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4.9. SR 06-06-2016 EGty1� ,.,�� Request for Action River To Item Number Mayor and City Council 4.9 Agenda Section Meeting Date Prepared by ConsentJune 6, 2016 Amanda Othoudt,EDD Item Description Reviewed by Joplin Property Condemnation Action Cal Portner, City Administrator Reviewed by Action Requested Adopt,by motion, a resolution authorizing condemnation of Parcel 1 and Parcel 3A located at the intersection of Highway 10 and Joplin Street. Background/Discussion Staff is seeking authorization,by resolution, to proceed with condemnation action for two parcels located at the intersection of Highway 10 and Joplin Street. Nagell Appraisal,Inc. completed an appraisal on both of the remnant parcels. Parcel 1 and Parcel 3A have a combined value of$30,000. Parcel 1 is owned by the heirs of the Lakoduk's and the Wingness's. Parcel 3A (North 33 feet of Old Highway 10) is owned by Charles E.Johnson,who obtained title in 1909. Presumably Mr.Johnson is also no longer alive and the title evidence suggests that this property was not conveyed through a probated estate. The potential heirs we have identified will receive notice of the condemnation action,but their only interest should be in the compensation amount. If they think our appraised amount is too low, they can present their argument to the land commissioners. If in the event, a potential heir would come forward to claim an interest in the property, the city could enter into an agreement with the heir to compensate them in exchange for the quitclaim deed which would extinguish any interest that she/he may have. Financial Impact N/A Attachments ■ Resolution ■ Property Appraisal Report by Nagell Appraisal,Inc. ■ Parcel Diagram POWERED 6T AR VA City of Elk .�.^ RESOLUTION NO. 16- River RESOLUTION AUTHORIZING ACQUISITION BY EMINENT DOMAIN AND APPROVING APPRAISED VALUES FOR PROPERTIES LOCATED AT THE SE CORNER OF US HWY 10 &JOPLIN STREET NW WHEREAS, as part of an economic development project (the "Pro)ect"), the City has acquired certain vacant properties located at the Southeast corner of US Hwy 10 & Joplin Street NW (the "City Properties"). WHEREAS, two properties located adjacent to and to the North of the City Properties are currently encumbered by right-of-way easements in favor of the State of Minnesota and the City (the "ROW Properties",legally described in Exhibit A and depicted in Exhibit B); WHEREAS, the City has learned that the MnDOT easement in the ROW Properties is no longer needed for right-of-way purposes; WHEREAS, the City desires to acquire the ROW Properties for the Project; WHEREAS, to acquire clean title to the ROW Properties the City will both need to work with the MnDOT to release the State's easement and acquire the underlying fee interests; WHEREAS, title to the underlying fee interest of these ROW Properties remains in the names of property owners who have long been deceased; WHEREAS, under Minn. Stat. §465.01 the City has the power of eminent domain for any purpose for which it authorized by law to take or hold the same by purchase or gift; WHEREAS, under Minn. Stat. § 117.025, Subd. 11, the City is authorized to acquire property that it has determined to be abandoned; WHEREAS, acquisition of said abandoned property will be in furtherance of the Project, which is a public purpose; WHEREAS, the City finds that the ROW Properties constitute abandoned property, as that term is defined under Minn. Stat. §117.025, subd. 5; WHEREAS, the City Council finds that it is reasonably necessary, proper, and convenient, and in the interest of the general welfare that the City acquire title to and possession of the ROW Properties in furtherance of the Project; WHEREAS, the City Council finds that the schedule for the Project makes it necessary to acquire title to and possession of the ROW Properties prior to the filing of the final report of the condemnation commissioners to be appointed by the district court; WHEREAS, the City engaged an independent real estate appraiser to provide the City with the appraiser's opinion of value of the ROW Properties and the City Council finds that the values in the appraisal are appropriate and fair; and WHEREAS, the City has identified numerous potential heirs to the fee owners of the ROW Properties and is in the process of determining whether a voluntary conveyance of marketable title to the ROW Properties is possible; NOW THEREFORE, BE IT RESOLVED by the City Council (the "Council") of the City of Elk River,Minnesota as follows: 1. The acquisition of the ROW Properties is necessary and for the public purpose of eliminating abandoned property and doing so will be in furtherance of the Project; 2. The proper City officers and agents are authorized and directed to acquire marketable title to the ROW Properties needed for the Project by voluntary negotiation if possible and, if not,through the exercise of eminent domain; 3. The approved appraised values for the ROW Properties (as described on the attached Exhibit A) for the purposes of Minn. Stat. §117.042 are as follows: a. Parcel 1 -- $9,000. b. Parcel 3A-- $21,000 4. The law firm of Kennedy& Graven, Chartered,is authorized and directed to take all steps necessary on behalf of the City to acquire through eminent domain all interests in the ROW Properties that are not acquired by voluntary negotiation, including filing an action in eminent domain and using the quick take procedure under Minn. Stat. § 117.042. 5. To the extent that the legal descriptions in Exhibit A do not match the boundaries of the properties needed for the Pro)ect, City officers and agents may amend the legal descriptions to be used in a voluntary conveyance or action in eminent domain without further action from the Council. Approved by the City Council for the City of Elk River this 6"'day of June,2016. John J. Dietz,Mayor ATTEST: Tina Allard,City Clerk EXHIBIT A Legal descriptions of the ROW Properties Parcel 1: Part of the following described land, which description must be determined by a survey: Tract A: That part of the South half of the Northwest Quarter of Section 32, Township 33 North, Range 26 West, Sherburne County, Minnesota, which lies within a distance of 112.5 feet on each side of the following described line: Beginning at a point on the center line of High Street, distant 353.5 feet North of its intersection with the center line of Line Street in the Village of Elk River, according to the plat thereof now on file and of record in the office of Register of Deeds in and for Sherburne County; thence run westerly at an angle of 89 degrees 54 minutes with said center line of High Street (when measured from South to West) for a distance of 545.6 feet; thence deflect to the right at an angle of 26 degrees 01 minutes for a distance of 2,118.7 feet; thence deflect to the left at an angle of 28 degrees 21 minutes for a distance of 2,251.8 feet; thence deflect to the left on a 2 degree 30 minutes curve, delta angle 28 degrees 12 minutes, for a distance of 1,128 feet; thence on a tangent to said curve for a distance of 1,459.2 feet; thence deflect to the right on a 2 degree 30 minute curve, delta angle 30 degrees 51 minutes, for a distance of 1,234.0 feet; thence on tangent to said curve for a distance of 250 feet and there terminating; together with all that part of the Southwest quarter of the Northwest quarter of said Section 32 lying Southeasterly of the above described strip, excepting therefrom the right of way of existing highway. AND Tract B: That part of the Northwest Quarter of the Southwest Quarter of Section 32, Township 33 North, Range 26 West, Sherburne County, Minnesota; which lies Northwesterly of a line run parallel with and distant 112.5 feet Southeasterly of the following described line: Beginning at a point on the center line of High Street, distant 353.5 feet North of its intersection with the center line of Line Street in the Village of Elk River, according to the plat thereof now on file and of record in the office of Register of Deeds in and for Sherburne County; thence run westerly at an angle of 89 degrees 54 minutes with said center line of High Street (when measured from South to West) for a distance of 545.6 feet; thence deflect to the right at an angle of 26 degrees 01 minutes for a distance of 2,118.7 feet; thence deflect to the left at an angle of 28 degrees 21 minutes for a distance of 2827.5 feet; thence deflect left at an angle of 28 degrees 12 minutes for a distance of 2,034.9 feet; thence deflect to the right on a 2 degree 30 minute curve, delta angle 30 degrees 51 minutes for a distance of 1,234.0 feet; thence on a tangent to said curve for a distance of 250 feet and there terminating; together with all that part of the above described track lying Southeasterly of the above described strip and Northerly of the Southerly right of way line of Temporary Trunk Highway No. 10, as same is now located and traveled over and across the above described tract; excepting therefrom the right of way of existing highway. Parcel 3A: All that part of the West Half of the Northeast Quarter of the Southwest Quarter of Section 32, Township 33, Range 26, Sherburne County, Minnesota, lying between the North line and centerline of Old U.S. Highway No. 10. EXHIBIT B PARCEL SKETCHES (Parcels 1 and 3A) [see attached] �� ' # �• r � _ �' ��°IAF F' r H .� _ 4 w n' ti w P19 wwo(" olp MOIP W---------- fDCLi 4 CL F a W CL CLd. Vy CL uj y.r s Y a e b V. k, Report Type Appraisal Report Effective Date 5/11/2016 Client Submect Propert RiverCity of Elk - mnant LandAttn: Amanda Othoudt, Econmic Development Director Parcels 1 & 3A 13065 Orono Parkway SEC of US Hwy 10 & Joplin Street NW Elk River, MN 55330 Elk River, MN 55330 a Y 75-132-2425 75-132-292B Prepared By- Molly J. Lewis, Appraiser William R. Waytas, Appraiser 75-132-3100 (Parcel 1 =Blue Outline, Parcel 3A =Red Outline) Nagell Appraisal Incorporated 12805 Highway 55, Suite 300 File # Plymouth, MN 55441 G1605002 Tel: 952.544.8966/ Fax: 952.544.8969 Nagell Appraisal Incorporated 12805 Highway 55, #300 Minneapolis: 952.544.8966 Plymouth, MN 55441 St. Paul: 651.209.6159 Established in 1968 Central Fax: 952.544.8969 City of Elk River May 26, 2016 13065 Orono Parkway Elk River, MN 55330 Attn: Amanda Othoudt, Econmic Development Director In accordance with your request, an appraisal report has been made on the following described property: Subject Property: Remnant Land Parcels 1 & 3A Elk River, MN 55330 The property is legally described herein. The appraisal assumes that the property meets all current environmental standards. The appraisal analysis and conclusions are subject to certain limiting conditions and assumptions described herein. Final Value Opinion Parcel 1 Parcel 3A May 11, 2016 Fee Simple $9,000 $21,000 As-/s Property Components Appraised Real Estate Only Extraordinary Assumptions & Hypothetical Conditions Yes; See Rear of Report Exposure/ Marketing Time 1 Year/6 to 18 Months Our company has 12 employees, has been in business since 1968 and has sufficient knowledge, education, experience, resources and/or contacts to competently complete this assignment. The accompanying report contains data secured from my personal investigation and from sources considered to be reliable; however, correctness is not guaranteed. To the best of my knowledge and belief, the statements contained in this report are true and correct. Neither my employment to make this appraisal, nor the compensation, is contingent upon the value reported. This report has been prepared in conformity with the code of professional ethics and standards of professional appraisal practice of the Appraisal Institute and appraisal standards set forth by Uniform Standards of Professional Appraisal Practice. Sincerely, Molly J. Lewis William R. Waytas Certified General MN 20391975 Certified General MN 4000813 www.nagelimn.com TABLE OF CONTENTS General Information Page Summary of Important Facts and Conclusions 1 Introduction Value Type, Condition & Stability of Property 2 Intended Use of Report, Date of the Appraisal 3 Scope of the Appraisal 4 Property Rights Appraised, Property Components Appraised 5 Identification, Real Estate Taxes 6 Subject Sales, Building & Lease History 7 Descriptive Data Regional Data 8 Regional Map 14 City & Neighborhood Description 15 Neighborhood Map 17 Market Conditions Overview 18 Site Description 21 Zoning Description & Map 23 Flood Map 24 Aerial Plat Map 25 Survey 26 Aerial Map Surroundings 27 Subject Photographs 28 Valuation Highest and Best Use 31 Cost Approach 34 Income Approach 34 Sales Comparison Approach 34 Reconciliation 48 Exposure/Marketing Time 49 Definition of Market Value, Environmental & Building Conditions 49 Certification 50 Extraordinary Assumptions & Hypothetical Conditions 51 Assumptions and Limiting Conditions 51 Qualifications 54 Addenda 57 SUMMARY OF IMPORTANT FACTS & CONCLUSIONS General Information Street Address Parcels 1 & 3A City/State/Zip Elk River, MN 55330 County Sherburne Report Type Appraisal Report Current Property Use Vacant Land Effective Date 5/11/2016 Proposed Property Use Commercial Dev. Inspection Date 5/11/2016 Property Owner N/A Report Date 5/26/2016 Interest Appraised: Fee Simple Prosp Date/Completion N/A Site Information Site Size (SF) Topography Somewhat Level Parcel 1 12,522 Shape Somewhat Irregular Parcel 3A 28,500 Low None Noted Flood Zone/Map Appears No;See Flood Map Visibility Average to Good Utilities Available Location Rating Average Governmental Information Assessing Authority Sherburne Current Zoning C-3, Highway Commercial Property ID# N/A Land Use Plan Highway Business Current Tax Year Payable 2016 Current Use Permitted? Yes Assessor's Value N/A Zoning Change? None Reported Taxes Payable N/A Zoning Variance None Reported Delinquent Taxes? None Noted ITax Grievance I None Noted The subject is right of way. As such, the subject does not have a PID or legal Assessed Value discription and is tax exempt. Highest & Best Use As Vacant Commercial Development Extraordinary Assumptions/Limiting Conditions Yes; See Rear of Report Parcel 1 Parce 13A Cost Approach Not Applied Not Applied Income Approach Not Applied Not Applied Sales Comparison Approach $9,000 $21,000 Final Value Opinion $9,000 $21,000 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com INTRODUCTION This appraisal report reflects the data found and the opinions concluded from an appraisal of two vacant land parcels located in Elk River, Minnesota. The subject lots are located at the southeast corner of US Highway 10 and Joplin Street. Per client request, separate land values are concluded for each of the parcels. The subject parcels are remnant lots; Parcel 1 is 12,522 SF and fronts on US Highway 10. Parcel 3A is around 28,500 SF and is a long, narrow strip of land that appears to be half of a vacated street. Neither parcel is platted, has a legal description or a PID. The subject lots are bare land and given their size and/or access, do not appear to have stand alone development potential. The highest and best use is to assemble with adjacent properties to the south. NOTE: Parcels are appraised reflecting the as is remnant condition. If appraised as part of a larger buildable parcel the allocated portions of the two subject parcels would likely be higher. VALUE TYPE, CONDITION & STABILITY OF PROPERTY Market Value Type of Value: See Definitions Section for Market Value Defined As-Is Value Condition of Value: As of the effective date of the appraisal. Stabilized Stability of Property: The subject is vacant land. 2 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com INTENDED USE OF THE APPRAISAL Decision-Making for Potential Purchase This appraisal assignment was requested by the named client for its sole use. No party,other than the named client, may use or rely upon any part of this report Intended Use: without the prior written authorization of both the named client and the appraiser. This report is not valid unless it contains the original signatures in blue ink. Any unauthorized third party relying upon any portion of this report does so at its own risk. Intended User: City of Elk River City of Elk River Client: Attn:Amanda Othoudt, Econmic Development Director 13065 Orono Parkway Elk River, MN 55330 DATES OF APPRAISAL Effective Date: 5/11/2016 Inspection Date: 5/11/2016 Date of Report: 5/26/2016 (5/11/2016-5/26/2016) Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 3 SCOPE OF THE APPRAISAL REPORT USPAP defines Scope of Work as: The type and extent of research and analyses in an assignment. For each appraisal, appraisal review and appraisal consulting assignment, an appraiser must: 1) Identify the problem to be solved, 2) Determine and perform the scope of work necessary to develop credible assignment results; and 3) Disclose the scope of work in the report. 1) Provide a reasonably supported value opinion as it relates to the intended use & scope. Per assignment request (see addenda for engagement letter), the following degree of 2) research and analysis has been made. The narrative format used is an Appraisal Report, which is intended to comply with the reporting requirements set forth under Standards Rule 2-2 of USPAP. See individual approaches for further detail. The scope of work for this appraisal includes: • a) Property Identification: Public record, plat maps, zoning maps and aerial photographs were used to identify the subject property. • b) Property Inspection: A viewing of the subject property and neighborhood by the appraiser. Financial factors: The appraiser requested from the property representative income, rental and expense information on the property. Physical factors: The appraiser requested from the property representative building/site plans, and property issues. Based on property viewing and conversations with the client, city and county officials. Lot size is based on county information. Economic Factors: Consisted of gathering of information from market experts, city and/or county offices, and internet about the region, community, neighborhood, zoning, utilities, and any pending projects in the area that may affect the subject property. 3) • c) Extent of Data Researched: Sales data of competing properties within the subject market area were given primary consideration. The most relevant data is used in this report. Sources include, appraiser data files, assessor, internet, developers, agents, MLS, periodicals, in-office library, etc. In addition, during the course of appraisal practice and of this appraisal process, the appraiser has had ongoing discussions with market participants (buyers, sellers, property managers, real estate agents/brokers, appraisers, etc.) and/or viewed market data in relation to how the current real estate market may impact the subject value. The appraiser has not researched the title or ownership records. • d) Type and Extent of Analysis Applied at Opinions or Conclusions: An extensive review of market data was performed. The most recent, similar and proximate data has been used. The data used will be adjusted on a grid. Reasonable and appropriate collection, verification, analysis and viewing has been performed in the valuation approaches, given the purpose and intended use of the report. A final value opinion will be discussed and correlated. The data used was obtained from sources considered credible, yet its accuracy is not guaranteed. If found otherwise the value could differ. 4 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com PROPERTY RIGHTS APPRAISED Real property ownership consists of a group of distinct rights. There are two primary property rights, Fee Simple and Leased Fee (as defined by The Appraisal of Real Estate, 13th Edition, Appraisal Institute). Fee Simple Interest: Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat. Note: This would typically reflect an owner-occupied property. When the property rights appraised are the unencumbered fee simple interest of the real estate, the appraised value is subject to normal easements for drainage, public streets and utilities, if any. The effect of any existing mortgage or delinquent taxes on the subject property has not been considered in this appraisal. Leased Fee Interest: The ownership interest held by a lessor (landlord), which includes the right to the contract rent specified in the lease plus reversionary right when the lease expires. The lessor's interest in a property is considered a leased fee interest regardless of the duration of the lease, specified rent, the parties to the lease, or any of the terms in the lease contract. A leased property, even one with rent that is consistent with market rent, is appraised as a leased fee interest, not as a fee simple interest. Even if the rent of the lease terms are not consistent with market terms, the lease fee interest must be given special consideration and is appraised as a leased fee interest. (The Appraisal of Real Estate, 13th Edition, Page 114) The subject is vacant land. As such, the property rights appraised are the Fee Simple Interest of the real estate. PROPERTY COMPONENTS APPRAISED Real Estate: The appraised value includes the real estate value opinion. The methods utilized for the real estate valuation include: • Sales Comparison Approach FF&E: The appraised value does not include FF&E or personal property value. Business Value: The appraised value does not include business value. Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com rJ IDENTIFICATION Parcels 1 & 3A Address: SEC of US Hwy 10 & Joplin Street NW Elk River, MN 55330 County: Sherburne PID: N/A Legal: N/A Fee Owner: N/A Interest Appraised: Fee Simple Report Type: JAppraisal Report Values assumes the subject is owned free and clear--the appraised value does not take into account any extraordinary interest, rights or easement issues that may exist. REAL ESTATE TAXES Taxes, per County Records Parcell Parcel 3A Tax N/A N/A Tax Ratio N/A N/A Assessments, Fees, Other N/A N/A Total Tax&Assessments N/A N/A Delinquent Taxes None Noted Tax Grievance None Noted County Assessor's Vallue Parcell Parcel 3A Land N/A N/A Building N/A N/A TOTAL N/A N/A $/SF N/A N/A The subject is right of way. As such, the subject does not have a PID or legal discription and is tax exempt. Typical Tax Ratios by Prope Type Commercial retail,office,industrial, hotel,other, etc. 1.5%-4.0% Residential(multi-family, apartment,etc.) 0.9%-1.5% Single-family dwellings 0.8%-1.5% The appraised value given in this report assumes any/all special assessments, and/or liens are paid in full and that there are no delinquent taxes, deferred taxes, fees, payments, association dues, etc. Should it be found that any of these exist the amount should be deducted from the appraised value. Appraiser did not research these items; typically, a title search would reveal any of these. 6 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com SUBJECT SALES & BUILDING HISTORY Listing History No listings for the subject property. Sale Price: N/A Sale Price/Acre: N/A Sale Date: N/A Buyer: N/A Sales History: Seller: N/A Terms: N/A Source: N/A No known or reported sales of the subject property within the past 3 years. Building History: None;the subject is vacant land. Lease History: None;the subject is vacant land. Leasehold Interest: None;the subject is vacant land. Association Dues: None;the subject is not part of a common interest community. Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 7 REGIONAL DATA Metro Area Minneapolis-Saint Paul is the most populous urban area in Minnesota, and is composed of 186 cities and townships. Built around the Mississippi, Minnesota and St. Croix rivers, the area is also nicknamed The Twin Cities for its two largest cities, Minneapolis and Saint Paul. Saint Paul is the second largest city in Minnesota, as well as the state capital. The area is part of a larger U.S. Census division named Minneapolis-St. Paul-Bloomington, MN- WI, the country's 16th-largest metropolitan area, composed of eleven counties in Minnesota and two counties in Wisconsin. This larger area, in turn, is enveloped in the U.S. Census combined statistical area called Minneapolis-St. Paul-St. Cloud, MN-WI with an estimated population of 3.5 million people in 2006, ranked the 13th most populous in the U.S. In both of the fully developed central cities--Minneapolis and St. Paul--the population has declined due to smaller household sizes, yet growth in other areas of their counties has been more than offsetting. Below is detailed where this growth has occurred: POPULATION Census Census Census Forecast Growth Growth County 1990 2000 2010 2015 2000-2010 2010-2015 total annual total annual Hennepin 1,032,431 1,116,200 1,152,425 1,165,830 3.3% 0.3% 1.2% 0.2% Ramsey 485,765 511,035 508,640 491,820 -0.5% -0.1% -3.3% -0.7% Dakota 275,227 355,904 398,552 437,520 12.0% 1.2% 9.8% 2.0% m N Anoka 243,641 298,084 330,844 374,350 11.0% 1.1% 13.2% 2.6% N Washington 145,896 201,130 238,136 257,760 18.4% 1.8% 8.2% 1.7% Scott 57,846 89,498 129,928 186,820 45.2% 4.5% 43.8% 8.8% y Wright 68,710 89,986 124,700 159,640 38.6% 3.9% 28.0% 5.6% ci Carver 47,915 70,205 91,042 114,870 29.7% 3.0% 26.2% 5.2% Sherburne 41,945 64,417 88,499 119,040 37.4% 3.7% 34.5% 6.9% 0 Chisago 30,521 41,101 53,887 67,880 31.1% 3.1% 26.0% 5.2% Isanti 25,921 31,287 37,816 51,730 20.9% 2.1% 36.8% 7.4% Total 2,455,818 2,868,847 3,116,653 3,427,260 9.8% 1.0% 10.0% 2.0% Overall, the area has experienced moderate to good income growth. Annualized income growth of 2.5% to 3.5% is consistent with national averages. MEDIAN HOUSEHOLD INCOME Census Estimate Growth County 2000 2012 2000-2012 total annual M Hennepin 51,711 63,559 22.91% 1.91% Ramsey 45,722 53,152 16.25% 1.35% rn N Dakota 61,863 73,288 18.47% 1.54% H Anoka 57,754 69,916 21.06% 1.76% d Washington 66,305 80,747 21.78% 1.82% y Scott 66,612 84,571 26.96% 2.25% ci Wright 53,945 70,930 31.49% 2.62% Carver 65,540 83,275 27.06% 2.26% Sherburne 57,014 72,041 26.36% 1 2.20% Chisago 52,012 66,592 28.03% 2.34% 8 Nagell Appraisal&Consulting 1 952-544-8966 www.callnagell.com Regional Data -continued Economic Trends Interest rates for a typical 30-year residential mortgage are around 4-5%. Commercial rates are around 5-7%. Rates are expected to be relatively stable over the next year. The current state of the macro economy (international, national, state, etc.) is fair since its peak in 2006, with ongoing signs of stabilization. "The Great Recession" is considered to be over. However, recovery timing is uncertain, and could span several years. Some property types experienced significant decline, particularly special use, recreational, high-end and outlying development properties. Currently, most property types are experiencing relatively stable values. Certain market segments/areas are experiencing growth, particularly the multi-family residential market. Although well diversified, the TCMA and surrounding Minnesota economy is not immune to the recent soft/declining trends of the overall economy. Minnesota Index and U.S. Index 1134.0 175.0 e r 174.0 165.0 164.0 a 155.0 164.0 145.0 lrrlN 144.0 -U.S. 135.0 134.0 c c Ii c tk c _ Z c iri 0 aF j aE j ar 'j 3 3 Z Source:Minnesota DEED Minnesota's index plunged along with the national index during the worst months of the recession but bottomed out earlier and dropped less than the national index. Minnesota's economy seems to be recovering at a similar rate as the national index. other South The regional economic climate is boominu 5.0 6.3 29.2 21.1 17.0 The regional economic climate is level 23.8 25.3 23.1 9.9 17.8 The regional economic climateis morle-ately positive 48.8 55.8 40.4 61.2 52.6 The regional economic cIiniintei5 51.ayimii1 14.0 3.2 1.9 0.7 1.v The regional economic climateis weak 12.5 9.5 13.5 7.2 11.1 Source:CCIM Institute.NATIONAL ASSOCIATION OF REALTORS' Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 9 Regional Data —continued EMPLOYMENT & LABOR TWIN CITIES LABOR FORCE,EMPLOYMENT I UNEMPLOYMENT •PROPERTY TYPE LABOR FORGE UNEMPLOYMENT RATE L95M 9% r ` 895 1.94M 7.2°o — 796 1.85M 1.80M 1.75M 1,6°° 3,696 3-996 3-9 4% 3,196 2.7% 35: 1.70M 2% 1.65M 191, 1.6OM 0% NOV 45 NOV O6 NOV 07 NOV 08 NOV 49 NOV 10 NOV 11 NOV 12 NOV 13 NOV 14 NOV IS Smme:Nlmn—ra aoparename of Employe l and Eroa W Ooralop—t Over the past ten years, unemployment rates have gone from near historical lows in 1999 to at/near historical highs by year end 2009. Currently, unemployment is below pre-recession values. LJnemploynxnt Rates 12.0- 11.0-- 10.0-- 9.0---- 11 2.Q11.Q1Q.Q9.Q 8.Q V �Q fi.Q 1A I 5.0 a.Q 3.Q 2.0- 1.0-- 0.0 .Q1.QO.Q 4t- 1990 1992 1994 1996 1998 2333 2332 2334 2]76 2338 2713 2312 2314 1991 1993 1995 1997 1999 2371 2373 2335 2737 2339 2711 2313 2315 —US —Minnesota Minneapolis-St.Paul-Bloomington, Source:DEED LaborMarketInformation Of6oe WWI MetroSA LocalArea LlnemploymentStatistics{LAL9 0 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com Regional Data —continued COMMERCIAL REAL ESTATE - Vacancy Rates for Major Building Types I TWIN CITIES METRO RENT&VACANCY •AVERAGE MONTHLY RENT • VACANCY $1,200- $10S3 79E $1,000 6% $800 596 $600 4% $400 3% 29E $200 t% $0 `05 '06 '07 08 109 10 11 '12 13 '14 SEP is O 50ur[e:Marquette Advisors Apartment vacancy declined significantly from 2009 to 2014 and remained relatively stable in 2015. New construction is taking place in good quality and built-up markets. Despite the increased number of units, vacancy has remained at/near historic lows with rental rates increasing slightly. ABSORPTION, • ABSORPTION • CONSTRUCTION •VACANCY 3.5M 14% 3.17 3.10 3M =2.89 12:G 10.1 9-S 2.5141 23 109. 2.04 7.9 8.4 83 a 2M 7.1 8% w 6 0.33 lb 10,74 6.6 it Wf.3 5.7 11-12 1M 0.93 0.90 0:924% 0.69 0.37.5M ,432 2% . 0.260.17 0.19 oM I 0% 0.20} (.5M) 2%1200S 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Saurte:Cushman 8 Wak06e dM6,tMMarq The retail market has recovered and is now showing signs of growth. Vacancy has decreased consistently for the last several years. Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 11 Regional Data -continued ABSORPTION, •ABSORPTION •CONSTRUCTION •VACANCY SM 20% 19.6 lg'g 19.2 4M - 18.0 1G% 16.1 15.2 15.2 15.9 16.6 16.0 3M 12% 2M 8% U 1.47 1.35 w 1M 0.95 0.97 1 0.98 4% < .6 0.52 0.62 Q 0.33 0.48 6.� 0.17 (33 0.18 0.16 . .00 .02 Ln 0M 0% 0.15) 0.07 0.00 0.00 0.00 (2M) (1.83) (8%) (3M) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 10%) Source:Cushman&Wakefield/NorthMarq Office vacancy is still the highest of the four major building sectors. New construction is typically limited when vacancy is over 10%. Although current vacancy is high, vacancy has been trending downward over the past three years. ABSORPTION,CONSTRUCTION&VACANCY •ABSORPTION •CONSTRUCTION •VACANCY SM - 20% 4M 3 15 . ..2 77 16.4 16.1 1fi% 3.67 13.2 12.9 12.8 118 12.0 3M12% 2.52 9.5 2.27 2M 2.16 1.72 1.92 1.88 8% w LLLLJ l09 0.93 0,890.881.04 1.01 1M 4: 0.61 C3 0.04 0.00 0.27 0-3 N 0 0.00 0 1M (4%) 2M _tJ (8%) t38 (3M)L-- 3M) (12%) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source:Cushman&Wakefi.1d/NarthMarq Vacancy has been trending downward over the past three years. Buildings with high clear height tend to have stronger demand in the current market. 2 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com Regional Data —continued 2015 Anneal Housing Market Report—Twin Cities Metro Quick Facts kd I N N EAPOLIS AREA Association Rankings indludle geographies with 15 sales ar mare.Uun'azs,townships and Minneapolis neigh 0orhook are not included. 1 REALTORS' New Listings Pending Sales 77,380 57,s 76 73,65fl 4g 336 52,761 49,461 72,026 42,042 68,851 4m 65,874 2019 2012 2013 2014 2015 2011 2092 2013 2014 2016 Median Sales Price Average Sales Price $192,000 $205,600 $220,000 $236,262 $252,692 $2fi3,175 $150,000 $167,900 $193,36fi $210,740 2011 2012 2013 2014 52015 20111 2012 2013 2014 2015 Median Sales Price 2012 ■2013 2014 ■2015 $220.000 $221,000 5229,000 $las 025 $153,900 $160,000 $129,200 $140,000 $133,000 $137,625 $140,000 $118,003 +0.5% +9.9% 3.5% Traditional Short Sales Foreclosures Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 13 REGIONAL MAP Location Map West L ke Fr cis Shores North Bran 95 5 Oxlip ° nti5 rant 10 Bodum Weber I S A I 9 Orrook 4 Crown 47 9 12 14 11 H E B U E 169 ........... ..... ........ ...........ethel......- ... .... ........ 76 ..........-... 0 CHISAG 20 3 5 - 70 n 28 72 Sta Lin 65 15 ' Franci East B hel &� Chicago City '.Salida 1 SUB]ECT — 74 Li o 75 25 c VVyomi Big Lake 13 66 °Oa Gr vea 24 ails o---, r— ' 22 .Monticello a iver Cedar 61}Y $ 7 5g ; i 39 sego ,� 78 .. .... ....... .... . 1S $3 A N O 17 crest Lake 82 candia 37 R H T 56 ,Ramsey .Ham Lake 19 97 Albertvil [101 9 Andover 23 Mill 118. Lin � 3 St.Mich 144 o of'n �h< X242 14 Lak 4 36.E R s Dayton 10 Coon pi HanoveY Champlin, '12 ❑, enter ugo 55 81 121 N N--E 5 'O T A iYc ?. 117 1181�1 Pi SA q., 21 7 20 30 4- Osseo Brooklyn blain a Beef 10 T all rk i lk Park 1 15 109 ❑ %pring 49 Reashr ockl:or 19 50 Cor ' Maple Grove 252 Lake Park areview q'"�., eighton ❑ : 'Fridley y4nit a6 12^ _ I `Brooklyn Centel Hilltop q� Vadnais He hts 12 92 4 OYEttO 55 Flew Br on � a Pa. New Hope Crystal i I Ci 36 Heights. Delano 9U M pie Plymouth ° ° 47-- RdsevllW r. ❑ ° North St.Paul : Indfpendence .Plain - Falcon ASHIN T 'Orono H I ha Valley Lauderdale: Hly{ls 'Maplewood 6 (t Yalle O�F�T'�...30 Lyndale -ong Lake VVayaata ° 40 O ° + 65 SagaHll Woodland 100 Minneapolis (D St. Paul O 24 15 48 Mound, ,Spring Park °Minnetonka 'St.Louis � Landfal Minr.etrista Hopkins Tonka Bayo, p Park West St.Paul. " o dbu Deephaven ........ ,� 160 Edina 35 Lilydale :..... ..Shor:ewO d4 tx«eNior 60 7 212 62 Richfield 14 South St.Pa I 18 pMaple ° Mendota 11 4 ° 5 Eden Prairie 13 Heights 52 N Victoria Chan assen ° Cott a� 77 '55 St.Paul Parte 10 Gr 43 101 . ❑ 95 _ q f 1 ❑ Eagan laver Gf01le HOight C A Bloomington 284 ° o Iley PYaitie St nal rea Benton 14a Shakopee 32 71 NinNiger Dahlgren 16 Burnsville° 4 42 Appl 3 15 131 �, 11 Valley q r_ Hasti s .. ° 53 14 17 Iw semou Coates Gotha 50 40 45 y' pring ke ke South 46 48 91 �¢ 1 0 27 k 23 31 D A t4 O A85 47 52 y T 21 81 erm on 51 Cr66 Em Riv=r re - - - --:''�.i5� sftk:rosmt'�o r�larari'or� �lers.a4ur reaeruetl. p 14 Nagell Appraisal&Consulting 952-544-8966 www.callnagell.com CITY& NEIGHBORHOOD DESCRIPTION Type of Neighborhood: Outlying Northwestern Suburban Community Percent Built-Up: 60% Developed Stage of Development: Stable Subject Neighborhood: City Limits Major Transportation: Highway 169/101, US Highway 10 Single Family Residential 45% Two- & Multi-Family 5% Commercial/Industrial 10% Predominant Type & Conformity: Other/Vacant Land 40% Total 100% Average Conformity Reputation of the Area: Average Typical Property Age: New to 65 + Years; Predominant Under 20 Years Single-Family Home Sales: $100,000 to $400,000+ Apartment Sales: $30,000 to $75,000+ per Unit Office Property Sales: $40.00 to $150.00+ per SF Retail Property Sales: $75.00 to $200.00 + per SF Industrial Property Sales: $30.00 to $100.00+ per SF Capitalization Rates: 8% to 12% Historic Detrimental Influences: No Major Apparent Comments: The subject is located in Elk River, which is an outer-ring suburban community about 45 minutes northwest of Downtown Minneapolis. Due to the expanding Metro Area, the city experienced significant commercial, industrial and residential growth from 2000-2008. However, due to declining economy, rising gas prices, and an oversupply of residential and commercial properties, outer-suburban communities, including Elk River, experienced significant drops in property values. The Northstar Commuter Rail, a commuter train that connects the Northwest Suburban Community (beginning in Big Lake) to Downtown Minneapolis, runs through the city. Most major shopping is within the city. Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 15 City & Neighborhood Description -- continued Subject County & City: The subject is located in Elk River, which is in the southern portion of Sherburne County. City Data c Population in 201& 23,447 (82% urban, 18% rural). Population change since 2OOD: +42.6° ca Q Males: 11.702 (49.9%) a° Females: 11,745 (50.1%) E Estimated median house or condo value in 2013: $105,526 (it was $146,000 in 2000) Elk River. $105„526 d MN: $1180,100 12 y 1112015 Unemployment W 3.1 N National: 5 E � + � CL E 3 LU 512DO5 512007 512039 512011 5121713 512015 y College/University in Elk River: Q Minnesota School of Business-Elk River i�(Full-time enrol lment:104;Location:11560193rd Ave NW,Private,far-proht;Website:elkriver.msbcollege.ed u!) L > Collegesluniversities with over 2000 students nearest to Elk River: Anoka-Ramsey Community College(about 16 miles.Coon Rapids,MN;Full-time enrollment:4;104) Hennepin Technical College(about 18 miles;Brooklyn Park,MN;FT enrollment:2,552) 08 North Hennepin Community College(about 18 miles;Brooklyn Park,MN,FT enrollment:2,985) U) Bethel University(about 28 miles;Saint Paul,MN;FT enrollment 3,411) Northwestern College(about 28 miles;Saint Paul,MN;FT enrollment:2,046) Minneapolis Community and Technical College(about 28 miles,Minneapolis,MN;FT enrollment:4,477) C Capella University(about 29 miles;Minneapolis,MN;FT enrollment:2,361) U Source:City-Data &Homefacts 16 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com NEIGHBORHOOD MAP Location Map 0 0""flake m i 3au:;,rr «W Hey '851h Ln T1ty ti J°FAm Rd y a Otorlo Park � ro 42 w W �a2 m YYrstbaund Uquat S/ll�arc Elk Rower YMCA 1 La v E).✓�a( aroma Rd NW lienal Cratf Machine BusonPs &Engrneerrng,Inc Subway �rP�Or qw Fardmh Food Shertxfne County Fair ■ a iA C 183rd Ave NW o Opkwy NW CID ' enrs ► 183rr y� Counfry Crossings Park c a to 187n m ,�L 3. C N 4a Ffesno Pae NW N O a z ,2 C Nagell Appraisal&Consulting 1 952-544-8966 www.callnagell.com 17 MARKET CONDITIONS OVERVIEW Development Land Market Vacant remnant land parcels in the subject market are rare and they typically do not get openly marketed nor do they sell on the Remnant Land Listings: open market as the only potential buyers are typically the adjoining property owners. That being said, virtually no listings of remnant land parcels found. Market Balance Market Area: Greater Metro Area Scope: Remnant Land Parcels Supply: No current listings found of remnant land parcels Demand: Typically adjoining property owners Subject Market: Overall, the Elk River market is in a state of recovery Market exposure time varies based on seller motivations; typically 6 Marketing Time: to 18 months if listed competitively Market Participant Comments&Observations Typically, remant parcels sit idle for years until an adjoining owner is motivated to purchase it or use it. If an adjoining owner is not interested in assembling with the remnant parcel, potential buyers/users become even more scarce and/or non-existant. The appraiser has viewed the neighborhood, considered recent publications, news articles and interviews/comments from local market participants. Listing prices for vacant land properties have been recovering from a preceding declining period during the "Great Recession". Remnant parcels like the subject have very limited market appeal; typically, the only viable buyer is the adjoining land owner(if interested). As such, remnant parcels typically sell at a discount due to captive seller and/or need for assemblage. Conversely, in some circumstances, remnant parcels that are needed to create a larger, buildable site for an adjoining property owner can sell for a premium due to captive buyer. Overall Market Condition: Somewhat Stable 8 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com Subject Market Overview -- continued JANUARY 111111h WAKEFIELD COMPASS Navigating ithe Minneapiol Paul Cornmerclai Real Estate Market .40 LAND MARKET LIN11- Demand for Industrial Sites Continues to Drive Land Market The boom in demand and prices for industrial Sites continued to be the leading story in land during the second half of 2015.with no signs of a looming market correction as of yet.I rdustrial developers continued to compete for the best sites to take advantage of the current cycle.as well as to gain long-term positions for the future. � o3 Industrial was followed closely by multi-famly.where developers also competed for the best sites during the past six months.Lard prices for INDUSTRIAL multi-family projects in downtown Minneapolis have reached record high MULTI-FAMILY prices as the majority of buildable sites have been put Into production In AND RETAIL the face of continued demand from both renters and mufti-family irvestors in high demand Retail and demand was also strong as builders sought out new lard positions to keep pace with the expansion of single-family housing davalopment it the suburban areas. INDUSTRIAL Within the hottest land sector.the majority of actrvrty was relate: b industrial parks—either the creation of entirely new ones or new -e;en.. e_.within existing ones.Anew park was created in November 10% rise in prices . property Trust purchased 188 acres in Dayton and Rogers for zh.e rrerch Lake Industrial Center.And an example of robust demand .Or' W dustrial land in second hal` within existing parks was United Properties'announcement of plans to build a third 200,000-sf buiIdingat Blaine Preserve and construction of a 100, 00-sfspeculative building. •Other new business parks are in various stages of planning Ryan Companies is working or a new inoustrial park in Elko, andanother new park near 1.35E in Lino Lakes is in the preliminary stages projects are also in the plennrrg stages it Arden Hills and Shoreview. •IndustrWland prices continued to climb.up an additroral 10%in the second half of 2015-Meanwhile.more lar-_-ea•9 are progressingto closing.with an estimated 70%chance of transactions now reaching the closing stage COMPASSVANT MORE MARKET INSIC.HTSI VISIT THE rLILL REPORT AT 11,100THKAROCOMPASS CO H M AM Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 19 Subject Market Overview -- continued COM 'PASS LAND MARKET MULTI-FAMILY •Land prices for the best•bcated multi-family projects continued to Maras demand for neva,high reache ty apartments remained stre o t Cpsf indowntownthe town builds pos t for instance,reached as high as S160 per square fit(paf}astheeasilybuildablesites have all but disappeared,leaning on I y more com p Iicated and expensive s Re s. $160 psf •5omesitesIhathadformerlybeenplannEdforoficedevelopmEntarenowswitching Ir. dowr;towr Nlirr.c-apo 5 over to m u h i-family uses.5ome examples of this include Norman Pointe in B bom i ngton aid the west End in St.Louis.Park. RETAIL •The grocery sector continues to expand as relative market newcomer Hy-Vee continues to look for neva store sites. Another sign of retail strength is robust land demand for neighborhood scale,in-line retail strips—which are generally 10,000-to 1SODO-sf,one-story multi-tenant buildings.For the first time in recent memory,developers oft his product type are veryact ive. •Meanwhile,retail is also getting a boost by the coming of major mixed-use redevelopment projects such as Central Park Commons in Eagan and City Place in Woodbury. OUTLOOK Industrial land transactions are expected tocontinuetheirhot pace,likely for the next 24months,aswill land deals forafordableand market-rate multi-family projects in"class A"locations. Potential developers of newoffice product,meanwhile,are jockeying for land positions in and around top suburban kxations,leading to the Iikelihoodthatat least some newspeculative ofice will emerge in the near future.Likely locations include the southwest metro market,the Interstate 394corridorandthe west End area of 5t.Louis Park. Land appetite for retail development will also likely remain robust as developers continue to keep up with housing expansion further out into the suburbs.This retail development will likely follow new housing development. Meanwhile,some metro-area cities that have remained resistant to opening up land for market-driven demand such as industrial and single-family home development will likely remain under pressure to do so.For instance,Lake Elmo has recently moved to allow more development and Dayton has approved warehouse-di stri but ion land uses and more single-family residential developments within its borders. • THE COMPASS REPORT CUSHMAN&WAKEFIELD{NORTHMARG . __.. .. •.••. .:.'a3,Wr_- _ _. ..__ .5 .. :]' _-. ._.sy,:,mJ aa.3s..r,rs:::... .....'t Y-.a Ranked#1 f More than$2,3 billion ta-s3rto-s a--__ , CUSHMAN & 11111h WAKEFIELD 43 rnaf daxsets. de'ma qv ■=t 1 rk17 Iart� a Top Places to Wo rk�,3.n z— _._-- = ':J P4 s.toe • Employs nearly 500 v�fessa-a s aahwakan ncaam 20 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com SITE DESCRIPTION Parcel 1 Dimensions: N/A-See Drawing Gross Site Size(per drawing): SF: 12,522 Acres: 0.29 Topography/Shape/Low: Rolling/Irregular/None Noted Soil Conditions/Drainage: Assumed Stable in Upland Areas/Appears Average Utilities: Electricity/Gas Available Water/Sanitary Sewer Available Off-Site Improvements: Street/Curb/Gutter: Bituminous/Concrete(Joplin Street), None(US Hwy 10) Sidewalk/Alley: Yes/None Street Lights: Standard Storm Sewer: Storm Sewer Access to Site: None Frontage: US Highway 10 Ingress/Egress: None Visibility/Exposure: Above Average Due to US Highway 10 Flood Hazard Zone: Appears No; See Flood Map Apparent Easements: Typical Utility&Drainage Encroachments/Conditions: None Apparent Use: Remnant Land Building Improvements: None N: US Highway 10 Surrounding Uses: S: Vacant Land, Sherburne County Fairgrounds E: Commercial W. Commercial Distance to Major Road: The subject fronts on US Highway 10, at the southeast corner of 1Hwy10 and Joplin Street. Comments:The subject fronts on US Highway 10 and is located in a commercial district that sits at the southeast corner of the Highway 10/Joplin Street intersection. Nearby commercial uses include liquor store,gas station/c-store, retail strip center and office. The subject site appears to be a state-owned right of way remnant land parcel. Per survey,the site is 12,522 SF,fronts on US Highway 10 and is landlocked. The property does not appear to be buildable on a stand-alone basis. The properties located south of Parcels 3A&3B are city-owned. The city would like to assemble with the subject property(and Parcels 3A&3B)in order to make a larger, more useable site. Appraised value does not consider potential assemblage. Appraised value reflects the subject site as-is. No other apparent unusual conditions, adverse easements or encroachments are noted. Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 2 Subject Market Overview —continued Parcel 3A Dimensions: N/A-See Drawing Gross Site Size(per drawing*): SF: 28,500 Acres: 0.65 Topography/Shape/Low: Mostly Level/Mostly Rectangular/None Noted Soil Conditions/Drainage: Assumed Stable in Upland Areas/Appears Average Utilities: Electricity/Gas Available Water/Sanitary Sewer Available Off-Site Improvements: Street/Curb/Gutter: Bituminous/Concrete(Joplin Street) Sidewalk/Alley: Yes/None Street Lights: Standard Storm Sewer: Storm Sewer Access to Site: From Driveway Easement off of Business Center Drive NW Frontage: Very Limited Due to Shape;Joplin St&Bussiness Ctr Dr Nw Ingress/Egress. Average Visibility/Exposure: Average Flood Hazard Zone: Appears No; See Flood Map Apparent Easements: Typical Utility&Drainage Encroachments/Conditions: None Apparent Use: Remnant Land Building Improvements: None N: Remnant Land, US Highway 10 Surrounding Uses: S: Vacant Land, Sherburne County Fairgrounds E: Commercial W: Commercial Distance to Major Road: The subject is located at the southeast corner of the US Highway 10/Joplin Street intersection. Comments:The subject is located in a commercial district that sits at the southeast corner of the Highway 10/Joplin Street intersection. Nearby commercial uses include liquor store,gas station/c-store, retail strip center and office. The subject site appears to be an old street right of way that resulted from a road realignment project in the area. Per survey,the total size for Parcel 3 is 1.29 acres. Appraiser estimates that Parcel 3A represents just over 50%of Parcel 3's total site size or 28,500 SF. If site size is found to be otherwise,value could differ. The site appears to be accessible via driveway easement. However,due to shape, the property does not appear to be buildable on a stand-alone basis. The adjacent properties to the south are city-owned. The city would like to assemble with the subject property(and Parcel 1)in order to make a larger, more useable site. Appraised value does not consider potential assemblage. Appraised value reflects the subject site as-is. No other apparent unusual conditions, adverse easements or encroachments are noted. 22 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com ZONING C-3, Highway Commercial 1 R4 ME s3 C n1 � PARK Clyic LAKE fE'�RR k COMM fyC1A � ORONO �} cnV= R5 6U'siNE55 CE72TEH CR ANDER Cq.gP . ATHLE 11 lnlKL COUNTY COMP FAIR COUrSRV GROUND Cgm 11dK5 • COUNTY o'unorn 9Cgp1, LLJ COURT AT Purpose Purpose,The purpose of the C-3 highway commercial district is to recognize the need for commercial establlshments on or serving with immediate access to major highways. Permitted land uses should take advantage of the highway access in a manner which other business districts are not afforded.In addition to retail and commerclal uses, quasi-industrial and wholesale enterprises that do not meet an industrial setting and have considerable customer contact are acceptable In the highway commercial district Permitted Uses General office,general retail, personal service, convenience stores, restaurants,etc. Conditional Uses Auto sales, carwash facility,shopping centers,day care center, hotel/motel, mini storage,etc. Site Requirements Minimum Lot Size=43,560 SF Minimum Lot Width= 100' Setback Requirements =25'(front),20'(side),40'(rear) Parking Parking requirements vary with use. Land Use Plan Th subject is guided"Highway Business". Comments The current zoning and land use plan indicate a similar commercial use. Given the subject size and location along US Highway 10,a commercial use is logical. Current Use Permitted? Yes Zoning Change Applied For? None Reported Zoning Variance Applied For? None Reported Source:City of Elk River Zoning Code,Zoning Map and Land Use Map. Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 23 FLOOD MAP �t r� Prepared for Naged Appraisal A Consulting In}e r F I V od Joplin Street&Business Cenler Odve Y I 1 t� � M w- 11dw t , 4 I k MAP DATA MAP LEGEND FEMA$pecal Pow Hazard Area.lip ® Amas mufadalod by 500-yNar flooding ® PtolYC1@d Areae %lap Numbw:27141 C0390F Zone-% ® Arens murrdslea by 100-yeorflood 4ng Fboaway Map Date.November 15.2011 © Velocity Heterd 0 Subject Arra FiPS:27141 Per InterFlood 24 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com AERIAL PLAT MAPS G _ a or a % •,�, < 1'--152-2426 F a 75-575-0010 2 z. 75-132 101 Parcel 1 — Outline is Approximate � C 75-575-0010 i` _ ..n.. y.. .. 75-132-M1 1 *� 75-132100 75L Parcel 3A— Outline is Approximate Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 25 SURVEY FEE V f — — — — - I � FT !E ' I a a Iy�t k wr rp 4 tit ■ °Y'r7� 1 tett tt l I r i■ ■ �,'a ^�y}� r�� !� ° tt1 a'u �°two ��' ��`■ s' as a ° i Blue = Parcel 1, Yellow = Parcel 3A 26 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com SO • • SO ' ' • 0/-0170 A V _ e Ndy� 3G3s, � �95rh Lni l - j Or d Orono Palk Westbound Loquor Store'' Elk•River YMCA rono AdlNW `o -chore +' .14i n9,tnc - Subway; 7 s' y - ,�� Y Faritiattlk-f� Sher�bume Count ' air do 1$3rd`Ave NW it os s Cr �frryy,NW ' 176 - ,. 183rd Ave NW "aiarL. 2 !'Oi r t r Cl'?:i:- Polk : a .9. n !- r8� 182nd Ave NW i- fr✓ a rn +� sus - f4r`p`sno Y'ark { - 4Le NW 1 2 Z� z - :E m 81st Ln NWL181It'C,INW -181s1-Ln NW ? l k Ak' m '# R - MississippiftdNl� D� C`.00le ..- I.. . . ..- SUBJECT PHOTOGRAPHS r, Parcel 1 r s I Parcel 1 & Parcel 3A 28 Nagell Appraisal&Consulting 952-544-8966 1 www.callnagell.com Subject Photographs —continued r. I i - a. Parcel 3A US Highway 10 Nagell Appraisal&Consulting 1 952-544-8966 www.callnagell.com 29 Subject Photographs —continued Joplin Street 30 Nagell Appraisal&Consulting 1 952-544-8966 www.callnagell.com HIGHEST & BEST USE Highest and best use as defined in The Appraisal of Real Estate, 13th Edition, by the Appraisal Institute is: "The reasonably probable and legal use of vacant land or an improved property, that is physically possible, legally permissible, appropriately supported, financially feasible, and that results in the highest value." Highest and best use is analyzed in two ways, site as vacant and site as improved. Since the subject is vacant land, only the site as vacant is analyzed. Typically there are four criteria in highest and best use analysis: - Legally permissible use: What uses are allowed by zoning? - Physically possible use: What uses are physically possible on the site? - Financially feasible use: Which possible & permissible uses produce a positive return? - Maximally productive use: Of the financially feasible uses, which use produces the highest return warranted by the market (the ideal improvements)? Site as Vacant: "Among all reasonable, alternative uses, the use that yields the highest present land value, after payments are made for labor, capital and coordination. The use of a property based on the assumption that the parcel of land is vacant or can be made vacant by demolishing any improvements."The Dictionary of Real Estate Appraisal 5'h Edition Parcel 1 Legally Permissible Uses: The current C-3, Highway Commercial, zoning allows for a variety of commercial uses including retail, office, service and restaurants. The land use plan is similar. Minimum site size is 43,560 SF. Physically Possible Uses: The physical characteristics of the site are not suitable for development on a standalone basis. The site is landlocked, but has above average visibility/exposure due to US Highway 10. Given the subject characteristics, it would be logical to assemble the site with the adjoining parcels to the south. Financially Feasible Uses: Surrounding uses, market demand and the availability of financing typically drive financial feasibility. • Surrounding Uses: The subject is located in a small commercial district that is situated at the intersection of US Highway 10 and Joplin Street. Surrounding uses include commercial to the east and west, multi-family residential to the north and county fairgrounds to the south. The subject has good visibility from US Highway 10. Given the subject's surroundings and highway exposure, a commercial use would be logical. Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 31 Highest & Best Use —continued • Financing: Subject does not appear to have significant site issues that would restrict typical financing for well qualified buyers if assembled with adjoining land. As a standalone parcel, financing options would likely be somewhat limited as the site is not considered buildable. • Market Demand: Overall, demand for vacant remnant land is poor as potential buyers are typically limited to adjoining owners. Depending on the use options and potential for assemblage, demand can vary. Demand for usable commercial land in the subject market is rated to be average. Maximally Productive Use: A typical owner would likely consider the following options: 1. Continue the Existing ROW Use: The site appears to be right of way. However, the subject is not being used for road and appears to be excess land that was acquired during a road realignment project, but was never used for road purposes. As is, the site's potential is very limited (overflow snow storage, additional road expansion, etc). 2. Assemble With the Adjoining Properties to the South: The subject is adjacent to other government owned land that has limited use potential as-is. As such, assemblage would allow for all the parcels to become one buildable site with adequate access, size and visibility/exposure for development. All of the sites are zoned commercial. Based on the above discussion, Option 2 appears to be the most logical. Assembling the subject with the properties to the south would create a more appealing site. Therefore, the highest and best use as vacant would be to assemble with the adjoining parcels to the south for future commercial development. Most Likely Buyer: Investor/Developer, Speculation. Parcel 3A Legally Permissible Uses: The current C-3, Highway Commercial, zoning allows for a variety of commercial uses including retail, office, service and restaurants. The land use plan is similar. Minimum site size is 43,560 SF. Physically Possible Uses: The physical characteristics of the site are not suitable for development on a standalone basis. The site is a long, narrow strip of land that appears to be part of a vacated roadway. The subject has average access and visibility/exposure. Given the subject characteristics, it would be logical to assemble the site with the adjoining parcels to the north and south. 32 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com Highest & Best Use —continued Financially Feasible Uses: Surrounding uses, market demand and the availability of financing typically drive financial feasibility. • Surrounding Uses: The subject is located in a small commercial district that is situated at the intersection of US Highway 10 and Joplin Street. Surrounding uses include commercial to the east and west, multi-family residential to the north and county fairgrounds to the south. The subject is visible from US Highway 10. Given the subject's surroundings and proximity to US Highway 10, a commercial use would be logical. • Financing: Subject does not appear to have significant site issues that would restrict typical financing for well qualified buyers if assembled with adjoining land. As a standalone parcel, financing options would likely be somewhat limited as the site is not considered buildable. • Market Demand: Overall, demand for vacant remnant land is poor as potential buyers are typically limited to adjoining owners. Depending on the use options and potential for assemblage, demand can vary. Demand for usable commercial land in the subject market is rated to be average. Maximally Productive Use: A typical owner would likely consider the following options: 1. Continue the Existing ROW Use: The site appears to be right of way. However, the subject is not being used for road, but rather appears to be a road that was vacated during a road realignment project. As is, the site's potential is very limited (access easement, overflow snow storage, etc). 2. Assemble With the Adjoining Properties to the South: The subject is adjacent to other government owned land that has limited use potential as-is. As such, assemblage would allow for all the parcels to become one buildable site with adequate access, size and visibility/exposure for development. All of the sites are zoned commercial. Based on the above discussion, Option 2 appears to be the most logical. Assembling the subject with the properties to the north and south would create a more appealing site. Therefore, the highest and best use as vacant would be to assemble with the adjoining parcels to the north and south for future commercial development. Most Likely Buyer: Investor/Developer, Speculation. Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 33 COST APPROACH Since the subject is vacant land, the Cost Approach is not applicable. INCOME APPROACH Very limited rental data of vacant land renders the Income Approach an unreliable indicator. Therefore, the Income Approach is not included. SALES COMPARISON APPROACH The Sales Comparison Approach to Value is predicated upon sales of properties with similar characteristics as the subject. The primary premise of this approach is that the market value of the subject is directly related to the prices of competing properties after adjustment. Adjustments are made to competing properties for significant differences. Land Value: Land value is estimated as if the land were vacant and available for development to its highest and best use. There are several different methods to analyze land values: sales comparison, allocation, extraction, subdivision development, land residual, and ground rent capitalization. One or more of these methods may be applicable depending on market conditions and the type of land. The preferred and most reliable approach is the sales comparison; however, when sales data is very limited, some of the other methods may be employed if appropriate data is available. For purposes of this appraisal, the sales comparison method has been utilized. A number of sales were reviewed in the subject's marketing area. Of the data analyzed, the most relevant sales were selected and used on the following pages. The Following Outline Is Used In The Sales Comparison Approach: - A location map of the comparable sales. - Comparable sales are listed. - An adjustment grid using the comparable sales. - A discussion of adjustment and conclusion of value. Primary Data Selection Criteria/Scope: • Similar non-buildable and/or limited build potential land sales will be used. Due to limited sales of remnant parcels, the search area, use type and time frame will be expanded. 34 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com Sales Comparison Approach -- continued Comparable Location Map .................................................... a, Rvh? o- o-Bradford o-Sunrise Eureka Spencer North Brgnc Center i Brbok Isar�tio- ..Branch 25 {+ 35 o-Orrock I SA N T I Centuriao' S H E R B ,r C H I S A G 4 Taylors Becker SALE 6 '.................................... Sfac Lindstrom .Center City Falls St.Francis �` - ° o-East Bethel p - s==r POLK /Chlsago City 189 Oak Gr ve Wyomin o-Dresser 98 ' '. ..pMontice Io Ilk River o- 85 ':, Osceola 81 8 East Otsego' �rQ;.... ... .. .. A N O K A F Forest Lake W R I G T Scandia o-Farmington SUBJECTover Albertville ............................. St.Michaelo-. `'�� ` ,';�, a � Lina Lakes o- Offalo Rogers Champlin oon I:Lapids Orreka Lake Star o erville Prairie o- .13 o- Circle Somerset V)` r. Hugo SALE 4 Br klyn Park 81oi Pines... : 84 WASHINGTON Grov ooklyn 11: o rldl o bore w 35 0 Eagle L e o-Mahtomedi o-Stillwater V o-MorM� Lake Sarah p SALE 1 o- _ k Park Heights 25 Relano 12 SALE 3 Ho ° o-Bayport alc o apl ood — H A..... I Hudson o- a6f 6wn Long Lake ° o- a ata .L .' o- Oakdale .PBuI : Lakelan Spring Park. Minnetonkao 189, E Minnetristao- Reephaveno- Hop nso- dine li .....o.. :!' 0 Woodbury18 ST.CROIX Lake SALE 5 Afton Wacania 5 Chanhasseno ........... ........... Wacaniao- Eden F. a Park, C°Vee e '�River Falls ;:.. Bloomingtono 7}; agan ver Gro C A R V E R $hakapee... Frights �5 Chaska 212 Rice Lak n Bu ville ? •••••. RahlgrRn o o I Savage" Apple Valley h10 P I�,Fi C E 13 ° 42 55'j Hastings Prior Lakeo- :.. 3 Trimbelleo-� 282 2t 52 35 :....... R A K T A Jordan Lakeville �. 189 Helena SALE 2 Farmington 11 Belle Plaine 50 S C O T T o-Cedar Lake Tr on. New Prague Castle Rock Red ............... 19 ............ ... 0 20 .........rte? f Henson I kebstero- i' Gannon Falls J ,....... Lonsdale o- G O O R H U E L E S IJ E IJ R o-W 58 heatland R I 'C E ,Northfield !19 13 k :::Lexington (Montgomery 52 I,�1 Goodhue Le Center Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 35 Sales Comparison Approach -- continued COMPARABLE11 r ► two - ti — Oak Park A N �5x y��s} Rig n �1n.w! N n 'hm N yy sa ap, wi! vanes .. aeon.Memu.d.r i. .r r, i'l.YS RantA Rd -b sry,. paa S N 5th A.-- N4M 3AL£t x N air Ava 3 S =N o 3rd kve Nd N2nd 2nd 1a0 ,_ qn [rlSlt Park � S Mi11RQ8P4115 ciQnwaad,wk rn cnesmut A w -_ u � j s rl P aQ Q " w '' E PiQ3s.Lh _� aA L.ann9 Park h fpm 55 C Q Q 14th$',.t M arr. Property Data 2603-2nd Avenue N, Address: PID/Legal: 2002924430013 Minneapolis Property Use: Indust/Res Physical Characteristics: Landlocked Site Size (SF): 13,068 Utilities: Available Comments: Landlocked parcel surrounded by park, trail easement and industrial. Sale Data Sale Price: $7,880 Price per SF: 1$0.60 Sale/Close Date: 10/16/2015 Property Rights: Fee Simple Buyer: June Capital, LLC Financing: Cash Seller: State of MN Forfeited Lands Conditions: Typical Source/Verification: CREV, Buyer's Rep. Comments: Market appropriate sale price reported. 36 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com Sales Comparison Approach -- continued COMPARABLE 2 r sT 111 F Mob Iwo&— t. e 5r LatF q,r N, ,x 1119-Y 6, en b „4 Sk411g W wa;yr Mai 5t ssN 5; r �. soime.s>wemoeei vak c'—p- MI S[ Property Data XXXX Bench Street, Address: PID/Legal: Part of 55-285-0100 Red Wing Property Use: Commercial Physical Characteristics: Landlocked Site Size (SF): 17,424 Utilities: Available Comments: Purchased bythe adjacent property owner. Sale Data Sale Price: $7,110 Price per SF: $0.41 Sale/Close Date: 3/31/2015 Property Rights: Fee Simple Buyer: TR Amdahl Financing: Cash Seller: State of MN DOT Conditions: Typical Source/Verification: CREV, Buyer's Rep. Comments: Market appropriate sale price reported. Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 37 Sales Comparison Approach -- continued COMPARABLE 3 uts" mom Ir 2ith St W 4 h'/ 41 J W 26tM1 St F I- 26th St NN St o m D m V+ 271h S m a Cedar'Lake Ave peg QkwY Oz$ a -A ➢ m m ➢a_ z¢MVV 281h St W 2M St Irt r" Y- t EN 7R h,1 W 29th 6t 3 m FPerk d i Y zD 5 g ry7'MQIOIIkB Bi1M1Y - `_ m N y s W L W W 2 1Lake SI Lake C3 ae.en W LI-1 > I I,k R— , m M1h'31st St ` [n IlS4.Lwic f n Pak 9 W 311t St VV 3131 Si VV 3 I d1 31:t ST t n W 32nd SI o rn �AJS 0 m P' Fed W 32nd SI a W 32,1 St *F+ o.k wn Park ,y W 33rd SI 22 33M.SY. � +- _w 34rn sL 34th St _ N;35th 91 OassLrke c E Walker St - Qf� N, 9'4,t>nrh' Preserve 2 (� i E z t W 36th St M 2 4 e — ss' W"th S1 r"N 1. 11V 36th 51 :,^tF.St_M4.y - 9�St W tlmrrak3W Pg Sl n, zt o— W D - 37th St WE ]rvu.un SI _ Gg z m r, Property Data 4231 State Highway 7, Address: PID/Legal: 0602824110051 St. Louis Park Property Use: Comm/Indust Physical Characteristics: Average Site Size (SF): 7,208 Utilities: Available Comments: Land was purchased by the adjacent property owner. Next to ROW, on service road of highway. Sale Data Sale Price: $10,000 Price per SF: J$1.39 Sale/Close Date: 5/20/2013 Property Rights: Fee Simple Buyer: Diamond Hill Center, LLP Financing: Cash Seller: State of MN Conditions: Typical Source/Verification: MLS, CREV Comments: Auction sale. 38 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com Sales Comparison Approach -- continued COMPARABLE 4 -3i•-9,1H 5T NE I ST NE �-- " �\ 10303000 0- \3 + }63 01605 8O 0 t 033610058060 � lo3zasoo-reto .. a +, of osvot � vendelf St �� 18N 54 NGItlIC Ln t 1,96 A ....sat S, S , Q � � 22nd Si NE — JIh t St I� .�.:, E9 X N G y 9th 57 NW� J � � g NE � BM 51 NE Alih St NE OS u taY1 mal s sM — I� Property Data SWC of 3rd &Hwy 55, Address: PID/Legal: 103042004010 Buffalo Property Use: Commercial Physical Characteristics: Merage Site Size (SF): 30,878 Utilities: Available Comments: At the time ofsale,the individual parcels did not appear to have stand-alone development potential. Sale Data Sale Price: $61,645 Price per SF: $2.00 Sale/Close Date: 3/2014& 5/2015 Property Rights: Fee Simple Buyer: Airborne Ent Inc, MN Corp Financing: Cash Seller: City of Buffalo/MnDOT Conditions: Premium Source/Verification: Buyer, ReaList Buyer reports that a significant premium was paid for the strip of land along the highway Comments: as the assemblage process was already in motion and the land was needed for development. Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 39 Sales Comparison Approach -- continued COMPARABLE 5 F is 61 "'05 B5Ih St S • vs� ➢ St 5 y 10 f Q N 99 Y HPerW 881h$t$ 9QIh St S \� y '91n 3t S I',pgl g — =-l5ilf-uF8„ E 9 .2 CaM.9e Groae `E -S' aaone T 97th . Property Data XXXX E. Pt. Douglas Rd, Address: PID/Legal: 2102721130017 Cottage Grove Property Use: Commercial Physical Characteristics: Long/Narrow Site Size (SF): 11,326 Utilities: Available Comments: Purchased by the adjacent property owner. Sale Data Sale Price: $13,100 Price per SF: $1.16 Sale/Close Date: 10/14/2014 Property Rights: Fee Simple Buyer: Dews Investments, Inc. Financing: Conventional Seller: John Bedard Conditions: ITypical Source/Verification: CREV, Buyer's Rep. Comments: Market appropriate sale price reported. 40 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com Sales Comparison Approach -- continued COMPARABLE 6 m s ,t 4 � � Qesep�l y F � Ave 209tI1Ave NbN $ - . 1_A Ave_ s All T- �q A,ye N4Y b n i e Nu �` Ei4 viva Property Data XXXX-198th Avenue NW, Address: PID/Legal: Big Lake Property Use: Industrial Physical Characteristics: Average Site Size (SF): 25,265 Utilities: lAvailable Although site likely had build potential, due to small size and shape, development Comments: potential was likely somewhat limited. Punccased by adjacent property owner. Sale Data Sale Price: $20,000 Price per SF: 1$0.79 Sale/Close Date: 5/13/2014 Property Rights: Fee Simple Buyer: John Gracik Financing: Conventional Seller: S&J Battin Conditions: Typical Source/Verification: CREV, Buyer's Rep. Comments: Public promotion and market appropriate sale price reported. Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 41 Sales Comparison Approach —continued Listed below is the adjustment grid for the comparables listed on the previous pages. Comparable items of significant difference are adjusted for. Parcel 1 SALES COMPARISION ADJUSTMENT GRID Parcel 1 Sale 1 Sale 2 Sale 3 Sale 4 Sale 5 Sale 6 SEC of US Hwy 2603-2nd )000(Bench 4231 State SWC of 3rd& )000(E. Pt. )000<-198th Address 10&Joplin, Avenue N, Street, Highway 7, Hwy 55, Douglas Rd, Avenue NW, Elk River Minneapolis Red Wing St. Louis Park Buffalo Cottage Grove Big Lake Proximity Subject 30 miles SE 70 miles SE 30 miles SE 16 miles SW 45 miles SE 7 miles NW Property Rights Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Financing Market Cash Cash Cash Cash Conventional Conventional Conditions Typical Typical Typical Typical Premium Typical Typical Sale Date Current Oct-15 Mar-15 May-13 3/2014&5/2015 Oct-14 May-14 Location Average Good Fair Good Average Avg/Good Average Frontage US Hwy 10 None US Hwy 61 State Hwy 7 State Hwy 55 US Hwy 61 US Hwy 10 Use Commercial Indust/Res Commercial Comm/Indust Commercial Commercial Industrial Site Size 12,522 13,068 17,424 7,208 30,878 11,326 25,265 Phys.Char. Landlocked Landlocked Landlocked Average Average Long/Narrow Average Utilities Available Available Available Available Available Available Available Sale Price Current $7,880 $7,110 $10,000 $61,645 $13,100 $20,000 Price/SF $0.60 $0.41 $1.39 $2.00 $1.16 $0.79 Adjustments Property Rights Fee Simple Financing Market Conditions Typical _ Net Adjust 0% 0% 0% 0% 0% Part Adj.$/SF $0.60 $0.41 $1.39 $1.30 $1.16 $0.79 Sale Date Current Equalized$/SF $0.60 $0.41 $1.39 $1.30 $1.16 $0.79 Location Average 20% 20% _v -10% Frontage US Hwy 10 20% Use Commercial 15% 5% 10°% Site Size(SF) 12,522 Phys.Char. Landlocked -25% -25% -10% -25% Utilities Available Net Adjust 15% 20% 40% -25% -20% -15°!° Adjusted Price/SF $0.69 $0.49 $0.83 $0.97 $0.93 $0.67 Note: Wide variation in sale price is not uncommon given the current market, outlying location and remnant appeal. 42 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com Sales Comparison Approach –continued Discussion of Adjustments Property Rights: Refers to the ownership interest conveyed at the time of sale. Properties with leases or other encumbrances in place can sell for more or less than a comparable property that sells fee simple interest. All sales, regardless of leased fee or fee simple interest appear to have sold at market. Financing: The impact financing may have had on the sale price, favorable interest rate or term. All sales were cash or estimated to be near or at market rates. Conditions of Sale: Reflects non-market conditions which may or may not impact market value, such as differing motivations of buyer or seller (related parties, distressed or liquidation sale, assemblage, listings, pending sales, etc.), impending eminent domain proceedings, influence due to tax ramifications, lack of market exposure, vacancy, or leased-fee and fee- simple adjustments. Buyer of Comparable 4 reports paying a significant premium due to assemblage and captive buyer. Market Conditions: On average, the market has been somewhat stable over the last 5 years. No market adjustment is applied. Location: This adjustment is based on the appraiser's judgment. It takes into consideration surrounding land uses, intended use, neighborhood characteristics and access. Comparables 1, 3 and 5 adjusted for closer proximity to the TCMA. Comparable 2 adjusted for more outlying location. Frontage: Comparable 1 doesn't have road frontage—adjustment required. Intended Use: Comparables 1, 3 and 6 adjusted for properties with less commercial potential due to zoning and/or surroundings. Site Size: No adjustments necessary. When dealing with remnant sites, size often has little impact on the property value, as demand is generally poor and most sites are acquired for assemblage purposes. Physical Characteristics: The subject is landlocked. Comparables 3, 4, 5 and 6 adjusted for more appealing site characteristics. Utilities: All comparables have city services. No adjustment required. Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 43 Sales Comparison Approach —continued Conclusion: Comparables used are rated to be the most indicative of data analyzed and bracket the subject regarding overall appeal. Other sales reviewed were older, more distant, and/or needed more adjustment. The comparables utilized in this analysis each have several characteristics in common with the subject. While none are totally identical to the subject, each represents a viable alternative to a prospective buyer of the subject property and, after adjustment, can be utilized as an indicator of market value for the subject property. Variance in sale price is common in the current market. Data Summary Minimum Maximum Average Median Before Adjustment $0.41 $2.00 $1.06 $0.97 After Adjustment $0.49 $0.97 $0.76 $0.76 The indicated average and median are lower after adjustment, primarily due to location and site characteristics. All comparables given equal consideration, as together, they bracket the subject characteristics. Given the data, the following value is concluded: Parcel 1 12,522 SF x $0.75 per SF = $9,392 FINAL VALUE OPINION BY SALES COMPARISON APPROACH $9,000 44 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com Sales Comparison Approach —continued Listed below is the adjustment grid for the comparables listed on the previous pages. Comparable items of significant difference are adjusted for. Parcel 3A SALES COMPARISION ADJUSTMENT GRID Parcel 3A Sale 1 Sale 2 Sale 3 Sale 4 Sale 5 Sale 6 P3A,SEC of US 2603-2nd X000(Bench 4231 State SWC of 3rd& )000(E. Pt. )000(-198th Address Hwy 10&Joplin, Avenue N, Street, Highway 7, Hwy 55, Douglas Rd, Avenue NW, Elk River Minneapolis Red Wing St. Louis Park Buffalo Cottage Grove Big Lake Proximity Subject 30 miles SE 70 miles SE 30 miles SE 16 miles SW 45 miles SE 7 miles NW Property Rights Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Financing Market Cash Cash Cash Cash Conventional Conventional Conditions Typical Typical Typical Typical Premium Typical Typical Sale Date Current Oct-15 Mar-15 May-13 3/2014&5/2015 Oct-14 May-14 Location Average Good Fair Good Average Avg/Good Average Frontage Average None US Hwy 61 State Hwy 7 State Hwy 55 US Hwy 61 US Hwy 10 Use Commercial Indust/Res Commercial Comm/Indust Commercial Commercial Industrial Site Size 28,500 13,068 17,424 7,208 30,878 11,326 25,265 Phys. Char. Long/Narrow Landlocked Landlocked Average Average Long/Narrow Average Utilities Available Available Available Available Available Available Available Sale Price Current $7,880 $7,110 $10,000 $61,645 $13,100 $20,000 Price/SF $0.60 $0.41 $1.39 $2.00 $1.16 $0.79 Adjustments Property Rights Fee Simple Financing Market Conditions Typical -3511.0 Net Adjust 0% 0% 0% -35% 0% 0% Part Adj.$/SF $0.60 $0.41 $1.39 $1.30 $1.16 $0.79 Sale Date Current Equalized$/SF $0.60 $0.41 $1.39 $1.30 $1.16 $0.79 Location Average -20% 20% -20% -10% Frontage Average 10% -10% -10% -10% -10% -104io Use Commercial 15% 5% 10% Site Size(SF) 28,500 Phys. Char. Long/Narrow 10% 10% -150/; -1,5% -15% Utilities Available Net Adjust 15% 20% -40% -25%p -20% -15%0 Adjusted Price/SF $0.69 $0.49 $0.83 $0.97 $0.93 $0.67 Note: Wide variation in sale price is not uncommon given the current market, outlying location and remnant appeal. Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 45 Sales Comparison Approach —continued Discussion of Adjustments Property Rights: Refers to the ownership interest conveyed at the time of sale. Properties with leases or other encumbrances in place can sell for more or less than a comparable property that sells fee simple interest. All sales, regardless of leased fee or fee simple interest appear to have sold at market. Financing: The impact financing may have had on the sale price, favorable interest rate or term. All sales were cash or estimated to be near or at market rates. Conditions of Sale: Reflects non-market conditions which may or may not impact market value, such as differing motivations of buyer or seller (related parties, distressed or liquidation sale, assemblage, listings, pending sales, etc.), impending eminent domain proceedings, influence due to tax ramifications, lack of market exposure, vacancy, or leased-fee and fee- simple adjustments. Buyer of Comparable 4 reports paying a significant premium due to assemblage and captive buyer. Market Conditions: On average, the market has been somewhat stable over the last 5 years. No market adjustment is applied. Location: This adjustment is based on the appraiser's judgment. It takes into consideration surrounding land uses, intended use, neighborhood characteristics and access. Comparables 1, 3 and 5 adjusted for closer proximity to the TCMA. Comparable 2 adjusted for more outlying location. Frontage: Comparable 1 doesn't have road frontage and Comparables 2 through 6 have superior highway frontage. Adjustments required. Intended Use: Comparables 1, 3 and 6 adjusted for properties with less commercial potential due to zoning and/or surroundings. Site Size: No adjustments necessary. When dealing with remnant sites, size often has little impact on the property value, as demand is generally poor and most sites are acquired for assemblage purposes. Physical Characteristics: Comparables 1 and 2 adjusted for being land locked. Comparables 3, 4 and 6 adjusted for more appealing/useable shape appeal. Utilities: All comparables have city services. No adjustment required. 46 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com Sales Comparison Approach —continued Conclusion: Comparables used are rated to be the most indicative of data analyzed and bracket the subject regarding overall appeal. Other sales reviewed were older, more distant, and/or needed more adjustment. The comparables utilized in this analysis each have several characteristics in common with the subject. While none are totally identical to the subject, each represents a viable alternative to a prospective buyer of the subject property and, after adjustment, can be utilized as an indicator of market value for the subject property. Variance in sale price is common in the current market. Data Summary Minimum Maximum Average Median Before Adjustment $0.41 $2.00 $1.06 $0.97 After Adjustment $0.49 $0.97 $0.76 $0.76 The indicated average and median are lower after adjustment, primarily due to location, frontage and site characteristics. All comparables given equal consideration, as together, they bracket the subject characteristics. Given the data, the following value is concluded: Parcel 3A 28,500 SF x $0.75 per SF = $21,375 FINAL VALUE OPINION BY SALES COMPARISON APPROACH $21,000 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 47 RECONCILIATION The subject is vacant land. Therefore, the Cost Approach is not applicable. The Income Approach is not used. Very limited rental data of vacant land renders the Income Approach an unreliable indicator. The Sales Comparison Approach to value analyzed recent sales of properties as compared with the characteristics of the subject property. Adjustments were made to the comparables to make them as similar to the subject as possible. This results in an indication of market value at which the typical buyer would be willing to pay for the subject property. The comparables used are all competing properties located in the subject market and are considered to provide a reliable estimate of market value. Sales data for the subject property was average. Conclusion: The Sales Comparison Approach is considered the only relevant indicator of value. Therefore, the appraised value opinion is: Final Value Opinion Parcel 1 Parcel 3A Value Opinion by cost Approach Not Applied Not Applied Value Opinion bylncome Approach Not Applied Not Applied Value Opinion by Sales Comparison Approach $9,000 $0.72 per SF $21,000 $0.74 per SF Final Value Opinion $9,000 $0.72 per SF $21,000 $0.74 per SF Note: Properties that are unstable, distressed, or have unusual condition and/or motivated sellers tend to sell below market value. Based on market observations and discussions with various market experts, discounts for such properties can range from 10 to 50% + when compared to normal market transactions. 48 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com EXPOSURE TIME/MARKETING TIME Final values reflect "market exposure" time of under 1 year before the Exposure Time: effective date of the appraisal. Changes in the market, use, lease and/or building subsequent to the effective appraisal date could impact value. Marketing Time: Marketing times for appropriately priced properties is generally 6 to 18 months DEFINITIONS MARKET VALUE - The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently, knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: a) buyer and seller are typically motivated; b) both parties are well informed or well advised, and each acting in what they consider their own best interest; c) a reasonable time is allowed for exposure in the open market; d) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and e) the price represents the normal consideration for the property sold, unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. Source:The Dictionary of Real Estate Appraisal, 51h Addition. Appraisal Institute ENVIRONMENTAL & STRUCTURAL ISSUES Regarding any adverse environmental and/or improvement structural conditions (such as, but not limited to, hazardous wastes, toxic substances, mold, construction defects or inadequacies etc.) present in the improvements, on the site, or in the immediate vicinity of the subject property, none are apparent, however, appraiser is not an expert in this field, value assumes no hazardous or significant structural conditions exist. Value assumes any abandoned wells will be properly sealed. If any of these conditions exist the appraised value could differ significantly. Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 49 CERTIFICATION I certify that, to the best of my knowledge and belief: 1) The statements of fact contained in this report are true and correct. 2) The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, impartial and unbiased professional analysis, opinions, and conclusions. 3) 1 have no (or specified) present or prospective interest in the property that is the subject of this report, and no (or the specified) personal interest with respect to the parties involved. 4) 1 have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. 5) My engagement in this assignment was not contingent upon developing or reporting predetermined results. 6) My compensation for completing this assignment is not contingent upon the development or reporting of predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. 7) My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. 8) For William R. Waytas, the reported analyses, opinions and conclusions were developed, and this report has been prepared in conformity with the requirements of the Appraisal Institute's Code of Professional Ethics and Standards of Professional Appraisal Practice, which includes the Uniform Standards of Appraisal Practice. 9) Molly J. Lewis has made a personal viewing of the property that is the subject of this report. William R. Waytas has been by the property (If more than one person signs the report, this certification must clearly specify which individuals did and which individuals did not make a personal viewing of the appraisal property). 10) No one provided significant professional assistance to the person signing this report. (If there are exceptions, the name of each individual providing significant professional assistance must be stated.) 11) In accordance with the competency provision of the USPAP, we have verified that our knowledge, experience and education are sufficient to allow us to competently complete this appraisal. See attached qualifications. 12) As of the date of this report, William R. Waytas had completed the requirements of the continuing education program of the Appraisal Institute. 13) The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representative. 14) I/we have performed no services, as an appraiser or otherwise, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. Yl L 2c1',--{P tip- Molly J. Lewis William R. Waytas, SRA, CRP Certified General MN 20391975 Certified General MN 4000813 50 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com EXTRA ORDINARY ASSUMPTIONS & HYPOTHETICAL CONDITIONS As stated by USPAP; Extraordinary Assumption: An assumption, directly related to a specific assignment, which, if found to be false, could alter the appraiser's opinions of conclusions. The following assumptions are made: • Values assumes the subject is owned free and clear--the appraised value does not take into account any extraordinary interest, rights or easement issues that may exist. • Value assumes that neither parcel is buildable on a standalone basis. • Per survey, the total size for Parcel 3 is 1.29 acres. Appraiser estimates that Parcel 3A represents just over 50% of Parcel 3's total site size or 28,500 SF. • Value assumes that both parcels are 100% useable land area. If any of the above assumptions are found to be otherwise, value could differ. Hypothetical Condition: That which is contrary to what exists but is supposed for the purpose of analysis. None ASSUMPTIONS AND LIMITING CONDITIONS 1. The appraisers assume no responsibility for matters of a legal nature affecting the property appraised or the title thereto, nor do the appraisers render any opinion as to the title, which is assumed to be good and marketable. The property is appraised as though under responsible ownership and good management. 2. The furnished legal description is assumed to be correct. 3. Any sketch in the report may show approximate dimensions and is included to assist the reader in visualizing the property. The appraisers have made no survey of the property. It is assumed unless otherwise noted that no survey has been viewed and that all improvements are located within the legally described property. 4. The appraisers are not required to give testimony or appear in court because of having made the appraisal with reference to the property in question, unless arrangements have been previously made therefore. 5. The distribution of the total valuation in this report between land and improvements applies only under the reported highest and best use of the property. The allocations of value for land and improvements must not be used in conjunction with any other appraisal and are invalid if so used. 6. The appraisers assume that there are no hidden or unapparent conditions of the property, subsoil, or structures, which would render it more or less valuable. The appraisers assume no responsibility for such conditions, or for engineering, which might be required to discover such factors. Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 51 Assumptions & Limiting Conditions—continued 7. Unless otherwise stated in this report, the existence of hazardous materials, which may or may not be present on the property, was not observed by the appraiser. The appraiser has no knowledge of the existence of such materials on or in the property. The appraiser, however, is not qualified to detect such substances. The presence of substances such as asbestos, urea-formaldehyde foam insulation, radon gas, or other potentially hazardous materials may affect the value of the property. The value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in this field, if desired. 8. Information, estimates, and opinions furnished to the appraisers, and contained in the report, were obtained from sources considered reliable and believed to be true and correct. However, the appraisers can assume no responsibility for accuracy of such items furnished the appraisers. 9. Disclosure of the contents of the appraisal report is governed by the Bylaws and Regulations of the professional appraisal organizations with which the appraisers are affiliated. No part of the contents of this report, or copy thereof (including conclusions as to the property value, the identity of the appraiser, professional designations, reference to any professional appraisal organizations, or the firm with which the appraiser is connected), shall be disseminated to the public through advertising, public relations, news, sales, or any other public means of communications without the prior written consent and approval of the appraisers. 10. The appraisers have no present or contemplated future interest in the property appraised; and neither the employment to make the appraisal, nor the compensation for it, is contingent upon the appraised value of the property. The appraisers have no personal interest or bias with respect to the parties involved. 11. The appraiser has personally inspected the subject site (unless noted otherwise). The comparable sales data has been viewed via aerial maps, photographs and/or online street views along with file pictures, when available. To the best of the appraiser's knowledge and belief, all statements and information in this report are true and correct, and the appraisers have not knowingly withheld any significant information. 12. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and is our personal, unbiased professional analyses, opinions, and conclusions. Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. 52 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com Assumptions & Limiting Conditions —continued 13. The Americans with Disabilities Act ("ADA") became effective January 26, 1992. We have not made a specific compliance survey and analysis of the property to determine whether or not it is in conformity with the various detailed requirements of the ADA. It is possible that a compliance survey of the property, together with a detailed analysis of the requirements of the ADA, could reveal that the property is not in compliance with one or more of the requirements of the Act. If so, this fact could have a negative effect upon the value of the property. Since we have no direct evidence relating to this issue, we did not consider possible non-compliance with the requirements of ADA in estimating the value of the property. 14. No one provided significant professional assistance to the person(s) signing this report. 15. This appraisal assignment was not based on a requested minimum valuation or specific valuation or approval of a loan. 16. To the best of our knowledge and belief, the reported analysis, opinions, and conclusions were developed, and this report was prepared in conformity with the requirements of the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the Appraisal Institute. 17. The appraised value opinion assumes all leases (if any) are current and paid in full as of the effective date of the appraisal. 18. Excel grids and tables may have slight deviations due to rounding, which may have a nominal impact on value. 19. The appraised value opinion assumes all formulas used in the Excel grids throughout the report are accurate. 20. Unless noted, value assumes no apparent adverse site, building or zoning issues or conditions. 21. Site and building sizes are based on public record, data services, client and/or appraiser measurement at the time of appraisal and are considered reliable, but not guaranteed. Actual size herein could vary if made by an engineer, surveyor and/or contractor. 22. If any of the above if found to be different, value could change. Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 53 CURRICULUM VITAE Appraisal Experience: Presently, and since July of 2003, Molly J. Lewis has been employed as a full time real estate appraiser. Currently a commercial appraiser at Nagell Appraisal Incorporated, an independent appraisal firm who annually prepares 1,500 +/- appraisal reports of all types. Ms. Lewis was employed with Paul Folland of Eagle Appraisal for part of 2003. Education: Graduate of Northwestern College, St. Paul, MN. B.S. Degree in Business Administration. Prosource Educational Services • Appraisal 100 Introduction to Construction Principles • Appraisal 101 Introduction to Appraisal Principles I • Appraisal 102 Introduction to Appraisal Principles 11 • Appraisal 103 Introduction to Appraisal Practices I • Appraisal 104 Introduction to Appraisal Practices 11 • Appraisal 105 Introduction to Appraisal Standards and Ethics Appraisal Institute, Pre-licensure and Continuing Education Courses • Basin Income Capitalization • Income Valuation of Small, Mixed-Use Properties • General Applications • Numerous courses covering USPAP, trends and various real estate and appraisal topics • Fundamentals of Separating Real Property, Personal Property & Intangible Business Assets Licenses Held: Resident Appraiser: Certified General License #20391975 Appraisals Performed: Commercial Appraisal • Agricultural, Residential and Commercial Land • Retail • Restaurant • Office • Industrial • Mixed-Use • New Construction • Residential Subdivision • Special Use Properties: Marina, Golf Dome, Church, Airplane Hangar • Eminent Domain, Condemnation Residential Appraisal • Single Family • Two-Family • Multi Family 54 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com Curriculum Vitae-- continued Appraisal Experience Presently and since 1985, William R. Waytas has been employed as a full time real estate appraiser. Currently a partner and President of the Nagell Appraisal Incorporated, an independent appraisal firm who annually prepare 1,500 +/- appraisal reports of all types. Mr. Waytas was employed with Iver C. Johnson & Company, Ltd., Phoenix, AZ from 1985 to 1987. Properties appraised: • Commercial - low and high-density multi-family, retail, office, industrial, restaurant, church, strip-mall, fast-food, convenience stores, auto-service and repair, hotel, hotel water park, bed & breakfast, cinema, marina, numerous special use properties, and subdivision analysis. • Residential— single-family residences, hobby farms, lakeshore, condominiums, townhouses, REO and land. • Eminent Domain — extensive partial and total acquisition appraisal services provided to numerous governmental agencies and private owners. • Special Assessment — numerous street improvement and utilities projects for both governmental and private owners. • Review—residential, commercial and land development. • Clients - served include banks, savings and loan associations, trust companies, corporations, governmental bodies, relocation companies, attorneys, REO companies, accountants and private individuals. • Area of Service - most appraisal experience is in the greater Twin Cities Metro Area (typically an hour from downtown metro). Numerous assignments throughout Minnesota. Professional Membership,Associations &Affiliations License: Certified General Real Property Appraiser, MN License#4000813. Appraisal Institute: SRA, Senior Residential Appraiser Designation, General Associate Member Employee Relocation Council: CRP Certified Relocation Professional Designation. International Right-Of-Way Association: Member HUD/FHA: On Lender Selection Roster and Review Appraiser DNR: Approved appraiser for Department of Natural Resources Testimony -- Court, deposition, commission, arbitration &administrative testimony given. Mediator -- Court appointed in Wright County. Committees -- President of Metro/Minnesota Chapter, 2002, Appraisal Institute. -- Chairman of Residential Admissions, Metro/MN Chapter, Al. -- Chairman Residential Candidate Guidance, Metro/Minnesota Chapter, Al. -- Elm Creek Watershed Commission, Medina representative 3 years. -- Medina Park Commission, 3 years. Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 55 Curriculum Vitae-- continued Education -- Graduate of Bemidji State University, Minnesota. B.S. degree in Bus. Ad. -- During college, summer employment in building trades (residential and commercial). -- Graduate of Cecil Lawter Real Estate School. Past Arizona Real Estate License. -- General & Professional Practice Courses &Seminars -- Course 101-Introduction to Appraising Real Property. -- Numerous Standards of Professional Practice Seminar. -- Fair Lending Seminar. -- Eminent Domain & Condemnation Appraising. -- Eminent Domain (An In-Depth Analysis) -- Property Tax Appeal -- Eminent Domain -- Business Practices and Ethics -- Scope of Work -- Construction Disturbances and Temporary Loss of Going Concern -- Uniform Standards for Federal Land Acquisitions (Yellow Book Seminar) -- Partial Interest Valuation Divided (conservation easements, historic preservation easements, life estates, subsurface rights, access easements, air rights, water rights, transferable development rights) Commercial/Industrial/Subdivision Courses & Seminars -- Capitalization Theory &Techniques -- Highest & Best Use Seminar -- General & Residential State Certification Review Seminar -- Subdivision Analysis Seminar. -- Narrative Report Writing Seminar(general) -- Advanced Income Capitalization Seminar -- Advanced Industrial Valuation -- Appraisal of Local Retail Properties -- Appraising Convenience Stores -- Analyzing Distressed Real Estate -- Evaluating Commercial Construction -- Fundamentals of Separating Real Property, Personal Property and Intangible Business Assets Residential Courses & Seminars -- Course 102-Applied Residential Appraising -- Narrative Report Writing Seminar(residential) -- HUD Training session local office for FHA appraisals -- Familiar with HUD Handbook 4150.1 REV-1 &other material from local FHA office. -- Appraiser/Underwriter FHA Training -- Residential Property Construction and Inspection -- Numerous other continuing education seminars for state licensing &Al Speaking Engagements -- Bankers -- Auditors -- Assessors -- Relocation (Panel Discussion) Publications -- Real Estate Appraisal Practice (book): Acknowledgement -- Articles for Finance &Commerce and Minnesota Real Estate Journal 56 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com ADDENDA TO APPRAISAL REPORT Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 57 NAGELL APPRAISAL & CONSULTING 12805 Highway 55 Minneapolis; 952-544-89£6 Plymouth, MN 55441 $t. Paul 651-209-6159 Established in 4968 Central Fax 952-544-8969 Client; City of Elk River May 4, W10 Attn.Amanda Othcudt 13462 Orono Parkway Elk river,MN 55330 RE; Appcomal or Ocie commarclal land parcels[business(park z6ning] NEC A Joplin Street d Business Cuter drive Elk River,MN 993.39 Dear Amanda: Thank you for your interest In obWlnlrkg appralsel services regarding the property above Per our conversaticn,you Indicated a reporl vWtm the iolkrS Mrig research and analysis is needed. Report Use, The reporl use is For decision making for potential purchase. 5ralue Type; Current market value as it relates for acquisition reflecting highest and best use per Uniform Standards of k rofessionaI Appraisal Practice will be provided. Property Description. See attached,Pard 1 and 3A not 3U. Contooi for access_ Zioope of Deport:(1)'View the prgoerty and neighbor, (2)Report the ph*oial er1d OW ecaWrrtic factors that could affect the property. (3) Appropriate research, collection, varification, analysis and viewing of pertinent market data will be conducted. The sppropdate approach(s) to vahm w1A be apOieot. (4) Report findings and conclusions_ Report Format. An Appraisal Report(narrative fcnrrtat)will be used. It has a summary of statements of the data, analysis and Conclusions. Appropriate photon, maps and exhibits are included_ An electranrc (PDF)copy wig be provided for each report- Fee: the tee is Should it be needed any additional meetings. updatedfupgraded appraisal reports,any discovery, preparation and testifying would be extra and billed at -Clienl named atlhve is responsible for payment in a timely manner: Due Date; The report can be completed In Information needed by the appraiser: Already provided. Our Company: has 12 employees and has been in business since 1568 and has sufficient knoWedgie, agperlence, educatlon, conlacts and resources to competently complete this assignment_ Neither the employment to make the appraisal, not the eompensalinn for it, is contingent upon the appraised a of the property_ If you agree to the above terms,please sign below and return by retail. It you h a any additional questions, please do not hesitate to corllael me_ Si ncerelly, Signa. re William R.4Vaytas Cerlified General 40001 13,MN Date www.nagellmn.com, 58 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com d8L0-51 sr+..x...apnr.r�As � r"h`4� 'o'a'd ,oe=.i •a'r'i . uor;on.�;suoo V9g3 'P-�MP morer�,m4s�crr� .wr�w�e.1°usi `�'�"� .A.v+�.....o,.sw.....wi vwr+w+i fi+++oa+..>ti+hs 17[.rwy TY' �'��,,,,p ?K""°f CP N-W s.-d f a�r�wae�.wPsur . .+tee wu.wr,po.vrwi "p�°zJ1 M avt�.yne w ll@4�g w+.d �— — — — — — — — — — — — , - - I ' a1 c $4 Y l 3i a?�j Uj it 6'4 �r .s =`—� ^.tzz om M� aar i JX Irk lit I