , 'i'" t' 'i:'" I i l' ;l I J ~, , ...... ....! , o i :::-. n .t':l t~J ,;i" " l.j') o II', d o l.[) o ',-, ~" I - " ':'"" - '. !7C! #,' t=J .. ,- ,~ J I',~ CI I, ,- - \'.l ""') ((', ~.'- C:J ~. I ,- .- ~ -',1 1J".i 0 ,I, r~ - i.iii ""j ,:j' 0 i C ") .:Jl '".1 ~Tl') 0 I -j;" Ijj ""j ("iJ Ci I ,- "" l'j ""') r 0 I r~ 1"'"1 \!5 ,-', --;1 i"J 'f " ,. :!~ 'j,': -:f: (.) .I !li J/I m j..... :~} I~.. ,.L ''','j u) ~; I.: ~' .'~J i..) (0 ! II 1:1 I .- i! [i , . J I I' II to It 1:1 1 !I ,,,:,, , [i :1: /' J , I C.j II D , " 1 'j! C II [i J G'.J 1: . . 1",).1 II 1 ,- (!j , J I (!'i I CD .1 , 1 II G ,I Qi.i ~;; J ,: II {'~f UJ 1 i- ,- -, f JE " , ~1. J L' :l Ci \) I: lD iJJ :3J f I::, ,- (lj , CI 1:1 0 ~ '11 .' (;; 0. a a , If) ([) ('., :./ ;-, 1 1 1 (1 01 , r"' G ",! i/) w! .- Ci I- ... G ("'-j ':"" , CI CI Ci Ci Ci CI ':t f.'-j (..j Ci CI CI C! Ci CI D a a 0 a ~ '" (\1 !~1 '::1' 1 1 1 G ;0", ~ IjFJ , I - -- --.. -un, "'h' , - - -. - -' -- ---- -, -, - '-,----' -"n"c""-a ,:;'.;:: :' -'.'" : -'. ,_.. - . _n _ . ': ~ _,' _ , , , , , - ~_. . - - - - - - -- ,- - . . . Jgati:ng 'C d" 't- e-~--" . , ' , - - . -- c-' . . . ~~ _',' ~ - - - - - - - -- - City of ChulaVi~ta . -.- ",No_vember17,_2008 ' , , , ., SULL/VANGROUP,REALESTATE ADVISQRS ," H" -- . - , . -, '-, . .' - -- '_-' P~terDe,rmehy,_ Sr: Vjce;Pr~sicJen_t _ (858) 523.;144~ x118, p.deri~ehy@~grea-:~com , ';q::u\,. <t c z W"" , "", '.'C) :<( .;'< I"~ +-' ' Q) ~ "- co ~ 0)," C ii'_' CJ) '::l" o I;, ;';:,','", '; -'; co c o .- +-' ' CO Z , ""fi' 0) ..c ~' '+oJ ,0) +-' ~ 0) "- ~ CO "- ~ CO O)'~ C, 0), .en .~ :J en o :J I 0 o I 0) ,~. 0) +-' .- C o :J o o ..c " +-' :J ">0 C/) C CO C/) 0) ..c ~, - - :1;;_ .<:l en C ,,0 .- en :J - () C 0' ,0, , ',,'iill[ . C) z - (fJ ::) o J:fm- msmIW <(~ Zo:: o - F ~<( Z W J: ~ . . '- 'New,::Home Sales cContil1L1etoFa/f ~'.' ......... .-.......... ........... . -.... ,_.. -... , ",- ,'.. ............... .. ..,- .. .. ._.._.~, ,",^ >Sack'to 1981 Race ,..-c.... ..',:",e,...., :.::'. co:. ..' i:-,', , ."-':;':;:;': -:: ....:-,._...- :-.. '>-:. :':'.. :) .. '" ' , 2005 = 1 ,286,000 Peak 2008 464,000 (Annual Pace) ; ci~~i" ;"::, ,~'?t:. _.'-,-': ,\JlCcll 3Fnr11 "1,,' '" c~ ,-; .~,'-" ./ 'i __1I..om~JIl ~llrE~:~;'''''''' \! ' 1\ . ,opo ~li I 800 , "",';~ (I) co .0 N' (I), (I) (I) ...... ....... en 'en..en en en ~ :~-T"'" T"'". 'or- "l"""'- , i . , . f , I , , , . , , , , i ! . ; . . j , I I I . . , , , , ~ . ~ . ~ ~ ~ . . I . .. ! t . , ! , ~ , , . ! ~ , , j - f , . , , . i > 600 = 400 ~ . . , . .. . . 200 - . , , i - . - . , . , , . . I l I , . . . . "'" __ (I) co ......,..... ..... en en .en T"'"_ - T"'" 'T"'" o co (1) ~ N' "",' --(I).CO 0 co . co.. co . co' en en.. en. en .en en T"'"/:'.~ "l"""'. T"'" "r":' . N', "'" (I) en en -, en en': en en T"'"'~ T"'" ~. co. O. N. "'" en' '0. o. 0 en 0 0- 0 N.N'N "<.0:., ~,..: o co o 0 N 0 N .Source: Census Bureau; released October 27, 2008; Sullivim Group . . . ",;"',1 --,:,,'~ ')1:1<\""1' ','::.,..... .'0,'- ""Qi.S ':: ca' '13 ""E' i"Q) , 'Q).O '::::"" ,""" oE , , .... ' Ilf'I" ''''. ~ ;-!::: ~.,,~:, Q.. '(I> i, Q..' .' '" '=:3 ,""loIC, , t?) ".e.,., ""~ e";, ",,'0 w' , , , =:3 ' ::.t:. '...... ,i,~,: 0' :'Q):"~.,,:,, ,:~":..,'5t, Ji':;:;' "':";:::",';;Li' , ,., . Plloal: . ..... cLOOZ . 900Z,,":, 1 .J-_.....,:SOOZ '~;-'-'.' .rj700Z' '=::'~~l:OOZ. 1 _.__..: ZOOZ 1."'""",,,,,......,-- r;-: I . 1 ",\-lOOZ, ,i=::,L~.. -t.oooz T . ,"J''"-'''''''''"'='"'-,666~ tl~";.n"',.,=" ,-- ,,,,r':S66 .c. F,.Ji66 ' 1'-- :_j 966~ '-:=r=~:E._-t.;~~r' '- 1 "~--~,-,w:".l:66~. >: '.',i' '''--i" I ':"Z66~' ":'-;:==':~=:.~66~, l"'''''~'''t''''''''''''''' ."~ I - I ",,~,=, 066 ~ . I ._., , "",', "" '686~, I __,_'-"-~, __L,__m;w~, 886,~:: ,.,--,-- 1 1 '>L86~ 1'~='=i.,,- :=:r" ::t..9 8 6'~/,.. I 'I ........, .S86~ . "~-,=,..,...~,..."",~",,, . fc' '-'--~""+',--~,:: .: :::j::.-:t:Im:': -~-"'-~....,""'- "'~86 I '. ._-<,_.,.L.t~~",~"""""",~~~""""",,,wl_ 086~, ," 1 I., 'i6L6~. ,. f~- -1Im;)!1 'C :'---:.L =~,-tSL6~" b"_"', ',.' _..~ ..PL6~ ,,,,,,"'-"",~,,~",,- I' '':'''L6 1"'.iio'lJ'''''''''_'''''''''''''' " , ..J ~ cZL6 L.r~:!~~:;:', "I", :I:,:___~ 99W 'C___;___', -.i'.S96~ "':-~F:.:t=~.J,~:~r " [""'';',,,_ , en ...... en C ......::> C ::>g 00_ 00 01'- (O-L() ill II 0')..:.::: II CO co Q) aD.. ......(0 0.0 Q) CJ)Q) ~ <( en ..c ...... C o ~ L() o :or- II i< co o o N ... ........ .,_. '.' " '-, ' .,,--.... ...., ,.-, ," .' .... ~Resa/ff~LJpply l-IasL~eveledRecently. . . . Can We<Work~'Off More SupplyiI12009?, _ ,OOO,OOQ. .: ,4 500000 (:'-- .. , _'___ C' , ,_ .- m..",~ 000,000 ,500,000 3 000'000 '--' ,. - 2,500,000 2 000000 , . - '-, - ~ -~:- ,500,000 1,000,000 500 000 O':~"= o Months of supply has decreased from 1 0.0 in Sept. 2007 to 9.4 in Sept. 2008. 6.0 4.0 mmOO~~NNMM~~~~WW~~ro m m 0 00 0 0.0 0.0 0 0 0.00 0 000 1:';,':1; ':1 1.:;>1-:1.1:::.,':.1 .::1" ~;I-;,;,_'-I:'''',,'I__ .II,' 1_:;>1'__ ':L.. .1'2--'1 I' e . U e U.e U e. U . e U'. e.U e u.. e U. e .' U e ::J <1) ::J <1) '.::J . <1) ::J - <1) .::J <1)-::J <1) ::J <1) . c. ::J <1) ::J ~ <1) ::J -'0 -'0 -'0 -'.0 -, 0 -, 0.-,0-,.0 -'0 ,-. .~~- --- ',. - - - - - -.--- - -- --- . Source:~National Assn. of Realtors; SUllivan-Group - -.. .~ . Z~OZ O~,OZ . 800Z 900Z POOZ.i ZOOZ OOOZ 866~ 966~ P6,6~ Z66~ 066~. 886~ 986~. t86~i ,.Z86~, . . 086~ 8L6r" 9L6~,. PL6~ ZL6~ OL6~ (\.. 0) <::) ,..... -~' C'\I "- Q) ~'...'.' .~ ;""'P~ 't- ",'"", '~''''\I' . ...... :CI) ,'- - ,--, t:: i. CU...... (.) , '-ti..., t::. i~ ]0' ..Q ]i.'. CI> a::: .... tiJ:Y" 'i:'-:/' 0). . ;:t:. ..... ,: "':-, , ' >",cn';li:/,:,,;,'11 -C ,~.' "'.0 .' ::2: ..;t; ,,~ . ~ . ~ ~ ~ C'! ~"'~ NN N """ """ ~' """ ~O ~P~lS 6u!SnOH :lW puedS '.....,,,..,,.....,,. :':i.I.,':.;' '''', ',_:.,': .:', ,: . .,;"':" ',. :::> .ro Q) ;;;L.. :::> CD <1) , ..:::> , "'<1) C Q) ,0 ;L:Ci); '.. .:::> ,/;~ ,f 'L.. . :::> 1:,1:0 .. C/) , :.0.."..- ...;_",..._ 0""':-:..~1'" ...'<,.;" .'- ~~>- ,:-:-~~- ~ - '800000 _""'u "__";'.'- . 700 000 ""'..::',,;- , ""'--".,.' L ,~'6.00,000 500,000 .. 400,000 . !~ -NaflohaLFot:eclosuresStilf Hight "';;'::"'.:.,"/:;:;::.::::,. ,,,,':;<,; ",..".)::: ,.""..::;... :...,..,;::::,.:: '--:,):':, ,,"':':;''': :.;-:",,':....: ,:"::>.. ..". ..::":;,::':: . .co:';:: . "'..,.,',", Quarterly Data 5- Monthly Data ~ ~. lli ~ "' ~ "'3 %3 ~ "'--:: ~ I ~ Il Ai' ',jf i'!i "'. -" 265,968 .. ,....- -,., "'::'{"".-':... "':::,:":::;:< -,'.,,,,,.' ,..-".." . .... ',,,":;. .,. ,.'""-'" ,...'," !::JIO!::JIO'~ !::JA.. !::J~; !::J~ .~~CO !::Jtb !::JCo- ~~:;.~':~ ~CO ~i ~q) ~CO~-~<&~CoS:,co~i"~CO- "JO: . ~Cj. ~(J.. ",(J."J(J.~q ~(J.",(J. "J(J.9"-':~~~:~e~' ~~~ ~~ ~~' ~~<:~~ ')V~ ')~ ~vo; <?e~' .. i ;;:~'~ There are 'about 2 million tno'rehom,eowners 'tCJday~thilnJong-terl1l tren~s' wouldindicate ' ,.-", 68% ~4-Q,(~~fMlf-i:ti1J~~e,~ ~<ate,~ iilfll ~(1b~r 7.0% ARM interest Rates in 2000 i'_'_.-',_ ---, ."63% 2Q08=68.10/0 62% ;:-;; 'N "". 10 co 0' N "" 10,. co ,0 N "",loCO 0 N. "" 10 co 10 .. 10 10', 10 r-- 'r-- r--' r-- ' r-- . co co co co co en en en en en ',en en en' en en. en en en. en en. en en' en' ',en . en en en'.en en WT- TO" ~~~~.'or-' ^~ _TO"'T- ~~5",-~ ~ "f':'" 'f"""n. -c-, .~ r .~-_ ~-,- T"'" ._-'~ ON""u)< o 0 0 o. co. o 0"0 0 0 N N.N N 0 N . -- -- .-_. i,Source: Census Bureau; Sullivan Group' U.S. Homeownership ---- - -". --- '. , Linear (U.s,: HomeownershipRate) San:~iego 'sResidential Permits ,are at the Lowest Level Since WWII c 2004 15,587 2005 14,306 2006 9,194 2007 7,461 2008P 5,804 '.50,000 45,000~ tn .... 40,000 E.~5,QOOm &. 30,000. . C) 25,000 c: 20,000 :0 15000' - , ':;" 10,000 m ;.5,000 . O. -8% -36% -19% -22% , , , ; ( ~ , t' .1 . 1 ~ ' 00 "II:t 0 (0 "'"00 0') m 0') 0') 0'). 0') '~ ~. :'~' ~. N c.. o .00 o 0 No N 00 "II:t "'" LO 0') 0') " ~.: m~ o (0 N (0 (0 "'" 0') 0') 0') ~ ~ ~ ..,. " m '._ _. . -- --- iSourte: sacos; Sullivan Group Real 'i::state Advisors I.' .;UH;.;:. ";.' _;,';:;1 S lJlLiIJj1W~"N '. .,,',l':;if "l 'n' :j::{-;.}~:. '. :,\.( E' ,Ii T""'" .,<L,",:,,/,,' ",\"},,Analyjsls. ~'; ;,,~u:>i~~:'0;iil1li;;i!_!!lJ;:!lilij.1j4ji!lU;..JJbili;1J~, ,,_ _ _ _ __" _,_ :_ i.,' ::Tota/:"New -'and'ExistingHome Sales Baqkto'95. Levels. t" . . . "..... ..... ". San Diego '. .... ',' ..' .i,' .. 1:' , 30,000," 20,000 10;000 :; O' ... N " 0 0 0 ,. '0 0 0 N N N r-.. a. o 00, . 0 ~o N 0 N -'J New Existing - -- ---- - -- - - -- n' _, Source:-bataCluick;llanley Wood; S'ullivan Group Real Estate Advisors, tive"PrCJjects Ha~veDeclined.40% ..' .in~the Past 24 "Months. san Diego: Jan20.05 to Sept 2008. Peak Proiects '. 348 in Nov 06 "(-40%) inSep 08 . ~- ::g.:- ::g ~- '-I I I I ~ :::s :u c:_~ '<1: ..., 0 ~. Active.. Pr()jects lcSource: Hanley)JIJood; Sullivan Group Real Estate AdvIsors' 400 "'- VI 300 ..... () cu ...... . 0 D: 200' cCU .::: ...... L() . .<( 100 o It) .0 , .<: ra c7"'c It) o , ... a. <I: It) '0 ....!. September 2008 Active Projects - 209 Total Sales - 138 ~ ; ~ ~ 0 ~ ~ ~ & = = ~ :::l ..., It) 0.. , - t.) o <0' o , <: "'ra ..., r--:.,- ,.... ,.....-. 000 I ~: I :.,0.' - ::re t):. <1:. ..., 0 '. Sales 00 o. '"." .<: ra. . ..., co ClO-~ O' 0:, ..!..' ...!. a.' :::l <1:. ..., '2000.. , .1,500 .1,000 500 . o VI CU ra (J) - ra ..... o I- ~"MostNewAJtacheq Inventory iir CentrafSubmar/(ef ~~- ~c' ~o, c' ~ n_ _~ Sept~-moer20b8h 0- -, _,~, ~ ~~;; ~ ~ : : 2 60o-~ - 20.0 ~,'" ",~,~,... '. , , 1,80018:0 'o~ 1,600' 16.0 ~ ,- ~ BO/,O LAttacbecUnvento 0 a:;'1 AOO .0 0 ~ -,' - ,f-Y- 14.0 c - ~_ 1,200 ,. j-A-GeA-tral $uem-af-k 12.0 ~ , c Q) 1,000 10.0 4- > 0 co 800 8.0 en - ..c 13 600 6.0 C ~ 400 4.0 ~ ,if) 200 - 2.0 o ~~ 0 . 0 :: San Di~g Central Coastal: East Inland South Bay County North . North Speculative Inventory Months of Inventorx - __c', - ,~_, _ .,Of, _~,_,_ -c,_._ '-:"", , _~:.- .. :,,"'-, :::_ HiomleyWood; SullivarrGroup Real Estate Advisors New,p~tar;hedln'ventolJl is f?ene-rall}fLow $eptember2008 .5 f,: ,~ 600 -'+-, . c .(]) > ,.c (]) > 1u 300 :::l () ~ 150 C/) . >- '- o +-' 'c ,(]) > c' 4- 3.0 ~ ..c +-' c o 1.5 .~ ."S,an Diego.(3entral 7 County CoastaL . East North Inland South Bay North ..,...... .......... .....,.... .........0.. ......". .. _.',.............,. _... .........n... ___.,. .... " - .- . __ .'.....n. __ "'__'_ - _".c.._, ',_ __-,_~' __ ___ _._ . Source: Hanley Wood; Sullivan GrouppeafEstate Advisors Number of Units "Monthsoflnvento(y" SOmon'V" '.' ~6n(i) . LO. .V, Q) . 90m6n'f -. ; '. SOm6h\1' ~. "'PO-6n,,.,.! h.i' . '.' ; E()mOn'Vi. .'~. , zo~on'V, .01, :, . ~o~6n'V,., .'~ .' " 00;'611'" · >" . 66~on". 0 'S6~onv .: '6 Q)' .L6mn\f.. ~, '. 96mon'V ~Il "'S6~6n,,' ..' '~ 'PS;.6nV' . ~ . . en w .... E6;.6nV1,' ~lil~1 , ,ctl 0:: .' Z6-6,nv,: .' .en.: g-. , ., """':," ,._ "-0 . ~,6mpr'V: JS".~ ;';<ii';:',i';;":~,:';";;j';-"'.'" '::Old; en 06-onV. r .~ . 6'g-6n,!'h'l .; 'S'S-0I1W1 " . " i .:V,','",: (.:: .",;',.':::i,.-:."",:,'.,,: .,....,........0..:: t: """ C1>"Q')" . . (1)."- .' CQQ.", ,_.. . .' (I) t':' "'en:','m. . .:t:. .CI). ,._ "'"" :",:X,;. .;....,:.,;;".[ . Q) .... t: E."~.' ..~. ~. i__' fa" ., o Q) . ::i..>. 1 ""~:""5. ...... '~"'~.'.'" ....; 0,' ; 'a;.. ',' .' t: ~'" .:;::;.....0.. (I)' ;'._"~ : '>< '.0'.' UJ' IJ..;; '~. ....,.. en 'S:::s:' 1 '~.' o 10C' 0 ,:.....Q . 00,,000000 "0'000'000'0 00000000. ',' ~:',:'''''.'.>''''i',;l''\.',', '":'. ...... ',"-""',.:..... 00 ,....' (g'an <i:t M N 'f- ; ::';~~~:n; l' ~lf' ,?~~;Il\d '~i: ~q 5U:l.d.:.I:\1IAl ':':'~;:~t~+TI!~!\i1} :i\:~W~5!::T~r,~ji:1~t~:tY'(: "';1:., , ' " u' ,,' '. ~/,Ih~ly . ""~>';'"'.^~':0:',;:;;,,,~,_ ~ . -, n__ ,. . '," _ _ ____ _ _ ~here';isa 4.9 Month Supply of Resale Uni_ts 25,000 4,000 20000 3,500 . '.' ;/1 iii ~. r 01 ~l 3,000 15,000 ~i ~ ;~ ~2,500 1i ,~~., 2,000 10,000 . ~ .' :~ 1,500 . 5,000 ~.} 1 510,0000 ,~f;, t:f' o 0 '. .!'--. . o I ..0 Q) LL !'-- o I . 1..... Q. <C . !'-- o I +-' () o 00 o I +-' () o 00 o I: 0) :J <( !'-- o 1 () Q) o 00 o 1 ..0 Q) LL. !'-- o .1 'C :J J !'-- o I 0) - :J <( .. 00 o ~ Q. <( '.00 '0 I C :J J . ....... . Listings Totali::xisting Sale~ '4.9r-nonthsof sl1pplyis bas~d onthe Jl1ly. ALJg, Sep2008aver3ge monthlY:sale~.,' :'Source: Zip Realt ; Dataquick; SullivanOroupRealEstate Advisors . 3006 = 561 3007 = 2,355 3008 = 6,463 ~ " :": , ~" m'O'~'N.M.~Lt) (0 ~ 00 m O.~NM""',Lt)(O.r--oo oo;en men en mm 0') m en as 0 0000 0000, ..........>_.........-~--_~_-c__.......... .-.......... _............'....... .:........... ...................... ~- .......... ..........:-,........~'"..........-"~....... c-:.......... '_.......-_.......... ~ "N?N'NNNNN N N N N N'N'NN"'NcNN NN croooo 000000.00 Q.O'OOO 0 0 . . - -. . . Sourc;e:RearE~taie ResearchCounc;il; CAR; Sullivan Group Real EstateAdvisor~ .'- - - - --- -,-- " - ,. - - - ~ - '- -~ -- . - - - .-- '~~Noticesi:ofl)etaulfin'San Diego County - ' JuI08=3,206 Aug O~ ::::,3,116" , " ep 0 ::b1,360 :1,269 I"- l"- e 0 I .'. -> (.)0' e z 00 00 00 00 00 00 00 00 00 ,0 0 0 0 0 0 0 0 <:) I I I , , I I I I .c ..... .... >. c: C') Co - Q) co a.- co = = " = Q) (.) LL ,.:E <( :E ..., n -<( C/) e ,...... . -""-...,. ., ',' 4 000 ,- -' 3;500 3,000 2,500 2,000 1,500 1,000 , 500 '" o I"- 00 o 0 I .. (.) c: Q) co C n "J Source: InnoVest Resource Mgmt; Sullivan Group Real Estate Advisors, Percent' of ' Over a Ir.>Transactions ",,:: ""';~,'::, ;.;)) <'0;;:" .,';-'",:::_>:"'<:::;_ . ,,; ':':':;~:_:_'_':~' Oct 'O~ =12.:7%) Sep. & Oct. an aberration due to new state requirement which requires lenders to contact homeowners 30 days prior to filing. 25% \ . . '.20%. I' . (/) '15%; .~ '.:. . 0 '1 o~/ . <( . /0 "- o 5%; fA. , cu. (/). l:J W W o 0)':- -~ we - (/) :J ~ f:- 0% , .. - .~ C\J ('I") "'t. L[) (Q N> CO CJ) 0.' '<'- C\J ('1")' "'t. L[)(Q N:' CO CJ)(j) 0). CJ) CJ) 0) CJ) CJ) CJ) oq, o. q 0..0 0 00 I, I .. I... . k.. I........... I.. I. I I. I..... I...... I.... I..... I. I.... ',1. I.. I: 0. 0.'0. 0. 0. 0. 0.. 0.: 0.' 0.: . 0.' 0.: 0. 0. 0.: 0. 0. 0.' (]).(]).(]) (]), <J) " (]) . (]) (]).. (]) (]) (]) (])... (]) (]) (]).....(]) (1.) (1.) (f) (1) (f) UJ (f) (f)(f)(f) (f) (f) (f) (f);. (f)j (f)(f)(f)(f) (f)J. I h:1 All Deeds D Notices of Default _ Trustee's Deed ~ - ---.- - "'--.. ,"-' . S6urce.... :lnnoVest ReJ6urce. Mg'rnt;Sullivan GmupReal Estate A(jvisors .. - "- ". 'f:;' >- I-- Z :J o UF J:W .......~ ~a:: 0<( U) w J: I- . - - """""" 2008 YTD Permits I' , Single Family - 96 Permits i , Multi-Family -174 Permits! '2,000 * & .~ .~ '" ... !:: ::>. .' 1,500 .1,000 ,. <0 ilw ""- 't"! .. o 00 al. ....... ....N 00 . al :--~ ''<I" 00: ale T"""-'. · 2008P is annualized through September. . SOUrce: Bureau of the~Census;Su"ivan GroUp - 'H _n,_ _ _', '_ _ " 4,00 3500 " 3,000 2,500 2,000 1,500 1,000 500 o - -- _ _: , ._'_ ~.' _ _"'_ __ n_,:.,"O 0 .~. " "~~Sol.lth.9ql!JJt:y"Ne"V fjome.:Sa les, Sales I 2004 - 3,770 I 2005 - 2,016 . 2006 - 1,620 2007 - 858 2008~.- ~91, . I .... 988 199019.92' 1994. 1996 ..1998' 2000 2002 2004. 2006 2008P' 2008P is annualized through September, .. . Source: H~lnleyWood;Sullivan Group IIJDetached III Attached I :. l"1S0J/~h,FO:u1Jty/s~$lJalie;oo, ~. ~~'Ne1A{ Home~Sares Has Decr:eased" 000 , . 000 , .": lJ) E ",4,000 0" . J: : ~ .: 3,000 .' z . i"~: 0=2 000 ~ f:;,j~C),;,::,,,:<':'_c , "<'t' ,1::: 'lL . E1 000 ::l , . z,. . o 2005 ~ . 2007 . 2008P '~Central ~lnland,NQdhC :.2D08Ris agnualized tflrough Septemper. 'S:ource:Ha~ley Wood ;Sullivan."Group '. ~Coastal North [jJ.S OLJthC Ol..mty DEa$.t County" .' Median Attached Price I. 2005 Peak - $417,348 i 2008* Current- $337,032 I % Change - (-19%) , Median Detached Price I 2006 Peak - $773,019 I 2008* Current- $573,982 i % Change - (-26%) . 1988 1990. 1992 994 1991 1998200fr 2002 2004 -2006 2008* San Diego ... . South. Bayoetached ... . South Bay Attached C' ',_ ..,' , -, '- . ',- ..... ".... ,....... '0"," ':C-"',' 2008* isaveraged through th,:ough Sep!ember. Source: Hanley Wood; Sullivan Group . L:,~2:n:; :';'~';:" ;:,~,'r~~,',,';Y :t;"~~~IV,~~J~'fY:.' , ,...; .~ '. ':, . ., "", <b"i J. . ,0 ".fj'~>j" }~'Anaj\fsisli, 'A., I. ...... ,. "'4> ."Yl., -, ,....lv.. 1,,,,,",,", mr',xJ.~ ,:;- ,}', ",W;. .,1'....",,;/ ,,'I'. ,.."ih\i . !'''''''0'' ny"-,d4;~illL!"_""__hi'..~h'\1L!.lli...,,,,,,,1i.4ll <Il --.., 25 " 0> , .~ 0 '- c- O> 20 > :;::; " <( .... 15 ,0 ,-' 0> '" E 10 :0 Z 5 ':Attacf[etfJ Projects and Sales Rate ',$oLlth'Bay , ' 302008 Projects - 17 Sales Rate - 0.5 18,0 20,0 16,0 i ~ 0> - III 14:0 or: <Il 0> 12,0 ~ c= ~ 10,0 :5 c o 8,0, ~, 0> Cl 6.0 r: 0> > 4,0, <( .. ~ ! D , ; I 2,0, 0,0 o "oo,~ "r:Jo, "o<:,~,,,o<:,<:' ,," _<:,'1- <:,'1- i:," "C5: ,,0 ,,0 ,,0 d>" d>', <:,0 '<:,0t;)'O'i:,'O <:,'\ <::;,'\ ^<:,'b _ ^<:,'b ,,0 ,,,0,,0 ,,0 ,,0 ,,()' ,,0 ,,0 "V' "V' - -- -- - .;I_projects-+- Sale~ Rate I . . ~ 'Source:, Hanley Wood;"Sulli\ian Group <:! , ! i , if i. I l I , " . . . , , . , ~ i ~~ , , - , .\ , ~ , '~.". '. r., 'h()'J . ~ () ,,0: "3,'... ~ ! , , , , , , {i ; '" 10 c:: "'~ (1)1 ~"iii en.. ~-- 10.0 :C. ... c: o 80 ::;: ~ '" 01.: 6.0~ ~ QLc > <(. "o<t-:",o<t-. "O()"".' ",O()'0 "O()'O ., .-.,. _.,,-"~" ".~ .- 91915 650 9 ~r95Y1:re9'~14T~1J;~;Y3'\'8~<5''';:3t'~f2Y~3';';;;W ~-L...1..........;;.,,}, 'f!" J'__."..,-,,'t. N~", ",' 92019 332 27 ""':""'''"'~-j,,~''~~~'''W-~~'''f 'd.921.16{ '..,16,>. ,.0' 051',',': 91978 99 66 '. '.~,.~-- '" "'. Sa.n.-D.... ieg,o(:REOResale$. - ~- -- --- L:1J 251 to ~SO [] 151to2SO bJ 76tol50 o <:blO/~ o . --- - - - . HousingCyqlesHave-S- Parts ; Highest . Output 1 '04/'05 . 2 .. Recession. 3. bottom 4. Recovery .5. . EXPANSION 2 '07/'08 [~..... 20097 - -- --- Source: Sullivar{Grol.lp Rea(~state Advisors. . .... . . . .... ..... ..' . . . .-~ - - . ['-j' -- - - -- -- - . . . - . - - _. -- - - - .. - - -- . · ~'."DebrLoad '. - - . . . . . - --. . . ..' ~O.../ .~ Job 'Losses -- .. . - . ... {Liquidity. ~ .' '.' . O. .... ~Low Confidence. . . - --- - --- - - '- . - - - -,.._, - .' ./ .', Low lnterestRate - --" -- -- - c __.. _ u_ ~.: --- -= - - '.,- - - :: c.'. . Thereis:no independent~variable~~ .. i~ . ! . . . , ~ (/) or- ........ or- ~ N ~ (/) '" - .. .;- M c o . :::~ 00 ~M o - M ~ " ~ , or- :<<- ~ C- O . E~ ~o ~.: ~ (/) M 00 o ~ or- 'f: ; r~ ,,'it' ~, . - - -- - . . - - - . .. - . ~. o' The focus; jobs, ana ~ forec/gsyres . .. .Inflatio.n worries suften ..... LbweroiLcosts . . -- ----- ._~ -- - .. ---- - .-- - - - - ~Lowerinterest rates i-.. . . - - ." 0' Banks take an active role in repricing ;. . o ConfidenceUpswing?c .'.. , Unprecedentednationaland international POlicy couperati(;m . ~ Newadministration . ..' New year' .~ , " . 0 " Wild Card: The: Commerdal Market' "L-. ..~c. . .~.We:.:still hav~ pairrahead-bUt .. ... . .. . Why is there opportunity in Southern" California? . ''',,:' .c..,.,.....",.. '".:...::: , .-:-..:..... _.....,: . '--:-:.:." _.:.... .... . :.-... ."'_: -,:......' :::. '~--e-' :..- -:'-_ ---' ~ . .:~"., - . ,-;- - .~ The classic fu-ndamentals are stiU in place: ..........Weather -QualityofLifE9 ." ...- Jrnprovedaffordability; . . ..S~pplyis.b~ing .cQnsurn~d(alld\IVe reaHydQhavea "Iirnited" IpL$upply). . . . - - . - - -.... :. ,', , · Landi"sbeing looked at as a liability again.. .. ~";"", -:c, .. .."....,.. --- . _n ,.. ." _ -- ~. _ - -' '. - · There are varying levels of "rebo.undability". ;-- ... .... ."'.- ,- ',':CO',-'-, " __... .... '_:__", .' .m, __ _.._'_ . .. - ----- " REO HOl11esselling below replacement cost ii'SoCf;lI.... . - -. - - - - . -- --- -- ---- '.. --. -- , '"" - _,,'.. _:: _'.:", .ee '.,,, "::", :"::.- -'.--::.:. -:. Source::Sullivan. Group' ~ ,"' -;P;;'''~~' .~~.".."","..""",., '~";~~>?:;,'\'..., l"~:U~;." , _.._~~..~..~"_,;",~",,,,,,,,,,.,j,:r..;;'j,';,a,_,,"~~,,":;';';""""." _