MOD | R | APPRAISAL OF NATIONAL PARK SERVICE FACILITIES

FBO DAILY ISSUE OF APRIL 01, 2006 FBO #1587
MODIFICATION

R -- APPRAISAL OF NATIONAL PARK SERVICE FACILITIES

Notice Date: 3/30/2006
Notice Type: Modification
Contracting Office: WASO-WCP Denver Contracting & Procurement 12795 W Alameda Parkway Lakewood CO 80228
ZIP Code: 80225-0287
Solicitation Number: QSHEN230306
Archive Date: 3/30/2007
Point of Contact: Michael Bachofen Contract Specialist 3039876977 mike_bachofen@nps.gov;
E-Mail Address: Point of Contact above, or if none listed, contact the IDEAS EC HELP DESK for assistance
(EC_helpdesk@NBC.GOV)
Small Business Set-Aside: N/A
Description: The purpose of this amendment is to add the Scope of Services which did not go through with the initial announcement. If you have trouble reading this announcement from www.fbo.gov, go to http://ideasec.nbc.gov/j2ee/announcement.jsp. If you still have trouble, contact Mike Bachofen at 303-987-6977 or email mike_bachofen@nps.gov SCOPE OF SERVICES APPRAISAL SERVICES FOR SHENANDOAH NATIONAL PARK CONCID: SHEN001 CONFIDENTIALITY: All data, information, and deliverables provided to the Contractor under this order and/or developed by the Contractor under this order are the property of the U.S. Government and shall be kept in strict confidence. PERFORMANCE PERIOD: The work under this purchase order shall be provided from approximately May 15, 2006 through October 31, 2006. I. OVERVIEW Shenandoah National Park requires appraisal services to value possessory interest in concessioner improvements located on park premises. The possessory interest is granted by Concession Contract No. CC-SHEN001-85 (concession contract) between ARAMARK Sports and Entertainment Services, Inc. (ARAMARK) (concessioner) and the National Park Service (NPS). The concessioner has a right of compensation for its possessory interest in concessioner improvements as defined by the concession contract. The concessioner is entitled to be paid this compensation by a successful offeror for the new concession contract that is to go into effect as of January 1, 2007. The measure of the compensation ("sound value") is described below. It is the objective of this task directive to identify to the Contractor the work necessary to determine the sound value of the concessioner's possessory interest in concessioner improvements under the terms of the concession contract as further defined below. II. SCOPE OF POSSESSORY INTEREST COMPENSATION VALUATION A. Definitions " "Concessioner improvements" (further defined by Section 6(a) of the concession contract) are buildings, structures, fixtures, equipment, and other improvements, affixed to or resting upon the lands assigned to the concessioner in such manner as to be part of the realty that the concessioner has provided for the purposes of the concession contract. " "Possessory interest" (further defined in Section 6(b) of the concession contract) is a contractual right to compensation for the sound value of concessioner improvements. Possessory interest is generally described as: żall incidents of ownership, except legal title, which is vested in the United States. However, possessory interest shall not be construed to include or imply any authority, privilege, or right to operate or engage in any business or other activity and the use or enjoyment of any structure, fixture, or improvement in which the concessioner has a possessory interest shall be wholly subject to the applicable provisions of the Concession Contract and to the laws and regulations relating to the park. " "Sound value" of concessioner improvements (further defined in Section 13(b) of the concession contract) is the reconstruction cost of the concessioner improvements less depreciation evidenced by their its condition and prospective serviceability in comparison with a new unit of like kind, but not to exceed fair market value. " "Reconstruction cost" in accordance with law is synonymous with the term "reproduction cost"' as defined on page 188 of "The Appraisal of Real Estate," 3rd, Ed., prepared by the American Institute of Real Estate Appraisers; i.e., "reproduction cost is the present cost of replacing [the improvement] with as nearly an exact replica as modern materials and equipment will permit." " "Fair Market Value" is considered synonymous with "market value." The Contractor shall cite the market value definition contained in the UASFLA. B. Clarification of "Possessory Interest" and "Sound Value" Under the terms of the concession contract, possessory interest: 1. does not extend to land that is owned by the United States, 2. does not include personal property of any nature, and 3. does not include the "authority, privilege, or right to operate or engage in any business or other activity." (reference). Item # 3 (above) means that while it is apparent that USA intends to allow a Concession Contractor to conduct certain uses of property, USA does not guarantee that those uses will continue to be allowed (for any reason) at the sole discretion of USA. The possibility that uses allowed under a concession contract may be modified, suspended, or ceased, is a known risk, accepted by a Concessioner that may affect the value of improvements. In estimating the compensation to be paid to a concessioner for a possessory interest, the Appraisal Contractor is required to meet the test (definitional requirements) of the term "possessory interest". Compensation for a possessory interest requires that the Concessioner receive "sound value" for the Concessioner's improvements. To estimate "sound value", the Appraisal Contractor must: 1. Estimate the worth of the Concessioner's improvements by conducting a "unit-in-place" reconstruction/reproduction cost take off estimate. The current cost value of improvements must be factored to account for depreciation evidenced by condition and serviceability. This means that the current cost "as new" must be reduced for all forms of depreciation; physical, functional, and external. In addition, USA does not consider that entrepreneurial profit/incentive is an element of sound value for the following reasons: a. the Concessioner has no titled interest in the Real Estate b. the Concessioner is not competing within the market under typical terms c. the improvements already exist therefore there is no risk associated with a construction costs estimate, and d. Entrepreneurial profit, while targeted by developers, only manifests when Fair Market Value of a completed improvement exceeds its construction costs. As sound value is contractually limited to the lesser of construction costs or Fair Market Value it is procedurally impossible for Entrepreneurial profit to exist in an estimate of Possessory Interest Compensation. Estimate the fair market value of the improvements. Estimating Fair Market Value of Concessioner's improvements must take into consideration all the contractual limitations on use and utility and be reflective of only the contractual interests for use that the Concessioner holds. III. SERVICES TO BE PERFORMED A. IN GENERAL The required work product is a Complete, Self-Contained appraisal report of the sound value of the concessioner's possessory interest in concessioner improvements under the terms of the concession contract. The report shall comply with the Uniform Appraisal Standards for Federal Land Acquisitions (UASFLA), the Uniform Standards of Professional Appraisal Practice (USPAP), and the appraisal guidelines set forth herein. Please note, USPAP compliance will not yield UASFLA compliance; therefore, the provisions of the UASFLA take precedence over the provisions of the USPAP. Furthermore, when additional guidance is necessary (i.e., not covered by the two standards or this scope of work statement), the Contractor shall refer to, and follow, the guidance offered by the Appraisal Institute's The Appraisal of Real Estate (12th Edition), A certified appraiser with the professional designation "Member, Appraisal Institute" (MAI) will complete the appraisal assignment. The individual appraiser will be identified by the Contractor for approval by the Department of Interior. Condition assessment data provided to the Contractor or gathered under this task order should be adjusted based upon expected useful life, consumer price indices, recent condition assessment information (deficiencies, design life, remaining life, reproduction and depreciation analysis) and all other material provided to the Contractor. All materials provided to the Contractor shall be read by the Contractor. Their relevance to the appraisal shall be explained, upon request, by personnel of the area. The concessioner improvements that are the subject of this appraisal owned (held in title by) the United States Government and assigned to the concessioner by the concession contract. . The concession contract commenced on January 1, 1985, for a term of 20 years. The concession contract has been extended to December 31, 2006. B. ASSIGNMENT PLANNING Prior to the commencement of the appraisal, the Contractor shall review existing facility, financial and market information available. In many cases the amount of information available to the Contractor will be extensive. C. APPRAISAL REPORT The following subheadings relate to specific sections within a Self Contained appraisal report and identify considerations specific to the appraisal. Assumptions and Limiting Conditions " Clearly state assignment-specific assumptions and limiting conditions and explain how they differ from typical circumstances. " Reiterate comments that may be made in other areas of the appraisal that provide the reader with an understanding of how the valuation of possessory interest in concessioner improvements, based on the terms of the concession contract, differs from the valuation of real property in typical market transactions. History of the Property " Consider any transaction relating to the interest appraised during the 10 years preceding the date of value, if any. These may include transfers or assignments of the concession contract to another entity, subsequent construction or improvements to facilities. " Sale and transfer transactions involving concessioner improvements are always part of the sale and transfer of the concession contract in its entirety. Accordingly, the Contractor must attempt to derive an allocation of the purchase price for the concession contract to the assumed purchase price of concessioner improvements. Rights Appraised " Identify the rights under consideration, as the concept of possessory interest is not commonly used in typical market transaction. It is therefore likely to be misunderstood by users of the appraisal unless thoughtfully presented. " Provide an abstract of the concession contract provisions that gives rise to the possessory interest in concessioner improvements. " Describe the provisions in sufficient detail to demonstrate that only the possessory interest is being valued, being careful to describe other aspects of the facilities and operations as related to, but not a part of, the appraisal. Purpose of the Appraisal " The purpose of the appraisal is to estimate the sound value of the concessioner's possessory interest in concessioner improvements under the terms of the concession contract. . Date of Value " Possessory Interest is valued at the time of its transfer. " The appraiser is required to provide two value conclusions. " The first value conclusion is the current value as of the date of inspection. " The second value conclusion is a retrospective value opinion as of 9/4/91 to provide a sound value basis for the calculations indentified in Amendment 1 and 2 attached. " Site Description " Describe all site improvements, indicating any that belong to the concessioner, together with their condition, age, and other elements necessary for subsequent cost analysis. " Describe nature and extent of government-owned land and government-owned site improvements, including infrastructure and utilities, in order to accurately identify the appropriate return to the government for the use of these benefits in the valuation section of the appraisal. Property Description " Describe the concessioner improvements. See the attached "Summary of Concessioner. " Describe the size, quality, effective age, and other descriptive elements of the concessioner improvements so as to provide an accurate basis for calculating reproduction cost. (See the attached "Condition Assessment." " Enhance property descriptions with photos, NPS maps, and other graphics as appropriate, including NPS-provided aerial photographs, or other materials that may be available. Describe the concessioner's operations in sufficient detail to understand any constraints imposed or benefits derived as a result of the operating environment within a national park. " Describe (overview - not detailed) furniture, fixtures and equipment (FF&E) (personal property only), recognizing that FF&E that is personal property is not included in possessory interest calculations. However, the extent and nature of personal property FF&E will play a role in establishing an appropriate reserve account when performing the income approach. Furthermore, the contributory value of FF&E should be removed from the income capitalization technique. Property Taxes " Consider property taxes, even though concessions on NPS property generally pay no property taxes. The park will provide the appropriate information. " Investigate assessments and taxes of comparable off-site properties in order to accurately develop an estimate of the benefits derived by the concessioner for this tax relief, if applicable. Area and Neighborhood Analysis " Describe the impact of the park area and the concession operation on the surrounding community, including such topics as seasonality, limits on growth, etc. " Local economic analysis should support the Contractor's conclusions regarding availability of labor, spending patterns, market-based utility charges, and other aspects underlying the valuation section of the report. D. MARKET ANALYSIS This section of the appraisal shall provide much of the basis for making market-based adjustments to the concessioner's actual profit & loss statement. The real property analysis Contractor will provide the Contractor with copies of rate comparability studies and five years of approved rates for services such as lodging. The Contractor will work with this contractor to develop the market analysis. " Survey supply and demand factors for each significant component of the concessioner's possessory interest. For example, if the concessioner has a possessory interest in a lodging facility, it is incumbent upon the Contractor to examine other lodging facilities in and around the national park. Relevant factors to investigate are a function of local market conditions but typically include such considerations as occupancy levels, average room rates, expense trends, and the like. For example, the concessioner is required to have their rates approved in accordance with NPS guidelines, which could have an effect on the revenue stream as compared to other businesses that operate without this oversight. " Clearly distinguish between demand trends in-park vs. off-park. That is, demand and pricing for in-park services such as lodging vs. off-park services of a comparable quality level. This analysis is necessary to justify adjustments in the income capitalization approach, such as the fair return to the site. " Carefully distinguish the impact of park regulations versus operating factors that affect in-park and off-park properties alike. For instance, if a park has a seasonal closing that is inconsistent with natural visitation trends (relating to weather, mud or other causes), then this may represent a form of external obsolescence due to government controls. However, if the seasonality affects in-park and off-park properties equally, there is no need to make an adjustment in the valuation. " Discuss and consider as applicable the economic advantages of the by virtues of location within a national park, including, without limitation, lack of direct competition, reduced marketing expenses due to the park area's "destination" draw; and high occupancy and visitation rates. E. HIGHEST AND BEST USE " Consider constraints on the highest and best use of the property due to governmental oversight. Because the concessioner is not free to materially alter the property without the prior approval of NPS, the main concern under Highest and Best Use is to evaluate what is the best use of the property as improved. The management documents that may include the General Management Plan, Development Concept Plans and variety of implementation plans and NPS policies in effect at the park, may provide some of the characteristics that a zoning or building code would in a municipality. Similarly the park's mission, or charter, to enable visitors to experience the park limits the use of improvements to visitor-related functions. As such, the Contractor should consider such resources when estimating Highest & Best Use. F. APPROACHES TO VALUE Organize the valuation section of the appraisal report to set forth depreciated reproduction cost and fair market value of the concessioner's possessory interest in concessioner improvements. To insure that all forms of accrued depreciation are properly recognized, the Contractor should be guided by the guidance offered in the 12th Edition of the Appraisal of Real Estate. " The three approaches to market value must be considered. When evaluating the concessioner's actual income statements, the Contractor must remove all recognized income components that do not specifically derive from concessioner's improvements. G. DEDUCTIONS FROM INCOME AND MARKET APPROACH ESTIMATE " Subtract the cost of any deferred maintenance, the value of the concessioner's inventory, and the value of any furnishings, fixtures and equipment ("FF&E"). Imminent deferred maintenance, which will be cured prior to a new concession contract, includes items of deterioration that need to be fixed immediately. One example might be new ceiling tiles for a ballroom where a leak had caused enough damage to make the room un-rentable. The concessioner's inventory will sold at its book value. The sale is performed as a separate transaction between the concessioner and a new concessioner. " The appraiser will be provided with a personal property report and the appraiser should determine and analyze the report and determine how the personal property contributes to the overall final value. The scope of the personal property report has been provided for your review and consideration H REPRODUCTION COST " A Real Property Assessment Report was conducted in November 2004. Condition and reproduction cost estimates, as well as deferred maintenance assessment, will be completed by March 2006. This work should be considered for determining reproduction cost less depreciation. " Analyze the Real Property Assessment Report to determine if it is suitable for use in the appraisal. Collect additional information, as required, to estimate the reproduction cost of concessioner's improvements. See previous statements regarding accuracy of this report. " Consider the various methods for estimating cost; however, given the many unique attributes of concessioner's improvements in a national park, the quantity survey method is typically preferred. If the Contractor is considering a method other than the quantity survey method, this point must be discussed in advance with the NPS. I. DEPRECIATION " In the majority of cases the breakdown method will be the most appropriate way in which to measure depreciation associated with concessioner improvements. " All three forms of depreciation are to be evaluated including physical deterioration, functional obsolescence and external obsolescence. Refer to The Appraisal of Real Estate for general guidance concerning the proper method of quantification of all forms of depreciation. IV. SUBCONTRACTORS The report is to be completed by the Contractor, and/or by members of his/her staff who are employees of the Contractor's firm under the Contractor's direct supervision. The NPS must approve any use of subcontractors, including professional cost estimators, prior to the commencement of the assignment. If the Contractor intends to use a subcontractor (non-employee) for any portion of the analysis of the report leading to value conclusions, the following must be furnished in advance and approved: " The names, addresses, qualifications, current employer, and immediate contact telephone numbers of such subcontractors; " A description of the work that the subcontractor will be performing on this assignment; " Disclosure of any relationships between the Contractor and any of the subcontractors. As stated above, the Contractor shall rely upon the previously completed Financial Feasibility Report (or Annual Financial Reports) and Real Property Assessment Report, as provided by the NPS. V. DELIVERABLES Deliverables are detailed in the following paragraphs: " Two draft copies of the Complete, Self-Contained appraisal report are due within 45 days of commencing work. NPS will have 30 days to review the draft and provide comments to the Contractor. " Two full hard copy narrative appraisal reports and one final version of the report in electronic form 15 days after NPS comments are received. A certified appraiser with the professional designation Member of the Appraisal Institute (MAI) will complete these appraisals. VI. DATA AND MATERIALS PROVIDED BY NPS The items outlined herein will be provided or made available by NPS upon award of the task order for the purpose of completing the services required under this task directive. All data and materials provided by NPS are strictly confidential, and may not be duplicated or released in any way to the public. These items and any unused portions thereof shall be returned to NPS upon completion of the work before final payment is made, unless NPS approves other arrangements in writing. The Contractor shall verify data (in as much as necessary to be reasonably accurate) furnished by NPS for use in completion of this task directive. " The concession contract, and all amendments " Any transactions that have affected the concession operations within the last ten years " Summary of Concessioner and Government Improvements " Real Property Condition Assessment Report, including: " Appendix A - Real Property Listing " Appendix C - Deficiencies Identified During Condition Assessment " Appendix D - Component Inventory List " Appendix E - Reproduction and Depreciation Analysis " Financial Feasibility Analysis, if completed " 5 years of Annual Financial Reports (AFRs) " Site map " Access to NPS personnel, who will aid in the appraisal process. These individuals will include appraisers, architects, and local facility management/construction and concessions management personnel. VII. DESIGNATED OFFICIALS Contracting Officer: Michael B. Bachofen National Park Service 12795 W. Alameda Parkway P.O. Box 25287, MS-WCP Denver, CO 80225 (303) 987-6977 Contracting Officer's Kathy Fleming Representative (COR): National Park Service 12795 W. Alameda Parkway P.O. Box 25287 Denver, CO 80225 (303) 987-6910 Contracting Officer's Technical Brian Holly Representative (COTR) NBC Chief Appraiser 1849 C street NW 202-208-6931 brian_m_holly@nbc.gov Project Field Coordinators (PFC): Robbie Brockwehl Shenandoah National Park 3655 U.S. Highway 211 East Luray, VA 22835-9036 (540) 999-3470 Lynne Koser National Park Service Northeast Region 15 State Street Boston, MA 02109 (617) 223-5209 NOTE: THIS NOTICE WAS NOT POSTED TO FEDBIZOPPS ON THE DATE INDICATED IN THE NOTICE ITSELF (30-MAR-2006); HOWEVER, IT DID APPEAR IN THE FEDBIZOPPS FTP FEED ON THIS DATE. PLEASE CONTACT fbo.support@gsa.gov REGARDING THIS ISSUE.
Web Link: Please click here to view more details.
(http://www.fbo.gov/spg/DOI/NPS/APC-IS/QSHEN230306/listing.html)
Place of Performance: Address: SHENENDOAH NATIONAL PARK; Zip Code: 228359036; Country: USA
Record: SN01018703-F 20060401/060330215504 (fbodaily.com)
Source: FedBizOpps Link to This Notice
(may not be valid after Archive Date)

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R -- APPRAISAL OF NATIONAL PARK SERVICE FACILITIES