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7. EDSR 11-13-2007ITEM # 7. fiver MEMORANDUM TO: Economic Development Authority FROM: Catherine Mehelich, Director of Economic Development~~ DATE: November 13, 2007 SUBJECT: Update on Fine Dining Restaurant Project Following the EDA's direction at its October meeting, staff has been working with Umbria - La Cucina Italiana, the developer of the proposed Assisi/Level fine dining and night club, to evaluate their request. The developer has requested from the EDA a letter of intent for the EDA's purchase of the post office property identified as Lot 1, Block 1 Mulvaney Point, Elk River, with the intent to transfer the property with financial assistance to the developer in order for the proposed project to be constructed on the site. Staff will provide a verbal update on the status of the project at the EDA meeting. S:AEDA\LAND~Ivlulvaney Point\11.13.07 EDA Update.doc ~~~ . a'~^ tver MEMORANDUM TO: Economic Development Authority FROM: Catherine Mehelich, Director of Economic Development DATE: November 13, 2007 SUBJECT: Update on Restaurant Recruitment Over the past two months staff has completed the following activities with regard to the EDA's desire for restaurant recruitment: Researched and developed a comprehensive listing of restaurants and contact information. Researched and developed inventory of available commercial property and lease space for distribution and posting on City website. Distributed direct mail letter, sites inventory and community information to over 80 restaurant contacts (see list attached). Staff will be responding to inquiries generated as a result of the direct mailing and referring prospective restaurants to the various sites available. An update on inquiries received will be provided to the EDA on a periodic basis; however the success of the marketing campaign will be difficult to accurately measure since many of the inquiries may be directly received by the commercial property contact rather than through the city. EDA Commissioners should notify staff of any additional restaurants to add to the distribution list for mailing. S:\EDA\Marketing\Restaurant Marketing\I 1.13.07 EDA update.doc Name Axle's Bonfire Grill Cuisine Conce is Texas & Bar Abilene Ba rischer Hof Biella Bi Bowl Boca Chica Cafe Twent Ei ht Can on Grille Cham s Entertainment, Inc. Landry's Restaurants, Inc. (Chart House Restaurant The Cheesecake Factor ,Inc. Su erior Conce ts, Inc. Ciatti's Italian Restaurant Claim Jum er Restaurants Crave Crostini Grille Dakota Jazz Club & Restaurant Dan erfield's Dixies on Grand Avado Brands Cor orate Office Don Pablo's Eden Avenue Grill Edina Grill, Hi hland Grill & Lon fellow Grill Famous Dave's Gaudala~ara Giannis Golden Corral Cor oration Granite Cit Food & Brewer Great Waters Brewin Co. Green Mill Restaurant Houlihans Ike's Food & Cocktails Jax Cafe Jensen's Su er Club Joe Sensers S orts Grill Ke 's Kincaids Kozlaks Ro al Oak Restaurant Koz 's Steaks & Seafood Lake Elmo Inn Lord Fletchers LoTo Luci Ancora Mann s Murra 's Nicollet Island Inn Ocean Air Olive Garden Ori final Roadhouse Grill Outback P.F. Chan s China Bistro Pirates Cove Ravello Red Lobster Restaurants Redstone American Grill Rub Tuesda Rudol h's Bar-B-Que Saffron Restaurant &Loun e Solera S ill the Wine Stella's Fish Cafe Stone's Restaurant &Loun e Sunsets on Wa zata Ba Tanners Station Texas Roadhouse The Herkimer Pub & Brewer The Historic Afton House Inn The Sam le Room Thistles Timber Lod e TreVina Italian Steak House Tucci Benuchh Vescio's Cucina Vescio's Ori finale Whitne Bistro Wild Fire S:\EDA\Marketing\Restaurant Marketing\I ].13.07 EDA update.doc ^^~ UNITEO QUILDINGAN INDUSTRIAL.,-STRENGTH FOUNDATION (PROPERTIES Strong Communities Need More Than Retail and Residential United Properties offers our perspec- tive on the commercial real estate ac- tivity inthe third quarter of 2007. This market update is compiled with input from the United Properties commer- cialreal estate professionals, whose client relationships and complete market coverage in all property sectors give them an unparalleled understanding of the Twin Cities' marketplace. MORE ONLINE: Additional information available at http://outlook.u propert ies.com CONTACT US: United Properties 3500 American Blvd. W. Suite 200 Minneapolis, MN 5543 (9521831-000 tnrww.u properties.com info@uproperties.com The Twin Cities industrial market is on the verge of a comeback: Space is tightening, rates are ticking upward, and select submarkets are seeing both speculative and build- to-suit development. This uptick in activity is spurring discussions regarding the benefits of a strong industrial base not only for individual communities, but for the metropolitan area as a whole. More commercial and industrial tax dollars, for example, pay for amenities like parks and trails, which make communities better places to live. The market recovery also is prompting conversations related to rising land costs, limited industrial land in various communities, and restricted uses allowed in some cities. Many industrial businesses, in some cases, are being pushed farther out from the metro's core. This concerns industry experts, who emphasize the importance of a strong foundation of industrial businesses in the community. •4 .~ .. ,,, ~ _a ~ `-- _ , __ ., _ t .. tr~< _. A healthy industrial market can create living-wage jobs, train the unemployed or under-employed for positions with good wages and benefits, and help assure a healthy, diverse tax base, says Tony DelDotto, senior associate -Industrial Brokerage at United Properties. (continued on page 2) G~pyriy ;t',' it i ?~rae r , &~he ay ,., .~.ce~ OUTL00 K U date p MARKET ACTIVITY AND PERSPECTIVE FROM UNITED PROPERTIES VI EWP01 NT: Economic Development Association of Minnesota Ini'u:;fri~~t i , mipoil<~i t tp ~ ,_crr~rrnanil~~ hr_~cau i it builr,s t t ux ha~~e oral additional uiv~stment it ~ corer .oily by pro ~i,iir y 1:;b, aria crc~riir d ~3 cl,r<,tr~rinU crf ba ~i ~~,~I~~ins Marc Nwinski, piasident of the f_:r.~,r~n^,ic frwetopment Assoc iation sf Minnesota. ~lt r,pn ~e a ~_atalyst tr~r zidditiur~~l ~_or~~~n~unity invest- ment, which may include r•Cail Arid rF rtaurpnts to support the employees, soma of whoir~ are car rir;g troni other on~~- munities to work" Is it (air for >rne coinmurntics not [c, t uve their fair ~al~rare of ind ~s~trial? ~~I dor~~t think it' ar i=sua of f-airr oss,~~ Nevin ski ~~ry.~ ~~It's more an issue of l _al cont~ctnrd d~cid it y on. your cemrr~nnifv~s d~~~,tinv. I ri~.il~! tf rnk ta'i%rt rvnrq rornn~nr ity wo~.ild ~ pant a rr a_ rouble ar rr t rf indu~~h ial t 'I L. anU support it earth a t~, ~ ~, it you roi r.~i7 I l ycrc,~~..,~I .,~ ii~c> ~rntt.in y;ur i~ , it ~, ap qu~slity of life i ~*,~ie ~ I ;j;lr, f ,ay<., -~r'?r~t rrrurutir~; Luny 1r~1,nu~er~ t r wont .~~ ~ gun { r~nri nor< tirr.e with their iarrili~t5. ~ Ir orne osvn t ~ ,~.f ,,t ., yo~ir vi pion (or yuur r~oi7~r~~unit~ ~ CITIES WITH MORE THAN 1,000 INDUSTRIAL- ZONED ACRES* Lino Lakes - --- 1,046.43 4.43;1, fl anhas nn 1 09 5.~0 7 ~~ __, __.._. Blom~~ingt~n i 1 all r, 7 Savuye _ ---- 1,48'/.27 1, _~~ Eder Prainr 1 ~3u 97 I Woodbury 1,G872G i Hrooklyn Park 1.89b 4 hoer Gro r IIugP's 1 Plymaillh __ 1 ,, __ __ - ,rsrkrptse ~ ~ ~ ~ BkCVllla I ,_ + ~ ~I __ _...~.. _._ . . _. _. 5l Paul __ .. .... i ' 9 --- -- - --- -- ~ r -- r ottage Cro r i i i. ~ __. durnse~ille i ~~~ _ ; F _. __. ~, __. _..-- - _... _ ---f - - - -- _ --- ---_ _ B(iine 5 0p ~ l1 - - _ --- A - - -- Ra~r~pJl ~ _ ~ ~~ 3 - I. - I~u~ceapoli: -__ - - _. ~ . 'i i lu~,rs poly nu pal .~~e~ vi ~°al~~'~^. ~.r~ ~~ -J i Sour a Metrop I a~ Cuunal C coral ~ '~om ~ F s"rtJa`.e re:adataava~la'rlea~~a rrr lr at'd.anr 3 'm The Metropolitan Council reported $338 million in industrial construction activity in the metro in 3006, a 4°/u jump from 3004 and a significant increase over previous years tracked, dating back to 3002. As for land, Met Council statistics show the Twin Cities has 59,600 acres zoned for industrial use. Of that, 47,190 acres sit within the metropolitan urban services area. However, it's no secret that the metro has lost large reserves of industrial land inside the Interstate 494/694 loop as a result of parcels being rezoned for residential, retail and office uses. DelDotto emphasizes that communities' need to protect their areas that support industrial businesses-businesses that add tangible value to the goods that pass through the metro. Cities need to protect these areas because the difference in ]and value between industrial land and retail and residential land could eventually force out many industrial jobs. Prices will just be too high for industrial users to afford. "Land `upzoning' for other uses is putting Minnesota's industrial land at risk;' agrees Shakopee Mayor John Schmitt. His community of 34,000 people boasts a large industrial base. (See Viewpoints on page 4) Scott Moe, vice president, industrial leasing at Duke Realty Corp., believes cities need to be tougher on zoning. "Cities need to say `We're going to have a strong iudustrial base and not allow rezoning for other uses for some of our land because of the jobs, tax benefits, etc. We see the value: City planners and council members can't let landowners drive the issue; it's a master plan issue:' In some communities, however, there's been a longstanding approach ofN[MBY ("not in my back yard") when it comes to industrial "If a city opens up land-use zoning, industrial is the first to be re-zoned for higher-end uses, but there's a strong point to be made that industrial brings a ~` diversity of uses, good-payingjobs, a healthy tax base, and a place where people can live and work," DelDotto says."The Twin Cities needs strong distribution, manufacturing, wholesaling and trucking operations, and when companies are pushed out, this ultimately forces prices up for the creation and distribution of consumer goods." Today, cities like Shakopee, Minneapolis, St. Louis Park, Apple Valley and Blaine are recognizing the importance of (continued on page 3) (2 ~ ~ ~., ~ i ...,~ ~. -~s~vc ~I~~,<arbntted to the .,~_ ... •; t7...~.i ~c~ng~aatrrtna~5~0i) "If a city rezones industrial land because it believes retail or residential is a better use, it should consider replacing it in another part of the city." protecting their industrial base. For example, Maxfield Research reported in 2006 that Minneapolis steadily lost industrial land and could lose another 31°/~ to other uses if no action is taken. The industrial market is recovering, and Minneapolis wants to be positioned to capture demand, so it's working to preserve the remaining industrial land. "Cities that embrace the concept of having a mix of development will be in a much better competitive position;' says DelDotto. Also, cities must evaluate the long-term economic benefits of industrial versus other uses. While abig- bos retailer, for example, might employ 85 part-time people at minimum wage, a warehousing operation could employ a dozen employees with frill-time, stable jobs that pay ~~0,0(1O annually with good benefits. Cities must weigh these benefits. If a city rezones industrial ]and because it believes retail or residential is a better use, it should consider replacing it in another part of the city, DelDotto notes. Oftentimes, it's taken for a net loss. °If the Twin Cities continues to chip away at its industrial base," he says,°we'll lose businesses and jobs" DelDotto is also concerned about land prices.'Because cities are being more selective in the uses they allow, that's putting pressure on the available industrial sites and pushing up land prices. It will only make sense for higher-end indus- trial users, because heavy industrial can't afford higher land prices. And where will Chey go?" The industrial market is begriming its recovery, and the strength of that recovery in the Twin Cities depends not only on the individual businesses, but also on each city's willin},mess to work with these users to maintain, if not expand, the com- munity's industrial base. Some cities, however, can and do get by without an industrial component.The accompanying arti- cles seek to provide additional perspectives about industrial- zoned land in the community. Why Cities Choose Not to Have Industrial If ,~ ci~ '~~, to I we ar ur~ustrial h~~se, it b~,cause it offF r~ i ~~ts, a tax P,a,c; anrJ the oi~portrdnity (~r peopia to work in lht~ir community, ays Tcby Madden, a Bederal R Bank of Mn r eapoli; ieraionalrcoromist. ~~However. a r i'~ , y 3~.idc rot to Have it austrial in their particular city. B plc ;:ai rote with their f22t. SC1YT e conunur ities would rather be ~~ bedroo~r community and Fave rift en=, 'travel to anther lily to work.' This, t ~ _,ays, ct~n ber~etit the city witY~ the irdvstr ial hale, be 3~i>e p~oplo tr ~ ~El.inq to work in their p irk ~riill support their retaiU :~rricer Al~:c, hE =ays nearby cili s ~.ai, ~i ~v~, it a ,r. adv intar~E. If ~~ .ornr~unity hzas ~~ sUale .~y n t 1,~ f ~dc u•~;~stri-al the anti-treat city h~~~s more of an ir~ r~nfr br~~ ,:i~~ts ~ `f the (' ~~ t. up r~t~nd I :ion't think ~' '>hia it ~ _>.aun ~ i:~t~~: ilia~_~ ~' Mad- ., jvs_ ira.a,tr i~jl i ,not lot ~,ery c m~rnunity D> we watt a ! plant r ~ L-eke Mint ~~t:mka with all of the high end '~ i : tir.[hony a _;mall ~~~~>graphir arc<3-be ~~ rc~siri, r lial, retail any: industrial? II, n :I i ~ b cn.e, sir<<~ if~~s a t~ droor~ ~'ur•~m,unity. F~ ~ ~ ~ ~ ~~ ,apply lah~x it otI e~ crtias is r t !~ppl~/ ~r jem ar ~, Macy r ,~~,~s, will i ~, push the rigF~t ill ~cahon of re u.er?tial anc; _ r ~ i_il -irea, ni ere theti~a3re rr~caed mcsL It or .r ~~ d n't ~ acct waret ousinri fur examplc:~, b i1 t~ ~: hou ,irg due t ~ a large nur7iber of r t .~~'~. i ~ ~ _ a premium cn w ~~ -'~o i ace_ ~~Se if {" ~ h a~~ailabhi land, l c ~r ~ ~ liC, ~ explains. r ~ ~ ~t~ therF will a~ly-~ay~ b~= conflict k ~ fi- nt opmi;:n on thr~ tvpi~_ ..It., r ~ .,, ~ ~ _ i .e cor ~ l aces. CITIES WITH THE FEWEST ACRES OF INDUSTRIAL-ZONED LAND* httpalouttook.uproperties.com 3 VIEWPOINT: 'r Shakopee Mayor John Schmitt Developer Scott Moe, Duke Realty Corporation - One Mayor's Perspective A Developer's Perspective Shakopr:e Mayon john ;_hmitt is a hiq sui~p«rter v( <~ s(roi a n r:us-trial b;sc. Ir `5hak p , . r~,,~,t ii~;,a~_In ~, JeveloF~rrkr it' ~ in ern partior (1' J.y~. The bciie'~r i~ ~ ~h~;r I ~~ town inb tr~~,>~~ a r ~~ ~,~r,~r,~a, ~ ~ ~ l~ ~ John Schmitt I I. ~ ~;If~ ~ i~ erororr.ir ~_~sistan~ r~v_~ '~ 3;ca one ! ~ ~ , :~er- ~,,~ ~~~~r~.b.~, per-hour r~;crfor <ryp~c St,3k,~pce 1,,~~ everything tr ~ r~~l like Anchor C,I~;s<~ i;r , lr~r plrt Inl<a 1 rvr C~a to high icct ~ , r~~rani ~:,, nul~iuii ~ ~- ;iT,- rr ~rncalirin rnanulacturinr7 ~ r.~~i„ -s i~ ~ `~e,a l<~te Tr;~-' F `-U f~r_ilitV TI ~ ~ 3 ' , i~ I .i ~c Ii; Rehr M~'Jir_; t, t'_ l~i~,r•s( ~,i' t- r~~_~lr hr.,.~aE_~r it IF r,or' ~ ~nri a hr~,ir~ ri Jilt, i'~ r s_L3IC d~ irir r, i~ri -a h.~~- _,.r_Il C V 1 3 ~,ne ~ ~~ t~ t~uilJ '~lioi ,sr~ f i~ ~u~,tri-,~ l;r ~ ~ r ~:,, rt, r~rr~r stii~r r .a~. u t r , l ;~.... i ~ _ ~ l d r;~r~ ~ ,, air n arr,f par-k. ~ ~i ~ 5~ l r*utt cr n, I r;i „ rt I u~ie inr:.i5tnat t~ ki ,~, player . it so~~ h~ ~ l -:; ~, ~~~ ~ ~~ ~~ x.1:1 l,OnlF 3flV ~~4t JndE~r thf. If':p t ~ I1'I Jf ICI Braid ' i~~lati/~ly limit~[,~ a;/s SI~:~I-; it ' ~~(~i iltr.isin; ~ l~mittpair~~ ~~ ;ir, rr ~ir ~jc:~ ~~ tr~r°. ;f 51 ~ko~ ~n d ih~ ,cnef~~_ .~.. ~~, _ ~ h l fair i ~ ,n r f irnlr ,~ macro standpr;int u~,dustrial h~3~~ always been tl ~~ backbone of our _ntry,~ ~ay~s S~:r,it Moe, Dikes vi!,c is pi 'r~^nl uiiusiri~,t Ir~a~.ing. ~~But we -~ l pushmy truckin ~. logistic r p~+r~i avid cril ~ r F~~er~ , iru~stnal is (artt ~~i "ut (l I werr kn?q for a 1~ ! ri .~kc it rr it < <~lorv fay all cries Scott Mne ~nc~it ,~ ~,cr twin h~rlion of tf;eir land f~:r u~r,a~,(n~~l ,i_e. 11 ~.ilel be proprirh,~i~ate to tt~. ~~ize of tl -ir rrr,r~~unit, .n. it ludo >,rr e oul ,i~,~ ~tor~ga. Out~u7e ',:1 ~r !~-, ti~r ~~- -1 ~ klu~ ~,r u~:!usU i ~l, l~os,^dr~i it snip- por I~~ 3 r a~,~,i ~ ~ ~li5tntn~lur. Wt r,r ,~ ~ on rarity s,i~y=. r~ , ~~, ill ~r_' ! era,). ,They r, t °;inr~ good r_~~ri p.3nica p+~ 1'-' ~~ii. , r_ke I yin fry raking ~, ~ornrnon 1 in ,,~~trit3i ~~~,~r ~,,,r "F.~ tan .~~ ron"~- r~, ~rr°rE r ~l it ~~i "a frum lh=ir r~ ~,h ~ r~rtait 1. ,tc ' bv~ ~ l i~nin ~_ TI ~~ r~ ~,~ t -,brut i' it d 4s~ . t ~ rlr~ t ~.~rnpanics tl .,~ ~.h~,i ~rrr°runih l~rr~ i i,~_,~~ii. raq,r ~, lar: ~ rt :,hers Y~ ~ life. i~.'J ~ i irk~~.l La~;ar ~, ,F rf lhs.~rl ~ t :. r.~~ the t rture. f sang: ' ^rift i -~,~ ;rtat ~ ~ Iine in Ir~;ei r,~ F'~ ~~~hr~_ ~ ti ucki t' ~ ity :>ai.1 ~`~~~,_ „_ 1f s/il t,~ ~. i'.'i ~,,l c l[I 3 ~=1C_tl i~- -;- - l .~r~ent. ~ a ai r~cat } ~_re far X r n- c - ~r = ar tf ptian t~ r ~_one it_~~ ~ i~'I~,,_ ,.. ~~ .,~ ~ <~r height f; ~ ~ pane p _-~3us~ r ~ ar^ . ~ ~ t~ , i~ i .. V t ~ ~ .. '; ~ ray c t_ ~ i ~.,. ~ ,_ i 4 www.uproperties.comloutlook r _i Market ACTIVITY A Summary of Third Quarter 2007 Twin Cities Commercial Real Estate Market Activity OFFICE MARKET West • Willis of Minnesota plans to occupy 29,000 sq. ft. in Duke's 1600 Tower in St. Louis Park and vacate space at 4000 Olson Memorial Highway in Golden Valley in the first quarter of 2008. • Mortenson Construction will back-fill the vacated Willis space at 4000 Olson Memorial Highway. • Park Place East and West were sold in July by Guggenheim Partners Real Estate to a partnership between Golub & Company and AEW Capital Management. These properties, totaling 387,000 sq. ft., are located on I-394/Wayzata Boulevard in St. Louis Park. The buyers are planning to implement an exten- sive capital plan, including renovating the lobbies, eleva- torsand signage. Major tenants include CDI Manage- ment Corporation and National Arbitration Forum. Southwest • Benfield signed a lease for 1.30,000 sq. ft. at the new, 275,000-sq.-ft. 8200 Tower in Normandale Lake Office Park in Bloomington. Construction on the tower began in October. • CB Richard Ellis will be the lead tenant for the new Two Market Pointe project on the northwest corner of I-494 and France Avenue in Bloomington. The company signed a lease for 80,000 sq. ft. • Told Development has under construction a 100,000- sq.-ft. build-to-suit project for Alliant Tech Systems at 7590 Flying Cloud Drive in Eden Prairie. • General Dynamics signed a lease far 53,000 sq. ft. of office space at Hampshire Avenue Tech Center in Bloomington. South/Airport • AppTec Laboratory Services renewed along-term lease for 62,000 sq. ft. at 1201 Northland Drive in Mendota Heights. • Paychex renewed their lease for 30.000 sq. ft. at Mendota Heights Office Center III. • Champion Air renewed its 30,000-sq.-ft. lease at Riverview Office Tower in Bloomington. Northwest •Dex Media downsized its space to 50,000 sq. ft. and renewed its lease at 6401 Sycamore Court in Maple Grove. The remaining space in this 72,000-sq.-ft. build- ing, which was fully occupied by Dex Media, will now be marketed for lease, bringing this building to the multi-tenant market. Northeast • Secure Computing Corporation expanded by 45,000 sq. ft. at its corporate headquarters site located at Hwy 280 and Energy Park Drive. CSM developed the first phase of 95,000 sq, ft. on the former HB Fuller site in 2005. CSM is also developing the second phase, which is currently under construction. • Internet Broadcasting Systems leased 79,000 sq. ft. at River Bend Business Center, located at Shepard Road and Randolph Avenue in St. Paul. IBS took occupancy in August 2007. • University of Minnesota leased 35,000 sq. ft. in two phases at University Park Plaza located on University Avenue in Minneapolis. St. Pout CBD • Gander Mountain expanded its space at 180 East Fifth Street by 20,000 sq. ft. for a total of 85,000 sq. ft. • NorthStar Capital Market Services Inc. renewed its lease at UBS Plaza for 11,600 sq. ft. and expanded by another 11,800 sq. ft. • UBS renewed and expanded in 18,300 sq. ft. at UBS Plaza. Minneapolis CBD • Law firm Stoel Rizes is expanding its Minneapolis office and has signed a 10-year lease for the entire 42nd floor and half of the 41st floor at 33 South Sixth Street. • PDI will occupy the former Rider Bennet space at 33 South Sixth with a lease for 75,000 sq. ft. on the top three floors of the tower. • Lindquist and Vennum has renewed its lease and expanded into 120,000 sq. ft. at IDS Center, 80 South Eighth Street, with a 10-year term. Medical Office • Ryan Companies US, Inc. completed the 40,000 sq.-ft. Grove Health Medical Building at 9550 Upland Lane North, which is located one block from the planned site of the new Maple Grove hospital. Medical Advanced Pain Specialists (MAPS) signed along-term lease for the first floor of the building, which will accommodate a surgery center, clinic and therapy pool Gillette Children's Specialty Healthcare also signed along-term lease for space on the second floor. The group will operate a physical therapy clinic and a therapy playground at the building. • Mount Development broke ground on the approximately 60,000-sq.-ft. Ridgeview Professional Building at 560 Maple Street in Waconia in September. The building, which is adjacent to Ridgeview Medical Center, is continued on page 6~ httpaloutlook.uproperties.com (5'. ~_ ~ ..~. ~ Market ACTIVITY A Summary of Third Quarter 2007 Twin Cities Commercial Real Estate Market Activity planned for completion in summer 2008. Western OB/GYN, MOHPA, Minnesota Radiation Oncology, Edina Eye Physicians and Surgeons, and Orthopedic Consultants are among the tenants that have commit- ted to space in the new building. This building addition is ahospital-driven effort to accommodate its expan- sion and to add capacity to the campus. • Southdale Medical Center at 6545 France Avenue South in Edina has broken ground on a 23,000-sq.-ft. expan- sion of its first and second floors. The expansion, anchored by Southdale Diagnostics, is scheduled for completion in summer 2008. Negotiations are underway with an additional five to six tenants for the balance of the space on first and second floors. INDUSTRIAL MARKET Northwest • Minntech signed athree-year lease and doubled their distribution space from 22,000 sq. ft. to 44,000 sq. ft. at Plymouth Ponds at 17300 Medina Road in Plymouth. • The Generation Company IEmpirehouse) sold a 51,585 sq.-ft. property at 4401 Quebec Avenue North in New Hope to 4401 Quebec LLC (Horwitz Mechanical) for $bl per square foot. • Cobalt Investors purchased a 70,100-sq.-ft. property at 19875 South Diamond Lake Road in Rogers. Cobalt also has several other properties under contract and is scheduled to close on them before the end of the year. • Hedberg Associates signed asix-year deal for 55,000 sq. ft. at Medicine Lake Industrial Building on Nathan Lane in Plymouth. • First Industrial signed a deaf with PODS Enterprises for 70,000 sq. ft. in a new speculative building in Brooklyn Park called Winnetka Distribution Center. • Two companies signed deals at Plymouth Corporate Center on Fernbrook Lane North in Plymouth. NeoMetrics Inc. signed aseven-year deal for 21,464 sq. ft. Johnson Controls took 29,206 sq. ft. for 61 months. Northeast • Arrowhead Electrical Products consolidated three sites into 50,000 sq. ft. at Blaine Preserve Business Park on 95th Avenue in Blaine. • Coloplast relocated its manufacturing from Minneapolis to 85,000 sq. ft. at Willow Lake Technology Center in Vadnais Heights. This property had been vacant for three years. • Logistics company Magno International signed a lease for 97,000 sq. ft. at AMB Northpoint Industrial Center in Fridley. Southwest • CyberPower Systems signed aseven-year lease for 76,000 sq. ft. at River Crossing Distribution Center, located at 4241 12th Avenue East in Shakopee. • Remote Technologies, Inc. also signed aseven-year lease for 30,899 sq. ft. at Park 2000 III, located at 5775 12th Avenue East in Shakopee. • Iron Mountain took 23,000 sq. ft. in a 10-year deal at Huntington Business Park I on 106th St. in Bloomington. • Kraft signed afive-year lease far 30,000 sq. ft. of office space at 13200 Pioneer Trail in Eden Prairie, part of the Staring Lake development. • SurModics is assuming 73,000 sq. ft. of sublease space at Lake Smetana Business Parkin Eden Prairie. The space was leased to CNS. • Hub Management purchased the 51,901-sq.-ft. Westwood III Business Center at 6251 Bury Drive in Eden Prairie from Rex Rice. Southeast • Uline signed a lease for 140,000 sq. ft. at the Highway 55 Distribution Center in Eagan. The transaction includes 5,000 sq. ft. for office space. • Staywell signed a long-term lease for 71 ,808 sq. ft. in a 110,000 sq.-ft. building in a new development in Boulder Lakes Business Park. The total size of this project, located in Eagan, is one million square feet, and construction is expected to begin in June 2008. • Also in Eagan, Lifeworks will take 25,122 sq. ft. in a long-term lease at the 38,000-sq.-ft. Waters VII on Lone Oak Road. RETAIL MARKET • Best Buy will be relocating to 53,206 sq. ft. of end cap space at Crossroads of Roseville on County Road B2 and Snelling Avenue. Dick's Sporting Goods will take the 55,000 sq. ft. vacated by Best Buy. Both retailers will be open in 2008. • Raising Cane's will be taking a 2,691-sq.-ft. end cap space, its second Twin Cities location, in the newly renovated Stadium Village Mall at 825 Washington Avenue in Minneapolis following approval by neighbor- hood groups. The quick service restaurant is expected to open in February 2008. • Maurice's has signed a lease for 4,814 sq. ft. at Woodbury Lakes on 194 and Hudson Road. • Petco signed a lease for 18,500 sq. ft. at 1970 South Robert Street in West St. Paul following more than two years of working with the city to redevelop the former Frank's Nursery property. (continued on page 7) I61 httpaloutlaok.uproperties.com Outlook Resources • Shoppes on Maine in Rochester, a 750,000-sq.-ft. BROKERAGE INDUSTRIAL retail center, opened with SuperTarget and Lowe's Mike Ohmes 952-893-8838 West Metro Home Im rovement. p Senior ['ire Pre:ddent-Bmkcroge Srrvites Chris Garcia 952-837-$579 Chris Hickok 952-893-8845 OFFICE Bruce Hoberman 952-820-8775 INVESTMENT MARKET Minnea alis CBD P Sydney Johnson 952-893-8840 Sonja Breyfogle 612-305-2144 Brent Masica 952-893-823( Office Paul Donovan bt2-305-2113 Jason Meyer 952-820-8735 • Ryan Companies sold Marketpointe One, at 4300 Brent Erickson 612-305-2110 Dave Paradise 952-893-8226 Market Pointe Drive in Bloomin ton, to McMor an 9 9 Jim Montez 612-305-2107 Mark Sims 952-893-8829 & Company. The 236,000-sq.-ft. property was built Kevin Peck 612-305-2129 Kris Smeltzer 952-837-8575 in 2000 and is 100% occupied. Major tenants Tom Pohlad 612-305-2108 Jon Yanta 952-820-8734 include United Health Group and Wells Fargo. Brent Robertson 612-305-2ti4 • Swervo Development purchased the 675,814-sq.-ft. 180 East Fifth Street building in St. Paul from St. Pau( CBD and Ea st Metro Southeast Metro Frauenshuh Companies. Formerly First Trust Rob Davis 651-734-2386 Tony DelOotto 952-893-8893 Center, the property is the headquarters for Eric King 651-734-2385 Tom Sullivan 952-837-8657 Gander Mountain. Tom Stella 651-734-2383 North Metro Multi-Family South Metro Todd Hanson 952-820-8737 • Osprey Property Companies sold the 324-unit Larissa Champeau 952-893-8847 Matthew Lange 952-893-8835 Burningham Apartments property at 1505 East Dan Gleason 952-893-8884 Jason Sell 952-837-8515 Burnsville Parkway in Burnsville to Johnson Jeff Hart 952-893-8855 Management. The transaction, valued at approx- Jim Jetland 952-893-8888 LAND matety $23.65 million, closed in August. John McCarthy 952-893-7591 Jon Barthelme 952-837-8532 • Parkway Apartments on Chestnut Drive in Eden Dan Nechanicky 952-820-8765 Adam Colon 952-820-8786 Prairie was sold to Invesco in late June. Healey Zach Pettus 952-893-8278 Maren Leuer 952-820-8728 Ramme Company sold the 375-unit property for Tom Sampair 952-893-8283 Lonnie Provencher 952-820-8722 approximately $36.85 million. Court Storey 952-893-8833 Jon Rausch 952-893-8251 Tom Tracy 952-921-2021 Retail Casey Welch 952-837-8601 RETAIL • North American Properties and Principal Global Dan Wicker 952-893-8254 Peter Armbrust 952-893-8255 Investors sold Calhoun Square to BlackRock David Daly 952-837-8607 Realty. This 144,000-sq.-ft. property traded for just West and Northwes t Metro Gregg Erickson 952-837-8509 under $50 million in August. Greg McMillan 952-837-8577 Jen Hetm 952-893-8264 Bob Revoir 952-893-?586 grad Kaplan 952-893-8830 Industrial Bill Rothstein 952-893-8214 Stefanie Meyer 952-893-7599 • First Industrial sold an office/flex portfolio of nine AveryTicer 952-893-7592 Trivia Pitchford 952-820-8763 buildings totaling 766,240 sq. ft. to Hines REIT. The Katie Provencher 952-893-7589 properties, located in Eden Prairie, Golden Valley, HEALTHCARE Ned Rukavina 952-820-8738 Hopkins, Bloomington and St. Paul, were 86% Stephen Brown 952-837-8517 Mike Scotl 952-893-8240 leased to 41 tenants. The average sale price was Mike Fteetham 952-837-8520 Mike Sims 952-893-8288 $114 per square foot. Julie Hinman 952-820-8759 • Inland Group purchased the 219,664-sq. ft. Atlas Julie Miller 952-820-8721 Ronn Thomas 952-893-8230 Cold Storage building at 240 Chester Street in St. Matt Votpano 952-837-8602 Paul from Atlas Cold Storage. This was asale- Julie Yeazte 952-893-8266 GIS & MARKET ANALYTICS lease-back transaction with a sate price of $15.2 Dirk Koentopf 952-837-8578 million and part of an 11 property portfolio. INVESTMENT SALE S Scott Zeimetz 952-837-8574 • OPUS Northwest sold Elm Creek Commerce Eric Bjelland 952-893-8282 Center on 109th Avenue in Champlin to KBS. This Ryan Kratz 952-893-8802 MARKETING COMM UNICATIONS 231,416-sq.-ft property was built in 1995. Scott Pollock 952-893-7590 Martha Nevanen 952-893-7539 Pete Rand 952-837-8585 Kathy Conniff 952-893-8292 Leah Truax 952-893-8825 For additional copies contact kconnifF'9:uproperties.tom httpaloutlook.uproperties.com 17 9< cv{ /{ {9l MINNEAPOLIS y9{ ST. AUL 9{ 75W 35E ~~ f9{ /''~ Building an Industrial-Strength Foundation Increased activity in the industrial market has spurred conver- sations about the benefits of a strong industrial base not only for individual communities, but also for the metropolitan area as a whole. Perspectives on Industrial Use Marc NeVlnski, EconomicDeve(opmentAssociation of MN Toby Madden, Federal Reserve Bank of Mmneapo(rs John Schmitt, Shakopee Mayor Scott MOe, Deve(vper-Duke Realty Corporation S3112~3dObd O~llNfl WO~Jd ~~Il0~dS2~3d ON'd ~lll/1110b' 13~ibdW NW "s1dW 9E58i# 1!W~ad Ultld afielsod ~S~fl SStl1J 1SNIj ACTIVITY ~ ~~rf~rr~ry ~f Third ~uat•t~f ZC t Ci~i~~ camp ~. "=~~a€ st~ - OFFICE MARKET West ... i- ~' Mi,n. ;,..a f-I,; t ., ..~ _~p, ?t;, ;.;0 ~ , ft.n [.h]'s r..~ f:.v.. rt `.1. , cu Park aniJ va ..F ..,~~ca at t,fj' lint P .rrtii,r':a f i:.`t.,<:•, t ~:.'...en V~illr"y in ;ar •P~1aro-_ns(n'.,>>;.ru~icn ~•i',.Lb+ck «i.l:h~,~ c.~'vbil.is spa~a a'.4„~,0 !Jlson 'vlen':or,al. Nigr+,vay. ... • -:I K ~Jt-..t .::..y ?nj 'v~Yr . 4~i E.'rt', .~ I _IUI~J •,, -,n;q - ,ht'.i f71 'a 't reel `.i ('C~ l.,tat . t'.. .; i _r`;hlp betn , i .,.:;u x ......;~;rry and k ~ v` Capita'',. Panay rr of ~asep ]pPr~ ~, tiny3Hr 00 ,,y fL, are l~.a:~-.; .; I ;'..j1^r,;r, al t ;o~i ~~ . - i*; t :is P;rk. Tfte buy .:_ arr; pl it < ni, 'rnent ~ t -'x`.~n.. r,wr r;it',: pl r i '.ii:.ir „ r-.:cv tit t.r~ „Il;~, err ~t:- lo!: u Irn g _~I tc i-trials .r de CC ti".nr<yi: rnen C,c:E>c:r~i.,n;~nd 3.L.~~,,lar_:raLon ;rr:. Southwest Fen i ~ _g-t a lzn --r Inr 1 : ~ (l0 - q. ~ L ai t F r Pev i-ty, ..,, ..,.1, t sli,,., f.t.n.:, rt <.c Ir:~nla~~ tak `11 rice Pa k n B r:,rnu?c?fort. Consu ucticn rrt ae lc'.~,:er hcc;an : 0"rber'. • CES R,.hi-.rJ EI i;l C~ the led .r. ~nt foi .he no'.v ado Pv;;;r~c e', :col nt_ ,. ~r>-...: n ~.,.. ^:O r.:ilo e.:,t .c. ni - of -494 and a'.ce .na ir; Gl~orrrlrnat, r ', n_ ccn•,pe tj :~c t 1 a :.,.... . f.~ s,00 ;q. ft. • f~:fd )? u~a.;ireni. rigs a ,'t,: cc-..~ .;., on 1, r111(;- Sr1. l ,.,:it::~-Jc, .,,;It :orc :;.I -.,r -v,l'r~ tf l~:cti ` Y:.:;erns al ,•'~<;fl i ,In;; ~a:.ud I;rivt- i .,en Prairie. v~ ..~:a J;+na ul.. , ~'.ilr c. ,; Iran ., :,:i,. t. i,. ;;f`i ..ce ~ ~ ~ ps*.ir ~ ~:ent.i: `ech Ccr .i r n 6li;orn nytr;n South/Airport • 6,(:n ? f ,.:~ ; ato ~,.i . ca. r, nen?d ,. nn , ri :ea>e tor' hr X00 ,q 1. ..( :20 N:.r lhlar d :drive i hrr-nd:;ta (<: ; l l • Pa}chFx rertre r'd t~:r=ir I, a:~;, rix ., .'ll(1 ..-{. t'. a': h.fendola HeinhL; 01`ic Center III. .:,rt ., cry J`,L . r n~ ,,.: It ..~.00C L. te<;si: ,.. Riv r. cv, JLi:.. T~vver n ~.~~~ri <c::n. Northwest • I?er h1 ;1 .;r n ..: <..: it .-;,,a..r t )ii ;10 s , (l :r; r"e rt i? .:.d :.... <, .~< ,et n '. `,, ~:rnn: E- ., c,:. rt. in ~: ~ ;(e Gfn-.r ., re:.ai .i'. tpa..,, it It i~ ~.~,;0-.,rl It !;lili'.. i tn,'•,~h : 't 4vtt - f; l ~..,...:.;t:i<<t . ; 7~x ..odic. vci.l't,: be rr-:.r><r _uo u _c<..~.., i t~~:nyJ t~ti_ t,u'ldi ,, rc th'ie rru_I I tri2snl :8rket. ~t ~a~~~~rity Northeast • ;.,rre Con. ire;; ! .rpi, ~.:cn axp~ndr ' t; u,t;ii0 .~. f +.t II: ..1pu.`a E h~;;dqu r:C s sift ..c< .: ~]1: I-va;;: <rU;='t:; t n ;r Park :).vc-'. C., F iJev.:;~,,._.1 (.:. :rst. p t,]~c_ n y, ~~lJ .,;. f: r,n t :c, fc~:n. Hf3 ,I;e:" sif>o :n i.,0:i (.:~h~' i.> aC;c ...,r;.l:.h:rid 1: ,..econa ph;t~',e ',nr: i::h i ( r': ^nt--'-I1~« rC' fi-'l -l: Ctl L`.:^:. 'nta ... Fir,a,...<.,t:t, .J.~l..•n,1.:,~ed .i). f..ai Ri c_r ~ ern:1 Gi~. i.:es- :.:,::>zr', ..<.~c.:.,; .hep ~,-^ no-,:~ and h~a^: l Avon; r' i >l. Pau. IH~> t r ut:o.ic;ancv • ll ti Fr iy ~ P ~It :ei a • lr.~.,ed ~5, .:0 r>;. t n tsx; p t ],~s at I: i.cr; rl. f':.r. ~'La~~, ,.. ~n :Jnl've: itf Ar n e i^: vt n :poi z. St. Paul CBD • f -url:_i Ni ~ ,tnia ex.:aiir;r_cl :i _F; ce a 'U _ r• ~ifh ` r I oy : Cl (1 ;;. '1 f ,r a t! t ~ I ~3d,C ilfl sq. I;. tit:rth~l:ar .,;,::,sl'~1:~1-k«;i: Sarvrir.__ .n renevr•:, Its lea_=,~ „ lli3 ~>Ir-.ra lire 1",.htJ("1 c;y. 1'. :?rid ~z;;t;~...... ';y aru~tt,rzr ' ,oOC s ft. • lJF , renevtE,:..nd ex.,a t.;F,.; it 't~,SO(1 :'q t, of 1..,.. .~~a. Minneapolis CBD • 1. to irm St l tize i xtand riy rfss heir, teapoll n hi:e end .._ si lnc . ,, .e~ ,c us«_ f~i Iii' ~rii. e =:;'n. f.cor art 1 ,If of t~ ,15i :1 ~ ~r at 3:~ ~u'f.:: six t I;'aet. ?CI'•~J.I ;r_c (] I: "r:~ h n° Rid Ceann~.1: ,p., i_ a :?:f ~ou:i't '.,Xtrt t..th a ...<.sc: ;a ; S,U,;., . `t. i)n the top h. ~c i.o~:! s .. f i'ie t~.~^rer • L.:.t.:auis( a:.:, ~h,:ni;n? bras re .:.4..;d ';s .ease a:xi cxp:nded it 1'%0,' U :. ft.:, IBS Ccu er, f5'~ .`_~c.lh ].,hla ->tr'ee'., ,•,i;a a 1fa..year fern-I. Medical Office • R : i Com _~i~:.._ J~ _c:i plc:_, ~ the ,000: .-f. ~rr,re I~.r.ali t P.r-r;ca, hr;lrl:n , al 95:;~,. l-p.a ., _ane u t i,'.~rln h _ .«......rie b u:_'r, trc~rn h. „.a n;-, ~ _ .~. t:.e n:.'•n hi,p:e fir :.. ]s.;iL,'. f1:. :; `.i arced Pain Spt. <. ats 111nP51 slq~i~..' a L n a :: rrn ,~.,, ,e for :ft:_ :i ~. .....:;f he bi;ll.iiriy, avttich rnli accon,rnodate a -,:,r~~ry ~~ ii:e , clJn c , :;:h :. ~y pool. ail eae ~ it yen s ';pe'::raV f ..:r..lai:ere als., rsipriua i~ (Ortn te'"i' leas.r' lt, ;pace un . r~ ~ re ,. I'.:. r. The ..^.'ou: ~JC „erat :: phyr--::cal fhe:~r;;y c,:nic and a herecrJ payyr'o~.uxi at h ~. i'i. inq. • ' i;:;r,; Ji:'v ..-. err ril ]kr~ c;r•.;i.,nd cri .he [:•'oxirr.::- bJ l O(l,: ~ . t id:;ef..4. Pr:,te .. i. ,,.yl Es:.ih::riq at ; t„ .t. :~. `;:rc ~ t 4rv'a::m :: is ~et:.r rt :,c,r. The b~i;dl .i.'.. „r ,. ~~ n> a .la:...r .o f<Id,,.:v.a•n `1..:ical Cen'e~ .: ci,ni I u ed o;t pa<;r' S1 fti~tA:r,g~t[~ck,upsapeetires.r_~m '.~- ACTIVITY "gird rte ,~,.~ f ~ mss= ~`in ~;r' ;;lan.:cd fo~ ;._, f 1~: ~. n .~umm .~ %00?~. 4av :ern :)Br'')~ v. ''I:i IF ,, h1inn~ ,aa f<t.,l,tt:urt :.ia 1:.,,t I iaa Eye f l,sician , r~, S,u c ~~~~n_: en~J J 1nop..:ic ;ai ,l:ants al.~ ; mo",., 'he ena..s'. gat "ale come-iit- ted to p3 _~e i~t the nc•r l:.ai:dinq- :tis bu_i i- y .,.aJ'tion s a '.al ~ ern r~f:c t t acc:;mrnodat~ t. erl?e:n- sicn .nJ R, „rJ 1 ~.,f.ac: y f,; .;n c. n ...>. `:o'.Ithd,,:e''.° aical.(.,;_n I..,'S4., <:t_:,,,:~n.l.::._iial tl.;i,.,t,str ,:tcr ,nr.;na fIl J-s xtan-. sir is I'~:r nJ -~:i n t 1 I uirt . Tfl_ cap t:iun, ar:r ..J :!y :,.,ut ...1 I: ~ ;rlc;t ,cht-ir ed r,,. cGU p c i r. it i In ler L008 I`Je n inti 1~ r c lde~rv:np rtal ...1 dial? (` J, :., ' .e .I;( ,,in8 , _, ~~ f^.~c b.,u i.:.B if t~'~tp ,aC-: n;`. I I ca C! ,....n,a ~.: ft(i; r:=;. INDUSTRIAL MARKET Northwest • Ivli of ch siq F;.; th~; a ~ iesse anti do ~tJF : the~r dial l l 1 !gin ~p u:n )~ tl ~, f 44 00 ~y `t. ui ('.~~ ..t,.a l'oni. `i; , , h1r .:in ~ ,.i in ':l nc,uth •T?ic~rrcrd';i.nC lr:~~ r, ,E~'pir II e;: ~ 1,,d~.. f; p'cl-,~~r ,at 44." la..h~: ,H/au,t `dn '1 in f.j~~,; ,.. I :ul, .:u ..n"' C t::..;...: C ;; .f~n: n t 1 .; Iran ~ :for $ri' q are'..c.i. ".;o.;r,.t I 1, a., :> t;.ar.:h .~ t i'l.l , .:{. =l ,r.;;;.:: ,y at 14E :, .youth _/~~lr and La.u ?, i?t it ~Rc 7c. ~ ~~..air dLsn ,. "2ra1 :h.- ;: tQ.,:;n.irl ,ntrct ~:d is srt r- 'ul.ed 'lc t I' ;i~ on~t t rr: bi;r rt h2 end f tt t year. • h~ ~i; rte:; c si lned .::< , .rc:r;al r 5,Ou0 r~i;. ft. at :~1eJiane '_acr, ~^l.l s'.r ial. Gui'~~.dinr on NaL'tan L[ rte n Plv:r';.,'~uth. • Fir I 'l.ah-in ,;n,~.i a ~ dL N,:l' f'l;.)`; : nt ,.;risers t:;r 70,,,,0 ~,,. ft ~n e -tew :,..::~1. F bu--dirtc In ~:~euklyn Part ,I L,d'sa n .;k Ci~:Gbufic t ~~ tte~. •~~RN,.:;.rr-p,:air. >,.n,al.J ,~~. ~ yrnoutft`...rpt,.~.F C~~tt_~ „ , =ur~;k,rock l ~•1: N°,rth irl Plymc~th Ns P", rriCS Ir c ,,^,rled a ~~...n-yP I de,:i I _~, id>i sib fl. J~ n~ron C~n1,;.1:; t~~!_ ~ ~::£~ _., i. rUr i"I ~ncrt.hs. Northeast • i'.rl r a~:J El . I ,:. Pr uc:'s c -' irirJ<af i t r .e <>itet; ntc .i0 .,..tl .>., ft a ~31a: . PI,.'.,Pr1E' [r....n ,=; f'ark,:r~ Co o, .a-: rc.c~~:.., ii; ln, a ar_ i n t:,ln 11 n; ~r.is to H) .,OO ,y. i ..y :.,.. ,, ..:ake T h ,l,;;y antar in bt; tas f-u.cliL,. This r ;~c. t! f~~,t9 .i~s~n v,.cdr . .,, threF ve:a-~ • Ltii .. ,._ ~.~n.a_ , ~4:t ~.rn ':tlcrr .t:na-. si,,l~ t) a w~sse icr r7 OOu sy ~~t i;ti1 ,o"litpoin :ndusl la'..;entel- :r1 1 rl,: f..j. Southwest ,bcr?;;:c ~) >:err , , i:;ned r: _._„r n ', . ~ l..'&e f~, ~ IJ;., :, t tt .... I.l.,.:.: n I, .>, lriliu t .,.:nf r, .~, ,... c' ..epee. 1, .. -.F~1 ~t:,1;Fr:.I~.E:1.,1:1„h,. f, „rr.lc T:. I1 v~.E:~l':.: .c ,. .: ;«~: v s~;«.n . ,.. 1. a c "o;' ; avv <.. I ,: f ,_: i. ~ .0 III, _.:c ~ t _ , ; 1,. tnren.t Ct t;n ktpe.. • II v.:. f .i,un t.m :,. d<. ?., 0(1. ,rJ t. in a "10 F,r ,_af ;;=t I Jn:i .,..on :,i:: inr~,~ Park I n~ 1fifta t in .sh'cn,inu:cn. • k' at. s ;n :.:.~ t.ve-',..,:I Le,t ;e (l ft. ,-,f ,f is ~. • . t. ,:: 1 <~Illl ?;0:-1. _ T n 1. n ~il ; F4 ~t ~ :~: 4:ar .( :'rr« ''ta i I ,t,c rj ,y ~~. l~r tt ,..r `fi.;,i, s . ,t .,.an nq .5 ,,:;17 . . f' t," :,:: ,1...35e ., tce ;,t I_ok:. ~,n,:.:..r . -31r ~n _> "a k r i~(;en ~'rai-~ie :F • Hl~lb Iv'a'taq:-~rnent pl;r ha~ec th~ Ei1,yn1-s~~. fI. v r v.,od I -~.:~!rt~~ (/enti ~2:;'I 8:r ' give in L.::Fn ~'rai i r a Frei face. Southeast • I l t«. iIri~ Cl ~ ..~. _. .r ',40,C U 11 fte -1igPi , ~J Jst i;..:iu7 r :,n cr ~r E<:y<5 t. This tr< fu..t.ilOn 11t..C ii ,::: :^ l I I„ 'Sid.:' t:,f U t:ct :.: d:8. • taJ1 I ,~~ ling .IrnP f r!1 ^. 't :na 1n,.;,; ,.{ t.'-i:ldnli a 4'.1.::..1:fine:lt~a CE u~:'er _~ ~ Bull E - F nrs i • taa of tha f r,lect, !.:, ...<_.! i ; :- i,: n, 't; e t , ilGon ,ua: e''c~et, trite : on':; r err dt ~I:i n 2„D8. •,til,., il.aq,{r,.if:w.c, .:, v. t1 ak..? ,1iv ,;. ft. in ,= I;;I;q :::rrn .~:... .,, h. :Uf.l s ft 'v''v, e ., ,`il cn ..cne i)a~ Ro,id. RETAIL MARKET • F' _ ; ruy v r l Ise rel _~.:ir.q to ~_.,a!lo sq, i:..f end .,u : , a C1 cr<iJ' f 7,>avilR~:;n pct il, '-;i:acJ B!~ tnd . ~tei.ln.J ,-:.:.:uu :) i.k i> Sf na ny `ccJs , i'',l :a, k the ", ltlii, p =r ;rr; 31ed %Y ~3 t ray'. '.+; t 1 re:,:krs; .a•iL. L...:pen :r. <..as. • R3: is < Cane s ~rIF. ia,~ i .1 Z.~, -sq. l e' n ca_r. ~a,_~, -._. _t;ond T„~i,: „i:;es .t,t.olion, i t i .a nt~:u•ly re^ovaiar ~adicrrt `,.,lia;:e h.1ai. al fi?i :'.'ashlai;lr~n ~....n::, .'t h In,r. .li.:.~ .1:.,, .t ~ dpp:o'~ .I .,, r,:.:;.aber.. hood t~rou, 1.- ,rl :c .. ..> _u a: i, ~xp . ._„ to ~ 1.«=n in ~ E'b`:r`:rv ~OOS's. • ~ IJ. I `_=. f1.3 :n:: J i .i Y f :::c.1/i ~ f:. . ' ~ :;bury .~kns On I ~ a;tu I riS.,n Roan • f'....,. , q;t.., -t lea'- in. 1~, ~00 .7 I:. a 7 t, _~ccth Ira.,,l:.aree, in'v.:-..t..,. ?aul .:t'.L;:~+, na m,~r~: tnan'.v; ~r; ~1 •,•,. ki„^, v,it fY~«~ cay t~ .e:xve.o, :,1«~ forn~e~ Fr:,n.c s tiu: ,.cry f~r<,,el ly_ i;O ltl tL;FCi nn f?9;: E? "~ ~ ~p~ilav~ti¢~k.~~:c~~~rt1~~_c©nr • ~hu~ ~ ca~~ 1 ~i ~ r in F it >iEr ~ 'i0,'u' ~ ~y.-C. re :~i..;rn:--~ :f.ene.d s h ;iip 'r : ar y .. {.,;rr.e Irnaroven~iert. INVESTMENT MARKET Office F'yan ~..rnp;r~ies.,dd'1<~rkr~~tct :nts ilr;r~, at ~~3C„ '~4arket I~r,irae I:'ride in 3oominc;on, P,^:cP,1or;-,an ~.l,an~~.;ttr.:- r ~3h0 ;q.-a ~.r ~erly .._'~.~il~. Iii :_itJ ~r ~ , J1`:: ~~ii~~d. P1-j.;r tr=n.nls ;,,_^,;:~ Ge:C,p,r^~.n: Fu .~h~<..;:.y t c ';r'i.ti 4 sq.-'i:. 1 .., ..:a t Frfr: ;;trey=.i b.iii,'inq :n `._,_ ~=a;a rcr.. ~rauen,huh Corr~penies. Fr~rrrie~rPJ Fir_.[ Trust C, tiler.hs, _ u, ~~~rfy i rh ~ hey 11~ ~ 1~-s for Gender' f~1our:rai^. Mutti-Family `;~. :iy 'r;p~r , Con-~!:ar:ie>> .a,..., lha :i~4.iirut 5 r ui rJhe :. ~~ i:..i ;mu itc Er'pr r / ~t 'I ~~ =arf ..,.:gyn. .__. ?~ ~ n.a,••i, I<u,ns;il hiison ~1~ crrie Tf~c:frn-,_ton ~.~31u~,,J~, .p,.:ox.. rnat , .i•2~~.r~~ niaicii c.' -.ed in ` i ;inst. • F' ,..r-rrrne~ifs.~n :' :=r~ it I;rive i Aden `:~ n ..e Corr >ol:J :n : pr;~F~ ; k;r uxirt,a r ly ~:C~H_, m l .m. Retait • f~J., rza f,rn r:aa N: op._i: ,,... ,..~. N r~cip„! C~ ~>ai _.vcsli; `i> ,.old ~..a:f ~c,~r•~ ~:nJa,~~i: ,; Bl.ec<. F',c:., RcLt,.Thi=lii4'.~Jt"i ~ f, h,:it ~,-trail ~fo`jrsi: find ~ 7; :.IIL:Cn n i. rT,;s,'. Industrial + F s! Ir y;^a ._ l sold ~ ~ u ;colt,, x F ,r..'o.i.; ur r ine it nr~<, I l`ilir r~ %~ n' _r~.' . f Fn~~:; REIT. Tf3i n a t e<. !n sta y it i Jen ~rsi' e. (',~Id V..l'l'r/. is :.~::J Ic41 to ~rnla, The _...°~q ~,~tls~ ;ri~. ,rts it ~a .,~,t. +liimdl:"ou .r c~:a~~d:ra21JC54-sy 1.rJ:_a~. 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C~~Llf~_t~____ NW "sldW 4£98't# i!~~ad aina a6eisnd'S'n SSVI~ iS81j United Properties Market Activity Page 1 of 4 July 1 through September 30, 2007 E,r~r~t~ Frt{wi~~us lea~re~ +,r~ ri Jump to: OFFICE MEDICAL OFFICE INDUSTRIAL RETAIL INVESTMENTS I I I I ~ "°' '~'' ~ ~ ~~" OFFICE MARKET KG'i i W ^`~~KC(dt a l'7`~S 3'~~ J'i West v.. i , --u ~,~~~.:. • Willis of Minnesota plans to occupy 29,000 sq. ft. in Duke's 1600 Tower in St. Louis Park and vacate space at 4000 Olson Memorial Highway in Golden Valley in the first quarter of 2008. ~;. ,-_a_t ~~3 ~;~, „ F,.u;• iUs • Mortenson Construction will back-fill the vacated Willis space at 4000 Olson Memorial Highway. ~ j, rC SS t'4f P°~a '„b tit ~Gk • Park Place East and West were sold in July by Guggenheim Partners Real Estate to a ~.1ar~zt f;~~p~<ts partnership between Golub & Company and AEW Capital Management. These properties, totaling 387,000 sq. ft., are located on I-394/Wayzata Boulevard in St. Louis Park. The buyers are planning to implement an extensive capital plan, including renovating the lobbies, elevators and signage. Major tenants include CDI Management Corporation and National i'_'r 7 ~ ~ 7 Arbitration Forum. CL,C?. EC:1~b' ~ Southwest • Benfield signed a lease for 130,000 sq. ft. at the new, 275,000-sq.-ft. 8200 Tower in Normandale Lake Office Park in Bloomington. Construction on the tower began in October. • CB Richard Ellis will be the lead tenant for the new Two Market Pointe project on the northwest corner of I-494 and France Avenue in Bloomington. The company signed a lease for 80,000 sq. ft. • Told Development has under construction a 100,000-sq.-ft. build-to-suit project for Alliant Tech Systems at 7590 Flying Cloud Drive in Eden Prairie. • General Dynamics signed a lease for 53,000 sq. ft. of office space at Hampshire Avenue Tech Center in Bloomington. South/Airport • AppTec Laboratory Services renewed along-term lease for 62,000 sq. ft. at 1201 Northland Drive in Mendota Heights. • Paychex renewed their lease for 30,000 sq. ft. at Mendota Heights Office Center III. • Champion Air renewed its 30,000-sq.-ft. lease at Riverview Office Tower in Bloomington. Northwest • Dex Media downsized its space to 50,000 sq. ft. and renewed its lease at 6401 Sycamore Court in Maple Grove. The remaining space in this 72,000-sq.-ft. building, which was fully occupied by Dex Media, will now be marketed for lease, bringing this building to the multi- tenant market. Minneapolis CBD • Law firm Stoel Rizes is expanding its Minneapolis office and has signed a 10-year lease for the entire 42nd floor and half of the 41st floor at 33 South Sixth Street. http://outlook.uproperties.com/features/2007/20070ctober_MarketActivity.htm 10/31/2007 United Properties Market Activity • PDI will occupy the former Rider Bennet space at 33 South Sixth with a lease for 75,000 sq. ft. on the top three floors of the tower. • Lindquist and Vennum has renewed its lease and expanded into 120,000 sq. ft. at IDS Center, 80 South Eighth Street, with a 10-year term. St. Paul CBD • Gander Mountain expanded its space at 180 East Fifth Street by 20,000 sq. ft. for a total of 85,000 sq. ft. • NorthStar Capital Market Services Inc. renewed its lease at UBS Plaza for 11,600 sq. ft. and expanded by another 11,800 sq. ft. • UBS renewed and expanded in 18,300 sq. ft. at UBS Plaza. Northeast • Secure Computing Corporation expanded by 45,000 sq. ft. at its corporate headquarters site located at Hwy 280 and Energy Park Drive. CSM developed the first phase of 95,000 sq. ft. on the former HB Fuller site in 2005. CSM is also developing the second phase, which is currently under construction. • Internet Broadcasting Systems leased 79,000 sq. ft. at River Bend Business Center, located at Shepard Road and Randolph Avenue in St. Paul. IBS took occupancy in August 2007. • University of Minnesota leased 35,000 sq. ft. in two phases at University Park Plaza located on University Avenue in Minneapolis. MEDICAL OFFICE MARKET Back #o Top • Ryan Companies US, Inc. completed the 40,000-sq.-ft. Grove Health Medical Building at 9550 Upland Lane North, which is located one block from the planned site of the new Maple Grove hospital. Medical Advanced Pain Specialists (MAPS) signed along-term lease for the first floor of the building, which will accommodate a surgery center, clinic, and therapy pool. Gillette Children's Specialty Healthcare also signed along-term lease for space on the second floor. The group will operate a physical therapy clinic and a therapy playground at the building. • Mount Development broke ground on the approximately 60,000-sq.-ft. Ridgeview Professional Building at 560 Maple Street in Waconia in September. The building, which is adjacent to Ridgeview Medical Center, is planned for completion in summer 2008. Western OB/GYN, MOHPA, Minnesota Radiation Oncology, Edina Eye Physicians and Surgeons, and Orthopedic Consultants are among the tenants that have committed to space in the new building. This building addition is ahospital-driven effort to accommodate its expansion and to add capacity to the campus. • Southdale Medical Center at 6545 France Avenue South in Edina has broken ground on a 23,000-sq.-ft. expansion of its first and second floors. The expansion, anchored by Southdale Diagnostics, is scheduled for completion in summer 2008. Negotiations are underway with an additional five to six tenants for the balance of the space on first and second floors. INDUSTRIAL MARKET Back #0 lop Northwest • Minntech signed athree-year lease and doubled their distribution space from 22,000 sq. ft. to 44,000 sq. ft. at Plymouth Ponds at 17300 Medina Road in Plymouth. • The Generation Company (Empirehouse) sold a 51,585-sq.-ft. property at 4401 Quebec Avenue North in New Hope to 4401 Quebec LLC (Horwitz Mechanical) for $61 per square foot. • Cobalt Investors purchased a 70,100-sq.-ft. property at 19875 South Diamond Lake Road in Rogers. Cobalt also has several other properties under contract and is scheduled to close on them before the end of the year. • Hedberg Associates signed asix-year deal for 70,000 sq. ft. at Medicine Lake Industrial Building on Nathan Lane in Plymouth. Page 2 of 4 http://outlook.uproperties.com/features/2007/20070ctober MarketActivity.htm 10/31/2007 United Properties Market Activity • First Industrial signed a deal with PODS Enterprises for 50,000 sq. ft. in a new speculative building in Brooklyn Park called Winnetka Distribution Center. • Two companies signed deals at Plymouth Corporate Center on Fernbrook Lane North in Plymouth. NeoMetrics Inc. signed aseven-year deal for 21,464 sq. ft., and Johnson Controls took 29,206 sq. ft. for 61 months. Northeast • Arrowhead Electrical Products consolidated three sites into 50,000 sq. ft. at Blaine Preserve Business Park on 95th Avenue in Blaine. • Coloplast relocated its manufacturing from Minneapolis to 85,000 sq. ft. at Willow Lake Technology Center in Vadnais Heights. This properly had been vacant for three years. • Logistics company Magno International signed a lease for 97,000 sq. ft. at AMB Northpoint Industrial Center in Fridley. Southwest • CyberPower Systems signed aseven-year lease for 76,000 sq. ft. at River Crossing Distribution Center, located at 4241 12th Avenue East in Shakopee. • Remote Technologies, Inc. also signed aseven-year lease for 30,899 sq. ft. at Park 2000 III, located at 5775 12th Avenue East in Shakopee. • Iron Mountain took 23,000 sq. ft. in a 10-year deal at Huntington Business Park I on 106th Street in Bloomington. • Kraft signed afive-year lease for 30,000 sq. ft. of office space at 13200 Pioneer Trail in Eden Prairie, part of the Staring Lake development. • SurModics is assuming 73,000 sq. ft. of sublease space at Lake Smetana Business Park in Eden Prairie. The space was leased to CNS. • Hub Management purchased the 51,901-sq.-ft. Westwood III Business Center at 6251 Bury Drive in Eden Prairie from Rex Rice. Southeast • Uline signed a lease for 140,000 sq. ft. at the Highway 55 Distribution Center in Eagan. The transaction includes 5,000 sq. ft. for office space. • Staywell signed along-term lease for 71,808 sq. ft. in a 110,000-sq- ft. building in a new development in Boulder Lakes Business Park. The total size of this project, located in Eagan, is one million square feet, and construction is expected to begin in June 2008. • Also in Eagan, Lifeworks will take 25,122 sq. ft. in a long-term lease at the 38,000-sq.-ft. Waters VII on Lone Oak Road. RETAIL MARKET Back to 70~ • Best Buy will be relocating to 53,206 sq. ft. of end cap space at Crossroads of Roseville on County Road 62 and Snelling Avenue. Dick's Sporting Goods will take the 55,000 sq. ft. vacated by Best Buy. Both retailers will be open in 2008. • Raising Cane's will be taking a 2,691-sq.-ft. end cap space, its second Twin Cities location, in the newly renovated Stadium Village Mall at 825 Washington Avenue in Minneapolis following approval by neighborhood groups. The quick service restaurant is expected to open in February 2008. • Maurice's has signed a lease for 4,814 sq. ft. at Woodbury Lakes on I-94 and Hudson Road. • Petco signed a lease for 18,500 sq. ft. at 1970 South Robert Street in West St. Paul following more than two years of working with the city to redevelop the former Frank's Nursery property. Page 3 of 4 http://outlook.uproperties.com/features/2007/20070ctober_MarketActivity.htm 10/31/2007 United Properties Market Activity Page 4 of 4 • Shoppes on Maine in Rochester, a 750,000-sq.-ft. retail center, opened with SuperTarget and Lowe's Home Improvement. INVESTMENT MARKET Back to Top Oifice • Ryan Companies sold Marketpointe One, at 4300 Market Pointe Drive in Bloomington, to McMorgan & Company. The 236,000-sq.-ft. property was built in 2000 and is 100% occupied. Major tenants include UnitedHealth Group and Wells Fargo. • Swervo Development purchased the 675,814-sq.-ft. 180 East Fifth Street building in St. Paul from Frauenshuh Companies. Formerly First Trust Center, the property is the headquarters for Gander Mountain. Multi-Family • Osprey Property Companies sold the 324-unit Burningham Apartments property at 1505 East Burnsville Parkway in Burnsville to Johnson Management. The transaction, valued at approximately $23.65 million, closed in August. • Parkway Apartments on Chestnut Drive in Eden Prairie was sold to Invesco in late June. Healey Ramme Company sold the 375-unit property for approximately $36.85 million. Retail • North American Properties and Principal Global Investors sold Calhoun Square to BlackRock Realty. This 144,000-sq.-ft. property traded for just under $50 million in August. Industrial • First Industrial sold an office/flex portfolio of nine buildings totaling 766,240 sq. ft. to Hines RErf. The properties, located in Eden Prairie, Golden Valley, Hopkins, Bloomington and St. Paul, were 86% leased to 41 tenants. The average sale price was $114 per square foot. • Inland Group purchased the 219,664-sq.-ft. Atlas Cold Storage building at 240 Chester Street in St. Paul from Atlas Cold Storage. This was asale-lease-back transaction with a sale price of $15.2 million and part of an 11-property portfolio. • OPUS Northwest sold Elm Creek Commerce Center on 109th Avenue in Champlin to KBS. This 231,416-sq.-ft property was built in 1995. Copyright 2002-2007. United Properties. All Rights Reserved. 3500 American Boulevard West, Minneapolis, MN 55431 Privacy Policy ~ Contact UP ~ Download Hard Coov ~ Request Hard Coov http://outlook.uproperties.com/features/2007/20070ctober MarketActivity.htm 10/31/2007 City of Elk -~-, River MEMORANDUM TO: Economic Development Authority FROM: Catherine Mehelich, Director of Economic Developmen Scott Clark, Community Development Director DATE: November 13, 2007 SUBJECT: EDA Closed Meeting to Discuss Purchase and Sale of Property Identified as Lot I, Block I Mulvaney Point, Elk River Issue The EDA will hold a closed meeting as allowed by MN Statutes 13D.05, subd. 3 for the purpose of discussing the purchase and sale of property identified as Lot 1, Block 1 Mulvaney Point, Elk River. The EDA's development attorney from Briggs & Morgan will be present at the meeting to assist in the discussions. Background At its October meeting staff provided the EDA and update on the post office and its intended sale of property. It was the consensus of the EDA to enter into the bidding process in an attempt to purchase the property. The purpose for the EDA's purchase of the property is to secure the high profile site to ensure development to its highest and best use for the community, and is regardless of the current fine dining restaurant proposal. Staff issued an appraisal be completed in order to establish an understanding on the value of the property for review and discussion at this EDA meeting. Issues for Discussion Staff requests the EDA's discussion of the following issues during the closed meeting: 1) Review and agreement on the appraisal 2) Confirm EDA's willingness to proceed in bidding process and the purchase price 3) Discuss resources to fund the property acquisition and reimbursement options 4) Discuss EDA's intentions with regard to the future sale of the property (e.g. desired end uses, sale price and/or financial assistance, etc.) PLEASE NOTE: The attached appraisal is considered confidential or nonpublic data under MN Statutes 13.44, subd. 3 and for EDA information only, until such time as established by law. rONFIDENTIAL Summary Appraisal Report _.. _ ;4 ~_ v. . ..... ~.~ _ _ _ ... :.~ ~ ~ 11 Vacant Land Property: NEC of Line Avenue & 181St Avenue Elk River, MN 55330 City of Elk River Prepared For: Attn: Catherine Mehelich, Director of Economic Development 13065 Orono Parkway Elk River, MN 55330 Date: November 5, 2007 Prepared Bv: Molly J. Lewis, Appraiser William R. Waytas, Appraiser NAGELL APPRAISAL ~ CONSULTING 7515 Wayzata Boulevard Minneapolis, MN 55426 Telephone: (952) 544-8966 Fax No. (952) 544-8969 File # G0710005 NAGEL~ APPRAISAL & CONSULTING 7515 Wayzata Blvd. #115 Minneapolis: 952-544-8966 Minneapolis, MN 55426 St. Paul: 651-209-6159 Established in 1968 Central Fax: 952-544-8969 City of Elk River November 7, 2007 Attn: Catherine Mehelich, Director of Economic Development 13065 Orono Parkway Elk River, MN 55330 Dear Ms. Mehelich: In accordance with your request, a summary appraisal report has been made on the following described property: Subject Property: NEC of Line Avenue & 181St Avenue 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. It is our opinion of the as-is market value as of November 5, 2007 is: FINAL OPINION OF AS-IS MARKET VALUE: $1,467,000 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, SRA, CRP Appraiser MN 20391975 Certified General MN 4000813 www.callnagell.com TABLE OF CONTENTS General Information Page Summary of Important Facts and Conclusions 1 Introduction, Intended Use of Report, Date of the Appraisal 2 Scope of the Appraisal 3 Property Rights Appraised, Personal Property 4 Identification, Real Estate Taxes, Subject Sales/Building History 5 Descriptive Data Regional Data 6 Regional Map 7 City & Neighborhood Description 8 Neighborhood Map 9 Site Description 10 Zoning 11 Plat Map 12 Flood Map 13 Aerial Photographs 14 Subject Photographs 15 Valuation Highest and Best Use 17 Cost Approach 18 Income Approach 18 Sales Comparison Approach 19 Reconciliation 29 Type & Definition of Market Value, Environmental & Building Conditions 30 Extraordinary Assumptions & Hypothetical Conditions 31 Assumptions and Limiting Conditions 31 Certification 34 Qualifications 35 Addenda 38 SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS ., ~~ ..._,- . .~_r _ - ~, ti ,~. ~. r . t~ General Description: Vacant Commercial Land Appraisal Report: Summary Report Current Use: Vacant Land Special Assumptions: Yes, see rear of report for standard assumptions Site Size: 195,584 SF Building Improvements: None Zoning: BP, Business Park Highest and Best Use: Commercial Development Property Rights Appraised: Fee Simple Interest Personal Property: No business or personal property included Cost Approach: Not Applied Income Approach: Not Applied Sales Comparison Approach: $1,467,000 Final Opinion of Market Value: $1,467,000 Nagell Appraisal & Consulting ~ 952-544-8966 ~ vuww.callnagell.com INTRODUCTION The subject property is a vacant parcel of land located at the northeast corner of Line Avenue and 181St Avenue in Elk River, MN. The site size is approximately 195,584 SF or 4.49 acres. The subject site has significant commercial appeal. New retail is located to the north, south and east, which includes a Walmart Supercenter, Home Depot and Tractor Supply Co. (among other small chain retail users). City indicated that although the traditional Business Park zoning emphasizes a more industrial-related use, the subject, given its location and surroundings, would likely be used for "upscale highway commercial." INTENDED USE OF REPORT The client intends to use the appraisal to assist in determining an offer regarding the possible purchase of the property. This appraisal assignment was requested by the named client/owner for its sole use. No party, other than the client, may use or rely upon any part of this report 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. DATE OF THE APPRAISAL The effective dates are: • The effective date and inspection date is November 5, 2007. • The date of the report is November 2, 2007 -November 7, 2007. 2 Nagell Appraisal & Consulting ~ 952-544-8966 ~ www.callnagell.com SCOPE OF THE APPRAISAL REPORT USPAP 2006 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 & pen`orm the scope of work necessary to develop credible assignment results 3) Disclose the scope of work in the report 1) Provide an opinion of market value, as it relates to the intended use. Per assignment request, the following degree of research and analysis has been made; The format used is a Summary Report, which is intended to comply with the reporting 2) requirements set forth under Standards Rule 2-2(b) of USPAP. As it relates to the nature of the assignment, a highest and best use analysis of the subject will be performed. All three approaches will be considered-see individual approaches for further detail. The scope of work for this appraisal includes: • a) The extent to which the property is identified: Public record, plat maps, zoning maps and/or aerial photographs were used to identify the subject property. • b) The extent to which tangible property is inspected: An inspection of the subject property, proposed plans/specifications (if any) and neighborhood by the appraiser. Physical factors: Based on property inspection and conversations with the client, city and county officials. Lot size is based on county data. 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) The type and extent of data researched: 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-ofFce library, past courses and seminars etc. 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. 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 appraiser accepts full professional responsibility for all of the analyses and conclusions contained within this report. The data used was obtained from sources considered credible, yet its accuracy is not guaranteed. Nagell Appraisal 8 Consulting ~ 952-544-8966 (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. Fee simple estate is defined in The Dictionary of Real Estate Appraisal, 3rd Edition as: "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." 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 is defined in The Dictionary of Real Estate Appraisal, 4th Edition as: "an ownership interest held by a landlord with the right of use and occupancy conveyed by lease to others. The rights of the lessor (the leased fee owner) and the lessee are specified by contract terms contained within the lease." This would generally reflect atenant-occupied property. The Fee Simple Interest of valuation will be appraised. Since the subject is vacant land, the fee simple interest is most appropriate. PERSONAL PROPERTY Appraised value reflects real estate only. No Business Value, FF8~E or personal property is included in the appraised value. 4 Nagell Appraisal & Consulting ~ 952-544-8966 ~ www.callnagell.com IDENTIFICATION Street Address: NEC of Line Avenue & 181St Avenue, Elk River Legal Description: S35-T33-R26, LOT 1, BLOCK 1, MULVANEY POINT, SHERBURNE COUNTY, MINNESOTA. The County PID #: 75-656-0105 The Fee Owner: United States Postal Service Census Tract #: 305.02 REAL ESTATE TAXES Tax, 2007 payable: Exempt Special assessments & other fees: None Total remaining assessments & other fees: None Assessor's Value (2007) Land: $1,026,800 Building: None Total: $1,026,800 ($5.25 per SF) Comments: The subject property owner is a tax exempt entity-therefore, not taxed. Tax rates for improved commercial properties typically range from 3-4% of the assessed value. SUBJECT BUILDING & SALES HISTORY Sales History: The subject last sold in September of 2000 for $1,222,682 ($6.25 per SF). No other known or reported sales of the subject property within the past 3 years. Building History: No buildings on site. Nagel) Appraisal 8 Consulting ~ 952-544-8966 (www.callnagell.com 5 REGIONAL DATA Metro Area: Minneapolis, St. Paul and the surrounding communities are known as the Twin Cities Metropolitan area. Slightly over half of Minnesota's residents live within this area. 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: County 1990 Census 2000 Census 2006 Est. Census % of Total `00-'06 Est. Chan a Median Income* Anoka 243,641 298,084 327,005 11.0% 9.7% $61,634 Carver 47,915 70,205 87,545 2.3% 24.7% $72,998 Dakota 275,227 355,904 388,001 13.1 % 9.0% $66,467 Hennepin 1,032,431 1,116,200 1,122,093 37.8% 0.5% $55,996 Ramsey 485,765 511,035 493,215 16.6% (3.5%) $49,898 Scott 57,846 89,498 124,092 4.2% 38.7% $78,106 Sherburne 41,945 64,417 84,995 2.9% 31.9% $61,313 Washington 145,896 201,130 225,000 7.6% 11.9% $73,491 Wright 68,710 89,986 114,787 3.9% 27.6% $59,615 Total 2,399,376 2,796,459 2,966,733 100.0% 6.1% $64,391 *Median incomes reported on this page are the 2005 Estimates from Census data. Subject County: The subject is located in Sherburne County, which had a population increase of 2.9% between 2000 and 2006. The subject is located in the southern portion of the county in the City of Elk River. Economic Data: The Twin Cities is the 13th largest market in population and the 11th in retail sales in the nation. In 1999, the median household income for the nine county Twin Cities Metro Area was $58,449. The above grid reflects a breakdown of median household income for the 9 county Twin Cities Metro Area. The subject county of Sherburne is below the Metro average. The unemployment rate for Minnesota as of January 2007 is around 5.4%, which is slightly above the national average of 5.0%. The current residential interest rates, for a typical 30 year mortgage, are around 5% to 7%. Commercial rates are around 5.5% to 7.5%. Rates are expected to be relatively stable over the next year. Subject City: The median income for Elk River as of 2000 was $58,114, which is near the county average. The Metropolitan Council population estimate for Elk River as of 2006 was 22,285, up from 16,447 in 2000-a 35.5% increase. The average sale price of asingle-family home in Elk River in 2006 was $248,640, down 2.15% from $254,102 in 2005. To date in 2007, the average sale price of asingle-family home in Elk River is $230,491, down 7.30% from the 2006 average (per Northstar MLS). 6 Nagell Appraisal & Consulting ~ 952-544-8966 ~ www.callnagell.com REGIONAL MAP .. Salida t5 ~ t16~ ~. 24 t.. I 74 Ea B LIrIWOOt1-~ y t .. y1o `US H E R B ',,U R N ~. ?7 68 ~ O ~k G ove 13 ~ mom ~S.a~ ~ 24 i~ ~~~ !+ I( i . `."1919 L 'Ahab ~-- `--.'=-1-• I : -J : ~~ 22 (8 r 9 ` nticello 9ailey . ~~ _ fiver; `y, :a7) ~ i Cedar •~ ' .. .. Ir~ ........ .39 ~ -- 64 5 58 ~ X851 C }; ~ K A e., orest Lake 5 37 ~{y15UBJECT 78 60, 17 19 82 "`~~~"' T Emer rk ~` hdwer Lake Y3 oke~ `. - 116 { it art ~~--' ~2a1 . ~ : 1o1r - Lino Lak s -------- 35 St. Mich T.~t ,. a o u _` i .242' 52 14 a I - ~' 203 R~rsr_, ~'I hamppn 1 10 , Ra ids' `B>_i l'1 ' Hanover ~'~ nter _ uga i ;~~ ~ ...: 19 117 ~ - 81 121 ~ ..,~ ~- IB P• 21 . r- 8A J _ I __ _ 1 .. .....:.... ..- ~-- 20 10 -- 130 ar ~I t e ~ 15 ~. I - 109 L i 47: ~ w 59 ' ~ ockford ~ 50 -~~ If +" - ~'~ ~ M a ~ 35 ~ • W alts 92 ~ ; 5JK 4B i ASHIN -.12, ~ _ ~.. a~~- , ei 12 i6e f ~ 1 ahtomed - .'~. • 11 ~ COIettO ~~" ~' S : 38 • 9 13 30 DeFdnO '"~ ~`r9~0-~ H E N ~ '~ 1 1 102 81 ~• ~65' f 23 =38 . PaUI 17 Inclepen ence~- ~ ~Medin F co p) [ e 61' ' I 8 w ........... ~ ( S ng Lake ~. ai1 ~ ~ Waterto ~ ~ 19 ~, 2a r~ 1. ^ dlando. ~~. - 51 • as ( Minuet I5ta .. 110~ Tonka Ba tot -~"' 7 ~ 17 5 ~ - •x 10 bu 10 ~ ~" $h0YBW00 " - ~ .• -~~. - t~55 h I 13A ^ St Boni Giu`$}"' ~_-. GGISi __ 62 _. ~ i, 52, ,... 18 - ~:...r;..... 1 7 t ,.^,F,... t"=~J'' a aul ~. _ ~ i at i a ~ ~ Jl; a ~'[Vewpo Wagta~i@~~' S-~VICtOr ~ Cha aS$ .: ~ ~ . 13 A Ai 58, l x.951 ', Kim= ~' ~` 89 , od --~ ~i ^, C A R 1V $ R ,~^ is ,(-j`~~y, = 1 ~a kl Gr Co , n ht ©2004"Mcrosoft Co .and/ores su tiers. All ri Ms reserved~.2 }~ - Nagell Appraisal & Consulting ~ 952-544-8966 ~ www.callnagell.com 7 CITY ~ NEIGHBORHOOD DESCRIPTION Type of neighborhood: Outlying Suburban Percent built-up: 45% Stage of Development: Growth Neighborhood boundaries: City Limits Major Transportation: Highways 10, 101 & 169 Predominant type ~& conformity: SF 20%, 2-4 fam. & Multi-fam. 10%, Comm/Ind. 15%, Ag/Vacant/Parks/Greenspace 55%. Average conformity. Supply if< Demand: In balance Reputation of the area: Average Typical properly age: New to 75 + years, predominant under 20 years Subject Market: Commercial Land Commercial land value: $6.00 to $10.00 + per SF Industrial land values: $1.00 to $3.00 + per SF Residential Property Values: $230,000 average (2007) Subject Market: Stable Neighborhood Trend: Gradual increase in values over time. Detrimental influences: No major apparent Comments: The subject is located in the City of Elk River, just east of Highway 169. As a result of the close proximity of Highway 169, the area is developing with new commercial uses. Subject market: In considering recent publications, news articles and comments from market participants, it is concluded that the overall outlying suburban commercial market in the subject area is somewhat soft to stable. New construction is slower than in recent years. Nagell Appraisal & Consulting ~ 952-544-8966 ~ www.callnagell.com NEIGHBORHOOD MAP ...,;. ~ 1 ~ `~ ~ . ~, Ni~~ ~ ~ 1~rd:l~lW ' ~~ -~ke,Cd ~4r ~ ~ ~~ ~ a~ ~~ ~~ -- __ _.__ -. _ - 4 ~ ~ l O `6 +~" ' ~ w,°~ ~ , 1 ~2 h ~F~= iV'J'J ~ 13 ~~ ~ ~ ~ ~ '~ E1K ~ ~ 'a ~ y ', , ~''' A d ' SCha~31 3t ~ ~I(~ ?irll° ~, 54 ~ ~*4~4; '~ - , ~ ' ~." ~ o ~, ~ i' 169 ~. ,.. >. ver tdk 4th. 5i ; ~ ,~ ~air~ Si ~ 10 ,~,,, a tylain 5t ~. i18~nd Ave N'W .... `;:,2nd St . t~ ~ ~ v 12 'f81st.:a~li@ 1~'~ 5 ~ ~ i ~ ~ . i ~ ' ~~ i ~ : . ~ ~ ` ,, ~, '~ Ofsego !, ' `. 1. "' "~ ___ _ ~~ ~'~'~ 1 1 ~ 1769 ~ ~'=. Nagel) Appraisal & Consulting ~ 952-544-8966 (www.callnagell.com 9 SITE DESCRIPTION Dimensions: Irregular, see plat Gross Site Area: 195,584 SF (4.49 acres), per county website Topography/Shape/Low: Sloping, wooded /Irregular /None noted Soil conditions: Assumed to be Stable Drainage: Appears Average Utilities: Electricity/Gas Yes/Yes Water/Sanitary Sewer Public/Public Off-Site Improvements: Street: Bituminous Curb/Gutter: Concrete Sidewalk/Alley: Concrete /None Street Lights: Standard Storm Sewer: Yes Accesa to site: Once developed, estimated to be off of 3~d Street NW Frontage: 3~d Street NW, Line Avenue, 181St Avenue Visibility: Good (visible from Highway 169) Flood hazard zone: No, see Flood Map Apparent Easements: Utility and Drainage Encroachments: None Apparent Unusual Conditions: None Apparent Use: Vacant commercial lot Building Improvements: None Surplus/Excess Land: Not Applicable Functional Adequacy: Average Surrounding Uses: North: New commercial, vacant commercial land South: New retail commercial East: New office condos, vacant commercial land West: Apartments, older commercial Distance to Major Road: 2 blocks east of Highway 169. Comments: The subject is situated in an area of newer commercial development (includes Walmart Supercenter, Home Depot, Tractor Supply Co. and other small chain retail users). Most commercial properties in the area front on or have visibility from Highway 169. Traffic at the corner of Line Avenue and 181St Street is busy. Given its elevation, the subject property is visible from Highway 169. ~ ~ Nagell Appraisal & Consulting ~ 952-544-8966 ~ www.callnagell.com ZONING The subject is zoned BP, Business Park. The subject is considered a legal and conforming use. City indicated that although the traditional Business Park zoning emphasizes a more industrial-related use, the subject, given its location and surroundings, would likely be used for "upscale highway commercial." Sec. 34-1294. BP business perk district. (a) Purpose. (1) The business park district is established to encourage a planned, integrated environment for certain industrial, office, and commercial uses, which are compatible with and complement each other as well as the surrounding land uses. The underlying land use designation within the district mad ualy and may be either light industrial or highway business. Development within the business park district will correspond with the land use designation. Industrial and office uses are allowed where the land use designation is light industrial, and commercial uses are allowed where the land use designation is highway business. (2) It is the intent of this section that development reflect common themes using compatible architectural design and consistency in signage, landscaping, and lighting. It is also the intent to encourage businesses, which generate a high number of jobs per square foot rather than predominantly warehouse type uses. B-P, Business Park Primary Permitted Uses Light manufacturing, R&D, office, showroom, warehouse. Minimum Site Size 1 acre (43,560 SF) Maximum Building Height 50' Setback Requirements 30' (front), 20' (rear), 25' (side) Maximum Lot Coverage 40% Nagel) Appraisal 8 Consulting ~ 952-544-8966 (www.callnagell.com 11 PLAT MAP '~ ,~ ..,, ,. 'I ;,~ ~ .~.. _I - -- ~,~,: - ~ ~ I .. - _:r `r' y[ ~: tip, 1 IJ~ ~~: - -J :s - : ~ 5 ~_ ..-.p- _ 4 e• ~ ~+~. ,~~ 0' L l~, ~d ~. .a ._ -. ~ y ~- \ ~ ~~ { _. _ .. .,e ... ,... ,. ~ ~ sit "`-..., ~ 2 °~ k.. ~,+R" ~ - i ~__ ~__ ' "~ ~ 3.~ ~~ I Y M.k,. ~ % '-y v I i _~~A ' A I {_ _ . ,~ Lnd 2~„e.~aur + CMU {ap~was. lm. ti ~ 2 Nagell Appraisal & Consulting ~ 952-544-8966 ~ www.callnagell.com FLOOD MAP o Prepared for: InterFlood Nagell Appraisal & Consulting '~ yy ~ 4 mOQ4 www.interttaod.c?om • 1-800-252-6633 Elk River, MN 55330 >9a ~ L'~ ~ ~ ;INCOLN ¢ ' CT f„ ROOSEl'EL y, CrR ~, au9vRr. as JErfERSON kVE NW '. ,t.S _____._..._.. Y" LANE "' `-y ~e> 34 35 _srtr ST H Si ~~ D ~ NE X z ~p~ ~, m 7 r 3H L' ='ST NY1 3riD Sl ~ ~ City of Elk River FflEE?6R RM AYE fv~ni 395-1 270436 7Nb ST NW ~ ~9 ~'y- 7Jt 5 ~ KJO p T 33 N f- ~'~ ___ _ T 32 N _ ___. _~..~_~ - . _ FLOODSCAPE '~ Flood Hazards Map ,~s to '~ Map Number 27141C0395E Eliectiae Date May 4,2000 t ~ ti,t ` ~ -ZaNE AE 3 ~ ~ For more information about I ` flood zones and flood t insurance, contact: l\ ~G 9C 159 ~p 2 a s ~zoa~ Isar aaa~ ~ , \ Powered by Flood Source 9 Z \ 877.77.FL00^ `'` yZ www.floodsouroe.com © 1999-2087 5ouroeProse and/or Flood Source Corporations. All rights reserved. Patents 8,831,328 and 8,678,815. Other paterrts pending. For Info: info@floodsouroe.com. Nagell Appraisal & Consulting ~ 952-544-8966 ~ www.callnagell.com 13 14 Nagell Appraisal & Consulting ~ 952-544-8966 ~ www.callnagell.com AERIAL PHOTOGRAPH View of Property Looking Southwest Nagell Appraisal & Consulting 1952-544-8966 ~ www.callnagell.com 15 SUBJECT PHOTOGRAPHS View of Property Looking Northeast Street Scene Looking North on Line Avenue 16 Nagell Appraisal & Consulting ~ 952-544-8966 ~ www.callnagell.com SUBJECT PHOTOGRAPHS Street Scene Looking Southeast on 181St Avenue HIGHEST AND BEST USE Highest and best use as defined in The Appraisal of Real Estate, Twelfth Edition, by the Appraisal Institute, 2001 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 being appraised as land only, only site as vacant is considered applicable. Typically, there are four criteria in the Highest ~ Best Use analysis Legally permissible uses: What uses are allowed by the zoning? Physically possible uses: What uses are physically possible on the site: Financially feasible uses: Which possible & permissible uses will produce a positive return? Maximally productive use: Of the financially feasible uses, which use produces the Highest return warranted b the market (the ideal im rovements . Site as Vacant Legally Permissible Uses: The current BP, Business Park, zoning allows for a variety of uses. Primary permitted uses include light manufacturing, R8~D, office, showroom and warehouse. City indicated that although the traditional Business Park zoning emphasizes a more industrial-related use, the subject, given its location and surroundings, would likely be used for "upscale highway commercial." Physically Possible Uses: The physical characteristics of the site appear suitable for development. Utilities are available. The site has average access and good visibility (Highway 169). The site will allow for a number of potential uses. Financially Feasible Uses: Surrounding uses include new commercial to the north, south and east with older commercial and apartments to the west. Given the subject's surrounding uses and proximity to Highway 169, a commercial related use is considered logical. The subject has good visibility, which is typical of commercial uses. Maximally Productive Use: Given the above discussion and keeping in mind market demand, site size, area growth, zoning and location, it appears logical to develop with commercial use. Conclusion Site as Vacant: Based on the above discussion, the highest and best use for the subject site as vacant would be for commercial development. Nagel) Appraisal 8 Consulting ~ 952-544-8966 ~ www.callnagell.com 17 COST APPROACH Since the site is vacant land, the Cost Approach is not considered applicable. INCOME APPROACH The Income Approach to value is not applicable in this situation. Very limited rental data of vacant land renders the Income Approach an unreliable indicator. ~ 8 Nagell Appraisal & Consulting ~ 952-544-8966 ~ www.callnagell.com 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. Supply and Demand: Sales in the market result from negotiations between buyers and sellers. Buyers reflect market demand and sellers supply. If demand is high, prices tend to increase, if it is low, prices usually decrease. Demand for properties like the subject in recent years has been average. Substitution: The principle of substitution holds that the value of a property tends to be set by the price paid to acquire a substitute property of similar utility and desirability within a reasonable amount of time (The Appraisal of Real Estate, 12th Edition). The sales comparison approach is less reliable if substitute properties are not available in the market. Sales are available. Balance: The market tends to force a balance between supply and demand. Balance can change due to shifts in population, variations in purchasing power, consumer tastes and preference, and time. Externalities: When possible, select comparables with similar location, economic conditions and support facilities. 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. Nagell Appraisal & Consulting ~ 952-544-8966 (www.callnagell.com ~ g COMPARABLE LOCATION MAP 63 / ~ 211t Aver _ 79 -~ ~ ~^~( ~.., ~~~ ~" f5,\~ 27 --_,yjit )' ~_j ~ 09th Ave NJV ~° 1 _ ~ ~ ~pg~~ ,qve 32 `~- ~ ~ T': }1 ~ -.--1. ~ ~ ~ ~~~ ~, 33 ~Sth Ave ~~ s2 '~ ~ ~ ~ I~ ~ ~ ~~ 15 y ' CR-32 ! o SALE 6 o. ['N ~~ ~ d - ~`yl S ~ 65 - tir ~ y R_35 ~~t~ ~ v'`r c SALE 5 ,'-/ __ 169' ~ = Q Bailey ~ __r~T.<-~_ 7 ~ 13 +~ - - ~~ - ~" b. -' ~.;~,,..-' SRLE 3 SUB]ECT R144~~. - -- ~ 22 1-` a '''. EI r ~ L- ' -. ` - I r -... Mississipg~ ................ ........... - ~~ 4 ~ . . . _._, ...,...... SALE 4 ~• SALE 1 -~. .., . Otsego ., ~. ~-~. _ _ ~ _..'.r.._____~~_"'. ~ ~ __ ~.', ~._ z ~ ~9 j'~,. ~ a ,.~~. ._ i q , ~'` th St NE ( ~ 5th St I ~~ _ i ~y `~~ `Rams w NE ~ _• SALE 2 \: ' __!4 °' 0th St NE 19 r ti ~` :~, a.-.. ~:1-. Q z .J ~ y ~ 169 `,` ~•,s ~ SY ~ - Q / ` ~ 37 ~ ~'~'..... U ~ -- -- ~~ ---- ---- 37.42 - ~~~ t7r Co ri M ©:2~04'Nicrosoh Co ..aridlor its su IierssFll ri Ms rese ed. 20 Nagell Appraisal & Consulting ~ 952-544-8966 ~ www.callnagell.com Sales Comparison Approach -- continued COMPARABLE 1 P i 17f'rN AV! Location: 11150 - 179th Avenue NW, Elk River Proximity: '/4 mile south Zoning/Use: Planned Unit Development /Big Box Retail Legal/PID: 75-747-0105 Site SF: 144,619 SF Buyer: AMT Management II, LLC Seller: Assoc. Investors of Elk River & Elk River Business Park Source: CREV, County Unpaid Specials: None reported Terms: N/A-Assumed Cash Equivalency Date of Sale: December 2005 Price: $972,570 Topography/Soil: Mostly level /Assumed average in upland areas Utilities: Available Comments: Currently has good visibility from Highway 169, however, does not have direct frontage. Developed with a Tractor Supply Co. retail store. Unit Price: $6.73 per SF Nagell Appraisal ~ Consulting ~ 952-544-8966 (www.callnagell.com 21 Sales Comparison Approach -- continued COMPARABLE 2 r »ns wve s Location: 17035 Yale Court NW, Elk River Proximity: 1 3/4 miles south Zoning/Use: Planned Unit Development /Financial Institution Legal/PID: 75-786-0110 Site SF: 87,555 SF Buyer: Greater MN Credit Union Seller: Mississippi Ridge, LLC Source: CREV, County Unpaid Specials: None reported Terms: N/A-Assumed Cash Equivalency Date of Sale: March 2007 Price: $755,000 Topography/Soil: Level /Assumed average in upland areas Utilities: Available Comments: Fronts directly on Highway 10. Less new commercial development in immediate area. Developed with a credit union. Unit Price: $8.62 per SF 22 Nagell Appraisal & Consulting (952-544-8966 ~ www.callnagell.com Sales Comparison Approach -- continued COMPARABLE 3 f Leo tr e.aau cre Location: 11175 - 183`d Circle NW, Elk River Proximity: 1 lot north Zoning/Use: Business Park / Abra Auto Body Shop Legal/PID: 75-738-0105 Site SF: 130,680 SF Buyer: Livonia Properties, LLC Seller: N/A Source: County Unpaid Specials: None reported Terms: N/A-Assumed Cash Equivalency Date of Sale: October 2004 Price: $522,720 Topography/Soil: Sloping /Assumed average in upland areas Utilities: Available Comments: Used despite older sale date due to proximity to subject and similar zoning. Not located at a busy intersection- does not have visibility from Hwy 169. Unit Price: $4.00 per SF Nagell Appraisal & Consulting ~ 952-544-8966 ~ www.Callnagell.com 23 Sales Comparison Approach -- continued COMPARABLE 4 Location: 18201 Carson Street, Elk River Proximity: '/4 mile southwest Zoning/Use: C-3, Highway Commercial / 2 Strip Retail Centers Legal/PID: 75-759-0115 & 75-759-0110 Site SF: 178,160 SF Buyer: Elk River 2006, LLC Seller: Carson Business Park, LLC Source: Appraiser's files Unpaid Specials: None reported Terms: Cash Date of Sale: August 2006 Price: $2,120,000 Topography/Soil: Mostly level /Assumed average in upland areas Utilities: Available Comments: Fronts directly on Highway 169. Located across highway from Walmart retail development. Significant amount of frontage on Highway 169. Unit Price: $11.90 per SF 24 Nagell Appraisal & Consulting ~ 952-544-8966 ~ www.callnagell.com Sales Comparison Approach -- continued COMPARABLE 5 a us N~sxw~r to 1NTN AVt ~. Location: 16904 - 198th Avenue, Big Lake Proximity: 7 miles northwest Zoning/Use: B-3, General Business /Medical Clinic Legal/PID: 65-528-0125 & 65-528-130 Site SF: 263,538 SF Buyer: CentraCare Health System Seller: Dynamics Design and Land Co., LLC Source: CREV, Buyer, County Unpaid Specials: None reported Terms: N/A-Assumed Cash Equivalency Date of Sale: November 2006 Price: $1,795,016 Topography/Soil: Mostly level /Assumed average in upland areas Utilities: Available Comments: Fronts directly on Highway 10. Location further from TCMA. Used to bracket subject size. Unit Price: $6.81 per SF Nagell Appraisal & Consulting ~ 952-544-8966 ~ www.callnagell.com 2rJ Sales Comparison Approach -- continued COMPARABLE 6 f yo7Ty AVE ili~71M 4 ~, `tl~ i Location: 16965 Holt Street NW, Elk River Proximity: 2 miles northwest Zoning/Use: Planned Unit Development /Financial Institution Legal/PID: 75-739-0105 Site SF: 54,450 SF Buyer: US Bank National Association Seller: 7040 Lakeland Partners Source: CREV, Plat Systems Unpaid Specials: None reported Terms: N/A-Assumed Cash Equivalency Date of Sale: January 2005 Price: $931,360 Topography/Soil: Mostly level /Assumed average in upland areas Utilities: Available Comments: Fronts directly on Highway 169. Located at a busy intersection. Developed with a US Bank. Unit Price: $17.10 per SF 26 Nagell Appraisal & Consulting ~ 952-544-8966 ~ 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. n parlson rid SUBJECT COMP1 COMP2 COMP3 COMP4 COMP5 COMP6 Address NEC of Line Ave & 181st Ave, EIk River 11150 -179th Avenue NW, Elk River 17035 Yale Court NW, Elk River 11175 -183rd Circle NW, Elk River 18201 Carson Street, EIk River 16904. 198th Avenue, Bi Lake 19695 Holt Street NW, Elk River Proxima Sub'ect 1/4 mile S 1 3/4 miles S 1 lot N 1/4 mile SW 7 miles NW 2 miles NW Terms Market Market Market Market Market Market Market Conditions T ical T ical T ical T ical T ical T ical T ical Date of Sale Current Dec-05 Mar-07 Oct-04 Au -06 Nov-06 Jan-05 Location Good Good Av /Good Av /Good Good Avera a Excellent FrontNis Av /Good Av /Good Good None Excellent Good Excellent Zonin IUse Commercial Bi Box Retail Bank Auto Bod Retail Stri Ctr Clinic Bank Utilities Available Available Available Available Available Available Available Phys Char Wooded/Sloped Mostly Rect Open/Level Irregular Open/Level Mostly Rect Wooded/Sloped Mostly Rect Open/Level Mostly Rect Open/Level Mostly Rect Open/Level Irregular Sale Price N/A $972,570 $755,000 $522,720 $2,120,000 $1,795,016 $931,360 Site Size SF 195,584 144,619 87,555 130,680 178,160 263,538 54,450 Price/SF $6.73 $8.62 $4.00 $11.90 $6.81 $17.10 ADJUSTMENTS Terms Cash E . Conditions Typical MarketAd'. Current 7% 2% 12% 5% 4% 11% Net Ad' 7% 2% 12% 5% 4% 11% Effective $/SF $7.20 $8.80 $4.48 $12.49 57.08 $18.99 Location Good 10% 10% 20% -25% H Fronta a None -10% 20% -20°/ -10% -10% Zonin /Use Commercial 15% Utilities Available Ph sChar Wooded/Slo ed -10% -10% -10% Site Size SF 195,584 -15 % 15% -25 Net Ad 0% -25% 45% -30% 1SYe -60% Ad Unlt 5730 6.Btf E6.50 56.78 56.1lS 57.59 "Slight deviations may exist due to rounding. Discussion of Adjustments Cash equivalency of sale: The impact financing may have had on the sale price, favorable interest rate or term. All of the sales were cash or estimated to be near or at market rates. Conditions of sale: Reflects non-market conditions that may or may not impact the sale price, 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 or lack of market exposure. All comparables considered to have normal market conditions. Market Adjustment: An adjustment of 4% is used to account for appreciation. Nagel) Appraisal & Consulting 1952-544-8966 ~ www.callnagell.com 27 Sales Comparison Approach -continued Location: This adjustment is based on the appraiser's judgment. It takes into consideration surrounding land uses, intended use, neighborhood characteristics and access. Comparables 2, 3 and 5 adjusted for locations with less commercial development and/or further proximity from TCMA. Comparable 6 adjusted for superior location at a busy intersection. Frontage/Visibility: The subject does not front on a highway, but has good visibility. Comparables 2, 4, 5 and 6 adjusted for having more highway frontage while Comparable 3 adjusted for not having highway frontage or visibility. Zoning: Although subject and comparables have different zoning designations, it appears that most of the comparables and subject have the potential to be used for commercial development. However, city indicated that when Comparable 3 was purchased, the zoning was focused more on industrial at the time-adjustment required. Utilities: All comparables considered competing. Physical Characteristics: Shape and topography adjustments reflect the market preference for rectangular and level parcels, which optimize development potential. Comparables 1, 2, 4, 5 and 6 adjusted for having open, level sites requiring little in additional land development costs. However, adjustments for Comparables 1 and 6 are off-site by irregular shaped sites. Site Size: Adjustments recognize smaller parcels of land typically sell for more per SF than larger sites. Comparables 2 and 6 adjusted for smaller site size while Comparable 5 adjusted for larger site size. Conclusion: The comparables used are considered good indicators of value for the subject and are deemed to be the best of available data. Other sales considered were farther, needed more adjustment and/or were more dated. After adjustment, all of the sales are considered to provide a good indication of market value for the subject site. The land sales have an indicated range of $6.50 to $8.15 per SF with an average of $7.46 per SF. All comparables given equal consideration. Therefore, taking into account the above discussion and the overall characteristics of the subject, including size, location and development potential, a value of $7.50 per SF is considered appropriate for the subject site. 195,584 SF x $7.50 per SF = $1,466,880 OPINION OF SITE VALUE: $1,467,000 28 Nagell Appraisal & Consulting ~ 952-544-8966 ~ www.callnagell.com RECONCILIATION Cost Approach Not Applied Income Approach ~ ~ Not Applied Sales Comparison Approach ~ ~ $1,467,000 Since the subject is vacant land, the Cost Approach is not considered appropriate. The Income Approach to value is not applicable in this situation. Very limited rental data of vacant land renders the Income Approach an unreliable indicator. The Direct Sales Comparison Approach to value analyzed recent sales as compared with the characteristics of the subject property. The comparables reflect what a 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 opinion of market value. Conclusion: The Sales Comparison Approach is deemed to be the only reliable indicator of value because it represents the actions of buyers and sellers in the area for competing properties. The derived market value opinion for the subject property as of November 5, 2007 is: FINAL OPINION OF MARKET VALUE: $1,467,000 Final Value reflects "market exposure" time of under 1 year before effective date of appraisal. Changes in the market and/or the building management subsequent to the effective appraisal date could impact the market value of the property. Nagel) Appraisal & Consulting ~ 952-544-8966 (www.callnagell.com 29 TYPE AND DEFINITION OF VALUE This report provides an opinion of market value. 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, 4th Addition. Appraisal Institute ENVIRONMENTAL 8- BUILDING CONDITIONS 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. 30 Nagell Appraisal & Consulting ~ 952-544-8966 ~ www.callnagell.com EXTRAORDINARY ASSUMPTIONS OR HYPOTHETICAL CONDITIONS As stated by USPAP, 2005; Extraordinary Assumption: An assumption, directly related to a specific assignment, which, if found to be false, could alter the appraiser's opinions of conclusions. Value assumes site can be developed with commercial, as indicated by the City-if found to be otherwise, value could differ. No other extraordinary assumptions were made in this appraisal report. Hypothetical Condition: That which is contrary to what exists but is supposed for the purpose of analysis. No hypothetical conditions were made in this appraisal report. ASSUMPTIONS AND LIMITING CONDITIONS 1. The appraiser assumes no responsibility for matters of a legal nature affecting the property appraised or the title thereto, nor does the appraiser 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 appraiser has 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 appraiser is 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. Nagell Appraisal & Consulting ~ 952-544-8966 (www.callnagell.com 31 Assumptions and Limiting Conditions -continued 6. The appraiser assumes that there are no hidden or unapparent conditions of the property, subsoil, or structures, which would render it more or less valuable. The appraiser assumes no responsibility for such conditions, or for engineering, which might be required to discover such factors. 7. Unless otherwise stated in this report, the existence of hazardous material, 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 appraiser, and contained in the report, were obtained from sources considered reliable and believed to be true and correct. However, no responsibility for accuracy of such items furnished to the appraiser can be assumed by the appraiser. 9. Disclosure of the contents of the appraisal report is governed by the Bylaws and Regulations of the professional appraisal organizations with which the appraiser is 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 appraiser. 10. The appraiser has 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 appraiser has no personal interest or bias with respect to the parties involved. 11. The appraiser has personally inspected the subject site. To the best of the appraiser's knowledge and belief, all statements and information in this report are true and correct, and the appraiser has not knowingly withheld any significant information. 12. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, unbiased professional analyses, opinions, and conclusions. My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. 32 Nagell Appraisal & Consulting ~ 952-544-8966 ~ www.callnagell.com Assumptions and Limiting Conditions -continued 13. The Americans with Disabilities Act ("ADA") became effective January 26, 1992. I 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 I have no direct evidence relating to this issue, I did not consider possible non-compliance with the requirements of ADA in estimating the value of the property. 14. As of the date of this report, William R. Waytas has completed the requirements of the continuing education program of the Appraisal Institute. 15. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representative. 16. To the best of my 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. Nagel) Appraisal 8 Consulting ~ 952-54d-8966 (www.caltnagell.com 33 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) I 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) I 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 and the Appraisal Institute. 8) Molly J. Lewis has made a personal inspection of the property that is the subject of this report. William R. Waytas has been by the area (if more than one person signs the report, this certification must clearly specify which individuals did and which individuals did not make a personal inspection of the appraisal property). 9) 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.) 10) No one provided significant professional assistance to the person signing this report. 11) This appraisal assignment was not based on a requested minimum valuation or specific valuation or approval of a loan. 12) In accordance with the competency provision of the USPAP, I have verified that my knowledge, experience and education are sufficient to allow me to competently complete this appraisal. See attached qualifications. Molly J. Lewis William R. Waytas, SRA, CRP Certified General Certified General MN 20391975 MN 4000813 Date: 11/05/2007 Date: 11/05/2007 34 Nagell Appraisal & Consulting ~ 952-544-8966 ~ www.callnagell.com QUALIFICATIONS 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 & Consulting, an independent appraisal firm (8 appraisers) 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 II • Appraisal 103 Introduction to Appraisal Practices I • Appraisal 104 Introduction to Appraisal Practices II • 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 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 Nagell Appraisal & Consulting ~ 952-544-8966 ~ www.callnagell.com 35 CURRICULUM VITAE 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 & Consulting, an independent appraisal firm (8 appraisers) 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/metro area (typically an hour from downtown metro) of Minneapolis/St. Paul, MN. Numerous assignment throughout Minnesota. Professional Membership, Associations 8~ 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. 36 Nagell Appraisal 8 Consulting ~ 952-544-8966 ~ www.callnagell.com Qualifications -continued Committees -- President of Metro/Minnesota Chapter, 2002, Appraisal Institute. -- Chairman of Residential Admissions, Metro/MN Chapter, AI. -- Chairman Residential Candidate Guidance, Metro/Minnesota Chapter, AI. -- Elm Creek Watershed Commission, Medina representative 3 years. 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 8~ 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 -- Yellow Book Seminar (Uniform Appraisal Standards for Federal Land Acquisitions) 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 -- Partial Interest Valuation Divided (Conservation Easements, Historic Preservation Easements, Life Estates, Subsurface Rights, Access Easements, Air Rights, Water Rights, Transferable Development Rights) 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 & AI Nagel) Appraisal & Consulting ~ 952-544-8966 (www.callnagell.com 37 ADDENDA TO APPRAISAL REPORT 3$ Nagell Appraisal & Consulting ~ 952-544-8966 ~ www.callnagefl.com NAGELL ~-EP'R+4[SAL & GONS!lLT1~1G T515 Wayzata Blvd. #1'15 Wilnn~apcsiis: 9i52~44.8~866 Mfnneapofis, N1PJ 55426 St Paul 851.2t19-8159 ~stafa/fsftea fn 'f96& Central Fax 952-5dd-89$9 City of ~Ik River October 18, 2087 Attn: Catherine fvtehefich, t3irectar of laonomic E}eveiiopmettt 13065 C?rono Paekway Elk Diver, Mid 55330 RE: Appraisal of land {yEC of Line Avenue & 189" Avenue, Elk River, MN dear Nis. IUlehelich; Thank you for your interest in obtaining appraisal services regarding the property above. Per our conversation, you indicated an appraisal report with the fallowing research and ana[ysFs is needed. Report UsaiValue Typa: The report use is to assist the airy in detemvning an r~ffer regarding the possible purchase of the property. Current as is market values of the subject property as it relates to highest and best use par Uniform Standards of Professional Appraisal PracEice wiMl be provided, Property Description: A as»maraal sine welch about 4,5 acres owned by the United Sates Post Of1ic~, trontact for access: IVat necessary, -ccrpe +s# Report> (i) An inspection of the property and view the naigh~barhodd. (2j Report the physical andtor economic factors that could affect the property. (3) Appropriate research, oallection, verifica#ian, analyst and viewing of pertiroent market data will be conducted. Since the subject i:s vacant land only the sales c~npartson approach will be applied. (4} Where appropriate, camparables will be adjusted on a grid. (5) Report findings and conclusions. Report Format" A Summary Retsort (narrative format) wiU be used. tt has a summary of s#atements of the data, analysts and conclusions. Appropriate photos, maps and exhibits are indttded. Two beryl capr'es of the report provided, Fee: The fee is Client Warned above is n'SponsiBle fa- payment. Any subsequent report revisionslupgradeslupaates are extra and would be biAed at $l5 per hour. ~tue Oaten report ran be completed by provided signed confim~ation is prompt.. information needed Cay the appraiser at inspectirsn: Already provided. Our txampany has 1U employees and has beery in business since 1968 and has su~cient knowledge, experience, education and resources to competently complete this assignment Neither the employment t4 make the appraisal, nor the ct}mpensation for it, is c3antingent upon the appraised value of the property. If you agree to the above terms, please sign below and realm by fax or mail. if you have arty additw~nal questions, please do not hesitate to contact me. Sincerely, .: ;;: .- _ ~ -y _ ,ter ~,.,. Signatur William R. Waytas, SRA, GRP Certfied General 40008'13, MIV Date /~~-"C~ www.catlna~ell.eam Nagell Appraisal 8 Consulting ~ 952-544-8966 ~ www.callnagell.com 39