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HomeMy WebLinkAbout[05] 2019 Street Improvement Project - Benefit Report Report Type Real Estate Consulting Letter Report Effective Date April 26, 2019 Client Subject Property City of St. Joseph Street Improvement Project Attn: Thomas Jovanovich, City Attorney Elm Street, Birch Street, Old Highway 52, th 1010 West St. Germain #240 Cypress Drive, Pond View Ridge, 4 Avenue NE, th St. Cloud, MN 56301 4 Avenue SE, Townsite, Jade Road, etc. St. Joseph, MN 56374 Prepared By: Ethan Waytas, MAI, Appraiser William R. Waytas, SRA, Appraiser File # V1904002 Nagell Appraisal Incorporated 12805 Highway 55, Suite 300 Plymouth, Minnesota 55441 Tel: 952.544.8966 | Fax: 952.544.8969 PROJECT The City of St. Joseph is proposing to fully reconstruct, partially reconstruct, and/or update utility infrastructure to the roads previously discussed. Per request, you desire to know the benefit (if any) as it impacts properties in the project area. Motivation for the road improvement project appears to stem from deteriorating road surface and older utility infrastructure. AREA DESCRIPTION St. Joseph is located about 10 minutes west of St. Cloud along Highway 75 and I-94. The community is a suburb of St. Cloud. 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. The population was 6,534 as of 2010 census (an increase of 39.6% from the 2000 census). The 2017 estimated population is 7,126 (an increase of 9.1% from 2010). The city is comprised of a variety of commercial, industrial, religious, single-family, multi-family, park, and agricultural uses. Most existing buildings in the area are of average quality. Single family homes generally range in value between $75,000 and $300,000+ within city limits. The higher end homes are on the nearby lakes. The average home price over the past two years is around $215,000 (MLS statistics). Most homes are average to good quality. SUBJECT PROPERTIES The project areas consist of single-family residential homes, religious properties, multi-family properties, commercial, industrial, public, and agricultural. Page 2 Nagell Appraisal Incorporated | 952.544.8966 OVERALL PROJECT MAP The projects are individual described on the following pages, as well as the benefits. Nagell Appraisal Incorporated | 952.544.8966 Page 3 HIGHEST AND BEST USE The subject project area is located throughout St. Joseph. The properties in the project area are a mixture of single-family residential, townhomes, twin homes, development land, commercial, religious, agricultural, public, and industrial. Owners in the subject area appear to update their property as needed when site and building components wear out or become dated. Owners in the overall area commonly pave their driveways or maintain parking lots as needed, recognizing it adds value when done. Therefore, it is logical to update the road and/or utility infrastructure to the subject properties as needed, as these are essential property characteristics that are expected in this market. An informed buyer would consider the condition of the road and traffic flow/management. A well- constructed and good condition road provides aesthetic appeal to a property and efficient/safe traffic flow. Given a choice, a potential informed buyer would likely prefer a newer road with good traffic flow over a deteriorating road with fair traffic flow. Additionally, a potential informed buyer would likely prefer newer utility infrastructure as compared to older, dated and inferior utility infrastructure. If replacement of components of real estate near the end of their economic life in a home or building is postponed, it can be costlier in the long run; delays in replacing components can result in incurring higher interim maintenance costs and potential difficulty in marketing the property. Also, it is typical for the cost of the replacement of an improvement to increase over time. That said it is logical and prudent for market participants to update/replace dated components when needed. Therefore, the highest and best use of the surrounding properties in the project area is for the continued various uses with the proposed infrastructure improvements. Page 4 Nagell Appraisal Incorporated | 952.544.8966 PROJECT MAP Jade Road Nagell Appraisal Incorporated | 952.544.8966 Page 5 PHOTOGRAPHS Jade Road Jade Road project Jade Road project Jade Road project Jade Road project Page 6 Nagell Appraisal Incorporated | 952.544.8966 Subject Photographs continued Jade Road project Jade Road project Jade Road project Jade Road project Nagell Appraisal Incorporated | 952.544.8966 Page 7 EXISTING STREETS & UTILITIES Jade Road Project Physical Condition of the Existing Road: The existing road improvements are asphalt with base. The street does not have concrete curb or gutter. The road condition, based on the visual inspection of the streets is rated to be poor. There are signs of transverse and alligator cracking, along with some areas of graveling. There are numerous pot holes. Physical Condition of Existing Utilities: There are no utilities within the project area. Functional Design of the Road: The existing paved road is in poor condition. There are signs of transverse and alligator cracking, along with areas of graveling. Roads in fair to average condition do not meet the expectations of typical market participants in this suburban market for re-development, resale price, and/or updating the current uses. Overall, the existing street improvements are in poor condition, are beginning to look dated and reflect likewise on the adjoining and side street properties. PROPOSED ROAD IMPROVEMENT Jade Road Project The city is There are no proposed utility updates. Given the existing condition of the road, the proposed project is logical. If any of the above descriptions change, the benefit due to the project could differ. Page 8 Nagell Appraisal Incorporated | 952.544.8966 DISCUSSION OF MARKET BENEFIT Jade Road Project Listed below are the factors that will be taken into consideration concerning the potential benefit to the properties. Existing Description Change Improvements Road reclaimed, new 1) Road Surface Poor asphalt, good 2) Base Condition Fair/Average Updated & compacted 3) Curb None None 4) Drainage Surface Surface 5) Storm Sewer n/a n/a 6) City water None None 7) City sewer None None 8) Sidewalk None None 9) Street Lights Average Average 10) Functional Design of Road Dated Good 11) Traffic Management Average Average 12) Pedestrian Use (biking, walking, etc.) Fair Good 13) Median n/a n/a 14) Road Proximity to Properties n/a n/a 15) Dust n/a n/a 16) Visual Impact on Properties Fair Good Based on the preceding grid, the subject properties will improve in 5 of the 16 categories. Market participants generally recognize that roads need replacing when nearing the end of a long economic life. A typical buyer in the subject market commonly prefers a good condition paved road surface road versus an inferior condition paved road surface. 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 indirectly/directly abut or have driveways/access that exit on the new street will benefit. Based on past appraisals, experience, and general market information, it is not uncommon for properties similar to those in the subject market to realize an increase in price for new street improvements. Nagell Appraisal Incorporated | 952.544.8966 Page 9 Discussion of Market Benefit Continued Given the scope of the project and the age/quality/condition of the buildings/sites, properties in the area with newer street improvements could see an average price benefit of: Public use $0.005 to $0.01 per SF of site area Agricultural $0.01 to $0.02 per SF of site area Rural residential $0.01 to $0.02 per SF of site area Note: The above benefit considers only the scope of the project. Page 10 Nagell Appraisal Incorporated | 952.544.8966 PROJECT MAP Cypress Drive & Old Hwy 2 Project Nagell Appraisal Incorporated | 952.544.8966 Page 11 PHOTOGRAPHS Cypress Drive & Old Hwy 2 Project Cypress Drive and Highway 52 project Cypress Drive and Highway 52 project Cypress Drive and Highway 52 project Cypress Drive and Highway 52 project Page 12 Nagell Appraisal Incorporated | 952.544.8966 Subject Photographs continued Cypress Drive and Highway 52 project Cypress Drive and Highway 52 project Cypress Drive and Highway 52 project Cypress Drive and Highway 52 project Nagell Appraisal Incorporated | 952.544.8966 Page 13 EXISTING STREETS & UTILITIES Cypress Drive & Old Hwy 2 Project Physical Condition of the Existing Road: The existing road improvements are asphalt with base. The streets do have concrete curb and gutter. The road condition, based on the visual inspection of the streets is rated to be fair. There are signs of transverse and alligator cracking, along with some areas of graveling. Physical Condition of Existing Utilities: The utilities within the neighborhood are public sanitary sewer and public water. Functional Design of the Road: The existing paved road is in fair condition. There are signs of transverse and alligator cracking, along with areas of graveling. Roads in fair to average condition do not meet the expectations of typical market participants in this suburban market for re-development, resale price, and/or updating the current uses. Overall, the existing street improvements are in fair condition, are beginning to look dated and reflect likewise on the adjoining and side street properties. PROPOSED ROAD IMPROVEMENT Cypress Drive & Old Hwy 2 The existing clay sanitary sewer will be -yard sewer system currently in-place. The the back-yard sewer system currently in-place. Given the existing condition of the road and utility infrastructure, the proposed project is logical. If any of the above descriptions change, the benefit due to the project could differ. Page 14 Nagell Appraisal Incorporated | 952.544.8966 DISCUSSION OF MARKET BENEFIT Cypress Drive & Old Hwy 2 Listed below are the factors that will be taken into consideration concerning the potential benefit to the properties. Existing Description Change Improvements Road 1) Road Surface Fair reclaimed/reconstructed, new asphalt, good 2) Base Condition Fair/Average Updated & compacted 3) Curb Average Average 4) Drainage Average Average 5) Storm Sewer Average Average 6) City water Average Average 7) City sewer Dated, old New PVC in street 8) Sidewalk None None 9) Street Lights Average Average 10) Functional Design of Road Dated Good 11) Traffic Management Average Average 12) Pedestrian Use (biking, walking, Fair Good etc.) 13) Median n/a n/a 14) Road Proximity to Properties n/a n/a 15) Dust n/a n/a 16) Visual Impact on Properties Fair Good Based on the preceding grid, the subject properties will improve in 6 of the 16 categories. Market participants generally recognize that roads need replacing when nearing the end of a long economic life. A typical buyer in the subject market commonly prefers a good condition paved road surface road versus an inferior condition paved road surface. 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 indirectly/directly abut or have driveways/access that exit on the new street will benefit. Based on past appraisals, experience, and general market information, it is not uncommon for properties similar to those in the subject market to realize an increase in price for new street improvements. Nagell Appraisal Incorporated | 952.544.8966 Page 15 Discussion of Market Benefit Continued Given the scope of the project and the age/quality/condition of the buildings/sites, properties in the area with newer street improvements could see an average price benefit of: Single-family residential, reconstruct, no utilities $4,500 to $8,000 per lot/unit Single-family residential, reconstruct, sanitary sewer $9,000 to $12,000 per lot/unit Multi-family, reconstruct, no utilities $1,000 to $2,000 per unit Multi-family, reconstruct, sanitary sewer $2,000 to $3,000 per unit Public uses $0.05 to $0.10 per SF of site size Future development land (1+ acres) $0.01 to $0.03 per SF of site size Future development land (<1 acre) $0.50 to $1.00 per SF of site size Note: The above benefit considers only the scope of the project. Page 16 Nagell Appraisal Incorporated | 952.544.8966 th PROJECT MAP 4 Avenue Project Nagell Appraisal Incorporated | 952.544.8966 Page 17 th PHOTOGRAPHS 4 Avenue Project thth 4 Avenue Project 4 Avenue Project thth 4 Avenue Project 4 Avenue Project Page 18 Nagell Appraisal Incorporated | 952.544.8966 Subject Photographs continued thth 4 Avenue Project 4 Avenue Project thth 4 Avenue Project 4 Avenue Project Nagell Appraisal Incorporated | 952.544.8966 Page 19 th EXISTING STREETS & UTILITIES 4 Avenue Project Physical Condition of the Existing Road: The existing road improvements are asphalt with base, concrete curb, and concrete gutter. The road condition, based on the visual inspection of the streets is rated to be fair/average. There are signs of transverse and alligator cracking, along with some areas of graveling. th 4 Avenue Northeast (from East Minnesota Street to Highway 75 has a concrete sidewalk. Physical Condition of Existing Utilities: The utilities within the neighborhood are public sanitary sewer and public water. The utilities are not part of the project. Functional Design of the Road: The existing paved road is in fair condition. There are signs of transverse and alligator cracking, along with areas of graveling. Roads in fair to average condition do not meet the expectations of typical market participants in this suburban market for re-development, resale price, and/or updating the current uses. Overall, the existing street improvements are in fair condition, are beginning to look dated and reflect likewise on the adjoining and side street properties. th PROPOSED ROAD IMPROVEMENT 4 Avenue Project th The city is proposing to mill and pave 4 Avenue Northeast. The asphalt will be entirely removed down th The city is proposing a traditional mill and overlay for 4 Avenue Southeast and Western Court. The public water and sewer are not part of the project. Given the existing condition of the road, the proposed project is logical. If any of the above descriptions change, the benefit due to the project could differ. Page 20 Nagell Appraisal Incorporated | 952.544.8966 th DISCUSSION OF MARKET BENEFIT 4 Avenue Project Listed below are the factors that will be taken into consideration concerning the potential benefit to the properties. Existing Description Change Improvements th Mill & Overlay on 4 1) Road Surface Fair Ave SE; full depth on th 4 Ave NE th Re-compacted on 4 2) Base Condition Dated/Average Ave NE 3) Curb Average Average 4) Drainage Average Average 5) Storm Sewer n/a n/a 6) City water Average Average 7) City sewer Average Average 8) Sidewalk None None 9) Street Lights Average Average 10) Functional Design of Road Dated Good 11) Traffic Management Average Average 12) Pedestrian Use (biking, walking, etc.) Fair Good 13) Median n/a n/a 14) Road Proximity to Properties n/a n/a 15) Dust n/a n/a 16) Visual Impact on Properties Fair Good Based on the preceding grid, the subject properties will improve in 5 of the 16 categories. Market participants generally recognize that roads need replacing when nearing the end of a long economic life. A typical buyer in the subject market commonly prefers a good condition paved road surface road versus an inferior condition paved road surface. 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 indirectly/directly abut or have driveways/access that exit on the new street will benefit. Based on past appraisals, experience, and general market information, it is not uncommon for properties similar to those in the subject market to realize an increase in price for new street improvements. Nagell Appraisal Incorporated | 952.544.8966 Page 21 Discussion of Market Benefit Continued Given the scope of the project and the age/quality/condition of the buildings/sites, properties in the area with newer street improvements could see an average price benefit of: Residential, overlay $1,500 to $3,000 per lot Residential, reconstruct $4,500 to $8,000 per lot Commercial/Office, reconstruct $0.15 to $0.30 per SF of useable site area Public use, reconstruct $0.15 to $0.30 per SF of useable site area *Properties with side street frontage would be assessed at the lower end of the range, especially if no direct access on the improved street Note: The above benefit considers only the scope of the project. Page 22 Nagell Appraisal Incorporated | 952.544.8966 PROJECT MAP Elm & Birch Street East Project Nagell Appraisal Incorporated | 952.544.8966 Page 23 PHOTOGRAPHS Elm & Birch Street East Project Birch and Elm Street project Birch and Elm Street project Birch and Elm Street project Birch and Elm Street project Page 24 Nagell Appraisal Incorporated | 952.544.8966 Subject Photographs continued Birch and Elm Street project Birch and Elm Street project Birch and Elm Street project Birch and Elm Street project Nagell Appraisal Incorporated | 952.544.8966 Page 25 EXISTING STREETS & UTILITIES Elm & Birch Street East Project Physical Condition of the Existing Road: The existing road improvements are asphalt with base. Elm Street West has concrete curb and gutter while Birch Street East does not. The road condition, based on the visual inspection of the streets is rated to be fair. There are signs of transverse and alligator cracking, along with some areas of graveling. Physical Condition of Existing Utilities: The utilities within the neighborhood are public sanitary sewer and public water. The utilities are older and the city is planning on extending them and upgrading them. Functional Design of the Road: The existing paved road is in fair condition. There are signs of transverse and alligator cracking, along with areas of graveling. Roads in fair to average condition do not meet the expectations of typical market participants in this suburban market for re-development, resale price, and/or updating the current uses. Overall, the existing street improvements are in fair condition, are beginning to look dated and reflect likewise on the adjoining and side street properties. PROPOSED ROAD IMPROVEMENT Elm & Birch Street East Project The city is proposing to reconstruct a portion of Elm Street West. The project would remove the existing The city would also extend city sewer and water to an adjoining parcel that does not have public utility access. This results in the city installing new water main and replacing some of the existing sanitary sewer with new PVC pipe. The city is proposing to reclaim Birch Street East. The project would remove the existing asphalt and sanitary sewer system would not be updated at this time. The public water and sewer are not part of the project. Given the existing condition of the road, the proposed project is logical. If any of the above descriptions change, the benefit due to the project could differ. Page 26 Nagell Appraisal Incorporated | 952.544.8966 DISCUSSION OF MARKET BENEFIT Elm and Birch Street East Listed below are the factors that will be taken into consideration concerning the potential benefit to the properties. Existing Description Change Improvements 1) Road Surface Fair New, asphalt, good 2) Base Condition Fair New base, good Average on Elm Average on Elm 3) Curb None on Birch None on Birch 4) Drainage Average Average 5) Storm Sewer Average Average Extended and 6) City water Fair to average upgraded on Elm and Birch New portions on Elm, 7) City sewer Fair to average none on Birch 8) Sidewalk None None 9) Street Lights Average Average 10) Functional Design of Road Dated Good 11) Traffic Management Average Average 12) Pedestrian Use (biking, walking, etc.) Fair Good 13) Median n/a n/a 14) Road Proximity to Properties n/a n/a 15) Dust n/a n/a 16) Visual Impact on Properties Fair Good Based on the preceding grid, the subject properties will improve in 7 of the 16 categories. Market participants generally recognize that roads need replacing when nearing the end of a long economic life. A typical buyer in the subject market commonly prefers a good condition paved road surface road versus an inferior condition paved road surface. 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 indirectly/directly abut or have driveways/access that exit on the new street will benefit. Based on past appraisals, experience, and general market information, it is not uncommon for properties similar to those in the subject market to realize an increase in price for new street improvements. Nagell Appraisal Incorporated | 952.544.8966 Page 27 Discussion of Market Benefit Continued Given the scope of the project and the age/quality/condition of the buildings/sites, properties in the area with newer street improvements could see an average price benefit of: Elm Street Residential, reconstruct road and new utility extension $8,000 to $12,000 per lot/unit Residential, new utility extension $6,000 to $10,000 per lot/unit Residential, reconstruct road and utility upgrades $4,000 to $8,000 per lot/unit Public, reconstruct road $0.10 to $0.20 per SF of useable site size Birch Street East Residential , reconstruct street and watermain $4,000 to $8,000 per lot/unit Residential , reconstruct street $3,000 to $6,000 per lot/unit Commercial, reconstruct street and watermain $0.50 to $1.00 per SF of useable site size *Properties with side street frontage would be assessed at the lower end of the range, especially if no direct access on the improved street Note: The above benefit considers only the scope of the project. Page 28 Nagell Appraisal Incorporated | 952.544.8966 PROJECT MAP Pond View Ridge Project Nagell Appraisal Incorporated | 952.544.8966 Page 29 PHOTOGRAPHS Pond View Ridge Project Pond View Ridge project Pond View Ridge project Pond View Ridge project Pond View Ridge project Page 30 Nagell Appraisal Incorporated | 952.544.8966 Subject Photographs continued Pond View Ridge project Pond View Ridge project Pond View Ridge project Pond View Ridge project Nagell Appraisal Incorporated | 952.544.8966 Page 31 Subject Photographs continued Pond View Ridge project Pond View Ridge project Pond View Ridge project Pond View Ridge project Page 32 Nagell Appraisal Incorporated | 952.544.8966 EXISTING STREETS & UTILITIES Pond View Ridge Project Physical Condition of the Existing Road: The existing road improvements are asphalt with base. The streets do have concrete curb and gutter. The road condition, based on the visual inspection of the streets is rated to be fair. There are signs of transverse and alligator cracking, along with some areas of graveling. Physical Condition of Existing Utilities: The utilities within the neighborhood are public sanitary sewer and public water. The utilities are not part of the project. Functional Design of the Road: The existing paved road is in fair condition. There are signs of transverse and alligator cracking, along with areas of graveling. Roads in fair to average condition do not meet the expectations of typical market participants in this suburban market for re-development, resale price, and/or updating the current uses. Overall, the existing street improvements are in fair condition, are beginning to look dated and reflect likewise on the adjoining and side street properties. PROPOSED ROAD IMPROVEMENT Pond View Ridge Project The city is proposing two types of road improvements. A majority of the project is a mill and overlay The public water and sewer are not part of the project. Given the existing condition of the road, the proposed project is logical. If any of the above descriptions change, the benefit due to the project could differ. Nagell Appraisal Incorporated | 952.544.8966 Page 33 DISCUSSION OF MARKET BENEFIT Pond View Ridge Project Listed below are the factors that will be taken into consideration concerning the potential benefit to the properties. Existing Description Change Improvements Mixture of mill & 1) Road Surface Fair overlay, partial reclamation 2) Base Condition Fair to average Portions updated 3) Curb Average Average 4) Drainage Average Average 5) Storm Sewer Average Average 6) City water Average Average 7) City sewer Average Average 8) Sidewalk None None 9) Street Lights Average Average 10) Functional Design of Road Dated Good 11) Traffic Management Average Average 12) Pedestrian Use (biking, walking, etc.) Fair Good 13) Median n/a n/a 14) Road Proximity to Properties n/a n/a 15) Dust n/a n/a 16) Visual Impact on Properties Fair Good Based on the preceding grid, the subject properties will improve in 5 of the 16 categories. Market participants generally recognize that roads need replacing when nearing the end of a long economic life. A typical buyer in the subject market commonly prefers a good condition paved road surface road versus an inferior condition paved road surface. 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 indirectly/directly abut or have driveways/access that exit on the new street will benefit. Based on past appraisals, experience, and general market information, it is not uncommon for properties similar to those in the subject market to realize an increase in price for new street improvements. Page 34 Nagell Appraisal Incorporated | 952.544.8966 Discussion of Market Benefit Continued Given the scope of the project and the age/quality/condition of the buildings/sites, properties in the area with newer street improvements could see an average price benefit of: Residential, overlay $1,500 to $3,000 per lot/unit Residential, reconstruction $4,500 to $8,000 per lot/unit *Properties with side street frontage would be assessed at the lower end of the range, especially if no direct access on the improved street Note: The above benefit considers only the scope of the project. Nagell Appraisal Incorporated | 952.544.8966 Page 35 PROJECT MAP Townsite & Alleys Page 36 Nagell Appraisal Incorporated | 952.544.8966 PHOTOGRAPHS Townsite & Alleys Townsite and Alleys project Townsite and Alleys project Townsite and Alleys project Townsite and Alleys project Nagell Appraisal Incorporated | 952.544.8966 Page 37 Subject Photographs continued Townsite and Alleys project Townsite and Alleys project Townsite and Alleys project Townsite and Alleys project Page 38 Nagell Appraisal Incorporated | 952.544.8966 Subject Photographs continued Townsite and Alleys project Townsite and Alleys project Townsite and Alleys project Townsite and Alleys project Nagell Appraisal Incorporated | 952.544.8966 Page 39 Subject Photographs continued Townsite and Alleys project Townsite and Alleys project Townsite and Alleys project Townsite and Alleys project Page 40 Nagell Appraisal Incorporated | 952.544.8966 Subject Photographs continued Townsite and Alleys project Townsite and Alleys project Nagell Appraisal Incorporated | 952.544.8966 Page 41 EXISTING STREETS & UTILITIES Townsite & Alleys Physical Condition of the Existing Road: There are two components to this proposed project area, public streets and two areas of alleys. st The streets are Birch Street West, Ash Street West, and 1 Avenue Northwest. These streets are comprised of asphalt service and aggregate road base. The streets have concrete curb and gutter. The road condition, based on the visual inspection of the streets is rated to be fair. There are signs of transverse and alligator cracking, along with some areas of graveling. The second component are the alleys referred to in the feasibility report as Block 7 and Block 8. The Block 7 alley road surface consists of asphalt and gravel. The condition of the alley is rated to be fair. The block 8 alley has a mixture of asphalt and gravel surfaces. The condition of the alley is rated to be fair. Both alleys provide ingress and egress to the adjoining properties. Physical Condition of Existing Utilities: The utilities within the neighborhood are public sanitary sewer and public water. The utilities in the alleys are proposed to be updated. Functional Design of the Road: The existing paved roads are in fair condition. There are signs of transverse and alligator cracking, along with areas of graveling. Roads in fair to average condition do not meet the expectations of typical market participants in this suburban market for re-development, resale price, and/or updating the current uses. Overall, the existing street improvements are in fair condition, are beginning to look dated and reflect likewise on the adjoining and side street properties. PROPOSED ROAD IMPROVEMENT Townsite & Alleys st For Birch Street West, Ash Street West, and 1 Avenue Northwest the city is proposing a mill and overlay with no other updates. The public water and sewer are not part of the project. For the alleys, the city is proposing the following: Block 7: Reconstruction of the and water pipes under the east and west legs of Block 7 will be replaced. New storm sewer will also be installed. Block 8: asphalt. A spot repair to the sanitary sewer will be completed. The water main in the west alley leg and a section in the east alley leg will be replaced with new piping. New storm sewer will also be installed. Given the existing condition of the road, the proposed project is logical. If any of the above descriptions change, the benefit due to the project could differ. Page 42 Nagell Appraisal Incorporated | 952.544.8966 DISCUSSION OF MARKET BENEFIT Townsite & Alleys Listed below are the factors that will be taken into consideration concerning the potential benefit to the properties. Existing Description Change Improvements Mill & overlay on streets, full 1) Road Surface Fair reconstruction in the alleys Average on streets, New in alleys, 2) Base Condition fair in alleys unchanged in streets 3) Curb Average Average 4) Drainage Average Average 5) Storm Sewer None in alley New in alley Fair in portions of the New in portions of the 6) City water alleys alleys 7) City sewer Average Average 8) Sidewalk n/a n/a 9) Street Lights Average Average 10) Functional Design of Road Dated Good 11) Traffic Management Average Average 12) Pedestrian Use (biking, walking, etc.) Fair Good 13) Median n/a n/a 14) Road Proximity to Properties n/a n/a 15) Dust n/a n/a 16) Visual Impact on Properties Fair Good Based on the preceding grid, the subject properties will improve in 7 of the 16 categories. Market participants generally recognize that roads need replacing when nearing the end of a long economic life. A typical buyer in the subject market commonly prefers a good condition paved road surface road versus an inferior condition paved road surface. 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 indirectly/directly abut or have driveways/access that exit on the new street will benefit. Based on past appraisals, experience, and general market information, it is not uncommon for properties similar to those in the subject market to realize an increase in price for new street improvements. Nagell Appraisal Incorporated | 952.544.8966 Page 43 Discussion of Market Benefit Continued Given the scope of the project and the age/quality/condition of the buildings/sites, properties in the area with newer street improvements could see an average price benefit of: st Birch Street West, Ash Street West, & 1 Avenue Northwest Residential , overlay $1,500 to $3,000 per lot/unit Commercial/Office, overlay $0.10 to $0.20 per SF of useable site area Public use, overlay $0.10 to $0.20 per SF of useable site area Alleys Homestead (direct access to alley) $40 to $60 per linear foot of alley Homestead (indirect access to alley) $30 to $50 per linear foot of alley Commercial/office (direct access to alley) $50 to $70 per linear foot of alley Commercial/office (in direct access to alley) $40 to $60 per linear foot of alley *Properties with side street frontage would be assessed at the lower end of the range, especially if no direct access on the improved street Note: The above benefit considers only the scope of the project. Page 44 Nagell Appraisal Incorporated | 952.544.8966 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, Ethan Waytas, MAI William R. Waytas, SRA Certified General MN 40368613 Certified General MN 4000813 Enclosures: Location Map, Qualifications __________________________________________________________________________ www.nagellmn.com Nagell Appraisal Incorporated | 952.544.8966 Page 45 LOCATION MAP Page 46 Nagell Appraisal Incorporated | 952.544.8966 QUALIFICATIONS Appraisal Experience Presently and since 2006, Ethan Waytas, MAI has been employed as an employee of Nagell Appraisal Incorporated, an independent appraisal firm (10 employees) who annually prepare 1,500 +/- appraisal reports of all types. He is currently a full time licensed certified general real estate appraiser, partner, 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, golf courses, 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. Testimony -- Court, commission, mediation testimony, etc. has been given Professional Membership, Associations & Affiliations License: Certified General Real Property Appraiser, MN License #40368613 Holds the MAI designation from the Appraisal Institute Education -- Graduate of the University of Minnesota: College of Science and Engineering, Twin Cities Campus Bachelor of Science in Computer Science, with distinction, 3.86 GPA. -- General & Professional Practice Courses & Seminars -- Basic Appraisal Procedures -- Basic Appraisal Principles -- 2012-2013 15-Hour National Uniform Standards of Professional Appraisal Practice -- General Appraiser Sales Comparison Approach -- General Appraiser Income Approach Part 1 -- General Appraiser Income Approach Part 2 -- Advanced Income Capitalization -- General Appraiser Report Writing and Case Studies -- Real Estate Finance, Statistics and Valuation Modeling -- 2014-2015 7-hour National USPAP Update Course -- General Appraiser Site Valuation & Cost Approach -- Advanced Market Analysis and Highest & Best Use -- Advanced Concepts & Case Studies -- Quantitative Analysis Nagell Appraisal Incorporated | 952.544.8966 Page 47 Curriculum Vitae -- continued Appraisal Experience Presently and since 1985, William R. Waytas has been employed as a full time real estate appraiser. Currently a partner and President of the Nagell Appraisal & Consulting, an independent appraisal firm (10 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, cinema, marina, numerous special use properties, and subdivision analysis. Residential single-family residences, hobby farms, lakeshore, condominiums, townhouses, REO and land. Eminent Domain extensive partial and total acquisition appraisal services provided to numerous governmental agencies and private owners. Special Assessment numerous street improvement and utilities projects for both governmental and private owners. Review residential, commercial and land development. Clients - served include banks, savings and loan associations, trust companies, corporations, governmental bodies, relocation companies, attorneys, REO companies, accountants and private individuals. Area of Service - most appraisal experience is in the greater Twin Cities Metro Area (typically an hour from downtown metro). Numerous assignments throughout Minnesota. Professional Membership, Associations & Affiliations License: Certified General Real Property Appraiser, MN License #4000813. Appraisal Institute: SRA, Senior Residential Appraiser Designation, General Associate Member Employee Relocation Council: CRP Certified Relocation Professional Designation. International Right-Of-Way Association: Member HUD/FHA: On Lender Selection Roster and Review Appraiser DNR: Approved appraiser for Department of Natural Resources Testimony -- Court, deposition, commission, arbitration & administrative testimony given. Mediator -- Court appointed in Wright County. Committees -- President of Metro/Minnesota Chapter, 2002, Appraisal Institute. -- Chairman of Residential Admissions, Metro/MN Chapter, AI. -- Chairman Residential Candidate Guidance, Metro/Minnesota Chapter, AI. -- Elm Creek Watershed Commission, Medina representative 3 years. -- Medina Park Commission, 3 years. Page 48 Nagell Appraisal Incorporated | 952.544.8966 Curriculum Vitae -- continued Education -- Graduate of Bemidji State University, Minnesota. B.S. degree in Bus. Ad. -- During college, summer employment in building trades (residential and commercial). -- Graduate of Cecil Lawter Real Estate School. Past Arizona Real Estate License. -- General & Professional Practice Courses & Seminars -- Course 101-Introduction to Appraising Real Property. -- Numerous Standards of Professional Practice Seminar. -- Fair Lending Seminar. -- Eminent Domain & Condemnation Appraising. -- Eminent Domain (An In-Depth Analysis) -- Property Tax Appeal -- Eminent Domain -- Business Practices and Ethics -- Scope of Work -- Construction Disturbances and Temporary Loss of Going Concern -- Uniform Standards for Federal Land Acquisitions (Yellow Book Seminar) -- Partial Interest Valuation Divided (conservation easements, historic preservation easements, life estates, subsurface rights, access easements, air rights, water rights, transferable development rights) Commercial/Industrial/Subdivision Courses & Seminars -- Capitalization Theory & Techniques -- Highest & Best Use Seminar -- General & Residential State Certification Review Seminar -- Subdivision Analysis Seminar. -- Narrative Report Writing Seminar (general) -- Advanced Income Capitalization Seminar -- Advanced Industrial Valuation -- Appraisal of Local Retail Properties -- Appraising Convenience Stores -- Analyzing Distressed Real Estate -- Evaluating Commercial Construction -- Fundamentals of Separating Real Property, Personal Property and Intangible Business Assets Residential Courses & Seminars -- Course 102-Applied Residential Appraising -- Narrative Report Writing Seminar (residential) -- HUD Training session local office for FHA appraisals -- Familiar with HUD Handbook 4150.1 REV-1 & other material from local FHA office. -- Appraiser/Underwriter FHA Training -- Residential Property Construction and Inspection -- Numerous other continuing education seminars for state licensing & AI Speaking Engagements -- Bankers -- Auditors -- Assessors -- Relocation (Panel Discussion) Publications -- Real Estate Appraisal Practice (book): Acknowledgement -- Articles for Finance & Commerce and Minnesota Real Estate Journal Nagell Appraisal Incorporated | 952.544.8966 Page 49