The URL can be used to link to this page

Home My WebLink About[05a] Benefit AnalysisFile # V1403002 Report Type Real Estate Consulting Letter Report Effective Date March 17, 2014 Prepared By: Ethan Waytas, Appraiser William R. Waytas, Appraiser Nagell Appraisal & Consulting, Inc. 12805 Highway 55, Suite 300 Plymouth, Minnesota 55441 Tel: 952.544.8966 1 Fax: 952.544.8969 NAGELL APPRAISAL & CONSULTING 12805 Highway 55 #300 Minneapolis 952 - 544 -8966 Plymouth, MN 55441 St. Paul 651 - 209 -6159 Established in 1968 Central Fax 952 - 544 -8969 City of St. Joseph March 19, 2014 Attn: Thomas Jovanovich, City Attorney 1010 West St. Germain, #420 St. Cloud, MN 56301 To Thomas Jovanovich: Per your request, this is a letter report is to assist the city for guidance regarding a potential street improvement project within the city (see attached map for the location of the streets in the project). The proposed project would reconstruct the road, curb, and replace the existing dated water and sewer infrastructure. This report is not an appraisal, but rather provides a preliminary opinion of a general range of market benefit, if any, to the residential properties in the project area. SCOPE OF ASSIGNMENT In accordance with your request, a drive -by viewing of the properties has been made along with some general market comments regarding benefit (if any) for the proposed street improvement project as it relates to the subject market. As noted in the engagement letter, no specific sales data has been collected for this assignment. The general market comments are based on past appraisals, experience, and market information. The project area was viewed on March 17, 2014 by William R. Waytas. Ethan Waytas did not view the project area. Project information was provided by the City Administrator (Judy W.). The appraisers viewed the provided feasibility report, retained in files. PROJECT The City of St. Joseph is proposing improve the road, city sewer, and city water infrastructure on portions of 4th Avenue Northwest, 5th Avenue Northwest, West Ash Street, West Birch Street, and Old U.S. 52. Per request, you desire to know the benefit (if any) as it impacts properties in the project area. Motivation for the road improvement project stems from deteriorating road service, as well as very old sewer /water pipes. Nagell Appraisal & Consulb iy i 52.544.8966 AREA DESCRIPTION St. Joseph is located about 10 minutes west of St. Cloud along Highway 75 and 1 -94. The population was 6,534 as of the 2010 census (an increase of 39.6% from the 2000 census). The College of St. Benedict is located in town and St. John's University is located about 8 minutes to the west. The colleges in town and nearby provide a boost to the local economy with the influx of students every year. Single family homes generally range in value between $50,000 and $200,000+ in the City Limits with an average of about $170,000 (MLS statistics). The city is mostly built -up, however the city is expanding as it annexes land as the population increases. Most homes are average to good quality. SUBJECT PROPERTIES The project area consists of single family residential homes. On the east end of the project there are two parks. EXISTING STREETS Physical Condition of the Existing Road and City SewerMater Lines: The existing road improvements are reportedly nearing the end of their economic life with regard to condition and utility. The streets are older and were last reconstructed in 1985, 1986, and 1994 (Old Highway 52). Portions of the streets have excessive cracking. There are significant transverse cracks and random areas with alligator cracks and block cracking. Patching and repair of the existing road and infrastructure no longer appears to be financially a viable option due to the fair condition of the road improvements. In particular, the report highlighted the water and sewer are in desperate imminent need of repair. The city water /sewer and storm sewer pipes are leaking and cracking as they are made of water cast iron and sewer clay tile. The main driving force behind the project is the poor condition of the water /sewer lines. The existing roads and utilities have well exceeded the original expected life. The existing curb is in average to good condition and would be replaced as part of the project. Functional Design of the Road: The existing street improvements have a dated look and the base material no longer appears to provide adequate support for the road bed. The subgrade appears to be susceptible to moisture conditions. Drainage appears to be compromised as a result of the road design (near 4th Avenue Northwest). Additionally, the deteriorating sewer and water pipes could cause future problems with pipe breeches or back -ups. The current roads and utility infrastructure do not adequately meet the expectations of market participants or city standards, which can limit development and /or the updating the current properties. Overall, the existing street improvements and utilities are in fair condition, look dated and reflect likewise on the adjoining properties. Clearly, road and utility reconstruction is needed. Nagell Appraisal & Consulting 1952.544.8966 PROPOSED ROAD IMPROVEMENTS The city is proposing to reconstruct the roads in the project area (see following map). The road, curb, and gutter would all be new. Additionally, the project would replace the existing sewer and water lines with new materials. The road grade is expected to remain the same, expect for places where a grade change would help with drainage. If any of the above description changes, the benefit due to the project could differ. HIGHEST AND BEST USE The subject project area is built -up (excluding two parks) with single family residential homes Owners in the subject development, Park Terrace, appear to update their homes as needed when site and building components wear out or become dated. Therefore, it is logical to update the road and utilities to the subject properties as needed as these are essential property characteristics that expected in this market. It should be noted most driveways in the development are paved and are in generally average to good condition and updated as needed. An informed buyer would consider the condition of the road and underground utilities. A well constructed and good condition road provides aesthetic appeal to a home. More practically, the city sewer and water lines are reportedly in poor condition and need repair /replacement; a buyer would likely not want a water main to break due to road heaving or sewer to backup due to a penetrating tree root. Given a choice, a buyer would likely prefer a newer road and utility infrastructure. Therefore, the highest and best use of the surrounding properties is for the continued single family residential use with the proposed road to go in as it would update the utility infrastructure and repair the road. Nagell Appraisal & Consulting 1952.544.8966 Page 3 DISCUSSION OF MARKET BENEFIT Listed below are the factors that will be taken into consideration concerning the potential benefit to the properties. Description Existing Improvements Change 1) Road Surface Fair New 2) Base Condition Fair /Average New 3) Curb Average /Good New 4) Drainage Slow /Pools in areas Corrected 5) Storm Sewer Average Good 6) City water Poor Good, New 7) City sewer Poor Good, New 8) Sidewalk None None 9) Street Lights Average Average 10) Functional Design of Road Dated Good 11) Traffic Management N/A N/A 12) Median N/A N/A 13) Road Proximity to Properties N/A N/A 14) Visual Impact on Properties Fair Good Based on the preceding grid, the subject properties will improve in 9 of the 14 categories. Market participants generally recognize that streets need replacing when nearing the end of a long economic life. A typical buyer in the subject market commonly prefers a new surface road versus dated, older road improvements as well as new city water /sewer and storm sewer. In addition to visual benefit, new street improvements provide better and safer use for pedestrians (biking, walking, stroller, rollerblading, etc.) and drivers. The new streets will enhance potential for re- development and /or updating the current properties. Properties that directly abut the new street improvements project will benefit. Based on past appraisals, experience, and general market information, it is not uncommon for properties like those in the subject market to realize an increase in price for new street improvements. For most properties in the project (depending on site size, building quality, type of use and overall appeal) the average benefit could be around $6,000 to $10,000 per property. Page 4 Nagell Appraisal & Consulting 1952.544.8966 CONCLUSION The benefit amount noted above should not be construed or relied on as being an appraisal, but are general observations based on the overall market If an appraisal were made on the individual properties, the actual benefit amount could vary from market observations above. If you have additional questions, please do not hesitate to contact us. Sincerely, Ot Ethan Waytas Trainee Appraiser MN 40368613 William R. Waytas, SRA, CRP Certified General MN 4000813 Enclosures: Location Map, Aerial Map View of Project Map, Map of Road Extension Plan, Subject Photos, Qualifications, Engagement Letter www.callnagell.com Nagell Appraisal & Consulting 1952.544.8966 Page 5 LOCATION MAP Subject Area Page 6 Nagell Appraisal & Consulting 1952.544.8966 • � Wetab B E T O N day .nna • 51. We del q q F 33 f 55 / ! Parent 9 Sartell I �� Avon 28 23 Flve Poi I Collegevil auk R ids • � 95 • 41 Subject Area � ! 134 D�elm �� ! 7 0 oc AIF • OX 5 T E t N 5 _ Wade r m .... ...._ � ......... ............. st cl ad .......... M pa R ........ .............. ... ... f ...... T 's; r � � i 2 f1 - 23 7 o Arport • 7 1 75 1 3 { 4+ ,% •� 1 + cable + b Lr199s ea sent r } La� t Jacobs Prairie • f� s St. Auguste r S E R B N E t• Cold Spring � � r % • � • Luxemburg ! • ■ # Leaders _ k !• ar Lake Subject Area Page 6 Nagell Appraisal & Consulting 1952.544.8966 AERIAL VIEW OF PROJECT MAP T 4� r; ■*it r� 1 AL .r f IVA �r, - Q: 4 AW f .. .. . *Red line represents plans for road reconstruction Nagell Appraisal & Consulting 1952.544.8966 Page 7 PROJECT PLAN Ml► , '. 4 i N AWL IL MR 'E'' '. y -r� Ir mo, Page 8 I Provided by the city 1 Ob Al- Nagell Appraisal & Consulting 1952.544.8966 SUBJECT PHOTOGRAPHS __ ..._. fir" ��• i:.$e�, - atoll AL Road Road AL look Water Pooling Road Nagell Appraisal & Consulting 1952.544.8966 Page 9 Subject Photographs — continued Road Road - � 1 Alligator Cracking Road Page 10 Nagell Appraisal & Consulting 1952.544.8966 J � � FAA QUALIFICATIONS Appraisal Experience Presently and since 2006, Ethan Waytas has been employed as an employee of Nagell Appraisal & Consulting, an independent appraisal firm (13 employees) who annually prepare 1,500 +/- appraisal reports of all types. He is currently a full time licensed trainee real estate appraiser, as well as the director of the company's IT department. Properties appraised: • Commercial - low and high- density multi - family, retail, office, industrial, restaurant, church, strip - mall, fast -food, convenience stores, auto - service and repair, cinema, 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. • Clients - served include banks, savings and loan associations, trust companies, corporations, governmental bodies, relocation companies, attorneys, REO companies, accountants and private individuals. • Area of Service - most appraisal experience is in the greater Twin Cities Metro Area (typically an hour from downtown metro). Numerous assignments throughout Minnesota. Professional Membership, Associations & Affiliations License: Trainee Real Property Appraiser, MN License #40368613 Education -- Graduate of the University of Minnesota: College of Science and Engineering, Twin Cities Campus Bachelor of Science in Computer Science, with distinction -- General & Professional Practice Courses & Seminars -- Basic Appraisal Procedures -- Basic Appraisal Principles -- 2012 -2013 15 -Hour National Uniform Standards of Professional Appraisal Practice Page 12 Nagell Appraisal & Consulting 1952.544.8966 Curriculum Vitae -- continued Appraisal Experience Presently and since 1985, William R. Waytas has been employed as a full time real estate appraiser. Currently a partner and President of Nagell Appraisal & Consulting, an independent appraisal firm (13 employees) 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, senior /assisted living, schools /colleges, cinema, marina, campground, lumberyards, 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, schools /colleges (University of Minnesota, Metro State University, St. Mary's College), relocation companies, attorneys, REO companies, accountants and private individuals. Area of Service - most appraisal experience is in the greater /metro area (typically within 2 hours of downtown metro) of Minneapolis /St. Paul, MN. Numerous assignments throughout Minnesota. Professional Membership, Associations & Affiliations License: Certified General Real Property Appraiser, MN License #4000813. Appraisal Institute: SRA, Senior Residential Appraiser Designation, General Associate Member of Appraisal Institute Employee Relocation Council: CRP Certified Relocation Professional Designation. International Right -Of -Way Association: Member HUD /FHA: On Lender Selection Roster and Review Appraiser DNR: Approved appraiser for Department of Natural Resources Testimony -- Court, deposition, commission, arbitration & administrative testimony given. Mediator -- Court appointed in Wright County. Committees -- President of Metro /Minnesota Chapter, 2002, Appraisal Institute. -- Chairman of Residential Admissions, Metro /MN Chapter, Al. -- Chairman Residential Candidate Guidance, Metro /Minnesota Chapter, Al. -- Elm Creek Watershed Commission, Medina representative 3 years. -- Park Commission, Medina, 3 years Nagell Appraisal & Consulting 1952.544.8966 Page 13 Education -- Graduate of Bemidji State University, Minnesota. B.S. degree in Bus. Ad. -- During college, summer employment in building trades (residential and commercial). -- Graduate of Cecil Lawter Real Estate School. Past Arizona Real Estate License. General & Professional Practice Courses & Seminars -- Course 101 - Introduction to Appraising Real Property. -- Numerous Standards of Professional Practice Seminar. -- Fair Lending Seminar. -- Eminent Domain & Condemnation Appraising. -- Eminent Domain (An In -Depth Analysis) -- Property Tax Appeal -- Eminent Domain -- Business Practices and Ethics -- Scope of Work -- Construction Disturbances and Temporary Loss of Going Concern -- Uniform Standards for Federal Land Acquisitions (Yellow Book Seminar) -- Partial Interest Valuation Divided (Conservation Easements, Historic Preservation Easements, Life Estates, Subsurface Rights, Access Easements, Air Rights, Water Rights, Transferable Development Rights) Commercial /Industrial /Subdivision Courses & Seminars -- Capitalization Theory & Techniques -- Highest & Best Use Seminar -- General & Residential State Certification Review Seminar -- Subdivision Analysis Seminar. -- Narrative Report Writing Seminar (general) -- Advanced Income Capitalization Seminar -- Advanced Industrial Valuation -- Appraisal of Local Retail Properties -- Appraising Convenience Stores -- Analyzing Distressed Real Estate -- Evaluating Commercial Construction -- Appraising Distressed Commercial Real Estate -- Fundamentals of Separating Real Property, Personal Property, and Intangible Business Assets Residential Courses & Seminars -- Course 102 - Applied Residential Appraising -- Narrative Report Writing Seminar (residential) -- HUD Training session local office for FHA appraisals -- Familiar with HUD Handbook 4150.1 REV -1 & other material from local FHA office. -- Appraiser /Underwriter FHA Training -- Residential Property Construction and Inspection -- Numerous other continuing education seminars for state licensing & Al Appraising Waterfront and Lakeshore Property Speaking Engagements -- Bankers -- Auditors -- Assessors -- Relocation (Panel Discussion) Page 14 Nagell Appraisal & Consulting 1952.544.8966 ENGAGEMENT LETTTER NAGELL APPRAISAL & CONSULTING 12805 Highway 55 Minneapolis; 952 - 544.8966 Myrnouth, MIN 55441 St. Paul 651- 209.6159 Listablished in 1958 Central Fax 952 - 544.8969 City of St. Joseph March 10, 2014 Attn: Thomas Jovanovich. CityAftomey 1410 West St. Germain 9240 5t. Cloud, IAN Seam RE: Letter report regarding the Special Benaflt If anyfor a street improvement project Aboul42 Single Family Homes In Park Terrace 3t. Joseph, PAN Dear Tom: Thank you for your interest in -obtaining services regarding the properties above. Per our conversation, you Indicated a preliminary opinion of market benefit if any to the adjoining properties in the above project, Report Use: The report use is to assist the city for guidance regarding asse"nivnt dote rmination. Value Type: This report is not an appraisal, but rather provides a preliminary Iettar giving a genera] range of market benefit 9 any to the single family properties In the project area. Property Description: Detached single family homes. Contact for access, Not necessary. Scope of Report: (1) Drive by viewing of the subject properties and view the nelghborhood. (2) Nate the physical andlor economic factors that could affect the properties. (3) Comment on market benefit if any based on -observations of the market. (4) Provide a general range of benefit if any for the properties in the project. No specific sales data will be collected for this assignment- The general market nomments are based on past appraisals, experionCo and market information. Report Format: A Letter Report will be used. It has short statements and descriptions including appropriate photos, maps and exhibits are included. Two hard copies afrroporf provided. Few The fee is� Any meetings, owner cont&d, appraisal reports, any discovery, preparation and testifying would Client named above is responsible for payment in a timely manner. Due Date: The report can be completed b I ned confirmation Is prompt. Information needed by the appraiser: Feasibility report, maps and description of before and after conditions. Our company has 13 employees and has been in business since 1968 and has sufficient knowledge, experience, educalicn, resources and contacts to competently complete this assignment:. Neither the employment to make this report, nor the compensation for it, is cnntingenf upon the f' dings, If you agree to the above terms, please sign below and return by fax or mail. If you have any add I pal questions, please do not hesitate to contact me.� Sincerely,r sWilaturc William R. UWoytas, SRA, CRP Certified General 4090813, MN www.calinagell.com Nagell Appraisal & Consulting 1952.544.8966 Page 15