Legal documents and public records

Water Ripple

The Hillview Extended Stay Appraisal Report 12/2020 . More

VOM hired an appraisal company specialized in hotel appraisal to publish this report.  The value is substantially less than the $65 million.

Water Ripple

Argument against the Homekey project by Voices of Milpitas LLC. More

Details of the Hillview Homekey lawsuit

White Cotton Fabric

Recommendation letter from Office of Supportive Housing to the Santa Clara Board of Supervisors. More

Page 4, “Based on the size and/or types of units, the 132 apartments could be occupied by up to 134 people.” That means only 4 units would have 2 people. Not very family-friendly (Only 4 cases of one parent + one child).

Salt

Budget template - Hillview Court - Jamboree updated 93020.RK. More

  • On page #7, the "Developer Overhead/Profit" of $3,922,134, rounded to $4 million.

  • The employee cost for the project on top of page #9 with 5 FTE (full time employee), only three of which are Supportive Services Staff, only one of which is "On-site".

Marble Surface

All Classifications 07-05-2020.  More

All job classification/Salary - City of Milpitas - Human Resources

Salt

Hillview Court Appraisal 03/2020. More

Jamboree had an appraisal done in March 2020 that unreasonably inflated the price to match the $65 Million purchase price. After the purchase fell through in April 2020, Jamboree just recycled its outdated March appraisal for the Homekey application in August 2020. The appraisal compares sales of 4-star hotels, e.g., the RIU Plaza Fisherman’s Wharf San Francisco, with the 2-star Extended Stay America to support its unjustified valuation. The appraisal unreasonably predicts a 2020 net income of about $3.6 Million, i.e., a 44% increase from prior years, when the yearly net income of the Extended Stay America was about $2.5 Million from 2014 to 2019. Based on the hotel’s 2019 net income, a current appraisal price is actually $39.5 Million (Done by [Company name] in Dec 2020).

Most disturbingly, page 23, bottom states the appraisal “is premised on the extraordinary assumption the Covid-19 Virus will not have a measurable long-term impact on the value of the subject matter,” and fails to account for the Covid-19 pandemic at all.

 

This means that Covid-19 and its effect on the price was never considered for the price valuation, although Covid-19 was already in full swing at the time of this appraisal and should significantly reduce the value of the property. Furthermore, the appraisal states three approaches to determine the price, i.e., Sales Comparison Approach, Cost Approach and Income Capitalization Approach (see page 73 of the appraisal). It is understood in the industry that the Income Cap Approach is most relied upon, since the other two introduce too much variability. As such, the other two are used to confirm the Income Cap value. For quick reference, the purchase price is estimated as the estimated net income divided by the cap rate. On page 118, the price is calculated to be $3,576,121 divided by 5.5% cap rate to yield $65,002,198 in price. However, if you look at Table 12 on page 120, the estimated income is artificially inflated as the net income of all prior years starting in 2013 fluctuates around $2.5M. Using therefore a net income of $2.5M with a cap rate of 6% (as suggested by the range of 5-7% on page 118), the price comes out to be $41,666,667 (and that prior Covid-19). 

 

These are the most obvious errors in the appraisal. There are others - too many to mention here.
 

Marble Surface

Jamboree purchase intent.  More

You will find the letter of intent to purchase this hotel between the owner and Jamboree dated back to November 18, 2019. The purchase price then was already $65M. Note that the appraisal which was provided to us was not done until March 2020.

Smear of Cream

Budget proposal and purchase letter from November, 2019.  More

Budget proposal and purchase letter from November, 2019