appraisal report prepared for mr. miles slattery, …...march 28, 2016 mr. miles slattery, director...
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APPRAISAL REPORT PREPARED FOR
MR. MILES SLATTERY, DIRECTOR
CITY OF EUREKA, PARKS & RECREATION DEPARTMENT 1011 WATERFRONT DRIVE
EUREKA, CALIFORNIA 95501
OF THE
REAL PROPERTY LOCATED AT 2600 N. 6th STREET
EUREKA, HUMBOLDT COUNTY, CALIFORNIA PROJECT: EUREKA WATERFRONT TRAILS
March 28, 2016 Mr. Miles Slattery, Director City of Eureka, Parks & Recreation Department 1011 Waterfront Drive Eureka, CA 95501 Re: Appraisal Report of property located at 2600 N. 6th Street, Eureka Humboldt County,
California Humboldt County APN: 002-252-028 RYAN File No: 216002.JMR
Dear Mr. Slattery; As you requested, we have prepared an appraisal report of the subject property referenced above. The market was researched and pertinent data analyzed to provide a credible and supportable opinion of the market value of the subject property. The fee simple interest is appraised. My opinion of the market value of the subject property in the before condition and the subject property in the after condition being encumbered by the proposed public service easement, are subject to the definitions, underlying assumptions and limiting conditions set forth in this report, based on the analysis of the data contained in this report, and the definition of market value provided in the body of the report as of March 1, 2015 is:
Opinion of Market Value: Before Condition $1,506,305
Opinion of Market Value: After Condition $1,498,661
Difference $7,644
Damages $25,776
Special Benefits $0
Temporary Construction Easement $16,217
Just Compensation / Diminution in Value $49,637
This summary appraisal report is completed in accordance with the reporting requirements set forth under Standards Rule 2-2(a) of the Uniform Standards of Professional Appraisal Practice(USPAP) for an Appraisal Report. This report also conforms to the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. This appraisal does not include any value for any personal property, non-realty items, or FF&E. I have never completed an appraisal on this subject property.
Page 2 Mr. Slattery March 28, 2016 Documentation concerning the data, reasoning, and analysis is maintained in the appraiser’s files. The depth of discussion contained in this report is specific to the intended use of the client. The appraiser is not responsible for unauthorized use of this report. Neither all or any part of the contents contained within this appraisal report, specifically any conclusions to value, the identity of the appraiser, or the firm with which the appraiser was contracted, shall be disseminated to the public through advertising, news, sales, public relations or any other means without prior written approval and consent of the appraiser. The contents of this appraisal report is confidential and the property of RYAN, real estate appraisers and cannot be released by the reader without written permission. John Michael Ryan has completed the Standards and Ethics Education Requirement of the Appraisal Institute for Candidates for Designation. Sincerely,
John Michael Ryan California Certified General No. AG 0036466 Expiration: February 17, 2017
TABLE OF CONTENTS
216002.JMR City of Eureka: Schneider
RYAN Real Estate Appraisers and Consultants [3]
SUMMARY OF SALIENT FACTS ........................................................................ 5
SCOPE OF WORK ............................................................................................... 7
CLIENT ............................................................................................................................ 7 INTENDED USER OF THE REPORT ...................................................................................... 7 INTENDED USE OF THE REPORT ........................................................................................ 7 PROJECT DESCRIPTION/OVERVIEW ................................................................................... 7 APPRAISAL DEVELOPMENT AND REPORTING ...................................................................... 7 DEFINITION OF FAIR MARKET VALUE ................................................................................. 8 PROPERTY RIGHTS APPRAISED ......................................................................................... 9 CASH EQUIVALENCY IN VALUE ESTIMATES ......................................................................... 9 DATE OF INSPECTION ....................................................................................................... 9 DATE OF VALUE ............................................................................................................... 9 DATE OF REPORT ............................................................................................................. 9 EXTRAORDINARY ASSUMPTIONS / HYPOTHETICAL CONDITIONS ........................................... 9 SUBJECT PHOTOS ............................................................................................................ 9
SUBJECT PHOTOS .......................................................................................... 10
AERIAL IMAGE OF LARGER PARCEL WITH APPROXIMATE PARCEL BOUNDARIES ...................11
MARKET AREA MAP ......................................................................................... 12
SUBJECT PROPERTY DATA: BEFORE CONDITION ..................................... 13
LOCATION OF PROPERTY .................................................................................................13 DESCRIPTION OF SUBJECT PROPERTY: LARGER PARCEL ...................................................13 OWNER OF THE PROPERTY ..............................................................................................13 SALE HISTORY OF THE SUBJECT PROPERTY .....................................................................13 ZONING ..........................................................................................................................13 PROPERTY TAXES ...........................................................................................................13 ALQUIST-PRIOLO SPECIAL STUDIES ZONE ........................................................................13
LARGER PARCEL: BEFORE CONDITION ....................................................... 14
ASSESSOR PARCEL MAP ................................................................................ 16
PROJECT MAP: 002-252-028 ............................................................................ 17
TCE MAP: 002-252-028 ...................................................................................... 18
ZONING MAP ..................................................................................................... 19
FLOOD MAP ....................................................................................................... 20
AERIAL IMAGE .................................................................................................. 21
HIGHEST AND BEST USE ................................................................................. 22
HIGHEST AND BEST USE DEFINITION ................................................................................22 HIGHEST AND BEST USE AS IF VACANT .............................................................................22
216002.JMR City of Eureka: Schneider
RYAN Real Estate Appraisers and Consultants [4]
HIGHEST AND BEST USE AS IMPROVED .............................................................................22
SALES COMPARISON APPROACH TO VALUE .............................................. 23
SALES SUMMARY TABLE ..................................................................................................24 COMPARABLE SALES LOCATION MAP ...............................................................................25 COMPARABLE LAND SALE NO. 1 .......................................................................................26 COMPARABLE LAND SALE NO. 2 .......................................................................................27 COMPARABLE LAND SALE NO. 3 .......................................................................................28 COMPARABLE LAND SALE NO. 4 .......................................................................................29 COMPARABLE LAND SALE NO. 5 .......................................................................................30 PROPERTY RIGHTS .........................................................................................................31 FINANCING ......................................................................................................................31 CONDITIONS OF SALE ......................................................................................................31 MARKET CONDITIONS ......................................................................................................31 LOCATION .......................................................................................................................31 ACCESS ..........................................................................................................................31 SIZE ...............................................................................................................................31 ELECTRICAL AND PHONE UTILITIES ...................................................................................31 VALUE CONCLUSIONS & RECONCILIATION: BEFORE CONDITION .........................................33
LARGER PARCEL: AFTER CONDITION .......................................................... 34
VALUE CONCLUSIONS: AFTER CONDITION ........................................................................35 TEMPORARY CONSTRUCTION EASEMENT (TCE) ANALYSIS ................................................36 CONSTRUCTION CONTRACT WORK...................................................................................37 FINAL CONCLUSIONS AND JUST COMPENSATION ESTIMATES .............................................37
ADDENDA .......................................................................................................... 38
GRANT DEED ..................................................................................................................39 UNDERLYING ASSUMPTIONS AND LIMITING CONDITIONS ....................................................41 APPRAISER QUALIFICATIONS FOR JOHN MICHAEL RYAN ....................................................43 APPRAISER LICENSE FOR JOHN RYAN ..............................................................................44 CERTIFICATION ...............................................................................................................45
216002.JMR City of Eureka: Schneider
RYAN Real Estate Appraisers and Consultants [5]
SUMMARY OF SALIENT FACTS Schneider Property / Shoreline RV Park
Eureka, Humboldt County, California
VALUATION SUMMARY Value of Total Parcel: Before Condition Value $1,506,305
Value of Remainder Parcel: After Condition Value $1,498,661
DIFFERENCE $7,644
Damages to Remainder: $25,776
Special Benefits: $0
Temporary Construction Easement $16,217
JUST COMPENSATION $49,637
HIGHEST AND BEST USE As Vacant: Before Condition Hold until demand warrants commercial development
As Vacant: After Condition Same as before condition
Project Name Eureka Waterfront Trails Project
Location 2600 N. 6th Street Portion of Section 23 Township 5 North, Range 1 West
Project Parcel Humboldt County APN: 002-252-028: 4.94 Acres Source:(Humboldt County GIS)
Larger Parcel The subject property(larger parcel) that will be impacted by the
proposed project includes a single parcel. The larger parcel tests of contiguity, unity of ownership, and highest and best use were applied to arrive at our conclusion for the larger parcel. Land Area: 4.94 Acres Source:(Humboldt County GIS)
Size of Acquisition / Take Area According to the legal description provided, the area to be acquired
for the proposed trail easement is approximately 0.03 acres / 1,092 square feet. Please refer to the addenda of this report for a legal description of the take area. A map of the area and the engineering map depicting the trail location is included in the body of the report.
Larger Parcel: Before Condition 4.94 acres / 215,186 square feet Larger Parcel: After Condition 4.91 acres / 214,094 square feet Temporary Construction Easements: Approximately 46,335 square feet will be encumbered for the
construction. The client has estimated that the construction window will be approximately (6) six months. 002-252-028: TCE = 46,335 square feet
Improvements: The subject property is improved to an RV Park. Improvements
include the pad sites for guests, utility infrastructure, and a small office for operations and guest check-in.
216002.JMR City of Eureka: Schneider
RYAN Real Estate Appraisers and Consultants [6]
Zoning: CS: Service Commercial The property is also located in the coastal zone. A detailed discussion of the zoning will be provided in our Highest and Best Use analysis. Agency of Jurisdiction: City of Eureka
Land Use: The land area needed for the project is finished with some
landscaping and lawn area but is otherwise unimproved. Flood Plain: It appears that portions of the subject property are located in Zone
A, 100 Year flood areas. The base flood elevations have not been determined for this area of Humboldt County. FEMA FIRM: 060 062 0005C dated June 17, 1986
Date of Inspection: March 1, 2016 Date of Valuation: March 1, 2016 Date of Report: March 28, 2016 Property Rights Appraised: Fee Simple in the Before Condition and After Condition Appraiser: John Michael Ryan
ECT PHOTOGRAPHS
216002.JMR City of Eureka: Schneider
RYAN Real Estate Appraisers and Consultants [7]
SCOPE OF WORK CLIENT The client is the City of Eureka.
INTENDED USER OF THE REPORT The intended users of this report is Mr. Miles Slattery, Director of Parks and Recreation.
INTENDED USE OF THE REPORT The intended use of the report is to assist the client and intended user in establishing market value of the subject property for the purpose of acquiring a portion of the larger parcel for a public works project, specifically the construction of, and the expansion of a community trail system. The City of Eureka will be acquiring an easement on the subject property.
PROJECT DESCRIPTION/OVERVIEW With a tentative completion date of 2018, The Eureka Waterfront Trail will offer members of the community the opportunity to walk, bike or run from one end of the city to the other. The Eureka Waterfront Trail will be divided up into four phases, which when connected, will make up the 6.3 mile contiguous trail. 1.
1. http://ci.eureka.ca.gov/depts/pnr/trails/default.asp
APPRAISAL DEVELOPMENT AND REPORTING The process of appraisal development began with an inspection of the subject property. The property was inspected by the signing appraiser on foot with an attempt to locate the property boundaries. Physical characteristics and natural boundaries provided the appraiser with approximate locations of the property corners though no official monuments were located. The appraiser also inspected the surrounding properties to identify and better understand the market area. We next obtained data specific to the subject properties including zoning information, flood plain data, aerial photographs, topographical maps and agency jurisdiction to begin the process of determining the highest and best use of the subject property. Our search for sales data included vacant commercial properties as the zoning for the subject property is Service Commercial. The subject property is improved to an RV Park just east of Highway 101 and adjacent to the Eureka Slough. No spaces will be lost in the after condition but three spaces will be impacted during the construction which will result in a loss of rent for the duration of the construction period. Recent activity in this area of Western Humboldt County provided the appraiser with sufficient data to arrive at a value conclusion for the subject properties in the as-is (BEFORE) condition. The appraiser utilized Humboldt County MLS, as well as Parcel Quest for any sale information that may have been unavailable through the MLS. The deed for every sale was obtained and analyzed and in every case, either the buyer or seller were contacted to verify the specifics of the sale transactions. Using the sale data obtained in the market place, we compared the subject properties to the sale properties having the physical characteristics most similar to the subject property in the before condition including a similar highest and best use. The area that will be encumbered by the public service easement will include only bare land which is why we have employed only the sales
216002.JMR City of Eureka: Schneider
RYAN Real Estate Appraisers and Consultants [8]
comparison approach. The cost approach is not applicable as the subject property has no improvements in the take area. The appraisal problem associated with this assignment is threefold. We first will estimate the market value of the subject property in the before condition. We will measure the effect of the proposed public service easement on the subject to estimate the value of the subject property in the after condition. The difference between the market value of the subject property in the before and after condition represents the value diminution to the property encumbered by the trail easement.
John Ryan performed all of the above steps; the appraisal development process included:
inspection of the subject properties and collection of necessary data including zoning classification, inclusion in flood zone, topography, availability of utilities, access, and linkage;
gathering information by inspecting the subject’s neighborhood;
selecting comparable sales of vacant land and confirming pertinent information;
analyzing all information collected through application of the sales comparison approach to value;
reconciling to concise conclusion the estimated highest and best use, and the market value estimates;
set forth the conclusions in a report format for the client’s particular needs.
DEFINITION OF FAIR MARKET VALUE
The definition of Market Value used in this report is from the California Code of Civil Procedure, section 1263.320:
(a) The fair market value of the property taken is the highest price on the date of valuation that would be agreed to by a seller, being willing to sell but under no particular or urgent necessity for so doing, nor obliged to sell, and a buyer, being ready, willing, and able to buy but under no particular necessity for so doing, each dealing with the other with full knowledge of all the uses and purposes for which the property is reasonably adaptable and available.
216002.JMR City of Eureka: Schneider
RYAN Real Estate Appraisers and Consultants [9]
PROPERTY RIGHTS APPRAISED We appraised the fee simple interest in the subject property. The Dictionary of Real Estate Appraisal, 4th Edition defines fee simple estate 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.”
CASH EQUIVALENCY IN VALUE ESTIMATES The market value of the subject property is reported in many ways: (1) cash, (2) terms of financial arrangement equivalent to cash, or (3) other precisely defined terms. Our value estimate assumes terms of financial arrangements equivalent to cash. Adjusting for odd financing varying from cash equivalency is completed when necessary. Cash equivalency analysis is: “A price expressed in terms of cash, as distinguished from a price expressed totally or partly in terms of the face amounts of notes or other securities that cannot be sold at their face amounts.
DATE OF INSPECTION March 1, 2016
DATE OF VALUE March 1, 2016
DATE OF REPORT March 28, 2016
EXTRAORDINARY ASSUMPTIONS / HYPOTHETICAL CONDITIONS None
SUBJECT PHOTOS The subject property photographs were taken by the signing appraiser on the day of inspection.
216002.JMR City of Eureka: Schneider
RYAN Real Estate Appraisers and Consultants [10]
SUBJECT
PHOTOS
Entrance to subject property from 6th Street
Parcel One: Take Area
Parcel Two: Take Area
Approximate Area of Temporary Construction Easement
Approximate Area of Temporary Construction Easement
Park Overview
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AERIAL IMAGE OF LARGER PARCEL WITH APPROXIMATE PARCEL BOUNDARIES
216002.JMR City of Eureka: Schneider
RYAN Real Estate Appraisers and Consultants [12]
MARKET AREA MAP
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SUBJECT PROPERTY DATA: BEFORE CONDITION
LOCATION OF PROPERTY The subject property is located in the City of Eureka at 2600 N. 6th Street, just east of US Highway 101. Paved access is available to the subject property from US Highway 101 to N. 6th Street or V Street to N. 6th Street.
DESCRIPTION OF SUBJECT PROPERTY: LARGER PARCEL The project parcel is a single parcel, Humboldt County APN 002-252-028. A complete legal description of the larger parcel is included in the addenda of the report as exhibit to the Grant Deed.
OWNER OF THE PROPERTY According to the Humboldt County Assessor, the property is vested to Travis Schneider.
SALE HISTORY OF THE SUBJECT PROPERTY The subject property has been under the current ownership since at least 2007. According to the most recent Grand Deed, the transfer price from Shoreline RV Park to Travis Schneider was $550,000.
ZONING The zoning for the subject property is CS – Service Commercial. The property is also with the coastal zone.
PROPERTY TAXES In 1978, California voters passed the Jarvis-Gann Amendment, Proposition 13. Under Proposition 13, all parcels were effectively reappraised to 1975 base year market values. If the property is transferred to a new owner or substantially altered through remodeling or addition, it is reappraised at market value. Otherwise, the original 1975 market values can be increased only approximately two percent per year. There are no unusual bonds affecting the subject property.
TAXES AND ASSESSMENTS 2015-2016
APN Assessed Values Tax Rate Real Estate Taxes Delinquencies
002-252-028 Land $578,564
Improvements $596,092 1.12% $13,144.40 $0
The property taxes for the subject include the following special assessments
1. CR 2005/2007 GO Bonds 2. Eureka Unified HS 2002 GO Bonds 3. Eureka Unified SD 2015 GO Bonds 4. Eureka Unified Elementary 2002 GO Bonds
ALQUIST-PRIOLO SPECIAL STUDIES ZONE According to Humboldt County GIS, the subject property is not located in a defined fault zone.
216002.JMR City of Eureka: Schneider
RYAN Real Estate Appraisers and Consultants [14]
LARGER PARCEL: BEFORE CONDITION Land Area: The land area of the larger parcel comprises 4.94 acres
Source: Humboldt County Assessor
Take Area:
APN TAKE AREA TCE
002-252-028 1,092 square feet 46,335 square feet Source: Engineering maps provided by Gutierrez Land Surveying
Shape: The larger parcel includes only a single parcel and is
irregular in shape. Please refer to the aerial image for an illustration of the shape
Access: Paved access is available to the subject property from US
Highway 101 to N. 6th Street or V Street to N. 6th Street. Terrain: The subject property is at road grade. Utilities:
UTILITY SERVICE PROVIDER Electricity Pacific Gas & Electric
Water City of Eureka
Sewer City of Eureka
Natural Gas Pacific Gas & Electric
Easements/Encumbrances: The appraiser was not provided a Preliminary Title
Report. We assume there are no easements or encumbrances that would affect the marketability or market value of the subject property.
216002.JMR City of Eureka: Schneider
RYAN Real Estate Appraisers and Consultants [15]
Soil and Subsoil: We were not provided soil reports. We assume that there are no hidden conditions of the soil or subsoil, which would affect valuation of the property. We assume no responsibility for such conditions or for engineering required to discover such factors. We assume the load bearing qualities of the soil are adequate for the subject's highest and best use. Neither the individual completing this inspection nor Ryan Appraisals has any liability for the identification of environmental concerns except as defined in applicable industry standards.
Hazardous Waste/Contamination: There is no indication of any hazardous waste or
hazardous material that was apparent from our inspection. The appraiser invokes an extraordinary assumption that the property is free from any hazardous or toxic materials.
.
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ASSESSOR PARCEL MAP
216002.JMR City of Eureka: Schneider
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PROJECT MAP: 002-252-028
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TCE MAP: 002-252-028
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ZONING MAP
CS: Service Commercial
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FLOOD MAP
The red arrow is the approximate location of the subject property.
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AERIAL IMAGE
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HIGHEST AND BEST USE
HIGHEST AND BEST USE DEFINITION
“The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum productivity.”
The definition above applies to the highest and best use of the land. Where a site has existing improvements on it, the highest and best use may very well be determined to be different from the existing use. Existing use as improved will continue unless vacant land value minus improvement demolition cost (or in some cases building conversion; or addition cost) exceeds the fee simple interest estimated market value of the property in its existing “as is” condition. Current Use of Subject Property: RV Park The zoning classification for the subject property is SC – Service Commercial. The legally permissible uses are numerous but generally allow for many commercial uses including some industrial uses that may not be appropriate in commercial areas. The current use is an allowable use in the SC zone with a conditional use permit. The land is mostly flat with all public utilities extended making most legally permissible uses physically possible. The issue with the site today is financially feasibility. There have been very few land sales in the area and even fewer new projects that have broken ground. A review of new commercial building permits in the City of Eureka was reviewed for the past 24 months. There has been very little new commercial development in this area of Eureka in that time period. Based on the dearth of land sales and the absence of any significant new commercial development, it is unlikely that any large scale commercial development that would maximize the use of this highway frontage site is feasible.
HIGHEST AND BEST USE AS IF VACANT We estimate the highest and best use of the subject property under current market conditions to be to hold the property vacant until demand warrants new commercial development.
HIGHEST AND BEST USE AS IMPROVED We estimate the highest and best use of the subject property as improved is for the continued use as an RV Park.
216002.JMR City of Eureka: Schneider
RYAN Real Estate Appraisers and Consultants [23]
SALES COMPARISON APPROACH TO VALUE Employment of the Sales Comparison Approach is the preferred method to value land when sales of vacant land are available. The principal of substitution is the basic concept behind the Sales Comparison Approach, and in effect means: market participants will pay no more for a parcel of land than the lowest priced property with similar characteristics offering the same benefits with the market place. Most often, the analysis is performed using units of comparison common to both sales and subject; likewise, adjustments are made to elements of comparison inherent in both. A few examples of units of comparison are price per square foot, price per acre, price per front foot, and price per lot. The elements of comparison often requiring adjustments are for condition of sale, market conditions or date of sale, availability of utilities, and physical characteristics (such as location, topography, and physical condition of improvements). Data provided on the following pages include a sales summary table, detailed data sheets, and a location map.
216002.JMR City of Eureka: Schneider
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SALES SUMMARY TABLE
APN / LOCATION / IDENTIFICATION
Sale Date Sale Price LAND AREA
ACRES / SQUARE FT SALE PRICE
SQUARE FOOT UTILITIES TOPOGRAPHY ZONING SHAPE
N. 6th Street 03-16-2007 $550,000 4.94 / 215,186 All Public Road Grade SC - Service Commercial Irregular
1 Waterfront & Marina Drive: 12-31-2012 $252,000 5.09 / 221,720 $1.14 All Public Mostly Flat MC – Coastal Dep. Indust Irregular
2 11th & M Street: Arcata 06-24-2013 $250,000 1.06 / 46,174 $5.41 All Public Mostly Flat IL: Industrial - Limited Irregular
3 Sunset Blvd. Arcata 02-18-2014 $850,000 2.55 / 111,077 $7.65 All Public Mostly Flat PF: Public Facilities Irregular
4 Vance Avenue: Samoa 06-20-2014 $430,000 22.00 / 958,320 $0.45 Water-Power Mostly Flat MC – Coastal Dep. Indust Irregular
5 Sunset Drive: Eureka 02-26-2013 $1,200,000 9.29 / 404,672 $2.97 Need to be Extended Mostly Flat PF- IL Irregular
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COMPARABLE SALES LOCATION MAP
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COMPARABLE LAND SALE NO. 1
Photographer John Ryan
Date Taken 11-1-2015
Camera Angle Facing northwest
Location Waterfront Drive
Location: Waterfront Drive & Marina Way APN: 003-062-021
City: Eureka County: Humboldt
State: California Land Type / Use: Vacant land
Grantor: City of Eureka
Grantee: Schneider Sale Instrument: Grant Deed
Date of Sale: 12-31-2012 Document No.: 2012-31474
Gross Square Feet: 221,720 Transfer Tax: Not Disclosed
Access: Paved Zoning: MC- Coastal Dependent Industrial
Utilities: Public Water - Power Topography: Mostly Flat
Gross Sale Price: $252,000 Unit Price\square foot: $1.14
Financing: Cash to seller
Conditions of Sale: Normal
Highest and Best Use: Industrial Development
Remarks: This property is the transfer of the fee interest of the property that is encumbered by the Dock “B” Access Road. The purchase price was agreed upon after an appraisal by John Brooks. The seller, City of Eureka, retained the easement for access to Dock B on Marina Way. Access to Dock B is also available to the north of this sale property from Waterfront Drive. The property was under City of Eureka ownership for greater than 15 years.
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COMPARABLE LAND SALE NO. 2
Photographer John Ryan
Date Taken 11-1-2015
Camera Angle Facing northwest
Location Corner of 11th & M
Location: 11th Street & M Street APN: 020-128-002
City: Arcata County: Humboldt
State: California Land Type / Use: Vacant land
Grantor: Arcata Volunteer Fire Department
Grantee: Kevin McKenney Sale Instrument: Grant Deed
Date of Sale: 06-24-2013 Document No.: 2013-18042 & 18043
Gross Square Feet: 46,174 Transfer Tax: $275.00
Access: Paved Zoning: IL: Industrial - Limited
Utilities: All public utilities available Topography: Mostly Flat
Gross Sale Price: $250,000 Unit Price\square foot: $5.41
Financing: Cash to seller
Conditions of Sale: Normal
Highest and Best Use: Service Commercial
Remarks: This property is located in Arcata and has all public utilities available to the property boundary. The topography is mostly flat and would require very little grading before development. As well, the frontage along 11th Street is fully improved. The property is considerably smaller than the subject and in area that is almost 90% developed with other service commercial and light industrial uses.
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COMPARABLE LAND SALE NO. 3
Photographer John Ryan
Date Taken 11-1-2015
Camera Angle Facing west
Location Sunset Avenue
Location: Sunset Avenue & Jay Street APN: 505-121-030
City: Arcata County: Humboldt
State: California Land Type / Use: Vacant land
Grantor: Arcata Volunteer Fire Department
Grantee: Open Door Community Health Sale Instrument: Grant Deed
Date of Sale: 02-11-2014 Document No.: 2014-02979
Gross Square Feet: 111,078 Transfer Tax: $935.00
Access: Paved Zoning: PF: Public Facilities
Utilities: All public utilities available Topography: Mostly Flat
Gross Sale Price: $850,000 Unit Price\square foot: $7.65
Financing: Cash to seller
Conditions of Sale: Normal
Highest and Best Use: Residential
COMMENT: This property is located on Sunset Avenue near the intersection with Jay Street. The surrounding improvements to the north are primarily single family residences in average to below average condition but the property is proximate to Humboldt State University and ingress/egress from State Highway 101 is less than 1/8 mile away. Given the proximity to US 101, Humboldt State University, and the commercial core of Arcata, the property is ranked as slightly superior to the subject property.
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COMPARABLE LAND SALE NO. 4
Photographer John Ryan
Date Taken Aerial Photo
Camera Angle
Location
Location: Vance Avenue APN: 401-122-004-005
City: Samoa County: Humboldt
State: California Land Type / Use: Vacant land
Grantor: Freshwater LLC
Grantee: Schneider Sale Instrument: Grant Deed
Date of Sale: 06-14-2014 Document No.: 2014-10694
Gross Square Feet: 958,320 Usable Transfer Tax: Not Disclosed
Access: Paved Zoning: MC- Same as Subject
Utilities: Water-Power Topography: Mostly Flat
Gross Sale Price: $430,000 Unit Price\square foot: $0.45
Financing: Cash to seller
Conditions of Sale: Normal
Highest and Best Use: Industrial Development
COMMENT: This property is located on Vance Avenue in Samoa. The entire sale included two parcels comprising 24 acres of which only 22 are usable. Access is paved to the property boundary but given the lack of utility infrastructure, this property is inferior to the subject property. It appears this property may have also transferred in 2008 but the specifics of the transaction could not be verified.
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COMPARABLE LAND SALE NO. 5
Photographer John Ryan
Date Taken 12-31-2015
Camera Angle Facing north
Location Sunset Drive
Location: Sunset Drive APN: 019-341-005
City: Eureka County: Humboldt
State: California Land Type / Use: Brewery
Grantor: Roman Catholic Church
Grantee: Red House Fandango LLC Sale Instrument: Grant Deed
Date of Sale: 02-26-2013 Document No.: 2013-4110
Gross Square Feet: 404,672 Transfer Tax: $1,320.00
Access: Paved Zoning: PF: Public Facilities
Utilities: Available but not extended Topography: Mostly Flat
Gross Sale Price: $1,200,000 Unit Price\square foot: $2.96
Financing: Cash to seller
Conditions of Sale: Normal
Highest and Best Use: Industrial Development
COMMENT: This property is located on Sunset Drive just east of South State Highway 101 toward the southern end of Eureka. The property was purchased by Lost Coast Brewing for the construction of a new brewery. Utilities were available but had to be extended up Sunset Drive.
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PROPERTY RIGHTS All comparable properties involved the transfer of the fee simple interest and no adjustments are required for property rights.
FINANCING Owner financed transactions are not uncommon for rural properties, however all of the comparable sales were all cash transactions. There is no adjustment necessary for atypical financing.
CONDITIONS OF SALE All of the sale properties included in the data set were reportedly arms-length transactions with no unusual terms or conditions.
MARKET CONDITIONS Market conditions for most types of industrial real estate peaked in 2006 and had been on a downward trend locally and regionally through 2012. A very slight but measurable recovery was observed in 2014 but 2016 has brought some additional uncertainty. We found no true pairings in our dataset that would provide any indication to support a market condition adjustments.
LOCATION The subject property is located in Eureka on the Northern California Coast in Western Humboldt County. All of the comparable properties selected are also located in Western Humboldt County. A qualitative ranking will be assigned to each comparable property.
ACCESS The subject property along with all comparable properties have paved access.
SIZE The subject property (Larger Parcel) comprises 4.94 acres. The sale properties identified for analysis range in size from approximately 1.06 acres to 24 acres. Qualitative adjustments will be made for size.
ELECTRICAL AND PHONE UTILITIES With the exception of Sale Property No. 4, all of the comparable sales as well as the subject property have all public utilities extended to, or available at the property boundary.
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Qualitative Adjustment Grid
Sale 1 Sale 2 Sale 3 Sale 4 Sale 5
Location Waterfront & Marina 11th & M – Arcata Sunset & Jay - Arcata Vance – Samoa Sunset Drive
Date of Sale 12-31-2012 06-24-2013 02-18-2014 06-20-2014 02-26-2013
Sale Price $252,000 $250,000 $850,000 $430,000 $2,200,000
Size- Square Feet 221,720 46,174 111,077 958,320 404,672
Sale Price / SF $1.14 $5.41 $7.65 $0.45 $2.97
LOCATION Slightly Superior Inferior Superior Inferior Inferior
UTILITIES Similar Similar Similar Inferior Inferior
DEVELOPMENT POTENTIAL Inferior Similar Superior Inferior Similar
SHAPE Superior Similar Similar Superior Similar
SIZE Similar Superior Superior Inferior Inferior
COASTAL INFLUENCE Superior Inferior Inferior Superior Inferior
OVERALL COMPARISON INFERIOR SLIGHTLY INFERIOR SLIGHTLY SUPERIOR INFERIOR INFERIOR
216002.JMR City of Eureka: Schneider
RYAN Real Estate Appraisers and Consultants [33]
VALUE CONCLUSIONS & RECONCILIATION: BEFORE CONDITION We identified five comparable properties to use for analysis in estimating the market value of subject property. The highest and best use of the subject property was concluded to be for the continued use as improved to the RV Park. Sale Property No. 1 is located southwest of the subject property and while similar in size, the property is inferior in development potential given the industrial zoning. Sale No. 2 is considerably smaller and likely has a different highest and best use. This property is located in an area that is developed primarily to automotive and service commercial uses and is therefore ranked as slightly inferior to the subject property. Sale Property No. 4 is significantly larger in size. The property is also inferior in location as well as being inferior with respect to utility infrastructure. Sale Property No. 5 is inferior in size and location. The property is located just east of State Highway 101 but has no visibility or exposure from the highway. Sale Property No. 3 provides the best evidence of value for the subject property. The property is well located proximate to Humboldt State University and although smaller than the subject property, this property is proximate to State Highway 101. The property is most similar to the subject property but is still ranked as slightly superior. Given the available data and our analysis of that data, we estimate the value of the subject property in the before condition by the sales comparison approach, placing primary weight on Sale Property No. 3 to be as follows:
215,186 square feet @ $7.00 per square foot = $1,506,305
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RYAN Real Estate Appraisers and Consultants [34]
LARGER PARCEL: AFTER CONDITION Land Area: The land area of the larger parcel comprises 4.91 acres Shape: No Change from Before Condition
Access: No Change from Before Condition
Terrain: No Change from Before Condition
Utilities:
UTILITY SERVICE PROVIDER Electricity Pacific Gas & Electric
Water City of Eureka
Sewer City of Eureka
Natural Gas Pacific Gas & Electric
Vegetation: No Change from Before Condition
Easements/Encumbrances: The property will be encumbered by the proposed trail
Soil and Subsoil: No Change from Before Condition
Hazardous Waste/Contamination: No Change from Before Condition
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VALUE CONCLUSIONS: AFTER CONDITION
BEFORE CONDITION VALUATION
215,186 square feet @ $7.00 per square foot $1,506,305
BEFORE CONDITION VALUATION (TAKE AREA: 1,092 square feet)
214,094 square feet @ $7.00 per square foot $1,498,661
Just Compensation / Diminution in Value $7,644
216002.JMR City of Eureka: Schneider
RYAN Real Estate Appraisers and Consultants [36]
TEMPORARY CONSTRUCTION EASEMENT (TCE) ANALYSIS The area impacted by the TCE will be used for staging equipment and temporary storage of construction materials for use in the construction of the proposed trail. According to the client, the TCE will be for a period of six months and will only encumber the surface area. As explained in our scope of work, the proposed TCE area comprises 46,335 square feet. The City of Eureka acquired an easement for the proposed trail in 2005 which will be adjacent to the TCE. The existing area that was previously acquired cannot be used for construction. Comparable rental data for vacant land in the area is scarce. Since ascribing a market rent to the subject as a whole by capitalizing the land value is recognized as an appropriate method, the appraiser employed this technique to estimate just compensation for the TCE. As no rental data was available, we have elected to capitalize potential rental income to estimate value. Using a capitalization rate of 10% and our opinion of land value for the area required for the TCE, a market rent for the entire property is calculated below. The rent is then allocated to the land area necessary for construction staging over a 6 month period.
Land Area 46,335 square feet
Opinion of Market Value @$7.00 per sf $324,345
Capitalization Rate 10%
Indicated Annual Market Rent for Whole $32,435
Market Rent of TCE Area for 6 months $16,217
Improvements in the Take Area: None $0
Estimated Just Compensation for Temporary Construction Easement
$16,217
For this particular project, the TCE does not negatively impact the Highest and Best Use of the site but does encroach on three RV spaces. In addition to the compensation due to the property owner for land rent, there will be lost revenue for these three RV spaces. Using a space rent of $46.95 per night, we have calculated the rent loss due to the construction window of the project. The appraiser was not provided any income or expense information. Based on data obtained from the company website, we have estimated the lost income as follows.
Space Rent $46.95
Space Rent for (1) Month @ $46.95 per night $1,432
Monthly Rent for (3) spaces $4,296
Rent loss for (3) spaces for 6 Months $25,776
Damages due to Lost Income
$25,776
216002.JMR City of Eureka: Schneider
RYAN Real Estate Appraisers and Consultants [37]
CONSTRUCTION CONTRACT WORK There is some potential for the need to remove portions of an existing fence between the project area and the location of the Temporary Construction Easement. The City of Eureka indicated to the signing appraiser that any costs associated with fence removal or repair would be absorbed by the city. No costs were provided to the signing appraiser for this potential CCW item.
FINAL CONCLUSIONS AND JUST COMPENSATION ESTIMATES The value conclusions and estimates of just compensation are based on the most recent data available to the appraiser in the market place. The project requires 1,092 square feet for the project trail. The construction easement will encumber 46,335 square feet of land area for a period of six months. The 1,092 square foot take area will be entirely encumbered by the trail. While the City of Eureka is only acquiring an easement, the effect is a 100% taking as the property in the after condition will be unavailable for commercial development. As such, we have awarded the property owner the full fee value of the take area. As well, three spaces in the RV Park will be un-rentable during the six month construction project. This loss in revenue is shown as damages below. A summary table illustrating these conclusions is shown below.
Opinion of Market Value: Before Condition $1,506,305
Opinion of Market Value: After Condition $1,498,661
Difference $7,644
Damages $25,776
Special Benefits $0
Temporary Construction Easement $16,217
Just Compensation / Diminution in Value ROUNDED) $49,637
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ADDENDA
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GRANT DEED
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UNDERLYING ASSUMPTIONS AND LIMITING CONDITIONS
1. This report was written to comply with Standard Rule 2-2(a) of the Uniform Standards of Professional Appraisal Practice for an appraisal report. As such, it might not include full discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraiser’s opinion of value. Supporting documentation concerning the data, reasoning, and analyses is retained in the appraiser’s file. The information contained in this report is specific to the needs of the client and for the intended use stated in this report. The appraiser is not responsible for unauthorized use of this report.
2. No responsibility is assumed for legal or title considerations. Title to the property is assumed to be
good and marketable unless otherwise stated in this report. 3. The property is appraised free and clear of any and all liens and encumbrances unless otherwise
stated in this report. 4. Responsible ownership and competent property management are assumed unless otherwise
stated in this report. 5. The information furnished by others is believed to be reliable. However, no warranty is given for
its accuracy. 6. All engineering is assumed to be correct. Any plot plans and illustrative material in this report are
included only to assist the reader is visualizing the property. 7. It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or
structures that render it more or less valuable. No responsibility is assumed for such conditions or for arranging for engineering studies that may be required to discover them.
8. It is assumed that there is full compliance with all applicable federal, state, and local environmental
regulations and laws unless otherwise stated in this report.
9. It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless a nonconformity has been stated, defined, and considered in this appraisal report.
10. It is assumed that all required licenses, certificates of occupancy or other legislative or
administrative authority from any local, state, or national governmental or private entity or organization have been or can be obtained or renewed for any use on which the value estimates contained in this report are based.
11. Any sketch in this report may show approximate dimensions and is included to assist the reader in
visualizing the property. Maps and exhibits found in this report are provided for reader reference only. No guarantee as to accuracy is expressed or implied unless otherwise stated in this report. No survey has been made for the purpose of this report.
12. It is assumed that the utilization of the land and improvements are within the boundaries or property
lines of the property described, and that there is no encroachment or trespass unless otherwise stated in this report.
13. The appraiser is not qualified to detect hazardous waste and/or toxic materials. Any comment by
the appraiser that might suggest the possibility of the presence of such substances should not be taken as confirmation of the presence of hazardous waste and/or toxic materials. Such determination would require investigation by a qualified expert in the field of environmental assessment. The presence of substances such as asbestos, urea-formaldehyde, foam insulation,
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or other potentially hazardous materials may affect the value of the property. The appraiser’s value estimate is predicated on the assumption that there are no such materials on or in the property that would cause a loss in value unless otherwise stated in this report. No responsibility is assumed for any environmental conditions, or for any expertise or engineering knowledge required to discover them. The appraiser’s descriptions and resulting comments are the result of the routine observations made during the appraisal process unless otherwise stated in this report, the subject property is appraised without a specific compliance survey having been conducted to determine if the property is or is not in conformance with the requirements of the Americans With Disabilities Act. The presence of architectural and communications barriers that are structural in nature that would restrict access by disabled individuals may adversely affect the property’s value, marketability, or utility.
14. Any proposed improvements are assumed to be completed in good workmanlike manner in
accordance with the submitted plans and specifications. 15. The distribution, if any, of the total valuation in this report between land and improvements applies
only under the stated program of utilization. The separate allocations for land and buildings must not be used in conjunction with any other appraisal and are invalid if so used.
16. Possession of this report, or a copy thereof, does not carry with it the right of publication. It may
not be used for any purpose by any person other than the party to whom it is addressed without the written consent of the appraiser, and in any event, only properly written qualification and only in its entirety.
17. Neither all nor any part of the contents of this report (especially any conclusions as to value, the
identity of the appraiser, or the firm with which the appraiser is connected) shall be disseminated to the public through advertising, public relations, news sales, or other media without prior written consent and approval of the appraiser.
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APPRAISER QUALIFICATIONS FOR JOHN MICHAEL RYAN EDUCATION: Bachelor of Science: California Polytechnic State University, San Luis Obispo College of Agriculture: Agribusiness, Appraisal & Finance PROFESSIONAL EXPERIENCE: January 2006 to Present: Ryan Appraisals Inc. Appraiser, Owner January 2003 to December 2005: Ryan & Associates Trainee, Researcher
APPRAISAL EDUCATION APPRAISAL INSTITUTE
Appraisal Principles: AI 110: Dublin, CA (April 2003)
Appraisal Procedures: AI 120; Salt Lake City, UT (July 2003)
Basic Income Capitalization: AI 310: San Francisco, (December 2003)
National USPAP (15 Hour): AI 410: San Francisco, CA (July 2003)
Advanced Income Capitalization: AI 510: Denver, CO (March 2004)
Highest & Best Use: Market Analysis AI 520: Oakland, CA (March 2008)
Advanced Sales & Cost Approach AI 530: Boise, ID (July 2006)
Advanced Concepts & Case Studies AI 503 GD: Ontario, CA (June 2012)
General Report Writing & Case Study Chicago, Illinois (November 2014)
AMERICAN SOCIETY OF FARM MANAGERS & RURAL APPRAISERS
Principles of Rural Appraisal: A-200: Denver, CO (March 2005)
Conservation Easement Valuation Austin, TX (October 2005)
Highest and Best Use A-250: Sacramento, CA (May 2008)
Eminent Domain A-290: Sacramento, CA (June 2008)
SEMINARS Analyzing Commercial Lease Clauses San Jose, CA (May 2004)
California Conservation Easements Sacramento, CA (November 2005)
UASFLA (Yellow Book) Sacramento, CA (November 2006)
Land Valuation Assignments Pleasanton, CA (January 2007)
Land Valuation Adjustment Procedure Pleasanton, CA (January 2007)
Perspectives from Commercial Review Appraisers Webinar (July 2011)
Case Study in Lodging Appraisal Sacramento, CA (March 2012)
Appraising the Appraisal: Appraisal Review Sacramento, CA (March 2012)
USPAP: National 7 Hour Chicago, IL (January 2015)
LICENSES: State of California: Real Estate Appraiser; AG036466, Expiration: February, 17 2017 PROFESSIONAL AFFILIATIONS: Candidate for Designation; Appraisal Institute: AI: Chicago, IL
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APPRAISER LICENSE FOR JOHN RYAN
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CERTIFICATION I certify that, to the best of my knowledge and belief: ▪ The statements of fact contained in this report are true and correct. ▪ The reported analyses, opinions, and conclusions are limited only by the reported assumptions and
limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions.
▪ I have no present or prospective interest in the property that is the subject of this report and no
personal interest with respect to the parties involved. ▪ I have no bias with respect to the property that is the subject of this report or to the parties involved
with this assignment. ▪ My engagement in this assignment was not contingent upon developing or reporting
predetermined results. ▪ My compensation for completing this assignment is not contingent upon the development
or reporting of a 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.
▪ The reported analyses, opinions, and conclusions were developed, and this report has been
prepared, in conformity with the requirements of the Code of Professional Ethics & Standards of Professional Appraisal Practice of the Appraisal Institute, which include the Uniform Standards of Professional Appraisal Practice.
▪ The use of this report is subject to the requirements of the Appraisal Institute relating to review by
its duly authorized representatives. ▪ I have made a personal inspection of the property that is the subject of this report.
▪ As of the date of this report, I John Michael Ryan have completed the Standards and Ethics Education Requirement of the Appraisal Institute required for Candidates for Designation.
___________________________ Date: March 28, 2016
John Michael Ryan
California Certified General No. AG 036466
Expiration: February 17, 2017