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Cow Palace Urgent Action - Do you live in Sen. Yee's district??
(originally sent 8/6/08)

This just in from Kevin Patterson. Please reply to him with any questions at kevin@savethecowpalace.com


Dear Friend of the Cow Palace,

Sorry to keep pestering you with emails, but we have a huge opportunity to make a difference in the future of the Cow Palace.  Tomorrow may be the final committee hearing on the bill.

Do you live in Senator Yee's district?  Do you know someone who does?

Here's a map of his district: http://www.sen.ca.gov/ftp/SEN/senplan/SENMAPS/MAP08_300.JPG

If so, please call 916-651-4008 TOMORROW between 8:30 AM and 10:00 AM.

Simply tell the person who answers that you respectfully request that Senator Yee withdraw his bill (SB1527). Say that you believe he has already achieved his stated goal of getting negotiations for a retail center on 13 acres of Cow Palace land "going again".

You can also say that without the legislation, the lease of the 13 acres will be able to continue and that this will be best for California and best for the local community because it will provide more income to the Cow Palace AND get a deal for a grocery store going more quickly.

That's it.

Thanks!!!

Kevin

Kevin Patterson
Friends of the Cow Palace

PS.

If you want to help more, here's how:

Copy, personalize and email the following letter to the members of the
Assembly appropriations committee (yes, another letter!)

Subject line: Please vote no on SB1527

<Assemblymember.leno@assembly.ca.gov>,
<Assemblymember.Lieu@assembly.ca.gov>, <Assemblymember.Ma@assembly.ca.gov>,
<Assemblymember.nakanishi@assembly.ca.gov>,
<Assemblymember.nava@assembly.ca.gov>,
<Assemblywoman.Runner@assembly.ca.gov>,
<Assemblymember.solorio@assembly.ca.gov>,
<Assemblymember.walters@assembly.ca.gov>,
<Assemblymember.Caballero@assembly.ca.gov>,
<Assemblymember.Davis@assembly.ca.gov>,
<Assemblymember.DeSaulnier@assembly.ca.gov>,
<Assemblymember.emmerson@assembly.ca.gov>
<michelle.toppin@asm.ca.gov>

Dear Assemblymember,

At Thursday's (8/7/08) Assembly Appropriations Committee hearing, you will likely be voting on SB1527, a bill proposed by Senator Leland Yee. The amended bill currently calls for 13 acres of Cow Palace property to be sold "at fair market value" with Daly City retaining a "first right of refusal".

After numerous requests by various organizations supporting a viable future for the Cow Palace, the bill's proponents (Daly City) continue to resist a provision for a long-term lease.  This is because they stand to gain a tremendous financial advantage by forcing a sale through this legislation.

If this bill passes, it will provide a windfall profit to Daly City at the expense of all California citizens.

The Cow Palace Board and the California Construction Authority are in the middle of an RFLP (request for lease proposal) process on this parcel.  We urge you to vote no on SB1527 thus allowing the long-term lease process to continue, (improving the State's negotiating position at the same time).

Here are the bottom line numbers that make a very clear case for leasing instead of selling:

1) If the 13 acres are sold "at fair market value" in today's down real estate market, the price range is likely to be $15-20 million (max). This is based on a 2006 Cushman-Wakefield land value appraisal of $20,900,000.

2) Alternately, in response to the District 1-A Board's RFLP, the California Construction Authority has received 2 serious bids for long term lease of the 13 acre parcel.  Although the dollar values have not been made public, the estimated income from a long-term lease based on the above sale value range, and today's Cushman Wakefield commercial real estate estimated industry-average cap rate of 7%, is $1.0 - $1.4 million annually.

Setting aside the very significant issue of future value, which in 50 years, at the end of a long-term lease, has been estimated by appraisers to be $75-$100 million for the 13 acres...

the ANNUAL income comparison is as follows:

Interest income from sale proceeds placed in a 3% government account:

$15-20 million @ 3% annually = $450,000 - $600,000 per year

vs.

$1.0 - $1.4 million per year (a 7% cap rate) for a long-term lease not including normal annual increases built in to any reasonable lease.


The reality is that if SB1527 passes, Daly City stands to receive a sweetheart deal at the expense of California and its citizens.

Note: although the bill language now includes the ability for other bidders to participate, Daly City holds a "First Right of Refusal", which effectively eliminates competition.  Why would serious developers invest staff time to produce viable offers if their bids could be defeated by Daly City offering $1 more?

The Cow Palace Board wanted to lease the 13 acres in the first place, nearly 3 years ago, in order to SELF-FUND long overdue improvements to their facility. DGS spoiled the deal by requiring a 10% cap rate for the lease and Daly City refused to continue negotiations, believing they could do much better via legislation.

Please vote no on this bill and send Daly City back to the negotiating table. We believe everyone, on both sides, will be very motivated to complete a deal.  Senator Yee has already achieved his stated goal of getting the process "unstuck".

FYI - The Cow Palace currently operates in the black except for the Grand National Rodeo, which has been putting them in the red the last 3 years. This can change, and the facility - serving the heart of SF and the Peninsula - can again become a profitable enterprise, once improvements are complete. Adequate staffing in their sales and marketing area which is currently operating without a marketing director or an updated marketing plan, could also be achieved with income from a lease.

Any business will perform better with adequate, regular, upgrades to physical plant and a strong marketing program. The Cow Palace board wants to do this - with zero cost to tax payers - SB1527 thwarts this effort.

Please help us achieve what is best for California and vote no on SB1527.

Thank you!

Sincerely,

<your name and address>


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