HomeMy WebLinkAbout05(E) - Approval of a Resolution for CSAH 21 and Revere Way Intersection Improvements - Right-of-Way Coordination ReportAPPRAISAL REPORT
Project: CSAH 21 Reconstruction Project
Parcel: #1
County: Scott County
Owner: ABHE & Svoboda, Inc.
Parcel Address: Unaddressed Industrial Lane SE
Prior Lake, MN
Report Prepared For:
SRF Consulting / City of Prior Lake
Report Prepared By:
Kelly Lindstrom
Date of Valuation: November 12, 2021
Parcel #1: ABHE & Svoboda, Inc.
2
Kelly Lindstrom, Certified General Appraiser
10779 Falling Water Lane - Unit C, Woodbury, MN 55129
651-436-8842
December 9, 2021
Mr. Ken Helvey, Principal
SRF Consulting
3701 Wayzata Boulevard Suite 100
Minneapolis, MN 55415-3791
RE: Appraisal Report for Parcel #1
CSAH 21 Reconstruction Project
ABHE & Svoboda, Inc. Property
Dear Mr. Helvey:
Pursuant to your request, a market value appraisal has been performed and an appraisal report
prepared for the above referenced property. The appraisal estimates the November 12, 2021
(the date of the most recent property inspection) fee simple market value of the subject before
and after the proposed acquisition including valuation of any impacted site improvements and/or
temporary construction easement(s). The report is subject to the certification, assumptions and
limiting conditions herein stated. This appraisal values the subject property, before and after the
acquisition, as vacant industrial/business park land applying the hypothetical condition that the
subject has been rezoned for industrial/business park utilization consistent with its guiding in the
City’s 2040 Comprehensive Plan. The methods and reasoning used in the analyses, as well as
the data gathered during the investigation of the property and marketplace, are also detailed in
this report.
After careful consideration of all the pertinent factors influencing market value, it is my opinion
that the fee simple market value of the acquisition as of November 12, 2021, is computed as
follows:
Estimated Value Before Proposed Acquisition: $1,230,800.00
Estimated Value After Proposed Acquisition: $1,223,300.00
Diminution in Value: $7,500.00
Parcel #1: ABHE & Svoboda, Inc.
3
The allocation of the acquisition is as follows:
Permanent Trail, Drainage, and Utility Easement: $5,500.00
Temporary Construction Easement (18 months*): $2,000.00
Affected Site Improvements: $0.00
Estimated Damages: $7,500.00
*The cost to extend the construction easement an additional twelve months (through June 30,
2024) is estimated to be $1,350.
This appraisal report has been completed in conformance with the Uniform Standards of
Professional Appraisal Practice (USPAP) of The Appraisal Foundation, Code of Professional
Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute, and (Mn/DOT)
Right-of-Way (R/W) Manual, Section 200. All statements of fact contained in this report upon
which the analyses, opinions, and conclusions expressed herein are based, are true and correct
to the best of my knowledge.
Please feel free to contact me if you have any questions regarding this report. Thank you for the
opportunity to assist you in this valuation matter.
Respectfully Submitted,
Kelly Lindstrom, Certified General Appraiser
Minnesota Certified General Appraiser License #20315256
Parcel #1: ABHE & Svoboda, Inc.
4
Table of Contents
Table of Contents 4
Summary & Conclusions - Partial Acquisition 5
Certifications 7
Introduction 9
Intended Use of the Report (Purpose and Function of the Report) 9
Date of Valuation 9
Property Rights Appraised 9
Market Value 9
Exposure Time and Marketing Time 10
Assumptions and Limiting Conditions 10
Extraordinary Assumptions & Hypothetical Conditions 12
Competency 13
Executive Summary 14
Scope of Appraisal 15
Larger Parcel Consideration 16
Discussion of Assignment and Conditions 17
The Appraisal Process 17
Approaches Used in This Appraisal Assignment 18
Research and Analysis Applied 18
Property Identification 19
Subject Description 20
Zoning 22
Highest and Best Use 27
Before Acquisition Valuation 34
The Proposed Acquisition 44
After Acquisition Valuation 47
Affected Site Improvements 48
Summary and Final Analysis 48
ADDENDA 50
Easement Valuation Matrix
Appraisers’ Certifications & Qualifications
Glossary of Terms
Parcel #1: ABHE & Svoboda, Inc.
5
Summary & Conclusions - Partial Acquisition
Project:
CSAH 21 Reconstruction
Project Parcel: Parcel #1
County:
Scott
Owner: ABHE & Svoboda, Inc.
Property Address:
Unaddressed Industrial Lane
SE
Prior Lake, MN
Valuation Date: November 12, 2021
Inspection
Date: November 12, 2021
Rights & Interests: Fee Simple
Zoning:
R-1: Low Density
Residential
(Valued as C-3: Business
Park District) Present Use: Vacant Land
Highest & Best Use
Before:
Industrial/business park
development After:
Industrial/business park
development
Effective Land
Area Before: 241,322 SF (5.54 AC) *
Effective Land
Area After:
241,322 SF with 1,416 SF
encumbered by the proposed
trail/drainage easement
Type of Building: None
*Per Scott County Property Records and may
include areas encumbered by easements
located in setback areas.
ALLOCATION OF ACQUISITION
Size Value/SF
Permanent Trail, Drainage, and
Utility Easement: 1,416 SF x $5.10/SF x 75%
Rounded: $5,500.00
Temporary Easement: 3,245 SF $2,000.00
Impacted Improvements: None $0.00
TOTAL ACQUISITION VALUE $7,500.00
Appraised by: Kelly Lindstrom Date: December 9, 2021
Appraised by: Lois Davis Date: December 9, 2021
Parcel #1: ABHE & Svoboda, Inc.
6
ESTIMATE OF VALUE BEFORE ACQUISITION
# Units Price/Unit
Unencumbered Land Value*: 241,322 SF $5.10/SF $1,230,800.00 Rounded
Total: 241,322 SF
Total Land Value Before Acquisition
(Rounded):
$1,230,800.00
ESTIMATE OF VALUE AFTER ACQUISITION
# Units Price/Unit
Unencumbered Land Value*: 239,906 SF $5.10/SF $1,223,500.00 Rounded
Encumbered Land Value: 1,416 SF $5.10 x 25% $1,800.00
Total: 241,322 SF $1,225,300.00
Temporary Easement Value (18
months**):
($2,000.00)
Affected Site Improvements Value: ($0.00)
Total Land Value Before Acquisition
(Rounded):
$1,223,300.00
TOTAL ACQUISITION VALUE
Rounded to: $7,500.00
*Includes areas encumbered by exiting easements in setback areas
**The cost to extend the temporary construction easement an additional twelve months
is estimated to be $1,350.
Parcel #1: ABHE & Svoboda, Inc.
7
CERTIFICATION
Project: CSAH 21 Reconstruction Project
Parcel: #1 - ABHE & Svoboda, Inc.
I hereby certify:
That on November 12, 2021, Kelly Lindstrom, Certified General Appraiser, personally inspected the property herein appraised
and that she has afforded the property owner(s), ABHE & Svoboda, Inc., the opportunity to accompany her at the time of the
inspection. The property owners did not accompany the appraiser. She has also personally made a field inspection, to the
extent possible, of the comparable sales relied upon in making said appraisal. The subject and the comparable sales relied
upon in making said appraisal were as represented by the photographs contained in this appraisal report.
That to the best of my knowledge and belief the statements contained in the appraisal hereinabove set forth are true , and the
information upon which the opinions expressed therein are based is correct, subject to the limiting conditions herein set forth.
That I understand that said appraisal is to be used by SRF Consulting on behalf of the City of Prior Lake for negotiation
purposes related to a proposed acquisition for the CSAH 21 Reconstruction Project located along the roadway frontage of the
subject.
That such appraisal has been made in conformity with the appropriate State laws, regulations, policies and procedures
applicable to real property appraisal and to the best of our knowledge no portion of the value assigned to such property
consists of items which are non-compensable under established State or Federal law.
That neither my employment nor my compensation for making this appraisal and report are in any way contingent upon the
values reported herein.
That I have performed no services as an app raiser or in any other capacity regarding the property that is the subject of this
report within the three-year period immediately preceding acceptance of this assignment.
That I have no direct or indirect present or contemplated future personal interest in such property or in any benefit from the
acquisition of such property appraised.
That in making this appraisal, I have disregarded any increase or decrease in the before value caused by the project for whic h
the property is being acquired.
That I will not reveal the findings and results of such appraisal to anyone other than the proper officials of SRF Consulting
and/or the City of Prior Lake, or its assigns, until authorized by agency officials to do so, or until we are required to do so, by
due process of law, or until we are released from the obligation by having publicly testified as to such findings.
That the reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with
the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute .
That use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized
representatives.
As of the date of this report, I, Kelly Lindstrom, have completed the Standards and Ethics Educatio n Requirement for the
Candidates of the Appraisal Institute.
That my independent opinion of the market value of the proposed acquisition as of November 12, 2021 (the most recent
inspection date) is $7,500.00, and the conclusion set forth in this appraisal was reached without collaboration or direction as
to value.
Dated: December 9, 2021
Kelly A. Lindstrom; Certified General Appraiser; Minn. #2031526
Parcel #1: ABHE & Svoboda, Inc.
8
CERTIFICATION
Project: CSAH 21 Reconstruction Project
Parcel: #1 ABHE & Svoboda, Inc.
I hereby certify:
That on November 12, 2021, Lois Davis inspected the property herein appraised. She has also personally made a field
inspection, to the extent possible, of the comparable sales relied upon in making said appraisal. The subject and the
comparable sales relied upon in making said appraisal were as represented by the photographs contained in this
appraisal report.
That to the best of my knowledge and belief the statements contained in the appraisal hereinabove set forth are true
and the information upon which the opinions expressed therein are based as correct, subject to the limiting conditions
herein set forth.
That I understand that said appraisal is to be used by SRF Consulting on behalf of the City of Prior Lake for negotiation
purposes related to a proposed acquisition for the CSAH 21 Reconstruction Project located along the roadway frontage
of the subject.
That such appraisal has been made in conformity with the appropriate State laws, regulations, policies, and procedures
applicable to real property appraisal and that to the best of our knowledge no portion of the value assigned to such
property consists of items which are non-compensable under established State or Federal law.
That neither my employment nor my compensation for making this appraisal and report are in any way contingent upon
the values reported herein.
I have performed no services as an appraiser or in any other capacity, regarding the property that is the subject of this
report within the three-year period immediately preceding acceptance of this assignment.
That I have no direct or indirect present or contemplated future personal inter est in such property or in any benefit from
the acquisition of such property appraised.
That in making this appraisal, I have disregarded any increase or decrease in the before value caused by the project
for which the property is being acquired.
That I will not reveal the findings and results of such appraisal to anyone other than the proper officials of SRF
Consulting and/or the City of Prior Lake, or its assigns, until authorized by agency officials to do so, or until we are
required to do so, by due process of law, or until we are released from the obligation by having publicly testified as to
such findings.
That my independent opinion of the market value of the proposed acquisition as of November 12, 2021 (the most recent
inspection date) is $7,500.00, and the conclusion set forth in this appraisal was reached without collaboration or
direction as to value.
Dated: December 9, 2021
Lois Marie Davis, Residential Appraiser-Trainee, MN 40078294
Parcel #1: ABHE & Svoboda, Inc.
9
Introduction
This report is designed to comply with the reporting requirements of Standards Rule 2 -2
of the Uniform Standards of Professional Appraisal Practice which addresses report
specifications. The appraisal is presented in an “Appraisal Report” format, as descri bed
in 2020 - 2021 USPAP Standards Rule 2-2 (a). Supporting documentation not contained
in the report is retained in the appraiser’s work file. The depth of data and analysis
contained in this report is specific to the needs of the client, SRF Consulting on behalf of
the City of Prior Lake and for the intended use of acquiring permanent right of way related
to the CSAH 21 Reconstruction Project. The subject property is 241,322 (+/- 5.54 acres)
of land addressed as Unaddressed Industrial Lane SE located in Prior Lake, MN. The
subject property is valued with an industrial/business park zoning (hypothetical condition,
please see that section of this report).
Intended Use of the Report (Purpose and Function of the Report)
The intended use (purpose) of this appraisal is to provide an opinion of market value for
the client, SRF Consulting on behalf of the City of Prior Lake, and its assigns, whose
representatives intend to use this report (function) for negotiation purposes related to a
proposed acquisition that includes permanent right of way related to the CSAH 21
Reconstruction Project.
Date of Valuation
The date of valuation is the date of the most recent property inspection, November 12,
2021.
Property Rights Appraised
The subject property is appraised by estimating the market value of the fee simple interest
of the subject’s underlying land. Fee Simple Interest, as considered throughout this report
is defined on pg. 90 of The Dictionary of Real Estate Appraisal, Sixth Edition, as:
“Absolute ownership unencumbered by any other interest or estate, subject only
to the limitation imposed by the governmental powers of taxation, eminent domain,
police power and escheat”.
Market Value
Market Value is defined in The Dictionary of Real Estate Appraisal, Sixth Edition, as:
"The most probable price that 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 and 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:
• Buyer and seller are typically motivated;
Parcel #1: ABHE & Svoboda, Inc.
10
• Both parties are well informed or well advised and acting
in what they consider their best interests;
• A reasonable time is allowed for exposure in the open
market
• Payment is made in terms of cash in U.S. dollars or in
terms of financial arrangements comparable thereto; and
• The price represents the normal consideration for the
property sold unaffected by special or creative financing
or sales concessions granted by anyone associated with
sale.”
Market value, unless otherwise noted, shall represent cash equivalent terms where the
seller receives all cash for their interest. The property may be financed at typical market
terms under this definition.
Exposure Time and Marketing Time
Exposure Time and Marketing Time are defined within The Dictionary of Real Estate
Appraisal, Sixth Edition, as:
Exposure Time: “The estimated length of time that the property interest being
appraised would have been offered on the market prior to the hypothetical
consummation of a sale at market value on the effective date of the appraisal; a
retrospective opinion based on an analysis of past events assuming a competitive
and open market.”
Marketing Time: “An opinion of the amount of time it might take to sell a real or
personal property interest at the concluded market value level during the period
immediately after the effective date of an appraisal. Marketing time differs from
exposure time, which is always presumed to precede the effective date of an
appraisal.”
The market values are based on the property having approximately three to six months
of exposure time prior to the effective date of the appraisal, which is typical of the market
as of the effective date of the appraisal, November 12, 2021. The marketing time of the
subject property is considered to be approximately three to six months.
Assumptions and Limiting Conditions
The certification of this appraisal report is subject to the following assumptions and limiting
conditions:
1. This appraisal values the subject property (land only) as the improvements are not
anticipated to be impacted by the acquisition.
2. The Appraiser assumes no responsibility for matters of a legal nature affecting the
property appraised or the marketability of the title.
Parcel #1: ABHE & Svoboda, Inc.
11
3. The property is assumed to be under responsible ownership and management.
4. The property is appraised as though clear and free of any liens, encumbrances, or
indebtedness, unless stated otherwise.
5. To the best of this appraiser's belief, the information contained in this report is true
and reported correctly. The information in this report, while not guaranteed, has
been taken from sources or records believed to be reliable.
6. The Appraiser assumes that there exist no hidden defects with the site, sub-soil,
or improvements, which would render it more or less valuable.
7. Disclosure by the Appraiser of the contents of this appraisal report is subject to
review in accordance with the by-laws and regulations of the professional appraisal
organizations with which the Appraiser is affiliated.
8. The Appraiser is not required to appear in court or give testimony because of
having made this report, unless arrangements have been made in advance.
9. This report, or any portions thereof, will not be distributed, or otherwise
disseminated, to anyone other than the person who commissioned this or those
involved in the certification, except as required by law.
10. This entire appraisal report must be con sidered as a whole, and any excerpts or
portions from this report cannot be considered separately.
11. It is assumed that there is full compliance with all applicable federal, state and local
environmental regulations and laws, as well as applicable zoning regulations and
restrictions, unless otherwise stated in this report.
12. It is assumed that all required licenses, consents or other authority from any local,
state, or federal governments have been obtained or can be renewed.
13. It is assumed that the subject improvements, if any, are within the stated
boundaries, and that there are no encroachments on neighboring property, or
neighboring encroachments on the subject property, unless otherwise stated in
this report.
14. The existence of potentially hazardous material such as urea-formaldehyde foam
insulation, asbestos, and the existence of toxic water, toxic waste, or radon gas
may have an effect on the value of the property. The Appraiser is not qualified to
determine if such substances are present. The client may wish to consult an expert
in this field.
Parcel #1: ABHE & Svoboda, Inc.
12
15. Acceptance of or use of this appraisal report constitutes an understanding of and
acceptance of these assumptions and limiting conditions.
Extraordinary Assumptions
An extraordinary assumption is something specific to the particular assignment that is
assumed to be true but is not certain. If it turns out to be untrue, the value conclusion
would be impacted. It is different from a general assumption, which could be applicable
to any assignment. We relied on information provided and made available by SRF
Consulting on behalf of the City of Prior Lake as to the subject's and comparable sales'
sizes and characteristics not readily apparent during the property inspections. We relied
on information provided by Scott County as to effective site size (includes areas
encumbered by existing easements located within setback areas). We relied on
information contained in the Scott County property records as to site size; topography;
and other characteristics that may not be apparent based on visual inspections. We relied
on the parcel staking as to impacted site improvements and believe that the sign is outside
of the acquisition area and will not be impacted by the project. If the staking is inaccurate
or if additional site improvements are impacted by the acquisition, value conclusions could
be impacted. The following general assumptions have been made related to the
proposed project:
1. There will be no interruption of access to the subject resulting from the project.
2. There will be no damages to subject improvements unless stated within this report.
3. The areas impacted by the project will be repaired or replaced in a similar fashion
to that prior to the project.
4. The temporary easement acquisition area is being returned to its pre-acquisition
elevation with no significant slope changes.
If any of these assumptions is incorrect, value conclusions may be impacted. No
extraordinary assumptions were utilized in this report unless otherwise noted.
Hypothetical Conditions
A hypothetical condition is a condition, directly related to a specific assignment, which is
contrary to what is known by the appraiser to exist on the effective date of the assignment
results but is used for the purpose of analysis. We valued the subject as though it were
currently zoned C-3: Business Park District as supported by the city’s comprehensive
plan (Planned Industrial Development) and as indicated by the City of Prior Lake’s
Community Development Department. No additional hypothetical conditions were utilized
in this report unless otherwise noted.
Parcel #1: ABHE & Svoboda, Inc.
13
Competency
The appraisers certify that they have the knowledge and experience to co mplete this
appraisal assignment competently. The Certified General Appraiser, Kelly Ann
Lindstrom, has extensive real estate appraisal background in terms of education and
appraisal experience. She has considerable experience appraising real estate in b oth
the Twin City Metropolitan Area market and outstate Minnesota. Both appraisers
researched the local real estate market to assure a complete understanding of the
external influences that affect value in the project area, specifically Scott County,
Minnesota. Therefore, Kelly Ann Lindstrom, Certified General Appraiser, is competent to
complete this appraisal assignment. Lois Marie Davis aided in the preparation of this
appraisal report.
Parcel #1: ABHE & Svoboda, Inc.
14
Executive Summary
Address: Unaddressed Industrial Lane SE; Prior Lake, MN
Project Information: CSAH 21 Reconstruction Project; Parcel #1
Property Type: Industrial property
Owner: ABHE & Svoboda, Inc.
Interests Appraised: Fee simple estate
Appraisal Purpose: Provide a market value estimate of the subject’s permanent diminution in value, temporary construction
easement, and any acquired site improvements related to the CSAH 21 Reconstruction Project.
Appraisal Use: SRF Consulting on behalf of The City of Prior Lake will utilize the report for negotiation purposes related to
a proposed acquisition for the CSAH 21 Reconstruction Project.
Improvement Description: None (vacant land)
Site Description: Shape: Generally rectangular
Location: Unaddressed Industrial Lane SE, Prior Lake, MN
Effective Size Before Acquisition: 241,322 SF (+/- 5.54 AC)
Permanent Trail, Drainage, and Utility Easement: 1,416 SF
Effective Size After Acquisition: 241,322 SF including 1,416 SF encumbered by the proposed trail and
drainage and utility easement
Temporary Construction Easement: 3,245 SF
Topography: Level to gently sloping
Impacted Site Improvements: None
Impacted Structural Improvements: None
Zoning: R-1: Low Density Residential valued as C-3: Business Park District
Present Use: Vacant land
Highest and Best Use
Before and After Acquisition
-as Vacant:
Industrial/business park development
Five Year Sales History: The property has been owned by the current property owner for over five years.
Scott County Property I.D.
#:
PID# 254760010
Partial Legal Description: Tract A, except the East 450.00 feet; Registered Land Survey No. 98, Files of the Registrar of Titles, Scott
County, Minnesota.
Total Assessor’s Market
Value (Payable 2021):
For Taxes Payable 2021:
For Taxes Payable 2022:
ASSMT YR
2020
2021
LAND
$1,201,800
$1,222,100
BUILDING(S)
$0
$0
TOTAL
$1,201,800
$1,222,100
Payable 2021 Property Tax
& Assessments:
$35,134
Estimated Permanent Diminution in Land
Value: $5,500.00
Estimated Temporary Construction Easement
Value: $2,000.00
Estimated Affected Site Improvements Value: $0.00
Estimated Total Value of Acquisition: $7,500.00
Date of Valuation: November 12, 2021 (Date of the Most Recent Inspection)
Appraiser(s): Kelly Ann Lindstrom, Certified General Appraiser, MN 20315256
Lois Marie Davis, Residential Appraiser: Trainee, MN 40078294
Parcel #1: ABHE & Svoboda, Inc.
15
Scope of Appraisal (Appraisal Methodology)
The scope of the assignment relates to the extent and manner in which research is
conducted, data is gathered, and analysis is applied, all based upon the following
problem-identifying factors stated elsewhere in this report:
1. Client
2. Intended use
3. Intended user
4. Type of opinion
5. Effective date of opinion
6. Relevant characteristics about the subject
The appraisal task is to estimate the subject’s market value as of the effective date of this
report. The appraisal has been performed in compliance with the Code of Professional
Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute.
Appraisal Methodology Summary
The following data and concepts pertaining to the subject property have been examined
and analyzed.
• Physical characteristics of the real property including:
1. Inspection of subject on November 12, 2021 in order to gather
information about the subject’s characteristics as relevant to the
valuation;
2. Review of county aerial and Google Earth aerial images;
3. Analysis and observations of the local market and the subject’s
location and place within this local market
• Non-physical characteristics of the real property including:
1. Property rights
2. Legal description
3. Existing easements
4. Tax and assessment data
5. Zoning data
6. Future land use data
• Observations and data regarding the subject’s market and indicators within
this market (by reviewing sales of properties from Scott County Assessor’s
Office, MLS, RediComp and/or commercial listing services) including:
1. Comparative analysis of factors considered relevant that influence
value
2. Supply and demand generators of the market
Parcel #1: ABHE & Svoboda, Inc.
16
3. Financing options available within the market
4. Perception of the future market
• Utilizing the above data and concepts, the following analyses occurred:
1. Highest and best use of the subject property
2. All three approaches to value were considered. Given the subject is
being valued as vacant, the sales comparison approach was
considered applicable and therefore utilized.
3. After gathering, verifying through public record searches and
independent verifications with transaction participant(s) and
analyzing the relevant data, the estimated market value was
estimated for the subject property as vacant.
4. Reconciliation and final estimate of value
• This Appraisal Report was prepared and summarizes the data, work
performed, analysis, and conclusions.
Larger Parcel Consideration
The appraisers conducted a larger parcel consideration to allow for an examination of the
highest and best use potential of the subject property. The Dictionary of Real Estate
Appraisal defines the Larger Parcel as follows: “In condemnation, that tract or tracts of
land which are under beneficial control of a single individual or entity and have the same
or an integrated highest and best use. Elements for consideration by the appraiser in
making a determination in this regard are contiguity, or proximity, as it bears on the
highest and best use of the property, unity of ownership, and unity of highest and best
use.” In relative terms, the appraiser must consider the Larger Parcel in the above terms
and in terms of highest and best use; and for purposes of just compensation its most
advantageous use as it actually affects the present market value. The Larger Parcel (as
defined in The Dictionary of Real Estate Appraisal) is considered to be the subject of this
report as shown in the below aerial map:
Larger Parcel
Parcel #1: ABHE & Svoboda, Inc.
17
Discussion of Assignment and Conditions
SRF Consulting, on behalf of The City of Prior Lake, requested we perform an appraisal
to estimate damages relating to a proposed acquisition. The acquisition is a portion of a
generally rectangular shaped tract, owned by ABHE & Svoboda, Inc. addressed as
Unaddressed Industrial Lane SE, Prior Lake, MN. Effective parcel size, before the
acquisition, is considered to be 241,322 SF (+/- 5.54 AC) and is net of existing right of
way easements but includes areas encumbered by existing easements located in the
setback areas. The proposed acquisition contains a 1,416 SF permanent trail, drainage,
and utility easement and a 3,245 SF temporary construction easement as shown on the
parcel sketch within this report. The temporary construction easement is expected to
encumber the area for eighteen months (through June 30, 2023). The City of Prior Lake
requested a valuation of a possible twelve-month extension (through June 30, 2024).
The Appraisal Process
A property’s value can be estimated through three approaches to value. The three
approaches are based on the market’s interpretations of value, and they are the cost
approach, the income approach, and the market approach. They are described briefly as
follows:
The Cost Approach: The cost approach estimates the current replacement or
reproduction cost of the impacted improvements (main structures and site
improvements). Depreciation is then subtracted from the base replacement or
reproduction cost. There are three sources of depreciation: physical depreciation
(deterioration), functional obsolescence, and external (economic) obsolescence.
The cost of the land vacant (as obtained from market data), combined with the
estimated replacement or reproduction cost of any improvements minus
depreciation provides an indication of value for the subject. As the subject is valued
as vacant industrial/business park development land, this approach is not being
processed.
The Income Approach: The income approach estimates the present value of the
expected annual income stream. The income stream is then capitalized at a rate
commensurate with the risk and life expectancy of the improvements, to arrive at
an indication of value from a typical investor's standpoint. The capitalization of the
present value of an income stream provides an indication of value for the subject.
The potential income stream of the subject property is not impacted by the
acquisition and the acquisition area is vacant land, which typically is not leased in
this market. As the subject is valued as vacant industrial/business park
development land, this approach to value is not being processed.
The Sales Comparison (Market) Approach: Gene rally, the market approach
compares the subject property with other similar properties that have recently sold
or are currently listed for sale. Comparable properties used are intended for similar
use, similarly zoned. Positive and negative adjustments, either qualitative or
quantitative, are made to the comparable sales for the differences that exist
Parcel #1: ABHE & Svoboda, Inc.
18
between them and the subject. Objective comparison with comparable sales
provides an indication of value for the subject property. This approach to value is
being processed.
Approaches Used in This Appraisal Assignment
All three approaches to value were considered, but only the Sales Comparison Approach
has been fully developed and is considered to be a reliable indicator of market value for
this assignment. The Sales Comparison Approach was used to determine the value of
the subject property as vacant land on a price per unit basis. The Cost Approach was not
used to value the subject's underlying land and is not considered a reliable indicator of
market value given the acquired area is vacant land with a highest and best use of
industrial/business park development. The income approach was not used as industrial
land is generally not leased in the subject’s marketplace. Elements of the cost approach
may have been utilized to determine the value of any affected site improvements.
Research and Analysis Applied
To determine a value for the subject’s acquired area, the sales comparison approach was
processed to extrapolate the value of the subject’s underlying land. Unimproved land
comparable sales were obtained from the Scott County Assessor’s Office, Multiple Listing
Service (MLS), and/or from REDI Comps. Relevant information related to these
comparable sales was obtained, and they have been confirmed, viewed, and analyzed.
Information on these related comparable sales is compiled on comparable data sheets in
this report. Qualitative and quantitative analyses was performed, and this information
was used to determine the subject’s before and after acquisition land values.
Severance
The acquisition includes a permanent trail, drainage, and utility easement and a
temporary construction easement located along the subject’s CSAH 21 roadway frontage.
It is noted that the subject property is valued as industrial/business park development
property and as such the acquisition does not create any nonconformance of the subject
property as neither site size or setback compliance is impacted by these easements .
Access to Industrial Lane SE remains reasonable, suitable, and convenient for industrial
utilization. We believe an informed market participant will not perceive the subject as
being less desirable after the proposed acquisition than it is before. Severance is not
considered relevant.
Parcel #1: ABHE & Svoboda, Inc.
19
Property Identification
The physical property was legally identified through the legal description, PID Numbers,
and its location as shown on the following GIS map. Additionally, the parcel sketches,
contained within this report, indicates acquisition areas.
Parcel #1: ABHE & Svoboda, Inc.
20
Property Inspection
Kelly Ann Lindstrom, Certified General Appraiser, most recently inspected the subject
property on November 12, 2021. The following photograph(s) depict the subject as
indicated in the following photographs.
Looking Northwesterly along Acquisition Area
Looking Southeasterly along Acquisition Area
(Sign is Outside of the Acquisition Area)
Parcel #1: ABHE & Svoboda, Inc.
21
Subject Description
The subject is located in Prior Lake along CSAH 21 with access from Industrial Lane SE
as depicted on the parcel sketch contained within this report. The subject’s effective size
is 241,322 SF (+/- 5.54 AC). It is vacant industrial guided land that is valued as industrial
land as its highest and best use is considered to be industrial/business park development.
The following chart summarizes the subject’s site characteristics.
Salient Features of Subject Property
Site Size/Shape/Location:
241,322 SF (+/- 5.54 AC), generally rectangular in shape, Prior Lake, MN
Access:
Frontage:
Access is from Industrial Lane SE
Frontage is along CSAH 21 (Eagle Creek Avenue)
Topography: The topography is considered to be level to gently sloping at or near roadway
grades.
Drainage/Floodplain: The drainage on the site is believed to be adequate. The subject is not located
in a floodplain.
Soil Conditions: Assumed buildable as evidenced by length of existing construction in the area;
no tests were made for stability or for toxic substance presence.
Utilities: None
Site Improvements: None
Environmental Nuisances & Hazards: The market does not appear to reflect any negative environmental concerns
that would adversely impact the subject, as if improved and as vacant, within
the marketplace. The subject is valued as though free of any potential
contamination.
Zoning: R-1: Low Density Residential
Subject is valued as though zoned C-3: Business Park District
Surrounding Property Relationship: Subject is zoned for industrial/business park use. The subject's immediate
neighborhood is comprised of industrially utilized tracts of land.
Easements and Other Restrictions: We are not title experts and have depended upon information provided
regarding the location of the existing right-of-way and any easements
(including typical and atypical easements). There do not appear to be any
atypical easements on the property that would affect the subject's value other
than those noted on the parcel sketch. No discounts were applied as all
existing easements appear to be located in the subject’s setback areas.
Functional Utility: The subject is conducive to its hypothetical C-3: Business Park District zoning
classification. There is no functional obsolescence to the site for the
marketplace.
MN/Dot Traffic Count:
Parcel #1: ABHE & Svoboda, Inc.
22
Zoning
Zoning Map (City of Prior Lake)
The subject is currently zoned R-1: Low Density Residential as governed by the City of
Prior Lake. The parcel was annexed from Credit River Township as such was
automatically zoned R-1. The subject property is guided for planned industrial utilization
in the City of Prior Lake’s 2040 Comprehensive Plan:
Parcel #1: ABHE & Svoboda, Inc.
23
The subject’s likely future zoning, according to Casey McCabe, Community Development
Director for the City of Prior Lake, will be C-3: Business Park. We are applying the
hypothetical condition that the subject has been rezoned to C-3: Business Park (a
planned industrial utilization) as the surrounding uses are industrial/business park
and the subject is guided for planned industrial utilization as shown above. The
purpose of the C-3 Zoning District is to promote high standards of design and construction
for business park uses in the city. It is slightly more restrictive than the City’s I-1 General
Industrial Zoning District which provides for industrial/business park development that
would not conform to the C-3 Zoning District due to size or nature of business. C-3:
Business Park District Requirements are as follows:
Parcel #1: ABHE & Svoboda, Inc.
24
Parcel #1: ABHE & Svoboda, Inc.
25
Parcel #1: ABHE & Svoboda, Inc.
26
Parcel #1: ABHE & Svoboda, Inc.
27
Conforming/Non-conforming Use
The subject, as it exists, is comprised of a legal lot of record and is considered a
conforming use to its designation in the City’s Comprehensive Plan and its hypothetical
C-3 Business Park Zoning as stated by the Community Development Director of the City
of Prior Lake. As the acquisitions are for a trail, drainage, and utility easement and a
temporary construction easement, neither site size nor setback compliance is impacted
by the acquisitions.
Comprehensive Land Use Plan: The subject’s valuation as industrial property is
consistent with its guiding on the comprehensive land use plan (please see future land
use map included in the addenda of this report).
Other Legal Restrictions: We are not aware of any other legal restrictions placed on the
subject property except as may be noted on the parcel sketch within this report. We are
not title experts and have depended upon information provided by SRF Consulting on
behalf of the City of Prior Lake regarding the location of the existing right-of-way and any
additional easements (based on the mapping provided). We are not aware of any
additional atypical encumbrances or restrictions that may be placed on the existing
property that would affect the subject's value (existing easements are located in the
setback areas of the subject).
Potential for Zoning Change: It is likely that the subject parcel will be rezoned from R-1 to
C-3: Business Park as this zoning designation is supported by its guiding in the city’s
future land use plan.
Economic Market Data
The United States Economic Data:
The economy entered 2020 with unemployment at historical lows, consumer confidence
high, the stock market bullish, and little to no signs of inflation. COVID -19 emerged in
early 2020 and on March 3rd, 2020, the Federal Reserve took the emergency step of
cutting the benchmark U.S. interest rate by half a percentage point in an attempt to limit
the economic and financial fallout from COVID-19. The U.S. central bank has not made
a cut similar to this since late 2008, shortly after the collapse of Lehman Brothers. Experts
believe COVID-19 may be the biggest risk to the global economy since the financial crisis
that precipitated the Great Recession. Growth is now expected to slow sharply with
Goldman Sachs projecting growth in the United States could stall in the second quarter,
which runs from April through June. While Fed leaders believed it was wise to move
quickly, concerns continue to mount about the plunging stock market and a severe
disruption in every major economy. Recession fears in the United States have spiked in
recent weeks.
Rates sat at 1.0% to 1.25% until March 15, 2020. On Sunday, March 15, 2020, the
Federal Reserve took emergency action and lowered its benchmark rate 0.75% given
fears the viral outbreak would depress economic growth in the coming months. The
Parcel #1: ABHE & Svoboda, Inc.
28
Federal Reserve stated it would keep its key rate at a range between zero and 0.25%
until it feels confident that the economy would survive the effects of COVID-19.
The national unemployment rate fluctuated between 3.5% and 4.5% in the year prior to
the emergence of COVID-19. 2020 was expected to follow suit as all indicators indicated
the economy would remain strong given the forecasted unemployment was expected to
remain below 3.8%. The US unemployment rate jumped to 14.8% in April 2020, the
highest in the history of the series and compared to market expectations of 16%, as the
COVID-19 crisis threw millions out of work. The US unemployment rate fell to 4.6 percent
in October 2021, the lowest since March 2020 and slightly below market expectations of
4.7 percent. The labor market has continued to gradually recover from the pandemic hit,
helped by a surge in demand for labor, record levels of job openings, the expiration of
enhanced jobless benefits and the subsiding summer wave of COVID-19 infections. The
number of unemployed people declined by 255 thousand to 7.4 million in October, while
employment levels rose by 359 thousand to 154.0 million. It is noted that the
unemployment rate remained well above the pre-crisis level of about 3.5 percent, amid
reports of persistent worker shortages (source: U.S. Bureau of Labor Statistics) as shown
by the following chart:
Current conditions are generally considered the most important dri ver of consumer
spending. The consumer confidence indicator provides an indication of future
developments of households’ consumption and saving, based upon answers regarding
their expected financial situation, their sentiment about the general economic si tuation,
unemployment and capability of savings. An indicator above 100 signals a boost in the
consumers’ confidence towards the future economic situation, as a consequence of which
they are less prone to save, and more inclined to spend money on major pur chases in
the next 12 months. Values below 100 indicate a pessimistic attitude towards future
developments in the economy, possibly resulting in a tendency to save more and
consume less. As a shortage of workers, supply chain issues, and continuing specula tion
about high inflation levels, the consumer confidence levels are starting a downward
trajectory after recovering from its April 2020 low:
Parcel #1: ABHE & Svoboda, Inc.
29
As of the effective date of this report, there is conversation at the federal level about a
fourth stimulus package to bolster the economy which has still not fully recovered from
the effects of the COVID-19 pandemic.
Minnesota Data: Minnesota is the second fastest growing state in the north central area
(second to North Dakota). It was the 19th fastest growing state in the number of people
in the United States from 2000 to 2010 with population growth of 7% compared to national
growth of 9.1%. The population of Minnesota in 2020 is estimated at 5,706,494 residents
and shows an approximate 8% increase since 2010. The five largest counties (by
population) are Hennepin, Ramsey, Dakota, Anoka, and Washington. The five fastest
growing counties (by population percentages) are Carver, Scott, Hennepin, Washington,
and Clay. As of October 2021, the Minnesota unemployment rate was at 3.5%; however,
it is not at pre-pandemic levels as shown in the following charts:
Parcel #1: ABHE & Svoboda, Inc.
30
Minnesota/TCMA Real Estate Market: Prior to the pandemic, the Minneapolis-St. Paul
economy continued to boast one of the lowest unemployment rates in the country,
considered full employment. The metro area is home to 16 Fortune 500 company
headquarters, as well as large local employers like the University of Minnesota. United
Health Group, Thrivent Financial, Minnesota Mutual, and St. Paul Travelers are based in
the Twin Cities Metropolitan Area. Additionally, the TCMA is home to the corporate
headquarters of US Bank, the regional headquarters of Wells Fargo, and TCF Bank. The
US Government’s Ninth Federal Reserve Bank is located in Minneapolis. The local
workforce ranks 11th in the country in terms of education, with 41% achieving a bachelor’s
degree or higher. The average annual household income of $74,500 tops the national
average by 29%.
The TCMA, historically, has been one of the strongest commercial real estate markets in
the Midwest for a variety of reasons including the educated workforce and the
entrepreneurial spirit evidenced by the strong venture capital market. Companies are
attracted to the economic atmosphere and tend to stay due to the work force that
traditionally has a tremendous work ethic. Minnesota is not reliant on one major industry
or sector, which generally minimizes the impact of an economic recession. While
Minnesota does not see huge spikes in growth during a boom time in a particular market
(i.e. technology), it also does not see the bust period when the industry loses favor.
The Minnesota real estate market is adjusting to the changing climate. Commercial
properties are adjusting to employees no longer coming into the office and owners are
having to rethink requirements as they adjust to the advent of e -commerce and on-line
working from home. There will likely be considerable redevelopment as the demand for
medium to high density housing increases while the demand for office and commercial
space decreases. The new on-line shopping habits are pushing up the demand in the
industrial sector as bulk distribution centers are in high demand.
Parcel #1: ABHE & Svoboda, Inc.
31
Single-family housing demands increased in the second half of 2020 to date. Impacts
related to COVID-19, primarily working from home, has changed consumer preferences
and cities in third and fourth ring suburbs are becoming a desirable option as there is no
longer the same commuting demands as once were considered “ty pical”. Consumers
and homebuilders continue to seek homes and sites located in suburban cities with a
good school districts and consumers prefer areas with considerable “open/green space”.
Land located in first or second ring suburbs for residential dema nd have been in high
demand as there is continued shrinking availability as these cities become fully built out.
There is some speculation that new development may slow due to supply chain issues
and lag time receiving building materials; however, this is speculative at this time.
Minnesota/TCMA Real Estate Markets Summary
Residents and consumers are cautious as they proceed forward in a more tentative
manner as the effects of the pandemic have likely not been fully realized . Prior to the
emergence of COVID-19, analysis of data revealed a trend of general growth and a well-
diversified economy with a solid, and improving, real estate market. While the market
appears to have somewhat settled, there is still much uncertainty moving forward.
City of Prior Lake
The subject is located in Prior Lake, Minnesota which is located in Scott County,
southeast of the Twin Cities Metropolitan Area:
Prior Lake is considered a rapidly developing suburb and is located approximately 24
miles south and west of downtown Minneapolis. The city offers a superior quality of life
with beautiful parks, trails and wetlands as well as a charming downtown and excellent
schools. The population of Prior Lake is about 27,500 and is projected to grow to 37,000
by 2040. The City of Prior Lake is home to the Shakopee Mdewakanton Sioux Community
(SMSC) and Mystic Lake Casino, the second largest Indian Gaming Casino in the nation
and the largest employer within the city.
Parcel #1: ABHE & Svoboda, Inc.
32
Prior Lake is a premier recreational community in the Twin Cities, featuring more than 55
parks on 1,000 acres, over 100 miles of trails and sidewalks and 14 lakes. Park amenities
include two large athletic complexes, Lakefront community park (160 acres),
neighborhood parks, fishing piers, boat slips, swimming beaches, and green space.
Upper and Lower Prior Lake, totaling 1,340 acres, are considered one of the most popular
lakes in the metropolitan area for boating, skiing and fishing. Although primarily a
residential community, opportunities in commercial and industrial development are
increasing and are a priority for the City Council in hopes of diversifying the tax base.
Prior Lake has several new commercial developments including a brewery, law office,
restaurant and medical building in downtown. Industrial development includes a nationally
recognized golf cart maker, pizza dough manufacturer, fire investigation business, and
sign company among others.
The city's modern growth is attributed to the completion and upgrade of State Highway
13 which provides access to State Highways 169 and I-35. There are also numerous
local and county roadways providing expedient access to the TCMA.
City of Prior Lake Economic Summary
The City of Prior Lake enjoys a relatively stable economy supported by strong
infrastructure including major roadways that provide quick access to the surrounding
communities and the major cities of Minneapolis and St. Paul. The city’s economy, while
strong, is not considered to be a stand-alone economy as many residents seek
employment outside of city borders, primarily in the surrounding communities and the
central business districts of Minneapolis and St. Paul. The housing market remains
strong in the City of Prior Lake as it consistently ranks as one of the best cities to live in
the TCMA and the commercial/industrial market continues to expand with the city looking
to expand its tax base.
Parcel #1: ABHE & Svoboda, Inc.
33
Neighborhood Description
The subject is located in Prior Lake, MN west of Revere Way along CSAH 21 (Eagle
Creek Avenue) with access from Industrial Lane SE in its southwest corner. The subject's
immediate neighborhood is comprised industrial/business park development with
residential development to the west and industrial/business development to the north:
Highest and Best Use
Highest and best use is defined in The Dictionary of Real Estate Appraisal, Sixth Edition,
as:
The reasonably probable and legal use of vacant land or an improved property that
is physically possible appropriately supported, financially feasible, and that results
in the highest value. The four criteria the highest and best use must meet are legal
permissibility, physical possibility, financial feasibility, and maximum productivity.
The Dictionary of Real Estate Appraisal, Fourth Edition, differentiates highest and best
use as vacant and as improved:
Highest and best use of land or site as though 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.
Highest and best use of property as improved: The use that should be made of a
property, as it exists. An existing improvement should be removed or retained as
is, 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 construction a new one.
Parcel #1: ABHE & Svoboda, Inc.
34
In order to determine the highest and best use of the subject property, the
following factors must be considered when addressing possible uses:
1. Physically possible
2. Legally permissible
3. Financially feasible
4. Maximally productive
As vacant
The highest and best use of the land, as vacant, is for industrial/business park
development as allowed by the hypothetical C-3: Business Park District Zoning and its
industrial guiding in the city’s 2040 Comprehensive Plan.
1. Industrial/business park development would be physically possible given
the physical characteristics of the subject site.
2. Industrial/business park development is legally permissible given the
requirements of the hypothetical C-3: Business Park District Zoning.
3. Our analysis of the market indicates adequate demand for
industrial/business park development land in the subject’s area. As such,
industrial/business park development is considered to be financially feasible
given the existing market demands in the subject’s marketing area.
4. Industrial/business park development is considered the maximally
productive use of the site as no alternative allowed use would generate a
higher residual land value as permitted by the hypothetical C-3: Business
Park District Zoning.
The highest and best use of the subject, as vacant, is for industrial/business park
development as allowed by its guiding as industrial property and its hypothetical C-3:
Business Park District zoning.
Before Acquisition Valuation
The subject is valued as if it is ready for development into its highest and best use,
industrial/business park development, as noted above. The first step of the sales
comparison approach is the selection of comparable sales and/or listings that are
reasonably similar in size, location, and attributes when compared to the subject.
Adjustments, both qualitative and quantitative may be made to the selected comparables
to determine the subject’s value. Properties selected for comparison should be similar
enough that few adjustments are required. The sales comparison approach becomes
less reliable when more adjustments are required to match the subject property with the
comparable property.
Ideally, adjustments are determined and supported in the market by the use of paired
sales, which allow the appraiser to extract a valuation for a single market factor. Due to
limited data availability, oftentimes appraisers are unable to do this and must apply their
judgment and professional expertise to evaluate a difference between the subject and its
comparables. The adjustments are considered market supportable and the appraisers
use their judgment and are able to support the adjustments as required. All adjustments
contained in this report are based on the judgment and experience of the appraisers and
market support. All sales were from 2020 to date in the subject’s neighborhood.
Parcel #1: ABHE & Svoboda, Inc.
35
The selected comparables are vacant land sales, all similarly zoned, from similar
locations, intended for industrial/business park development. The comparable sales are
reasonably proximate to the subject property, are intended for similar uses, are
reasonably similar in size, and are ready for industrial/business park development.
Market supportable adjustments are applied as noted on the Sales Comparison Chart. A
detailed explanation of the adjustment categories immediately follows the Sales
Comparison Chart with Comparable Sales Sheets following the chart.
Parcel #1: ABHE & Svoboda, Inc.
36
COMPARABLE INDUSTRIAL LAND SALES
Subject Sale 1 Sale 2 Sale 3 Sale 4
Address/ Location
Unaddressed
Industrial Lane SE
Prior Lake, MN
Unaddressed
Revere/Adelmann
Prior Lake, MN
5818 Granite
Court
Prior Lake, MN
5835 Granite
Court SE
Prior Lake, MN
Unaddressed
Graystone Court
Prior Lake, MN
Sale Price $312,760
$2.00/SF
$531,214
$4.67/SF
$200,000
$4.59/SF
$175,000
$4.02/SF
Spec. Conditions None None None None
Financing/ Terms Cash/Cash
Equivalency
Cash/Cash
Equivalency
Cash/Cash
Equivalency
Cash/Cash
Equivalency
Motivations Owns Adjacent
Parcel Typical Typical Typical
Date of Sale/ Mkt.
Conditions 05/2021
+5%
12/2020
+9.17%
12/2020
+9.17%
09/2020
+9.17%
Adjusted Sale
Price/SF $2.10/SF $5.10/SF $5.01/SF $4.39/SF
Site Size
5.54 AC
241,322 SF
3.58 AC
156,380 SF
2.61 AC
113,692 SF
1 AC
43,560 SF
1 AC
43,560 SF
Use/Intended Use Industrial Industrial Industrial Industrial Industrial
Shape/
Topography
Slightly Irregular/
Level
Rectangular/
Area of
lowlands/pond
along northern
boundary
+
Generally
Rectangular/
Level
=
Generally
Rectangular/
Level
=
Generally
Rectangular/
Level
=
Frontage
Eagle Creek
Avenue/Industrial
Lane SE
Revere Way &
Adelmann Street
Granite Court
(Cul-de-sac from
Adelmann Street)
Granite Court
(Cul-de-sac from
Adelmann Street)
Graystone Court
(Cul-de-sac from
Adelmann Street)
Zoning
General Business
C-3
(Hypothetical)
General Business
C-2
General Industrial
I-1
General Industrial
I-1
Business Park
C-3
Location
Industrial Area
Revere
Way/Eagle Creek
Ave
Deerfield
Industrial Park
=
Deerfield
Industrial Park
=
Deerfield
Industrial Park
=
Deerfield
Industrial Park
=
Net Adjustment + = = =
Adjusted Greater Than Approx. Approx. Approx.
Price/SF $2.10/SF $5.10/SF $5.01/SF $4.39/SF
Parcel #1: ABHE & Svoboda, Inc.
37
Comparable Sales Map
Parcel #1: ABHE & Svoboda, Inc.
38
COMPARABLE LAND SALE ONE
ADDRESS/LOCATION: Unaddressed Revere/Adelmann; Prior Lake, MN
PID #: 254270110
SALE PRICE: $312,760
DATE OF SALE: 05/2021
SALE METHOD: Warranty Deed
TERMS: Cash/Cash Equivalency
SITE SIZE: 3.58 AC/156,380 SF
INTENDED USE: Assemblage with adjacent parcel under common ownership
TOPOGRAPHY: Level with wetlands along northern boundary
SHAPE: Generally rectangular
SELLER/BUYER: Central Development Corp. of America/Mesenbrink
Construction & Engineering, Inc.
SALES PRICE/SF: $2.00/SF
CONFIRMED WITH: CREV #1248265/County Records
Scott County Aerial Mapping
Google Earth Aerial Image
Outlot B of Deerfield Industrial Park 2nd Addition
Lowland along northern boundary; public promotion; buyer paid appraisal
Parcel #1: ABHE & Svoboda, Inc.
39
COMPARABLE LAND SALE TWO
ADDRESS/LOCATION: 5818 Granite Court; Prior Lake, MN
PID #: 254270060
SALE PRICE: $531,214
DATE OF SALE: 12/2020
SALE METHOD: Warranty Deed
TERMS: Cash/Cash Equivalency
SITE SIZE: 2.61 AC/113,692 SF
INTENDED USE: Industrial
TOPOGRAPHY: Level
SHAPE: Generally Rectangular
SELLER/BUYER: Mesenbrink Construction & Engineering, Inc/Busse
Properties, LLC
SALES PRICE/ SF: $4.67/SF
CONFIRMED WITH: CREV #1236777/County Records
Scott County Aerial Mapping
Google Earth Aerial Image
Deerfield Industrial Park – 2nd Addition; public promotion buyer paid appraisal
Parcel #1: ABHE & Svoboda, Inc.
40
COMPARABLE LAND SALE THREE
ADDRESS/LOCATION: 5835 Granite Court SE; Prior Lake, MN
PID #: 254270080
SALE PRICE: $200,000
DATE OF SALE: 12/2020
SALE METHOD: Warranty Deed
TERMS: Cash or Cash Equivalent
SITE SIZE: 1 AC/43,560 SF
INTENDED USE: Industrial
TOPOGRAPHY: Level
SHAPE: Generally rectangular
SELLER/BUYER: Busse Properties, LLC/Accelerated Auto Service and Repair,
LLC
SALES PRICE/SF: $4.59/SF
CONFIRMED WITH: CREV 1202370/County Records
Scott County Aerial Mapping
Google Earth Aerial Image
Deerfield Industrial Park – 2nd Addition; public promotion buyer paid appraisal
Parcel #1: ABHE & Svoboda, Inc.
41
COMPARABLE LAND SALE FOUR
ADDRESS/LOCATION: Unaddressed Graystone Court; Prior Lake, MN
PID #: 254440020
SALE PRICE: $175,000
DATE OF SALE: 09/2020
SALE METHOD: Warranty Deed
TERMS: Cash/Cash Equivalent
SITE SIZE: 1 AC/43,560 SF
INTENDED USE: Industrial
TOPOGRAPHY: Level
SHAPE: Generally rectangular
SELLER/BUYER: Gary B. Tupy, Et Al/Whitemore Properties, LLC
SALES PRICE/SF: $4.02/SF
CONFIRMED WITH: CREV 1155322/County Records
Scott County Aerial Mappping
Google Earth Aerial Image
Deerfield Industrial Park – 5th Addition
Parcel #1: ABHE & Svoboda, Inc.
42
Adjustments
Concessions/Additional Expenses: None of the sales had concessions or additional
expenses, no adjustments applied.
Financing/Terms: Adjustments for financing terms are the first adjustment that is applied,
as all sales must be analyzed on the same base assumption of cash/cash equivalency.
Conventional financing terms require no adjustments, but financing terms not available in
the typical market place, such as atypical seller-financing considerations, assessments
acquired by the purchaser, and alike, must be properly accounted for in the subject’s
reconciled value. All comparable sales transacted under typical terms and as such no
adjustments applied.
Motivations: Both buyer and seller must be typically motivated and acting free from any
undue stress or influence. None of the comparable sales appear to be the result of any
foreclosure activity (whereby a seller may accept less than actual market value due to
financial considerations) or related party transactions (whereby a buyer and/or seller ma y
agree on a nonmarket price based on their relationship). No adjustments applied.
Market Conditions/Date of Sale: Adjustments are generally made to reflect the passage
of time to reflect either the appreciation (an upward adjustment) or depreciation (a
downward adjustment) reflected in the marketplace over a period of time. The rate of
change fluctuates due to investors' perceptions of prevailing market conditions. This
adjustment category reflects value changes, if any, that have occurred between the date
of the sale and the effective date of the appraisal. Market data indicates a 10% annual
increase in industrial properties during 2021 with 2020 being fairly flat. Comparable sales
were adjusted at a rate of .83% per month from January 2021 through November 2021.
Site Size: Generally, a quantity of scale discount applies with all other factors being equal.
Larger sites sell for a discounted value on a per unit basis while smaller sites sell at a
premium value on a per unit basis. All comparable sales are considered reasonably
similar in size when compared to the subject; no adjustments applied.
Shape/Topography: The shape and topography preferred in the marketplace is generally
rectangular to maximize development opportunities with this differential being less for
larger sites. The subject, with its generally rectangular shape, is considered similar in
comparison to all comparable sales. The preferred topography in the marketplace is
generally level to gently rolling with minimal tree coverage as buildable area commands
a premium in the industrial marketplace. The subject’s topography is considered superior
when compared to Comparable Sale One as it has considerable non -buildable area and
similar to the remaining comparable sales when considering topography and terrain.
Zoning: Market data does not support an adjustment for the slightly different zoning types;
no adjustments applied.
Parcel #1: ABHE & Svoboda, Inc.
43
Location: The subject is located in the same business/industrial area as the comparable
sales; no adjustments applied.
Reconciliation of the Subject’s Underlying Land Value-Before Acquisition
Unencumbered Land Value
After adjustments have been considered, the estimated market value of
industrial/business park development land in the subject’s marketing area is greater than
$2.10/SF with a likely value between $4.39 and $5.10/SF. All comparable sales were
considered when estimating the subject’s underlying land value with the least
consideration given to Comparable Sale One as its topography is considered inferior.
The subject is considered to have an estimated market value of $5.10/SF as slightly more
weight is placed on Comparable Sale Two which is the largest of Comparable Sales Two,
Three, and Four. It is noted that no discount is applied to the existing easement areas
(electric transmission, sign, and ingress/egress easements) as these are located along
the subject’s roadway frontage within existing setback (non-buildable) areas and the
comparable sales likely include reasonably similar easements.
The subject property’s pre-acquisition land value is estimated as follows:
Subject Site Size: 241,322 SF X $5.10/SF, rounded = $1,230,800.00
Indicated Market Value of Land Before Acquisition $1,230,800.00
The subject’s underlying land value, before consideration of the proposed
acquisition, is considered to be $1,230,800.00.
Parcel #1: ABHE & Svoboda, Inc.
44
Description of Project
The City of Prior Lake, in partnership with Scott County, is planning for the reconstruction
of the County Highway 21 and Revere Way (County Road 87) intersection during the
2022 construction season. The project includes re-aligning the existing offset 170th Street
intersection with the Revere Way intersection along County Highway 21. The proposed
reconstruction of County Highway 21 through the project limits will include the
construction of a raised median and turn lanes at the intersection. The following m ap
highlights the project area:
The Proposed Acquisition
The proposed acquisition contains a 1,416 SF permanent trail, drainage, and utility
easement and a 3,245 SF temporary construction easement located within a larger tract
that is vacant land, please see the following parcel sketches. The acquisition area(s) do
not contain any impacted site improvements (sign is located outside the acquisition area).
Parcel #1: ABHE & Svoboda, Inc.
45
Parcel Sketches
Parcel #1: ABHE & Svoboda, Inc.
46
Parcel #1: ABHE & Svoboda, Inc.
47
After Acquisition Valuation
Highest and Best Use – After Acquisition
The highest and best use, after acquisition, will remain as industrial/business park
development, consistent with its hypothetical C-3: Business Park District zoning and the
land use guiding (Planned Industrial), as vacant. The proposed permanent trail, drainage,
and utility easement and the temporary construction easement do not affect the highest
and best use of the subject.
Conforming/Non-conforming Use
As the subject is valued as industrial/business park development land, the subject is
considered to conform to the hypothetical C-3: Business Park District Zoning.
Severance Consideration
Access to Industrial Lane SE remains reasonable, suitable, and convenient for
industrial/business park utilization. We believe an informed market participant will not
perceive the subject as being less desirable after the proposed acquisition than it is
before. Severance is not considered relevant.
Valuation
The subject’s size, after acquisition, is considered to be reduced by the amount of the
permanent trail, drainage, and utility easement, 1,416 SF. Due to the small size and
location of the acquisition, the same comparable sales were utilized when determining
the subject’s underlying land value after the acquisition. Due to the restrictive nature of
the permanent trail, drainage, and utility easement, it is compensated at 75%, please see
valuation matrix included in the addenda of this report. The preliminary after acquisition
value (before consideration of the acquisition of the temporary easement and impacted
site improvements) is estimated as follows:
Unencumbered Area*:
Newly Encumbered
Area:
Total:
239,906 SF
1,416 SF
241,322 SF
X $5.10/SF, rounded =
X $5.10/SF x .25, rounded =
$1,223,500.00
$1,800.00
*May include existing encumbered
area located within setbacks
Rounded to:
$1,225,300.00
The subject’s underlying land value, after consideration of the proposed
acquisition (before consideration of the temporary easement and/or impacted site
improvements), is considered to be $1,225,300.00. This indicates a permanent trail,
drainage, and utility easement land value of $5,500.00, (Before Acquisition Land Value
of $1,230,800.00 – Preliminary After Acquisition Land Value of $1,225,300.00).
Parcel #1: ABHE & Svoboda, Inc.
48
Temporary Construction Easement
The property will be subject to a proposed temporary construction easement that will
encumber an area of 3,245 SF for a period of 18 months ending June 30, 2023 with the
option to renew for an additional 12 months (ending June 30, 2024). The temporary
construction easement is located along the subject’s roadway frontage as depicted on the
parcel sketch contained within this report. The temporary construction easement is
valued at the underlying land value, $5.10/SF and the encumbered area is valued as if
the land were rented at an appropriate land capitalization rate for the duration of the
encumbrance. We apply a land rate of 8% with consideration given to real estate taxes
paid during the time of encumbrance. Value of the rental stream is calculated with a rate
viewed reflective of the current market.
Temporary Construction Easement Valuation
TE Land Area: 3,245 SF
Multiply by Indicated Market Value/SF: X $5.10/SF
Estimated Value of Encumbered Land: $16,549.50
Multiply by Land Capitalization Rate: X 8%
Annual Land Rent: $1,323.96
1.5 Years (18 months) Temporary Construction
Easement:
X 1.5 years
$1,985.94
Temporary Construction Easement Value (Rounded)*: $2,000.00
*The estimated cost to extend the temporary easement for an additional twelve months
(ending June 30, 2024) is estimated to be $1,350.00.
Affected Site Improvements
Impacted maintained yards and driveways will be repaired/replaced as part of the project.
There are no site improvements located in the acquisition area (some free will growth
which is not considered compensable). The estimated value of the impacted site
improvements is $0.00
After Acquisition Value
The subject’s after acquisition value, after consideration of the temporary construction
easement and affected site improvements, is considered to be $1,223,300 (preliminary
after acquisition value of $1,225,300 less the temporary easement value of $2,000.00
less the affected sites improvement value of $0).
Parcel #1: ABHE & Svoboda, Inc.
49
Summary and Final Analysis
The subject’s underlying land before and after acquisition market values were estimated
using the sales comparison approach for vacant land as this is the most reliable indicator
of value. The appraisers' final summation of the proposed acquisition , including the
affected site improvements, as of November 12, 2021, is presented as follows:
Before Acquisition Value: $1,230,800.00
Less After Acquisition Value: $1,223,300.00
Estimated Damages: $7,500.00
The allocation of the acquisition is as follows:
Permanent Trail, Drainage, and Utility Easement: $5,500.00
Temporary Construction Easement (18 months*): $2,000.00
Affected Site Improvements: $0.00
Estimated damages: $7,500.00
*The cost to extend the temporary construction easement an additional twelve months (ending
June 30, 2024) is estimated to be $1,350.
The diminution in value related to the acquisition is considered to be $7,500.00.
Parcel #1: ABHE & Svoboda, Inc.
50
ADDENDA
Parcel #1: ABHE & Svoboda, Inc.
51
Easement Valuation Matrix
(IRWA Magazine May/June 2006)
Parcel #1: ABHE & Svoboda, Inc.
52
KELLY ANN LINDSTROM
LINDSTROM KELLY A
10779 FALLING WATER LANE UNIT C
WOODBURY, MN 55129
STATE OF MINNESOTA
The Undersigned COMMISSIONER OF COMMERCE for the State of Minnesota hereby certifies that
KELLY ANN LINDSTROM
LINDSTROM KELLY A
10779 FALLING WATER LANE UNIT C
WOODBURY, MN 55129
has complied with the laws of the State of Minnes ota and is hereby licensed to transact the busines s of
Resident Appraiser : Certified General
License Number: 20315256
unless this authority is suspended, revoked, or o therwise legally terminated. This license shall be in effect
until August 31, 2023.
IN TESTIMONY WHEREOF, I have hereunto set my hand this July 01, 2021.
COMMISSIONER OF COMMERCE
Minnesota Department of Commerce
Licensing Division
85 7th Place East, Suite 500
St. Paul, MN 55101-3165
Telephone: (651) 539-1599
Email: licensing.commerce@state.mn.us
Website: commerce.state.mn.us
Notes:
•Individual Licensees Only - Continuing Education: 15 hours is required in the first renewal period , which includes a 7hour USPAP course. 30 hours is required for each subsequent renewal period, which includes a 7 hour USPAP course.
•Appraisers: You must hold a licensed Residential, Certified Residential, or Certified General qualification in order toperform appraisals for federally-related transact ions. Trainees do not qualify. For further details, please visit our websiteat commerce.state.mn.us.
Parcel #1: ABHE & Svoboda, Inc.
53
LOIS MARIE DAVIS
789 GOLDEN MEADOW ROAD
EAGAN, MN 55123
STATE OF MINNESOTA
The Undersigned COMMISSIONER OF COMMERCE for the State of Minnesota hereby certifies that
LOIS MARIE DAVIS
789 GOLDEN MEADOW ROAD
EAGAN, MN 55123
has complied with the laws of the State of Minnes ota and is hereby licensed to transact the busines s of
Resident Appraiser : Trainee
License Number: 40078294
unless this authority is suspended, revoked, or o therwise legally terminated. This license shall be in effect
until August 31, 2023.
IN TESTIMONY WHEREOF, I have hereunto set my hand this August 24, 2021.
COMMISSIONER OF COMMERCE
Minnesota Department of Commerce
Licensing Division
85 7th Place East, Suite 500
St. Paul, MN 55101-3165
Telephone: (651) 539-1599
Email: licensing.commerce@state.mn.us
Website: commerce.state.mn.us
Notes:
•Individual Licensees Only - Continuing Education: 15 hours is required in the first renewal period , which includes a 7hour USPAP course. 30 hours is required for each subsequent renewal period, which includes a 7 hour USPAP course.
•Appraisers: You must hold a licensed Residential, Certified Residential, or Certified General qualification in order toperform appraisals for federally-related transact ions. Trainees do not qualify. For further details, please visit our websiteat commerce.state.mn.us.
Parcel #1: ABHE & Svoboda, Inc.
54
Parcel #1: ABHE & Svoboda, Inc.
55
PROFESSIONAL QUALIFICATIONS
Lois M. Davis
Resident Appraiser-Trainee
EDUCATION
Appraisal
Basic Appraisal Procedures, Prosource
Basic Appraisal Principles, Prosource
Uniform Standards of Professional Appraisal Practice, Prosource/McKissock
The Art of the Addenda
The Evolution of Finance and the Mortgage Market
Residential Sales Comparison & Income Approaches, McKissock
Residential Market Analysis and Highest & Best Use, McKissock
General
College of St. Catherine, BA in Business Administration-Accounting - 1987
CPA Examination-1989
EXPERIENCE
Accountant/Managing Partner of Davis Specialty Transportation, LLC an independent
trucking/distribution company located in Minneapolis, MN
Auditor/Financial Control Officer for the State of Minnesota Veterans Homes Board of
Directors and Department of Finance for ten years
LICENSES, COMMISSIONS, MEMBERSHIPS/AFFILIATIONS
Lois Marie Davis, Resident Appraiser-Trainee, MN 40078294
Parcel #1: ABHE & Svoboda, Inc.
56
GLOSSARY OF TERMS
Appraisal Definitions
The below is excerpted from the 2006 USPAP and Advisory Opinions.
ADVOCACY: Representing the cause or interest of another, even if that cause or interest
does not necessarily coincide with one’s own beliefs, opinions, conclusions, or
recommendations.
APPRAISAL: The act or process of developing an opinion of value; an opinion of value
of or pertaining to appraising and related functions such as appraisal practice o r appraisal
services.
Comment: An appraisal must be numerically expressed as a specific amount, as a range
of numbers, or as a relationship (e.g., not more than, not less than) to a previous value
opinion or numerical benchmark (e.g., assessed value, collateral value).
APPRAISAL CONSULTING: The act or process of developing an analysis,
recommendation, or opinion to solve a problem, where an opinion of value is a component
of the analysis leading to the assignment results.
Comment: An appraisal consulting assignment involves an opinion of value but does not
have an appraisal or an appraisal review as its primary purpose.
APPRAISAL PRACTICE: Valuation services performed by an individual acting as an
appraiser, including but not limited to appraisal, appraisal review, or appraisal consulting.
Comment: Appraisal practice is provided only by appraisers, while valuation services are
provided by a variety of professionals and others. The terms appraisal, appraisal review,
and appraisal consulting are intentionally generic and are not mutually exclusive. For
example, an opinion of value may be required as part of an appraisal review and is
required as a component of the analysis in an appraisal consulting assignment. The use
of other nomenclature for an appraisal, appraisal review, or appraisal consulting
assignment (e.g. analysis, counseling, evaluation, study, submission, or valuation) does
not exempt an appraiser from adherence to the Uniform Standards of Professional
Appraisal Practice.
APPRAISAL REVIEW: The act or process of developing and communicating an opinion
about the quality of another appraiser’s work that was performed as part of an appraisal,
appraisal review, or appraisal consulting assignment.
Comment: The subject of an appraisal review assignment may be all or part of an
appraisal report, work file, or a combination of these.
APPRAISER: One who is expected to perform valuation services competently and in a
manner that is independent, impartial, and objective.
Comment: Such expectation occurs when individuals, either by choice or by requirement
place upon them or upon the service they provide by law, regulation, or agreement with
the client or intended users, represent that they comply. (See PREAMBLE.)
Parcel #1: ABHE & Svoboda, Inc.
57
APPRAISER’S PEERS: Other appraisers who have expertise and competency in the
same or a similar type of assignment.
ASSIGNMENT: A valuation service provided as a consequence of an agreement
between an appraiser and a client.
ASSIGNMENT RESULTS: An appraiser’s opinions and conclusions developed specific
to an assignment.
Comment: Assignment results include an appraiser’s:
• Opinions or conclusions developed in an appraisal assignment, such as value;
• Opinions of adequacy, relevancy, or reasonableness developed in an appraisal
review assignment; or
• Opinions, conclusions, or recommendations developed in an appraisal consulting
assignment.
ASSUMPTION: That which is taken to be true.
BIAS: A preference or inclination that precludes an appraiser’s impartiality,
independence, or objectivity in an assignment.
BUSINESS ENTERPRISE: An entity pursuing an economic activity.
BUSINESS EQUITY: The interests, benefits, and rights inherent in the ownership of a
business enterprise or a part thereof in any form (including, but not necessarily limited to,
capital stock, partnership interests, cooperatives, sole proprietorships, options, and
warrants).
CLIENT: The party or parties who engage an appraiser (by employment or contract) in
a specific assignment.
Comment: The client identified by the appraiser in an appraisal, appraisal review, or
appraisal consulting assignment (or in the assignment work file) is the party or parties
with whom the appraiser has an appraiser-client relationship in the related assignment,
and may be an individual, group, or entity.
CONFIDENTIAL INFORMATION: Information that is either:
• Identified by the client as confidential when providing it to an appraiser and that is
not available from any other source; or
• Classified as confidential or private by applicable law or regulation
CREDIBLE: Worthy of belief.
Comment: Credible assignment results require support, by relevant evidence and logic,
to the degree necessary for the intended use.
COST: The amount required to create, produce or obtain a property.
Parcel #1: ABHE & Svoboda, Inc.
58
Comment: Cost is either a fact or an estimate of fact.
EXTRAORDINARY ASSUMPTION: An assumption, directly related to a specific
assignment, which, if found to be false, could alter the appraiser’s opinion or conclusions.
Comment; Extraordinary assumptions presume as fact otherwise uncertain information
about physical, legal, or economic characteristics of the subject property; or about
conditions external to the property, such as market conditions or trends; or about the
integrity of data used in an analysis.
FEASIBILITY ANALYSIS: A study of the cost-benefit relationship of an economic
endeavor.
HYPOTHETICAL CONDITION: That which is contrary to what exists but is supposed for
the purpose of analysis.
Comment: Hypothetical conditions assume conditions contrary to known facts about
physical, legal, or economic characteristics of the subject property; or about conditions
external to the property, such as market conditions or trends; or about the integrity of data
used in an analysis.
INTANGIBLE PROPERTY (INTANGIBLE ASSETS): Nonphysical assets, including but
not limited to franchises, trademarks, patents, copyrights, goodwill, equities, mineral
rights, securities, and contracts, as distinguished from physical assets such as facilities
and equipment.
INTENDED USE: The use or uses of an appraiser’s reported appraisal, appraisal review,
or appraisal consulting assignment opinions and conclusions, as identified by the
appraiser based on communication with the client at the time of the assignment.
INTENDED USER: The client and any other party as identified, by name or type, as
users of the appraisal, appraisal review, or appraisal consulting report by the appraiser
on the basis of communication with the client at the time of the assignment.
JURISDICTIONAL EXCEPTION: An assignment condition that voids the force of a part
or parts of USPAP, when compliance with part or parts of USPAP is contrary to law or
public policy applicable to the assignment.
MARKET VALUE: The most probably 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 and 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:
1. Buyer and seller are typically motivated
2. Both parties are well informed or well advised, and acting in what they
consider their own best interests;
3. A reasonable time is allowed for exposure in the open market
Parcel #1: ABHE & Svoboda, Inc.
59
4. Payment is made in terms of cash in United States dol lars or in terms of
financial arrangements comparable thereto; and
5. 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.
The above definition of market value is consistent with the definition referenced in this
report, as well as the definition in The Appraisal of Real Estate, Twelfth Edition (Appraisal
Institute, 2001).
MASS APPRAISAL: The process of valuing a universe of properties as of a given date
using standard methodology, employing common data, and allowing for statistical testing.
PERSONAL PROPERTY: Identifiable tangible objects that are considered by the general
public as being “personal” for example, furnishings, artwork, antiques, gems and jewelry,
collectibles, machinery and equipment, all tangible property that is not classified as real
estate.
PRICE: The amount asked, offered, or paid for a property
Comment: Once stated, price is a fact, whether it is publicly disclosed or retained in
private. Because of the financial capabilities, motivations, or special interests of a given
buyer or seller, the price paid for a property may or may not have any relation to t he value
that might be ascribed to that property by others.
REAL ESTATE: An identified parcel or tract of land, including improvements, if any.
REAL PROPERTY: The interests, benefits, and rights inherent in the ownership of real
estate.
Comment: In some jurisdictions, the terms real estate and real property have the same
legal meaning. The separate definitions recognize the traditional distinction between the
two concepts in appraisal theory.
REPORT: Any communication, written or oral, of an appra isal, appraisal review, or
appraisal consulting service that is transmitted to the client upon completion of an
assignment.
Comment: Most reports are written and most clients mandate written reports. Oral report
requirements (see the Record Keeping section of the ETHICS RULE) are included to
cover court testimony and other oral communications of an appraisal, appraisal review,
or appraisal consulting service.
SCOPE OF WORK: The type and extent of research and analysis in an assignment.
SIGNATURE: Personalized evidence indicating authentication of the work performed by
the appraiser and the acceptance of the responsibility for content, analyses, and the
conclusions in the report.
Parcel #1: ABHE & Svoboda, Inc.
60
Comment: A signature can be represented by a handwritten mark, a digitize d image
controlled by a personalized identification number, or other media, where the appraiser
has sole personalized control of affixing the signature.
SUPPLEMENTAL STANDARDS: Requirements issued by government agencies,
government sponsored enterprises, or other entities that establish public policy which add
to the purpose, intent, and content of the requirements in USPAP, that have a material
effect on the development and reporting of assignment results.
Comment: Supplemental standards are published in regulations, rules, policies, and
other similar documents, and have the same applicability to all properties or assignments
in a particular category or class regardless of the contracting entity.
VALUATION SERVICES: Services pertaining to aspects of property value.
Comment: Valuation services pertain to all aspects of property value and include
services performed both by appraisers and by others.
VALUE: The monetary relationship between properties and those who buy, sell, or use
those properties.
Comment: Value expresses an economic concept. As such, it is never a fact but always
an opinion of the worth of a property at a given time in accordance with a specific definition
of value. In appraisal practice, value must always be qualified; for example , market value,
liquidation value, or investment value.
WORK FILE: Documentation necessary to support an appraiser’s analysis, opinions,
and conclusions.
APPRAISAL REPORT
Project: CSAH 21 Reconstruction Project
Parcel: #2
County: Scott County
Owner: Schweich Construction, Inc.
Parcel Address: Unaddressed Revere Way
Prior Lake, MN
Report Prepared For:
SRF Consulting / City of Prior Lake
Report Prepared By:
Kelly Lindstrom
Date of Valuation: November 12, 2021
Parcel #2: Schweich Construction, Inc.
2
Kelly Lindstrom, Certified General Appraiser
10779 Falling Water Lane - Unit C, Woodbury, MN 55129
651-436-8842
December 10, 2021
Mr. Ken Helvey, Principal
SRF Consulting
3701 Wayzata Boulevard Suite 100
Minneapolis, MN 55415-3791
RE: Appraisal Report for Parcel #2
CSAH 21 Reconstruction Project
Schweich Construction, Inc. Property
Dear Mr. Helvey:
Pursuant to your request, a market value appraisal has been performed and an appraisal report
prepared for the above referenced property. The appraisal estimates the November 12, 2021
(the date of the most recent property inspection) fee simple market value of the subject before
and after the proposed acquisition including valuation of any impacted site improvements and/or
temporary construction easement(s). The report is subject to the certification, assumptions and
limiting conditions herein stated. It is noted that the subject property is the common area for a
common interest community (Revere Way Industrial Condominiums) that includes five industrial
condominium units; however, fee ownership, based on the title work provided and Scott County
property records, is considered to be Schweich Construction, Inc. This appraisal values the
subject property, before and after the acquisition, subject to the following hypothetical conditions:
• The subject is valued as though its development were not
restricted by its designation as the common area for the Revere
Way Industrial Condominiums. The subject is valued as though it
could be independently developed.
• The subject is valued without consideration to the five
condominium units (five separate tax parcels) which are within the
subject’s parcel boundaries but under separate ownerships.
• The subject is valued as though it has been rezoned for
industrial/business park utilization (C-3: Business Park District).
The methods and reasoning used in the analyses, as well as the data gathered during the
investigation of the property and marketplace, are also detailed in this report.
Parcel #2: Schweich Construction, Inc.
3
After careful consideration of all the pertinent factors influencing market value, it is my opinion
that the fee simple market value of the acquisition as of November 12, 2021, is computed as
follows:
Estimated Value Before Proposed Acquisition: $573,200.00
Estimated Value After Proposed Acquisition: $561,600.00
Diminution in Value: $11,600.00
The allocation of the acquisition is as follows:
Temporary Construction Easement (18 months*): $7,100.00
Affected Site Improvements: $4,500.00
Estimated Damages: $11,600.00
*The cost to extend the construction easement an additional twelve months (through June 30,
2024) is estimated to be $4,700.
This appraisal report has been completed in conformance with the Uniform Standards of
Professional Appraisal Practice (USPAP) of The Appraisal Foundation, Code of Professional
Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute, and (Mn/DOT)
Right-of-Way (R/W) Manual, Section 200. All statements of fact contained in this report upon
which the analyses, opinions, and conclusions expressed herein are based, are true and correct
to the best of my knowledge.
Please feel free to contact me if you have any questions regarding this report. Thank you for the
opportunity to assist you in this valuation matter.
Respectfully Submitted,
Kelly Lindstrom, Certified General Appraiser
Minnesota Certified General Appraiser License #20315256
Parcel #2: Schweich Construction, Inc.
4
Table of Contents
Table of Contents 4
Summary & Conclusions - Partial Acquisition 5
Certifications 7
Introduction 9
Intended Use of the Report (Purpose and Function of the Report) 9
Date of Valuation 9
Property Rights Appraised 9
Market Value 9
Exposure Time and Marketing Time 10
Assumptions and Limiting Conditions 10
Extraordinary Assumptions & Hypothetical Conditions 12
Competency 13
Executive Summary 14
Scope of Appraisal 15
Larger Parcel Consideration 16
Discussion of Assignment and Conditions 17
The Appraisal Process 17
Approaches Used in This Appraisal Assignment 18
Research and Analysis Applied 18
Property Identification 19
Subject Description 20
Zoning 24
Highest and Best Use 29
Before Acquisition Valuation 34
The Proposed Acquisition 46
After Acquisition Valuation 49
Affected Site Improvements 50
Summary and Final Analysis 50
ADDENDA 52
Easement Valuation Matrix
Appraisers’ Certifications & Qualifications
Glossary of Terms
Parcel #2: Schweich Construction, Inc.
5
Summary & Conclusions - Partial Acquisition
Project:
CSAH 21 Reconstruction
Project Parcel: Parcel #2
County:
Scott
Owner: Schweich Construction, Inc.
Property Address:
Unaddressed Revere Way
Prior Lake, MN
Valuation Date: November 12, 2021
Inspection
Date: November 12, 2021
Rights & Interests: Fee Simple
Zoning:
R-1: Low Density
Residential
(Valued as C-3: Business
Park District) Present Use:
Common area for Revere
Way Industrial
Condominiums
Highest & Best Use
Before:
Industrial/business park
development After:
Industrial/business park
development
Effective Land
Area Before: 112,385 SF (2.58 AC) *
Effective Land
Area After: 112,385 SF (2.58 AC)
Type of Building: None
*Per Scott County Property Records and may
include areas encumbered by easements
located in setback areas.
ALLOCATION OF ACQUISITION
Size Value/SF
Temporary Easement: 11,499 SF $7,100.00
Impacted Improvements: Trees $4,500.00
TOTAL ACQUISITION VALUE $11,600.00
Appraised by: Kelly Lindstrom Date: December 10, 2021
Appraised by: Lois Davis Date: December 10, 2021
Parcel #2: Schweich Construction, Inc.
6
ESTIMATE OF VALUE BEFORE ACQUISITION
# Units Price/Unit
Unencumbered Land Value*: 112,385 SF $5.10/SF $573,200.00 Rounded
Total Land Value Before Acquisition
(Rounded):
$573,200.00
ESTIMATE OF VALUE AFTER ACQUISITION
# Units Price/Unit
Unencumbered Land Value*: 112,385 SF $5.10/SF $573,200.00 Rounded
Temporary Easement Value (18
months**):
($7,100.00)
Affected Site Improvements Value: ($4,500.00)
Total Land Value Before Acquisition
(Rounded):
$561,600.00
TOTAL ACQUISITION VALUE
Rounded to: $11,600.00
*Includes areas encumbered by existing easements in setback areas
**The cost to extend the temporary construction easement an additional twelve months
is estimated to be $4,700.
Parcel #2: Schweich Construction, Inc.
7
CERTIFICATION
Project: CSAH 21 Reconstruction Project
Parcel: #2 - Schweich Construction, Inc.
I hereby certify:
That on November 12, 2021, Kelly Lindstrom, Certified General Appraiser, personally inspected the property herein appraised
and that she has afforded the property owner (s), Schweich Construction, Inc., the opportunity to accompany her at the time
of the inspection. The property owners did not accompany the appraiser. She has also personally made a field inspection,
to the extent possible, of the comparable sales relied upon in making said appraisal. The subject and the comparable s ales
relied upon in making said appraisal were as represented by the photographs contained in this appraisal report.
That to the best of my knowledge and belief the statements contained in the appraisal hereinabove set forth are true , and the
information upon which the opinions expressed therein are based is correct, subject to the limiting conditions herein set forth.
That I understand that said appraisal is to be used by SRF Consulting on behalf of the City of Prior Lake for negotiation
purposes related to a proposed acquisition for the CSAH 21 Reconstruction Project located along the roadway frontage of the
subject.
That such appraisal has been made in conformity with the appropriate State laws, regulations, policies and procedures
applicable to real property appraisal and to the best of our knowledge no portion of the value assigned to such property
consists of items which are non-compensable under established State or Federal law.
That neither my employment nor my compensation for making this appraisal and report are in any way contingent upon the
values reported herein.
That I have performed no services as an app raiser or in any other capacity regarding the property that is the subject of this
report within the three-year period immediately preceding acceptance of this assignment.
That I have no direct or indirect present or contemplated future personal interest in such property or in any benefit from the
acquisition of such property appraised.
That in making this appraisal, I have disregarded any increase or decrease in the before value caused by the project for whic h
the property is being acquired.
That I will not reveal the findings and results of such appraisal to anyone other than the proper officials of SRF Consulting
and/or the City of Prior Lake, or its assigns, until authorized by agency officials to do so, or until we are required to do so, by
due process of law, or until we are released from the obligation by having publicly testified as to such findings.
That the reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with
the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute .
That use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized
representatives.
As of the date of this report, I, Kelly Lindstrom, have completed the Standards and Ethics Educatio n Requirement for the
Candidates of the Appraisal Institute.
That my independent opinion of the market value of the proposed acquisition as of November 12, 2021 (the most recent
inspection date) is $11,600.00, and the conclusion set forth in this appraisal was reached without collaboration or direction as
to value.
Dated: December 10, 2021
Kelly A. Lindstrom; Certified General Appraiser; Minn. #2031526
Parcel #2: Schweich Construction, Inc.
8
CERTIFICATION
Project: CSAH 21 Reconstruction Project
Parcel: #2 Schweich Construction, Inc.
I hereby certify:
That on November 12, 2021, Lois Davis inspected the property herein appraised. She has also personally made a field
inspection, to the extent possible, of the comparable sales relied upon in making said appraisal. The subject and the
comparable sales relied upon in making said appraisal were as represented by the photographs contained in this
appraisal report.
That to the best of my knowledge and belief the statements contained in the appraisal hereinabove set forth are true
and the information upon which the opinions expressed therein are based as correct, subject to the limiting conditions
herein set forth.
That I understand that said appraisal is to be used by SRF Consulting on behalf of the City of Prior Lake for negotiation
purposes related to a proposed acquisition for the CSAH 21 Reconstruction Project located along the roadway frontage
of the subject.
That such appraisal has been made in conformity with the appropriate State laws, regulations, policies, and procedures
applicable to real property appraisal and that to the best of our knowledge no portion of the value assigned to such
property consists of items which are non-compensable under established State or Federal law.
That neither my employment nor my compensation for making this appraisal and report are in any way contingent upon
the values reported herein.
I have performed no services as an appraiser or in any other capacity, regarding the property that is the subject of this
report within the three-year period immediately preceding acceptance of this assignment.
That I have no direct or indirect present or contemplated future personal interest in such property or in any benefit from
the acquisition of such property appraised.
That in making this appraisal, I have disregarded any increase or decrease in the be fore value caused by the project
for which the property is being acquired.
That I will not reveal the findings and results of such appraisal to anyone other than the proper officials of SRF
Consulting and/or the City of Prior Lake, or its assigns, until authorized by agency officials to do so, or until we are
required to do so, by due process of law, or until we are released from the obligation by having publicly testified as to
such findings.
That my independent opinion of the market value of the proposed acquisition as of November 12, 2021 (the most recent
inspection date) is $11,600.00, and the conclusion set forth in this appraisal was reached without collaboration or
direction as to value.
Dated: December 10, 2021
Lois Marie Davis, Residential Appraiser-Trainee, MN 40078294
Parcel #2: Schweich Construction, Inc.
9
Introduction
This report is designed to comply with the reporting requirements of Standards Rule 2 -2
of the Uniform Standards of Professional Appraisal Practice which addresses report
specifications. The appraisal is presented in an “Appraisal Report” format, as described
in 2020 - 2021 USPAP Standards Rule 2-2 (a). Supporting documentation not contained
in the report is retained in the appraiser’s work file. The depth of data and analysis
contained in this report is specific to the needs of the client, SRF Consulting on behalf of
the City of Prior Lake and for the intended use of acquiring permanent right of way related
to the CSAH 21 Reconstruction Project. The subject property is 112,385 SF (+/- 2.58
acres) of land addressed as Unaddressed Revere Way located in Prior Lake, MN. The
subject property is valued with an industrial/business park zoning (hypothetical condition,
please see that section of this report).
Intended Use of the Report (Purpose and Function of the Report)
The intended use (purpose) of this appraisal is to provide an opinion of market value for
the client, SRF Consulting on behalf of the City of Prior Lake, and its assigns, whose
representatives intend to use this report (function) for negotiation purposes related to a
proposed acquisition that includes permanent right of way related to the CSAH 21
Reconstruction Project.
Date of Valuation
The date of valuation is the date of the most recent property inspection, November 12,
2021.
Property Rights Appraised
The subject property is appraised by estimating the market value of the fee simple interest
of the subject’s underlying land. Fee Simple Interest, as considered throughout this report
is defined on pg. 90 of The Dictionary of Real Estate Appraisal, Sixth Edition, as:
“Absolute ownership unencumbered by any other interest or estate, subject only
to the limitation imposed by the governmental powers of taxation, eminent domain,
police power and escheat”.
Market Value
Market Value is defined in The Dictionary of Real Estate Appraisal, Sixth Edition, as:
"The most probable price that 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 and knowledgeably, and assuming the
price is not affected by undue stimulus. Implicit in this definitio n is the
consummation of a sale as of a specified date and the passing of title
from seller to buyer under conditions whereby:
• Buyer and seller are typically motivated;
Parcel #2: Schweich Construction, Inc.
10
• Both parties are well informed or well advised and acting
in what they consider their best interests;
• A reasonable time is allowed for exposure in the open
market
• Payment is made in terms of cash in U.S. dollars or in
terms of financial arrangements comparable thereto; and
• The price represents the normal consideration for the
property sold unaffected by special or creative financing
or sales concessions granted by anyone associated with
sale.”
Market value, unless otherwise noted, shall represent cash equivalent terms where the
seller receives all cash for their interest. The property may be financed at typical market
terms under this definition.
Exposure Time and Marketing Time
Exposure Time and Marketing Time are defined within The Dictionary of Real Estate
Appraisal, Sixth Edition, as:
Exposure Time: “The estimated length of time that the property interest being
appraised would have been offered on the market prior to the hypothetical
consummation of a sale at market value on the effective date of the appraisal; a
retrospective opinion based on an analysis of past events assuming a competitive
and open market.”
Marketing Time: “An opinion of the amount of time it might take to sell a real or
personal property interest at the concluded market value level during the period
immediately after the effective date of an appraisal. M arketing time differs from
exposure time, which is always presumed to precede the effective date of an
appraisal.”
The market values are based on the property having approximately three to six months
of exposure time prior to the effective date of the appraisal, which is typical of the market
as of the effective date of the appraisal, November 12, 2021. The marketing time of the
subject property is considered to be approximately three to six months.
Assumptions and Limiting Conditions
The certification of this appraisal report is subject to the following assumptions and limiting
conditions:
1. This appraisal values the subject property (land only) as the improvements are not
anticipated to be impacted by the acquisition.
2. The Appraiser assumes no responsibility for matters of a legal nature affecting the
property appraised or the marketability of the title.
Parcel #2: Schweich Construction, Inc.
11
3. The property is assumed to be under responsible ownership and management.
4. The property is appraised as though clear and free of any liens, encumbrances, or
indebtedness, unless stated otherwise.
5. To the best of this appraiser's belief, the information contained in this report is true
and reported correctly. The information in this report, while not guaranteed, has
been taken from sources or records believed to be reliable.
6. The Appraiser assumes that there exist no h idden defects with the site, sub-soil,
or improvements, which would render it more or less valuable.
7. Disclosure by the Appraiser of the contents of this appraisal report is subject to
review in accordance with the by-laws and regulations of the professional appraisal
organizations with which the Appraiser is affiliated.
8. The Appraiser is not required to appear in court or give testimony because of
having made this report, unless arrangements have been made in advance.
9. This report, or any portions thereof, will not be distributed, or otherwise
disseminated, to anyone other than the person who commissioned this or those
involved in the certification, except as required by law.
10. This entire appraisal report must be considered as a whole, and any excerpts or
portions from this report cannot be considered separately.
11. It is assumed that there is full compliance with all applicable federal, state and local
environmental regulations and laws, as well as applicable zoning regulations and
restrictions, unless otherwise stated in this report.
12. It is assumed that all required licenses, consents or other authority from any local,
state, or federal governments have been obtained or can be renewed.
13. It is assumed that the subject improvements, if any, are within the stated
boundaries, and that there are no encroachments on neighboring property, or
neighboring encroachments on the subject property, unless otherwise stated in
this report.
14. The existence of potentially hazardous material such as urea-formaldehyde foam
insulation, asbestos, and the existence of toxic water, toxic waste, or radon gas
may have an effect on the value of the property. The Appraiser is not qualified to
determine if such substances are present. The client may wish to consult an expert
in this field.
Parcel #2: Schweich Construction, Inc.
12
15. Acceptance of or use of this appraisal report constitutes an understanding of and
acceptance of these assumptions and limiting conditions.
Extraordinary Assumptions
An extraordinary assumption is something spe cific to the particular assignment that is
assumed to be true but is not certain. If it turns out to be untrue, the value conclusion
would be impacted. It is different from a general assumption, which could be applicable
to any assignment. We relied on information provided and made available by SRF
Consulting on behalf of the City of Prior Lake as to the subject's and comparable sales'
sizes and characteristics not readily apparent during the property inspections. We relied
on information provided by Scott County as to effective site size (includes areas
encumbered by existing easements located within setback areas). We relied on
information contained in the Scott County property records as to site size; topography;
and other characteristics that may not be apparent based on visual inspections. We relied
on the parcel staking as to impacted site improvements. If the staking is inaccurate or if
additional site improvements are impacted by the acquisition, value conclusions could be
impacted. The following general assumptions have been made related to the proposed
project:
1. There will be no interruption of access to the subject resulting from the project.
2. There will be no damages to subject improvements unless stated within this report.
3. The areas impacted by the project will be repaired or replaced in a similar fashion
to that prior to the project.
4. The temporary easement acquisition area is being returned to its pre-acquisition
elevation with no significant slope changes.
If any of these assumptions is incorrect, value conclusions may be impacted. No
extraordinary assumptions were utilized in this report unless otherwise noted.
Hypothetical Conditions
A hypothetical condition is a condition, directly related to a specific assignment, which is
contrary to what is known by the appraiser to exist on the effective date of the assignment
results but is used for the purpose of analysis. We valued the subject as though it were
currently zoned C-3: Business Park District as supported by the city’s comprehensive
plan (Planned Industrial Development) and as indicated by the City of Prior Lake’s
Community Development Department. We also valued the subject property, which
is the common area for an industrial condominium development, as though it could
be independently developed and without consideration to the five condominium
units which are within the subject’s parcel boundaries but under separate
ownerships. No additional hypothetical conditions were utilized in this report unless
otherwise noted.
Parcel #2: Schweich Construction, Inc.
13
Competency
The appraisers certify that they have the knowledge and experience to complete this
appraisal assignment competently. The Certified General Appraiser, Kelly Ann
Lindstrom, has extensive real estate appraisal background in terms of education and
appraisal experience. She has considerable experience appraising real estate in both
the Twin City Metropolitan Area market and outstate Minnesota. Both appraisers
researched the local real estate market to assure a complete understanding of the
external influences that affect value in the project area, specifically Scott County,
Minnesota. Therefore, Kelly Ann Lindstrom, Certified General Appraiser, is competent to
complete this appraisal assignment. Lois Marie Davis aided in the preparation of this
appraisal report.
Parcel #2: Schweich Construction, Inc.
14
Executive Summary
Address: Unaddressed Revere Way; Prior Lake, MN
Project Information: CSAH 21 Reconstruction Project; Parcel #2
Property Type: Industrial property
Owner: Schweich Construction, Inc.
Interests Appraised: Fee simple estate
Appraisal Purpose: Provide a market value estimate of the subject’s permanent diminution in value, temporary construction
easement, and any acquired site improvements related to the CSAH 21 Reconstruction Project.
Appraisal Use: SRF Consulting on behalf of The City of Prior Lake will utilize the report for negotiation purposes related to
a proposed acquisition for the CSAH 21 Reconstruction Project.
Improvement Description: None (subject is the common area supporting five industrial condominium units)
Site Description: Shape: Trapezoid
Location: Unaddressed Revere Way, Prior Lake, MN
Effective Size Before Acquisition: 112,385 SF (+/- 2.58 AC)
Effective Size After Acquisition: 112,385 SF (+/- 2.58 AC)
Temporary Construction Easement: 11,499 SF
Topography: Level to gently sloping
Impacted Site Improvements: Trees
Impacted Structural Improvements: None
Zoning: R-1: Low Density Residential valued as C-3: Business Park District
Present Use: Common area for Revere Way Industrial Condominiums
Highest and Best Use Before and
After Acquisition -as Vacant: Industrial/business park development
Five Year Sales History: The property has been owned by the current property owner for over five years.
Scott County Property I.D. #: PID# 254770060
Partial Legal Description: The East 450 feet of Tract A, and all of Tract B, Registered Land Survey No. 98 EXCEPT Condominium No.
1009, Revere Way Industrial Condominium, Files of the Registrar of Titles, Scott County, Minnesota.
Total Assessor’s Market Value
(Payable 2022):
Subject is common area for Revere
Way Industrial Condominiums and
its value is allocated amongst the
five condominium units.
ASSMT YR
2021
LAND
$369,700
(Value allocated
to the 5 industrial
condominiums)
BUILDING(S)
N/A Subject is
common area of five
units under separate
ownership
TOTAL
$369,700
Payable 2021 Property Tax &
Assessments:
N/A; Allocated to the five improved condominium units
Estimated Permanent Diminution in Land Value: $0.00
Estimated Temporary Construction Easement Value: $7,100.00
Estimated Affected Site Improvements Value: $4,500.00
Estimated Total Value of Acquisition: $11,600.00
Date of Valuation: November 12, 2021 (Date of the Most Recent Inspection)
Appraiser(s): Kelly Ann Lindstrom, Certified General Appraiser, MN 20315256
Lois Marie Davis, Residential Appraiser: Trainee, MN 40078294
Parcel #2: Schweich Construction, Inc.
15
Scope of Appraisal (Appraisal Methodology)
The scope of the assignment relates to the extent and manner in which research is
conducted, data is gathered, and analysis is applied, all based upon the following
problem-identifying factors stated elsewhere in this report:
1. Client
2. Intended use
3. Intended user
4. Type of opinion
5. Effective date of opinion
6. Relevant characteristics about the subject
The appraisal task is to estimate the subject’s market value as of the effective date of this
report. The appraisal has been performed in compliance with the Code of Professional
Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute.
Appraisal Methodology Summary
The following data and concepts pertaining to the subject property have been examined
and analyzed.
• Physical characteristics of the real property including:
1. Inspection of subject on November 12, 2021 in order to gather
information about the subject’s characteristics as relevant to the
valuation;
2. Review of county aerial and Google Earth aerial images;
3. Analysis and observations of the local market and the subject’s
location and place within this local market
• Non-physical characteristics of the real property including:
1. Property rights
2. Legal description
3. Existing easements
4. Tax and assessment data
5. Zoning data
6. Future land use data
• Observations and data regarding the subject’s market and indicators within
this market (by reviewing sales of properties from Scott County Assessor’s
Office, MLS, RediComp and/or commercial listing services) including:
1. Comparative analysis of factors considered relevant that influence
value
2. Supply and demand generators of the market
Parcel #2: Schweich Construction, Inc.
16
3. Financing options available within the market
4. Perception of the future market
• Utilizing the above data and concepts, the following analyses occurred:
1. Highest and best use of the subject property
2. All three approaches to value were considered. Given the subject is
being valued as vacant, the sales comparison approach was
considered applicable and therefore utilized.
3. After gathering, verifying through public record searches and
independent verifications with transaction participant(s) and
analyzing the relevant data, the estimated market value was
estimated for the subject property as vacant.
4. Reconciliation and final estimate of value
• This Appraisal Report was prepared and summarizes the data, work
performed, analysis, and conclusions.
Larger Parcel Consideration
The appraisers conducted a larger parcel consideration to allow for an examination of the
highest and best use potential of the subject property. The Dictionary of Real Estate
Appraisal defines the Larger Parcel as follows: “In condemnation, that tract or tracts of
land which are under beneficial control of a single individual or entity and have the same
or an integrated highest and best use. Elements for consideration by the appraiser in
making a determination in this regard are contiguity, or proximity, as it bears on the
highest and best use of the property, unity of ownership, and unity of highest and best
use.” In relative terms, the appraiser must consider the Larger Parcel in the above terms
and in terms of highest and best use; and for purposes of just compensation its most
advantageous use as it actually affects the present market value. The Larger Parcel (as
defined in The Dictionary of Real Estate Appraisal) is considered to be the subject parcel
(excluding the five tax parcels within its borders as they are under separate ownership)
as shown in the below aerial map:
Larger Parcel
Condominium
Units (Located
within subject;
Separate
Ownership &
PIDs)
Parcel #2: Schweich Construction, Inc.
17
Discussion of Assignment and Conditions
SRF Consulting, on behalf of The City of Prior Lake, requested we perform an appraisal
to estimate damages relating to a proposed acquisition. The acquisition is a portion of a
generally trapezoid shaped tract (condominium units within its boundaries), owned by
Schweich Construction, Inc. addressed as Unaddressed Revere Way, Prior Lake, MN.
The subject parcel is the common area surrounding the Revere Way Industrial
Condominiums. Effective parcel size, before the acquisition, is considered to be 112,385
SF (+/- 2.58 AC) and is net of existing right of way easements but includes areas
encumbered by existing easements located in the setback areas. The proposed
acquisition contains a 11,499 SF temporary construction easement as shown on the
parcel sketch within this report. The temporary construction easement is expected to
encumber the area for eighteen months (through June 30, 2023). The City of Prior Lake
requested a valuation of a possible twelve-month extension (through June 30, 2024).
The Appraisal Process
A property’s value can be estimated through three approaches to value. The three
approaches are based on the market’s interpretations of value, and they are the cost
approach, the income approach, and the market approach. They are described briefly as
follows:
The Cost Approach: The cost approach estimates the current replacement or
reproduction cost of the impacted improvements (main structures and site
improvements). Depreciation is then subtracted from the base replacement or
reproduction cost. There are three sources of depreciation: physical depreciation
(deterioration), functional obsolescence, and external (economic) obsolescence.
The cost of the land vacant (as obtained from market data), combined with the
estimated replacement or reproduction cost of any improvements minus
depreciation provides an indication of value for the subject. As the subject is valued
as vacant industrial/business park development land, this approach is not being
processed.
The Income Approach: The income approach estimates the present value of the
expected annual income stream. The income stream is then capitalized at a rate
commensurate with the risk and life expectancy of the improvements, to arrive at
an indication of value from a typical investor's standpoint. The capitalization of the
present value of an income stream provides an indication of value for the subject.
The potential income stream of the subject property is not impacted by the
acquisition and the acquisition area is vacant land, which typically is not leased in
this market. As the subject is valued as vacant industrial/business park
development land, this approach to value is not being processed.
The Sales Comparison (Market) Approach: Generally, the market approach
compares the subject property with other similar properties that have recently sold
or are currently listed for sale. Comparable properties used are intended for similar
use, similarly zoned. Positive and negative adjustments, either qualitative or
Parcel #2: Schweich Construction, Inc.
18
quantitative, are made to the comparable sales for the differences that exist
between them and the subject. Objective comparison with comparable sales
provides an indication of value for the subject property. This approach to value is
being processed.
Approaches Used in This Appraisal Assignment
All three approaches to value were considered, but only the Sales Comparison Approach
has been fully developed and is considered to be a reliable indicator of market value for
this assignment. The Sales Comparison Approach was used to determine the value of
the subject property as vacant land on a price per unit basis. The Cost Approach was not
used to value the subject's underlying land and is not considered a reliable indicator of
market value given the acquired area is vacant land with a highest and best use of
industrial/business park development. The income approach was not used as industrial
land is generally not leased in the subject’s marketplace. Elements of the cost approach
may have been utilized to determine the value of any affected site improvements.
Research and Analysis Applied
To determine a value for the subject’s acquired area, the sales comparison approach was
processed to extrapolate the value of the subject’s underlying l and. Unimproved land
comparable sales were obtained from the Scott County Assessor’s Office, Multiple Listing
Service (MLS), and/or from REDI Comps. Relevant information related to these
comparable sales was obtained, and they have been confirmed, viewed, and analyzed.
Information on these related comparable sales is compiled on comparable data sheets in
this report. Qualitative and quantitative analyses was performed, and this information
was used to determine the subject’s before and after acquisition land values.
Severance
The acquisition includes a temporary construction easement located along the subject’s
CSAH 21 roadway frontage. It is noted that the acquisition is for a temporary construction
easement and does not impact compliance with setback or site size requirements .
Access to Revere Way remains reasonable, suitable, and convenient for industrial
utilization. We believe an informed market participant will not perceive the subject as
being less desirable after the proposed acquisition than it is before. Severance is not
considered relevant.
Parcel #2: Schweich Construction, Inc.
19
Property Identification
The physical property was legally identified through the legal description, PID Number s,
and its location as shown on the following GIS map. Additionally, the parcel sketches,
contained within this report, indicates acquisition areas.
Condominium
Units (Differing
ownership
from subject
with five PIDs)
Parcel #2: Schweich Construction, Inc.
20
Property Inspection
Kelly Ann Lindstrom, Certified General Appraiser, most recently inspected the subject
property on November 12, 2021. The following photograph(s) depict the subject as
indicated in the following photographs.
Looking Northerly along Revere Way toward Eagle Creek Avenue
Looking Northwesterly along Acquisition Area
(Three large deciduous trees located in the Temporary Easement Area
Fence located outside of and adjacent to the Temporary Easement Area)
Parcel #2: Schweich Construction, Inc.
21
Looking Northwesterly along Acquisition Area
(Two large trees in photo located east of improvement are located in the acquisition
area; shrubs to the right of parking area are located In Existing ROW)
Looking Southeasterly along Acquisition Area
Looking at Five Unit Condominium Building Supported by Subject
(Subject is the Revere Way Industrial Condominium Common Area)
Parcel #2: Schweich Construction, Inc.
22
Subject Description
The subject is located in Prior Lake along CSAH 21 with access from Revere Way as
depicted on the parcel sketch contained within this report. The subject’s effective size is
112,385 SF (+/- 2.58 AC) of land that is the common area for the Revere Way Industrial
Condominiums (5 units with separate tax parcels with different ownership interests than
the subject). We valued the subject as though it could be independently developed
without consideration to it being a common area for the condominium units (see
hypothetical conditions). The subject’s highest and best use is considered to be
industrial/business park development subject to the hypothetical conditions stated within
this report. The following chart summarizes the subject’s site characteristics.
Parcel #2: Schweich Construction, Inc.
23
Salient Features of Subject Property
Site Size/Shape/Location: 112,385 SF (+/- 2.58 AC), generally trapezoid shaped, Prior Lake, MN
Access:
Frontage:
Access is from Revere Way
Frontage is along CSAH 21 (Eagle Creek Avenue) and Revere Way
Topography: The topography is considered to be level to gently sloping at or near roadway
grades.
Drainage/Floodplain: The drainage on the site is believed to be adequate. The subject is not located
in a floodplain.
Soil Conditions: Assumed buildable as evidenced by length of existing construction in the area;
no tests were made for stability or for toxic substance presence.
Utilities: None
Site Improvements: Parking lot
Environmental Nuisances & Hazards: The market does not appear to reflect any negative environmental concerns
that would adversely impact the subject, as if improved and as vacant, within
the marketplace. The subject is valued as though free of any potential
contamination.
Zoning: R-1: Low Density Residential
Subject is valued as though zoned C-3: Business Park District
Surrounding Property Relationship: Subject is hypothetically zoned for industrial/business park use. The subject's
immediate neighborhood is comprised of industrially utilized tracts of land.
Easements and Other Restrictions: We are not title experts and have depended upon information provided
regarding the ownership interest, the location of the existing right-of-way and
any easements (including typical and atypical easements). We valued the
subject as though it could be independently developed without consideration
to it being a common area for the condominium units (see hypothetical
conditions). No discounts were applied to the existing easements located in
the subject’s setback areas.
Functional Utility: The subject is conducive to its hypothetical C-3: Business Park District zoning
classification. We are valuing the site as though there is no functional
obsolescence to the site for the marketplace (subject valued without
consideration to it being a common area for the industrial condominium units it
supports, see hypothetical conditions).
MN/Dot Traffic Count:
Parcel #2: Schweich Construction, Inc.
24
Zoning
Zoning Map (City of Prior Lake)
The subject is currently zoned R-1: Low Density Residential as governed by the City of
Prior Lake. The parcel was annexed from Credit River Township as such was
automatically zoned R-1. The subject property is guided for planned industrial utilization
in the City of Prior Lake’s 2040 Comprehensive Plan:
Parcel #2: Schweich Construction, Inc.
25
The subject’s likely future zoning, according to Casey McCabe, Community Development
Director for the City of Prior Lake, will be C-3: Business Park. We are applying the
hypothetical condition that the subject has been rezoned to C-3: Business Park (a
planned industrial utilization) as the surrounding uses are industrial/business park
and the subject is guided for planned industrial utilization as shown above. The
purpose of the C-3 Zoning District is to promote high standards of design and construction
for business park uses in the city. It is slightly more restrictive than the City’s I-1 General
Industrial Zoning District which provides for industrial/business park development that
would not conform to the C-3 Zoning District due to size or nature of business. C-3:
Business Park District Requirements are as follows:
Parcel #2: Schweich Construction, Inc.
26
Parcel #2: Schweich Construction, Inc.
27
Parcel #2: Schweich Construction, Inc.
28
Parcel #2: Schweich Construction, Inc.
29
Conforming/Non-conforming Use
The subject, as it exists, is comprised of a legal lot of record and is considered a
conforming use to its designation in the City’s Comprehensive Plan and its hypothetical
C-3 Business Park Zoning.
Comprehensive Land Use Plan: The subject’s valuation as industrial property is
consistent with its guiding on the comprehensive land use plan (please see future land
use map included in the addenda of this report).
Other Legal Restrictions: The subject property is the common area for the Revere Way
Industrial Condominiums, a 5-unit industrial condominium development; however, we are
valuing the subject property without consideration to this restriction (see hypothetical
conditions section of this report). We are not aware of any other legal restrictions placed
on the subject property except as may be noted on the parcel sketch within this report.
We are not title experts and have depended upon information provided by SRF Consulting
on behalf of the City of Prior Lake regarding the location of the existing right-of-way and
any additional easements (based on the mapping provided). We are not aware of any
additional atypical encumbrances or restrictions that may be placed on the existing
property that would affect the subject's value (existing typical easements are located in
the setback areas of the subject).
Potential for Zoning Change: It is likely that the subject parcel will be rezoned from R-1 to
C-3: Business Park as this zoning designation is supported by its guiding in the city’s
future land use plan. This likely rezoning is applied as a hypothetical condition when
valuing the subject.
Economic Market Data
The United States Economic Data:
The economy entered 2020 with unemployment at historical lows, consumer confidence
high, the stock market bullish, and little to no signs of inflation. COVID -19 emerged in
early 2020 and on March 3rd, 2020, the Federal Reserve took the emergency step of
cutting the benchmark U.S. interest rate by half a percentage point in an attempt to limit
the economic and financial fallout from COVID-19. The U.S. central bank has not made
a cut similar to this since late 2008, shortly after the collapse of Lehman Brothers. Experts
believe COVID-19 may be the biggest risk to the global economy since the financial crisis
that precipitated the Great Recession. Growth is now expected to slow sharply with
Goldman Sachs projecting growth in the United States could stall in th e second quarter,
which runs from April through June. While Fed leaders believed it was wise to move
quickly, concerns continue to mount about the plunging stock market and a severe
disruption in every major economy. Recession fears in the United States h ave spiked in
recent weeks.
Rates sat at 1.0% to 1.25% until March 15, 2020. On Sunday, March 15, 2020, the
Federal Reserve took emergency action and lowered its benchmark rate 0.75% given
fears the viral outbreak would depress economic growth in the coming months. The
Parcel #2: Schweich Construction, Inc.
30
Federal Reserve stated it would keep its key rate at a range between zero and 0.25%
until it feels confident that the economy would survive the effects of COVID-19.
The national unemployment rate fluctuated between 3.5% and 4.5% in t he year prior to
the emergence of COVID-19. 2020 was expected to follow suit as all indicators indicated
the economy would remain strong given the forecasted unemployment was expected to
remain below 3.8%. The US unemployment rate jumped to 14.8% in April 2020, the
highest in the history of the series and compared to market expectations of 16%, as the
COVID-19 crisis threw millions out of work. The US unemployment rate fell to 4.6 percent
in October 2021, the lowest since March 2020 and slightly below market expectations of
4.7 percent. The labor market has continued to gradually recover from the pandemic hit,
helped by a surge in demand for labor, record levels of job openings, the expiration of
enhanced jobless benefits and the subsiding summer wave of COVID-19 infections. The
number of unemployed people declined by 255 thousand to 7.4 million in October, while
employment levels rose by 359 thousand to 154.0 million. It is noted that the
unemployment rate remained well above the pre -crisis level of about 3.5 percent, amid
reports of persistent worker shortages (source: U.S. Bureau of Labor Statistics) as shown
by the following chart:
Current conditions are generally considered the most important driver of consumer
spending. The consumer confidence indicator provides an indication of future
developments of households’ consumption and saving, based upon answers regarding
their expected financial situation, their sentiment about the general economic situation,
unemployment and capability of savings. An ind icator above 100 signals a boost in the
consumers’ confidence towards the future economic situation, as a consequence of which
they are less prone to save, and more inclined to spend money on major purchases in
the next 12 months. Values below 100 indicate a pessimistic attitude towards future
developments in the economy, possibly resulting in a tendency to save more and
consume less. As a shortage of workers, supply chain issues, and continuing speculation
about high inflation levels, the consumer confidence levels are starting a downward
trajectory after recovering from its April 2020 low:
Parcel #2: Schweich Construction, Inc.
31
As of the effective date of this report, there is conversation at the federal level about a
fourth stimulus package to bolster the economy which has still no t fully recovered from
the effects of the COVID-19 pandemic.
Minnesota Data: Minnesota is the second fastest growing state in the north central area
(second to North Dakota). It was the 19th fastest growing state in the number of people
in the United States from 2000 to 2010 with population growth of 7% compared to national
growth of 9.1%. The population of Minnesota in 2020 is estimated at 5,706,494 residents
and shows an approximate 8% increase since 2010. The five largest counties (by
population) are Hennepin, Ramsey, Dakota, Anoka, and Washington. The five fastest
growing counties (by population percentages) are Carver, Scott, Hennepin, Washington,
and Clay. As of October 2021, the Minnesota unemployment rate was at 3.5%; however,
it is not at pre-pandemic levels as shown in the following charts:
Parcel #2: Schweich Construction, Inc.
32
Minnesota/TCMA Real Estate Market: Prior to the pandemic, the Minneapolis-St. Paul
economy continued to boast one of the lowest unemployment rates in the country,
considered full employment. The metro area is home to 16 Fortune 500 company
headquarters, as well as large local employers like the University of Minne sota. United
Health Group, Thrivent Financial, Minnesota Mutual, and St. Paul Travelers are based in
the Twin Cities Metropolitan Area. Additionally, the TCMA is home to the corporate
headquarters of US Bank, the regional headquarters of Wells Fargo, and TCF Bank. The
US Government’s Ninth Federal Reserve Bank is located in Minneapolis. The local
workforce ranks 11th in the country in terms of education, with 41% achieving a bachelor’s
degree or higher. The average annual household income of $74,500 tops the national
average by 29%.
The TCMA, historically, has been one of the strongest commercial real estate markets in
the Midwest for a variety of reasons including the educated workforce and the
entrepreneurial spirit evidenced by the strong venture cap ital market. Companies are
attracted to the economic atmosphere and tend to stay due to the work force that
traditionally has a tremendous work ethic. Minnesota is not reliant on one major industry
or sector, which generally minimizes the impact of an ec onomic recession. While
Minnesota does not see huge spikes in growth during a boom time in a particular market
(i.e. technology), it also does not see the bust period when the industry loses favor.
The Minnesota real estate market is adjusting to the changing climate. Commercial
properties are adjusting to employees no longer coming into the office and owners are
having to rethink requirements as they adjust to the advent of e -commerce and on-line
working from home. There will likely be considerable redevelopment as the demand for
medium to high density housing increases while the demand for office and commercial
space decreases. The new on-line shopping habits are pushing up the demand in the
industrial sector as bulk distribution centers are in high demand.
Parcel #2: Schweich Construction, Inc.
33
Single-family housing demands increased in the second half of 2020 to date. Impacts
related to COVID-19, primarily working from home, has changed consumer preferences
and cities in third and fourth ring suburbs are becoming a desirable option as there is no
longer the same commuting demands as once were considered “typical”. Consumers
and homebuilders continue to seek homes and sites located in suburban cities with a
good school districts and consumers prefer areas with considerable “open/green space”.
Land located in first or second ring suburbs for residential demand have been in high
demand as there is continued shrinking availability as these cities become fully built out.
There is some speculation that new development may slow due to sup ply chain issues
and lag time receiving building materials; however, this is speculative at this time.
Minnesota/TCMA Real Estate Markets Summary
Residents and consumers are cautious as they proceed forward in a more tentative
manner as the effects of the pandemic have likely not been fully realized . Prior to the
emergence of COVID-19, analysis of data revealed a trend of general growth and a well-
diversified economy with a solid, and improving, real estate market. While the market
appears to have somewhat settled, there is still much uncertainty moving forward.
City of Prior Lake
The subject is located in Prior Lake, Minnesota which is located in Scott County,
southeast of the Twin Cities Metropolitan Area:
Prior Lake is considered a rapidly developing suburb and is located approximately 24
miles south and west of downtown Minneapolis. The city offers a superior quality of life
with beautiful parks, trails and wetlands as well as a charming downtown and excellent
schools. The population of Prior Lake is about 27,500 and is projected to grow to 37,000
by 2040. The City of Prior Lake is home to the Shakopee Mdewakanton Sioux Community
(SMSC) and Mystic Lake Casino, the second largest Indian Gaming Casino in the nation
and the largest employer within the city.
Parcel #2: Schweich Construction, Inc.
34
Prior Lake is a premier recreational community in the Twin Cities, featuring more than 55
parks on 1,000 acres, over 100 miles of trails and sidewalks and 14 lakes. Park amenities
include two large athletic complexes, Lakefront community park (160 acres),
neighborhood parks, fishing piers, boat slips, swimming beaches, and green space.
Upper and Lower Prior Lake, totaling 1,340 acres, are considered one of the most popular
lakes in the metropolitan area for boating, skiing and fishing. Although primarily a
residential community, opportunities in commercial and industrial development are
increasing and are a priority for the City Council in hopes of diversifying the tax base.
Prior Lake has several new commercial developments including a brewery, law office,
restaurant and medical building in downtown. Industrial development includes a nationally
recognized golf cart maker, pizza dough manufacture r, fire investigation business, and
sign company among others.
The city's modern growth is attributed to the completion and upgrade of State Highway
13 which provides access to State Highways 169 and I-35. There are also numerous
local and county roadways providing expedient access to the TCMA.
City of Prior Lake Economic Summary
The City of Prior Lake enjoys a relatively stable economy supported by strong
infrastructure including major roadways that provide quick access to the surrounding
communities and the major cities of Minneapolis and St. Paul. The city’s economy, while
strong, is not considered to be a stand-alone economy as many residents seek
employment outside of city borders, primarily in the surrounding communities and the
central business districts of Minneapolis and St. Paul. The housing market remains
strong in the City of Prior Lake as it consistently ranks as one of the best cities to live in
the TCMA and the commercial/industrial market continues to expand with the city looking
to expand its tax base.
Parcel #2: Schweich Construction, Inc.
35
Neighborhood Description
The subject is located in Prior Lake, MN west of Revere Way along CSAH 21 (Eagle
Creek Avenue) with access from Revere Way along its eastern boundary. The subject's
immediate neighborhood is comprised industrial/business park development with
residential development to the west and industrial/business development to the north:
Highest and Best Use
Highest and best use is defined in The Dictionary of Real Estate Appraisal, Sixth Edition,
as:
The reasonably probable and legal use of vacant land or an improved property that
is physically possible appropriately supported, financially feasible, and that results
in the highest value. The four criteria the highest and best use must meet are legal
permissibility, physical possibility, financial feasibility, and maximum productivity.
The Dictionary of Real Estate Appraisal, Fourth Edition, differentiates highest and best
use as vacant and as improved:
Highest and best use of land or site as though 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.
Highest and best use of property as improved: The use that should be made of a
property, as it exists. An existing improvement should be removed or retained as
is, 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 construction a new one.
Parcel #2: Schweich Construction, Inc.
36
In order to determine the highest and best use of the subject property, the
following factors must be considered when addressing possible uses:
1. Physically possible
2. Legally permissible
3. Financially feasible
4. Maximally productive
As vacant
The highest and best use of the land, as vacant, is for industrial/business park
development as allowed by the hypothetical C-3: Business Park District Zoning and its
industrial guiding in the city’s 2040 Comprehensive Plan.
1. Industrial/business park development would be physically possible given
the physical characteristics of the subject site.
2. Industrial/business park development is legally permissible given the
requirements of the hypothetical C-3: Business Park District Zoning.
3. Our analysis of the market indicates adequate demand for
industrial/business park development land in the subject’s area. As such,
industrial/business park development is considered to be financially feasible
given the existing market demands in the subject’s marketing area.
4. Industrial/business park development is considered the maximally
productive use of the site as no alternative allowed use would generate a
higher residual land value as permitted by the hypothetical C-3: Business
Park District Zoning.
The highest and best use of the subject, as vacant, is for industrial/business park
development as allowed by its guiding as industrial property and its hypothetical C-3:
Business Park District zoning. It is noted that we are valuing the subject as though its
development were not restricted by its common area designation related to the Revere
Way Industrial Condominiums.
Before Acquisition Valuation
The subject is valued as if it is ready for developm ent into its highest and best use,
industrial/business park development, as noted above. The first step of the sales
comparison approach is the selection of comparable sales and/or listings that are
reasonably similar in size, location, and attributes when compared to the subject.
Adjustments, both qualitative and quantitative may be made to the selected comparables
to determine the subject’s value. Properties selected for comparison should be similar
enough that few adjustments are required. The sales comparison approach becomes
less reliable when more adjustments are required to match the subject property with the
comparable property.
Ideally, adjustments are determined and supported in the market by the use of paired
sales, which allow the appraiser to extract a valuation for a single market factor. Due to
limited data availability, oftentimes appraisers are unable to do this and must apply their
judgment and professional expertise to evaluate a difference between the subject and its
comparables. The adjustments are considered market supportable and the appraisers
use their judgment and are able to support the adjustments as required. All adjustments
Parcel #2: Schweich Construction, Inc.
37
contained in this report are based on the judgment and experience of the appraisers and
market support. All sales were from 2020 to date in the subject’s neighborhood.
The selected comparables are vacant land sales, all similarly zoned, from similar
locations, intended for industrial/business park development. The comparable sales are
reasonably proximate to the subject property, are intended for similar uses, are
reasonably similar in size, and are ready for industrial/business park development.
Market supportable adjustments are applied as noted on the Sales Comparison Chart. A
detailed explanation of the adjustment categories immediately follows the Sales
Comparison Chart with Comparable Sales Sheets following the chart.
Parcel #2: Schweich Construction, Inc.
38
COMPARABLE INDUSTRIAL LAND SALES
Subject Sale 1 Sale 2 Sale 3 Sale 4
Address/ Location
Unaddressed
Revere Way
Prior Lake, MN
Unaddressed
Revere/Adelmann
Prior Lake, MN
5818 Granite
Court
Prior Lake, MN
5835 Granite
Court SE
Prior Lake, MN
Unaddressed
Graystone Court
Prior Lake, MN
Sale Price $312,760
$2.00/SF
$531,214
$4.67/SF
$200,000
$4.59/SF
$175,000
$4.02/SF
Spec. Conditions None None None None
Financing/ Terms Cash/Cash
Equivalency
Cash/Cash
Equivalency
Cash/Cash
Equivalency
Cash/Cash
Equivalency
Motivations Owns Adjacent
Parcel Typical Typical Typical
Date of Sale/ Mkt.
Conditions 05/2021
+5%
12/2020
+9.17%
12/2020
+9.17
09/2020
+9.17%
Adjusted Sale
Price/SF $2.10/SF $5.10/SF $5.01/SF $4.39/SF
Site Size
2.58 AC
112,385 SF
3.58 AC
156,380 SF
2.61 AC
113,692 SF
1 AC
43,560 SF
1 AC
43,560 SF
Use/Intended Use Industrial Industrial Industrial Industrial Industrial
Shape/
Topography
Trapezoidal/ Level
(Valued without
consideration to
the condominium
development
within its
boundaries)
Rectangular/
Area of
lowlands/pond
along northern
boundary
+
Generally
Rectangular/
Level
=
Generally
Rectangular/
Level
=
Generally
Rectangular/
Level
=
Frontage
Eagle Creek
Avenue/Revere
Way
Revere Way &
Adelmann Street
Granite Court
(Cul-de-sac from
Adelmann Street)
Granite Court
(Cul-de-sac from
Adelmann Street)
Graystone Court
(Cul-de-sac from
Adelmann Street)
Zoning
General Business
C-3
(Hypothetical)
General Business
C-2
General Industrial
I-1
General Industrial
I-1
Business Park
C-3
Location
Industrial Area
Revere
Way/Eagle Creek
Ave
Deerfield
Industrial Park
=
Deerfield
Industrial Park
=
Deerfield
Industrial Park
=
Deerfield
Industrial Park
=
Net Adjustment + = = =
Adjusted Greater Than Approx. Approx. Approx.
Price/SF $2.10/SF $5.10/SF $5.01/SF $4.39/SF
Parcel #2: Schweich Construction, Inc.
39
Comparable Sales Map
Parcel #2: Schweich Construction, Inc.
40
COMPARABLE LAND SALE ONE
ADDRESS/LOCATION: Unaddressed Revere/Adelmann; Prior Lake, MN
PID #: 254270110
SALE PRICE: $312,760
DATE OF SALE: 05/2021
SALE METHOD: Warranty Deed
TERMS: Cash/Cash Equivalency
SITE SIZE: 3.58 AC/156,380 SF
INTENDED USE: Assemblage with adjacent parcel under common ownership
TOPOGRAPHY: Level with wetlands along northern boundary
SHAPE: Generally rectangular
SELLER/BUYER: Central Development Corp. of America/Mesenbrink
Construction & Engineering, Inc.
SALES PRICE/SF: $2.00/SF
CONFIRMED WITH: CREV #1248265/County Records
Scott County Aerial Mapping
Google Earth Aerial Image
Outlot B of Deerfield Industrial Park 2nd Addition
Lowland along northern boundary; public promotion; buyer paid appraisal
Parcel #2: Schweich Construction, Inc.
41
COMPARABLE LAND SALE TWO
ADDRESS/LOCATION: 5818 Granite Court; Prior Lake, MN
PID #: 254270060
SALE PRICE: $531,214
DATE OF SALE: 12/2020
SALE METHOD: Warranty Deed
TERMS: Cash/Cash Equivalency
SITE SIZE: 2.61 AC/113,692 SF
INTENDED USE: Industrial
TOPOGRAPHY: Level
SHAPE: Generally Rectangular
SELLER/BUYER: Mesenbrink Construction & Engineering, Inc/Busse
Properties, LLC
SALES PRICE/ SF: $4.67/SF
CONFIRMED WITH: CREV #1236777/County Records
Scott County Aerial Mapping
Google Earth Aerial Image
Deerfield Industrial Park – 2nd Addition; public promotion buyer paid appraisal
Parcel #2: Schweich Construction, Inc.
42
COMPARABLE LAND SALE THREE
ADDRESS/LOCATION: 5835 Granite Court SE; Prior Lake, MN
PID #: 254270080
SALE PRICE: $200,000
DATE OF SALE: 12/2020
SALE METHOD: Warranty Deed
TERMS: Cash or Cash Equivalent
SITE SIZE: 1 AC/43,560 SF
INTENDED USE: Industrial
TOPOGRAPHY: Level
SHAPE: Generally rectangular
SELLER/BUYER: Busse Properties, LLC/Accelerated Auto Service and Repair,
LLC
SALES PRICE/SF: $4.59/SF
CONFIRMED WITH: CREV 1202370/County Records
Scott County Aerial Mapping
Google Earth Aerial Image
Deerfield Industrial Park – 2nd Addition; public promotion buyer paid appraisal
Parcel #2: Schweich Construction, Inc.
43
COMPARABLE LAND SALE FOUR
ADDRESS/LOCATION: Unaddressed Graystone Court; Prior Lake, MN
PID #: 254440020
SALE PRICE: $175,000
DATE OF SALE: 09/2020
SALE METHOD: Warranty Deed
TERMS: Cash/Cash Equivalent
SITE SIZE: 1 AC/43,560 SF
INTENDED USE: Industrial
TOPOGRAPHY: Level
SHAPE: Generally rectangular
SELLER/BUYER: Gary B. Tupy, Et Al/Whitemore Properties, LLC
SALES PRICE/SF: $4.02/SF
CONFIRMED WITH: CREV 1155322/County Records
Scott County Aerial Mappping
Google Earth Aerial Image
Deerfield Industrial Park – 5th Addition
Parcel #2: Schweich Construction, Inc.
44
Adjustments
Concessions/Additional Expenses: None of the sales had concessions or additional
expenses, no adjustments applied.
Financing/Terms: Adjustments for financing terms are the first adjustment that is applied,
as all sales must be analyzed on the same base assumption of cash/cash equiva lency.
Conventional financing terms require no adjustments, but financing terms not available in
the typical market place, such as atypical seller-financing considerations, assessments
acquired by the purchaser, and alike, must be properly accounted for i n the subject’s
reconciled value. All comparable sales transacted under typical terms and as such no
adjustments applied.
Motivations: Both buyer and seller must be typically motivated and acting free from any
undue stress or influence. None of the comparable sales appear to be the result of any
foreclosure activity (whereby a seller may accept less than actual market value due to
financial considerations) or related party transactions (whereby a buyer and/or seller may
agree on a nonmarket price based on their relationship). No adjustments applied.
Market Conditions/Date of Sale: Adjustments are generally made to reflect the passage
of time to reflect either the appreciation (an upward adjustment) or depreciation (a
downward adjustment) reflected in the marketplace over a period of time. The rate of
change fluctuates due to investors' perceptions of prevailing market conditions. This
adjustment category reflects value changes, if any, that have occurred between the date
of the sale and the effective date of the appraisal. Market data indicates a 10% annual
increase in industrial properties during 2021 with 2020 being fairly flat. Comparable sales
were adjusted at a rate of .83% per month from January 2021 through November 2021.
Site Size: Generally, a quantity of scale discount applies with all other factors being equal.
Larger sites sell for a discounted value on a per unit basis while smaller sites sell at a
premium value on a per unit basis. All comparable sales are considered reaso nably
similar in size when compared to the subject; no adjustments applied.
Shape/Topography: The shape and topography preferred in the marketplace is generally
rectangular to maximize development opportunities with this differential being less for
larger sites. The subject, with its generally rectangular shape, is considered similar in
comparison to all comparable sales. The preferred topography in the marketplace is
generally level to gently rolling with minimal tree coverage as buildable area co mmands
a premium in the industrial marketplace. The subject’s topography is considered superior
when compared to Comparable Sale One as it has considerable non -buildable area and
similar to the remaining comparable sales when considering topography and te rrain.
Zoning: Market data does not support an adjustment for the slightly different zoning types;
no adjustments applied.
Parcel #2: Schweich Construction, Inc.
45
Location: The subject is located in the same business/industrial area as the comparable
sales; no adjustments applied.
Reconciliation of the Subject’s Underlying Land Value-Before Acquisition
Unencumbered Land Value
After adjustments have been considered, the estimated market value of
industrial/business park development land in the subject’s marketing area is greater than
$2.10/SF with a likely value between $4.39 and $5.10/SF. All comparable sales were
considered when estimating the subject’s underlying land value with the least
consideration given to Comparable Sale One as its topography is considered inferior.
The subject is considered to have an estimated market value of $5.10/SF as slightly more
weight is placed on Comparable Sale Two which is the largest of Comparable Sales Two,
Three, and Four. It is noted that no discount is applied related to the existing
condominium development (hypothetical condition) or to the existing easement areas as
these are located along the subject’s roadway frontage within existing setback (non -
buildable) areas and the comparable sales likely include reasonably similar easements.
The subject property’s pre-acquisition land value is estimated as follows:
Subject Site Size: 112,385 SF X $5.10/SF, rounded = $573,200.00
Indicated Market Value of Land Before Acquisition $573,200.00
The subject’s underlying land value, before consideration of the proposed
acquisition, is considered to be $573,200.00.
Parcel #2: Schweich Construction, Inc.
46
Description of Project
The City of Prior Lake, in partnership with Scott County, is planning for the reconstruction
of the County Highway 21 and Revere Way (County Road 87) intersection during the
2022 construction season. The project includes re-aligning the existing offset 170th Street
intersection with the Revere Way intersection along County Highway 21. The proposed
reconstruction of County Highway 21 through the project limits will include the
construction of a raised median and turn lanes at the intersection. The following map
highlights the project area:
The Proposed Acquisition
The proposed acquisition contains a 11,499 SF temporary construction easement located
within a larger tract that is vacant land, please see the following parcel sketches. The
acquisition area(s) do not contain any impacted site improvements.
Parcel #2: Schweich Construction, Inc.
47
Parcel Sketches
Parcel sketch does not reflect the
subject’s owner of record
Parcel #2: Schweich Construction, Inc.
48
Parcel sketch does not
reflect the subject’s owner
of record
Parcel #2: Schweich Construction, Inc.
49
After Acquisition Valuation
Highest and Best Use – After Acquisition
The highest and best use, after acquisition, will remain as industrial/business park
development, consistent with its hypothetical C-3: Business Park District zoning and the
land use guiding (Planned Industrial), as vacant. The proposed temporary construction
easement does not affect the highest and best use of the subject.
Conforming/Non-conforming Use
As the subject is valued as industrial/business park development land, the subject is
considered to conform to the hypothetical C-3: Business Park District Zoning. The
acquisition does not impact the subject’s compliance with zoning requirements as it is for
a temporary construction easement.
Severance Consideration
Access to Revere Way remains reasonable, suitable, and convenient for
industrial/business park utilization. We believe an informed market participant will not
perceive the subject as being less desirable after the proposed acquisition than it is
before. Severance is not considered relevant.
Valuation
The subject’s size, after acquisition, remains 112,384 SF and the subject’s preliminary
underlying land value, before consideration of the temporary easement and/or impacted
site improvements, is considered to remain $573,200.00 ($5.10/SF).
Temporary Construction Easement
The property will be subject to a proposed temporary construction easement that will
encumber an area of 11,499 SF for a period of 18 months ending June 30, 2023 with the
option to renew for an additional 12 months (ending June 30, 2024). The temporary
construction easement is located along the subject’s roadway frontage as depicted on the
parcel sketch contained within this report. The temporary construction easement is
valued at the underlying land value, $5.10/SF and the encumbered area is valued as if
the land were rented at an appropriate land capitalization rate for the duration of the
encumbrance. We apply a land rate of 8% with consideration given to real estate taxes
paid during the time of encumbrance. Value of the rental stream is calculated w ith a rate
viewed reflective of the current market.
Parcel #2: Schweich Construction, Inc.
50
Temporary Construction Easement Valuation
TE Land Area: 11,499 SF
Multiply by Indicated Market Value/SF: X $5.10/SF
Estimated Value of Encumbered Land: $58,644.90
Multiply by Land Capitalization Rate: X 8%
Annual Land Rent: $4,691.59
1.5 Years (18 months) Temporary Construction
Easement:
X 1.5 years
$7,037.39
Temporary Construction Easement Value (Rounded)*: $7,100.00
*The estimated cost to extend the temporary easement for an additional twelve months
(ending June 30, 2024) is estimated to be $4,700.00.
Affected Site Improvements
Impacted maintained yards, parking lots, and driveways will be repaired/replaced as part
of the project. There are three large deciduous trees located in the acquisition area that
will likely be impacted by the project. Their replacement is valued at a 2:1 replacement
rate with replacement trees valued at $750/tree. The cost estimates were obtained from
local contractors and/or online cost estimating programs and are intended to include
delivery and planting. Calculation of their replacement cost is as follows:
3 trees x 2:1 replacement rate x $750/replacement tree = $4,500.00
It is noted that the fence is located adjacent to the acquisition area and is not expected to
be impacted (please see sketches showing acquisition area and construction limits. The
estimated value of the impacted site improvements is $4,500.00
After Acquisition Value
The subject’s after acquisition value, after consideration of the temporary construction
easement and affected site improvements, is considered to be $561,600.00 (preliminary
after acquisition value of $573,200.00 less the temporary easement value of $7,100.00
less the affected sites improvement value of $4,500.00).
Parcel #2: Schweich Construction, Inc.
51
Summary and Final Analysis
The subject’s underlying land before and after acquisition market values were estimated
using the sales comparison approach for vacant land as this is the most reliable indicator
of value. The appraisers' final summation of the proposed acquisition , including the
affected site improvements, as of November 12, 2021, is presented as follows:
Before Acquisition Value: $573,200.00
Less After Acquisition Value: $561,600.00
Estimated Damages: $11,600.00
The allocation of the acquisition is as follows:
Temporary Construction Easement (18 months*): $7,100.00
Affected Site Improvements: $4,500.00
Estimated damages: $11,600.00
*The cost to extend the temporary construction easement an additional twelve months (ending
June 30, 2024) is estimated to be $4,700.
The diminution in value related to the acquisition is considered to be $11,600.00.
Parcel #2: Schweich Construction, Inc.
52
ADDENDA
Parcel #2: Schweich Construction, Inc.
53
Easement Valuation Matrix
(IRWA Magazine May/June 2006)
Parcel #2: Schweich Construction, Inc.
54
KELLY ANN LINDSTROM
LINDSTROM KELLY A
10779 FALLING WATER LANE UNIT C
WOODBURY, MN 55129
STATE OF MINNESOTA
The Undersigned COMMISSIONER OF COMMERCE for the State of Minnesota hereby certifies that
KELLY ANN LINDSTROM
LINDSTROM KELLY A
10779 FALLING WATER LANE UNIT C
WOODBURY, MN 55129
has complied with the laws of the State of Minnes ota and is hereby licensed to transact the busines s of
Resident Appraiser : Certified General
License Number: 20315256
unless this authority is suspended, revoked, or o therwise legally terminated. This license shall be in effect
until August 31, 2023.
IN TESTIMONY WHEREOF, I have hereunto set my hand this July 01, 2021.
COMMISSIONER OF COMMERCE
Minnesota Department of Commerce
Licensing Division
85 7th Place East, Suite 500
St. Paul, MN 55101-3165
Telephone: (651) 539-1599
Email: licensing.commerce@state.mn.us
Website: commerce.state.mn.us
Notes:
•Individual Licensees Only - Continuing Education: 15 hours is required in the first renewal period , which includes a 7hour USPAP course. 30 hours is required for each subsequent renewal period, which includes a 7 hour USPAP course.
•Appraisers: You must hold a licensed Residential, Certified Residential, or Certified General qualification in order toperform appraisals for federally-related transact ions. Trainees do not qualify. For further details, please visit our websiteat commerce.state.mn.us.
Parcel #2: Schweich Construction, Inc.
55
LOIS MARIE DAVIS
789 GOLDEN MEADOW ROAD
EAGAN, MN 55123
STATE OF MINNESOTA
The Undersigned COMMISSIONER OF COMMERCE for the State of Minnesota hereby certifies that
LOIS MARIE DAVIS
789 GOLDEN MEADOW ROAD
EAGAN, MN 55123
has complied with the laws of the State of Minnes ota and is hereby licensed to transact the busines s of
Resident Appraiser : Trainee
License Number: 40078294
unless this authority is suspended, revoked, or o therwise legally terminated. This license shall be in effect
until August 31, 2023.
IN TESTIMONY WHEREOF, I have hereunto set my hand this August 24, 2021.
COMMISSIONER OF COMMERCE
Minnesota Department of Commerce
Licensing Division
85 7th Place East, Suite 500
St. Paul, MN 55101-3165
Telephone: (651) 539-1599
Email: licensing.commerce@state.mn.us
Website: commerce.state.mn.us
Notes:
•Individual Licensees Only - Continuing Education: 15 hours is required in the first renewal period , which includes a 7hour USPAP course. 30 hours is required for each subsequent renewal period, which includes a 7 hour USPAP course.
•Appraisers: You must hold a licensed Residential, Certified Residential, or Certified General qualification in order toperform appraisals for federally-related transact ions. Trainees do not qualify. For further details, please visit our websiteat commerce.state.mn.us.
Parcel #2: Schweich Construction, Inc.
56
Parcel #2: Schweich Construction, Inc.
57
PROFESSIONAL QUALIFICATIONS
Lois M. Davis
Resident Appraiser-Trainee
EDUCATION
Appraisal
Basic Appraisal Procedures, Prosource
Basic Appraisal Principles, Prosource
Uniform Standards of Professional Appraisal Practice, Prosource/McKissock
The Art of the Addenda
The Evolution of Finance and the Mortgage Market
Residential Sales Comparison & Income Approaches, McKissock
Residential Market Analysis and Highest & Best Use, McKissock
General
College of St. Catherine, BA in Business Administration-Accounting - 1987
CPA Examination-1989
EXPERIENCE
Accountant/Managing Partner of Davis Specialty Transportation, LLC an independent
trucking/distribution company located in Minneapolis, MN
Auditor/Financial Control Officer for the State of Minnesota Veterans Homes Board of
Directors and Department of Finance for ten years
LICENSES, COMMISSIONS, MEMBERSHIPS/AFFILIATIONS
Lois Marie Davis, Resident Appraiser-Trainee, MN 40078294
Parcel #2: Schweich Construction, Inc.
58
GLOSSARY OF TERMS
Appraisal Definitions
The below is excerpted from the 2006 USPAP and Advisory Opinions.
ADVOCACY: Representing the cause or interest of another, even if that cause or interest
does not necessarily coincide with one’s own beliefs, opinions, conclusions, or
recommendations.
APPRAISAL: The act or process of developing an opinion of value; an opinion of value
of or pertaining to appraising and related functions such as appraisal practice o r appraisal
services.
Comment: An appraisal must be numerically expressed as a specific amount, as a range
of numbers, or as a relationship (e.g., not more than, not less than) to a previous value
opinion or numerical benchmark (e.g., assessed value, collateral value).
APPRAISAL CONSULTING: The act or process of developing an analysis,
recommendation, or opinion to solve a problem, where an opinion of value is a component
of the analysis leading to the assignment results.
Comment: An appraisal consulting assignment involves an opinion of value but does not
have an appraisal or an appraisal review as its primary purpose.
APPRAISAL PRACTICE: Valuation services performed by an individual acting as an
appraiser, including but not limited to appraisal, appraisal review, or appraisal consulting.
Comment: Appraisal practice is provided only by appraisers, while valuation services are
provided by a variety of professionals and others. The terms appraisal, appraisal review,
and appraisal consulting are intentionally generic and are not mutually exclusive. For
example, an opinion of value may be required as part of an appraisal review and is
required as a component of the analysis in an appraisal consulting assignment. The use
of other nomenclature for an appraisal, appraisal review, or appraisal consulting
assignment (e.g. analysis, counseling, evaluation, study, submission, or valuation) does
not exempt an appraiser from adherence to the Uniform Standards of Professional
Appraisal Practice.
APPRAISAL REVIEW: The act or process of developing and communicating an opinion
about the quality of another appraiser’s work that was performed as part of an appraisal,
appraisal review, or appraisal consulting assignment.
Comment: The subject of an appraisal review assignment may be all or part of an
appraisal report, work file, or a combination of these.
APPRAISER: One who is expected to perform valuation services competently and in a
manner that is independent, impartial, and objective.
Comment: Such expectation occurs when individuals, either by choice or by requirement
place upon them or upon the service they provide by law, regulation, or agreement with
the client or intended users, represent that they comply. (See PREAMBLE.)
Parcel #2: Schweich Construction, Inc.
59
APPRAISER’S PEERS: Other appraisers who have expertise and competency in the
same or a similar type of assignment.
ASSIGNMENT: A valuation service provided as a consequence of an agreement
between an appraiser and a client.
ASSIGNMENT RESULTS: An appraiser’s opinions and conclusions developed specific
to an assignment.
Comment: Assignment results include an appraiser’s:
• Opinions or conclusions developed in an appraisal assignment, such as value;
• Opinions of adequacy, relevancy, or reasonableness developed in an apprai sal
review assignment; or
• Opinions, conclusions, or recommendations developed in an appraisal consulting
assignment.
ASSUMPTION: That which is taken to be true.
BIAS: A preference or inclination that precludes an appraiser’s impartiality,
independence, or objectivity in an assignment.
BUSINESS ENTERPRISE: An entity pursuing an economic activity.
BUSINESS EQUITY: The interests, benefits, and rights inherent in the ownership of a
business enterprise or a part thereof in any form (including, but not necessarily limited to,
capital stock, partnership interests, cooperatives, sole proprietorships, options, and
warrants).
CLIENT: The party or parties who engage an appraiser (by employment or contract) in
a specific assignment.
Comment: The client identified by the appraiser in an appraisal, appraisal review, or
appraisal consulting assignment (or in the assignment work file) is the party or parties
with whom the appraiser has an appraiser-client relationship in the related assignment,
and may be an individual, group, or entity.
CONFIDENTIAL INFORMATION: Information that is either:
• Identified by the client as confidential when providing it to an appraiser and that is
not available from any other source; or
• Classified as confidential or private by applicable law or regulation
CREDIBLE: Worthy of belief.
Comment: Credible assignment results require support, by relevant evidence and logic,
to the degree necessary for the intended use.
COST: The amount required to create, produce or obtain a property.
Parcel #2: Schweich Construction, Inc.
60
Comment: Cost is either a fact or an estimate of fact.
EXTRAORDINARY ASSUMPTION: An assumption, directly related to a specific
assignment, which, if found to be false, could alter the appraiser’s opinion or conclusions.
Comment; Extraordinary assumptions presume as fact otherwise uncertain information
about physical, legal, or economic characteristics of the subject property; or about
conditions external to the property, such as market conditions or trends; or about the
integrity of data used in an analysis.
FEASIBILITY ANALYSIS: A study of the cost-benefit relationship of an economic
endeavor.
HYPOTHETICAL CONDITION: That which is contrary to what exists but is supposed for
the purpose of analysis.
Comment: Hypothetical conditions assume conditions contrary to known facts about
physical, legal, or economic characteristics of the subject property; or about conditions
external to the property, such as market conditions or trends; or about the integrity of data
used in an analysis.
INTANGIBLE PROPERTY (INTANGIBLE ASSETS): Nonphysical assets, including but
not limited to franchises, trademarks, patents, copyrights, goodwill, equities, mineral
rights, securities, and contracts, as distinguished from physical assets such as facilities
and equipment.
INTENDED USE: The use or uses of an appraiser’s reported appraisal, appraisal review,
or appraisal consulting assignment opinions and conclusions, as identified by the
appraiser based on communication with the client at the time of the assignment.
INTENDED USER: The client and any other party as identified, by name or type, as
users of the appraisal, appraisal review, or appraisal consulting report by the appraiser
on the basis of communication with the client at the time of the assignment.
JURISDICTIONAL EXCEPTION: An assignment condition that voids the force of a part
or parts of USPAP, when compliance with part or parts of USPAP is contrary to law or
public policy applicable to the assignment.
MARKET VALUE: The most probably 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 and 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:
1. Buyer and seller are typically motivated
2. Both parties are well informed or well advised, and acting in what they
consider their own best interests;
3. A reasonable time is allowed for exposure in the open market
Parcel #2: Schweich Construction, Inc.
61
4. Payment is made in terms of cash in United States dollars or in terms of
financial arrangements comparable thereto; and
5. The price represents the normal consideration for the p roperty sold
unaffected by special or creative financing or sales concessions granted by
anyone associated with the sale.
The above definition of market value is consistent with the definition referenced in this
report, as well as the definition in The Appraisal of Real Estate, Twelfth Edition (Appraisal
Institute, 2001).
MASS APPRAISAL: The process of valuing a universe of properties as of a given date
using standard methodology, employing common data, and allowing for statistical testing.
PERSONAL PROPERTY: Identifiable tangible objects that are considered by the general
public as being “personal” for example, furnishings, artwork, antiques, gems and jewelry,
collectibles, machinery and equipment, all tangible property that is not classified as real
estate.
PRICE: The amount asked, offered, or paid for a property
Comment: Once stated, price is a fact, whether it is publicly disclosed or retained in
private. Because of the financial capabilities, motivations, or special interests of a given
buyer or seller, the price paid for a property may or may not have any relation to the value
that might be ascribed to that property by others.
REAL ESTATE: An identified parcel or tract of land, including improvements, if any.
REAL PROPERTY: The interests, benefits, and rights inherent in the ownership of real
estate.
Comment: In some jurisdictions, the terms real estate and real property have the same
legal meaning. The separate definitions recognize the traditional distinction between the
two concepts in appraisal theory.
REPORT: Any communication, written or oral, of an appraisal, appraisal review, or
appraisal consulting service that is transmitted to the client upon completion of an
assignment.
Comment: Most reports are written and most clients mandate written reports. Oral report
requirements (see the Record Keeping section of the ETHICS RULE) are included to
cover court testimony and other oral communications of an appraisal, appraisal review,
or appraisal consulting service.
SCOPE OF WORK: The type and extent of research and analysis in an assignment.
SIGNATURE: Personalized evidence indicating authentication of the work performed by
the appraiser and the acceptance of the responsibility for content, analyses, and the
conclusions in the report.
Parcel #2: Schweich Construction, Inc.
62
Comment: A signature can be represented by a handwritten mark, a digitized image
controlled by a personalized identification number, or other media, where the appraiser
has sole personalized control of affixing the signature.
SUPPLEMENTAL STANDARDS: Requirements issued by government agencies,
government sponsored enterprises, or other entities that establish public policy which add
to the purpose, intent, and content of the requirements in USPAP, that have a material
effect on the development and reporting of assignment results.
Comment: Supplemental standards are published in regulations, rules, policies, and
other similar documents, and have the same applicability to all properties or assignments
in a particular category or class regardless of the contracting entity.
VALUATION SERVICES: Services pertaining to aspects of property value.
Comment: Valuation services pertain to all aspects of property value and include
services performed both by appraisers and by others.
VALUE: The monetary relationship between properties and those who buy, sell, or use
those properties.
Comment: Value expresses an economic concept. As such, it is never a fact but always
an opinion of the worth of a property at a given time in accordance with a specific definition
of value. In appraisal practice, value must always be qualified; for example, market value,
liquidation value, or investment value.
WORK FILE: Documentation necessary to support an appraiser’s analysis, opinions,
and conclusions.
APPRAISAL REPORT
Project: CSAH 21 Reconstruction Project
Parcel: #3
County: Scott County
Owner: Patrick K. and Jeanne L. Brewer Family Trust
Parcel Address: 6127 170th Street East
Credit River, MN (Prior Lake Mailing Address)
Report Prepared For:
SRF Consulting / City of Prior Lake (In Partnership with Scott County)
Report Prepared By:
Kelly Lindstrom
Date of Valuation: November 12, 2021
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
2
Kelly Lindstrom, Certified General Appraiser
10779 Falling Water Lane - Unit C, Woodbury, MN 55129
651-436-8842
December 10, 2021
Mr. Ken Helvey, Principal
SRF Consulting
3701 Wayzata Boulevard Suite 100
Minneapolis, MN 55415-3791
RE: Appraisal Report for Parcel #3
CSAH 21 Reconstruction Project
Patrick K. and Jeanne L. Brewer Family Trust Property
Dear Mr. Helvey:
Pursuant to your request, a market value appraisal has been performed and an appraisal report
prepared for the above referenced property. The appraisal estimates the November 12, 2021
(the date of the most recent property inspection) fee simple market value of the subject before
and after the proposed acquisition including valuation of any impacted site improvements and/or
temporary construction easement(s). The report is subject to the certification, assumptions and
limiting conditions herein stated. As the structural improvements are not expected to be physically
or monetarily impacted by the acquisition, this appraisal values the subject property, before and
after the acquisition, as rural residential land applying the hypothetical condition that the subject
property is vacant. The methods and reasoning used in the analyses, as well as the data
gathered during the investigation of the property and marketplace, are also detailed in this report.
After careful consideration of all the pertinent factors influencing market value, it is my opinion
that the fee simple market value of the acquisition as of November 12, 2021, is computed as
follows:
Estimated Value Before Proposed Acquisition: $328,900.00
Estimated Value After Proposed Acquisition: $297,350.00
Diminution in Value: $31,550.00
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
3
The allocation of the acquisition is as follows:
Permanent Right of Way Easement: $1,750.00
Temporary Construction Easement (18 months*): $1,300.00
Affected Site Improvements: $28,500.00
Estimated Damages: $31,550.00
*The cost to extend the construction easement an additional twelve months (through June 30,
2024) is estimated to be $900.
This appraisal report has been completed in conformance with the Uniform Standards of
Professional Appraisal Practice (USPAP) of The Appraisal Foundation, Code of Professional
Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute, and (Mn/DOT)
Right-of-Way (R/W) Manual, Section 200. All statements of fact contained in this report upon
which the analyses, opinions, and conclusions expressed herein are based, are true and correct
to the best of my knowledge.
Please feel free to contact me if you have any questions regarding this report. Thank you for the
opportunity to assist you in this valuation matter.
Respectfully Submitted,
Kelly Lindstrom, Certified General Appraiser
Minnesota Certified General Appraiser License #20315256
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
4
Table of Contents
Table of Contents 4
Summary & Conclusions - Partial Acquisition 5
Certifications 7
Introduction 9
Intended Use of the Report (Purpose and Function of the Report) 9
Date of Valuation 9
Property Rights Appraised 9
Market Value 9
Exposure Time and Marketing Time 10
Assumptions and Limiting Conditions 10
Extraordinary Assumptions & Hypothetical Conditions 12
Competency 13
Executive Summary 14
Scope of Appraisal 15
Larger Parcel Consideration 16
Discussion of Assignment and Conditions 17
The Appraisal Process 17
Approaches Used in This Appraisal Assignment 18
Research and Analysis Applied 18
Property Identification 19
Subject Description 20
Zoning 24
Highest and Best Use 29
Before Acquisition Valuation 34
The Proposed Acquisition 47
After Acquisition Valuation 50
Affected Site Improvements 51
Summary and Final Analysis 51
ADDENDA 53
Easement Valuation Matrix
Appraisers’ Certifications & Qualifications
Glossary of Terms
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
5
Summary & Conclusions - Partial Acquisition
Project:
CSAH 21 Reconstruction
Project Parcel: Parcel #3
County:
Scott
Owner:
Patrick K. and Jeanne L.
Brewer Family Trust
Property Address:
6127 170th Street East
Credit River, MN
(Prior Lake Mailing Address)
Valuation Date: November 12, 2021
Inspection
Date: November 12, 2021
Rights & Interests: Fee Simple
Zoning:
UER: Urban Expansion
Reserve District Present Use: Residential
Highest & Best Use
Before: Residential After: Residential
Effective Land
Area Before: 421,661 SF (9.68 AC) *
Effective Land
Area After: 421,661 SF (9.68 AC)
Type of Building:
Single-family residential
dwelling & outbuilding(s)
*Per Scott County Property Records. Excludes
areas encumbered by ROW easements but
includes areas encumbered by non-ROW
easements located in setback areas.
ALLOCATION OF ACQUISITION
Size Value/SF
Permanent Right of Way Easement: 2,222 SF x $0.78/SF
Rounded: $1,750.00
Temporary Easement: 13,704 SF $1,300.00
Impacted Improvements: Freewill growth $28,500.00
TOTAL ACQUISITION VALUE $31,550.00
Appraised by: Kelly Lindstrom Date: December 10, 2021
Appraised by: Lois Davis Date: December 10, 2021
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
6
ESTIMATE OF VALUE BEFORE ACQUISITION
# Units Price/Unit
Unencumbered Land Value*: 421,661 SF $0.78/SF $328,900.00 Rounded
Total: 421,661 SF
Total Land Value Before Acquisition
(Rounded):
$328,900.00
ESTIMATE OF VALUE AFTER ACQUISITION
# Units Price/Unit
Unencumbered Land Value*: 419,439 SF $0.78/SF $327,150.00 Rounded
Encumbered Land Value: 2,222 SF $0.00
Total: 421,661 SF $327,150.00
Temporary Easement Value (18
months**):
($1,300.00)
Affected Site Improvements Value: ($28,500.00)
Total Land Value Before Acquisition
(Rounded):
$297,350.00
TOTAL ACQUISITION VALUE
Rounded to: $31,550.00
*Excludes areas encumbered by existing right of way easements and i ncludes areas
encumbered by exiting typical easements in setback areas
**The cost to extend the temporary construction easement an additional twelve months
is estimated to be $900.
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
7
CERTIFICATION
Project: CSAH 21 Reconstruction Project
Parcel: #3 - Patrick K. and Jeanne L. Brewer Family Trust
I hereby certify:
That on November 12, 2021, Kelly Lindstrom, Certified General Appraiser, personally inspected the property herein appraised
and that she has afforded the property owner (s), Patrick K. and Jeanne L. Brewer Family Trust, the opportunity to accompany
her at the time of the inspection. The property owner, Patrick K. Brewer did not accompany the appraisers on the inspection
but did meet with the appraisers on November 12, 2021. She has also personally made a field inspection, to the extent
possible, of the comparable sales relied upon in making said appraisal. The subject and the comparable sales relied upon in
making said appraisal were as represented by the photographs contained in this appraisal report.
That to the best of my knowledge and belief the statements contained in the appraisal hereinabove set forth are true , and the
information upon which the opinions expressed therein are based is correct, subject to the limiting conditions herein set forth.
That I understand that said appraisal is to be used by SRF Consulting on behalf of the City of Prior Lake (In Partnership with
Scott County) for negotiation purposes related to a proposed acquisition for the CSAH 21 Reconstruction Project located along
the roadway frontage of the subject.
That such appraisal has been made in conformity with the appropriate State laws, regulations, policies and procedures
applicable to real property appraisal and to the best of our knowledge no portion of the value assigned to such property
consists of items which are non-compensable under established State or Federal law.
That neither my employment nor my compensation for making this appraisal and report are in any way contingent upon the
values reported herein.
That I have performed no services as an app raiser or in any other capacity regarding the property that is the subject of this
report within the three-year period immediately preceding acceptance of this assignment.
That I have no direct or indirect present or contemplated future personal interest in such property or in any benefit from the
acquisition of such property appraised.
That in making this appraisal, I have disregarded any increase or decrease in the before value caused by the project for whic h
the property is being acquired.
That I will not reveal the findings and results of such appraisal to anyone other than the proper officials of SRF Consulting
and/or the City of Prior Lake (In Partnership with Scott County), or its assigns, until authorized by agency officials to do so, or
until we are required to do so, by due process of law, or until we are released from the obligation by having publicly testif ied
as to such findings.
That the reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with
the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute.
That use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized
representatives.
As of the date of this report, I, Kelly Lindstrom, have completed the Standards and Ethics Educatio n Requirement for the
Candidates of the Appraisal Institute.
That my independent opinion of the market value of the proposed acquisition as of November 12, 2021 (the most recent
inspection date) is $31,550.00, and the conclusion set forth in this appraisal was reached without collaboration or direction as
to value.
Dated: December 10, 2021
Kelly A. Lindstrom; Certified General Appraiser; Minn. #2031526
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
8
CERTIFICATION
Project: CSAH 21 Reconstruction Project
Parcel: #3 Patrick K. and Jeanne L. Brewer Family Trust
I hereby certify:
That on November 12, 2021, Lois Davis inspected the property herein appraised. She has also personally made a field
inspection, to the extent possible, of the comparable sales relied upon in making said appraisal. The subject and the
comparable sales relied upon in making said appraisal were as represented by the photographs contained in this
appraisal report.
That to the best of my knowledge and belief the statements contained in the appraisal hereinabove set forth are true
and the information upon which the opinions express ed therein are based as correct, subject to the limiting conditions
herein set forth.
That I understand that said appraisal is to be used by SRF Consulting on behalf of the City of Prior Lake (In Partnership
with Scott County) for negotiation purposes related to a proposed acquisition for the CSAH 21 Reconstruction Project
located along the roadway frontage of the subject.
That such appraisal has been made in conformity with the appropriate State laws, regulations, policies, and procedures
applicable to real property appraisal and that to the best of our knowledge no portion of the value assigned to such
property consists of items which are non-compensable under established State or Federal law.
That neither my employment nor my compensation for making this appraisal and report are in any way contingent upon
the values reported herein.
I have performed no services as an appraiser or in any other capacity, regarding the property that is the subject of this
report within the three-year period immediately preceding acceptance of this assignment.
That I have no direct or indirect present or contemplated future personal inter est in such property or in any benefit from
the acquisition of such property appraised.
That in making this appraisal, I have disregarded any increase or decrease in the before value caused by the project
for which the property is being acquired.
That I will not reveal the findings and results of such appraisal to anyone other than the proper officials of SRF
Consulting and/or the City of Prior Lake (In Partnership with Scott County), or its assigns, until authorized by agency
officials to do so, or until we are required to do so, by due process of law, or until we are released from the obligation
by having publicly testified as to such findings.
That my independent opinion of the market value of the proposed acquisition as of November 12, 2021 (the most recent
inspection date) is $31,550.00, and the conclusion set forth in this appraisal was reached without collaboration or
direction as to value.
Dated: December 10, 2021
Lois Marie Davis, Residential Appraiser-Trainee, MN 40078294
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
9
Introduction
This report is designed to comply with the reporting requirements of Standards Rule 2 -2
of the Uniform Standards of Professional Appraisal Practice which addresses report
specifications. The appraisal is presented in an “Appraisal Report” format, as descri bed
in 2020 - 2021 USPAP Standards Rule 2-2 (a). Supporting documentation not contained
in the report is retained in the appraiser’s work file. The depth of data and analysis
contained in this report is specific to the needs of the client, SRF Consulting on behalf of
the City of Prior Lake (In Partnership with Scott County) and for the intended use of
acquiring permanent right of way related to the CSAH 21 Reconstruction Project. The
subject property is 421,661 SF (+/- 9.68 acres) of land not encumbered by existing right
of way easements addressed as 6127 170th Street East located in Credit River, MN. The
subject property is valued as unimproved residential land.
Intended Use of the Report (Purpose and Function of the Report)
The intended use (purpose) of this appraisal is to provide an opinion of market value for
the client, SRF Consulting on behalf of the City of Prior Lake (In Partnership with Scott
County), and its assigns, whose representatives intend to use this report (function) for
negotiation purposes related to a proposed acquisition that includes permanent right of
way related to the CSAH 21 Reconstruction Project.
Date of Valuation
The date of valuation is the date of the most recent property inspection, November 12,
2021.
Property Rights Appraised
The subject property is appraised by estimating the market value of the fee simple interest
of the subject’s underlying land. Fee Simple Interest, as considered throughout this report
is defined on pg. 90 of The Dictionary of Real Estate Appraisal, Sixth Edition, as:
“Absolute ownership unencumbered by any other interest or estate, subject only
to the limitation imposed by the governmental powers of taxation, eminent domain,
police power and escheat”.
Market Value
Market Value is defined in The Dictionary of Real Estate Appraisal, Sixth Edition, as:
"The most probable price that 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 and 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:
• Buyer and seller are typically motivated;
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
10
• Both parties are well informed or well advised and acting
in what they consider their best interests;
• A reasonable time is allowed for exposure in the open
market
• Payment is made in terms of cash in U.S. dollars or in
terms of financial arrangements comparable thereto; and
• The price represents the normal consideration for the
property sold unaffected by special or creative financing
or sales concessions granted by anyone associated with
sale.”
Market value, unless otherwise noted, shall represent cash equivalent terms where the
seller receives all cash for their interest. The property may be financed at typical market
terms under this definition.
Exposure Time and Marketing Time
Exposure Time and Marketing Time are defined within The Dictionary of Real Estate
Appraisal, Sixth Edition, as:
Exposure Time: “The estimated length of time that the property interest being
appraised would have been offered on the market prior to the hypothetical
consummation of a sale at market value on the effective date of the appraisal; a
retrospective opinion based on an analysis of past events assuming a competitive
and open market.”
Marketing Time: “An opinion of the amount of time it might take to sell a real or
personal property interest at the concluded market value level during the period
immediately after the effective date of an appraisal. Marketing time differs from
exposure time, which is always presumed to precede the effective date of an
appraisal.”
The market values are based on the property having approximately three to six months
of exposure time prior to the effective date of the appraisal, which is typical of the market
as of the effective date of the appraisal, November 12, 2021. The marketing time of the
subject property is considered to be approximately three to six months.
Assumptions and Limiting Conditions
The certification of this appraisal report is subject to the following assumptions and limiting
conditions:
1. This appraisal values the subject property (land only) as the improvements are not
anticipated to be impacted by the acquisition.
2. The Appraiser assumes no responsibility for matters of a legal nature affecting the
property appraised or the marketability of the title.
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
11
3. The property is assumed to be under responsible ownership and management.
4. The property is appraised as though clear and free of any liens, encumbrances, or
indebtedness, unless stated otherwise.
5. To the best of this appraiser's belief, the information contained in this report is true
and reported correctly. The information in this report, while not guaran teed, has
been taken from sources or records believed to be reliable.
6. The Appraiser assumes that there exist no hidden defects with the site, sub -soil,
or improvements, which would render it more or less valuable.
7. Disclosure by the Appraiser of the contents of this appraisal report is subject to
review in accordance with the by-laws and regulations of the professional appraisal
organizations with which the Appraiser is affiliated.
8. The Appraiser is not required to appear in court or give test imony because of
having made this report, unless arrangements have been made in advance.
9. This report, or any portions thereof, will not be distributed, or otherwise
disseminated, to anyone other than the person who commissioned this or those
involved in the certification, except as required by law.
10. This entire appraisal report must be considered as a whole, and any excerpts or
portions from this report cannot be considered separately.
11. It is assumed that there is full compliance with all applicable federal, state and local
environmental regulations and laws, as well as applicable zoning regulations and
restrictions, unless otherwise stated in this report.
12. It is assumed that all required licenses, consents or other authority from any local,
state, or federal governments have been obtained or can be renewed.
13. It is assumed that the subject improvements, if any, are within the stated
boundaries, and that there are no encroachments on neighboring property, or
neighboring encroachments on the subject property, unless otherwise stated in
this report.
14. The existence of potentially hazardous material such as urea -formaldehyde foam
insulation, asbestos, and the existence of toxic water, toxic waste, or radon gas
may have an effect on the value of the property. The Appraiser is not qualified to
determine if such substances are present. The client may wish to consult an expert
in this field.
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
12
15. Acceptance of or use of this appraisal report constitutes an understanding of a nd
acceptance of these assumptions and limiting conditions.
Extraordinary Assumptions
An extraordinary assumption is something specific to the particular assignment that is
assumed to be true but is not certain. If it turns out to be untrue, the value co nclusion
would be impacted. It is different from a general assumption, which could be applicable
to any assignment. We relied on information provided and made available by SRF
Consulting on behalf of the City of Prior Lake (In Partnership with Scott County) as to the
subject's and comparable sales' sizes and characteristics not readily apparent during the
property inspections. We relied on information provided by Scott County as to effective
site size (excludes areas encumbered by existing right of way easements but includes
areas encumbered by existing easements located within setback areas ). We relied on
information contained in the Scott County property records as to effective site size;
topography; and other characteristics that may not be apparent based on visual
inspections. We relied on the parcel staking as to impacted site improvements. If the
staking is inaccurate or if additional site improvements are impacted by the acquisition,
value conclusions could be impacted. The following general assumptions have been
made related to the proposed project:
1. There will be no interruption of access to the subject resulting from the project.
2. There will be no damages to subject improvements unless stated within this report.
3. The areas impacted by the project will be repaired or replaced in a similar fashion
to that prior to the project.
4. The temporary easement acquisition area is being returned to its pre-acquisition
elevation with no significant slope changes.
If any of these assumptions is incorrect, value conclusions may be impacted. No
extraordinary assumptions were utilized in this report unless otherwise noted.
Hypothetical Conditions
A hypothetical condition is a condition, directly related to a specific assignment, which is
contrary to what is known by the appraiser to exist on the effective date of the assignment
results but is used for the purpose of analysis. We valued the subject as though it is
vacant land as the structural improvements are not expected to be physically or
monetarily impacted by the acquisition. No additional hypothetical conditions were utilized
in this report unless otherwise noted.
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
13
Competency
The appraisers certify that they have the kn owledge and experience to complete this
appraisal assignment competently. The Certified General Appraiser, Kelly Ann
Lindstrom, has extensive real estate appraisal background in terms of education and
appraisal experience. She has considerable experience appraising real estate in both
the Twin City Metropolitan Area market and outstate Minnesota. Both appraisers
researched the local real estate market to assure a complete understanding of the
external influences that affect value in the project area, spe cifically Scott County,
Minnesota. Therefore, Kelly Ann Lindstrom, Certified General Appraiser, is competent to
complete this appraisal assignment. Lois Marie Davis aided in the preparation of this
appraisal report.
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
14
Executive Summary
Address: 6127 170th Street East; Credit River, MN (Prior Lake mailing address)
Project Information: CSAH 21 Reconstruction Project; Parcel #3
Property Type: Residential property
Owner: Patrick K. and Jeanne L. Brewer Family Trust
Interests Appraised: Fee simple estate
Appraisal Purpose: Provide a market value estimate of the subject’s permanent diminution in value, temporary construction
easement, and any acquired site improvements related to the CSAH 21 Reconstruction Project.
Appraisal Use: SRF Consulting on behalf of The City of Prior Lake (In Partnership with Scott County) will utilize the report
for negotiation purposes related to a proposed acquisition for the CSAH 21 Reconstruction Project.
Improvement Description: Single-family residential dwelling and outbuilding(s)
Site Description: Shape: Trapezoid
Location: 6127 170th Street East, Credit River, MN
Effective Size Before Acquisition: 421,661 SF (+/- 9.68 AC)
Permanent Right of Way Easement: 2,222 SF
Effective Size After Acquisition: 421,661 SF including 2,222 SF encumbered by the proposed right of way
easement
Temporary Construction Easement: 13,704 SF
Topography: Level to gently sloping
Impacted Site Improvements: Freewill growth
Impacted Structural Improvements: None
Zoning: UER: Urban Expansion Reserve District
Present Use: Improved residential property
Highest and Best Use Before
and After Acquisition – As
Improved
Continued use as improved
Highest and Best Use Before
and After Acquisition -as if
Vacant:
Residential utilization
Five Year Sales History: The property has been owned by the current property since May of 2018 when purchased for $665,000.00.
Scott County Property I.D. #: PID# 049070011
Partial Legal Description: The East 516.41 feet of the West 1435.41 feet (as measured at right angles) of that part of the North one-
half of the Northwest Quarter (N ½ of NW ¼), and Government Lot 2, Section 7, Township 114, Range 21,
Scott County, Minnesota, lying North of the Northerly right-of-way line of Chicago, Milwaukee and St. Paul
Railway Company.
Total Assessor’s Market Value
(Payable 2021):
For Taxes Payable 2021:
For Taxes Payable 2022:
ASSMT YR
2020
2021
LAND
$188,700
$199,000
BUILDING(S)
$310,400
$384,200
TOTAL
$499,100
$583,200
Payable 2021 Property Tax &
Assessments:
$4,892.00
Estimated Permanent Diminution in Land Value: $1,750.00
Estimated Temporary Construction Easement
Value: $1,300.00
Estimated Affected Site Improvements Value: $28,500.00
Estimated Total Value of Acquisition: $31,550.00
Date of Valuation: November 12, 2021 (Date of the Most Recent Inspection)
Appraiser(s): Kelly Ann Lindstrom, Certified General Appraiser, MN 20315256
Lois Marie Davis, Residential Appraiser: Trainee, MN 40078294
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
15
Scope of Appraisal (Appraisal Methodology)
The scope of the assignment relates to the extent and manner in which research is
conducted, data is gathered, and analysis is applied, all based upon the following
problem-identifying factors stated elsewhere in this report:
1. Client
2. Intended use
3. Intended user
4. Type of opinion
5. Effective date of opinion
6. Relevant characteristics about the subject
The appraisal task is to estimate the subject’s market value as of the effective date of this
report. The appraisal has been performed in compliance with the Code of Professional
Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute.
Appraisal Methodology Summary
The following data and concepts pertaining to the subject property have been examined
and analyzed.
• Physical characteristics of the real property including:
1. Inspection of subject on November 12, 2021 in order to gather
information about the subject’s characteristics as relevant to the
valuation;
2. Review of county aerial and Google Earth aerial images;
3. Analysis and observations of the local market and the subject’s
location and place within this local market
• Non-physical characteristics of the real property including:
1. Property rights
2. Legal description
3. Existing easements
4. Tax and assessment data
5. Zoning data
6. Future land use data
• Observations and data regarding the subject’s market and indicators within
this market (by reviewing sales of properties from Scott County Assessor’s
Office, MLS, RediComp and/or commercial listing services) including:
1. Comparative analysis of factors considered relevant that influence
value
2. Supply and demand generators of the market
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
16
3. Financing options available within the market
4. Perception of the future market
• Utilizing the above data and concepts, the following analyses occurred:
1. Highest and best use of the subject property
2. All three approaches to value were considered. Given the subject is
being valued as vacant, the sales comparison approach was
considered applicable and therefore utilized.
3. After gathering, verifying through public record searches and
independent verifications with transaction participant(s) and
analyzing the relevant data, the estimated market value was
estimated for the subject property as vacant.
4. Reconciliation and final estimate of value
• This Appraisal Report was prepared and summarizes the data, work
performed, analysis, and conclusions.
Larger Parcel Consideration
The appraisers conducted a larger parcel consideration to allow for an examination of the
highest and best use potential of the subject property. The Dictionary of Real Estate
Appraisal defines the Larger Parcel as follows: “In condemnation, that tract or tracts of
land which are under beneficial control of a single individual or entity and have the same
or an integrated highest and best use. Elements for consideration by the appraiser in
making a determination in this regard are co ntiguity, or proximity, as it bears on the
highest and best use of the property, unity of ownership, and unity of highest and best
use.” In relative terms, the appraiser must consider the Larger Parcel in the above terms
and in terms of highest and best use; and for purposes of just compensation its most
advantageous use as it actually affects the present market value. The Larger Parcel (as
defined in The Dictionary of Real Estate Appraisal) is considered to be the subject of this
report as shown in the below aerial map:`
Larger Parcel
`
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
17
Discussion of Assignment and Conditions
SRF Consulting, on behalf of The City of Prior Lake (In Partnership with Scott County),
requested we perform an appraisal to estimate damages relating to a proposed
acquisition. The acquisition is a portion of a generally trapezoid shaped tract, owned by
Patrick K. and Jeanne L. Brewer Family Trust addressed as 6127 170th Street East,
Credit River, MN (Prior Lake mailing address). Effective parcel size, before the
acquisition, is considered to be 421,661 SF (+/- 9.68 AC) and is net of existing right of
way easements but includes areas encumbered by existing easements located in the
setback areas. The proposed acquisition contains a 2,222 SF permanent right of way
easement and a 13,704 SF temporary construction easement as shown on the parcel
sketch within this report. The temporary construction easement is expected to encumber
the area for eighteen months (through June 30, 2023). The City of Prior Lake (In
Partnership with Scott County) requested a valuation of a possible twelve-month
extension (through June 30, 2024).
The Appraisal Process
A property’s value can be estimated through three approaches to value. The three
approaches are based on the market’s interpretations of value, and they are the cost
approach, the income approach, and the market approach. They are described briefly as
follows:
The Cost Approach: The cost approach estimates the current replacement or
reproduction cost of the impacted improvements (main structur es and site
improvements). Depreciation is then subtracted from the base replacement or
reproduction cost. There are three sources of depreciation: physical depreciation
(deterioration), functional obsolescence, and external (economic) obsolescence.
The cost of the land vacant (as obtained from market data), combined with the
estimated replacement or reproduction cost of any improvements minus
depreciation provides an indication of value for the subject. As the subject is valued
as vacant residential land, this approach is not being processed.
The Income Approach: The income approach estimates the present value of the
expected annual income stream. The income stream is then capitalized at a rate
commensurate with the risk and life expectancy of the improvements, to arrive at
an indication of value from a typical investor's standpoint. The capitalization of the
present value of an income stream provides an indication of value for the subject.
The potential income stream of the subject property i s not impacted by the
acquisition and the acquisition area is vacant land, which typically is not leased in
this market. As the subject is valued as vacant residential land, this approach to
value is not being processed.
The Sales Comparison (Market) Approach: Generally, the market approach
compares the subject property with other similar properties that have recently sold
or are currently listed for sale. Comparable properties used are intended for similar
use, similarly zoned. Positive and negative adjustments, either qualitative or
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
18
quantitative, are made to the comparable sales for the differences that exist
between them and the subject. Objective comparison with comparable sales
provides an indication of value for the subject property. This approach to value is
being processed.
Approaches Used in This Appraisal Assignment
All three approaches to value were considered, but only the Sales Comparison Approach
has been fully developed and is considered to be a reliable indicator of market value for
this assignment. The Sales Comparison Approach was used to determine the value of
the subject property as vacant land on a price per acre basis. The Cost Approach was
not used to value the subject's underlying land and is not considered a reliable indicator
of market value given the acquired area is vacant land with a highest and best use of
residential utilization. The income approach was not used as residential land is generally
not leased in the subject’s marketplace. Elements of the cost approach may have been
utilized to determine the value of any affected site improvements.
Research and Analysis Applied
To determine a value for the subject’s acquired area, the sales comparison approach was
processed to extrapolate the value of the subject’s underlying l and. Unimproved land
comparable sales were obtained from the Scott County Assessor’s Office, Multiple Listing
Service (MLS), and/or from REDI Comps. Relevant information related to these
comparable sales was obtained, and they have been confirmed, viewed, and analyzed.
Information on these related comparable sales is compiled on comparable data sheets in
this report. Qualitative and quantitative analyses was performed, and this information
was used to determine the subject’s before and after acquisition land values.
Severance
The acquisition includes a permanent right of way easement and a temporary
construction easement located along the subject’s rear CSAH 21 roadway frontage. The
acquisition does not create any nonconformance of the subject property. Access to 170th
Street East remains reasonable, suitable, and convenient for residential utilization. We
believe an informed market participant will not perceive the subject as being less
desirable after the proposed acquisition than it is before. Severance is not considered
relevant.
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
19
Property Identification
The physical property was legally identified through the legal description, PID Number s,
and its location as shown on the following GIS map. Additionally, the parcel sketches,
contained within this report, indicates acquisition areas.
G3
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
20
Property Inspection
Kelly Ann Lindstrom, Certified General Appraiser, most recently inspected the subject
property on November 12, 2021. The following photograph(s) depict the subject as
indicated in the following photographs.
Looking Northwesterly along Acquisition Area
Looking Southeasterly along Acquisition Area
(Fence is Outside of the Acquisition Area)
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
21
Looking Southeasterly along Southern Boundary of Acquisition Area
(Fence is Outside of the Acquisition Area)
Looking Southeasterly along Acquisition Area from Adjacent Parcel
Looking Southerly Toward Eagle Creek Avenue from TE Boundary
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
22
Looking Southeasterly into Acquisition Area – Freewill Growth
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
23
Subject Description
The subject is located in Credit River (Prior Lake Mailing Address) with its rear frontage
along CSAH 21 with access from 170th Street East as depicted on the parcel sketch
contained within this report. The subject is 421,661 SF (+/- 9.68 AC) of improved
residential property that is valued as vacant residential land as its highest and best use,
if vacant, is considered to be residential utilization. The following chart summarizes the
subject’s site characteristics.
Salient Features of Subject Property
Effective Site Size/Shape/Location: 421,661 SF (+/- 9.68 AC), generally trapezoidal in shape, Prior Lake, MN
Access:
Frontage:
Access is from 170th Street East
Frontage is along 170th Street and CSAH 21 (Eagle Creek Avenue)
Topography: The topography is considered to be level to gently sloping at or near roadway
grades.
Drainage/Floodplain: The drainage on the site is believed to be adequate. The subject is not located
in a floodplain.
Soil Conditions: Assumed buildable as evidenced by length of existing construction in the area;
no tests were made for stability or for toxic substance presence.
Utilities: Private septic & water
Site Improvements: Single-family residential dwelling and outbuilding(s)
Environmental Nuisances & Hazards: The market does not appear to reflect any negative environmental concerns
that would adversely impact the subject, as if improved and as vacant, within
the marketplace. The subject is valued as though free of any potential
contamination.
Zoning: UER: Urban Expansion Reserve District
Surrounding Property Relationship: Subject is zoned for residential use. The subject's immediate neighborhood is
comprised of residentially utilized tracts of land.
Easements and Other Restrictions: We are not title experts and have depended upon information provided
regarding the location of the existing right-of-way and any easements
(including typical and atypical easements). There do not appear to be any
atypical easements on the property that would affect the subject's value other
than those noted on the parcel sketch. No discounts were applied as all
existing easements appear to be located in the subject’s setback areas.
Functional Utility: The subject is conducive to UER: Urban Expansion Reserve District zoning
classification. There is no functional obsolescence to the site for the
marketplace.
MN/Dot Traffic Count:
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
24
Zoning
The subject is currently zoned UER: Urban Expansion Reserve District as governed by
the city of Credit River (subject is located in Credit River with a mailing address of Prior
Lake). Current zoning requirements were adopted by the Credit River City Council in
January 2021.
Zoning Map (Credit River)
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
25
The subject property is guided as Urban Expansion Reserve in the City of Credit River’s
2040 Comprehensive Plan:
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
26
The following are some of the minimum requirements within the subject’s UER: Urban
Expansion Reserve District for improved sites (complete zoning immediately follows):
Minimum lot area*: Forty (40) acres or quarter-quarter section. A lot of record less than
40 acres (if created and recorded before October 29, 1971) is
considered buildable subject to normal building permit
requirements.
Minimum front yard setback: 150’ from centerline of a county road OR
100’ from county road right of way (whichever is greater).
100’ from the centerline of a local public street OR
67’ from the local public street right of way (whichever is greater)
Minimum side yard setback : 30’
Minimum rear yard setback: 60’
Accessory structure
setback/requirements:
Front yard: same as principal structure
Side yard: 5’
Rear yard: 10’
No structure shall be located within an easement area
*Lot area excludes area encumbered by existing right of way held in easement . Zoning
Ordinance Section 1; 1-6 states that lot area is defined as the area of a lot in a horizontal
plane bounded by lot lines. Lot line is defined as the property line bounding a lot except
that where any portion of a lot extends into the public right of ways then the lot line is
deemed to be the boundary of said public right of way.
Any parcel or lot which legally existed prior to the adoption date of this Ordinance
(adopted January 2021), but which fails to meet the current required lot size, or
width of the zoning district, may be utilized in compliance with all other ordinance
requirements subject to certain provisions. The section goes on to state: A parcel
of land which contains an existing single-family home in all zoning districts on the
effective date of this Ordinance, and does not meet the minimum lot size, lot
dimensions, or have sufficient publicly maintained road frontage, shall be
considered a legal nonconforming lot, subject to the provisions within this section.
Section 30, UER: Urban Expansion Reserve District zoning follows.
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
27
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
28
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
29
Conforming/Non-conforming Use
The subject, as it exists, is comprised of a legal lot of record and is considered a
conforming use to its underlying UER: Urban Expansion Reserve District. It appears to
be non-conforming to current site size requirements both before and after the acquisition.
As area encumbered by right of way is excluded from site size calculation, the subject is
considered to contain less than 10 acres before and after the acquisition. It is a legal lot
of record. The subject is considered to be a legal non-conforming site as it legally existing
prior to the adoption of the current zoning (Zoning Ordinance Section 3.2: Legal Non -
Conforming Lots; adopted January 2021).
Comprehensive Land Use Plan: The subject is guided for urban expansion, see future
land use map.
Other Legal Restrictions: We are not aware of any other legal restrictions placed on the
subject property except as may be noted on the parcel sketch within this report. We are
not title experts and have depended upon information provided by SRF Consulting on
behalf of the City of Prior Lake (In Partnership with Scott County) regarding the location
of the existing right-of-way and any additional easements (based on the mapping
provided). We are not aware of any additional atypical encumbrances or restricti ons that
may be placed on the existing property that would affect the subject's value.
Potential for Zoning Change: It is unlikely that the subject parcel will be rezoned in the
near future as it is zoned as guided in the 2040 Comprehensive Plan .
Economic Market Data
The United States Economic Data:
The economy entered 2020 with unemployment at historical lows, consumer confidence
high, the stock market bullish, and little to no signs of inflation. COVID -19 emerged in
early 2020 and on March 3rd, 2020, the Federal Reserve took the emergency step of
cutting the benchmark U.S. interest rate by half a percentage point in an attempt to limit
the economic and financial fallout from COVID-19. The U.S. central bank has not made
a cut similar to this since late 2008, shortly after the collapse of Lehman Brothers. Experts
believe COVID-19 may be the biggest risk to the global economy since the financial crisis
that precipitated the Great Recession. Growth is now expected to slow sharply with
Goldman Sachs projecting growth in the United States could stall in th e second quarter,
which runs from April through June. While Fed leaders believed it was wise to move
quickly, concerns continue to mount about the plunging stock market and a severe
disruption in every major economy. Recession fears in the United States h ave spiked in
recent weeks.
Rates sat at 1.0% to 1.25% until March 15, 2020. On Sunday, March 15, 2020, the
Federal Reserve took emergency action and lowered its benchmark rate 0.75% given
fears the viral outbreak would depress economic growth in the coming months. The
Federal Reserve stated it would keep its key rate at a range between zero and 0.25%
until it feels confident that the economy would survive the effects of COVID-19.
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
30
The national unemployment rate fluctuated between 3.5% and 4.5% in the year prior to
the emergence of COVID-19. 2020 was expected to follow suit as all indicators indicated
the economy would remain strong given the forecasted unemployment was expected to
remain below 3.8%. The US unemployment rate jumped to 14.8% in April 2020, the
highest in the history of the series and compared to market expectations of 16%, as the
COVID-19 crisis threw millions out of work. The US unemployment rate fell to 4.6 percent
in October 2021, the lowest since March 2020 and slightly below market expectations of
4.7 percent. The labor market has continued to gradually recover from the pandemic hit,
helped by a surge in demand for labor, record levels of job openings, the expiration of
enhanced jobless benefits and the subsiding summer wave of COVID-19 infections. The
number of unemployed people declined by 255 thousand to 7.4 million in October, while
employment levels rose by 359 thousand to 154.0 million. It is noted that the
unemployment rate remained well above the pre -crisis level of about 3.5 percent, amid
reports of persistent worker shortages (source: U.S. Bureau of Labor Statistics) as shown
by the following chart:
Current conditions are generally considered the most important driver of consumer
spending. The consumer confidence indicator provides an indication of future
developments of households’ consumption and saving, based upon answers regarding
their expected financial situation, their sentiment about the general economic situation,
unemployment and capability of savings. An indicator above 100 signals a boos t in the
consumers’ confidence towards the future economic situation, as a consequence of which
they are less prone to save, and more inclined to spend money on major purchases in
the next 12 months. Values below 100 indicate a pessimistic attitude towards future
developments in the economy, possibly resulting in a tendency to save more and
consume less. As a shortage of workers, supply chain issues, and continuing speculation
about high inflation levels, the consumer confidence levels are starting a downwa rd
trajectory after recovering from its April 2020 low:
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
31
As of the effective date of this report, there is conversation at the federal level about a
fourth stimulus package to bolster the economy which has still not fully recovered from
the effects of the COVID-19 pandemic.
Minnesota Data: Minnesota is the second fastest growing state in the north central area
(second to North Dakota). It was the 19th fastest growing state in the number of people
in the United States from 2000 to 2010 with population growth of 7% compared to national
growth of 9.1%. The population of Minnesota in 2020 is estimated at 5,706,494 residents
and shows an approximate 8% increase since 2010. The five largest counties (by
population) are Hennepin, Ramsey, Dakota, Anoka, and Washington. The five fastest
growing counties (by population percentages) are Carver, Scott, Hennepin, Washington,
and Clay. As of October 2021, the Minnesota unemployment rate was at 3.5%; however,
it is not at pre-pandemic levels as shown in the following charts:
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
32
Minnesota/TCMA Real Estate Market: Prior to the pandemic, the Minneapolis-St. Paul
economy continued to boast one of the lowest unemployment rates in the country,
considered full employment. The metro area is home to 16 Fortu ne 500 company
headquarters, as well as large local employers like the University of Minnesota. United
Health Group, Thrivent Financial, Minnesota Mutual, and St. Paul Travelers are based in
the Twin Cities Metropolitan Area. Additionally, the TCMA is hom e to the corporate
headquarters of US Bank, the regional headquarters of Wells Fargo, and TCF Bank. The
US Government’s Ninth Federal Reserve Bank is located in Minneapolis. The local
workforce ranks 11th in the country in terms of education, with 41% achieving a bachelor’s
degree or higher. The average annual household income of $74,500 tops the national
average by 29%.
The TCMA, historically, has been one of the strongest commercial real estate markets in
the Midwest for a variety of reasons including the educated workforce and the
entrepreneurial spirit evidenced by the strong venture capital market. Companies are
attracted to the economic atmosphere and tend to stay due to the work force that
traditionally has a tremendous work ethic. Minnesota is not reliant on one major industry
or sector, which generally minimizes the impact of an economic recession. While
Minnesota does not see huge spikes in growth during a boom time in a particular market
(i.e. technology), it also does not see the bust period when the industry loses favor.
The Minnesota real estate market is adjusting to the changing climate. Commercial
properties are adjusting to employees no longer coming into the office and owners are
having to rethink requirements as they adjust to the advent of e-commerce and on-line
working from home. There will likely be considerable redevelopment as the demand for
medium to high density housing increases while the demand for office and commercial
space decreases. The new on-line shopping habits are pushing up the demand in the
industrial sector as bulk distribution centers are in high demand.
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
33
Single-family housing demands increased in the second half of 2020 to date. Impacts
related to COVID-19, primarily working from home, has change d consumer preferences
and cities in third and fourth ring suburbs are becoming a desirable option as there is no
longer the same commuting demands as once were considered “typical”. Consumers
and homebuilders continue to seek homes and sites located in s uburban cities with a
good school districts and consumers prefer areas with considerable “open/green space”.
Land located in first or second ring suburbs for residential demand have been in high
demand as there is continued shrinking availability as these cities become fully built out.
There is some speculation that new development may slow due to supply chain issues
and lag time receiving building materials; however, this is speculative at this time.
Minnesota/TCMA Real Estate Markets Summary
Residents and consumers are cautious as they proceed forward in a more tentative
manner as the effects of the pandemic have likely not been fully realized . Prior to the
emergence of COVID-19, analysis of data revealed a trend of general growth and a well-
diversified economy with a solid, and improving, real estate market. While the market
appears to have somewhat settled, there is still much uncertainty moving forward.
City of Credit River
The subject is located in Credit River (Scott County) with a mailing address of Prior Lake,
Minnesota south of the Twin Cities Metropolitan Area:
Credit River Township became a city in June 2021 bringing the total number of Minnesota
cities to 854. (Source: League of Minnesota Cities). Its population is slightly less than
6,000 residents and it is surrounded by the cities of Lakeville, Savage, and Prior Lake.
The township had begun budgeting to make the change from a township to a city in 2010.
In 2018, Credit River lost two parcels of land totaling about 15 acres when residents
desiring sewer and water service applied to Prior Lake for annexation. When a third
annexation application came in 2020, the Prior Lake City Council declined to pursue it ;
however, Credit River Township, in response to the likelihood that further annexation
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
34
efforts could loom, determined they would prefer to have more control over their future
and it was incorporated as a city on May 11, 2021. The City of Credit River now has the
ability to maintain tighter control over inevitable future growth.
In January 2021, Credit River took over planning and zoning for its own land, a job that
was previously done by Scott County. Credit River also contracted with the county for a
sheriff’s deputy to provide police coverage for the city. As part of the transition, Credit
River also submitted to the Metropolitan Council a 2040 Comprehensive Plan that outlines
plans for future development. The document covers future land use, housing, parks,
natural resources, and water and sewer systems.
The residential market in the subject’s area continues to increase in value (both improved
and unimproved sites) and the inventory for existing sites is less than 30 days:
City of Credit River Economic Summary
The City of Credit River enjoys a relatively stable economy supported by strong
infrastructure including major roadways that provide quick access to the surrounding
communities and the major cities of Minneapolis and St. Paul. The city’s economy is not
considered to be a stand-alone economy as many residents seek employment outside of
city borders, primarily in the surrounding communities and the central business districts
of Minneapolis and St. Paul.
Neighborhood Description
The subject is located in Credit River (Prior Lake mailing address) with its rear boundary
along CSAH 21 (Eagle Creek Avenue) and access from 170th Street East. The subject's
immediate neighborhood is comprised of improved residential tracts of land with industrial
development located to the south and commercial development located to the south and
west in the City of Prior Lake:
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
35
Highest and Best Use
Highest and best use is defined in The Dictionary of Real Estate Appraisal, Sixth Edition,
as:
The reasonably probable and legal use of vacant land or an improved property that
is physically possible appropriately supported, financially feasible, and that results
in the highest value. The four criteria the highest and best use must meet are legal
permissibility, physical possibility, financial feasibility, and maximum productivity.
The Dictionary of Real Estate Appraisal, Fourth Edition, differentiates highest and best
use as vacant and as improved:
Highest and best use of land or site as though 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.
Highest and best use of property as improved: The use that should be made of a
property, as it exists. An existing improvement should be removed or retained as
is, so long as it continues to contribute to the total market value of the property, or
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
36
until the return from a new improvement would more than offset the cost of
demolishing the existing building and construction a new one.
In order to determine the highest and best use of the subject property, the
following factors must be considered when addressing possible uses:
1. Physically possible
2. Legally permissible
3. Financially feasible
4. Maximally productive
As improved
The highest and best use of the subject is continued use as improved. The subject’s
value as improved is greater than the value of the underlying land.
As if vacant
The highest and best use of the land, as if vacant, is for residential utilization as allowed
by the UER: Urban Expansion Reserve District Zoning and its guiding in the city’s 2040
Comprehensive Plan.
1. Residential utilization would be physically possible given the physical
characteristics of the subject site.
2. Residential utilization is legally permissible given the requirements of the
UER: Urban Expansion Reserve District Zoning.
3. Our analysis of the market indicates adequate demand for residential land
in the subject’s area. As such, residential utilization is considered to be
financially feasible given the existing market demands in the subject’s
marketing area.
4. Residential utilization is considered the maximally productive use of the site
as no alternative allowed use would generate a higher residual land value
as permitted by the UER: Urban Expansion Reserve District Zoning.
The highest and best use of the subject, as vacant, is for residential utilization as allowed
by its UER: Urban Expansion Reserve District zoning.
Before Acquisition Valuation
The subject is valued as if it is ready for development into its highest and best use,
residential utilization, as noted above. The first step of the sales comparison approach is
the selection of comparable sales and/or listings that are reasonably simila r in size,
location, and attributes when compared to the subject. Adjustments, both qualitative and
quantitative may be made to the selected comparables to determine the subject’s value.
Properties selected for comparison should be similar enough that fe w adjustments are
required. The sales comparison approach becomes less reliable when more adjustments
are required to match the subject property with the comparable property.
Ideally, adjustments are determined and supported in the market by the use of paired
sales, which allow the appraiser to extract a valuation for a single market factor. Due to
limited data availability, oftentimes appraisers are unable to do this and must apply their
judgment and professional expertise to evaluate a difference between the subject and its
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
37
comparables. The adjustments are considered market supportable and the appraisers
use their judgment and are able to support the adjustments as required. All adjustments
contained in this report are based on the judgment and experience of the appraisers and
market support. All sales were from 2020 to date in the subject’s neighborhood.
The selected comparables are vacant land sales, all similarly zoned, from similar
locations (within ten miles of the subject), intended for residential utilization. The
comparable sales are reasonably proximate to the subject property, are intended for
similar uses, are reasonably similar in size, and are ready for residential utilization.
Market supportable adjustments are applied as noted on the Sales Comparison Chart. A
detailed explanation of the adjustment categories immediately follows the Sales
Comparison Chart with Comparable Sales Sheets following the chart.
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
38
COMPARABLE LAND SALES
Subject Sale 1 Sale 2 Sale 3 Sale 4 Sale 5
Address/
Location
6127 170th
Street East
Credit River,
MN
3615 E 200th
Street East
Prior Lake,
MN
Unaddressed
190th Street
East
Spring Lake
Twp., MN
Unaddressed
Vergus
Avenue
Prior Lake,
MN
Unaddressed
Mushtown
Road
Spring Lake
Twp., MN
Unaddressed
182nd Street
East
Spring Lake
Twp., MN
Sale Price $305,000
$0.72/SF
$460,000
$0.72/SF
$199,900
$0.77/SF
$300,000
$0.73/SF
$319,250
$0.77/SF
Spec.
Conditions None None None None None
Financing/
Terms Cash/Cash
Equivalency
Cash/Cash
Equivalency
Cash/Cash
Equivalency
Cash/Cash
Equivalency
Cash/Cash
Equivalency
Motivations Typical Typical Lot Split Typical Typical
Date of Sale/
Mkt.
Conditions
05/2021
+6%
09/2021
+2%
10/2021
+1%
10/2021
+1%
11/2021
-
Adjusted Sale
Price/SF $0.76/SF $0.73/SF $0.78/SF $0.74/SF $0.77/SF
Effective Site
Size (Area not
encumbered
by ROW)
9.68 AC
421,661 SF
9.77 AC
425,581 SF
=
14.63 AC
637,280 SF
+
5.98 AC
260,489 SF
-
9.41 AC
409,900 SF
=
9.58 AC
417,305 SF
=
Use/Intended
Use Residential Residential Residential Residential Residential Residential
Shape/
Topography
Slightly
Trapezoidal/
Level
Level with
some tree
coverage;
pond along
rear
-
Generally
Rectangular/
Level/Minimal
Tree
Coverage
+
Rectangular/
Level/Minimal
Tree
Coverage
+
Generally
Rectangular/
Level/Light
Tree
Coverage
+
Generally
Rectangular/
Level/No
Trees
+
Frontage
Eagle Creek
Avenue/170th
Street East
East 200th
Street
(Asphalt;
County Road)
=
190th Street
(Asphalt
County Road)
=
Vergus
Avenue
(Asphalt
Township
Road)
=
Mushtown
Road (Asphalt
Township
Road)
=
182nd Street
East (Gravel)
+
Zoning
UR
Urban
Expansion
Rural
Residential
Rural
Residential
Rural
Residential
Rural
Residential
Rural
Residential
Location
170th Street
Rear along
Eagle Creek
Avenue
South of
Subject
+
Reasonably
Similar
=
Reasonably
Similar
=
Reasonably
Similar
=
Reasonably
Similar
=
Net
Adjustment Net + + Net + + +
Adjusted Approx. Greater Than Approx. Greater Than Greater Than
Price/SF $0.76/SF $0.73/SF $0.78/SF $0.74/SF $0.77/SF
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
39
Comparable Sales Map
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
40
COMPARABLE LAND SALE ONE
ADDRESS/LOCATION: 3615 East 200th Street; Prior Lake, MN
PID #: 119270036
SALE PRICE: $305,000
DATE OF SALE: 05/2021
SALE METHOD: Warranty Deed
TERMS: Cash/Cash Equivalency
SITE SIZE: 9.77 AC (Deeded Acres: 10)
INTENDED USE: Residential
TOPOGRAPHY: Level with trees and pond along its rear
SHAPE: Generally rectangular
SELLER/BUYER: Kevin & Dawn Ranagan/Kyle & Marissa Jones
SALES PRICE/SF: $0.72/SF
CONFIRMED WITH: CREV #1252320/County Records
Scott County Aerial Mapping
Google Earth Aerial Image
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
41
COMPARABLE LAND SALE TWO
ADDRESS/LOCATION: Unaddressed 190th Street East; Spring Lake Twp.
PID #: 119130260
SALE PRICE: $460,000
DATE OF SALE: 09/2021
SALE METHOD: Warranty Deed
TERMS: Cash/Cash Equivalency
SITE SIZE: 14.63 AC (Deed Acres: 14.81)
INTENDED USE: Residential
TOPOGRAPHY: Level to gently rolling with trees and small pond along rear
SHAPE: Generally Rectangular
SELLER/BUYER: Albert & Nancy Salazar/William and Pamela Lenz
SALES PRICE/ SF: $0.72/SF
CONFIRMED WITH: CREV #1324195/County Records
Scott County Aerial Mapping
Google Earth Aerial Image
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
42
COMPARABLE LAND SALE THREE
ADDRESS/LOCATION: Unaddressed Vergus Avenue; Prior Lake, MN
PID #: Part of PID 119160330
SALE PRICE: $199,900
DATE OF SALE: 10/2021
SALE METHOD: Warranty Deed
TERMS: Cash or Cash Equivalent
SITE SIZE: 5.98 AC (Deeded Acres Same)
INTENDED USE: Residential
TOPOGRAPHY: Level; Trees along rear
SHAPE: Generally rectangular
SELLER/BUYER: Dean & Wanda Gullickson/Scott & Shelly Anderson
SALES PRICE/SF: $0.77/SF
CONFIRMED WITH: CREV 1336774/County Records
Scott County Aerial Mapping
Google Earth Aerial Image
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
43
COMPARABLE LAND SALE FOUR
ADDRESS/LOCATION: Unaddressed Mushtown Road; Spring Lake Twp.; Mn
PID #: 119140213
SALE PRICE: $300,000
DATE OF SALE: 10/2021
SALE METHOD: Warranty Deed
TERMS: Cash/Cash Equivalent
SITE SIZE: 9.41 AC (Deeded AC: 10.03)
INTENDED USE: Residential
TOPOGRAPHY: Level
SHAPE: Generally rectangular
SELLER/BUYER: Richard & Jutta Oldenburrg/Casey & Tonya Miller
SALES PRICE/SF: $0.73/SF
CONFIRMED WITH: CREV #1339185/County Records
Scott County Aerial Mappping
Google Earth Aerial Image
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
44
COMPARABLE LAND SALE FIVE
ADDRESS/LOCATION: Unaddressed 182ND Street East; Spring Lake Twp.; Mn
PID #: 119140235
SALE PRICE: $319,250
DATE OF SALE: 11/2021
SALE METHOD: Warranty Deed
TERMS: Cash/Cash Equivalent
SITE SIZE: 9.58 AC (Deeded AC: 10.07)
INTENDED USE: Residential
TOPOGRAPHY: Level/No Tree Coverage
SHAPE: Generally rectangular
SELLER/BUYER: Randall & Mary Busse/Ross Babcock & Elizabeth Tauer
SALES PRICE/SF: $0.77/SF
CONFIRMED WITH: CREV #1348242/County Records
Scott County Aerial Mappping
Google Earth Aerial Image
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
45
Adjustments
Concessions/Additional Expenses: None of the sales had concessions or additional
expenses, no adjustments applied.
Financing/Terms: Adjustments for financing terms are the first adjustment that is applied,
as all sales must be analyzed on the same base assumption of cash/cash equivalency.
Conventional financing terms require no adjustments, but financing terms not available in
the typical market place, such as atypical seller-financing considerations, assessments
acquired by the purchaser, and alike, must be properly accounted for in the subject’s
reconciled value. All comparable sales transacted under typical terms and as such no
adjustments applied.
Motivations: Both buyer and seller must be typically motivated and acting free from any
undue stress or influence. None of the comparable sales appear to be the result of any
foreclosure activity (whereby a seller may accept less than actual market value due to
financial considerations) or related party transactions (whereby a buyer and/or seller may
agree on a nonmarket price based on their relationship). No adjustments applied.
Market Conditions/Date of Sale: Adjustments are generally made to reflect the passage
of time to reflect either the appreciation (an upward adjustment) or d epreciation (a
downward adjustment) reflected in the marketplace over a period of time. The rate of
change fluctuates due to investors' perceptions of prevailing market conditions. This
adjustment category reflects value changes, if any, that have occurred between the date
of the sale and the effective date of the appraisal. Market data indicates a 12% annual
increase during 2021. Comparable sales were adjusted at a rate of 1%/month.
Effective Site Size: Generally, a quantity of scale discount applies with all other factors
being equal. Larger sites sell for a discounted value on a per unit basis while smaller
sites sell at a premium value on a per unit basis. All comparable sales are adjusted
commensurate with their variance when compared to the subject.
Shape/Topography: The shape and topography preferred in the marketplace is generally
rectangular to maximize development opportunities with this differential being less for
larger sites. The subject, with its generally rectangular shape, is considered similar in
comparison to all comparable sales. No adjustments applied for shape. The preferred
topography in the marketplace is generally level to gently rolling with light to medium tree
coverage. The subject has medium tree coverage, primarily along its rear. It is considered
superior when compared to Comparable Sale s Two, Three, Four, and Five which have
minimal tree coverage. Comparable Sale One is considered superior as it includes a
pond along its rear as water amenities generally commands a premium in the residential
marketplace.
Frontage: Generally, a premium is paid in the residentia l marketplace for sites with
asphalt frontages, similar to the subject. Comparable Sale Five has gravel frontage and
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
46
its value, therefore, is adjusted upward. The remaining comparable sales are considered
similar; no adjustments applied.
Zoning: Market data does not support an adjustment for the slightly different zoning types;
no adjustments applied.
Location: All comparable sales are located within ten miles of the subject. Comparable
Sale One is located considerably south and a distance from major roadways and
locational amenities such as proximity to stores, recreational opportunities, and
parks/nature areas; its location is considered inferior and its value is adjusted upward.
The remaining comparable sales are considered reasonably similar and no adjustment
applied.
Reconciliation of the Subject’s Underlying Land Value-Before Acquisition
Unencumbered Land Value
After adjustments have been considered, the estimated market value of residential land,
similar to the subject in the subject’s marketing area, is greater than $0.73/SF with a likely
value between $0.76 and $0.78/SF of unencumbered land (land not encumbered by
existing right of way easements). All comparable sales were considered when estimating
the subject’s underlying land value with the least consideration given to Comparable Sale
One due to its inferior location and Comparable Sale Two which has adjustments for size
and topography. The subject is considered to have an estimated market value of
$0.78/SF of land not encumbered by existing right of way. It is noted that no discount is
applied to any existing typical easement areas within the subject’s effective site size area
as these are located along the subject’s roadway frontage within existing setback (non-
buildable) areas and the comparable sales include reasonably similar easements.
The subject property’s pre-acquisition land value is estimated as follows:
Subject Effective Site Size: 421,661 SF X $0.78/SF, rounded = $328,900.00
Indicated Market Value of Land Before Acquisition $328,900.00
The subject’s underlying land value, before consideration of the proposed
acquisition, is considered to be $328,900.00.
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
47
Description of Project
The City of Prior Lake, in partnership with Scott County, is planning for the reconstruction
of the County Highway 21 and Revere Way (County Road 87) intersection during the
2022 construction season. The project includes re-aligning the existing offset 170th Street
intersection with the Revere Way intersection along County Highway 21. The proposed
reconstruction of County Highway 21 through the project limits will include the
construction of a raised median and turn lanes at the intersection. The following m ap
highlights the project area:
The Proposed Acquisition
The proposed acquisition contains a 2,222 SF permanent right of way easement and a
13,704 SF temporary construction easement located within a larger tract that is vacant
land, please see the following parcel sketches. The acquisition area(s) do not contain
any impacted site improvements (sign is located outside the acquisition area).
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
48
Parcel Sketches
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
49
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
50
After Acquisition Valuation
Highest and Best Use – After Acquisition
The highest and best use, after acquisition, will remain as residential utilization, consistent
with its UER: Urban Expansion Reserve District zoning and guiding, as if vacant and
continued residential utilization as improved. The proposed permanent right of way
easement and the temporary construction easement do not affect the highest and best
use of the subject.
Conforming/Non-conforming Use
The subject is considered to remain a conforming use to the underlying zoning. It
continues to be non-conforming to site size requirements before and after the acquisition.
Severance Consideration
Access to 170th Street East remains reasonable, suitable, and convenient for residential
utilization and the subject remains a considerable distance from CSAH 21 (Eagle Creek
Avenue) after the acquisition. We believe an informed market participant will not perceive
the subject as being less desirable after the proposed acquisition than it is before.
Severance is not considered relevant.
Valuation
The subject’s effective size, after acquisition, is considered to be reduced by the amount
of the permanent right of way easement, 2,222 SF. Due to the small size and location of
the acquisition, the same comparable sales were utilized when determining the subject’s
underlying land value after the acquisition. Due to the restrictive nature of the permanent
right of way easement, it is compensated at 100% of the underlying land value and is
considered to have an after acquisition value of $0.00 (see Easement Valuation Matrix
included in the addenda of this report). The preliminary after acquisition value (before
consideration of the acquisition of the temporary easement and impacted site
improvements) is estimated as follows:
Unencumbered Area*:
Newly Encumbered Area:
Total:
419,439 SF
2,222 SF
421,661 SF
X $0.78/SF, rounded =
X $0.00/SF =
$327,150.00
$0.00
*May include existing encumbered area
located within setbacks
Rounded to:
$327,150.00
The subject’s preliminary underlying land value, after consideration of the
proposed right of way acquisition (before consideration of the temporary easement
and/or impacted site improvements), is considered to be $327,150.00. This indicates
a permanent right of way easement land value of $1,750, (Before Acquisition Land Value
of $328,900.00 – Preliminary After Acquisition Land Value of $327,150.00).
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
51
Temporary Construction Easement
The property will be subject to a proposed temporary construction easement that will
encumber an area of 13,704 SF for a period of 18 months ending June 30, 2023 with the
option to renew for an additional 12 months (ending June 30, 2024). The temporary
construction easement is located along the subject’s roadway frontage as depicted on the
parcel sketch contained within this report. The temporary construction easement is
valued at the underlying land value, $0.78/SF and the encumbered area is valued as if
the land were rented at an appropriate land capitalization rate for the duration of the
encumbrance. We apply a land rate of 8% with consideration given to real estate taxes
paid during the time of encumbrance. Value of the rental stream is calculated with a rate
viewed reflective of the current market.
Temporary Construction Easement Valuation
TE Land Area: 13,704 SF
Multiply by Indicated Market Value/SF: X $0.78/SF
Estimated Value of Encumbered Land: $10,689.12
Multiply by Land Capitalization Rate: X 8%
Annual Land Rent: $855.13
1.5 Years (18 months) Temporary Construction
Easement:
X 1.5 years
$1,282.70
Temporary Construction Easement Value (Rounded)*: $1,300.00
*The estimated cost to extend the temporary easement for an additional twelve months
(ending June 30, 2024) is estimated to be $900.00.
Affected Site Improvements
Impacted maintained yards and driveways will be repaired/replaced as part of the project.
There is considerable freewill growth located in the acquisition area which may be
impacted by the project. The freewill growth provides a certain amount of privacy and
screening from the busy roadway, and as such, is considered compensable. We believe
a row of coniferous trees planted 15’ apart would adequately replace the impacted freewill
growth as the construction limits (please see parcel sketch) indicate a certain amount of
the existing screening will remain. We estimate approximately 575 linear fe et are
impacted, and as such, approximately 38 trees planted 15’ apart should provide adequate
screening, similar to that existing condition before the acquisition. Replacement costs
are estimated to be $750/replacement tree and are intended to include de livery and
planting based on valuations obtained from local contracts and/or online cost estimation
programs.
38 trees x $750/replacement tree = $28,500.00
The estimated value of the impacted site improvements is $28,500.00
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
52
After Acquisition Value
The subject’s after acquisition value, after consideration of the temporary construction
easement and affected site improvements, is considered to be $297,350.00 (preliminary
after acquisition value of $327,150.00 less the temporary easement value of $1,300.00
less the affected sites improvement value of $28,500.00).
Summary and Final Analysis
The subject’s underlying land before and after acquisition market values were estimated
using the sales comparison approach for vacant land as this is the most reliable indicator
of value. The appraisers' final summation of the proposed acquisition , including the
affected site improvements, as of November 12, 2021, is presented as follows:
Before Acquisition Value: $328,900.00
Less After Acquisition Value: $297,350.00
Estimated Damages: $31,550.00
The allocation of the acquisition is as follows:
Permanent Right of Way Easement: $1,750.00
Temporary Construction Easement (18 months*): $1,300.00
Affected Site Improvements: $28,500.00
Estimated damages: $31,550.00
*The cost to extend the temporary construction easement an additional twelve months (ending
June 30, 2024) is estimated to be $900.
The diminution in value related to the acquisition is considered to be $31,550.00.
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
53
ADDENDA
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
54
Easement Valuation Matrix
(IRWA Magazine May/June 2006)
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
55
KELLY ANN LINDSTROM
LINDSTROM KELLY A
10779 FALLING WATER LANE UNIT C
WOODBURY, MN 55129
STATE OF MINNESOTA
The Undersigned COMMISSIONER OF COMMERCE for the State of Minnesota hereby certifies that
KELLY ANN LINDSTROM
LINDSTROM KELLY A
10779 FALLING WATER LANE UNIT C
WOODBURY, MN 55129
has complied with the laws of the State of Minnes ota and is hereby licensed to transact the busines s of
Resident Appraiser : Certified General
License Number: 20315256
unless this authority is suspended, revoked, or o therwise legally terminated. This license shall be in effect
until August 31, 2023.
IN TESTIMONY WHEREOF, I have hereunto set my hand this July 01, 2021.
COMMISSIONER OF COMMERCE
Minnesota Department of Commerce
Licensing Division
85 7th Place East, Suite 500
St. Paul, MN 55101-3165
Telephone: (651) 539-1599
Email: licensing.commerce@state.mn.us
Website: commerce.state.mn.us
Notes:
•Individual Licensees Only - Continuing Education: 15 hours is required in the first renewal period , which includes a 7hour USPAP course. 30 hours is required for each subsequent renewal period, which includes a 7 hour USPAP course.
•Appraisers: You must hold a licensed Residential, Certified Residential, or Certified General qualification in order toperform appraisals for federally-related transact ions. Trainees do not qualify. For further details, please visit our websiteat commerce.state.mn.us.
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
56
LOIS MARIE DAVIS
789 GOLDEN MEADOW ROAD
EAGAN, MN 55123
STATE OF MINNESOTA
The Undersigned COMMISSIONER OF COMMERCE for the State of Minnesota hereby certifies that
LOIS MARIE DAVIS
789 GOLDEN MEADOW ROAD
EAGAN, MN 55123
has complied with the laws of the State of Minnes ota and is hereby licensed to transact the busines s of
Resident Appraiser : Trainee
License Number: 40078294
unless this authority is suspended, revoked, or o therwise legally terminated. This license shall be in effect
until August 31, 2023.
IN TESTIMONY WHEREOF, I have hereunto set my hand this August 24, 2021.
COMMISSIONER OF COMMERCE
Minnesota Department of Commerce
Licensing Division
85 7th Place East, Suite 500
St. Paul, MN 55101-3165
Telephone: (651) 539-1599
Email: licensing.commerce@state.mn.us
Website: commerce.state.mn.us
Notes:
•Individual Licensees Only - Continuing Education: 15 hours is required in the first renewal period , which includes a 7hour USPAP course. 30 hours is required for each subsequent renewal period, which includes a 7 hour USPAP course.
•Appraisers: You must hold a licensed Residential, Certified Residential, or Certified General qualification in order toperform appraisals for federally-related transact ions. Trainees do not qualify. For further details, please visit our websiteat commerce.state.mn.us.
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
57
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
58
PROFESSIONAL QUALIFICATIONS
Lois M. Davis
Resident Appraiser-Trainee
EDUCATION
Appraisal
Basic Appraisal Procedures, Prosource
Basic Appraisal Principles, Prosource
Uniform Standards of Professional Appraisal Practice, Prosource/McKissock
The Art of the Addenda
The Evolution of Finance and the Mortgage Market
Residential Sales Comparison & Income Approaches, McKissock
Residential Market Analysis and Highest & Best Use, McKissock
General
College of St. Catherine, BA in Business Administration-Accounting - 1987
CPA Examination-1989
EXPERIENCE
Accountant/Managing Partner of Davis Specialty Transportation, LLC an independent
trucking/distribution company located in Minneapolis, MN
Auditor/Financial Control Officer for the State of Minnesota Veterans Homes Board of
Directors and Department of Finance for ten years
LICENSES, COMMISSIONS, MEMBERSHIPS/AFFILIATIONS
Lois Marie Davis, Resident Appraiser-Trainee, MN 40078294
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
59
GLOSSARY OF TERMS
Appraisal Definitions
The below is excerpted from the 2006 USPAP and Advisory Opinions.
ADVOCACY: Representing the cause or interest of another, even if that cause or interest
does not necessarily coincide with one’s own beliefs, opinions, conclusions, or
recommendations.
APPRAISAL: The act or process of developing an opinion of value; an opinion of value
of or pertaining to appraising and related functions such as appraisal practice o r appraisal
services.
Comment: An appraisal must be numerically expressed as a specific amount, as a range
of numbers, or as a relationship (e.g., not more than, not less than) to a previous value
opinion or numerical benchmark (e.g., assessed value, collateral value).
APPRAISAL CONSULTING: The act or process of developing an analysis,
recommendation, or opinion to solve a problem, where an opinion of value is a component
of the analysis leading to the assignment results.
Comment: An appraisal consulting assignment involves an opinion of value but does not
have an appraisal or an appraisal review as its primary purpose.
APPRAISAL PRACTICE: Valuation services performed by an individual acting as an
appraiser, including but not limited to appraisal, appraisal review, or appraisal consulting.
Comment: Appraisal practice is provided only by appraisers, while valuation services are
provided by a variety of professionals and others. The terms appraisal, appraisal review,
and appraisal consulting are intentionally generic and are not mutually exclusive. For
example, an opinion of value may be required as part of an appraisal review and is
required as a component of the analysis in an appraisal consulting assignment. The use
of other nomenclature for an appraisal, appraisal review, or appraisal consulting
assignment (e.g. analysis, counseling, evaluation, study, submission, or valuation) does
not exempt an appraiser from adherence to the Uniform Standards of Professional
Appraisal Practice.
APPRAISAL REVIEW: The act or process of developing and communicating an opinion
about the quality of another appraiser’s work that was performed as part of an appraisal,
appraisal review, or appraisal consulting assignment.
Comment: The subject of an appraisal review assignment may be all or part of an
appraisal report, work file, or a combination of these.
APPRAISER: One who is expected to perform valuation services competently and in a
manner that is independent, impartial, and objective.
Comment: Such expectation occurs when individuals, either by choice or by requirement
place upon them or upon the service they p rovide by law, regulation, or agreement with
the client or intended users, represent that they comply. (See PREAMBLE.)
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
60
APPRAISER’S PEERS: Other appraisers who have expertise and competency in the
same or a similar type of assignment.
ASSIGNMENT: A valuation service provided as a consequence of an agreement
between an appraiser and a client.
ASSIGNMENT RESULTS: An appraiser’s opinions and conclusions developed specific
to an assignment.
Comment: Assignment results include an appraiser’s:
• Opinions or conclusions developed in an appraisal assignment, such as value;
• Opinions of adequacy, relevancy, or reasonableness developed in an appraisal
review assignment; or
• Opinions, conclusions, or recommendations developed in an appraisal consulting
assignment.
ASSUMPTION: That which is taken to be true.
BIAS: A preference or inclination that precludes an appraiser’s impartiality,
independence, or objectivity in an assignment.
BUSINESS ENTERPRISE: An entity pursuing an economic activity.
BUSINESS EQUITY: The interests, benefits, and rights inherent in the ownership of a
business enterprise or a part thereof in any form (including, but not necessarily limited to,
capital stock, partnership interests, cooperatives, sole proprietorships, options, and
warrants).
CLIENT: The party or parties who engage an appraiser (by employment or contract) in
a specific assignment.
Comment: The client identified by the appraiser in an appraisal, appraisal review, or
appraisal consulting assignment (or in the assignment work file) is the party or parties
with whom the appraiser has an appraiser-client relationship in the related assignment,
and may be an individual, group, or entity.
CONFIDENTIAL INFORMATION: Information that is either:
• Identified by the client as confidential when providing it to an appraiser and that is
not available from any other source; or
• Classified as confidential or private by applicable law or regulation
CREDIBLE: Worthy of belief.
Comment: Credible assignment results require support, by relevant evidence and logic,
to the degree necessary for the intended use.
COST: The amount required to create, produce or obtain a property.
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
61
Comment: Cost is either a fact or an estimate of fact.
EXTRAORDINARY ASSUMPTION: An assumption, directly related to a specific
assignment, which, if found to be false, could alter the appraiser’s opinion or conclusions.
Comment; Extraordinary assumptions presume as fact otherwise uncertain information
about physical, legal, or economic characteristics of the subject property; or about
conditions external to the property, such as market conditions or trends; or about the
integrity of data used in an analysis.
FEASIBILITY ANALYSIS: A study of the cost-benefit relationship of an economic
endeavor.
HYPOTHETICAL CONDITION: That which is contrary to what exists but is supposed for
the purpose of analysis.
Comment: Hypothetical conditions assume conditions contrary to known facts about
physical, legal, or economic characteristics of the subject property; or about conditions
external to the property, such as market conditions or trends; or about the integrity of dat a
used in an analysis.
INTANGIBLE PROPERTY (INTANGIBLE ASSETS): Nonphysical assets, including but
not limited to franchises, trademarks, patents, copyrights, goodwill, equities, mineral
rights, securities, and contracts, as distinguished from physical assets such as facilities
and equipment.
INTENDED USE: The use or uses of an appraiser’s reported appraisal, appraisal review,
or appraisal consulting assignment opinions and conclusions, as identified by the
appraiser based on communication with the client at the time of the assignment.
INTENDED USER: The client and any other party as identified, by name or type, as
users of the appraisal, appraisal review, or appraisal consulting report by the appraiser
on the basis of communication with the client at the time of the assignment.
JURISDICTIONAL EXCEPTION: An assignment condition that voids the force of a part
or parts of USPAP, when compliance with part or parts of USPAP is contrary to law or
public policy applicable to the assignment.
MARKET VALUE: The most probably 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 and 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:
1. Buyer and seller are typically motivated
2. Both parties are well informed or well advised, and acting in what they
consider their own best interests;
3. A reasonable time is allowed for exposure in the open market
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
62
4. Payment is made in terms of cash in United States dollars or in terms of
financial arrangements comparable thereto; and
5. 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.
The above definition of market value is consistent with the definition referenced in this
report, as well as the definition in The Appraisal of Real Estate, Twelfth Edition (Appraisal
Institute, 2001).
MASS APPRAISAL: The process of valuing a universe of properties as of a given date
using standard methodology, employing common data, and allowing for statistical testing.
PERSONAL PROPERTY: Identifiable tangible objects that are considered by the general
public as being “personal” for example, furnishings, artwork, antiques, gems and jewelry,
collectibles, machinery and equipment, all tangible property that is n ot classified as real
estate.
PRICE: The amount asked, offered, or paid for a property
Comment: Once stated, price is a fact, whether it is publicly disclosed or retained in
private. Because of the financial capabilities, motivations, or special interests of a given
buyer or seller, the price paid for a property may or may not have any relation to t he value
that might be ascribed to that property by others.
REAL ESTATE: An identified parcel or tract of land, including improvements, if any.
REAL PROPERTY: The interests, benefits, and rights inherent in the ownership of real
estate.
Comment: In some jurisdictions, the terms real estate and real property have the same
legal meaning. The separate definitions recognize the traditional distinction between the
two concepts in appraisal theory.
REPORT: Any communication, written or oral, of an appra isal, appraisal review, or
appraisal consulting service that is transmitted to the client upon completion of an
assignment.
Comment: Most reports are written and most clients mandate written reports. Oral report
requirements (see the Record Keeping section of the ETHICS RULE) are included to
cover court testimony and other oral communications of an appraisal, appraisal review,
or appraisal consulting service.
SCOPE OF WORK: The type and extent of research and analysis in an assignment.
SIGNATURE: Personalized evidence indicating authentication of the work performed by
the appraiser and the acceptance of the responsibility for content, analyses, and the
conclusions in the report.
Parcel #3: Patrick K. and Jeanne L. Brewer Family Trust
63
Comment: A signature can be represented by a handwritten mark, a digitize d image
controlled by a personalized identification number, or other media, where the appraiser
has sole personalized control of affixing the signature.
SUPPLEMENTAL STANDARDS: Requirements issued by government agencies,
government sponsored enterprises, or other entities that establish public policy which add
to the purpose, intent, and content of the requirements in USPAP, that have a material
effect on the development and reporting of assignment results.
Comment: Supplemental standards are published in regulations, rules, policies, and
other similar documents, and have the same applicability to all properties or assignments
in a particular category or class regardless of the contracting entity.
VALUATION SERVICES: Services pertaining to aspects of property value.
Comment: Valuation services pertain to all aspects of property value and include
services performed both by appraisers and by others.
VALUE: The monetary relationship between properties and those who buy, sell, or use
those properties.
Comment: Value expresses an economic concept. As such, it is never a fact but always
an opinion of the worth of a property at a given time in accordance with a specific definition
of value. In appraisal practice, value must always be qualified; for example , market value,
liquidation value, or investment value.
WORK FILE: Documentation necessary to support an appraiser’s analysis, opinions,
and conclusions.