HomeMy WebLinkAbout08(A) - Approval of a Resolution Authorizing the Mayor and City Manager to Enter into a Purchase Agreement for City-Owned property at 17232 Sunset Trail SW ReportGeneral Location Map
17232 Sunset Trail SW
040822v4
PURCHASE AGREEMENT
This agreement (“Agreement”) is made as of April 20, 2022, between CITY OF PRIOR
LAKE, a Minnesota municipal corporation (“Seller”), and MICHAEL P. JENSEN and MARY
B. JENSEN, husband and wife, as joint tenants (collectively the “Buyer”), the date of full
execution by the parties being the “Effective Date.”
1. SALE OF PROPERTY. Seller shall sell to Buyer, and Buyer shall buy from
Seller, the real property located at 17232 Sunset Trail SW, Prior Lake, Scott County, Minnesota
55372, legally described as Lot 3, Sunset Shore (“Land”), Tax Parcel No. 25-1340031, together
with (a) any vacated right-of-way that inures to the Land, and (b) all easements, hereditaments
and rights benefitting or appurtenant to the Land (collectively the “Property”). Buyer desires to
combine, consolidate, and improve the Property with Lot 2, Sunset Shore, for residential
purposes (“Intended Use”).
2. PURCHASE PRICE AND MANNER OF PAYMENT. The total purchase price
(“Purchase Price”) to be paid by Buyer to Seller for the Property shall be $140,000.00, payable
as follows:
2.01 $2,500.00 as earnest money (“Earnest Money”) to be paid within two days after
acceptance of this Agreement by Seller and held in trust by Scott County Abstract and Title, Inc.,
223 Holmes Street, Shakopee, Minnesota 55379 (“Title”), pursuant to the terms of the escrow
agreement attached hereto as Exhibit A (“Escrow Agreement”). At Closing (defined below), the
Earnest Money shall be applied to the Purchase Price.
2.02 $137,500.00 payable at Closing.
3. CONTINGENCIES. Unless waived by Buyer in writing, Buyer’s obligation to
purchase the Property shall be subject to and contingent upon each of the following:
3.01 The satisfaction of Buyer, in their sole discretion, with the Documents (defined
below), and the suitability of the Property for the Intended Use.
3.02 Buyer shall have secured a commitment for financing the acquisition and
improvement of the Property for the Intended Use upon terms acceptable to Buyer, in their sole
discretion.
3.03 The “Contingency Date” shall be the Closing Date. If any of the foregoing
contingencies have not been satisfied on or before the Contingency Date, then this Agreement is
terminated; and (a) Buyer and Seller shall execute a termination of this Agreement, (b) the
Earnest Money shall be released to Buyer, and (c) neither party will have further rights or
obligations regarding this Agreement or the Property. If all contingencies are satisfied in writing
on or before the Contingency Date, Seller and Buyer shall proceed to the Closing according to
the terms hereof.
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4. BUYER’S ACCESS AND INVESTIGATION. Seller shall allow Buyer, and
Buyer’s agents, access to the Property at reasonable times for the purpose of Buyer’s
investigation and testing the same. Buyer shall pay the costs and expenses of such investigation
and testing, and shall indemnify, defend and hold Seller and the Property harmless from the costs
and liabilities relating to Buyer’s activities.
5. SPECIAL COVENANTS.
5.01 Seller shall, within 5 days after the Effective Date, deliver to Buyer any existing
surveys, soil tests and other reports regarding the Property that are in the possession or control of
Seller (collectively the “Documents”).
5.02 Seller shall, concurrently or within 90 days after the Closing, vacate and replace
the easement established upon the Property by the Certificate of Completion, dated October 12,
1983, filed for record August 17, 1998, as documents 97183 and 423203 (“Utility Easement”), to
correct a defect in the legal description and include the placement and maintenance of the
existing storm sewer line as an additional authorized use.
5.03 Buyer shall enter into a Special Lot Combination Agreement substantially in the
form of the attached Exhibit B, to combine Lots 2 and 3, Sunset Shore, which shall be executed
and recorded at Closing. Buyer shall apply for consolidation of the Property with Lot 2, Sunset
Shore, into a single parcel for real estate tax purposes within sixty (60) days of the Closing.
5.04 To the extent the Property may constitute residential real estate, any obligation of
Seller to provide a disclosure statement under Minn. Stat. § 513.55 is waived by Buyer.
6. CLOSING.
6.01 The closing of the purchase and sale contemplated by this Agreement
(“Closing”) shall occur on or before May 27, 2022, (“Closing Date”). The Closing shall take
place at 10:00 a.m. at the office of Title or at such other time and place as Seller and Buyer
may mutually determine. Seller agrees to deliver possession of the Property to Buyer on the
Closing Date.
6.02 On the Closing Date, Seller shall execute and/or deliver to Buyer the following
(collectively “Seller’s Closing Documents”):
(a) A Limited Warranty Deed (“Deed”), in recordable form reasonably
satisfactory to Buyer, conveying the Property to Buyer, free and clear of all encumbrances,
except the encumbrances set forth on the attached Exhibit C (“Permitted Encumbrances”).
(b) An affidavit and/or indemnity (ALTA form) of Seller, as may be required
by Title to issue the Policy (defined below), indicating that on the Closing Date (i) there are no
outstanding, unsatisfied judgments, tax liens or bankruptcies against or involving Seller or the
Property; (ii) there has been no skill, labor or material furnished to the Property for which
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payment has not been made or for which mechanics’ liens could be filed; and (iii) there are no
other unrecorded interests in the Property.
(c) A non-foreign affidavit, properly executed, containing such information as
is required by Internal Revenue Code Section 1445(b)(2) and its regulations.
(d) All other documents reasonably determined by Buyer to be necessary to
transfer the Property to Buyer free and clear of all encumbrances, except the Permitted
Encumbrances.
6.03 Buyer’s Closing Documents. On the Closing Date, Buyer will execute and/or
deliver to Seller the following (collectively “Buyer’s Closing Documents”):
(a) The Purchase Price less the Earnest Money, by wire transfer or other
immediately available funds to be delivered to Seller on the Closing Date.
(b) All other documents reasonably determined by Title to record the Seller’s
Closing Documents and issue the Policy.
7. PRORATIONS.
7.01 Buyer will pay all costs of the Commitment (defined below) and the fees charged
by Title for any escrow required regarding Buyer’s Objections (defined below). Buyer will pay
the premiums required for the issuance of the Policy. Seller and Buyer shall each pay one-half of
any reasonable and customary closing fee or charge imposed by Title.
7.02 Seller shall pay any state deed tax regarding the Deed to be delivered by Seller
under this Agreement.
7.03 At Closing, the Purchase Price shall be adjusted as follows:
(a) The Property is currently owned by a municipal corporation and therefore
exempt from state and local real estate taxes; provided that in the unlikely event that any such or
a similar tax is payable in connection with the Closing, such tax shall be paid by the Seller at the
Closing.
(b) Levied or pending assessments (general or special) arising out of or in
connection with any assessment district created or confirmed prior to the Closing Date, including
any installment of such assessments and interest thereon certified for payment with the Taxes
due and payable in the year of Closing, shall be paid by Seller at Closing.
(c) Levied or pending assessments (general or special) arising out of or in
connection with any assessment district created or confirmed on or after the Closing Date,
including any installment of such assessments and interest thereon certified for payment with the
Taxes due and payable in or after the year in which Closing occurs, shall be assumed by Buyer at
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Closing or Buyer shall reimburse Seller for prepaid amounts at Closing in addition to the
payment of the Purchase Price.
7.04 Seller will pay the cost of recording all documents necessary to place record title
in the condition warranted by Seller and vacate the Utility Easement on the Property, and Buyer
shall pay the cost of obtaining a corrective legal description, drawing thereof, and utility
easement document to replace the Utility Easement. Buyer will pay the cost of recording all
other documents, including the replacement utility easement.
7.05 Each of the parties will pay their own attorneys’ fees.
8. TITLE EXAMINATION.
8.01 Buyer shall, within 5 days after the Effective Date, obtain and furnish to Seller a
commitment (“Commitment”) for an ALTA Form B 2021 owner’s policy of title insurance
(“Policy”) insuring title to the Property in the amount of the Purchase Price. The Commitment
will commit Title to insure title to the Property subject only to the Permitted Encumbrances.
8.02 Within 10 days after receiving both the Commitment, Buyer may make written
objections (“Objections”) to their respective form and/or contents. Buyer’s failure to make any
Objection within such time period will constitute a waiver of such Objection. Any matter shown
on the Commitment and not objected to by Buyer shall become a Permitted Encumbrance. Seller
will have 60 days after receipt to cure the Objections, during which period the Closing will be
postponed as necessary. Seller shall use reasonable efforts to correct the Objections. If any
Objections are not cured within such 60-day period, Buyer will have the option to do either of
the following:
(a) Terminate this Agreement and receive a refund of the Earnest Money; or
(b) Waive the Objections and proceed to Closing.
8.03 Buyer shall obtain either the Policy pursuant to the Commitment, or a suitably
marked up Commitment initialed by Title undertaking to issue the Policy in the form required by
the Commitment as approved by Buyer.
9. REPRESENTATIONS AND WARRANTIES BY SELLER. Seller represents
and warrants to Buyer as follows:
9.01 Seller has the authority to enter into and perform this Agreement and execute and
deliver the Seller’s Closing Documents.
9.02 Seller is not a “foreign person”, “foreign partnership”, “foreign trust”, or “foreign
estate” as those terms are defined in Section 1445 of the Internal Revenue Code.
9.03 To the best of Seller’s knowledge, there are no wells or individual sewage
treatment systems located on the Property.
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9.04 There is no proceedings of any kind pending or to the knowledge of Seller
threatened against Seller or any portion of the Property.
9.05 To the best of Seller’s knowledge, there are not now, nor have there ever been
underground or above ground storage tanks of any size or type located on the Property.
9.06 To the best of Seller’s knowledge, there are no Hazardous Materials on the
Property. The term “Hazardous Materials” as used herein shall mean any hazardous or toxic
substances, materials, chemicals, or wastes in any form and in any concentration that is or
becomes regulated by the United States or any state or local government authority having
jurisdiction over the Property. Seller will indemnify Buyer, its successors and assigns,
against, and will hold Buyer, its successors and assigns harmless from, any expenses or
damages, including reasonable attorney's fees, that Buyer incurs because of the breach of any
of its representations and warranties, whether such breach is discovered before or after the
conveyance of the Property for a period of one (1) year following the Date of Closing as
defined below.
10. CONDITION. Buyer shall accept possession of the Real Property on the Closing
Date strictly on an “AS IS, WHERE IS, WITH ALL FAULTS” basis, and that such sale shall be
without representation or warranty of any kind, express or implied, except as otherwise provided
herein. Buyer acknowledges and agrees that except for the proceeding to vacate the existing
Utility Easement as provided in Paragraph 5.02, Seller shall be under no duty to make any
changes, alterations or repairs to the Real Property. Any alterations or repairs required by the
Buyer shall be the sole responsibility and expense of the Buyer. Buyer understands the AS-IS
provision is a material inducement to Seller’s willingness to enter into this Agreement. The
provisions of this Paragraph 10 shall survive closing or termination of this Agreement.
11. BROKER’S COMMISSION. Seller and Buyer represent and warrant to each
other that they have dealt with no brokers, finders or the like in connection with this transaction,
and agree to indemnify each other and to hold each other harmless against all claims, damages,
costs or expenses of or for any other such fees or commissions resulting from their actions or
agreements regarding the execution or performance of this Agreement, and will pay all costs of
defending any action of lawsuit brought to recover any such fees or commissions incurred by the
other party, including reasonable attorneys’ fees.
12. FORCE MAJEURE. A non-monetary obligation of Seller or Buyer which
cannot be satisfied due to war, strikes, acts of God or other events which are beyond the
reasonable control of Seller or Buyer, as the case may be (each a “Force Majeure Event”), shall
be excused until the cessation of such Force Majeure Event; provided that in no event shall any
Force Majeure Event excuse any obligation for longer than a 12-month period from the
occurrence of such Force Majeure Event.
13. SURVIVAL. All of the terms of this Agreement will survive and be enforceable
after the Closing, provided that indemnification obligations herein shall survive any termination
of this Agreement.
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14. NOTICES. Any notice required or permitted hereunder shall be given by
personal delivery upon an authorized representative of a party hereto; or if mailed in a sealed
wrapper by United States registered or certified mail, return receipt requested, postage prepaid;
or if delivered by electronic mail notice (which shall be effective for all purposes hereunder),
sent to the electronic mail address provided below; provided, however, that any electronic mail
notice must be followed by another form of notice under this Section within one business day
which expressly states that it is intended to constitute a notice under this Agreement; or if
deposited cost paid with a nationally recognized, reputable overnight courier, properly addressed
as follows:
If to Seller: City of Prior Lake
Attn: Casey McCabe
4646 Dakota Street SE
Prior Lake, MN 55372
Email: cmccabe@cityofpriorlake.com
With Copy to: David S. Kendall
Campbell Knutson, P.A.
860 Blue Gentian Road, Suite 290
Eagan, MN 55121
If to Buyer: Michael P. Jensen and Mary B. Jensen
17244 Sunset Trail SW
Prior Lake, MN 55372
Email: signatureinvestmentsinc@gmail.com
With Copy to: Huemoeller, Gontarek & Cheskis PLC
Attn: Bryce D. Huemoeller
16670 Franklin Trail SE
Prior Lake, MN 55372
Email: bdh@priorlakelaw.com
Notices shall be deemed effective on the earlier of the date of receipt or the date of deposi t, as
aforesaid; provided, however, that if notice is given by deposit, the time for response to any
notice by the other party shall commence to run one business day after any such deposit. Any
party may change its address for the service of notice by giving notice of such change 10 days
before the effective date of such change.
15. CAPTIONS. The paragraph headings or captions appearing in this Agreement are
for convenience only, are not a part of this Agreement and are not to be considered in
interpreting this Agreement.
16. ENTIRE AGREEMENT, MODIFICATION. This written Agreement constitutes
the complete agreement between the parties and supersedes any prior oral or written agreements
between the parties regarding the Property. There are no verbal agreements that change this
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Agreement and no waiver of any of its terms will be effective unless in a writing executed by the
parties.
17. BINDING EFFECT. This Agreement binds and benefits the parties and their
successors and assigns.
18. CONTROLLING LAW. This Agreement has been made under the laws of the
State of Minnesota, and such laws will control its interpretation.
19. DEFAULT.
19.1 If Buyer defaults in the performance of Buyer’s obligations under this Agreement
due to no fault of Seller, then Seller may (a) cancel and terminate this Agreement in the m anner
provided by applicable law and retain the Earnest Money as liquidated damages; (b) enforce
specific performance of this Agreement; or (c) seek damages from Buyer in excess of the Earnest
Money.
19.2 If Seller defaults in the performance of Seller’s obligations under this Agreement
due to no fault of Buyer, then Buyer shall have the sole remedies as follows: (a) terminate this
Agreement, or (b) in lieu of termination hereof, seek specific performance of this Agreement.
The Seller shall not be liable to the Buyer for monetary damages of any kind arising from the
failure of the Seller to comply with any obligation pursuant to this Agreement, and the Buyer
understands the sole remedies available to the Buyer are outlined in this Section 19.2.
20. THIRD PARTY BENEFICIARY. There are no third-party beneficiaries of
this Agreement, intended or otherwise.
21. NO JOINT VENTURE, PARTNERSHIP. Seller and Buyer, by entering into
this Agreement and the transactions contemplated hereby, shall not be considered joint
venturers or partners.
22. SEVERABILITY. In the event that any term or provision of this Agreement is
determined to be invalid or unenforceable for any reason, such term or provisions shall be
severed from this Agreement without affecting the validity or enforceability of the remainder of
this Agreement; provided that both parties may still effectively realize the complete benefit of
the transaction set forth in this Agreement.
23. RECORDING. Seller and Buyer will not record this Agreement or a short-
form of this Agreement without the consent of the other party.
24. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original, but all of which, when
taken together, constitute the same instrument.
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SELLER
CITY OF PRIOR LAKE
BY______________________________
Its Mayor
AND____________________________
Its City Manager
Date Signed: ________________, 2022
BUYER
________________________________
MICHAEL P. JENSEN
________________________________
MARY B. JENSEN
Date Signed: ________________, 2022
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EXHIBIT A
[To Purchase Agreement, dated April 20, 2022, between CITY OF PRIOR LAKE, Seller,
and MICHAEL P. JENSEN and MARY B. JENSEN, Buyer]
ESCROW AGREEMENT
(Paragraph 2.1)
The undersigned, Scott County Abstract and Title, Inc. (“Title”), acknowledges receipt of
$2,500.00 (“Earnest Money”) to be held by it pursuant to the Purchase Agreement to which this
Escrow Agreement is attached. Title will hold, invest and disburse the Earnest Money in
accordance with the terms of the Purchase Agreement and disburse the same strictly in
accordance with such terms. Title will invest the Earnest Money in such interest -bearing
accounts, instruments, corporate paper, or money market funds as are approved by both Buyer
and Seller.
Title is not responsible for any decision concerning the performance or effectiveness of
the Purchase Agreement or for resolution of any disputes concerning the Purchase Agreement.
Title is responsible only to act in accordance with the Purchase Agreement, or in lieu thereof, the
direction of a court of competent jurisdiction. Seller and Buyer shall hold Title harmless from all
claims for damages arising out of this Escrow Agreement and hereby agree to indemnify Title
for all costs and expenses in connection with this escrow, including attorneys’ fees and costs,
except for the failure by Title to account for the funds held hereunder, or acting in conflict with
the terms hereof. This Agreement may be signed in counterparts.
The fees and charges of Title will be paid one-half by each party.
SELLER
CITY OF PRIOR LAKE
BY______________________________
Its Mayor
AND_____________________________
Its City Manager
Date Signed: _________________, 2022
BUYER
________________________________
MICHAEL P. JENSEN
________________________________
MARY B. JENSEN
Date Signed: ________________, 2022
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TITLE
SCOTT COUNTY ABSTRACT AND
TITLE, INC.
BY______________________________
ITS
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EXHIBIT B
[To Purchase Agreement, dated April 20, 2022, between CITY OF PRIOR LAKE, Seller,
and MICHAEL P. JENSEN and MARY B. JENSEN, Buyer]
SPECIAL LOT COMBINATION AGREEMENT
(Paragraph 5.03)
[See attached]
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EXHIBIT C
[To Purchase Agreement, dated April 20, 2022, between CITY OF PRIOR LAKE, Seller,
and MICHAEL P. JENSEN and MARY B. JENSEN, Buyer]
PERMITTED ENCUMBRANCES
(Paragraph 6.2)
1. The lien of real estate taxes not yet due and payable.
2. Building and zoning laws, ordinances, state and federal regulations.
3. Utility, road and drainage easements of record, including without limitation the
Utility Easement.
4. Covenants relating to the consolidation of Lots 2 and 3, Sunset Shore, into a
single parcel of record.
5. Any other matters consented to by Buyer in writing or not timely objected to by
Buyer.
218941v1 1
(reserved for recording information)
SPECIAL LOT COMBINATION
AGREEMENT
THIS INDENTURE is made and entered into this ______ day of ____________,
2021, by the CITY OF PRIOR LAKE, a Minnesota municipal corporation, its successors and
assigns (hereinafter referred to as “City”), and MICHAEL P. JENSEN AND MARY B.
JENSEN, husband and wife, as joint tenants, (hereinafter referred to as “Owners”).
WITNESSETH:
WHEREAS, Owners are the fee owners of certain real property in the City of Prior Lake,
Scott County, Minnesota, legally described as follows (and hereinafter collectively referred to as
the “Properties”):
Lot 2, Sunset Shore, Scott County, Minnesota (hereinafter described as “Parcel A”); and
Lot 3, Sunset Shore, Scott County, Minnesota (hereinafter described as “Parcel B”); and
WHEREAS, Owners intend to apply for a tax parcel combination of the Properties; and
WHEREAS, in Resolution ___________ adopted __________________, the City Council
required combination of Parcel A and Parcel B as a condition of the its approval of the Purchase
Agreement dated ____________, 2021 between City of Prior Lake, a Minnesota municipal
corporation (“Seller”) and Michael P. Jensen and Mary B. Jensen, husband and wife, as joint
tenants (collectively “Buyer”) ; and
WHEREAS, it is the intent of the Owners and the City that Parcel A and Parcel B are and
shall henceforth be continued in common ownership by the same person or persons, and further
that Parcel A and Parcel B are intended to be used and/or developed in common by Owners as they
were in fact one parcel instead of two.
218941v1 2
NOW, THEREFORE, for valuable consideration, the sufficiency of which is hereby
acknowledged, Owners hereby covenant, grant, gift, quit claim and convey to the City the right to
restrict, and Owners hereby agree to restrict, limit and preclude the ownership, use, improvement
and development of the Properties according to and under the conditions and covenants herein
contained, as follows:
1. The City and Owners agree that the Properties shall henceforth be contained in common
use and ownership even if recorded as a separate lot or parcel, and that the Properties will
not be conveyed, sold, leased or otherwise encumbered except together as if they were a
single parcel.
2. The City shall not issue any building permits, variances, or conditional use permits for any
structure or use on the Properties inconsistent with the covenants contained herein.
3. Owners hereby grant to the City the right to enter upon the Properties for the purposes of
inspection and enforcement of the covenants contained herein, and to cause to be lawfully
removed from the Properties, without any liability, any structures, uses, substances and
natural or unnatural materials inconsistent with the covenants contained herein.
4. In addition to any other remedy the City may have, the covenants and restrictions contained
herein may be enforced by injunction. Owners who are in possession of the Properties
shall pay to the City all costs and expenses including attorney’s fees incurred by the City
in enforcing the terms of this indenture.
5. The parties may mutually agree that the terms and conditions of this indenture may be
modified, amended, or extinguished and thereafter Parcel A and Parcel B may be separated.
6. Owners agree that recording of this indenture shall not vest any property rights in the
Properties and that any zoning of development authorities granted herein or hereinafter
because of this indenture shall remain subject to future regulation, modification, and/or
limitation by the City or other regulatory bodies in accordance with legally applicable and
enforceable zoning or other ordinances of the City.
7. The City does not intend that the public should have any interest in the Properties by virtue
of this indenture or otherwise, except as hereinabove set forth. This provision is not
intended to affect the validity of the City’s easement established upon the Property by the
Certificate of Completion, dated October 12, 1983, filed for record August 17, 1998, as
documents 97183 and 423203, as it may be amended, or any other easement for public
purposes on the Properties.
8. All provisions hereof shall run with the land and shall extend to and bind the heirs,
successors, representatives, grantees or assigns of the respective parties hereto.
218941v1 3
OWNERS:
______________________________________
Michael P. Jensen
______________________________________
Mary B. Jensen
STATE OF MINNESOTA )
)ss.
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me this _____ day of
____________________, 2021, by Michael P. Jensen, spouse to Mary B. Jensen.
________________________________________
NOTARY PUBLIC
STATE OF MINNESOTA )
)ss.
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me this _____ day of
____________________, 2021, by Mary B. Jensen, spouse to Michael P. Jensen.
________________________________________
NOTARY PUBLIC
218941v1 4
CITY OF PRIOR LAKE
By: _____________________________________
Kirt Briggs, Mayor
(SEAL)
By: _____________________________________
Jason Wedel, City Manager
STATE OF MINNESOTA )
( ss.
COUNTY OF SCOTT )
The foregoing instrument was acknowledged before me this ________ day of
______________, 2021, by Kirt Briggs and by Jason Wedel, respectively the Mayor and City
Manager of the City of Prior Lake, a Minnesota municipal corporation, on behalf of the
corporation and pursuant to the authority granted by its City Council.
_______________________________________
Notary Public
INSTRUMENT DRAFTED BY:
CAMPBELL KNUTSON
Professional Association
Grand Oak Office Center I
860 Blue Gentian Road, Suite 290
Eagan, Minnesota 55121
Telephone: (612) 452-5000
SNC/smt
Report Type
Appraisal Report
Effective Date
March 3, 2022
Prepared By:
Elizabeth Waytas, Appraiser
William R. Waytas, Appraiser, SRA
Ethan Waytas, MAI, Appraiser
Nagell Appraisal Incorporated
12805 Highway 55, Suite 300
Plymouth, Minnesota 55441
Tel: 952.544.8966 | Fax: 952.544.8969
Client Subject Property
City of Prior Lake Vacant Lake Frontage Land
Attn: Casey McCabe, Community Development Director 17232 Sunset Trail Southwest
4646 Dakota Street Southeast Prior Lake, Scott County, MN 55372
Prior Lake, MN 55372 Owner: City of Prior Lake
File # G2201006
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NAGELL APPRAISAL INCORPORATED
12805 Highway 55, #300
Plymouth, MN 55441 Phone: 952-544-8966
Established in 1968 Fax: 952-544-8969
____________________________________________________________________________________________________________________________________________
City of Prior Lake March 17, 2022
Attn: Casey McCabe, Community Development Director
4646 Dakota Street Southeast
Prior Lake, MN 55372
To Casey McCabe:
In accordance with your request, an appraisal report has been made on the following described
property:
Subject Property: Vacant Land
17232 Sunset Trail Southwest
Prior Lake, MN 55372
Described below is a summary of the appraisal report contained herein.
Property Overview
This report reflects the data found and the opinions concluded from an appraisal of a vacant residential lot
located in Prior Lake.
The site consists of 7,928 SF (0.18 acres) of site area and is has approximately 53’ front feet on Spring
Lake.
The subject site is non-buildable as a standalone site due to a large sanitary and storm sewer easement
running across the site, see survey for details. The site does have buildable area if assembled with
adjoining property.
Methodology: The highest and best conclusion of the subject is that a typical market participant would
likely sell the subject as extra side yard to an adjoining parcel (the subject is not buildable as a
standalone site). That being said, non-buildable lots can be difficult to find in the market as they do not
often sell.
Given this, a side yard analysis will be applied to determine the value of the subject. The side yard value
is the marginal increase in total price paid for extra lake front footage. Generally, as the width of a lot
increases beyond the minimum lot size, the price per front foot drops (unless the lot can be subdivided).
See later in the report for more information and analysis.
While a side yard analysis is applicable, there is also potential for an adjoining neighbor to pay a higher
value because their site is enhanced. For example, the neighbor to the south could create a larger
buildable pad area or the neighbor to the north could use the subject for impervious surface calculations.
Therefore, a second analysis will be conducted that considers the added market value of having a larger
lot. This captures the higher end of the value range.
A final value will be correlated between the two above indications.
Note: The COVID pandemic appears to be subsiding because of the vaccine and other factors and for
this property type no adjustment is deemed necessary.
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Letter of Transmittal – Continued
Report Use
− Decision making purposes
Intended User(s)
− City of Prior Lake
Extraordinary Assumptions
− None
Hypothetical Conditions
− None
Property Rights Appraised
− Fee Simple: The property is vacant land, as such, the appraised value reflects the fee simple
interest.
Property Components Appraised
− Real Estate: The appraised value includes the real estate value opinion.
− Furniture, Fixtures, & Equipment (FF&E): The appraised value does not include any values of
fixtures, furnishings and equipment. The appraised value reflects real estate only.
− Business Value: The appraised value does not include business value.
Highest and Best Use Conclusions
− As Vacant: See highest and best use analysis for details.
− As Improved: Not applicable as the subject is vacant land.
Valuation Methodology
The highest and best use of the subject is to sell to an adjoining neighbor for use as side yard.
Given the highest and best use, the following approaches are used:
− Cost Approach: Not applied due to no building improvements.
− Sales Comparison Approach: Similar residential land property sales.
− Income Approach: Not applicable as land like the subject is very rarely rented, which
limits the reliability of this approach.
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Letter of Transmittal – Continued
The property is legally described herein. The appraisal assumes that the property meets all current
environmental standards. The appraisal analysis and conclusions are subject to certain limiting conditions
and assumptions described herein. The final value opinion, as of March 3, 2022, is:
FINAL VALUE OPINION – Fee Simple Interest – $140,000
Exposure Time / Marketing Time
Exposure Time:
Final values reflect “market exposure” time of under 1 year before the effective
date of the appraisal. Changes in the market, use, lease and/or building
subsequent to the effective appraisal date could impact value.
Marketing Time: Marketing times for appropriately priced properties is generally 12 months +/-.
Our company has 12 employees, has been in business since 1968 and has sufficient knowledge,
education, experience, resources and/or contacts to competently complete this assignment. The
accompanying report contains data secured from my personal investigation and from sources considered
to be reliable; however, correctness is not guaranteed. To the best of my knowledge and belief, the
statements contained in this report are true and correct. Neither my employment to make this appraisal,
nor the compensation, is contingent upon the value reported. This report has been prepared in conformity
with the code of professional ethics and standards of professional appraisal practice of the Appraisal
Institute and appraisal standards set forth by Uniform Standards of Professional Appraisal Practice.
Please contact us if you have further questions.
Sincerely,
Elizabeth Waytas Ethan Waytas, MAI William R. Waytas
Trainee Appraiser MN 40672995 Certified General MN 40368613 Certified General MN 4000813
________________________________________________________________________________________________________________________________________
www.nagellmn.com
TABLE OF CONTENTS
SUMMARY OF IMPORTANT FACTS & CONCLUSIONS ....................................................................... 7
VALUE TYPE, CONDITION & STABILITY OF PROPERTY .................................................................... 8
INTENDED USE OF THE APPRAISAL ................................................................................................... 8
DATE OF APPRAISAL ............................................................................................................................. 8
SCOPE OF THE APPRAISAL REPORT .................................................................................................. 9
PROPERTY RIGHTS APPRAISED ........................................................................................................ 10
PROPERTY COMPONENTS APPRAISED ........................................................................................... 10
IDENTIFICATION ................................................................................................................................... 11
REAL ESTATE TAXES – PARCEL A..................................................................................................... 11
SUBJECT SALES & BUILDING HISTORY ............................................................................................ 12
REGIONAL DATA................................................................................................................................... 13
REGIONAL MAP .................................................................................................................................... 21
CITY & NEIGHBORHOOD DESCRIPTION ........................................................................................... 22
NEIGHBORHOOD MAP ......................................................................................................................... 24
SURROUNDING USES .......................................................................................................................... 25
SUBJECT MARKET CONDITIONS OVERVIEW ................................................................................... 26
SITE DESCRIPTION .............................................................................................................................. 27
ZONING .................................................................................................................................................. 28
ZONING MAP ......................................................................................................................................... 29
FLOOD MAP ........................................................................................................................................... 30
AERIAL / PLAT MAP .............................................................................................................................. 31
EXISTING EASEMENT SURVEY .......................................................................................................... 32
PROPOSED EASEMENT SURVEY ....................................................................................................... 33
SUBJECT PHOTOGRAPHS .................................................................................................................. 34
HIGHEST AND BEST USE .................................................................................................................... 36
COST APPROACH ................................................................................................................................ 38
INCOME APPROACH ............................................................................................................................ 38
SALES COMPARISON APPROACH ..................................................................................................... 38
RECONCILIATION ................................................................................................................................. 51
EXPOSURE TIME / MARKETING TIME ................................................................................................ 51
DEFINITIONS ......................................................................................................................................... 52
ENVIRONMENTAL & STRUCTURAL ISSUES ...................................................................................... 52
EXTRAORDINARY ASSUMPTIONS & HYPOTHETICAL CONDITIONS ............................................. 53
ASSUMPTIONS AND LIMITING CONDITIONS .................................................................................... 54
CERTIFICATION .................................................................................................................................... 56
QUALIFICATIONS .................................................................................................................................. 57
ADDENDA TO APPRAISAL REPORT ................................................................................................... 61
Nagell Appraisal Incorporated | 952.544.8966 Page 7
SUMMARY OF IMPORTANT FACTS & CONCLUSIONS
General Description: Vacant Residential Land
Appraisal Report: Appraisal Report
Current Use: Vacant land
Extraordinary Assumptions: None, see rear of report for assumptions
Hypothetical Assumptions: None, see rear of report for assumptions
Site Size: 7,928 SF (0.18 acres)
Year Built: n/a, the subject is not improved
GBA: n/a, the subject is not improved
Zoning: R1, Low Density Residential
Highest and Best Use: See highest and best use analysis for details. The conclusion
is to sell to an adjoining neighbor
Property Rights Appraised: Fee Simple
Business Value / FF&E: No business value or FF&E included
Cost Approach: Not Applicable
Sales Comparison Approach: $140,000
Income Approach: Not Applicable
Final Value Opinion (as is): $140,000
Page 8 Nagell Appraisal Incorporated | 952.544.8966
VALUE TYPE, CONDITION & STABILITY OF PROPERTY
Type of Value: This report provides an opinion of Market Value.
Condition of Value: This report provides an opinion of the as-is value.
Occupancy: The property is currently vacant land.
INTENDED USE OF THE APPRAISAL
Intended Use:
The client intends to use the appraisal decision making purposes.
No party, other than the named client and listed intended users, may
use or rely upon any part of this report without the prior written
authorization of both the named client and the appraiser. This report is
not valid unless it contains the original signatures in blue ink. Any
unauthorized third party relying upon any portion of this report does so
at its own risk.
Intended User(s): City of Prior Lake
DATE OF APPRAISAL
Effective Date: March 3, 2022
Inspection Date: March 3, 2022
Date of Report: March 17, 2022
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SCOPE OF THE APPRAISAL REPORT
USPAP defines Scope of Work as: The type and extent of research and analyses in an
assignment.
For each appraisal, appraisal review and appraisal consulting assignment, an appraiser must:
1) Identify the problem to be solved,
2) Determine and perform the scope of work necessary to develop credible
assignment results; and
3) Disclose the scope of work in the report.
1) Provide a reasonably supported value opinion as it relates to the intended use & scope.
2)
Per assignment request (see addenda for engagement letter), the following degree of research
and analysis has been made. The narrative format used is an Appraisal Report, which is
intended to comply with the reporting requirements set forth under Standards Rule 2-2a of
USPAP. See individual approaches for further detail.
3)
The scope of work for this appraisal includes:
• a) Property Identification: Public record, plat maps, zoning maps and aerial photographs
were used to identify the subject property.
• b) Property Inspection: A viewing of the subject property and neighborhood by the
appraiser. Physical factors: Based on property viewing and conversations with the client,
city and county officials. Lot size is based on county information. Economic Factors:
Consisted of gathering of information from market experts, city and/or county offices, and
internet about the region, community, neighborhood, zoning, utilities, and any pending
projects in the area that may affect the subject property.
• c) Extent of Data Researched: Sales data of competing properties within the subject market
area were given primary consideration. The most relevant data is used in this report.
Sources include, appraiser data files, assessor, internet, developers, agents, MLS,
periodicals, in-office library, etc. In addition, during the course of appraisal practice and of
this appraisal process, the appraiser has had ongoing discussions with market participants
(buyers, sellers, property managers, real estate agents/brokers, appraisers, etc.) and/or
viewed market data in relation to how the current real estate market may impact the subject
value. The appraiser has not researched the title or ownership records.
• d) Type and Extent of Analysis Applied at Opinions or Conclusions: An extensive review of
market data was performed. The most recent, similar and proximate data has been used.
The data used will be adjusted on a grid. Reasonable and appropriate collection,
verification, analysis and viewing has been performed in the valuation approaches, given
the purpose and intended use of the report. A final value opinion will be discussed and
correlated.
The data used was obtained from sources considered credible, yet its accuracy is not guaranteed. If
found otherwise, value could differ.
Page 10 Nagell Appraisal Incorporated | 952.544.8966
PROPERTY RIGHTS APPRAISED
Real property ownership consists of a group of distinct rights. There are two primary property rights, Fee
Simple and Leased Fee (as defined by The Appraisal of Real Estate, 13th Edition, Appraisal Institute).
Fee Simple Interest: Absolute ownership unencumbered by any other interest or estate, subject only to
the limitations imposed by the governmental powers of taxation, eminent domain, police power, and
escheat.
Note: This would typically reflect an owner-occupied property. When the property rights appraised are the
unencumbered fee simple interest of the real estate, the appraised value is subject to normal easements
for drainage, public streets and utilities, if any. The effect of any existing mortgage or delinquent taxes on
the subject property has not been considered in this appraisal.
Leased Fee Interest: The ownership interest held by a lessor (landlord), which includes the right to the
contract rent specified in the lease plus reversionary right when the lease expires. The lessor’s interest in
a property is considered a leased fee interest regardless of the duration of the lease, specified rent, the
parties to the lease, or any of the terms in the lease contract.
A leased property, even one with rent that is consistent with market rent, is appraised as a leased fee
interest, not as a fee simple interest. Even if the rent of the lease terms are not consistent with market
terms, the lease fee interest must be given special consideration and is appraised as a leased fee
interest. (The Appraisal of Real Estate, 13th Edition, Page 114)
The subject is currently vacant land. Given the scope of the assignment and use of the report, the Fee
Simple interest will be appraised.
PROPERTY COMPONENTS APPRAISED
Real Estate: The appraised value includes the real estate value opinion. The methods utilized for the real
estate valuation include:
• Sales Comparison Approach
FF&E: The appraised value does not include personal property, FF&E, or inventory.
Business Value: There is no business value included in the appraised value.
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IDENTIFICATION
Address: 17232 Sunset Trail Southwest,
Prior Lake, MN 55372
County PID: 251340031
Legal: SubdivisionName SUNSET SHORE Lot 003 SubdivisionCd 25134
Fee Owner: Prior Lake City Of & City Manager
Census Tract #: 0809.04
REAL ESTATE TAXES
Taxes, per County Records
Payable 2021 Payable 2022
Tax Tax Exempt n/a
Tax ratio (includes special assessments) n/a n/a
Special Assessments / Solid Waste Fee /
Other n/a n/a
Total Tax & Assessments: Tax Exempt n/a
Delinquent taxes: None noted, county records indicate taxes are current
COUNTY ASSESSOR’S VALUE
Payable 2021 Payable 2022
Land $322,000 $350,000
Building $0 $0
TOTAL $322,000 $350,000
Typical Tax Ratios by Property Type
Commercial (retail, office, industrial, hotel, other, etc.) 1.5% – 4.0%
Residential (multi-family, apartment, etc.) 0.9% – 1.5%
Single-family dwellings 0.8% – 1.5%
The appraised value given in this report assumes any/all special assessments, and/or liens are paid in full
and that there are no delinquent taxes, fees, payments, association dues, etc. Should it be found that any of
these exist the amount should be deducted from the appraised value. Appraiser did not research these
items; typically, a title search would reveal any of these. Note: The subject is tax exempt. Upon any
potential purchase taxes would likely increase significantly. The assessor appears to be treating the site as
entirely buildable, which is not the case.
Page 12 Nagell Appraisal Incorporated | 952.544.8966
SUBJECT SALES & BUILDING HISTORY
Listing History: The subject does not appear to be actively listed for sale.
Sales History:
Sale Price: n/a
Sale Date: n/a
Buyer: n/a
Seller: n/a
Terms: n/a
Source: Public records, MLS
There are no known or reported sales of the subject property within the past 3
years.
Pending Sale:
There is a potential pending sale between the city and owner to the south. A
price was not made available; this appraisal is part of the decision making
process.
Building History: None, the site is vacant.
Lease History: None apparent
Leasehold Interest: None apparent.
Association Dues: The subject is reportedly not part of an association or common interest
community (CIC).
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REGIONAL DATA
Metro Area
Minneapolis-Saint Paul is the most populous urban area in Minnesota and is composed of 186 cities and
townships. Built around the Mississippi, Minnesota and St. Croix rivers, the area is also nicknamed The
Twin Cities for its two largest cities, Minneapolis and Saint Paul. Saint Paul is the second largest city in
Minnesota, as well as the state capital.
The area is part of a larger U.S. Census division named Minneapolis-St. Paul-Bloomington, MN-WI, the
country’s 16th-largest metropolitan area, composed of eleven counties in Minnesota and two counties in
Wisconsin. This larger area, in turn, is enveloped in the U.S. Census combined statistical area called
Minneapolis-St. Paul-St. Cloud, MN-WI with an estimated population of 3.5 million people in 2006, ranked
the 13th most populous in the U.S.
In both of the fully developed central cities–Minneapolis and St. Paul–the population has declined due to
smaller household sizes, yet growth in other areas of their counties has been more than offsetting. Below
is detailed where this growth has occurred:
POPULATION
County Census
2000
Census
2010
Forecast
2020
Growth
2000 - 2010
Growth
2010 - 2020 Source: US Census Bureau total annual total annual
Hennepin 1,116,200 1,152,425 1,281,565 3.25% 0.32% 11.21% 1.12%
Ramsey 511,035 508,640 552,352 -0.47% -0.05% 8.59% 0.86%
Dakota 355,904 398,552 439,882 11.98% 1.20% 10.37% 1.04%
Anoka 298,084 330,844 363,887 10.99% 1.10% 9.99% 1.00%
Washington 201,130 238,136 267,568 18.4% 1.84% 12.36% 1.24%
Scott 89,498 129,928 150,928 45.17% 4.52% 16.16% 1.62%
Wright 89,986 124,700 141,337 38.58% 3.86% 13.34% 1.33%
Carver 70,205 91,042 106,922 29.68% 2.97% 15.45% 1.72%
Sherburne 64,417 88,499 97,183 37.38% 3.74% 17.44% 1.74%
Chisago 41,101 53,887 56,621 31.11% 3.11% 5.07% 0.51%
Total 2,837,560 3,116,653 3,458,245 9.84% 0.98% 10.96% 1.10%
Overall, the area has experienced moderate to good income growth. Annualized income growth of 2.5%
to 3.5% is consistent with national averages.
MEDIAN HOUSEHOLD INCOME
County Census
2010
Estimate
2019
Growth
2010 - 2019 Source: US Census Bureau total annual
Hennepin 59,236 78,167 31.96% 3.55%
Ramsey 50,136 64,660 28.97% 3.22%
Dakota 69,508 86,036 23.78% 2.64%
Anoka 65,771 82,175 24.94% 2.77%
Washington 77,239 96,671 25.16% 2.80%
Scott 77,314 102,152 32.13% 3.57%
Wright 66,833 84,974 27.14% 3.02%
Carver 80,173 101,496 25.13% 3.14%
Sherburne 69,971 89,250 27.55% 3.06%
Chisago 63,810 83,464 30.80% 3.42%
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Regional Data – continued
Economic Trends
The current residential interest rates for a typical 30-year mortgage are around 2.50% to 3.75%.
Commercial rates are around 4.0% to 6.0%. Rates are expected to be relatively stable for the
foreseeable future.
The state of the macro economy (national, state, etc.) declined from its peak in 2006, but in 2010 began
showing signs of recovery. Many economists are terming 2007 through 2009 as “The Great Recession”.
New construction labor costs have steadily increased, along with material costs as well. Overall,
construction costs are less competitive to what they were 5 to 6 years ago. Generally, when vacancy is
over 10%, new commercial/industrial construction is slow.
Listing prices have been increasing steadily since 2012 +/- and are starting to approach peak levels
similar to the market in 2006, which was a period of high seller expectations. However, recent buyer
and seller expectations regarding value and list prices appear to be trending towards equilibrium.
Although well diversified, the TCMA and surrounding Minnesota economy is not immune to the recent
soft/declining trends of the overall economy.
Source: Minnesota DEED
The recent COVID-19 pandemic created a significant drop in the economy due to high unemployment
and decreased spending in early 2020. However, spending has increased, employment is recovering, and
the COVID-19 vaccines have given markets stability.
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Regional Data – continued
EMPLOYMENT & LABOR
Over the past ten years, unemployment rates have gone from a peak of around 7.0% to near historical
lows of around 2% in late 2018. In 2020, the COVID-19 pandemic created a significant spike in the
unemployment rate. The most recent data, shown below, indicates that the rate has dropped significantly
and is approaching 2019 levels.
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Regional Data – continued
APARTMENT MARKET
CoStar reports that rents have been trending upward consistently for the past 10+ years. The current
average asking rate for an apartment unit in the Twin Cities Metro is around $1,350 per month.
Vacancy has fluctuated, but was trending downward until 2020. The COVID-19 pandemic caused a spike
in vacancy, which has since been declining.
However, vacancy is higher due to significant new construction, both in Minneapolis and surrounding
suburbs.
The following chart shows the annual absorption of apartment units:
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Regional Data – continued
RETAIL MARKET
CBRE indicates that current retail vacancy rates have been increasing and asking rent rates have been
declining. There has been absorption of vacant space in the market, however, many developers are
cautious about new retail construction. Strong locations retain typical demand; more speculative retail
construction generally does not occur.
Similarly, Cushman & Wakefield also shows stagnating retail asking rents and increasing vacancy:
Page 18 Nagell Appraisal Incorporated | 952.544.8966
Regional Data – continued
OFFICE MARKET
CBRE data shows that asking rents for the overall office market have generally been increasing. This has
also corresponded with an increase in vacancy rates as well. With the COVID-19 pandemic, many
employers and workers realized that working remotely was a viable option. It is anticipated that many
more companies will offer remote work full-time or part-time; this could impact office space as companies
need less square footage. The counterpoint, however, is that companies might retain the same space and
create social distancing opportunities in case of possible future COVID-19 flare-ups.
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Regional Data – continued
INDUSTRIAL MARKET
The industrial market nationwide has seen increases in rental rates and occupancy. Construction costs
have been increasing as well, due to shortages created by the COVID-19 pandemic. In Minnesota the
trend is similar to the country overall, vacancy has decreased, construction of new buildings is significant,
CBRE indicates that vacancy has been dropping, construction starts have increased, and absorption is
significant:
Speculative development, per CBRE, has been significant. For example, almost 3 million square feet of
speculative construction occurred in 2018/2019; of this, 96% has been leased. In 2020 around 1.5 million
square feet was constructed, around 85% is leased.
Buildings in 2021 are about 39% leased. It appears the market is supporting speculative industrial
development at this time.
Page 20 Nagell Appraisal Incorporated | 952.544.8966
Regional Data – continued
Cushman & Wakefield also reports decreasing vacancy rates and significant increases in asking rates for
industrial space.
Total construction and absorption has been generally stable, but in 2021 there was significantly more
absorption than construction. This would imply there is demand for more industrial space.
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REGIONAL MAP
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CITY & NEIGHBORHOOD DESCRIPTION
Type of neighborhood: Southwestern Suburban
Percent built-up: 80% developed
Stage of Development: Stable
Redevelopment: Limited redevelopment
Neighborhood boundaries: City Limits
Major Transportation: Highway 13, Highway 169
Predominant type & conformity:
Single Family Residential 60%
Two- & Multi-Family 10%
Commercial/Industrial 10%
Other/Vacant Land/Public 20%
Total: 100%
Average conformity.
Reputation of the area: Average
Typical property age: New to 65+ years, predominant 20-50 years
Single-Family Home Sales: $250,000 to $500,000+
Apartment Sales: $35,000 to $75,000+ per Unit
Office Property Sales: $40 to $150+ per SF
Retail Property Sales: $75 to $200 + per SF
Industrial Property Sales: $35 to $85+ per SF
Capitalization Rates: 8-12% Historic
Subject Market: Stabilizing
Neighborhood Trend: Stable
Detrimental influences: No major apparent
Comments: The subject is located in Prior Lake, a community approximately 30 minutes southwest of Downtown
Minneapolis. The city is situated around Upper and Lower Prior Lakes and Spring Lake, these lakes are recreational
in nature and are mostly surrounded by single-family residential. Prior Lake has a reputation as a stable community,
with nearby shopping and access to Highway 13 and 169. Access to downtown Minneapolis and surrounding
communities is fairly convenient with major shopping and commerce nearby.
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City & Neighborhood Description – continued
Subject City:
As of the 2010 census the population was 22,796, in 2000 it was 15,917. This represents a net increase
of 43.2% from 2000 to 2010. The 2019 population estimate for the city is 27,241, an increase of 19.5%.
The median income for the city is above both county and state levels (per Census Bureau). Income has
slightly increased over the time frame.
Median Home Prices: City of Prior Lake
Source: NorthstarMLS Stats
The median sale price for a single-family home in Prior Lake has steadily increased over the years. Prior
Lake is above both the County levels and the Twin Cities Region level.
Page 24 Nagell Appraisal Incorporated | 952.544.8966
NEIGHBORHOOD MAP
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SURROUNDING USES
Immediate surrounding uses consist primarily of residential. The subject is located on Spring Lake.
Subject
Residential
Residential
Residential
Upper Prior Lake
Spring Lake
Residential
Page 26 Nagell Appraisal Incorporated | 952.544.8966
SUBJECT MARKET CONDITIONS OVERVIEW
Market Conditions Overview is based on conversations with market participants, articles, publications and
data. Listed below are pertinent conditions of the subject market.
Current Market
Location Land Area Front Foot List
Date
Current
List Price $/FF
XXX 202nd Street West,
Lakeville 18,295 SF 87 Current $750,000 $8,621 per FF
Comments: Residential land listing located in Lakeville. The property is located on Lake Marion
Residential Land Sales $2,000 to $10,000+ per FF (depending on location, buildable, available utilities,
etc.)
Market Supply
Search Parameters: Source: MLS Location: Scott County
Property Type: Residential Land (Water Frontage 1+)
Search Results: Currently, there are 3 +/- offerings/available properties
Market Absorption
Search Parameters: Source: MLS Location: Scott County
Property Type: Residential Land (Water Frontage 1+)
Search Results: 8 +/- sales in the past year
Supply & Demand: Considering the above market data/statistics, and based on market
observations, the subject market is rated to be relatively stable.
Marketing Time: Market exposure times can vary based on seller motivations.
Typically, 6-24 months.
Market participant comments/
observations:
In general, raw (development) land value spiked up significantly between 2000 and 2007.
However, in 2007 to 2010, the market was correcting for atypical increases. Development
costs remained somewhat stable as raw material costs for construction were increasing and
labor costs were declining.
Beginning in mid-2012, new single-family residential developments were occurring in good
locations. This was due, in part, to increasing availability of credit, as well as pent up
demand for good quality, new housing. However, the pent-up demand that drove the market
through 2014 appears to have leveled off. Most developments, even in good markets, saw a
slow-down in 2015. Good markets include close-in locations (in-fill developments and/or
redevelopment sites), neighborhoods with convenient access or appealing amenity, areas
with highly rated schools, etc.
Demand for land in appealing communities (Plymouth, Maple Grove, Chanhassen,
Woodbury, Blaine, Lakeville, etc.) is somewhat average while demand continues to be a little
softer in more outlying locations closer to the development fringe (Albertville, Otsego, Lino
Lakes, Elko/New Market, Ramsey, Cottage Grove, etc.). Due to the availability of land in
secondary locations, demand has been slower to recover. Demand continues to be highly
variable depending upon use and location.
Overall Market Condition: Stable; however, economists are talking about a potential recession occurring
within the next 24 months.
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SITE DESCRIPTION
Dimensions: Mostly rectangular, see plat map
Gross Site Area: 7,928 SF (0.18 acres), per county
Topography / Shape: Mostly level / Mostly rectangular
Soil conditions / Drainage: Assumed stable / Appears average
Utilities:
Electricity/Gas Available
Water/Sanitary Sewer Available
Off-Site Improvements:
Street/Curb/Gutter: Bituminous / None
Sidewalk/Alley: None / None
Visual Road Condition: Fair to average, typical wear and tear
Street Lights/Storm Sewer: Standard / Surface
Access to site (#) / Frontage: Sunset Trail Southwest (1) / Sunset Trail Southwest
Visibility/Exposure: Average
Flood hazard zone: The subject does not appear to be located within a flood zone, see map
Bus Line: None apparent
Apparent Easements: Typical utility and drainage apparent; there is a large sanitary and storm
sewer easement located on the site, see survey for details.
Encroachments/Conditions: None noted
Surplus/Excess Land: None noted
Land to Building Ratio: n/a
Use / Functional Adequacy: Vacant residential land / Average
Surrounding Uses:
N – Residential S – Residential
E – Residential W – Spring Lake
Distance to Major Road: Less than a mile north of Highway 13 access
Comments: The subject is located along Sunset Trail Southwest, with average visibility for use. Immediate
surrounding uses consist primarily of residential. The subject is located on Spring Lake with approximately 53’
of lake frontage. No other apparent unusual conditions, adverse easements or encroachments are noted.
Page 28 Nagell Appraisal Incorporated | 952.544.8966
ZONING
Subject Zoning: R1, Low Density Residential
Intent (city code):
The purpose of the R1 Zoning District is to provide areas where the
emphasis is on single-family residential development. The Zoning
District provides for other uses which are compatible with the overall
low-density of these areas and which will serve the residential
neighborhood.
Permitted Uses: Boat slip, city; boat slip, personal; cemeteries; dwelling, single-family
detached; parks/open space; etc.
Conditional Uses: Cluster housing; controlled access lot; golf course; parking lot,
freestanding; parking lot, on-site; recreational dome; etc.
Major Building Restriction/
Requirements in this district:
Maximum Floor Area Ratio: cannot exceed 0.3
Minimum lot area: 12,000 SF
Minimum lot width: 86 feet
Front yard setback: 25 feet
Side yard setback: 10 feet
Rear yard setback: 25 feet
Parking: Dwelling, Single-Family Detached: Two parking spaces for each
dwelling unit
Use: The subject is vacant land. The site does not appear to meet the
minimum lot size and/or minimum lot width.
Future Land Use: Urban Low Density
Source: Zoning map, city code
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ZONING MAP
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FLOOD MAP
The subject does not appear to be located within a flood zone; however, appears to have typical shoreline
flooding.
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AERIAL / PLAT MAP
Red outline per county
Page 32 Nagell Appraisal Incorporated | 952.544.8966
EXISTING EASEMENT SURVEY
The red outline indicates the subject site area.
The blue dotted outline indicates the existing easement area.
The green dotted outline indicates the driveway easement area.
The above survey reflects the historical understanding of the various easement areas. However, a recent
survey indicated that the actual boundaries differ. This is shown on the next page.
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PROPOSED EASEMENT SURVEY
The above reflects the new proposed easement.
The red outline indicates the subject site area.
The blue dotted outline indicates the existing easement area.
The green dotted outline indicates the driveway easement area.
Note: This scenario will be applied; if found otherwise the appraised value could differ.
Note: It appears selling the subject to the parcel to the south is more feasible as they have potential to
add onto their existing house and/or redevelop.
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SUBJECT PHOTOGRAPHS
Looking north on Sunset Trail Southwest
Looking south on Sunset Trail Southwest
Right-of-way driveway
Site view
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Subject Photographs – Continued
Site view
Lake view
Shoreline
Sewer easement
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HIGHEST AND BEST USE
Highest and best use as defined in The Appraisal of Real Estate, Thirteenth Edition, by the Appraisal Institute, is:
"The reasonably probable and legal use of vacant land or an improved property, that is physically possible, legally
permissible, appropriately supported, financially feasible, and that results in the highest value.” Highest and best use
is analyzed in two ways, site as vacant and site as improved.
Typically, there are four criteria in highest and best use analysis
Legally permissible uses What uses are allowed by zoning?
Physically possible uses What uses are physically possible on the site?
Financially feasible use Which possible and permissible uses will produce a positive return?
Maximally productive use Of the financially feasible uses, which use produces the highest return warranted by the market
(the ideal improvements)?
Site as Vacant: Among all reasonable, alternative uses, the use that yields the highest present land value, after payments are
made for labor, capital, and coordination. The use of a property based on the assumption that the parcel of land is vacant or can be
made vacant by demolishing any improvements. The Dictionary of Real Estate Appraisal, Fifth Edition, by the Appraisal Institute.
Legally Permissible Uses: The subject is zoned R1, Low Density Residential, which allows for a
variety low density residential uses. The site is guided Urban Low Density. The site is not buildable as a
stand-alone site; however, if sold to a neighboring parcel (most likely the parcel to the south), the subject
could become buildable if assembled.
Physically Possible Uses: The physical characteristics of the site are not suitable for building as a
standalone due to the various easements. The site can be used as side yard and can support a home (if
assembled). Public utilities appear to be available and the subject has average visibility/access. The
property is located on Spring Lake with about 53’ of frontage.
Financially Feasible Uses: Typically, surrounding uses, market demand, and availability of financing
drive financially feasible uses.
Surrounding Uses: Immediate surrounding uses consist primarily of residential users. The
surrounding uses would support a residential related use (if assembled).
Financing: Residential interest rates are historically low, however, they have been creeping
upward. Currently, rates are 2.75% to 4.00%, depending on the loan amount and house type
(new construction rates are higher). Overall, financing availability is rated to be average to good.
The site as it currently exists would likely not be able to secure financing as it is not buildable. If
assembled, financing would not be an issue.
Market Demand: The property is located on Spring Lake in the City of Prior Lake. Overall,
demand for lake property is rated to be average to good. Most of the lots on the lake are built-up;
most new construction occurs with razing an existing house.
Financially Feasible Uses: The subject is not buildable. The city indicated that dock rights would
not be allowed on a vacant property. As such, a standalone residential or dock use is not possible
on the site. Assembly with an adjoining property to create a larger site is considered to be the
most financially feasible option.
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Highest and Best Use – Continued
Maximally Productive Use:
A typical market participant might consider the following options:
1) Develop the current vacant site: Given the useable area and zoning required setbacks, this
option does not appear to be feasible.
2) Sell to a neighbor: A typical market participant would likely sell the subject to a neighboring
parcel as extra side yard. It appears selling the subject to the parcel to the south is more feasible
as they have potential to add onto their existing house and/or redevelop.
3) Continue use: This option is possible; however, a typical market participant would likely sell it off
to a neighbor for assemblage.
Given the above, option 2 appears to be the most probable. As such, the highest and best use of the
subject is to sell off to a neighbor and/or continue to hold as the market demand warrants and zoning
allows.
Site as Improved: The use that should be made of a property as it exists. An existing improvement should be
renovated or retained as so long as it continues to contribute to the total market value of the property, or until the
return from a new improvement would more than offset the cost of demolishing the existing building and constructing
a new one. The Dictionary of Real Estate Appraisal, Fifth Edition, by the Appraisal Institute.
This analysis is not applicable as the subject is vacant land.
Most Likely Buyer: Would be a neighboring parcel for extra side yard and/or to expand existing home
(as allowed by zoning).
Valuation Methodology: The highest and best conclusion of the subject is that a typical market
participant would likely sell the subject as extra side yard to an adjoining parcel (the subject is not
buildable as a standalone site). That being said, non-buildable lots can be difficult to find in the market as
they do not often sell.
Given this, a side yard analysis will be applied to determine the value of the subject. The side yard value
is the marginal increase in total price paid for extra lake front footage. Generally, as the width of a lot
increases beyond the minimum lot size, the price per front foot drops (unless the lot can be subdivided).
While a side yard analysis is applicable, there is also potential for an adjoining neighbor to pay a higher
value because their site is enhanced. For example, the neighbor to the south could create a larger
buildable pad area or the neighbor to the north could use the subject for impervious surface calculations.
Therefore, a second analysis will be conducted that considers the added market value of having a larger
lot. This captures the higher end of the value range.
A final value will be correlated between the two above indications.
Page 38 Nagell Appraisal Incorporated | 952.544.8966
COST APPROACH
The subject is vacant land, the Cost Approach is not considered an applicable indicator of value and
therefore was not applied.
INCOME APPROACH
Vacant residential land is typically not rented in the market. Given the lack of applicable data, the Income
Approach was considered less reliable and was therefore not applied.
SALES COMPARISON APPROACH
The Sales Comparison Approach to Value is predicated upon sales of properties with similar
characteristics as the subject. The primary premise of this approach is that the market value of the
subject is directly related to the prices of competing properties after adjustment. Adjustments are
made in an effort to account for significant differences.
Supply and Demand: Sales in the market result from negotiations between buyers, sellers and
lenders. Buyers reflect market demand and sellers supply. If demand is high, prices tend to increase,
if it is low, prices usually decrease.
Substitution: The principle of substitution holds that the value of a property tends to be set by the
price paid to acquire a substitute property of similar utility and desirability within a reasonable amount
of time (The Appraisal of Real Estate, 14th Edition). The Sales Comparison Approach is less reliable
if substitute properties are not available in the market. There are adequate sales to apply the sales
comparison approach and formulate a reliable indication of market value.
Balance: The market tends to force a balance between supply and demand. Balance can change
due to shifts in population, variations in purchasing power, consumer tastes and preference and time.
Externalities: When possible, select comparables with similar location, economic conditions and
support facilities.
The Following Outline Is Used In The Sales Comparison Approach:
- A location map of the comparable sales.
- Comparable sales are listed.
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Comparable Location Map
Primary Comparable Selection/Search Criteria:
• Residential lake land sales
• Sale date of January 1, 2018+, older sales may be considered due to proximity
• Data from competing communities
• In some instances, older data and/or data from competing communities will be utilized due to
proximity to the subject and other characteristics similar to the subject.
Page 40 Nagell Appraisal Incorporated | 952.544.8966
Sales Comparison Approach – continued
COMPARABLE #1A
Location: 2xxx Center Road, Prior Lake
Description: Vacant Residential Land
Site Size: 16,771 SF
Lake: Upper Prior Lake
Front Foot: 110 Feet
Sale Date: September 2019
Sale Price: $555,000
Buildable: Yes
Unit Front Foot: $5,045 per SF
COMPARABLE #1B
Location: 5594 Candy Cove Trail Southeast,
Prior Lake
Description: Vacant Residential Land
Site Size: 22,216 SF
Lake: Lower Prior Lake
Front Foot: 78 Feet
Sale Date: October 2020
Sale Price: $500,000
Buildable: Yes
Unit Front Foot: $6,410 per SF
Sale A Sale B Difference
$/FF $5,045 $6,410 --
FF (front foot) 110 78 32
Sale Price $555,000 $500,000 $55,000
Side Yard Value (sale price difference / front foot difference) $1,719
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Sales Comparison Approach – continued
COMPARABLE #2A
Location: 9525 Laketown Road, Chaska
Description: Residential Land (nominal building
improvements)
Site Size: 1,960,636 SF
Lake: Piersons Lake
Front Foot: 277 Feet
Sale Date: March 2019
Sale Price: $925,000
Buildable: Yes
Unit Front Foot: $3,339 per SF
COMPARABLE #2B
Location: 9501 Lakewood Circle, Chaska
Description: Vacant Residential Land
Site Size: 2,793,938 SF
Lake: Piersons Lake
Front Foot: 417 Feet
Sale Date: January 2019
Sale Price: $1,325,000
Buildable: Yes
Unit Front Foot: $3,177 per SF
Sale A Sale B Difference
$/FF $3,339 $3,177 --
FF (front foot) 277 417 140
Sale Price $925,000 $1,325,000 $400,000
Side Yard Value (sale price difference / front foot difference) $2,857
Page 42 Nagell Appraisal Incorporated | 952.544.8966
Sales Comparison Approach – continued
COMPARABLE #3A
Location: XXX Lake Sarah Heights Drive,
Greenfield
Description: Residential Land (nominal building
improvements)
Site Size: 222,156 SF
Lake: Lake Sarah
Front Foot: 57 Feet
Sale Date: January 2020
Sale Price: $338,900
Buildable: Yes
Unit Front Foot: $5,945 per SF
COMPARABLE #3B
Location: 5125 Fern Drive, Independence
Description: Vacant Residential Land
Site Size: 63,162 SF
Lake: Lake Sarah
Front Foot: 150 Feet
Sale Date: April 2021
Sale Price: $435,000
Buildable: Yes
Unit Front Foot: $2,900 per SF
Sale A Sale B Difference
$/FF $5,945 $2,900 --
FF (front foot) 57 150 93
Sale Price $338,900 $435,000 $96,100
Side Yard Value (sale price difference / front foot difference) $1,033
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Sales Comparison Approach – continued
COMPARABLE #4A
Location: 121 Wildwood Beach Road,
Mahtomedi
Description: Vacant Residential Land
Site Size: 31,363 SF
Lake: White Bear Lake
Front Foot: 101 Feet
Sale Date: December 2018
Sale Price: $928,000
Buildable: Yes
Unit Front Foot: $9,188 per SF
COMPARABLE #4B
Location: 3 Gardner Lane, Dellwood
Description: Vacant Residential Land
Site Size: 22,564 SF
Lake: White Bear Lake
Front Foot: 150 Feet
Sale Date: September 2020
Sale Price: $1,100,000
Buildable: Yes
Unit Front Foot: $7,333 per SF
Sale A Sale B Difference
$/FF $9,188 $7,333 --
FF (front foot) 101 150 49
Sale Price $928,000 $1,100,000 $172,000
Side Yard Value (sale price difference / front foot difference) $3,510
Page 44 Nagell Appraisal Incorporated | 952.544.8966
Sales Comparison Approach – continued
COMPARABLE #5A
Location: 14535 Pine Road Northeast, Prior
Lake
Description: Residential Land (nominal building
improvements)
Site Size: 9,453 SF
Lake: Lower Prior Lake
Front Foot: 52 Feet
Sale Date: June 2021
Sale Price: $575,000
Buildable: Yes
Unit Front Foot: $11,058 per SF
COMPARABLE #5B
Location: 5562 Candy Cove Trail Southeast,
Prior Lake
Description: Residential Land (nominal building
improvements)
Site Size: 39,204 SF
Lake: Lower Prior Lake
Front Foot: 93 Feet
Sale Date: June 2020
Sale Price: $585,000
Buildable: Yes
Unit Front Foot: $6,290 per SF
Sale A Sale B Difference
$/FF $11,058 $6,290 --
FF (front foot) 52 93 41
Sale Price $575,000 $585,000 $10,000
Side Yard Value (sale price difference / front foot difference) $244
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Sales Comparison Approach – continued
COMPARABLE #6A
Location: 10321 – 204th Street West,
Lakeville
Description: Residential Land (nominal building
improvements)
Site Size: 16,553 SF
Lake: Lake Marion
Front Foot: 101 Feet
Sale Date: September 2021
Sale Price: $907,000
Buildable: Yes
Unit Front Foot: $8,980 per SF
COMPARABLE #6B
Location: 10330 – 199th Street West,
Lakeville
Description: Residential Land (nominal building
improvements)
Site Size: 36,373 SF
Lake: Lake Marion
Front Foot: 220 Feet
Sale Date: September 2021
Sale Price: $1,400,000
Buildable: Yes
Unit Front Foot: $6,363 per SF
Sale A Sale B Difference
$/FF $8,980 $6,363 --
FF (front foot) 101 220 119
Sale Price $907,000 $1,400,000 $493,000
Side Yard Value (sale price difference / front foot difference) $4,143
Page 46 Nagell Appraisal Incorporated | 952.544.8966
Sales Comparison Approach – continued
COMPARABLE #7A
Location: 1751 Shoreline Boulevard, Prior
Lake
Description: Residential Land (building
improvements torn down)
Site Size: 18,295 SF
Lake: Spring Lake
Front Foot: 105 Feet
Sale Date: July 2020
Sale Price: $425,000
Buildable: Yes
Unit Front Foot: $4,048 per SF
COMPARABLE #7B
Location: 1781 Shoreline Boulevard,
Shakopee
Description: Vacant Residential Lot
Site Size: 8,712 SF
Lake: Spring Lake
Front Foot: 73 Feet
Sale Date: June 2020
Sale Price: $250,000
Buildable: Yes
Unit Front Foot: $3,425 per SF
Sale A Sale B Difference
$/FF $4,048 $3,425 --
FF (front foot) 105 73 32
Sale Price $425,000 $250,000 $175,000
Side Yard Value (sale price difference / front foot difference) $5,469
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Sales Comparison Approach – continued
COMPARABLE #8A
Location: 1781 Shoreline Boulevard,
Shakopee
Description: Vacant Residential Lot
Site Size: 8,712 SF
Lake: Spring Lake
Front Foot: 73 Feet
Sale Date: June 2020
Sale Price: $250,000
Buildable: Yes
Unit Front Foot: $3,425 per SF
COMPARABLE #8B
Location: 17486 Vergus Avenue, Jordan
Description: Residential Land (building
improvements torn down)
Site Size: 35,153 SF
Lake: Spring Lake
Front Foot: 100 Feet
Sale Date: February 2019
Sale Price: $315,000
Buildable: Yes
Unit Front Foot: $3,150 per SF
Sale A Sale B Difference
$/FF $3,425 $3,150 --
FF (front foot) 73 100 27
Sale Price $250,000 $315,000 $65,000
Side Yard Value (sale price difference / front foot difference) $2,407
Page 48 Nagell Appraisal Incorporated | 952.544.8966
Sales Comparison Approach – Continued
Indicator Side Yard per FF
Range $244 - $5,469
Average $2,673
Median $2,632
The sales above reflect already assembled sites that do not have easements. The range in price per front
foot is common, as such 8 pairs have been considered. Given the location, characteristics, easement,
exposure, a rate near the lower end of the range is considered appropriate.
Front Foot (FF) Value per SF Total
53’ $1,900 $100,700
Opinion of Value (as is) – Side Yard $100,000 (rnd.)
Note: The above reflects a generic side yard value. A second value analysis will be completed on the
following page that indicates a higher potential value if the value add of assembling is considered.
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Sales Comparison Approach – Continued
The following analysis considers the contributory value of the subject if assembled with one of the
adjoining parcels to the north our south. The owner to the south expressed interest in purchasing the
subject, so that lot will be the basis for this analysis.
The land to the south has about 52’ of frontage on the lake. If combined with the subject the total lake
frontage would be 105’.
Based on the sales from the prior pages, specifically 1A, 1B, 5A, 5B, 6A, 6B, 7A, 7B, and 8B, the
following sale prices per front foot are indicated:
Minimum: $3,150 per front foot
Maximum: $11,058 per front foot
Average: $6,085 per front foot
Median: $6,290 per front foot
Sale 5A, which is $11,058 per front foot, appears to be a significant outlier. If removed, the average is
$5,464 per front foot while the median is $5,668 per front foot.
Considering a price per front foot of $5,000, the total value of the combined site would be:
105’ x $5,000 per front foot = $525,000 rounded
The base buildable lot, which is the neighbor to the south, likely would have a price per front foot around
$6,500. This would be:
53’ x $6,500 = $345,000 rounded
The residual value, which would be attributable to the subject, is:
$525,000 - $345,000 = $180,000
The price per front foot is:
$180,000 / 53’ = $3,396
The subject property would likely increase the adjoining property value, if assembled, by around
$180,000.
Opinion of Value (as is) – Assembled $180,000
Page 50 Nagell Appraisal Incorporated | 952.544.8966
Sales Comparison Approach – Continued
The Sales Comparison Approach considers two scenarios. The first is generic side yard while the second
is the assembled value.
The scenarios indicated the following:
Opinion of Value (as is) – Side Yard $100,000
Opinion of Value (as is) – Assembled $180,000
There is a high chance that the adjoining owner to the north or south would purchase the subject.
However, this value reflects a total assembled value and would be on the high end of the range. The
generic side yard value would be considered more applicable to the general market as a whole and likely
represents the value mid-range.
Because of the unique subject scenario and lake location, about equal weight is given to the above
scenarios. Therefore, the following final value is concluded:
Opinion of Value (as is) $140,000
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RECONCILIATION
Indicated Value by Cost Approach Not Applied
Indicated Value by Sales Comparison
Approach $140,000
Indicated Value by Income Approach Not Applied
The Cost Approach to value was not applied as the subject is being appraised as vacant land.
The Direct Sales Comparison Approach to value analyzed recent sales of properties as compared with
the characteristics of the subject property. This results in an indication of market value at which a typical
buyer would be willing to pay for the subject property. Quantity and quality of data for the subject was
rated to be fair to average.
The Income Approach was not utilized due to limited/ rents of properties similar to the subject.
Conclusion: The Sales Comparison Approach is considered the most applicable approach.
Final Value Opinion
FINAL VALUE OPINION – Fee Simple Interest – $140,000
NOTE: Changes in the economy, market, building, use, lease, and/or management, foreclosure, etc., subsequent to
the effective appraisal date could impact market value. Typically, unstable and/or distressed properties with unusual
conditions and/or motivated sellers tend to sell below market value. Based on market observations and discussions
with various market experts, bank owned discounts can range from 10%-50%+.
The appraised value opinion is considered to be indicative of the most probable price within the subject market (see Market V alue
Definition in rear of report). The actions of buyers and sellers operating in said market generally reflects a bell curve, wi th most
participants and prices in the middle of the curve. However, there are right and left tail market participants that may have a different
perception of value than most buyers/sellers resulting in a willingness to pay more or less than the appraised v alue opinion. Seller
may be fortunate and find a buyer who needs this property and is willing to pay more, conversely there could only be buyers that are
towards the left, that are willing to pay less.
EXPOSURE TIME / MARKETING TIME
Reasonable Exposure Time: Typically 12 months before
the effective date of the appraisal.
Marketing Time Opinion: 12 months or less after the
effective date of the appraisal.
Page 52 Nagell Appraisal Incorporated | 952.544.8966
DEFINITIONS
MARKET VALUE - The most probable price which a property should bring in a competitive and open
market under all conditions requisite to a fair sale, the buyer and seller each acting prudently,
knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the
consummation of a sale as of a specified date and the passing of title from seller to buyer under
conditions whereby:
(A) buyer and seller are typically motivated;
(B) both parties are well informed or well advised, and each acting in what they consider their
own best interest;
(C) a reasonable time is allowed for exposure in the open market;
(D) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements
comparable thereto; and
(E) the price represents the normal consideration for the property sold, unaffected by special or
creative financing or sales concessions granted by anyone associated with the sale.
Source: Dictionary of Real Estate Appraisal, Fifth Edition, Appraisal Institute
ENVIRONMENTAL & STRUCTURAL ISSUES
Regarding any adverse environmental and/or improvement structural conditions (such as, but not limited
to, hazardous wastes, toxic substances, mold, construction defects or inadequacies, etc.) present in the
improvements, on the site, or in the immediate vicinity of the subject property: None are apparent,
however, appraiser is not an expert in this field. Value assumes no hazardous or structural conditions
exist. Value assumes any abandoned wells will be properly sealed. If any of these conditions exist the
appraised value could differ significantly.
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EXTRAORDINARY ASSUMPTIONS & HYPOTHETICAL CONDITIONS
As stated by USPAP;
Extraordinary Assumption: An assumption, directly related to a specific assignment, which, if
found to be false, could alter the appraiser’s opinions of conclusions.
None
Hypothetical Condition: That which is contrary to what exists but is supposed for the purpose of
analysis.
None
Page 54 Nagell Appraisal Incorporated | 952.544.8966
ASSUMPTIONS AND LIMITING CONDITIONS
1. The appraisers assume no responsibility for matters of a legal nature affecting the property appraised
or the title thereto, nor do the appraisers render any opinion as to the title, which is assumed to be good
and marketable. The property is appraised as though under responsible ownership and good
management.
2. The furnished legal description is assumed to be correct.
3. Any sketch in the report may show approximate dimensions and is included to assist the reader in
visualizing the property. The appraisers have made no survey of the property. It is assumed unless
otherwise noted that no survey has been viewed and that all improvements are located within the legally
described property.
4. The appraisers are not required to give testimony or appear in court because of having made the
appraisal with reference to the property in question, unless arrangements have been previously made
therefore.
5. The distribution of the total valuation in this report between land and improvements applies only under
the reported highest and best use of the property. The allocations of value for land and improvements
must not be used in conjunction with any other appraisal and are invalid if so used.
6. The appraisers assume that there are no hidden or unapparent conditions of the property, subsoil, or
structures, which would render it more or less valuable. The appraisers assume no responsibility for such
conditions, or for engineering, which might be required to discover such factors.
7. Unless otherwise stated in this report, the existence of hazardous materials, which may or may not be
present on the property, was not observed by the appraiser. The appraiser has no knowledge of the
existence of such materials on or in the property. The appraiser, however, is not qualified to detect such
substances. The presence of substances such as asbestos, urea-formaldehyde foam insulation, radon
gas, or other potentially hazardous materials may affect the value of the property. The value estimate is
predicated on the assumption that there is no such material on or in the property that would cause a loss
in value. No responsibility is assumed for any such conditions, or for any expertise or engineering
knowledge required to discover them. The client is urged to retain an expert in this field, if desired.
8. Information, estimates, and opinions furnished to the appraisers, and contained in the report, were
obtained from sources considered reliable and believed to be true and correct. However, the appraisers
can assume no responsibility for accuracy of such items furnished the appraisers.
9. Disclosure of the contents of the appraisal report is governed by the Bylaws and Regulations of the
professional appraisal organizations with which the appraisers are affiliated. No part of the contents of
this report, or copy thereof (including conclusions as to the property value, the identity of the appraiser,
professional designations, reference to any professional appraisal organizations, or the firm with which
the appraiser is connected), shall be disseminated to the public through advertising, public relations,
news, sales, or any other public means of communications without the prior written consent and approval
of the appraisers.
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Assumptions & Limiting Conditions – continued
10. The appraisers have no present or contemplated future interest in the property appraised; and
neither the employment to make the appraisal, nor the compensation for it, is contingent upon the
appraised value of the property. The appraisers have no personal interest or bias with respect to the
parties involved.
11. The appraiser has personally inspected the subject site (unless noted otherwise). The comparable
sales data has been viewed via aerial maps, photographs and/or online street views along with file
pictures, when available. To the best of the appraiser’s knowledge and belief, all statements and
information in this report are true and correct, and the appraisers have not knowingly withheld any
significant information.
12. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and
limiting conditions, and is our personal, unbiased professional analyses, opinions, and conclusions. Our
analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity
with the Uniform Standards of Professional Appraisal Practice. The appraisal is for the sole use of the
named client.
13. The Americans with Disabilities Act ("ADA") became effective January 26, 1992. We have not made
a specific compliance survey and analysis of the property to determine whether or not it is in conformity
with the various detailed requirements of the ADA. It is possible that a compliance survey of the property,
together with a detailed analysis of the requirements of the ADA, could reveal that the property is not in
compliance with one or more of the requirements of the Act. If so, this fact could have a negative effect
upon the value of the property. Since we have no direct evidence relating to this issue, we did not
consider possible non-compliance with the requirements of ADA in estimating the value of the property.
14. To the best of our knowledge and belief, the reported analysis, opinions, and conclusions were
developed, and this report was prepared in conformity with the requirements of the Code of Professional
Ethics and the Standards of Professional Appraisal Practice of the Appraisal Institute.
15. The appraised value opinion assumes all leases (if any) are current and paid in full as of the effective
date of the appraisal.
16. Excel grids and tables may have slight deviations due to rounding, which may have a nominal impact
on value.
17. The appraised value opinion assumes all formulas used in the Excel grids throughout the report are
accurate.
18. Unless noted, value assumes no apparent adverse site, building or zoning issues or conditions.
19. Site and building sizes are based on public record, data services, client and/or appraiser
measurement at the time of appraisal and are considered reliable, but not guaranteed. Actual sizes herein
could vary if made by an engineer/surveyor/contractor.
20. Because market and property conditions may change rapidly, the named client should exercise
caution in relying on the appraised value subsequent to the appraisal date with the passage of time.
21. If any of the above if found to be different, value could change.
Page 56 Nagell Appraisal Incorporated | 952.544.8966
CERTIFICATION
I certify that, to the best of my knowledge and belief:
1) The statements of fact contained in this report are true and correct.
2) The reported analyses, opinions, and conclusions are limited only by the reported assumptions
and limiting conditions, and are my personal, impartial, and unbiased professional analysis,
opinions, and conclusions.
3) I have no present or prospective interest in the property that is the subject of this report, and no
personal interest with respect to the parties involved.
4) I have no bias with respect to the property that is the subject of this report or to the parties
involved with this assignment.
5) My engagement in this assignment was not contingent upon developing or reporting
predetermined results.
6) My compensation for completing this assignment is not contingent upon the development or
reporting of predetermined value or direction in value that favors the cause of the client, the
amount of the value opinion, the attainment of a stipulated result, or the occurrence of a
subsequent event directly related to the intended use of this appraisal.
7) My analyses, opinions, and conclusions were developed, and this report has been prepared, in
conformity with the Uniform Standards of Professional Appraisal Practice.
8) The reported analyses, opinions and conclusions were developed, and this report has been
prepared in conformity with the requirements of the Appraisal Institute’s Code of Professional
Ethics and Standards of Professional Appraisal Practice, which includes the Uniform Standards of
Appraisal Practice.
9) Elizabeth Waytas made a personal inspection of the property that is the subject of this report.
William R. Waytas and Ethan Waytas have not inspected the subject property.
10) No one provided significant professional assistance to the person signing this report.
11) In accordance with the competency provision USPAP, I have verified that my knowledge,
experience and education are sufficient to allow me to competently complete this appraisal. See
attached qualifications.
12) As of the date of this report, William R. Waytas has completed the requirements of the continuing
education program of the Appraisal Institute.
13) The use of this report is subject to the requirements of the Appraisal Institute relating to review by
its duly authorized representative.
14) We have not provided services as an appraiser, regarding the subject property within the 3-year
period immediately preceding acceptance to this assignment.
Elizabeth Waytas Ethan Waytas, MAI William R. Waytas
Trainee Appraiser MN 40672995 Certified General MN 40368613 Certified General MN 4000813
Date: see report Date: see report Date: see report
Nagell Appraisal Incorporated | 952.544.8966 Page 57
QUALIFICATIONS
Appraisal Experience
Presently and since 2015, Elizabeth Waytas has been employed as an employee of Nagell Appraisal
Incorporated, an independent appraisal firm (12 employees) who annually prepares 1,500 +/- appraisal
reports of all types. She is currently a full-time licensed trainee real estate appraiser, as well as data
support for Nagell.
Properties Appraised
⎯ Commercial – low and high-density multi-family, retail, office, office condos, storage units,
mixed-use, industrial, restaurant, strip-centers, convenience stores, auto- service and repair,
greenhouse/landscaping properties, dog kennels, mini-storage complexes, redevelopment land,
food production and distribution, churches, bed & breakfasts, numerous special use properties,
and subdivision analysis.
⎯ Residential – single-family residences, residential with water frontage, hobby farms, townhouses,
relocation properties (Relo’s) and land
⎯ Eminent Domain – assisted with extensive partial and total acquisition appraisal services
provided to numerous government agencies and private owners.
⎯ Special Assessment – assisted with numerous street improvement and utilities projects for both
government and private owners
⎯ Clients – served include banks, trust companies, corporations, governmental bodies, attorneys,
and private individuals
⎯ Area of Service – most appraisal experience is in the greater Twin Cities Metro Area (typically an
hour from downtown metro). Also, numerous assignments throughout Minnesota and Wisconsin.
Professional Membership, Associations & Affiliations
License: Trainee Real Property Appraiser, MN License #40672995
Education
-- Bemidji State University, Bemidji, MN
B.S. Degree in Business Adm., Management Emphasis
-- General & Professional Practice Courses & Seminars
-- Basic Appraisal Procedures
-- Basic Appraisal Principles
-- 2021-2022 15-Hour National Uniform Standards of Professional Appraisal Practice
-- Supervisory Appraiser/Trainee Appraiser Course
-- General Appraiser Income Approach – Part 1
-- General Appraiser Income Approach – Part 2
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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 Incorporated, an independent appraisal firm (12
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.
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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
Page 60 Nagell Appraisal Incorporated | 952.544.8966
Curriculum Vitae – continued
Appraisal Experience
Presently and since 2006, Ethan Waytas, MAI has been employed as an employee of Nagell Appraisal
Incorporated, an independent appraisal firm (12 employees) who annually prepare 1,500 +/- appraisal
reports of all types. He is currently a full time licensed certified general real estate appraiser, partner, and
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, 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
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ADDENDA TO APPRAISAL REPORT