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IP# 926 - APPRAISALSAPPRAISAL REPORT Bus Transportation Facility and Excess Land 4124 Winnetka Avenue New Hope, Minnesota December 1, 2014 HAC 14064-00 Copyright C 2005-2014 by Hosch Appraisal & Consulting, Inc. All rights reserved. Appraisal & Consulting;, 1 ne. December 17, 2014 Ms. Valerie Leone, City Clerk City of New Hope 4401 Xylon Avenue North New Hope, MN 55428 RE: APPRAISAL REPORT OF THE BUS TRANSPORTATION FACILITY AND EXCESS LAND LOCATED AT 4124 WINNETKA AVENUE IN NEW HOPE, MINNESOTA Dear Ms. Leone: As requested by you, we are providing you with an appraisal of the above -referenced property to arrive at a reliable estimate of the market value of the fee simple interest in the subject property. The following Appraisal Report is intended to comply with the reporting requirements set forth under within the Uniform Standards of Professional Appraisal Practice. This appraisal report has been written for the intended use of the City of New Hope and its authorized representatives, for purposes of internal decision making and potential purchase. Hosch Appraisal & Consulting, Inc. has not previously provided any services, appraisal or otherwise, on the subject property within the three years prior to the acceptance of this assignment. The depth of discussion contained in this report is specific to the needs of this client and for the intended use only. Hosch Appraisal & Consulting, Inc. is not responsible for the unauthorized or improper use of this report. We have made a complete inspection of the subject property and have fully identified the real estate in our written report. Additional supporting information may also be supplied within the Addenda of this report. After careful consideration of the many factors influencing value, it is our opinion that the subject property has an estimated market value, as of the December 1, 2014, of: THREE MILLION THIRTY-FIVE THOUSAND DOLLARS ---------$3,035,000" * We are aware a lease exists on the subject property between School District #281 and First Student, Inc. through June 30, 2016 for $1.00 per year; however, we have been instructed to appraise the fee simple interest in the subject property. As a result, our estimated market value places no consideration on the existing lease. 11172 Zealand Avenue North Minneapolis, MN 55316 Phone 6121331-1688 Fax 7631208-1670 www hoschappraisal. com Ms. Valerie Leone December 17, 2014 Page Two This appraisal does not include personal property, equipment, fixtures, or intangible items that are not real property nor does this appraisal take into consideration any going concern value. It is our opinion that a reasonable exposure time of up to 12 months is appropriate for the subject real estate at our estimated market value. Please refer to the Reasonable Exposure Time section of this appraisal for details. This report is written with the intent of meeting the reporting requirements of the Uniform Standards of Professional Appraisal Practice, 2014-2015 Edition (effective January 1, 2014). The appraisal has also been prepared in conformity with the requirements of the Code of Professional Ethics & Standards of Professional Appraisal Practice of the Appraisal Institute. The undersigned appraisers certify that they have investigated information believed to be pertinent to the valuation of the property, and to the best of their knowledge and belief the statements and opinions expressed herein are correct and reasonable, subject to the limiting conditions set forth herein. Very truly yours, Hosch Appraisal & Consulting, Inc. / I raw 4 �S� Nathan J. Brooberg Senior Appraiser Certified General Real Property Appraiser MN License #20249946 Stephen T. Hosch, MAI Certified General Real Property Appraiser President Minnesota License #4002903 CERTIFICATION I certify that, to the best of my knowledge and belief: I . I have taken into consideration the factors that have an impact on value in my development of the estimate of market value under continued use in the appraisal report. I have not knowingly withheld any significant information from the appraisal report and I believe, to the best of my knowledge, that all statements and information in the appraisal report are true and correct. 2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, unbiased professional analyses, opinions, and conclusions. 3. I have not provided services, appraisal or otherwise, regarding the subject property within the three years immediately preceding the acceptance of this report. 4. I have no current or prospective interest in the property that is the subject of this report, and I have no personal interest or bias with respect to the parties involved. 5. My compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event. 6. I performed this appraisal in conformity with the Uniform Standards of Professional Appraisal Practice that were approved and published by the Appraisal Standards Board of The Appraisal Foundation in 2014 effective January 1, 2014. I acknowledge that an estimate of a reasonable time for exposure in the open market is a condition in the definition of market value and the estimate I have developed is consistent with the market. 7, The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics & Standards of Professional Appraisal Practice of the Appraisal Institute, which include the Uniform Standards of Professional Appraisal Practice. 8, Nathan J. Brooberg and Stephen T. Hosch have both made a personal inspection of the site and improvements that are the subject of this report. 9. No one provided significant professional assistance to the person(s) signing this report. 10. As of the date of this report, Stephen T. Hosch has completed the requirements under the continuing education program of the Appraisal Institute. 11. This appraisal assignment was not based on a requested minimum valuation or specific valuation for approval of a loan. Appraisal fees are in no way contingent upon values concluded by the appraisal firm. 12. Hosch Appraisal & Consulting, Inc. and/or the appraisers of the subject property have previously prepared appraisal reports of bus transportation facilities and excess land. Therefore, I have the knowledge and experience to meet the competency provision of the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation. 13. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. The appraiser will not disclose the contents of the appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice. / i � �' 4 � � , , - 4,- t,- �': =/-- W� Nathan J. Brooberg Certified General Real Property Appraiser MN License #20249946 Stephen T. Hosch, MAI President MN License #4002903 Copyright 0 2005-2014 by Hosch Appraisal & Consulting, Inc. All rights reserved. CONTINGENT AND LIMITING CONDITIONS The value estimates and conclusions in the appraisal are made subject to these assumptions and conditions: I . This appraisal report has been written for the intended use of the City of New Hope, for purposes of internal decision making and potential purchase. Possession of this report, or a copy thereof, does not carry with it the right of publication (either in whole or in part), nor may it be used for any purpose other than the one stated in the Letter of Transmittal and the Purpose of the Report, without the express, written consent of the appraiser and client. Authorized copies of this report will be signed in blue ink by the appraiser(s). Unsigned copies or copies not signed in blue ink should be considered incomplete. All unauthorized or incomplete copies of this report should also be considered confidential, and as such, must be returned, in their entirety, to Hosch Appraisal & Consulting, Inc. 2. This property is appraised in fee simple, assuming responsible ownership and management, unless otherwise indicated. This appraisal recognizes that available financing is a major consideration by typical purchasers of income-producing real estate in the market, and the appraisal assumes availability of financing to responsible and sufficiently substantial purchasers of the property in amounts similar to those indicated or implied in this report. 3. Hosch Appraisal & Consulting, Inc. and/or its employees are not qualified to render expert opinions regarding structural issues, water damage, environmental assessments (such as mold), engineering/mechanical issues, ADA and/or building code compliance, land planning, architectural expertise or soil conditions. If requested, Hosch Appraisal & Consulting, Inc. will recommend qualified experts in these fields to assist the client and/or the appraisal process. 4. The property has been appraised as free and clear of all indebtedness, under responsible ownership and good management unless otherwise set forth in the appraisal. 5. No title search has been made, and the reader should consult an appropriate attorney or title insurance company for accurate ownership data. Unless title problems are specifically brought to our attention, Hosch Appraisal & Consulting, Inc. assumes that the title is good and marketable and therefore, will not render any opinions about the title. 6. The information contained in this report is not guaranteed, but it has been gathered from reliable sources. The appraiser certifies that, to the best of his/her knowledge and belief, the statements, information, and materials contained in the appraisal are correct. 7. No responsibility is assumed for matters which are legal in nature. It is assumed (without survey) that the improvements are located within the legally described property and that the buildings comply with all ordinances except as noted. The furnished legal description is assumed to be correct. It is assumed that the utilization of the land and improvements is within the boundaries or property lines of the property described and that there is no encroachment or trespass unless noted in the report. 8. No analysis of soil conditions was required and none has been made. Unless specifically brought to our attention, all value estimates in this report assume stable soil, and that any necessary soil corrections are to be made at the seller's expense. Contingent and Limiting Conditions - Continued Estimates herein are based on the present status of the national business economy and the current purchasing power of the dollar. The forecasts, projections, or operating estimates contained herein are based upon current market conditions, anticipated short-term supply and demand factors, and a continued stable economy. These forecasts are, therefore, subject to changes in future conditions. 10. A plat map or site survey may have been provided in this report to assist the reader in visualizing the general location and boundaries of the property. We have made no survey of the property and assume no responsibility for its accuracy. We may have provided a sketch in the appraisal report to show approximate dimensions of any improvements to assist the reader of the report in visualizing them and understanding our determination of their size. Surveys, plans and sketches provided may not be complete or drawn exactly to scale. 11. The market value herein assigned is based on conditions which were applicable at the time the property was inspected and may vary at a later date. 12. Hosch Appraisal & Consulting, Inc. employees shall not be required to prepare for or appear in court or before any board or governmental body by reason of the completion of this assignment without pre -determined arrangements and agreements. 13. Information in the appraisal relating to comparable market data is more fully documented in the confidential file in the office of the appraiser. All studies and field notes will be secured in our files for future reference. 14. The distribution of the total valuation in this report between land and improvements applies only under the reported highest and best use of the property. The allocations of value for land and improvements must not be used in conjunction with any other appraisal and are invalid if so used. 15. It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless a nonconformity has been stated, defined, and considered in the appraisal report. It is assumed that there is full compliance with all applicable federal, state, and local environmental regulations and laws unless noncompliance is stated, defined, and considered in the appraisal report. It is assumed that all required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state, or national government or private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is based. 16. We are assuming: 1) that any asbestos or urea -formaldehyde that may have been used in the building materials in the property are in compliance with current statutes and regulations and do not present a health hazard to the public; 2) that lead-based paint has not been used in a manner that would cause health problems for the public using the property; and 3) that the property has not been the site for the dumping of hazardous substances nor is subject to radon gas. If any or all of the above conditions exist, this could have a bearing on the market value of the property. 17. We have noted in the appraisal report any adverse conditions (such as, but not limited to, hazardous wastes, toxic substances, etc.) observed during the inspection of the subject property (or learned of) during the normal research involved in performing the appraisal. Unless otherwise stated in the appraisal report, we have no knowledge of any hidden or unapparent conditions of the property or adverse environmental conditions (including the presence of hazardous wastes, toxic substances, etc.) that would make the property more or less valuable, and have assumed that there are no such conditions. We make no guarantees or warranties, express or implied, regarding the condition of the property. (Hosch Appraisal & Consulting, Inc. will not be responsible for any engineering or testing that might be required to discover whether such conditions exist.) Because we are not experts in the field of environmental hazards, the appraisal report must not be considered as an environmental assessment of the property. iii Contingent and Limiting Conditions - Continued 18. The value indication provided in this appraisal report is not contingent upon this building complying with the Americans with Disabilities Act (ADA) which became effective January 26, 1992. A handicap analysis has not been completed for this building and has not been considered in the overall value conclusion. The market value of the property could change substantially if alterations are required to comply with ADA regulations. 19. The client agrees that Hosch Appraisal & Consulting, Inc. does not by performing the services rendered, assume, abridge, abrogate, or undertake to discharge any duty of client to any other entity. 20. Any use of the appraisal report, by the client, is conditioned upon payment of all fees in accordance with the agreed terms. 21. In consideration for performing the services rendered at the fee charged, Hosch Appraisal & Consulting, Inc. expressly limits its liability to five (5) times the amount of the fee paid or $50,000, whichever is less. Hosch Appraisal & Consulting, Inc. expressly disclaims liability as an insurer or guarantor. Any persons seeking greater protection from loss or damage than is provided for herein, should obtain appropriate insurance. The client shall indemnify and hold harmless the appraisal firm and its employees, against all claims by any third party or any judgement for loss or damage relating to the performance or non-performance of any services by Hosch Appraisal & Consulting, Inc. 22. Unless specifically brought to the appraiser's attention, we will assume that there are no hidden or unexpected conditions of the asset to be appraised that would adversely affect or enhance the value. 23. In the future, if Hosch Appraisal & Consulting, Inc. is compelled to produce documents or testify with regard to work performed, the client shall reimburse us for all costs and expenses incurred. 24. In the event of a dispute involving interpretation or application of this agreement, the parties agree that this agreement shall be governed under the laws of the State of Minnesota. 25. The conclusion of value reached by Hosch Appraisal & Consulting, Inc. is based upon the assumption that there are no hidden or unapparent conditions of the property that might have an impact upon buildability. It is recommended that due diligence be conducted through the local building department or municipality to investigate buildability and whether the property is suitable for development into its highest and best use. Hosch Appraisal & Consulting, Inc. makes no representations, guarantees or warranties. 1V SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS Type of Property: Bus Transportation Facility with excess land Location: 4124 Winnetka Avenue, New Hope, Minnesota Zoning: CC - City Center Date of Inspection: December 1, 2014, with subsequent informal inspections Effective Date of Appraisal: December 1, 2014 Date of the Report: December 17, 2014 Property Rights Appraised: Fee Simple Interest Land Size: 8.0 acres (348,688 square feet) total with approximately 244,188 square feet considered as the Bus Transportation Facility and 104,500 square feet considered excess land per estimates by Hosch Appraisal & Consulting, Inc. Gross Building Size: 48,843 square feet (per Bissell, Belair & Green) Date of Construction: 1966 Final Value Estimate: $3,035,000 Reasonable Exposure Time: Up to 12 months v TABLE OF CONTENTS Item Letter of Transmittal Page No. Certification.............................................................. i Contingent and Limiting Conditions ........................................... ii Summary of Important Facts and Conclusions ................................... v General Location Map......................................................1 Purpose of the Appraisal .................................................... 2 Intended Use of the Appraisal ................................................ 2 Intended User(s) of the Appraisal ............................................. 2 Scope of the Appraisal......................................................2 Property Rights Appraised ................................................... 3 Definition of Market Value .................................................. 4 Dates of Importance........................................................4 Brief Area Analysis........................................................ 5 Legal Description..........................................................7 Owner of Record..........................................................7 Real Estate Taxes and Special Assessments Analysis .............................. 8 Zoning..................................................................9 Flood Hazard Information................................................... 9 PropertyHistory...........................................................9 Subject Property Description .................................. . ............ . 10 Subject Photographs.......................................................15 Highest and Best Use......................................................19 The Valuation Process .................................................... 22 Sales Comparison Approach to Value - Excess Parcel ............................ 24 Sales Comparison Approach to Value ......................................... 28 Reasonable Exposure Time. ............................. 35 Qualifications of the Appraisers ............................................. 36 . _ ariwnl ,nAX IMIM PAiti ONKFAPta t i � SEwePgy �.� t IKP wnRl lw.sw� 'p oralou � \. .xraar � .eAkma ; I rsrPwu j '�' _ .Yovrla ww eauwcun _ r f w 1 -Pa lxae sr scala 4 txuh eMi:s. OWw, f = HM6 �, .:..+i�..0 �PUCO P• I641NhYr tv a'.,la •w. more } `Yw M4N/M nPa a.. J' YUCafdN EOrEWW ` � �s �` a1iLPrl�p P°r"'P f C—v . YMth W..Pt N l � wmA '~^• � M 1 Y 1y1 A� q y � / T � _ • n qP :. rlllla9al1 •lx` �.- fV G 1 ..f . .O.fw 1 P � � �� � +� • f auJl/. � —�•��� 4� CCC I1 ay `�5.,,� rl Vr04N jixllrj/ f /� �� a ••�•I AP , -m._ arl•J �e �. Vvr.6<.. afw aM.. P ,�yaw.ruaua ru S i1 .5 �(f. � C aK oaauxr .rrm ,,. y' ` ~f IftAAya 14 ti'� 1t arr.Pa r Mp.A • I ¢"" ,. •---�J.nr �. � � % \ \. V' I ate' "h� COlIK91 )♦y ,. pW�4PMtl lY. � 1 -� elPY4R .✓ K r� ,�\ fAniwl L. ffllpp il` a.Mn %nr —.• NIl}(OIIl -YAYRCf ,_ flh�raWlU y� I M wrlPl�m. wcl.xu 4 rwa.uau. 1 GENERAL LOCATION MAP HAC1406"0.wpd Hosch Appraisal & Consulting, Inc. 1 PURPOSE OF THE APPRAISAL The purpose of this report is to arrive at a reliable estimate of the market value of the fee simple interest in the real estate for the sole use of our client, the City of New Hope as well as authorized representatives for purposes of internal decision making and potential purchase. INTENDED USE OF THE APPRAISAL The intended use of the appraisal is for internal decision making and possible purchase of the subject real estate by the City of New Hope. INTENDED USER(S) OF THE APPRAISAL The intended user of this appraisal report is our client, the City of New Hope, as well as authorized representatives, for purposes of internal decision making and potential purchase. SCOPE OF THE APPRAISAL This appraisal analysis has not been limited in scope, and was based upon the generally accepted appraisal practices in order to comply with current USPAP Standards. Within this valuation analysis, we have completed the following functions and procedures. (Additional details of our research are included throughout the following pages of this report.) - Made an interior and exterior inspection of the subject property and reviewed building measurements provided by Bissell, Belair & Green; - Familiarized ourselves with the neighborhood and analyzed the surrounding property trends; - Considered and reviewed the historical market, taking into account stability and/or changes; - Based upon our market research and analysis, we have completed the highest and best use analysis for the subject property; - Researched comparable vacant land sales and analyzed their applicability to the subject, as a means of estimating the market value of the excess land via the sales comparison approach to value; - Researched comparable improved sales and analyzed their applicability to the subject, as a means of estimating the market value via the sales comparison approach to value; - Considered market rental rates applicable to the subject property to gain a general understanding of potential annual market rent for the subject property, but did not complete the income capitalization approach to value as credible results can still be obtained by completing the sales comparison approach; HAC14064-OO.wpd Hosch Appraisal & Consulting, Inc. 2 Scope of the Appraisal - Continued - Considered but did not complete the cost approach to value due to the inherent difficulties of estimating functional and economic obsolescence given the age of the building and considering that credible results can still be obtained by completing the sales comparison approach; - Developed an opinion of reasonable exposure time for the subject property to effect a sale at our estimated market value. Sources utilized to obtain this information include the property owner, information contained in our office files, City of New Hope, School District #281 and Hennepin County public records and discussions with other real estate experts, including brokers, buyers, sellers, assessors, and other appraisers. PROPERTY RIGHTS APPRAISED We are aware a lease exists on the subject property between School District #281 and First Student, Inc. through June 30, 2016; however, we have been instructed to appraise the fee simple interest in the subject property, so the existing lease will be ignored. The subject real estate will be appraised by estimating the market value of the fee simple interest of the real estate. For use in this report, the market value of the fee simple interest in the real estate is subject to the following definition contained on Page 78 of The Dictionary of Real Estate Appraisal, Fifth Edition: A fee simple estate implies absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat. HAC14064-OO.wpd Hosch Appraisal & Consulting, Inc. 3 DEFINITION OF MARKET VALUE Market value as utilized in this appraisal report conforms to the following definitions obtained from Page 122 of The Dictionary of Real Estate Appraisal, Fifth Edition, published by the Appraisal Institute. The most probable price that the specified property interest should sell for in a competitive market after a reasonable exposure time, as of a specified date, in cash, or in terms equivalent to cash, under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably, and for self-interest, and assuming that neither is under duress. The corresponding definition, as provided on Page A-75 in the Uniform Stalaclards of Professional Appraisal Practice, 2014 - 2015 Edition, has been agreed upon by agencies that regulate federal financial institutions in the United States and is provided below. The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently 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; 4. payment is made in terms of cash in U.S. 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. We have developed an opinion of reasonable exposure time within this appraisal. Please refer to that section of the report for details. DATES OF IMPORTANCE The market value for the subject property is estimated as of December 1, 2014. The date of inspection was December 1, 2014 with subsequent informal visits. The date of the report is December 17, 2014. HAC14064-0O.wpd Hosch Appraisal & Consulting, Inc. 4 BRIEF AREA ANALYSIS The subject property is located within the city of New Hope, an inner -ring suburb just northwest of Minneapolis. From its agricultural beginnings in the early 1900's to incorporation as a city in 1953, New Hope has evolved into a community of just over 20,000 residents. The city is located along U.S. Highway #169, which runs along the western border and provides the main access to Interstate Highway #694 to the north and State Highway #55 to the south. Many other county roads and local avenues serve as convenient routes throughout the city as well. After rapid expansion throughout the 1960's, the population of New Hope has dwindled for a number of years, decreasing by 2.6% between 2000 and 2010, with a slight increase predicted through 2012. The median age of the city's residents is 39. The number of households also declined by 2.7% between 2000 and 2010. Median household income increased by 6.5% to $49,833 in that time period, suggesting a sufficient supply of employment opportunities within New Hope and the nearby metropolitan area. The city is home to 420 businesses which provide employment opportunities to local residents. Public School District #281 is the largest employer in the city, providing 2,200 jobs. In addition, there are numerous jobs available in health care, distribution and manufacturing, and ample employment opportunities within commuting distance in the Twin Cities area. A summary of New Hope's demographic statistics is displayed in the chart below. NEW HOPE DEMOGRAPHIC STATISTICS -1990 TO 2012 % Change 1990 2000 2010 2000-2010 Estimated 2012 Population 21,853 20,873 20,339 -2.6% 20,436 Households 8,507 8,665 8,427 -2.7% 8,437 Median Household Income $36,096 $46,795 $49,833 6.5% $51,593 Source: U.S. Census * 2010 Estimated Income from the 2010 American Community Survey, 2012 Estimates from the 2012 American Community Survey The subject neighborhood is predominately commercial in nature with some office and quasi - industrial development as well. Businesses/uses located in the subject neighborhood include: Applebee's, McDonald's, Taco Johns, Life Time Fitness, Pioneer Dental, GNC, Walgreen's, Caribou Coffee, Country Kitchen, Goodyear Tire and School District #281 offices/bus garage. The neighborhood appears stable with limited land remaining for development. The neighborhood can be most conveniently accessed by 42nd Avenue North from the east or west and Winnetka Avenue from the north or south. HAC14064-00.wpd Hosch Appraisal & Consulting, Inc. 5 ELI 131001vil stave14 L 5.,Wd Aw N Lai Crystal Airport aii naps Lake Ail 67th A. N 14 fiNdA.N z.'W Rd 4914 Aw N N k" Hap 45111 Ave N N 44,h A - Li crystal LE RoWnlidisTr N 4216 A, ts, I N Mir Are k 7Gih Awi I North memorial outh Medical Center W NJ Rmdw*y Ax L L2 L N iWificil Valley at "th ArN rsS CITY MAP HAC14064-OO.wpd Hosch Appraisal & Consulting, Inc. LEGAL DESCRIPTION The following legal description was provided to us by Hennepin County: Beginning at the Southwest Corner of Lot 8 thence East to a point a distance of 5 feet West of the Southeast Corner of Lot 7 thence South to the North line of South 611.5 feet of Lot 9, thence East to a line drawn parallel and a distance of 125 feet Westerly of line a said line as being described as beginning at a point on a North line of Southwest 1/4 of the Northwest 1/4 a distance 653.3 feet East from the Northwest corner thereof to a point on the South line of Southwest 1/4 of the Northwest 1/4 a distance of 650.6 feet East from the Southwest corner thereof thence Southerly along said parallel line to Northern line of South 211.5 feet thence West to a West line thereof North to the beginning, except the roadway. OWNER OF RECORD According to public records, the subject property is currently owned by Independent School District #281. HAC14064-0O.wpd Hosch Appraisal & Consulting, Inc. 7 REAL ESTATE TAXES AND SPECIAL ASSESSMENTS ANALYSIS Real estate taxes in Minnesota are payable either in one lump -sum payment or can be paid in two installments which are due on May 15 and October 15. The annual real estate tax charge is based on the assessor's estimated market value as of January 2 of the prior year. The following sections will provide current real estate taxes and assessor's estimated market value(s) for the subject property which we have identified by property identification number (PID). Real Estate Tax Data Real Estate Tax Data (Payable 2014) PIDs Base Tax Specials Total Tax 17-118-21-23-0018 $0.00 $0.00 $0.00 The subject real estate is considered tax-exempt. Assessor's Estimated Market Value Assessor's Estimated Market Value (Payable 2014) PIDs Land Value Building Value Total Value 17-118-21-23-0018 1 $0 $0 $0 The subject property is considered tax-exempt. The assessor has not placed an Assessor's Estimated Market Value on the subject. Special Assessment Information There were no special assessments found in the course of this analysis. HAC14064-00.wpd Aosch Appraisal & Consulting, Inc. 8 ZONING The subject property is located within the CC - City Center in the city of New Hope. The purpose of this district "is to encourage a mixture of residential, commercial, office and civic uses in the city center area to enhance its function as the heart of the community." General permitted uses in the CC - City Center include: mixed-use residential and commercial, community centers, government buildings, essential services, public parks, recreation facilities, clinics, financial services, grocery, hospitality businesses, hotel, office, personal service, restaurant, retail, service and auto parking among other uses. The current use of the subject property as a bus transportation facility is not a permitted use in the CC District in the city of New Hope. The subject does not have a conditional use permit allowing for use as a bus transportation facility according to Aaron Chirtich, Community Development Specialist for New Hope. The subject's use as a bus transportation facility with outdoor storage is a legally non -conforming use according to Mr. Chirtich. The subject is guided for mixed use in the comprehensive plan with the City open to a number of potential uses of the subject site if vacant in the future according to the Community Development Specialist for New Hope with an emphasis on higher density and commercial and/or multi -family development. A portion of the subject, approximately 104,500 square feet, is currently underutilized as a vacant field of grass. According to a discussion with Mr. Chirtich, the City would allow the subdivision of this grassy area from the remainder of the bus transportation facility. The bus transportation facility would still meet all setback and impervious surface requirements. The City would prefer the same uses for this excess land parcel as described above. We assume that the current zoning will exist into the foreseeable future, and at this time no major changes are anticipated for the subject property's area. FLOOD HAZARD INFORMATION According to the Flood Insurance Rate Map (FIRM), the subject property is located in Zone X. Zone X corresponds to an area of minimal flooding. This information is found on Community -Panel Numbers 27053CO192E and 27053C0194E, dated September 2, 2004. HAC14064-OO.wpd Hosch Appraisal & Consulting, Inc. 9 PROPERTY HISTORY According to public records, the subject property is currently owned by Independent School District #281. The subject is encumbered with a lease. The terms of the lease, which began in 2012 between Independent School District #281 (lessor) and First Student, Inc. (lessee), call for a rent of $1 per year for any year the District pays the Contractor for the services and Contractor uses the Facility. The District is responsible for any maintenance, repair and replacement of all the exterior and structural elements of the facility. The Contractor is responsible for routine repairs and maintenance. The District pays for all utilities throughout the year and is reimbursed for actual costs by First Student, Inc. The lease concludes June 30, 2016. Since we have been instructed to appraise the fee simple interest in the subject property, no consideration will be given to this lease within this appraisal. We are not aware of any other material property history items that have occurred in the five years preceding the date of valuation. HAC14064-OO.wpd Hosch Appraisal & Consulting, Inc. 10 SUBJECT PROPERTY DESCRIPTION The entire subject property consists of a rectangular 8.0 acre land parcel that is developed with a bus transportation facility. The site is located at 4124 Winnetka Avenue which is one property south of the southeast corner of Winnetka Avenue and 42nd Avenue North. The site has good visibility from Winnetka Avenue and average visibility from 42nd Avenue North. Direct access to the site is provided by two full -movement access points along Winnetka Avenue. The site is generally level, at grade with adjacent roadways and soils are assumed stable. The parking lot appears in average condition. A large portion of the parcel (approximately 104,500 square feet) is underutilized and covered in grass while the remaining portion of the parcel (244,188 square feet) is either paved or supports the improvements. The improvements constructed on the subject property consist of a bus transportation facility with a gross building area of 48,843 square feet. The office portion accounts for approximately 3,000 square feet (6.1%) and includes office areas, restrooms and a break room. The bulk of the improvements are utilized as bus storage, with dedicated areas for bus maintenance and washing. The building was originally constructed in 1966. The improvements are in average condition overall with no items of deferred maintenance observed or brought to our attention during the inspection. The improvements consist of concrete block construction with a steel roof and a rubber membrane. External walls are brick and exposed aggregate. Internal finishing includes: tiled and concrete flooring, 2x2 acoustical tile ceiling in the office areas with exposed steel and steel decking in the storage and repair areas, painted sheetrock walls and exposed fluorescent lighting in the office areas with painted concrete block walls in the storage and repair areas. Windows are limited to near the gas pumps and above the service doors. The clear height is generally eleven feet throughout with a vault of approximately 14 feet in the maintenance area. The interior is heated by roof -mounted, gas-fired forced air units with the office area also cooled by central air conditioning, all distributed though ducts. The maintenance area includes three 13 -ton lifts, lines running oil, grease, differential fluid, compressed air, anti -freeze and transmission fluid. Outside the western side of the improvements are four pumps for gasoline (three diesel, one unleaded). The pumps are inspected annually. HAC14064-OO.wpd Hosch Appraisal & Consulting, Inc. 11 AERIAL MAP HAC14064-OO.wpd Hosch Appraisal & Consulting, Inc. 12 X� may•. q4�""`�. ; I�,1•'Jn',. � „r,i .Vey .. t i'•: i ANEW.- ANEW tr. tiN i. 4 iL an ALW Ak _ ti1.d BIRDSEYE MAP HAC14064-OO.wpd Hosch Appraisal & Consulting, Inc. 14 SUBJECT PHOTOGRAPHS Exterior view of the subject facing northwesterly from the southeastern portion of the improvements. View of the exterior of the subject, facing southeasterly from the northwestern corner. HAC 14064-OO.wpd Hosch Appraisal & Consulting, Inc. 15 Subject Photolwaplis - Continued View of office area. View of the wash bay. HAC14064-OO.wpd Hosch Appraisal & Consulting, Inc. 16 Subject Photographs - Continued View of the maintenance area. View of the storage area. HAC14064-OO.wpd Hosch Appraisal & Consulting, Inc. 17 Subject Photographs - Continued View of the storage area. View of the storage area. HAC14064-OO.wpd Hosch Appraisal & Consulting, Inc. 18 HIGHEST AND BEST USE The highest and best use of the subject real estate as it will be regarded in this appraisal report will conform to the following definition found on Page 277 of The Appraisal of Real Estate, 13th Edition: Highest and best use is the reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported and financially feasible and that results in the highest value. In order to determine the highest and best use of the subject property, a three-step process is followed, which we have defined as follows: The highest and best use of the site as though vacant is determined. Three options are available to owners of vacant sites: (1) leaving the property vacant; (2) holding the site for a future use, or (3) developing the site. The recommended option must be legally permissible, physically possible, financially feasible, and maximally productive. 2. If development is concluded as the highest and best use of the site as though vacant, the second step would be to determine the ideal improvement. The ideal improvement would reflect state-of-the-art design techniques, legal conformance, and provide the highest value. If the property is currently improved, the final step would be to determine the highest and best use of the property as improved. A comparison is made between the existing improvement and the ideal improvement in order to identify differences. To modify the existing improvements for any differences from the ideal, one of the following five options should be recommended to the owner: A. Leave the property in its current state. B. Remodel C. Renovate D. Convert E. Demolish to clear the site for redevelopment. The recommended option must be legally permissible, physically possible, financially feasible, and maximally productive. HAC14064-OO.wpd Hosch Appraisal & Consulting, Inc. 19 Hi Best and Best Use - Continued Hiehest and Best Use of the Property as Vacant The highest and best use of the property as vacant would be for mixed-use development including multi -family residential and retail/commercial uses taking advantage of the subject's location one property removed from the corner of Winnetka Avenue and 42nd Avenue North as conforming to zoning or the comprehensive plan. The reasons for our opinion are as follows: 1. Compatibility of these uses with the current zoning and surrounding land uses. 2. Suitability of the shape, topography, and location of the site. 3. Close proximity to a growing economic base. 4. Average accessibility to major roadways. 5. Good visibility of the site and access via Winnetka Avenue. HAC14064-OO.wpd Hosch Appraisal & Consulting, Inc. 20 Highest and :Best Use - Continued Highest and Best Use of the Property as Improved The subject improvements have been designed for use as a bus transportation facility with outdoor storage. The improvements were constructed in 1966 and they remain functional for their current use overall. The existing improvements will provide a higher return to the underlying land than any other potential uses for the property at this time. Approximately 244,188 square feet of land supports the bus transportation facility with 104,500 square feet underutilized as a vacant field. Considering the location of this parcel in the southern portion of the subject property, with some visibility from 42nd Avenue North and full visibility from Winnetka Avenue, this portion of the property could be independently developed with a commercial and/or multi -family use as indicated by the City of New Hope in discussions and within the Comprehensive Plan. The highest and best use of the property as improved is for continued use as a bus transportation facility for the northern portion of the parcel with development of the southern 104,500 square feet into a commercial and/or multi -family use as market conditions warrant. The reasons for our opinion are as follows: Legally non -conforming current use of the building and proposed use of the excess land parcel with the current zoning and surrounding land uses. 2. Suitability of the northern building and the southern excess land portion with the shape, topography, and location of the site. Close proximity to a significant residential and growing economic base. 4. Good accessibility and visibility from Winnetka Avenue. The current use of the northern 244;188 square feet of the site as a bus transportation facility and the proposed use of the southern 104,500 square feet of the site as a development with a commercial and/or multi -family residential use as market conditions warrant, is the only use of the subject property that provides the highest return on the underlying land while meeting the tests of being legally permissible, physically possible and financially feasible. HAC14064-0O.wpd Hosch Appraisal & Consulting, Inc. 21 THE VALUATION PROCESS The valuation process contains many facets. A wide variety of data, including the previously discussed Area Analysis, Subject Site and Improvements Descriptions, and Highest and Best Use Analysis, is compiled and utilized to value the property based upon three methods of valuation which are referred to as "approaches". These approaches to value are briefly described as follows: Cost Approach In the cost approach, an estimated reproduction or replacement cost of the building and land improvements as of the date of valuation is developed together with an estimate of the losses in value that have taken place due to wear and tear, design and plan, or neighborhood influences. To the depreciated building cost estimate, the estimated value of the land is added. The total represents the value indicated by the cost approach. Salcs Comparison Approach In the sales comparison approach, the subject property is compared to similar properties that have been sold or for which listing prices or offering figures are known. Data for generally comparable properties is used, and comparisons are made to demonstrate a probable price at which the subject property would be sold if offered on the market. Income Capitalization Approach In the income capitalization approach, the rental income to the property is shown with deductions for vacancy and collection loss and expenses. The net operating income of the property is estimated. To support this estimate, operating statements for previous years and comparable properties may be reviewed, along with available operating cost estimates. An applicable capitalization method and appropriate capitalization rates are developed and used in computations that lead to an indication of value. Other methods may also be applied, such as a gross rent multiplier, which reveals the relationship between gross rental income and the sale price of a given income-producing property. Gross rent multipliers are extracted from comparable sales and analyzed, with a reconciled gross rent multiplier applied to the subject's gross rent to render an indication of market value. HAC14064-0O.wpd Hosch Appraisal & Consulting, Inc. 22 The Valuation Process - Continued Inherent within the previous three approaches to value are some basic appraisal principles, which include anticipation, balance, change, externalities, substitution, and also supply and demand. These principles are briefly described below. (These definitions are derived from The Appraisal of Deal Estate, 13th Edition, pages 35-43.) Anticipation: The perception that value is created by the expectation of benefits to be derived in the future. Balance: The principle that real property value is created and sustained when contrasting, opposing, or interacting elements are in a state of equilibrium. Change: The result of the cause and effect relationship among the forces that influence real property value. Externalities: The principle that economies outside a property have a positive effect on its value while diseconomies outside a property have a negative effect upon its value. Substitution: The appraisal principle that states that when several similar or commensurate commodities, goods, or services are available, the one with the lowest price will attract the greatest demand and widest distribution. This is the primary principle upon which the cost and sales comparison approaches are based. - Supply and Demand: In economic theory, the principle that states that the price of a commodity, good, or service varies directly, but not necessarily proportionately, with demand, and inversely, but not necessarily proportionately, with supply. In a real estate appraisal context, the principle of supply and demand states that the price of real property varies directly, but not necessarily proportionately, with demand and inversely, but not necessarily proportionately, with supply. Explanation of the Reconciliation Process An appraisal is composed of a number of integrated, interrelated, and inseparable procedures that have a common objective -- a condensed, reliable estimate of value. Although the three approaches are seldom completely independent, it is important to note that in certain cases, greater emphasis is placed on a particular approach. The reasons for this are as varied as the properties themselves, and each appraisal must be addressed individually. The appraiser discusses the strengths and weaknesses of each of the approaches to value, and concludes to a final value which reflects the most applicable approaches. Summary In this case, the subject property is a bus transportation facility with excess land located in New Hope, Minnesota. As discussed in the previous sections of the report, the area surrounding the subject property is developed and exhibits a significant residential and economic base. After reviewing the pertinent information within our office, and having various discussions with other real estate experts, we have completed the sales comparison approach to value in the analysis of the subject property. The comparable information and our findings are further detailed and reconciled in the following section. HAC] 4064-OO.wpd Hosch Appraisal & Consulting, Inc. 23 SALES COMPARISON APPROACH TO VALUE - EXCESS LAND PARCEL The sales comparison approach to value is defined as: The process of deriving a value indication for the subject property by comparing market information for similar properties with the property being appraised, identifying appropriate units of comparison, and making qualitative comparisons with or quantitative adjustments to the sale prices (or unit prices, as appropriate) of the comparable properties based on relevant, market -derived elements of comparison. (The Dictionary of Real Estate Appraisal Fifth Edition, Page 175.) The major premise within this approach is that the market value of the subject property is directly related to the prices of comparable, competitive properties. Furthermore, this valuation method not only assumes that both buyer and seller are fully informed about the property, but also that both have general knowledge of the market for that type of property and that the property has been exposed in the open market for a reasonable time. Based upon the previously discussed highest and best use analysis of the subject property, comparable property sales with similar highest and best uses were gathered and analyzed from the metropolitan area. We believe these comparable sales best represent the subject property with respect to location, age, size, design, amenities, and other major characteristics. The comparable market data which is submitted in this report, in our opinion, suggests that the best unit of comparison for the subject real estate should be sale price per square foot of land area. The application of this unit of comparison produces an estimate of value for a property by comparing it with similar properties of the same type and class which have sold recently in the same or competing areas. The analytical processes utilized in determining the degree of comparability between two properties involves judgment as to their similarity with respect to many value factors such as location, date of sale, physical characteristics, and terms of sale. The sale price of those properties deemed most comparable tends to set the value range for the subject property. Further consideration of the comparative data indicates a figure representing the value of the subject property, that is, the probable price at which it could be sold by a willing seller to a willing buyer as of the date of the appraisal. The data involved in the application of this process concerns these comparable properties as well as the subject property, and this data will vary with the type of property. Four categories of data, however, are basic and apply regardless of the type of property. They are: Sales prices of comparable properties. 2. Conditions influencing each sale. 3. Location of each property. 4. Description of land and improvements of each comparable property. HAC14064-OO.wpd Hosch Appraisal & Consulting, Inc. 24 Sales Comparison Approach to Value - Excess Land Parcel - Continued The selected land sales which were useful in this site valuation are individually described in the chart below. Comparable real estate transactions which were useful in estimating this land value are individually described below. Characteristic differences between a comparable sale and the subject might require adjustments to increase the reliableness of a given sale as an indicator of value for the subject. Elements of comparison which may warrant adjustments include real property rights, financing, conditions of sale, buyer expenditures immediately after purchase, market conditions (time), and various physical characteristics, such as location, zoning, development stage, size, shape, topography/soils and others. An explanation of adjustments, a comparable sales location map, and a chart demonstrating our adjustment analysis are provided on the following pages. HAC14064-00.wpd Hosch Appraisal & Consulting, Inc. 25 COMPARABLE LAND SALES FACT CHART Sale 2013 Size in Price/ Sale Traffic Sale Intended S.F. Square No. Location Counts Date Use Zoning (Acres) Foot L 7601 62nd Avenue North 10,200 7/14 Multi- PUD 72,745 $4.18 New Hope, MN Family (1.67) 2. Louisiana Avenue/south of N/A 2/14 Retail CB 22,651 $3.97 Bass Lake Road (0.52) New Hope, MN 3. 5256 West Broadway 23,500 4/14 Commercial I-1 35,720 $8.96 Crystal, MN (0.82) 4. 4200 Xylon Avenue 19,100 11/14 Hy -Vee CC 579,348 $6.43 New Hope, MN (13.30) Sub- 2124 Winnetka Avenue 12,700 12/14 Mixed CC 104,500 ?? ject New Hope, MN (date of Use (2.40) value) Characteristic differences between a comparable sale and the subject might require adjustments to increase the reliableness of a given sale as an indicator of value for the subject. Elements of comparison which may warrant adjustments include real property rights, financing, conditions of sale, buyer expenditures immediately after purchase, market conditions (time), and various physical characteristics, such as location, zoning, development stage, size, shape, topography/soils and others. An explanation of adjustments, a comparable sales location map, and a chart demonstrating our adjustment analysis are provided on the following pages. HAC14064-00.wpd Hosch Appraisal & Consulting, Inc. 25 COMPARABLE LAND SALES MAP HAC14064-OO.wpd Hosch Appraisal & Consulting, Inc. 26 P -Lgh S-4 w LLE loll Lai U J1 9LP O 1A n 1,,, 63,d k. N 611d A. N 634 A. N UE � LLkj A Um 4 F— LA,,. Na ra 5m% AC 4 4, 491hA"N FanW*AVeN T4 U 4 4mbwb ;—w.,km4 LZ cww W.,� 0,X -1H.0..dP.A LLS, iiAA11A. X* A. *4, 4 161b A. 3411—N LYJ UWA-11 D* U COMPARABLE LAND SALES MAP HAC14064-OO.wpd Hosch Appraisal & Consulting, Inc. 26 Sales Comparison Approach to Value - Excess Land Parcel - Continued Before adjustments for differences, the aforementioned sales indicate a range of $3.97 per square foot to $8.96 per square foot for the subject land. Sales #2 and #3 are significantly smaller parcels when compared to the subject excess land. Sale #3 is located in Crystal and was given little weight in this analysis. Sale #1 is located at the southwest corner of West Broadway Avenue and 62nd Avenue North. This parcel formerly held three residential four-plexes as well as a gas station/convenience store. The improvements were all removed prior to the sale. The site was purchased for the development of a 68 -unit multi -family residential apartment building. Sale #1 has slightly lower direct traffic counts when compared to the subject and is slightly smaller in size. Overall, Sale #1 is slightly inferior to the subject. Sale #2 is located one property removed from Bass Lake Road. As such, its traffic counts are not measured. This parcel is significantly smaller when compared to the subject and has an inferior zoning district which does not allow for multi -family residential or mixed-use developments. Sale #2 is inferior to the subject. Sale #4 is the purchase of 579,348 square feet adjacent to the city center shopping area for the construction of a Hy -Vee grocery store. This site has a superior location along 42nd Avenue North and is adjacent to additional retail to the east. While this parcel is significantly larger than the subject, it still must be considered in our analysis as a function of its location relative to the subject. All of the transactions have been considered within our analysis of the subject property and have contributed to a value indication. We have also placed the least weight on Sale #3. The subject excess land parcel is located along Winnetka Avenue, two "parcels" removed from the more highly - traveled 42nd Avenue North. Furthermore, the adjacent land use of a bus transportation facility is a further drag on its locational attributes. Taking into account the smaller sizes of parcels #1 and #2, the larger size of Sale #4 and the locational attributes of all, and recognizing other differences, these sales indicate a range of approximately $4.00 to $5.00 per square foot for the subject property. After reconciling the adjustment process, it is our opinion that the subject excess land parcel has a market value of approximately $4.50 per square foot of land, calculated as follows. 104,500 square feet @ $4.50 per square foot $470,250 Rounded to: $470,000 HAC14064-OO.wpd Hosch Appraisal & Consulting, Inc. 27 SALES COMPARISON APPROACH TO VALUE The sales comparison approach to value is defined as: The process of deriving a value indication for the subject property by comparing market information for similar properties with the property being appraised, identifying appropriate units of comparison, and making qualitative comparisons with or quantitative adjustments to the sale prices (or unit prices, as appropriate) of the comparable properties based on relevant, market -derived elements of comparison. (The Dictionary of Real Estate Appraisal, Fifth Edition, Page 175.) The major premise within this approach is that the market value of the subject property is directly related to the prices of comparable, competitive properties. Furthermore, this valuation method not only assumes that both buyer and seller are fully informed about the property, but also that both have general knowledge of the market for that type of property and that the property has been exposed in the open market for a reasonable time. Based upon the previously discussed highest and best use analysis of the subject property, comparable property sales with similar highest and best uses were gathered and analyzed from the metropolitan area. We believe these comparable sales best represent the subject property with respect to location, age, size, design, amenities, and other major characteristics. The comparable market data which is submitted in this report, in our opinion, suggests that the best unit of comparison for the subject real estate should be sale price per foot of gross building area. The application of this unit of comparison produces an estimate of value for a property by comparing it with similar properties of the same type and class which have sold recently in the same or competing areas. The analytical processes utilized in determining the degree of comparability between two properties involves judgment as to their similarity with respect to many value factors such as location, date of sale, physical characteristics, and terms of sale. The sale price of those properties deemed most comparable tends to set the value range for the subject property. Further consideration of the comparative data indicates a figure representing the value of the subject property, that is, the probable price at which it could be sold by a willing seller to a willing buyer as of the date of the appraisal. The data involved in the application of this process concerns these comparable properties as well as the subject property, and this data will vary with the type of property. Four categories of data, however, are basic and apply regardless of the type of property. They are: 1. Sales prices of comparable properties. 2. Conditions influencing each sale. Location of each property. 4. Description of land and improvements of each comparable property. HAC14064-OO.wpd Hosch Appraisal & Consulting, Inc. 28 Sales Comparison Approach to Value - Continued Research revealed a number of real estate transactions in the area available for comparison to the improved north portion of subject real estate. Property sales we regard as most pertinent for estimating the subject's value are summarized in the fact chart below. Characteristic differences between a given comparable sale and the subject might require adjustments to increase the reliableness of that sale as an indicator of value for the subject. Elements of comparison which may warrant adjustments include real property rights, financing, conditions of sale, buyer expenditures immediately after purchase, market conditions (time), and various physical characteristics, such as location, zoning, age and condition, building quality/amenities, size, land -to -building ratio, and others. An explanation of adjustments, a comparable sales location map, and a chart demonstrating our adjustment analysis are provided on the following pages. HAC14064-00.wpd Rosch Appraisal & Consulting, Inc. 29 COMPARABLE BUILDING SALES FACT CHART Warehouse Sale Price Land -to- Clear Height/ Per S.F. Sale Location Sale Total GBA Gross Bldg. (Outdoor Total No. (Land Size) Date Age (Office) Ratio Storage?) GBA 1 261 Chester Street, 11/14 1988 34,180 2.97:1 16 ft. $40.96 St. Paul, MN (4,560) (No) (101,495 s.f.) 2 22098 Canton Ct. 7/14 2000 15,329 12.16:1 20 ft. $68.50 Farmington, MN (2,405) (Yes) (186,436 s.f) 3 32611 Northfield Blvd. 12/11 1972/ 31,137 8.56:1 11 ft. $20.71 Northfield, MN 1986 (1,783) (Yes) (266,587 s.f.) 4 6298 Hodgson Road 12/12 1966/ 19,840 18.77:1 11 ft. $66.53 Lino Lakes, MN 1975 (2,005) (Yes) (372,438 s.f.) Sub- 4124 Winnetka Avenue 12/14 1966 48,843 5.00:1 11 ft. ?? ject New Hope, MN (date of (3,000) (Yes) (assumed 244,188s.f.) value) Characteristic differences between a given comparable sale and the subject might require adjustments to increase the reliableness of that sale as an indicator of value for the subject. Elements of comparison which may warrant adjustments include real property rights, financing, conditions of sale, buyer expenditures immediately after purchase, market conditions (time), and various physical characteristics, such as location, zoning, age and condition, building quality/amenities, size, land -to -building ratio, and others. An explanation of adjustments, a comparable sales location map, and a chart demonstrating our adjustment analysis are provided on the following pages. HAC14064-00.wpd Rosch Appraisal & Consulting, Inc. 29 Sales Comparison Approach to Value - Continued Sale #1 - 261 Chester Street, St. Paul, MN Sale #2 - 22098 Canton Court, Farmington, MN I,AAC14064-00.wpd Hosch App -sisal & Consulting, Inc. 30 Sales Comparison Approach to Value - Continued Sale #3 - 32611 Northfield Boulevard, Northfield, MN Sale #4 - 6298 Hodgson Road, Lino Lakes, MN HAC14064-OO.wpd Hosch Appraisal & Consulting, Inc. 31 COMPARABLE IMPROVEMENT SALES MAP HAC14064-OO.wpd Hosch Appraisal & Consulting, Inc. 32 wV lake IW OIk WOIe (ee, &i.K IVMF4 � Ryq,v.lp � � � • L. 1 1 • Y• . AWYafeKR f!i kb N, LwbpKl U �. le Po1Per.9eb nemety H- LA V def Y.end.. L+ AM•renr ��"� ATWDYW txi` 51 Mwheel - -Lie. Nj, L 8 A+IVA. + ��.. CwnRoWs (ae iaeel.aw � kp+ areae Abc Wd cwcaen .(g Wabk*n Pork LbdileaLMK oftw Fr�ry wd>--aa'n C&.._ SN—"1k.1L ke r" M e cw W Mom vNpe 0444W sm'^YK r�xr•.rl., �, C. W sl UM C.,�pp. •, L: Raaerdv w morns: , LElmo 'r C ru „, "KT'"•` Mlnneepolia 1. r IL waenwm aala SlkewPy d u; SEP e4.V" y. x.M.rn `�`� MX1ntTaMra 1'Meaev YYoadhvey - s•.,,e.rx. � '�3 L: tom, V ieo'. r..� .. fdlna u.Wiehd [s!!'�'bee1 • .•.• . _ 7fF4pME Sa.A Rtabid Fifa nr.,reo 4To W"."" 1Gve rarye e+loo-minmm, wgkle. ems. G.4 MarteE ii+✓' shekapee Fnpan tir L7 plwulpd 6kI—lrl Yd e LMt4e f u 1 Amdke $aVlpe tkxmwkUp Fln " V Pelea1011lll l'"e van�y TrkPbelb Epnpnh eMraFlNr#r.y Aypeap7k9P4&Iv �.. I"r L) - � � •. Lelr„VAFe er [rau'h We+� (J' Famhglm ` �• &ekaley Belle PIdIK 7+ Abm d C ,7w'd Iyai (Je• Ir (J r • T'YIIMrgP F.� SIJ•, o • 1, Lev M '# .� M.,OamnY Ir IIS• �. . AJ (A Li & • fG L,, �r ► G e zpaarme cm-, N COMPARABLE IMPROVEMENT SALES MAP HAC14064-OO.wpd Hosch Appraisal & Consulting, Inc. 32 Sales Comparison Approach to Value - Continued Adiustments - Continued Before adjustments for differences, the aforementioned sales indicate a range $20.71 to $68.50 per square foot of gross building area for the subject property. Each of the sales is used as a bus transportation facility, with several sales also including outdoor storage. Sale #1 is a former FedEx ship center that is located along Chester Street, just removed from U.S. Highway #52 in St. Paul. This property is located just south of downtown St. Paul and approximately one block west of the St. Paul downtown airport. The improvements are concrete construction and include approximately 13.3% office space. The improvements were used as a former FedEx ship center and were purchased by the St. Paul School District as a bus transportation facility. The interior does not have dedicated repair or wash areas, but multi-purpose work areas. The building was constructed in 1988 and it was in average to good condition on the sale date. Sale #2 is a 15,329 square foot building (15.7% office) that is located in an industrial area of southeastern Farmington. The steel and brick exterior building was constructed in 2000 and it was in good condition on the sale date. This parcel was formerly used as a truck repair facility. The site contains outdoor storage but does not have dedicated wash areas. Sale #3 is a 31,137 square foot facility comprised of three buildings that are located along Northfield Boulevard in Northfield. The real estate has historically been used as a bus transportation facility, including storage, repair, wash and offices. The office portion includes 1,783 square feet or 5.7% of the building area. The steel buildings were constructed in 1972 and 1986, and it was in fair condition on the sale date. Sale #4 is a 19,840 square foot building located along Hodgson Road in Lino Lakes. The real estate has historically been used as bus transportation facility, and it includes repair, wash and storage areas as well as outdoor storage and 10.1 % office finish. The two buildings were constructed in 1966 and 1975 and were in average condition on the sale date. The sales had prices of $40.96, $68.50, $20.71 and $66.53 per square foot for Sales #1, #2, #3 and #4 respectively. Overall, Sales #1, #2 and #4 are most similar to the subject property in use, age, building quality and amenities and location. Sales #2 and #4 also include outdoor storage yards, with Sale #2 having a similar amount of storage to the subject property and Sale #4 having significantly more storage than the subject property. The majority of the subject's storage area is paved which is similar to Sale #4. The storage area of Sale #2 is gravel. Before adjustments, Sales #1, #2 and #4 fall in the narrowed range of $40.96 to $68.50 per square foot of gross building area. HAC14064-00.wpd Hosch Appraisal & Consulting. Inc. 33 Sales Comparison Approach to Value - Continued Adiustments - Continued When considering specific adjustments that would apply to Sale 41, the sale indicates a market value for the subject property that is above the price of Sale #1 of $40.96 per square foot. Sale #1 is of a similar building quality, but Sale #1 does not have the outdoor storage component, has a significantly lower land -to -building ratio when compared to the subject and does not have dedicated repair or wash areas. Sale #2 indicates a market value for the subject property that is lower than the price of Sale #2 of $68.50 per square foot. Despite the inferior location of this sale, Sale #2 has a generally similar quality of construction; however, this building was constructed in 2000 and is approximately 34 years newer than the subject which is a vastly superior trait. Sale #4 indicates a market value for the subject property that is below the price of Sale #4 of $66.53 per square foot. Sale #4 has an inferior age and quality of improvements when compared to the subject, but the land - to -building ratio of Sale #4 is significantly higher when compared to the subject with the majority of this area paved for outdoor storage. Sales #1, #2 and #4 are smaller in size when compared to the subject. Smaller buildings tend to sell for higher prices per square foot when compared to larger buildings. Therefore, after reconciling the adjustment process, it is our opinion that the subject property has a market value between $50 and $55 per square foot of building area, say $52.50 per square foot, which is slightly below the middle of the range of Sales #1, 42 and #4, calculated as follows: 48,843 square feet @ $52.50 per square foot $2,564,258 Plus Excess Land: $470,000 Total Estimated Value via the Sales Comparison Approach to Value, Including Excess Land: $3,034,258 Rounded to: $3,035,000 HAC14064-OO.wpd Hosch Appraisal & Consulting, Inc. 34 REASONABLE EXPOSURE TIME Exposure time can be defined as the estimated length of time 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. Reasonable exposure time can differ from actual exposure time. For example, a property may have been exposed at $1,000,000 for two years, which informed market participants considered unreasonable. Then the owner lowered the price to $900,000 and began receiving offers, resulting in a transaction at $800,000 six months later. Although the actual exposure time was 2.5 years, the reasonable exposure time at a value range of $800,000 to $900,000 would be six months. We have researched exposure time for properties similar to the subject property by reviewing information gathered through sales verification and having discussions with various market participants (such as brokers, buyers, sellers, etc.). Summary After reviewing the national and local data, and having discussions with brokers in the marketplace, it is our opinion that a reasonable exposure time for the subject property at our estimated market value would be up to 12 months. HAC14064-OO.wpd Hosch Appraisal & Consulting, Inc. 35 QUALIFICATIONS OF NATHAN J. BROOBERG Biographical Data and Education Raised in Fergus Falls, Minnesota. Graduated from Fergus Falls Senior High School. Bachelor of Arts degree, Gustavus Adolphus College, St. Peter, Minnesota, in Biology and Geography. Successfully completed the following real estate courses and seminars: Eminent Domain and Condemnation Business Practices and Ethics Real Estate Principles Real Estate Practices Standards of Professional Practice General Applications Professional Qualifications or Associations 14th Annual Real Estate Trends Seminar Residential Construction Case Studies in Highest and Best Use Income Capitalization Advanced Sales Comparison & Cost Approaches 2012-13 National USPAP Update Course Certified General Real Property Appraiser Licensed Appraiser— State of Minnesota, License #20249946, Expires August 31, 2016 Professional Experience Hosch Appraisal & Consulting, Inc., Minneapolis, Minnesota Real Estate Appraiser March 2005 — present Shenehon Company, Minneapolis, Minnesota Real Estate Appraiser February 2001 — March 2005 Duties and Responsibilities: Prepare professional valuations and market analysis of real estate, business enterprises, and intangible property rights. Appraisal assignments have involved numerous types of commercial, multiple family, industrial, and special purpose properties. These assignments have included mortgage financing, condemnation, tax abatement proceedings, investment counseling, potential sales and purchases, lease and rental analyses, charitable donations, internal management decisions, allocation of purchase price, and insurance indemnification. Partial Client List Accent Homes Allina Hospitals and Clinics Ames Construction Anchor Bank Babcock Neilson Mannela & Klint Bankwest Boundary Waters Bank BPK&Z Bremer Bank Briggs and Morgan Builders Development & Finance Capmark Finance, Inc. City of Maplewood City of New Hope City of Shoreview Ducks Unlimited Garith Anderson Trucking Gregerson, Rosow, Johnson & Nilan, Ltd. Hajek & Beauclaire, LLC Henson & Efron Lindquist & Vennum Malkerson Gunn Martin LLP Messerli & Kramer P.A. Metropolitan Airports Commission (MAC) Minnesota Dept of Natural Resources (DNR) Minnesota Dept. of Transportation (Mn/DOT) Minnwest Bank Moss & Barnett MPCA North Haven Church Oppenheimer Donnelly & Wolff LLP Osceola Medical Center Peterson, Peterson & Associates, PLC Pheasants Forever Pipestone County Rosemount National Bank Roseville Area Schools Sioux Steel Company Sovereign Bank State Bank of Hamel Swift County The Business Bank Three Rivers Park District URS Corporation U.S. Bank U.S. Department of the Interior U.S. Small Business Association Vic's Crane & Heavy Haul Wells Fargo/RETECHS Wiley Enterprises 36 QUALIFICATIONS OF STEPHEN T. HOSCH, MAI Biographical Data and Education Born and raised in Columbia Heights, Minnesota, and graduated from Columbia Heights High School. Attended St. Cloud State University and graduated with a Bachelor of Science degree in Real Estate with an emphasis in appraisal. Successfully completed numerous real estate appraisal courses offered by the Appraisal Institute, as well as attended several seminars covering specialized appraisal topics, some of the more recent of which are highlighted below: IREM - 2013 Annual Forecast - January 2013 13`s Annual Real Estate Trends Seminar - May 2011 7`h Annual Land Development Conference - May 2011 IREM - 2010 Annual Forecast - January 2010 Annual RERC - Industry Forecast: 2009 - January 2009 4`h Annual Minnesota Land Development Conference - May 2008 10`h Annual Real Estate Trends Seminar - May 2008 Professional Qualifications or Associations Annual RERC - Industry Forecast: 2007 - January 2007 Eminent Domain - November 2006 Land Development & Redevelopment Conference - May 2006 Annual RERC-Industry Forecast: 2006 - January 2006 22id Annual Real Estate Institute - November 2004 Mortgage Foreclosures in Minnesota - March 2004 Certified General Real Property Appraiser Licensed Appraiser - State of Minnesota, License #4002903, Expires August 31, 2015 Member - Appraisal Institute (MAI) Holding MAI Designation The MAI membership designation is held by appraisers who are experienced in the valuation and evaluation of commercial, industrial, residential and other types of properties, and who advise clients on real estate investment decisions. MAI members are the preferred choice among lawyers to serve as expert witnesses in trials, hearings, and other litigation matters. The Appraisal Institute conducts a mandatory program of continuing education for its designated members and also requires that they comply with the requirements of the Code of Professional Ethics & Standards of Professional Appraisal Practice of the Appraisal Institute. MAI's and RM's who meet the minimum standards of this program are awarded periodic educational certification. I am currently certified under the Appraisal Institute education program through December 31, 2016. Member - Institute of Business Appraisers (IBA) Qualified as a court-appointed commissioner in Wright County and Hennepin County Professional Experience Hosch Appraisal & Consulting, Inc., Minneapolis, Minnesota President, February 2005 - present Duties and Responsibilities: Prepare professional valuations and market analysis of real estate, businesses and intangible property rights. Real estate assignments involve numerous types of commercial, multiple family, industrial, and special purpose properties as well as land subdivisions, bulk acreage and proposed developments. Business valuation and consulting assignments have included both operating and holding companies. The specific purposes of these assignments have included highest and best use studies, mortgage financing, condemnation, tax abatement proceedings, feasibility analysis, investment counseling, potential sales and purchases, lease and rental analyses, bankruptcy proceedings, charitable donations, internal management decisions, special assessment appeals, gift tax, and allocation of purchase price. Court experience involves testifying at commissioner hearings, depositions and trials, preparation of affidavits, and providing litigation support. Qualified as a court-appointed commissioner in Hennepin and Wright Counties. Shenehon Company, Minneapolis, Minnesota Senior Vice President - Director of Real Estate, November 2003 - January 2005; Shareholder Senior Vice President - Co -Director of Real Estate, September 2002 - November 2003; Shareholder Vice President - Co -Director of Real Estate, April 2001 - September 2002; Shareholder Appraiser/Analyst from June 1991 to March 2001 37 QUALIFICATIONS OF STEPHEN T. HOSCH, MAI - CONTINUED Author/Co-Author or Guest Speaker of: "Appraisal Issues in Litigation," Various Minneapolis Law Firms, December 2007 "Creative Opportunities in the Current Real Estate Market," Valuation Viewpoint, Summer 2004 "Business Components and the Valuation of Real Estate," Valuation Viewpoint, Winter 2004 "Challenging Issues in Commercial and Industrial Valuation," Commercial Real Estate Financing Conference, March 13, 2002 "Market Valuation & Appraisals," Minnesota Commercial Association of Realtors, January 22, 2002 "Fundamentals of Special Assessments in Appraisal," Valuation Viewpoint, Spring 1999 "A Perspective on Subdivision Appraisal," Valuation Viewpoint, Winter 1997 Partial Client List Accent Homes Malkerson Gunn Martin LLP Allied Waste Industries McGrann Shea Anderson Carnival Straughn & Lamb Allina Hospitals & Clinics Merchants Bank, N.A. Ames Construction Messerli & Kramer P.A. Anchor Bank Metropolitan Airports Commission (MAC) BANKWEST Minnesota Department of Transportation (Mn/DOT) Bard and Bard, Ltd. Minnesota Department of Natural Resources (DNR) BPK&Z Minnwest Bank Best & Flanagan, LLP Moss & Barnett Bremer Bank MPCA Bridgewater Bank Olympic Steel, Inc. Briggs and Morgan Oppenheimer Donnelly & Wolff LLP Boundary Waters Bank Pace Realty Advisors, LLC Builders Development & Finance Peterson, Fram & Bergman, P.A. Capmark Finance, Inc. Peterson, Peterson & Associates, PLC City of Arden Hills Pheasants Forever City of Eagan Pinnacle Commercial Capital City of Fargo Pipestone County City of Maplewood Premier Bank City of New Hope Ramsey County City of Osseo Rosemount National Bank City of Shoreview Roseville Area Schools City of Victoria Sherburne County Fabyanske, Westra & Hart Sioux Steel Company Falcon National Bank SouthWest Transit Fargo Public School District No. 1 Sovereign Bank First National Bank of Elk River Speedway SuperAmerica First Resource Bank State Bank of Hamel Fredrikson & Byron P.A. Stearns Bank Gopher Resources Swift County Gregerson, Rosow, Johnson & Nilan, Ltd. The Business Bank Grossman Investments, LLC Three Rivers Park District Hajek & Beauclaire, LLC United Prairie Bank Harstad Development University of Minnesota Hennepin County U.S. Bank Henson & Efron U.S. Small Business Administration Hinshaw & Culbertson LLP Village Bank Home Federal Savings Bank Warchol Law Office James M. Neilson, Attorney at Law Wells Fargo/RETECHS Kraus -Anderson Realty Co. White Castle System, Inc. Larkin Hof man Daly & Lindgren Wiley Enterprises LeVander, Gillen & Miller, P.A. Winthrop & Weinstine Lincoln National Life Insurance Co. Lindquist & Vennum APPRAISAL REPORT Office Building 4148 Winnetka Avenue New Hope, Minnesota December 1, 2014 HAC 14064-01 Copyright 0 2005-2014 by Hosch Appraisal & Consulting, Inc. All rights reserved. Appraised & Consulting, a1 � z c a December 17, 2014 Ms. Valerie Leone, City Clerk City of New Hope 4401 Xylon Avenue North New Hope, MN 55428 RE: APPRAISAL REPORT OF THE OFFICE BUILDING LOCATED AT 4148 WINNETKA AVENUE IN NEW HOPE, MINNESOTA Dear Ms. Leone: As requested by you, we are providing you with an appraisal of the above -referenced property to arrive at a reliable estimate of the market value of the fee simple interest in the subject property. The following Appraisal Report is intended to comply with the reporting requirements set forth under within the Uniform Standards of Professional Appraisal Practice. This appraisal report has been written for the intended use of the City of New Hope and its authorized representatives, for purposes of internal decision making and potential purchase. Hosch Appraisal & Consulting, Inc. has not previously provided any services, appraisal or otherwise, on the subject property within the three years prior to the acceptance of this assignment. The depth of discussion contained in this report is specific to the needs of this client and for the intended use only. Hosch Appraisal & Consulting, Inc. is not responsible for the unauthorized or improper use of this report. We have made a complete inspection of the subject property and have fully identified the real estate in our written report. Additional supporting information may also be supplied within the Addenda of this report. After careful consideration of the many factors influencing value, it is our opinion that the subject property has an estimated market value, as of the December 1, 2014, of: ONE MILLION ONE HUNDRED FIVE THOUSAND DOLLARS ---------$1,105,000 HI 72 Zealand Avenue North Minneapolis, MN55316 Phone 6121331-1688 Fax 7631208-1670 www hoschappraisal. com Ms. Valerie Leone December 17, 2014 Page Two This appraisal does not include personal property, equipment, fixtures, or intangible items that are not real property nor does this appraisal take into consideration any going concern value. It is our opinion that a reasonable exposure time of up to 12 months is appropriate for the subject real estate at our estimated market value. Please refer to the Reasonable Exposure Time section of this appraisal for details. This report is written with the intent of meeting the reporting requirements of the Uniform Standards of Professional Appraisal Practice, 2014-2015 Edition (effective January 1, 2014). The appraisal has also been prepared in conformity with the requirements of the Code of Professional Ethics & Standards of Professional Appraisal Practice of the Appraisal Institute. The undersigned appraisers certify that they have investigated information believed to be pertinent to the valuation of the property, and to the best of their knowledge and belief the statements and opinions expressed herein are correct and reasonable, subject to the limiting conditions set forth herein. Very truly yours, Hosch Appraisal & Consulting, Inc. Nathan J. Brooberg Senior Appraiser Certified General Real Property Appraiser MN License #20249946 Stephen T. Hosch, MAI Certified General Real Property Appraiser President Minnesota License #4002903 CERTIFICATION I certify that, to the best of my knowledge and belief: L I have taken into consideration the factors that have an impact on value in my development of the estimate of market value under continued use in the appraisal report. I have not knowingly withheld any significant information from the appraisal report and I believe, to the best of my knowledge, that all statements and information in the appraisal report are true and correct. 2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, unbiased professional analyses, opinions, and conclusions. 3. I have not provided services, appraisal or otherwise, regarding the subject property within the three years immediately preceding the acceptance of this report. 4. I have no current or prospective interest in the property that is the subject of this report, and I have no personal interest or bias with respect to the parties involved. 5. My compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event. 6. I performed this appraisal in conformity with the Uniform Standards of Professional Appraisal Practice that were approved and published by the Appraisal Standards Board of The Appraisal Foundation in 2014 effective January 1, 2014. I acknowledge that an estimate of a reasonable time for exposure in the open market is a condition in the definition of market value and the estimate I have developed is consistent with the market. 7. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics & Standards of Professional Appraisal Practice of the Appraisal Institute, which include the Uniform Standards of Professional Appraisal Practice. 8. Nathan J. Brooberg and Stephen T. Hosch have both made a personal inspection of the site and improvements that are the subject of this report. 9. No one provided significant professional assistance to the person(s) signing this report. 10. As of the date of this report, Stephen T. Hosch has completed the requirements under the continuing education program of the Appraisal Institute. 11. This appraisal assignment was not based on a requested minimum valuation or specific valuation for approval of a loan. Appraisal fees are in no way contingent upon values concluded by the appraisal firm. 12. Hosch Appraisal & Consulting, Inc. and/or the appraisers of the subject property have previously prepared appraisal reports of office properties. Therefore, I have the knowledge and experience to meet the competency provision of the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation. 13. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. The appraiser will not disclose the contents of the appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice. Nathan J. Brooberg Certified General Real Property Appraiser MN License #20249946 Stephen T. Hosch, MAI President MN License #4002903 Copyright © 2005-2014 by Hosch Appraisal & Consulting, Inc. All rights reserved. CONTINGENT AND LIMITING CONDITIONS The value estimates and conclusions in the appraisal are made subject to these assumptions and conditions: 1. This appraisal report has been written for the intended use of the City of New Hope, for purposes of internal decision maldng and potential purchase. Possession of this report, or a copy thereof, does not carry with it the right of publication (either in whole or in part), nor may it be used for any purpose other than the one stated in the Letter of Transmittal and the Purpose of the Report, without the express, written consent of the appraiser and client. Authorized copies of this report will be signed in blue ink by the appraiser(s). Unsigned copies or copies not signed in blue ink should be considered incomplete. All unauthorized or incomplete copies of this report should also be considered confidential, and as such, must be returned, in their entirety, to Hosch Appraisal & Consulting, Inc. 2. This property is appraised in fee simple, assuming responsible ownership and management, unless otherwise indicated. This appraisal recognizes that available financing is a major consideration by typical purchasers of income-producing real estate in the market, and the appraisal assumes availability of financing to responsible and sufficiently substantial purchasers of the property in amounts similar to those indicated or implied in this report. 3. Hosch Appraisal & Consulting, Inc. and/or its employees are not qualified to render expert opinions regarding structural issues, water damage, environmental assessments (such as mold), engineering/mechanical issues, ADA and/or building code compliance, land planning, architectural expertise or soil conditions. If requested, Hosch Appraisal & Consulting, Inc. will recommend qualified experts in these fields to assist the client and/or the appraisal process. 4. The property has been appraised as free and clear of all indebtedness, under responsible ownership and good management unless otherwise set forth in the appraisal. 5. No title search has been made, and the reader should consult an appropriate attorney or title insurance company for accurate ownership data. Unless title problems are specifically brought to our attention, Hosch Appraisal & Consulting, Inc. assumes that the title is good and marketable and therefore, will not render any opinions about the title. 6. The information contained in this report is not guaranteed, but it has been gathered from reliable sources. The appraiser certifies that, to the best of his/her knowledge and belief, the statements, information, and materials contained in the appraisal are correct. 7. No responsibility is assumed for matters which are legal in nature. It is assumed (without survey) that the improvements are located within the legally described property and that the buildings comply with all ordinances except as noted. The furnished legal description is assumed to be correct. It is assumed that the utilization of the land and improvements is within the boundaries or property lines of the property described and that there is no encroachment or trespass unless noted in the report. S. No analysis of soil conditions was required and none has been made. Unless specifically brought to our attention, all value estimates in this report assume stable soil, and that any necessary soil corrections are to be made at the seller's expense. 11 Contingent and Limiting Conditions - Continued Estimates herein are based on the present status of the national business economy and the current purchasing power of the dollar. The forecasts, projections, or operating estimates contained herein are based upon current market conditions, anticipated short-term supply and demand factors, and a continued stable economy. These forecasts are, therefore, subject to changes in future conditions. 10. A plat map or site survey may have been provided in this report to assist the reader in visualizing the general location and boundaries of the property. We have made no survey of the property and assume no responsibility for its accuracy. We may have provided a sketch in the appraisal report to show approximate dimensions of any improvements to assist the reader of the report in visualizing them and understanding our determination of their size. Surveys, plans and sketches provided may not be complete or drawn exactly to scale. 11. The market value herein assigned is based on conditions which were applicable at the time the property was inspected and may vary at a later date. 12. Hosch Appraisal & Consulting, Inc. employees shall not be required to prepare for or appear in court or before any board or governmental body by reason of the completion of this assignment without pre -determined arrangements and agreements. 13. Information in the appraisal relating to comparable market data is more fully documented in the confidential file in the office of the appraiser. All studies and field notes will be secured in our files for future reference. 14. The distribution of the total valuation in this report between land and improvements applies only under the reported highest and best use of the property. The allocations of value for land and improvements must not be used in conjunction with any other appraisal and are invalid if so used. 15. It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless a nonconformity has been stated, defined, and considered in the appraisal report. It is assumed that there is full compliance with all applicable federal, state, and local environmental regulations and laws unless noncompliance is stated, defined, and considered in the appraisal report. It is assumed that all required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state, or national government or private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is based. 16. We are assuming: 1) that any asbestos or urea -formaldehyde that may have been used in the building materials in the property are in compliance with current statutes and regulations and do not present a health hazard to the public; 2) that lead-based paint has not been used in a manner that would cause health problems for the public using the property; and 3) that the property has not been the site for the dumping of hazardous substances nor is subject to radon gas. If any or all of the above conditions exist, this could have a bearing on the market value of the property. IT We have noted in the appraisal report any adverse conditions (such as, but not limited to, hazardous wastes, toxic substances, etc.) observed during the inspection of the subject property (or learned of) during the normal research involved in performing the appraisal. Unless otherwise stated in the appraisal report, we have no knowledge of any hidden or unapparent conditions of the property or adverse environmental conditions (including the presence of hazardous wastes, toxic substances, etc.) that would make the property more or less valuable, and have assumed that there are no such conditions. We make no guarantees or warranties, express or implied, regarding the condition of the property. (Hosch Appraisal & Consulting, Inc. will not be responsible for any engineering or testing that might be required to discover whether such conditions exist.) Because we are not experts in the field of environmental hazards, the appraisal report must not be considered as an environmental assessment of the property. iii Contingent and Limiting Conditions - Continued 18. The value indication provided in this appraisal report is not contingent upon this building complying with the Americans with Disabilities Act (ADA) which became effective January 26, 1992. A handicap analysis has not been completed for this building and has not been considered in the overall value conclusion. The market value of the property could change substantially if alterations are required to comply with ADA regulations. 19. The client agrees that Hosch Appraisal & Consulting, Inc. does not by performing the services rendered, assume, abridge, abrogate, or undertake to discharge any duty of client to any other entity. 20. Any use of the appraisal report, by the client, is conditioned upon payment of all fees in accordance with the agreed terms. 21. In consideration for performing the services rendered at the fee charged, Hosch Appraisal & Consulting, Inc. expressly limits its liability to five (5) times the amount of the fee paid or $50,000, whichever is less. Hosch Appraisal & Consulting, Inc. expressly disclaims liability as an insurer or guarantor. Any persons seeking greater protection from loss or damage than is provided for herein, should obtain appropriate insurance. The client shall indemnify and hold harmless the appraisal firm and its employees, against all claims by any third party or any judgement for loss or damage relating to the performance or non-performance of any services by Hosch Appraisal & Consulting, Inc. 22. Unless specifically brought to the appraiser's attention, we will assume that there are no hidden or unexpected conditions of the asset to be appraised that would adversely affect or enhance the value. 23. In the future, if Hosch Appraisal & Consulting, Inc. is compelled to produce documents or testify with regard to work performed, the client shall reimburse us for all costs and expenses incurred. 24. In the event of a dispute involving interpretation or application of this agreement, the parties agree that this agreement shall be governed under the laws of the State of Minnesota. 25. The conclusion of value reached by Hosch Appraisal & Consulting, Inc. is based upon the assumption that there are no hidden or unapparent conditions of the property that might have an impact upon buildability. It is recommended that due diligence be conducted through the local building department or municipality to investigate buildability and whether the property is suitable for development into its highest and best use. Hosch Appraisal & Consulting, Inc. makes no representations, guarantees or warranties. iv SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS Type of Property: Location: Zoning: Date of Inspection: Effective Date of Appraisal: Date of the Report: Property Rights Appraised: Land Size: Gross Building Size: Date of Construction: Final Value Estimate: Reasonable Exposure Time: Office 4148 Winnetka Avenue, New Hope, Minnesota CC - City Center December 1, 2014, with subsequent informal inspections December 1, 2014 December 17, 2014 Fee Simple Interest 1.83 acres (79,748 square feet) Per Public Records 20,100 square feet (per Ekberg -Petri, Inc.) •O: $1,105,000 Up to 12 months v TABLE OF CONTENTS Item Letter of Transmittal Page No. Certification.............................................................. i Contingent and Limiting Conditions .............. ... . ...................... . .. ii Summary of Important Facts and Conclusions. .. ................... v General Location Map......................................................1 Purpose of the Appraisal .................................................... 2 Intended Use of the Appraisal .................. . ............................. 2 Intended User(s) of the Appraisal. ............................................ 2 Scope of the Appraisal ...................... . ............................... 2 Property Rights Appraised...................................................3 Definition of Market Value .................................................. 4 Dates of Importance........................................................4 Brief Area Analysis........................................................ 5 Legal Description..........................................................7 Owner of Record..........................................................7 Real Estate Taxes and Special Assessments Analysis................ .............. 8 Zoning..................................................................9 Flood Hazard Information................................................... 9 Property History...........................................................9 Subject Property Description .............................................. . . 10 Subject Photographs.. . ................... 13 Highest and Best Use......................................................18 The Valuation Process .................................................... 20 Sales Comparison Approach to Value ......................................... 22 Reasonable Exposure Time.................................................30 Qualifications of the Appraisers . ............................................ 31 - id -TRIP IAN SAINT PAl'1 JdWKFAP111-; .. � •._ —. T ! _!'!. 1. ! �..� � I_ -. _ [%' _ A • r ,Tsl •� � . -_ 111111 _ NOYYITEM \I %f +� Y '.,4MY,4g54a ffffJJJJr,' -SE" - IAY54Y Er,MnM 4� MV1p1 � MMi � W,6Y � MANE! n •� WtR/9R0R CW[Nlu B R'ItaOsll'1!. 1 OOMI n u.¢2 I. Ntiraurw .� � r t� m,n�ns ,� ,... r/E 1Ct 4.? 'y { �RosErn 4�� �_ _/~ r- . .. .__...ter.✓ 1. .w. I..�q ewliErl4�r� •�. �I N. 1 wnewen� ' — � , 5ae.wAc,uS -r�l � X X 1 r ,ni r 1, C ,vleM yam- _--`. n,u..i, r aoo,u4Eso„ '^,��•• ';,, sa,t� y _ , F ,.,r N• NOW _ fes' i � ',� 6yF �.•'w � I i GENERAL LOCATION MAP HAC14064-Ol.wpd Hosch Appraisal & Consulting, Inc. 1 PURPOSE OF THE APPRAISAL The purpose of this report is to arrive at a reliable estimate of the market value of the fee simple interest in the real estate for the sole use of our client, the City of New Hope as well as authorized representatives for purposes of internal decision making and potential purchase. INTENDED USE OF THE APPRAISAL The intended use of the appraisal is for internal decision making and possible purchase of the subject real estate by the City of New Hope. INTENDED USER(S) OF THE APPRAISAL The intended user of this appraisal report is our client, the City of New Hope, as well as authorized representatives, for purposes of internal decision making and potential purchase. SCOPE OF THE APPRAISAL This appraisal analysis has not been limited in scope, and was based upon the generally accepted appraisal practices in order to comply with current USPAP Standards. Within this valuation analysis, we have completed the following functions and procedures. (Additional details of our research are included throughout the following pages of this report.) - Made an interior and exterior inspection of the subject property and reviewed building measurements provided by Ekberg -Petri, Inc.; - Familiarized ourselves with the neighborhood and analyzed the surrounding property trends; - Considered and reviewed the historical market, taking into account stability and/or changes; - Based upon our market research and analysis, we have completed the highest and best use analysis for the subject property; - Researched comparable improved sales and analyzed their applicability to the subject, as a means of estimating the market value via the sales comparison approach to value; - Considered market rental rates applicable to the subject property to gain a general understanding of potential annual market rent for the subject property, but did not complete the income capitalization approach to value as credible results can still be obtained by completing the sales comparison approach; HAC14064-01.wpd Hosch Appraisal & Consulting, Inc. 2 Scove of the Appraisal - Continued - Considered but did not complete the cost approach to value due to the inherent difficulties of estimating functional and economic obsolescence given the age of the building and considering that credible results can still be obtained by completing the sales comparison approach; - Developed an opinion of reasonable exposure time for the subject property to effect a sale at our estimated market value. Sources utilized to obtain this information include the property owner, information contained in our office files, City of New Hope, School District #281 and Hennepin County public records and discussions with other real estate experts, including brokers, buyers, sellers, assessors, and other appraisers. PROPERTY RIGHTS APPRAISED The subject real estate will be appraised by estimating the market value of the fee simple interest of the real estate. For use in this report, the market value of the fee simple interest in the real estate is subject to the following definition contained on Page 78 of The Dictionary of Real Estate Appraisal, Fifth Edition: A fee simple estate implies absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat. HAC14064-Ol.wpd Hosch Appraisal & Consulting, Inc. 3 DEFINITION OF MARKET VALUE Market value as utilized in this appraisal report conforms to the following definitions obtained from Page 122 of The Dictionary of heal Estate Apps-aisal, Fifth Edition, published by the Appraisal Institute. The most probable price that the specified property interest should sell for in a competitive market after a reasonable exposure time, as of a specified date, in cash, or in terms equivalent to cash, under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably, and for self-interest, and assuming that neither is under duress. The corresponding definition, as provided on Page A-75 in the Uniform Standards of Professional Appraisal Practice, 2014 - 2015 Edition, has been agreed upon by agencies that regulate federal financial institutions in the United States and is provided below. The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently 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; 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; 4. payment is made in terms of cash in U.S. 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. We have developed an opinion of reasonable exposure time within this appraisal. Please refer to that section of the report for details. DATES OF IMPORTANCE The market value for the subject property is estimated as of December 1, 2014. The date of inspection was December 1, 2014 with subsequent informal visits. The date of the report is December 17, 2014. HAC14064-O1.wpd Aosch Appraisal & Consulting, Inc. 4 BRIEF AREA ANALYSIS The subject property is located within the city of New Hope, an inner -ring suburb just northwest of Minneapolis. From its agricultural beginnings in the early 1900's to incorporation as a city in 1953, New Hope has evolved into a community of just over 20,000 residents. The city is located along U.S. Highway #169, which runs along the western border and provides the main access to Interstate Highway #694 to the north and State Highway #55 to the south. Many other county roads and local avenues serve as convenient routes throughout the city as well. After rapid expansion throughout the 1960's, the population of New Hope has dwindled for a number of years, decreasing by 2.6% between 2000 and 2010, with a slight increase predicted through 2012. The median age of the city's residents is 39. The number of households also declined by 2.7% between 2000 and 2010. Median household income increased by 6.5% to $49,833 in that time period, suggesting a sufficient supply of employment opportunities within New Hope and the nearby metropolitan area. The city is home to 420 businesses which provide employment opportunities to local residents. Public School District #281 is the largest employer in the city, providing 2,200 jobs. In addition, there are numerous jobs available in health care, distribution and manufacturing, and ample employment opportunities within commuting distance in the Twin Cities area. A summary of New Hope's demographic statistics is displayed in the chart below. NEW HOPE DEMOGRAPHIC STATISTICS -1990 TO 2012 % Change 1990 2000 2010 2000-2010 Estimated 2012 Population 21,853 20,873 20,339 -2.6% 20,436 Households 8,507 8,665 8,427 -2.7% 8,437 Median Household Income $36,096 $46,795 $49,833 6.5% $51,593 Source: U.S. Census * 2010 Estimated Income from the 2010 American Community Survey, 2012 Estimates from the 2012 American Community Survey The subject neighborhood is predominately commercial in nature with some office and quasi - industrial development as well. Businesses/uses located in the subject neighborhood include: Applebee's, McDonald's, Taco Johns, Life Time Fitness, Pioneer Dental, GNC, Walgreen's, Caribou Coffee, Country Kitchen, Goodyear Tire and School District #281 officesibus garage. The neighborhood appears stable with limited land remaining for development. The neighborhood can be most conveniently accessed by 42nd Avenue North from the east or west and Winnetka Avenue from the north or south. HAC14064-01.wpd Hosch Appraisal & Consulting, Inc. NOW, I law tork el. rLml Brooklyn LU Lit L , L Grove A Wid Ave N 610 take P49WNO Pei* Cry3fal Airpwl LLI N.take N z Y filth Aw, N 31 L L dArk N d�Ah An N OA4A�N 411., AWN 411th A" N E9 crystal LI! 1� flabbinsAile ,42. Idlkve 4 C.Mmy A" Q 36th A,. NMhAw 32.,dAWN NU, emm , al " lei ou(h Ok QO; Medical Center Lu w W ft'"'Vw*y Are ISA rfLLog N Goldw, Valley WAR NOW, B LI I Chh A -f N roll "foe nw— a CITY MAP HAC14064-01.wpd Hosch Appraisal & Consulting, Inc. LEGAL DESCRIPTION The following legal description was provided to us by Hennepin County: Lot 8 Auditor's Subdivision No. 324 Hennepin County, MN OWNER OF RECORD According to public records, the subject property is currently owned by Independent School District #281. HAC14064-01.wpd Hosch Appraisal & Consulting, Inc. 7 ESTATE TAXES AND SPECIAL ASSESSMENTS ANALYSIS Real estate taxes in Minnesota are payable either in one lump -sum payment or can be paid in two installments which are due on May 15 and October 15. The annual real estate tax charge is based on the assessor's estimated market value as of January 2 of the prior year. The following sections will provide current real estate taxes and assessor's estimated market value(s) for the subject property which we have identified by property identification number (PID). Real Estate Tax Data Real Estate Tax Data (Payable 2014) PIDs I Base Tax Specials Total Tax 17-118-21-23-0002 $0.00 $0.00 $0.00 The subject real estate is considered tax-exempt. Assessor's Estimated Market Value Assessor's Estimated Market Value (Payable 2014) PIDs Land Value Building Value Total Value 17-118-21-23-0002 $0 $0 $0 The subject property is considered tax-exempt. The assessor has not placed an Assessor's Estimated Market Value on the subject. Special Assessment Information There were no special assessments found in the course of this analysis. HAC14064-01.wpd Hosch Appraisal & Consulting, Inc. 8 ZONING The subject property is located within the CC - City Center in the city of New Hope. The purpose of this district "is to encourage a mixture of residential, commercial, office and civic uses in the city center area to enhance its function as the heart of the community." General permitted uses in the CC - City Center include: mixed-use residential and commercial, community centers, government buildings, essential services, public parks, recreation facilities, clinics, financial services, grocery, hospitality businesses, hotel, office, personal service, restaurant, retail, service and auto parking among other uses. The current use of the subject property as an office is a permitted use in the city of New Hope. The subject is guided for mixed use in the comprehensive plan with the City open to a number of potential uses of the subject site if vacant in the future according to the Community Development Specialist for New Hope with an emphasis on higher density and commercial and/or multi -family development. We assume that the current zoning will exist into the foreseeable future, and at this time no major changes are anticipated for the subject property's area. FLOOD HAZARD INFORMATION According to the Flood Insurance Rate Map (FIRM), the subject property is located in Zone X. Zone X corresponds to an area of minimal flooding. This information is found on Community -Panel Numbers 27053CO192E and 27053C0194E, dated September 2, 2004. PROPERTY HISTORY According to public records, the subject property is currently owned by Independent School District #281. There is not a lease in place on the subject property as it is owned and occupied by Independent School District #281. We are not aware of any other material property history items that have occurred in the five years preceding the date of valuation. HAC14064-01.wpd Hosch Appraisal & Consulting, Inc. 9 SUBJECT PROPERTY DESCRIPTION The subject property consists of a generally rectangular 1.83 acre land parcel that is developed with a three-story office building. The site is located at 4148 Winnetka Avenue which is on the southeast corner of Winnetka Avenue and 42nd Avenue North. The site has good visibility from both roadways. Direct access to the site is provided by full -movement access points along both roadways. The site is generally level, at grade with adjacent roadways and soils are assumed stable. The parking lot appears to be in average condition. The improvements constructed on the subject property consist of a single -tenant office with an above ground building area of 20,100 square feet per Ekberg -Petri, Inc. as well as an additional basement area consisting of approximately 17,632 square feet. An elevator provides access to all floors. The office includes a reception/waiting area, office areas, conference areas, substantial basement storage, mechanical room, kitchen and break room. A separate receiving dock/loading area is located south of the main improvements. This receiving dock/loading area is attached to the main building via the basement with a freight elevator running between the main floor and basement. The building was originally constructed in 1968 by Independent School District #281 with limited renovation of the improvements since. The improvements are in average condition overall with no items of deferred maintenance observed or brought to our attention during the inspection. The improvements consist of poured in place and concrete block construction with a built-up rubber membrane roof covered in rock. External walls are brick and exposed aggregate. Internal finishing of the office areas includes: carpeted and tiled floor, 2x2 acoustical tile ceiling, painted sheetrock walls and recessed fluorescent lighting. The reception area includes wainscoting and painted sheetrock walls, exposed concrete ceiling and tile flooring. The basement finishing includes painted exposed concrete walls, some painted sheetrock walls, exposed and recessed fluorescent lighting, and tile flooring. Ceiling heights of the main and upper levels are generally seven to eight feet with the basement height generally ten feet. Windows are limited to the four corners of each floor (except basement) and are narrow, double -pane and aluminum -framed and appear to be original. The interior is heated by electric rooftop units and cooled by rooftop chiller units, all distributed though ducts. Baseboard electric heating units are located on the floor adjacent to each window. HAC14064-01.wpd Hosch Appraisal & Consulting, Inc. 10 AERIAL MAP HAC14064-O1.wpd Hosch Appraisal & Consulting, Inc. I I 0 A1 I ► to. tl 411 BIRDSEYE MAP . %P*�A"Fr"W—F HAC14064-Ol.Nvpd Bosch Appraisal & Consulting, Inc. 12 SUBJECT PHOTOGRAPHS Exterior view of the improvements facing northerly. Exterior view of the receiving dock facing southeasterly. HAC14064-01.wpd Hosch Appraisal & Consulting, Inc. 13 Subject Photographs - Continued View of the entrance/reception area. View of the reception area/elevator. HAC14064-Ol.wpd Hosch Appraisal & Consulting, Inc. 14 Subject Photographs _ Continued View of typical office finish. View of the typical office hallway. HAC14064-Ol.wpd Hosch Appraisal & Consulting, Inc. 15 Subject Photographs - Continued View of internal office area. View of a conference room. HAC14064-01.wpd Hosch Appraisal & Consulting, Inc. 16 Subject Photographs - Continued View of basement storage area. Internal view of the receiving dock area. HAC14064-01.wpd Hosch Appraisal & Consulting, Inc. 17 HIGHEST AND BEST USE The highest and best use of the subject real estate as it will be regarded in this appraisal report will conform to the following definition found on Page 277 of The Appraisal of Real Estate, 13th Edition: Highest and best use is the reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported and financially feasible and that results in the highest value. In order to determine the highest and best use of the subject property, a three-step process is followed, which we have defined as follows: The highest and best use of the site as though vacant is determined. Three options are available to owners of vacant sites: (1) leaving the property vacant; (2) holding the site for a future use, or (3) developing the site. The recommended option must be legally permissible, physically possible, financially feasible, and maximally productive. 2. If development is concluded as the highest and best use of the site as though vacant, the second step would be to determine the ideal improvement. The ideal improvement would reflect state-of-the-art design techniques, legal conformance, and provide the highest value. If the property is currently improved, the final step would be to determine the highest and best use of the property as improved. A comparison is made between the existing improvement and the ideal improvement in order to identify differences. To modify the existing improvements for any differences from the ideal, one of the following five options should be recommended to the owner: A. Leave the property in its current state. B. Remodel C. Renovate D. Convert E. Demolish to clear the site for redevelopment. The recommended option must be legally permissible, physically possible, financially feasible, and maximally productive. HAC14064-Ol.wpd Hosch Appraisal & Consulting, Inc.. 18 Highest and Best Use - Continued Highest and Best Use of the Property as Vacant The highest and best use of the property as vacant would be for mixed-use development including multi -family residential and retail/commercial uses taking advantage of the subject's location on the corner of Winnetka Avenue and 42nd Avenue North as conforming to zoning or the comprehensive plan. The reasons for our opinion are as follows: Compatibility of these uses with the current zoning and surrounding land uses. 2. Suitability of the shape, topography, and location of the site. 3. Close proximity to a growing economic base. 4. Average accessibility to major roadways. Good visibility of the site and access via Winnetka Avenue and 42nd Avenue North. Highest and Best Use of the Property as Improved The highest and best use of the property as improved is for continued use as an office building. The reasons for our opinion are as follows: Compatibility of an office building with the current zoning and surrounding land uses. 2. Suitability of the building with the shape, topography, and location of the site. 3. Close proximity to a large residential and growing economic base. 4. Good accessibility and visibility from Winnetka Avenue and 42nd Avenue North. The current use of the property as an office building is the only use of the subject property that provides the highest return on the underlying land while meeting the tests of being legally permissible, physically possible and financially feasible. Our review of comparable improved sales ranging between $53.09 and $107.09 per square foot of above ground building versus the potential land value of the site considering the substantial cost to demolish the improvements indicates the existing office use is still financially feasible as of the date of valuation. HAC14064-01.wpd Hosch Appraisal & Consulting, Inc. 19 THE VALUATION PROCESS The valuation process contains many facets. A wide variety of data, including the previously discussed Area Analysis, Subject Site and Improvements Descriptions, and Highest and Best Use Analysis, is compiled and utilized to value the property based upon three methods of valuation which are referred to as "approaches". These approaches to value are briefly described as follows: Cost Approach In the cost approach, an estimated reproduction or replacement cost of the building and land improvements as of the date of valuation is developed together with an estimate of the losses in value that have taken place due to wear and tear, design and plan, or neighborhood influences. To the depreciated building cost estimate, the estimated value of the land is added. The total represents the value indicated by the cost approach. Sales Comparison Approach In the sales comparison approach, the subject property is compared to similar properties that have been sold or for which listing prices or offering figures are known. Data for generally comparable properties is used, and comparisons are made to demonstrate a probable price at which the subject property would be sold if offered on the market. Income Capitalization Approach In the income capitalization approach, the rental income to the property is shown with deductions for vacancy and collection loss and expenses. The net operating income of the property is estimated. To support this estimate, operating statements for previous years and comparable properties may be reviewed, along with available operating cost estimates. An applicable capitalization method and appropriate capitalization rates are developed and used in computations that lead to an indication of value. Other methods may also be applied, such as a gross rent multiplier, which reveals the relationship between gross rental income and the sale price of a given income-producing property. Gross rent multipliers are extracted from comparable sales and analyzed, with a reconciled gross rent multiplier applied to the subject's gross rent to render an indication of market value. HAC14064-01.wpd Hosch Appraisal & Consulting, Inc. 20 The Valuation Process - Continued Inherent within the previous three approaches to value are some basic appraisal principles, which include anticipation, balance, change, externalities, substitution, and also supply and demand. These principles are briefly described below. (These definitions are derived from The Appraisal of Real Estate, 13th Edition, pages 35-43.) Anticipation: The perception that value is created by the expectation of benefits to be derived in the future. - Balance: The principle that real property value is created and sustained when contrasting, opposing, or interacting elements are in a state of equilibrium. - Change: The result of the cause and effect relationship among the forces that influence real property value. Externalities: The principle that economies outside a property have a positive effect on its value while diseconomies outside a property have a negative effect upon its value. Substitution: The appraisal principle that states that when several similar or commensurate commodities, goods, or services are available, the one with the lowest price will attract the greatest demand and widest distribution. This is the primary principle upon which the cost and sales comparison approaches are based. Supply and Demand: In economic theory, the principle that states that the price of a commodity, good, or service varies directly, but not necessarily proportionately, with demand, and inversely, but not necessarily proportionately, with supply. In a real estate appraisal context, the principle of supply and demand states that the price of real property varies directly, but not necessarily proportionately, with demand and inversely, but not necessarily proportionately, with supply. Explanation of the Reconciliation Process An appraisal is composed of a number of integrated, interrelated, and inseparable procedures that have a common objective -- a condensed, reliable estimate of value. Although the three approaches are seldom completely independent, it is important to note that in certain cases, greater emphasis is placed on a particular approach. The reasons for this are as varied as the properties themselves, and each appraisal must be addressed individually. The appraiser discusses the strengths and weaknesses of each of the approaches to value, and concludes to a final value which reflects the most applicable approaches. Summary In this case, the subject property is an office located in New Hope, Minnesota. As discussed in the previous sections of the report, the area surrounding the subject property is developed and exhibits a substantial residential and growing economic base. After reviewing the pertinent information within our office, and having various discussions with other real estate experts, we have completed the sales comparison approach to value in the analysis of the subject property. The comparable information and our findings are further detailed and reconciled in the following section. HAC14064-Ol.wpd Hosch Appraisal & Consulting, Inc. 21 SALES COMPARISON APPROACH TO VALUE The sales comparison approach to value is defined as: The process of deriving a value indication for the subject property by comparing market information for similar properties with the property being appraised, identifying appropriate units of comparison, and making qualitative comparisons with or quantitative adjustments to the sale prices (or unit prices, as appropriate) of the comparable properties based on relevant, market -derived elements of comparison. (The Dictionary of Real Estate Appraisal, Fifth Edition, Page 175.) The major premise within this approach is that the market value of the subject property is directly related to the prices of comparable, competitive properties. Furthermore, this valuation method not only assumes that both buyer and seller are fully informed about the property, but also that both have general knowledge of the market for that type of property and that the property has been exposed in the open market for a reasonable time. Based upon the previously discussed highest and best use analysis of the subject property, comparable property sales with similar highest and best uses were gathered and analyzed from the metropolitan area. We believe these comparable sales best represent the subject property with respect to location, age, size, design, amenities, and other major characteristics. The comparable market data which is submitted in this report, in our opinion, suggests that the best unit of comparison for the subject real estate should be sale price per foot of above ground gross building area. The application of this unit of comparison produces an estimate of value for a property by comparing it with similar properties of the same type and class which have sold recently in the same or competing areas. The analytical processes utilized in determining the degree of comparability between two properties involves judgment as to their similarity with respect to many value factors such as location, date of sale, physical characteristics, and terms of sale. The sale price of those properties deemed most comparable tends to set the value range for the subject property. Further consideration of the comparative data indicates a figure representing the value of the subject property, that is, the probable price at which it could be sold by a willing seller to a willing buyer as of the date of the appraisal. The data involved in the application of this process concerns these comparable properties as well as the subject property, and this data will vary with the type of property. Four categories of data, however, are basic and apply regardless of the type of property. They are: 1. Sales prices of comparable properties. 2. Conditions influencing each sale. 3. Location of each property. 4. Description of land and improvements of each comparable property. HAC14064-Ol.wpd Hosch Appraisal & Consulting, Inc. 22 Sales Comparison Approach to Value - Continued Research revealed a number of real estate transactions in the area available for comparison to the subject real estate. Property sales we regard as most pertinent for estimating the subject's value are summarized in the fact chart below. Characteristic differences between a given comparable sale and the subject might require adjustments to increase the reliableness of that sale as an indicator of value for the subject. Elements of comparison which may warrant adjustments include real property rights, financing, conditions of sale, buyer expenditures immediately after purchase, market conditions (time), and various physical characteristics, such as location, zoning, age and condition, building quality/amenities, size, land -to -building ratio, and others. An explanation of adjustments, a comparable sales location map, and a chart demonstrating our adjustment analysis are provided on the following pages. HAC14064-01.wpd Hosch Appraisal & Consulting, Inc. 23 COMPARABLE BUILDING SALES FACT CHART Above Ground Sale Price Building Land -to- Per S.F. Sale Location Sale Land Size Building Sale Above No. (Traffic Counts) Date Age Size (Basement?) Ratio Price Ground 1 7777 Washington Ave. S 9/14 1972 146,362 13,660 10.71:1 $889,000 $65.08 Edina, MN (Yes) (46,500) 2 5810 78th St. W 6/14 1981 43,666 17,598 2.48:1 $1,884,542 $107.09 Bloomington, MN (Yes) (11,400) 3 5300 Glenwood Ave. 1/13 1969 50,530 20,700 2.44:1 $1,300,000 $62.80 Golden Valley, MN (No) (113,500) 4 2801 Wayzata Blvd. 5/12 1959 18,005 8,000 2.25:1 $787,500 $98.44 Minneapolis, MN (Yes) (132,000) 5 2151 Hamline Ave. N 7/11 1966 26,136 9,888 2.64:1 $525,000 $53.09 M Roseville, N (No) (24,900) Sub- 4148 Winnetka Avenue 12/14 1968 79,748 20,100 3.97:1 ?? ?? ject New Hope, MN (date of (Yes) (33,200) value) Characteristic differences between a given comparable sale and the subject might require adjustments to increase the reliableness of that sale as an indicator of value for the subject. Elements of comparison which may warrant adjustments include real property rights, financing, conditions of sale, buyer expenditures immediately after purchase, market conditions (time), and various physical characteristics, such as location, zoning, age and condition, building quality/amenities, size, land -to -building ratio, and others. An explanation of adjustments, a comparable sales location map, and a chart demonstrating our adjustment analysis are provided on the following pages. HAC14064-01.wpd Hosch Appraisal & Consulting, Inc. 23 Sales Comparison ARproach to Value - Continued Sale #1 - 7777 Washington Avenue South, Edina, MN Sale #2 - 5810 78th Street West, Bloomington, MN HAC14064-01.wpd Aosch Appraisal & Consulting, Inc. 24 Sales Comparison Approach to Value - Continued Sale #3 - 5300 Glenwood Avenue, Golden Valley, MN Sale #4 - 2801 Wayzata Boulevard, Minneapolis, MN HAC 14064-O1.wpd Hosch Appraisal & Consulting, Inc. 25 Sales Comparison Approach to Value - Continued Sale #5 - 2151 Hamline Avenue North, Roseville, MN HAC14064-Ol.wpd Hosch Appraisal & Consulting, Inc. 26 �J nw.nn .... . i.Ld yyAd NOWrNlN OAN OIgYF G6'f YFTIRI YA'ONF1kl r NPNSIWiFP t L 01Nf00 _ "Mir 1 �GIWOM •L �x•� '' aNDOY[p � wr CDLLINY{IC/ �' Y r�lrea ..• r rwde d1} I j{L1 NUIl xemir •.`��"ri" � ASA Lr. IYW-11 i ' 1 1NAra —00 �e4 A1Nr f1L11n1111 • R- , 1 t f 1 5 eecK+o►o. nnrrNnn.n eowaPNrp ,i, AnK Id °�`� CAArrY � '� noLrxor.ee j W �i� ' FF Wiru _. e -- """ - OIIOIML +e,rM }r m 1 IMS FAN,. a dLv�urn f♦ +-�"yq{{� � sI ,({/ is C .10V • Yr lYreaO x�"^�� 'ms's �J i, IYN 1rP000Uw1' �f -tacr sllu� i 1 f aParulaRw � S � wY. d - .N... dluldor� FunrYaxL t f NYN1 LAX! vlddalled � wFNLu 1 fAllYNatON COMPARABLE BUILDING SALES MAP HAC14064-01.wpd Aosch Appraisal & Consulting, Inc. 27 Sales Comparison Approach to Value - Continued Adiustments - Continued Before adjustments for differences, the aforementioned sales indicate a range $53.09 to $107.09 per square foot of above ground building area for the subject property. Each of the sales is used as an office. Sale #1 is the sale of an office building located with high visibility along the west side of U.S. Highway #169 just north of Interstate Highway #494 with access via Washington Avenue South in Edina. The improvements are concrete construction with a brick and stucco exterior and include a walkout basement with windows which has some office function. The property was sold without a tenant in place. The interior was constructed in 1972 and appeared in below average condition on the date of sale. Sale #2 is a 17,598 square foot building that is located in Bloomington along 78th Street West between East Bush Lake Road and State Highway #100 and just north of Interstate Highway #494. The improvements do not have visibility from Interstate Highway #494 or State Highway #100. The concrete building with a brick and stucco exterior was constructed in 1981. The three level building also has a basement which is used for mechanicals as well as 16 heating parking stalls. The interior has been recently updated. Sale #3 is a 20,700 square foot office located at the southwestern corner of State Highway #100 and Glenwood Avenue in Golden Valley. This building has good visibility from State Highway #100. The real estate has historically been used as a single -tenant office building. The building was purchased with a lease in place as the seller will lease the entire building from the buyer for a period of three years. The brick exterior building was constructed in 1969 and was in average condition at the time of sale. A portion of the main floor is used as heated parking. Sale #4 is a 8,000 square foot building located along Wayzata Boulevard in Minneapolis. The real estate has historically been used as a two-story with basement multi -tenant office building. A portion of the basement contains offices (with windows). The concrete block building was constructed in 1959 and was in average condition on the sale date. Approximately 33% of the building was occupied at the time of sale. The roof, mechanicals and windows had been replaced prior to the sale. This building has visibility from Interstate Highway #394. Sale #5 is a 9,888 square foot building with a brick exterior. This two-story office was constructed in 1966. The improvements were leased at the time of sale to a number of tenants. This property is located three blocks south of State Highway #36 at the southwestern corner of Hamline Avenue North and County Road B West in Roseville. The improvements do not contain a basement. HAC14064-Ol.wpd Hosch Appraisal & Consulting, Inc. 28 Sales Comparison Approach to Value - Continued Adjustments - Continued The sales had prices of $65.08, $107.09, $62.80, $98.44 and $53.09 per square foot for Sales #1, #2, #3, #4 and #5 respectively. Overall, Sales #1, #3 and #5 are most similar to the subject property in terms of use, age and condition of the improvements at the time of sale. Sales #1 and #5 are smaller in size when compared to the subject while Sale #3 is generally the same size. Before adjustments, Sales #1, #3 and #5 fall in the narrowed range of $53.09 to $65.08 per square foot of gross building area. When considering specific adjustments that would apply to Sale #1, the sale indicates a market value for the subject property that is below the price of Sale #1 of $65.08 per square foot. Sale #1 is of a similar building quality, but Sale #1 has a significantly higher land -to -building ratio and a walkout basement with windows which is superior to the subject. Sale #1 is located in Edina near the junction of U.S. Highway #169/Interstate Highway #494 which is a superior location when compared to the subject. Sale #2, located in Bloomington, north of Interstate Highway #494 and west of State Highway #100, indicates a market value for the subject property that is significantly lower than the price of Sale #2 of $107.09 per square foot. Despite the superior location of this sale, Sale #2 has a generally similar quality of construction; however, this building was constructed in 1981, is newer than the subject and has been recently updated which is a vastly superior trait. This building also has heated basement parking. Sale #3 is located in Golden Valley with good visibility from State Highway #100 (113,500 vehicles per day) and has a similar building size. The improvements were purchased with a single tenant in place for an additional three years. This building does not include a basement. The sale indicates a market value of the subject which is below the price of Sale #3. Sale #4 indicates a market value for the subject property that is significantly below the price of Sale #4 of $98.44 per square foot. Sale #4 has an inferior age but had major items such as roof, windows and mechanicals replaced and upgraded prior to the sale. The basement of this building includes a portion of office space with windows. The improvements of Sale #4 enjoy good visibility from Interstate Highway #394. Sale #5 has the most similar locational characteristics when compared to the subject as it is located at the intersection of two well -traveled roadways. Sale #5 is a concrete block building with a brick exterior. Sale #5 also shares the relatively small windows of the subject. Therefore, after reconciling the adjustment process, it is our opinion that the subject property has a market value between $50 and $60 per square foot of building area, say $55.00 per square foot, which is slightly below the middle of the range of Sales #1, #3 and #5, calculated as follows: 20,100 square feet @ $55.00 per square foot $1,105,500 Rounded to: $1,105,000 HAC14064-01.wpd Hosch Appraisal & Consulting, Inc. 29 REASONABLE EXPOSURE TIME Exposure time can be defined as the estimated length of time 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. Reasonable exposure time can differ from actual exposure time. For example, a property may have been exposed at $1,000,000 for two years, which informed market participants considered unreasonable. Then the owner lowered the price to $900,000 and began receiving offers, resulting in a transaction at $800,000 six months later. Although the actual exposure time was 2.5 years, the reasonable exposure time at a value range of $800,000 to $900,000 would be six months. We have researched exposure time for properties similar to the subject property by reviewing information gathered through sales verification and having discussions with various market participants (such as brokers, buyers, sellers, etc.). Summary After reviewing the national and local data, and having discussions with brokers in the marketplace, it is our opinion that a reasonable exposure time for the subject property at our estimated market value would be up to 12 months. HAC14064-01.wpd Hosch Appraisal & Consulting, Inc. 30 QUALIFICATIONS OF NATHAN J. BROOBERG Biographical Data and Education Raised in Fergus Falls, Minnesota. Graduated from Fergus Falls Senior High School. Bachelor of Arts degree, Gustavus Adolphus College, St. Peter, Minnesota, in Biology and Geography. Successfully completed the following real estate courses and seminars: Eminent Domain and Condemnation Business Practices and Ethics Real Estate Principles Real Estate Practices Standards of Professional Practice General Applications Professional Ounlifications or Associations 14th Annual Real Estate Trends Seminar Residential Construction Case Studies in Highest and Best Use Income Capitalization Advanced Sales Comparison & Cost Approaches 2012-13 National USPAP Update Course Certified General Real Property Appraiser Licensed Appraiser — State of Minnesota, License #20249946, Expires August 31, 2016 Professional Experience Hosch Appraisal & Consulting, Inc., Minneapolis, Minnesota Real Estate Appraiser March 2005 — present Shenehon Company, Minneapolis, Minnesota Real Estate Appraiser February 2001 — March 2005 Duties and Responsibilities: Prepare professional valuations and market analysis of real estate, business enterprises, and intangible property rights. Appraisal assignments have involved numerous types of commercial, multiple family, industrial, and special purpose properties. These assignments have included mortgage financing, condemnation, tax abatement proceedings, investment counseling, potential sales and purchases, lease and rental analyses, charitable donations, internal management decisions, allocation of purchase price, and insurance indemnification. Partial Client List Accent Homes Allina Hospitals and Clinics Ames Construction Anchor Bank Babcock Neilson Mannela & Klint Bankwest Boundary Waters Bank BPK&Z Bremer Bank Briggs and Morgan Builders Development & Finance Capmark Finance, Inc. City of Maplewood City of New Hope City of Shoreview Ducks Unlimited Garith Anderson Trucking Gregerson, Rosow, Johnson & Nilan, Ltd. Hajek & Beauclaire, LLC Henson & Efron Lindquist & Vennum Malkerson Gunn Martin LLP Messerli & Kramer P.A. Metropolitan Airports Commission (MAC) Minnesota Dept of Natural Resources (DNR) Minnesota Dept. of Transportation (Mn/DOT) Minnwest Bank Moss & Barnett MPCA North Haven Church Oppenheimer Donnelly & Wolff LLP Osceola Medical Center Peterson, Peterson & Associates, PLC Pheasants Forever Pipestone County Rosemount National Bank Roseville Area Schools Sioux Steel Company Sovereign Bank State Bank of Hamel Swift County The Business Bank Three Rivers Park District URS Corporation U.S. Bank U.S. Department of the Interior U.S. Small Business Association Vic's Crane & Heavy Haul Wells Fargo/RETECHS Wiley Enterprises 31 QUALIFICATIONS OF STEPHEN T. HOSCH, MAI Biographical Data and Education Born and raised in Columbia Heights, Minnesota, and graduated from Columbia Heights High School. Attended St. Cloud State University and graduated with a Bachelor of Science degree in Real Estate with an emphasis in appraisal. Successfully completed numerous real estate appraisal courses offered by the Appraisal Institute, as well as attended several seminars covering specialized appraisal topics, some of the more recent of which are highlighted below: IREM - 2013 Annual Forecast - January 2013 13th Annual Real Estate Trends Seminar - May 2011 7" Annual Land Development Conference - May 2011 IREM - 2010 Annual Forecast - January 2010 Annual RERC - Industry Forecast: 2009 - January 2009 4`h Annual Minnesota Land Development Conference - May 2008 10`' Annual Real Estate Trends Seminar - May 2008 Professional Qualifications or Associations Annual RERC - Industry Forecast: 2007 - January 2007 Eminent Domain - November 2006 Land Development & Redevelopment Conference - May 2006 Annual RERC-Industry Forecast: 2006 - January 2006 22nd Annual Real Estate Institute - November 2004 Mortgage Foreclosures in Minnesota - March 2004 Certified General Real Property Appraiser Licensed Appraiser - State of Minnesota, License #4002903, Expires August 31, 2015 Member - Appraisal Institute (MAI) Holding MAI Designation The MAI membership designation is held by appraisers who are experienced in the valuation and evaluation of commercial, industrial, residential and other types of properties, and who advise clients on real estate investment decisions. MAI members are the preferred choice among lawyers to serve as expert witnesses in trials, hearings, and other litigation matters. The Appraisal Institute conducts a mandatory program of continuing education for its designated members and also requires that they comply with the requirements of the Code of Professional Ethics & Standards of Professional Appraisal Practice of the Appraisal Institute. MAI's and RM's who meet the minimum standards of this program are awarded periodic educational certification. I am currently certified under the Appraisal Institute education program through December 31, 2016. Member - Institute of Business Appraisers (IBA) Qualified as a court-appointed commissioner in Wright County and Hennepin County Professional Experience Hosch Appraisal & Consulting, Inc., Minneapolis, Minnesota President, February 2005 - present Duties and Responsibilities: Prepare professional valuations and market analysis of real estate, businesses and intangible property rights. Real estate assigmnents involve numerous types of commercial, multiple family, industrial, and special purpose properties as well as land subdivisions, bulk acreage and proposed developments. Business valuation and consulting assignments have included both operating and holding companies. The specific purposes of these assignments have included highest and best use studies, mortgage financing, condemnation, tax abatement proceedings, feasibility analysis, investment counseling, potential sales and purchases, lease and rental analyses, bankruptcy proceedings, charitable donations, internal management decisions, special assessment appeals, gift tax, and allocation of purchase price. Court experience involves testifying at commissioner hearings, depositions and trials, preparation of affidavits, and providing litigation support. Qualified as a court-appointed commissioner in Hennepin and Wright Counties. Shenehon Company, Minneapolis, Minnesota Senior Vice President - Director of Real Estate, November 2003 - January 2005; Shareholder Senior Vice President - Co -Director of Real Estate, September 2002 - November 2003; Shareholder Vice President - Co -Director of Real Estate, April 2001 - September 2002; Shareholder Appraiser/Analyst from June 1991 to March 2001 32 QUALIFICATIONS OF STEPHEN T. HOSCH, MAI - CONTINUED Author/Co-Author or Guest Sneaker of: "Appraisal Issues in Litigation," Various Minneapolis Law Firms, December 2007 "Creative Opportunities in the Current Real Estate Market," Valuation Viewpoint, Summer 2004 "Business Components and the Valuation of Real Estate," Valuation Viewpoint, Winter 2004 "Challenging Issues in Commercial and Industrial Valuation," Commercial Real Estate Financing Conference, March 13, 2002 "Market Valuation & Appraisals," Minnesota Commercial Association of Realtors, January 22, 2002 "Fundamentals of Special Assessments in Appraisal," Valuation Viewpoint, Spring 1999 "A Perspective on Subdivision Appraisal," Valuation Viewpoint, Winter 1997 Partial Client List Accent Homes Malkerson Gunn Martin LLP Allied Waste Industries McGrann Shea Anderson Carnival Straughn & Lamb Allina Hospitals & Clinics Merchants Bank, N.A. Ames Construction Messerli & Kramer P.A. Anchor Bank Metropolitan Airports Commission (MAC) BANKWEST Minnesota Department of Transportation (Mn/DOT) Bard and Bard, Ltd. Minnesota Department of Natural Resources (DNR) BPK&Z Minnwest Bank Best & Flanagan, LLP Moss & Barnett Bremer Bank MPCA Bridgewater Bank Olympic Steel, Inc. Briggs and Morgan Oppenheimer Donnelly & Wolff LLP Boundary Waters Bank Pace Realty Advisors, LLC Builders Development & Finance Peterson, Fram & Bergman, P.A. Capmark Finance, Inc. Peterson, Peterson & Associates, PLC City of Arden Hills Pheasants Forever City of Eagan Pinnacle Commercial Capital City of Fargo Pipestone County City of Maplewood Premier Bank City of New Hope Ramsey County City of Osseo Rosemount National Bank City of Shoreview Roseville Area Schools City of Victoria Sherburne County Fabyanske, Westra & Hart Sioux Steel Company Falcon National Bank Southwest Transit Fargo Public School District No. 1 Sovereign Bank First National Bank of Elk River Speedway SuperAmerica First Resource Bank State Bank of Hamel Fredrikson & Byron P.A. Stearns Bank Gopher Resources Swift County Gregerson, Rosow, Johnson & Nilan, Ltd. The Business Bank Grossman Investments, LLC Three Rivers Park District Hajek & Beauclaire, LLC United Prairie Bank Harstad Development University of Minnesota Hennepin County U.S. Bank Henson & Efron U.S. Small Business Administration Hinshaw & Culbertson LLP Village Bank Home Federal Savings Bank Warchol Law Office James M. Neilson, Attorney at Law Wells Fargo/RETECHS Kraus -Anderson Realty Co. White Castle System, Inc. Larkin Hoffinan Daly & Lindgren Wiley Enterprises LeVander, Gillen & Miller, P.A. Winthrop & Weinstine Lincoln National Life Insurance Co. Lindquist & Vennum 33 Leone Valerie From: Steve Hosch [shosch@hoschappraisal.com] Sent: Friday, November 21, 201412:23 PM To: Leone Valerie Cc: Nate Brooberg; McDonald Kirk Subject: RE: Quote for Appraisals: 4148 and 4124 Winnetka Thank you Valerie. We will be in touch. Thanks, Steve Stephen T. Hosch, MAI President Hosch Appraisal & Consulting, Inc. 11172 Zealand Avenue North Minneapolis, MN 55316 (612) 331-1688 - Telephone (763) 208-1670 - Fax www.hoschappraisal.com This e-mail message, including all attachments, is for the sole use of the intended recipient(s) and may contain confidential and privileged information. Unless you are the intended recipient(s), you may NOT use, disclose, copy or disseminate this information. If you are not the intended recipient, please contact the sender by reply e-mail immediately. Please destroy all copies of the original message and all attachments. From: Leone Valerie [mailto:vleone@ci.new-hope.mn.us] Sent: Friday, November 21, 2014 12:20 PM To: Steve Hosch Cc: Nate Brooberg; McDonald Kirk Subject: RE: Quote for Appraisals: 4148 and 4124 Winnetka Jeff Priess is the Exec Director of Financial Services for Robbinsdale School District. His phone is 763-504-8037. In hindsight I should have followed up with a phone call. Thank you for expediting the appraisals. Valerie Leone, City Clerk City of New Hope (763)531-5117 vleone@ci.new-hope.mn.us From: Steve Hosch[mailto:shosch@hoschappraisal.com] Sent: Friday, November 21, 2014 12:08 PM To: Leone Valerie Cc: Nate Brooberg Subject: RE: Quote for Appraisals: 4148 and 4124 Winnetka Importance: High Hi Valerie: For some reason, I did not receive your email from October 16th where you notified us that we were awarded the appraisal assignment. We have gotten started and should be able to get this done in less than 30 days. We will do everything in our power to turn this around in less than 30 days. Do you have a contact for us to call in order to complete the inspections? Thanks, Steve Stephen T. Hosch, MAI President Hosch Appraisal & Consulting, Inc. 11172 Zealand Avenue North Minneapolis, MN 55316 (612) 331-1688 - Telephone (763) 208-1670 - Fax www.hoschaRpraisal.com This e-mail message, including all attachments, is for the sole use of the intended recipient(s) and may contain confidential and privileged information. Unless you are the intended recipient(s), you may NOT use, disclose, copy or disseminate this information. If you are not the intended recipient, please contact the sender by reply e-mail immediately. Please destroy all copies of the original message and all attachments. From: Leone Valerie[mailto:vieone@ci.new-hope.mn.us] Sent: Thursday, November 20, 2014 1:18 PM To: Steve Hosch Subject: FW: Quote for Appraisals: 4148 and 4124 Winnetka Steve, please advise of a targeted completion date. Thanks. Valerie Leone, City Clerk City of New Hope (763)531-5117 vleone&i.new-ho e.mn.us From: Leone Valerie Sent: Thursday, October 16, 2014 5:15 PM To: 'Steve Hosch' Cc: McDonald Kirk Subject: RE: Quote for Appraisals: 4148 and 4124 Winnetka Steve, At its meeting of October 13, 2014, the New Hope City Council accepted your quotation for these two appraisals. Please proceed and contact me if you have any questions. Thank you. Valerie Leone, City Clerk City of New Hope (763)531-5117 vleone@ci.new-ho e.mn.us From: Steve Hosch rmailto:shosch@hoschappraisal,com] Sent: Thursday, October 02, 2014 6:33 PM To: Leone Valerie Cc: Steve Hosch Subject: Quote for Appraisals: 4148 and 4124 Winnetka Hi Ms. Leone: Hosch Appraisal & Consulting, Inc. could complete these two appraisals within 30 days of receiving formal authorization to proceed for the following estimated fees assuming we would be hired to provide both appraisals: 4148 Winnetka Avenue (-0002): $2,750 to $3,250 4124 Winnetka Avenue (-0018): $2,750 to $3,250 The above fees include preparation of electronic narrative appraisal reports that would be emailed to you upon completion. If hard copies are requested, there would be an additional charge. These fees also assume background information and building plans are available and that requested information could be provided in a timely manner. We appreciate you considering our firm for this possible assignment. I look forward to hearing back from you at your earliest convenience. Thanks, Steve Stephen T. Hosch, MAI President Hosch Appraisal & Consulting, Inc. 11172 Zealand Avenue North Minneapolis, MN 55316 (612) 331-1688 -Telephone (763) 208-1670 - Fax www.hoschappraisal.com This e-mail message, including all attachments, is for the sole use of the intended recipient(s) and may contain confidential and privileged information. Unless you are the intended recipient(s), you may NOT use, disclose, copy or disseminate this information. If you are not the intended recipient, please contact the sender by reply e-mail immediately. Please destroy all copies of the original message and all attachments. Leone Valerie From: McDonald Kirk Sent: Tuesday, October 14, 2014 10:23 AM To: 'JeffPriess' Cc: 'Joel Dunning'; 'Stacie Kvilvang'; Jason Aarsvold; Leone Valerie Subject: Space Needs Update FYI, at the New Hope City Council meeting last night the council approved a quote from Hosch Appraisal & Consulting, Inc. to prepare appraisals of the District 281 property located at 4148 and 4124 Winnetka Avenue North. The appraisals should be completed in about 30 days. After that I would recommend the city, Ehlers and Wold get together to discuss a financing plan. Kirk McDonald Request for Action Originating Department Approved for Agenda Agenda Section City Manager October 13, 2014 Development & Planning Item No. By: Kirk McDonald By: Kirk McDonald, City Mana er 8.1 Motion authorizing staff to obtain appraisals from Hosch Appraisal & Consulting, Inc. for properties at 4148 and 4124 Winnetka Avenue North (project no. 926) Requested Action Staff recommends the City Council review the quotations for appraisals and approve a motion authorizing staff to obtain appraisals from Hosch Appraisal & Consulting, Inc. for properties at 4148 and 4124 Winnetka Avenue North. Background Over the past year the city has been exploring construction of a separate public safety/city hall facility on the current city hall/Civic Center Park site and/or the possibility of a joint venture with Robbinsdale School District (administrative offices) on the District 281 site. Both entities have been working with Wold Architects to identify facility needs, estimated costs, and to outline facility infrastructure and programmatic deficiencies. The City Council and District 281 Board conducted a second joint work session on May 13, 2014, regarding a potential joint facility, and staff from the two entities have been meeting subsequent to the work session. The District 281 Board discussed the issue at their July work session and the feedback from that meeting was that the District wants the city to make a proposal to purchase the District property and construct the facility with the District leasing their portion of the building. The City Council discussed this matter at the August 18 work session and directed staff to work with Ehlers and Wold on a financing plan. It was discussed that an accurate financing plan would require an appraisal of the District 281 properties. The Council was agreeable to proceeding with an appraisal of the properties if the District shared in the cost of the appraisal. Subsequent to the work session staff inquired if the District would be willing to split the cost of an appraisal and District staff responded that they thought it would be in the best interest of both parties to get separate appraisals and the Council was informed of the response. Staff proceeded to solicit quotations for appraisal from eight appraisal firms and four firms responded, as follows: Company Admin building property Bus garage property Total Quote Hosch Appraisal & Consulting, Inc. $2,750 to $3,250 $2,750 to $3,250 $5,500 to $6,500 The Appraisal Group (Dan Boris) Not separated Not separated $7,500 E.B. Herman Companies $4,950 $4,950 $9,990 Shenehon Company $6,500 $7,800 $14,300 Motion by �. Z(,�,Gf L� /L Second by fu— " To:[ Asa\ eu� V-(),TZ<LZ2Lq' 4C. 1:/KNA/CityManager/2014/Q-appraisals 101314 Request for Action, page 2 October 13, 2014 The low quote is from Hosch Appraisal & Consulting, Inc, for a maximum of $6,500. The appraisals would be completed within 30 days. Staff recommends that the City Council approve a motion authorizing staff to obtain appraisals on the two properties from Hosch Appraisal & Consulting, Inc. Upon completion of the appraisals, staff will coordinate with consultants on a financing plan. Funding The public safety/city hall space needs analysis is being funded with the City Hall CIP fund and staff recommends utilizing the same funding source for the appraisals. Attachments List of Firms Solicited Solicitation Correspondence Quotations August 18 work session minutes and RFA Quotations for appraisals of. 281's property requested from the following eight companies Mr. Stephen Hosch Hosch Appraisal & Consulting, Inc. 11172 Zealand Avenue North Minneapolis, MN 55316 Mr. Daniel Boris The Appraisal Group 11212 8611, Avenue North, Suite A Maple Grove, MN 55369 Mr. Terrence M. Johnson 7400 Metro Blvd # 100 Minneapolis, MN 55439 The Valuation Group, Inc. 3655 Plymouth Blvd., Suite 105 Plymouth, MN 55446 Mr. Kevin Meeks Meeks Appraisal & Consulting 3144 Hennepin Avenue, Suite 202 Minneapolis, MN 55408 Ms. Ellen Herman Herman Appraisal Services, Inc., Suite 3230 Campbell Mithun Tower, 222 South Ninth Street Minneapolis, MN 55402 Mr. Robert Stracohta Shenehon Company 88 South 10th Street, Suite 400 Minneapolis, MN 55403 Mr. Jeff Johnson Integra Realty Resources 8012 Old Cedar Avenue South Minneapolis, MN 55425 September 18, 2014 [name] [company] [address] [City/state/zip] Subject: Quote for Appraisals The city of New Hope is looking to acquire by "direct purchase" and not by condemnation the adjacent properties currently owned by the Independent School District #281 located as follows: 4148 Winnetka Avenue - PID# 17-118-21-23-0002 4124 Winnetka Avenue - PID# 17-118-21-23-0018 These properties are 281's Administration Building and Bus Garage located at 42nd Avenue North and Winnetka Avenue North in New Hope. We are seeking an experienced appraisal firm knowledgeable in appraising commercial real estate to provide the city with an appraisal for determining the market value of these properties. The appraisals will be used by the city in conveying an offer to purchase these properties from Robbinsdale School District in an arm's length transaction. If you are interested in this assignment, please provide us with a separate quote for providing each appraisal and an estimated date when the appraisals can be completed. Responses would be appreciated by Friday October 3rd and can be submitted to me by letter or e-mail (vleone@ci.new-hope.mn.us). Thank you. Sincerely, Valerie Leone, CMC City Clerk CITY OF NEW HOPE 4401 Xylon Avenue North • New Hope, Minnesota 55428-4898 • www. ci.new-hope.inn.us City Hall: 763-531-5100 . Police (non -emergency): 763-531-5170 • Public Works: 763-592-6777 • TDD: 763-531-5109 City Hall Fax: 763-531-5136 < Police Fax: 763-531-5174 s Public Works Fax: 763-592-6776 Leone Valerie From: Steve Hosch [shosch@hoschappraisal.com] Sent: Thursday, October 02, 2014 6:33 PM To: Leone Valerie Cc: Steve Hosch Subject: Quote for Appraisals: 4148 and 4124 Winnetka Hi Ms. Leone: Hosch Appraisal & Consulting, Inc. could complete these two appraisals within 30 days of receiving formal authorization to proceed for the following estimated fees assuming we would be hired to provide both appraisals: 4148 Winnetka Avenue (-0002): $2,750 to $3,250 4124 Winnetka Avenue (-0018): $2,750 to $3,250 The above fees include preparation of electronic narrative appraisal reports that would be emailed to you upon completion. If hard copies are requested, there would be an additional charge. These fees also assume background information and building plans are available and that requested information could be provided in a timely manner. We appreciate you considering our firm for this possible assignment. I look forward to hearing back from you at your earliest convenience. Thanks, Steve Stephen T. Hosch, MAI President Hosch Appraisal & Consulting, Inc. 11172 Zealand Avenue North Minneapolis, MN 55316 (612) 331-1688 - Telephone (763) 208-1670 - Fax www.hoscha raisal.com This e-mail message, including all attachments, is for the sole use of the intended recipient(s) and may contain confidential and privileged information. Unless you are the intended recipient(s), you may NOT use, disclose, copy or disseminate this information. If you are not the intended recipient, please contact the sender by reply e-mail immediately. Please destroy all copies of the original message and all attachments. THE GROUP A DIVISION OF KLINE INTERNATMWAL . TALI Premier Commercial &Residential Real Estate Valuation Services September 19, 2014 Ms, Valerie Leone, CMC City of New Hope—City Clerk 4401 Xylon Avenue North New Hope, Minnesota 55428-4898 Re: Detailed Real Estate Market Value Appraisal Assignment Robbinsdale Public School District #281 parcels 4148 Winnetka Avenue North (P.I.D. #17-118-21-23-0002) 4124 Winnetka Avenue North (P.I.D. #17-118-21-23-0018) Dear Ms. Leone: This letter is in response to a letter from you, as City Clerk, dated September 18, 2014, wherein you invite me to submit a proposal for Appraisal Services on the above - noted parcels of real estate owned by the Robbinsdale Public School District #281. I would recommend a single Detailed Appraisal Report depicting a separate value for each of the two parcels. All three traditional approaches to value would be analyzed in estimating market value—Cost Approach, Sales Comparison Approach, and Income Approach. A separate value of land and building improvements for each parcel would be further delineated. The fee for this assignment shall be a total of $7,500. Report delivery shall be no later than five weeks from confirmed contract to proceed. A retainer fee of 50% ($3,750) is required, along with a signed contract, to begin work on this assignment. This assignment is for purposes of estimating market value for an "arms -length" purchase offer to be made by the City of New Hope to the Robbinsdale Public School District. Report delivery shall comprise two (2) hard copies along with a digital copy downloaded to a computer disk or memory stick. The client will assist in providing for inspection of the property by the appraiser and any supporting information such as rentals, operating expenses, and summary of capital improvements. The research and analysis relating to this assignment and report shall conform to the Uniform Standards of Professional Appraisal Practice (USPAP) of the Appraisal Foundation. If you are in agreement with the terms and conditions of this proposal, please acknowledge by signing where indicated on the following page along with a Retainer fee of $3,750. Retain one copy for your files and send the other back to us as soon as possible to: The Appraisal Group Ltd. Daniel T. Boris, MAI, CCIM, SRA 11212 -86th Avenue North Maple Grove, MN 55369-4552 11212 - 86th Avenue North, Suitt. A, Maple Crove, NEIN 55369 �-- — -�-- SdS-IIFQI nll Prop AAA.777-717.5 sUiSIY 011r web site at Phnn,, 71iR- f — r — - — Please call me at 763-545-0690, ext 110 should you have any further questions. — )W� - - ZP-2-4 Daniel T. Boris, MAI, CCIM, SRA Vice President, Litigation/Consultation Division Date: 09/19/2014 Valerie Leone, CMC, City Clerk City of New Hope, Minnesota Date FIE 7111" GRQv1' A DIVISION OF T(LINU INTiEIiNA`I`IONAI,, The 'I'AG Teanfl, - Real Estate Valuation Specialists Daniel T. Boris AITnn , . 11212 -86th Avenue North MAI, CCIM, SRA Maple Grove, MN 55369-4552 Vice President, Litigation Division T 763.545.0690 F 763,543.3880 DBorls@tagmn.com Areas of Specialization Appraisal, Consultation, Market Analysis, Litigation, Feasibility Analysis Clients Served Corporate approlsal clients: 3M Company, American Express Financial Advisors, Andersen Window Company, Baker Square Restaurants, Bank of America, Bethany Eldercare, Borg-Warner Chemical Company, Briggs and Morgan Law Firm, Butler Paper Company, C, B. Richard Ellis, Cargill Company, Chicago -Northwestern Railway Company, Cintas Corporation, Citicorp, Dana Corporation, Dex Media, Dorsey & Whitney Law Office Downtown Council of Minneapolis, Eastman Kodak Company, Employee Transfer Company, Faegre & Benson Law Office Flanagan Bilton and Branigan Law Firm, Fredrikson & Byron Law Office Gittleman Company, Glasrud Associates Real Estate Company, Grand Casinos, Inc, I.B.M, Imaglnel Print Solutions, I.N.A. Insurance Company, IRET Properties, Kimco Corporation, Kinney & Lange Law Office, KKE Architects, K -Mart, Kohl's Department Stores, Land 0' Lakes, Cooperative, Leonard Street & Delnard Law Office M & I Corporate Trust Services, MacMillan Bloedel Limited, Mellon Bank of Houston, Meritex Corporation, Metropolitan Life Insurance Company, Midland National Life Insurance Resource Group, Minneapolis Public School District S-1 Northwestern Bell Telephone Company, Onan Corporation, Owens-Corning Fiberglass, Penske Trucking Company, Pittsburgh Plate Glass (P.P.G.), Principal Mutual Life Insurance Company, Public School District No. 287, Robert Hill and Associates Law Office, Target Corporation, U -Haul Corporation, Unisys Corporation, US Postal Service, Wal-Mart, Walgreens, Welcome Furniture Company, Westfield Insurance Company and Xcel Energy. Government Appraisal performedfor: Hennepin County Probate Court, Ramsey County Probate Court, Hennepin County Family Court, Ramsey County Family Court, Hennepin County Park Reserve District, Scott County Housing and Redevelopment Authority, Dakota County Housing and Redevelopment Authority, Minnesota State Tax Court, the U.S. Department of Veterans Affairs (V.A.), the City of Saint Louis Park, Minnesota, Minneapolis Public Schools, University of Minnesota, State of Minnesota Department of Land Management and numerous condemning authorities. Mortgage oppralsols performed for: Agstar Financial, American National Bank of St. Paul, American Residential Mortgage Corporation, Amerus Mortgage, Atlantic Mortgage of Jacksonville, Atlantis Mortgage of Florida, BancPlus Mortgage of San Antonio, Bell Mortgage Company, Bishop Cendant Mortgage, BMO Harris Bank Centennial Mortgage, Chemical Bank of New York, Citibank N.A., Citizens State Bank Columbia National Mortgage, Commonwealth United Mortgage Company, Community State Bank of Bloomington, Countrywide Home Loan, CTX Mortgage Company, Edina Financial Services Corporation, Elan Financial Advisors, Evergreen Mortgage Company, F.B.S. Mortgage Company (U.S. Bank System), Family Bank of Mankato, First Federal Savings and Loan of Rochester, First National Bank of Saint Peter, First National Bank of Waconia, First Republic Mortgage, First State Bank of Excelsior, Firstar Home Mortgage, Forest Lake State Bank, G.E. Capital Credit Corporation of San Bernandlno, GMAC Mortgage Corporation, Great Lakes Mortgage Company, Helgl Mortgage & Financial Corporation, Hometown Mortgage, Homeside Lending of Jacksonville, Florida, Homestead Mortgage, Huntington Mortgage of Columbus, Ohio, ICM Mortgage Corporation, Inland Mortgage, Investors Mortgage, Irwin Mortgage, Knutson Mortgage Corporation, Lakeland Mortgage Corporation, M&I Bank, Margaretten & Company, Marquette Bank, Marshall & Ilsley Trust, Merrill Lynch Mortgage, Metmor Financial Corporation, Metropolitan Federal Bank, Meridian National Bank, Mid-America Mortgage Corporation, Midland Mortgage Company of Oklahoma City, Moneylink Mortgage, Mortgage Direct of Santa Ana, National City Bank of Minneapolis, Northeast State Bank Northern Federal Savings Bank of Saint Paul, Northern Mortgage Company, Northwest Mortgage Corporation, PHH Mortgage, Pet Dairy Employees Federal Credit Union, Premier Mortgage Corporation , Presidential Bank, Prime Mortgage Corporation , Principal Mortgage Corporation, Pro -Action Mortgage Corporation, Residential Mortgage Group, River City Mortgage, Ryland Mortgage Corporation, Saint Paul Postal Employees Credit Union, Sears Mortgage Company, Sierra Mortgage, LLC, Standard Federal Savings Association of Gaithersburg, Maryland, Sterling Mortgage Corporation, TCF Mortgage Corporation, Village Bank Voyager Mortgage Corporation Wells Fargo Mortgage, Western Mortgage Corporation, United Mortgage, U,S. Bank and U.S. Home Mortgage Corporation. Education University of Minnesota, B.A. in Political Science Industry Leadership North Star Chapter of the Appraisal Institute 2011 President Appraisal Institute Region III Ethics and Review Counseling National Committee member. Certified Real Property Appraiser, Minnesota State Department of Commerce, License #4000357, Saint Paul, Minnesota. Registered Appraiser -Federal National Mortgage Association (FNMA) License #1085993, Chicago, Illinois. Fee Appraiser-U.S, Department of Veterans Affairs (VA), Saint Paul, Minnesota Regional Office, Fee Appraiser-U.S, Department of Housing and Urban Development (H.U.D), Minneapolis, Minnesota Regional Office. 1" Place Award from the Minnesota Creative Computer Symposium for development of a computer program which analyzes and calculates cash equivalency of non -market financial instruments International Right -Of -Way Association, Member Minnesota Employee Relocation Council, Member Minneapolis Building Owners and Managers Association (BOMA), Member National Association of Mortgage Brokers, Member Professional Designations Received GRI designation (Graduate, Realtors Institute), Minnesota Association of Realtors, December, 1974. Received CMA designation (Certified Minnesota Assessor), Minnesota State Board of Assessors, August, 1977. Received SAMA designation (Senior Accredited Minnesota Assessor), Minnesota State Board of Assessors, January, 1988. Received SRPA designation (Senior Real Property Appraiser) from the International Society of Real Estate Appraisers, Chicago, Illinois, September, 1988. Received MAI designation from the Appraisal Institute, Chicago, Illinois, May, 2005. Received CCIM designation from CCIM Institute, Chicago, Illinois, May, 2007. Teaching Experience Instructor of Real Estate Appraisal, William Mitchell College of Law, Saint Paul, Minnesota. Instructor of Real Estate Appraisal, Minnesota Institute of Legal Education, Minneapolis, Minnesota. Instructor of Real Estate Appraisal, Duluth Area Vocational Technical Institute (D.A.V.T.I). Instructor, "Expert Witness Testimony—Preparing for Court," Minnesota Association of Assessing Officers. Instructor, "Discounted Cash Flow Analysis," Minnesota Association of Assessing Officers, Saint Cloud, Minnesota. Continuing Education o Completed Course x101, "An Introduction to Appraising Real Property", sponsored by the Society of Real Estate Appraisers, University of Wisconsin at Madison, 1974. o Completed Course #201, "Principles of Income Property Appraising", sponsored by the Society of Real Estate Appraisers, University of Oklahoma at Norman, March, 1975. o Completed "Real Estate Law", University of Minnesota at Minneapolis, lune, 1976. o Completed Course A, "Tax Assessment Laws and History", sponsored by the Minnesota Department of Revenue and the University of Minnesota, August, 1977. o Completed Course #301, "Special Applications of Appralsal Analysis", sponsored by the Society of Real Estate Appraisers, University of Nebraska at Lincoln, August, 1978. o Completed Course B, "Techniques of Mass Appraisal", sponsored by the Minnesota Department of Revenue and the University of Minnesota, April, 1979. o Completed "Computer -Aided Assessment and Ratio Studies", sponsored by the Minnesota Department of Revenue and the University of Minnesota, February, 1980. o Completed International Association of Assessing Officers (IAAO) Course In "Assessment Administration", Saint Paul, Minnesota, August, 1980. o Completed "Capitalization Theory and Techniques", sponsored by the American Institute of Real Estate Appraisers, University if Minnesota, September, 1983. o Completed "Appraisal Analysis and Report Writing", sponsored by the American Institute of Real Estate Appraisers, University of Minnesota, September, 1984. o Completed "Lotus 1-2-3 Spreadsheet Analysis", sponsored by Amerldata Institute, Minneapolis, Minnesota, December, 1985. o Completed "Calculator, Segregated, and Computerized Cost Estimating", sponsored by Marshall -Swift Company, Bloomington, Minnesota, July, 1987. o Completed "Standards of Professional Practice and Professional Ethics", sponsored by the American Institute of Real Estate Appraisers and the University of Minnesota, January, 1988. o Completed "Business Valuation and Real Estate Seminar", sponsored by the American Institute of Real Estate Appraisers and the University of Minnesota, May, 1989, o Completed "Real Estate Extraction and Investment Analysis", sponsored by the Appraisal Institute and the University of Arizona at Tucson, February, 1991. o Completed "Appraising Troubled Properties", sponsored by the Appraisal Institute and the University of Minnesota at Saint Paul, December, 1991. o Completed "Americans with Disabilities Act and Real Estate", sponsored by the Minnesota Mortgage Bankers Association, Bloomington, March, 1992. o Completed "Mortgage Foreclosure Procedures", sponsored by the Minnesota Institute for Legal Education, Bloomington, Minnesota, April, 1992. o Completed "Eminent Domain Real Estate Valuation", sponsored by the Minnesota Institute for Legal Education, Bloomington, Minnesota, November, 1992. o Completed "Comprehensive Appraisal Review Seminar", sponsored by the Appraisal Institute and Boston University, Boston, Massachusetts, July, 1993. o Completed "Real Estate Property Tax Appeals", sponsored by the Minnesota Institute for Legal Education, Bloomington, Minnesota, November, 1993. o Completed "Mortgage Underwriting Review Seminar", sponsored by the Minnesota Mortgage Bankers Association, Minneapolis, Minnesota, February, 1994. o Completed "Discounted Cash Flow Analysis", sponsored by the Appraisal Institute and the University of Saint Thomas, Minneapolis, Minnesota, March, 1994, o Completed "Understanding Limited Appraisals Assignments", sponsored by the Appraisal Institute and the University of Saint Thomas, September, 1994. o Completed "The Underwriter's Perspectives on the Universal Residential Appraisal Report", sponsored by Norwest Mortgage Corporation, Bloomington, Minnesota, September, 1994. o Completed "Appraising Contaminated Real Estate", sponsored by the Minnesota Department of Revenue, Saint Cloud, Minnesota, December, 1994. o Completed "Appraising FHA -Insured Property", sponsored by the Appraisal Institute and the Department of Housing and Urban Development, Minneapolis, Minnesota, January, 1995. o Completed "Fair Lending and the Appraiser", sponsored by the Appraisal Institute and the University of Saint Thomas, Minneapolis, Minnesota, January, 1996. o Completed "Hotel/Motel Valuation Seminar", sponsored by the Appraisal Institute and the University of Saint Thomas, Minneapolis, Minnesota, April, 1996. o Completed "Tax Increment Financing", sponsored by Minnesota Institute for Legal Education, Minneapolis, Minnesota, November, 1996. o Completed "Case Studies In Professional Appraisal Practice and Ethic standards", sponsored by the Appraisal Institute and Arizona State University, Tempe, Arizona, September, 1997, o Completed "Real Estate Investment Trusts (REITs)", sponsored by the Appraisal Institute and the University of Colorado, Boulder, Colorado, April, 1999. o Completed "Case Studies In Commercial Highest and Best Use" sponsored by the Appraisal Institute and Arizona State University, Tempe, Arizona, August, 1999. o Completed "Internet Technologies in Real Estate Appraisal", sponsored by Ala Mode Software and University of Chicago, Chicago, Illinois, April, 2000. o Completed "Partial Interest Valuation" sponsored by the Appraisal Institute and University of Washington, Seattle, Washington, August, 2001. o Completed "2003 National USPAP Update", sponsored by the Appraisal Institute and University of Saint Thomas, Minneapolis, Minnesota, January, 2003, o Completed "Separating Business Enterprise Value and Personal Property from Real Estate", sponsored by the Appraisal Institute and Southern Methodist University, Dallas, Texas, September, 2003. o Completed "Appraising Manufactured Housing", sponsored by the Appralsal Institute and University of Minnesota, Saint Paul, Minnesota, March, 2004, o Completed "Evaluating Commercial Construction", sponsored by the Appraisal Institute and University of Minnesota, Saint Paul, Minnesota, January, 2005. o Completed "Commercial Real Estate Investment Analysis", sponsored by University of Iowa, Iowa City, Iowa, September, 2006. o Completed "User Decision Analysis of Commercial Real Estate", sponsored by Ohio State University, Columbus, Ohio, February, 2007, o Completed "Nursing Home and Assisted Living Appraisal", sponsored by Northwestern University, Evanston, Illinois, May, 2008. o Completed "Business Practices and Ethics", sponsored by University of Minnesota, Saint Paul, Minnesota, July, 2008. o Completed "Real Estate Trends", sponsored by University of Minnesota, Saint Paul, Minnesota, May, 2009. o Completed "Appraisal Curriculum Overview" sponsored by the University of Nebraska, Lincoln, Nebraska, April, 2010. o Completed "Appraising the Appraisal", sponsored by the University of Saint Thomas, Saint Paul, Minnesota, November, 2011. STATE OF MINNESOTA Y DANIEL T BORIS 11212 86TH AVENUE NORTH, SUITE A MAPLE GROVE, MN 55369-4552 The Undersigned COMMISSIONER OF COMMERCE for the State of Minnesota hereby certifies that DANIEL T BORIS 11212 86TH AVENUE NORTH, SUITE A MAPLE GROVE, MN 55369-4552 has complied with the laws of the State of Minnesota and Is hereby licensed to transact the business of Resident Appraiser: Certified General License Number: 4000357 unless this authority is suspended, revoked, or otherwise legally terminated. This license shall be in effect until August 31, 2015. IN TESTIMONY WHEREOF, I have hereunto set my hand this July 23, 2013. COMMISSIONER OF COMMERCE Minnesota Department of Commerce Licensing Division 85 7th Place East, Suite 500 St. Paul, MN 55101-3165 Telephone: (651) 599-1599 Email; licensing,commerce@state.mn.us Website: commerce.state.mn,us Notes: Continuing Education: LE-EgaWrement Type, Total - Appraiser USPAP CE Reg ired Hau a 30.00 7.00 Continuing Education: 15 hours Is required in the first renewal period, which includes a 7 hour USPAP course. 30 hours Is reepqulred for each subsequent renewal period, which Includes a 7 hour USPAP course. • pAppraisers: nofm appraisals fort ederally relateded Plransaclions Trainees do not quall� For furrlllher dellalls 1p;lce�lsen visit our website at commerce.stala.mn.us. Form ` !9 Request for Taxpayer Give Form to the (Rev, August 2leTr Identification Number and Certification t Section references are to the Internal Revenue Code unless otherwise noted, requester. f not "o""31,111 of the Treasury affocling Farm W-9 (such as agfslallon enacted slier we release ll) will be posted similar to this Form W-9. I send to the RS. Internal Revenue Service Purpose of Form person If you are: A person who Is required to Ille, an Information return with the IRS must obtain your • An Individual who Is a U.S, citizen or U.S, resident alien, Name (as shown on your 1AMMe, tax stern) - A parinershlp, corporation, company, or association created or organized In the you, payments made to you In settlement of payment card and third pony network The Appraisal Grou transar lions, real estate transactions, mortgage interest you paid, acquisition or N Business name/disregarded entity name, if different from above . A domestic trust (es defined in Regulations section 301.7701.7) d rn Special rules for partnerships. Partnerships that conduct a trade or business in provide your correct TIN to the person requesting It ((he requester) and, when M CL C Check appropriate box for federal lax classlllcation: Exemptlons (see instructions): N❑ Individual/sole proprietor Q C Corporation ❑ S Corporation ❑ Partnership ❑ TrusVestete to be o 2. Certify that you are not subject to backup withholding, or Exempt payee code (if any) 0 ❑ Limited liability company. Enter the tax classification (C -C corporation, S=S corporation, P=partnership) s Exemption from FATCA reporting N aC, eEl v Other (see instfuctlons) ► coda (If any) u Address (number, street, and apt. or suite no.) - RequWar's name and address (optional) c 11212 --86th Avenue North City, slate, and ZIP code N Maple Grove, MN 55369.4552 List account numbef(s) here (opflonal) 11 Taxpayer Identification Number TIN Enter your TIN In the appropriate box. The TIN provided must match the name given on the "Name" line Social seourlty'lumber avoid backup withholding. For Individuals, this Is your social security number However, for re peg r L_4�1J resident ellen, sole proprietor, or disregarded entity, see the Part I Instructions on page 3. For other i entities, It Is your employer Identification number (EIN). If you do not have a number, see How to get a TIN on page 3. Note. If the account Is in more than one name, see the chart on page 4 for guidelines on whose Employer tdentlficagon Aumber number to enter. 4 ( — 1 1 7 1 6 1 6 1 4 1 8 1 4 Under penalties of perjury, I certify that: 1. The number shown on this form Is my correct taxpayer Identiflcatlon number (or I am waiting for a number to be Issued to me), and 2, 1 am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup wtthholding as a result of a failure to report all Interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, end 3. 1 am a U.S. citizen or other U,S, person (defined below), and 4. The FATCA code(s) entered on this form (If any) Indicating that I am exempt from FATCA reporting Is correct, Certification Instructions, You must cross out Item 2 above If you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all Interest and dividends on your tax return. For real estate transactions, Item 2 does not apply. For mortgage Interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an Individual retirement arrangement (IRA), and generally, payments other (hanJntt and dividends, ou are nvt spulred to sign the certIfication, but you must provide your correct TIN. See the res instructions on page 3. / / / 9n Here Signature of us.person ► Date ► � dthholding tax on foreign partners' sharp of effectively connected Income, and General Instruction's U/ t Section references are to the Internal Revenue Code unless otherwise noted, 4, Certify that FATCA code(s) entered on this form (II any) Indicating that you are exempt from the FATCA reporting, Is correct. Future developments. The IRS has created a page on IRS.gov for information about Form W-9, at www.frs.rgovlw9. Information about any future developments Note. If you are a U.S. person and a requester gives you a form other than Form W-9 to request yo6r TIN, you must use the requester's form If it is substantially affocling Farm W-9 (such as agfslallon enacted slier we release ll) will be posted similar to this Form W-9. on that pn0o. Dalinlllah of a U.S. person. For federal tax purposes, you aro considered a U.S. Purpose of Form person If you are: A person who Is required to Ille, an Information return with the IRS must obtain your • An Individual who Is a U.S, citizen or U.S, resident alien, correct taxpayer fdanlllicaGon number (TIN) to report, for example, Income paid to - A parinershlp, corporation, company, or association created or organized In the you, payments made to you In settlement of payment card and third pony network United Slates or under Ihe laws of the United States, transar lions, real estate transactions, mortgage interest you paid, acquisition or . An estate (other than a foreign estate), or to anVIAabandonment of secured property, cancellation of debt, or conulbullons you made . A domestic trust (es defined in Regulations section 301.7701.7) Use Form W-9 only If you are a U.S. person (Including a resident alien), to Special rules for partnerships. Partnerships that conduct a trade or business in provide your correct TIN to the person requesting It ((he requester) and, when the United Slates are generally required to pay a withholding tax under section applicable, to- 1446 on any foreign partners' share of effacitvely connected taxable Income from Certifyt 1. Certify that the TIN you are giving Is correct (or you are wailing for a number such business. Further, In certain cases where a Form W-9 has not been received, the rules under section 1446 require a partnership to presume that a partner Is a to be foreign person, and pay the section 1446 withholding lax. Therefore. It you era a 2. Certify that you are not subject to backup withholding, or U.S. person that Is a partner In a partnership conducting a trade or business In the 3. Claim exemption from backup wlthholding if you are a U.S, exempt payee. If United States, provide Form W-9 to the partnership to establish your U.S. status and avoid section 1446 withholding on your share of partnership inoomo, applicable, you are also certifying that as a U,S. person, your allocable share of any partnership Income from a U.S, trade or barslness Is not subjecl to the Cal, No, 10231X Form W-9 (Rev. 8-2013) Leone Valerie From: Jim Wise UWise@ebHerman.com] Sent: Friday, October 03, 2014 4:26 PM To: Leone Valerie Cc: MAI Ellen B. B. Herman MAI Subject: Appraisal RFP's Attachments: New Hope Admin Bldg Prpsl.pdf; New Hope Bus Garage Prpsl.pdf Dear Valerie, Ellen Herman has requested that I forward our bid for appraisal services for the direct acquisition of the Independent School District 281 administrative building and the bus garage properties by the City of New Hope. Attached to this email in pdf format is our proposal for appraisal services for each of the properties. We thank you for the opportunity to respond to your bid request and appreciate your consideration. If you have any questions regarding our proposals, please contact Ellen or myself . Jim Wise James J. Wise, CPA, JD Vice President E.B. Herman Companies Herman Appraisal Services, Inc Herman Agency 222 South Ninth Street Suite 3230 Minneapolis, MN 55402 Telephone: 612-630-8077 Facsimile: 612-630-8075 ww w.ebHerman.com Our Credibility is Your AdvantageTM on EBHERMAN C; G : , A iii i [M ; October 3, 2014 Valerie Leone, CMC Re: Proposal for Real Estate Appraisal Services City Manager City Acquisition City of New Hope 4401 Xylon Avenue North Subject Property: School District #218 New Hope, MN 55428 Administrative Building Property 4148 Winnetka Avenue North Sent via email: New Hope, Hennepin County, Minnesota vleone.Caci. n ew-hope. m n. us PID #17-118-21-23-0002 Client: City of New Hope Dear Ms. Leone: Thank you for contacting EB Herman Companies/Herman Appraisal Services, Inc. (the Firm) about providing appraisal services to the City of New Hope (City), Based on your September 18, 2014 Request for Proposal (RFP) letter, it is our understanding that the City requires a market value appraisal of the above referenced property for acquisition purposes. The valuation services provided by the Firm will fully comply with the requirements of the Code of Professional Ethics and the Standards of Professional Practice of the Appraisal Institute and the Uniform Standards of Professional Appraisal Practice (USPAP) adopted by the Appraisal Standards Board of the Appraisal Foundation. Intended use of the appraisal and appraisal report is to determine the offering price for the acquisition of the subject property from the Robbinsdale School District in an arm's length transaction. The intended users of the appraisal and report are the Client and other authorized users by the Client. The Firm is fully qualified to perform the work requested by the RFP. The Firm's expertise includes the valuation of all types of real estate and closely held business interests. Our work frequently involves government and private sector acquisitions and dispositions. Ellen Herman, MAI, CNE, founder and CEO/president of the Firm, will be responsible for all work, and valuation opinions and conclusions developed for this assignment and will be the primary signatory of the report. For further information about the Firm please visit our website (www.ebherman.com). Our proposed fee for the above-described services is $4,950. The Firm will deliver the report in 4 to 6 weeks after being award the contract, unless you require an earlier delivery date. This fee proposal and delivery date is based on the scope of the assignment as described in your RFP. HERMAN APPRAISAL SERVICES, INC, THE HERMAN AGENCY I� ..:, I:.!.)'I;. 222 ,South Ninth Street:, Suit(, 3230, Minneapolis, MN 55402 1 T: 6.12-630-8077 1 F: 612-630.8075 1 ehherman,corn RE: Proposal for Real Estate Appraisal Services Acquisition of ISD #281 Administrative Building Valerie Leone, CMC City Manager City of New Hope October 3, 2014 Page 2 We thank you for providing us with an opportunity to respond to your proposal request. We greatly appreciate your consideration and hope to work with you on this interesting matter. EBH:jmj Very truly yours, EB HERMAN COMPANIES Ellen B. Herman, MAI, CNE President EB HERMAN COMPANIES HERMAN APPRAISAL. SERVICES, INC. "PlIP, HERMAN AGCaNCY C}!,'.: t I'.I'i)!s!i,1" Y iS YOUR,..tVANTiiX!; ESHERMAN October 3, 2014 Valerie Leone, CMC Re: Proposal for Real Estate Appraisal Services City Manager City Acquisition City of New Hope 4401 Xylon Avenue North Subject Property: School District #218 New Hope, MN 55428 Bus Garage Property 4124 Winnetka Avenue North Sent via email: New Hope, Hennepin County, Minnesota vJeone@ci.new-ho,pe.rnn.us PID #17-118-21-23-0018 Client: City of New Hope Dear Ms. Leone: Thank you for contacting EB Herman Companies/Herman Appraisal Services, Inc. (the Firm) about providing appraisal services to the City of New Hope (City). Based on your September 18, 2014 Request for Proposal (RFP) letter, it is our understanding that the City requires a market value appraisal of the above referenced property for acquisition purposes. The valuation services provided by the Firm will fully comply with the requirements of the Code of Professional Ethics and the Standards of Professional Practice of the Appraisal Institute and the Uniform Standards of Professional Appraisal Practice (USPAP) adopted by the Appraisal Standards Board of the Appraisal_ Foundation. Intended use of the appraisal and appraisal report is to determine the offering price for the acquisition of the subject property from the Robbinsdale School District in an arm's length transaction. The intended users of the appraisal and report are the Client and other authorized users by the Client. The Firm is fully qualified to perform the work requested by the RFP. The Firm's expertise includes the valuation of all types of real estate and closely held business interests. Our work frequently involves government and private sector acquisitions and dispositions. Ellen Herman, MAI, CNE, founder and CEO/president of the Firm, will be responsible for all work, and valuation opinions and conclusions developed for this assignment and will be the primary signatory of the report. For further information about the Firm please visit our website {www.ebherman.com). Our proposed fee for the above-described services is $4,950. The Firm will deliver the report in 4 to 6 weeks after being award the contract, unless you require an earlier delivery date. This fee proposal and delivery date is based on the scope of the assignment as described in your RFP, FTFRMAN APPRAISAL SERVICES, INC. THE HERMAN AGENCY 222 South Ninl:h Street, Suite 3230, Minneapolis, NfN 55402 '1':612-630-8077 I F:61.2-630-8075 I ehhcrman.com RE: Proposal for Real Estate Appraisal Services Acquisition of ISD #281 Bus Garage Building Valerie Leone, CMC City Manager City of New Hope October 3, 2014 Page 2 We thank you for providing us with an opportunity to respond to your proposal request. We greatly appreciate your consideration and hope to work with you on this interesting matter. EBH:jmj Very truly yours, EB HERMAN COMPANIES Ellen B. Herman, MAI, CNE President E3 HERMAN COMPANIES HERMAN APPRAISAL SERVICES, INC. THE Rf.:'RMAN AGENCY Leone Valerie From: Laura Wisneski [Iwisneski@shenehon.com] Sent: Friday, September 26, 2014 3:40 PM To: Leone Valerie Subject: Proposal: Appraisals of ISD #281 Buildings in New Hope Attachments: ISD 281 Buildings, New Hope.pdf Good afternoon, Ms. Leone: Please find attached our proposal to prepare market value appraisals of the Independent School District #281 properties at 4148 and 4124 Winnetka Avenue in New Hope, Minnesota. Hard copies of this document are available at your request. Thank you, and have a great weekend. Laura Wisneski i Administrative Coordinator 88 South 10th Street, Suite 400 Minneapolis, MN 55403 612,767.9452 612,333.6533 612.344.1635 shenehon.com The information contained in this message is confidential intended only for use by the individual or entity named above. If you are not the addressee, note that any disclosure, copying, distribution, or use of the contents of this message is prohibited. If you have received this transmission in error, please destroy it and notify us immediately at 612.333.6533. SHENEHONCOMPANY 11L SINFSS & R17A1, 1 S ['A"1 F i-ALV).A'I`I()N1S September 26, 2014 Ms. Valerie Leone City Clerk City of New Hope 4401 Xylon Avenue North New Hope, MN 55428-4898 RE: Proposal for Market Value Appraisals of the Properties Owned by Independent School District #281 at 4148 and 4124 Winnetka Avenue in New Hope, Minnesota Dear Ms. Leone: We are pleased to submit a proposal to appraise the above -referenced properties for the intended use in a direct purchase from Robbinsdale School District. The valuation date of the appraisals will be October 1, 2014. Please keep in mind that an appraisal of the same property with a different valuation date constitutes a new assignment. We understand that you are our client in this matter and responsible for ensuring our fees are paid in a timely manner. SCOPE OF THE ASSIGNMENT We will identify the problem to be solved and determine the appropriate scope of work to produce credible assignment results. Scope of work is the type and extent of research and analysis for the appraisal assignment. Determining the scope of work is an ongoing process in an assignment. Information or conditions discovered during the course of an assignment might cause the appraiser to reconsider the scope of work. The appraisals will comply with the requirements and guidelines of the Uniform Standards of Professional Appraisal Practice (USPAP). APPRAISAL REPORTS Shenehon Company will prepare an Appraisal Report for each property using all relevant approaches to value to estimate the market value of the subject properties. An Appraisal Report is one of the two written report options; the essential difference between the reports is the content and level of information provided. Our reports will summarize all information significant to the solution of the appraisal problem, with supporting data retained in our workfiles. You may review the workfiles at any time. n8 _,l.,U.l•l .1:'1'1.1 5•I I!.Ri6f )l,i l'.. •:;I.I(i i '�'f;NCr:p(:. E_I:; A'11v2N1:>O"i :1 i .. ` 6 e:a:i Is.,'o:: Gl:'%:'11-I635 4'f"t•i1'V,SIiE.1141 -IC?s.l,('0.10 C:. AP,I':.: %iAl!.;4'.c'S111:1 Ms. Valerie Leone Page 2 September 26, 2014 APPRAISAL FEE STRUCTURE Our fees for this engagement are not contingent upon any predetermined appraised value or the results of our services. Rather, our fees will be based on our hourly rates. Our estimated fees for these services are below. Note these are estimated fees, and our actual fees may differ. In the event we encounter unusual circumstances that would require us to expand the scope of the engagement or if we anticipate our fees will significantly exceed the estimated amount, we will advise you accordingly. An electronic copy and two hard copies of the written appraisal report are available, with additional copies available at our cost. In addition, you agree to reimburse us for any of our out-of-pocket costs incurred in connection with the performance of our services, including, but not limited to, travel expenses, color copies, and long-distance telephone calls. Appraisal Report — Administration Building $6,500 Appraisal Report — Bus Garage $7,800 Total $14,300 The fee is due and payable upon completion of each assignment. Invoices unpaid 30 days past the billing date may be deemed delinquent and any balance owed may be subject to interest charges at the annual rate allowed by law. A retainer is not necessary because of a previous client relationship. We anticipate that our appraisals will be completed within 45 days after we have received the retainer, written authorization, and all information and documents (see attached list). DESCRIPTION OF FIRM Shenehon Company is a real estate and business valuation firm serving both the public and private sectors throughout the United States, although our geographic concentration is the Upper Midwest. We have worked in over 40 states and are qualified to work in any state. If a property is in a state where we are not permanently licensed, we can secure a temporary license to appraise in that state. Shenehon Company is dedicated to providing its clients with quality valuations prepared by knowledgeable appraisers and analysts. Staff members incorporate extensive and ongoing education with practical experience performing a wide variety of real estate and business valuations. TECHNICAL QUALIFICATIONS Many of our appraisers hold professional designations that are highly regarded in the appraisal industry. Our appraisers are also active members of various boards and trade associations. Our senior appraisers serve as review appraisers, arbitrators, mediators, commissioners, special magistrates, and lecturers. Over the years, our appraisers have published articles in local and national trade journals. Ms. Valerie Leone Page 3 September 26, 2014 SPECIAL QUALIFICATIONS We have previously valued school properties similar to the subject property, giving us the knowledge and experience to meet the competency provision outlined in USPAP. Shenehon appraisers have testified for many purposes, such as condemnation actions, property tax appeals, special assessment appeals, marriage dissolution proceedings, and the like. We have represented clients in state and federal courts, as well as arbitration panels and public service commissions. Appraisal reports prepared for litigation comprise a significant portion of our practice. Our methods are recognized and respected, and our analyses are relied upon by the courts. We have enclosed a copy of our company brochure and most recent newsletter, along with resumes of our principals. For more information on Shenehon Company, please visit our website at www.shenehon.com. If this proposal and attached appraisal contract conditions are acceptable, please indicate your approval below and return it to the undersigned. Thank you for considering Shenehon for your appraisal needs. We look forward to working with you. Sincerely, SHENEHON COMPANY AUTHORIZATION TO PROCEED Robert J. Strachota, MAI, CRE®, MCBA, FIBA President, Shareholder Minnesota License No. 4000882 Certified General Appraiser /law Enclosures Signature: Name: Date: APPRAISAL CONTRACT CONDITIONS 1. Shenehon Company warrants that the services will be performed in a professional manner, in accordance with established appraisal industry standards. The firm makes no further warranty of any kind, expressed or implied. 2. Disclosure of the contents of this appraisal report is governed by the bylaws and regulations of the professional appraisal organizations with which various appraisers in the hrm are affiliated. These include the Appraisal Institute, the Institute of Business Appraisers, the American Society of Appraisers, and The Counselors of Real Estate'. Shenehon Company will preserve the confidential nature of information received from the client, in accordance with established appraisal industry standards. The client agrees to preserve the confidential format and content of the appraisal report. The report and the appraiser's identity may not be used in whole or part, outside the client's organization, without prior written approval, except for review by auditors and legal counsel, and by the representatives of taxing authorities. 4. The persons authorizing the engagement on behalf of the client and Shenehon Company are empowered to do so. 5. The client agrees that Shenehon Company does not, by entering into this contract or by performing the services rendered, assume, abridge, abrogate, or undertake to discharge any duty of the client to any other entity. 6. Any use of the appraisal report, by the client, is conditioned upon payment of all fees in accordance with the agreed terms. 7. The fee charged for the appraisal is not contingent upon values concluded by Shenehon Company or any future event such as the securing of financing. 8. The proposed delivery schedule indicated in the engagement letter (unless otherwise stated) assumes that: a. Written authorization and/or the retainer are received by a specified date or in a timely manner. b. All information requested by Shenehon Company is readily available or provided by the client in a timely manner. C. The appraisers employed by Shenehon Company will have ready access to the property to be appraised. 9. All fees set forth in the engagement letter are due and payable upon completion of the specified assignment regardless of whether the valuation conclusions reached coincide with the client's expectations. 10. No opinion is intended to be expressed for matters that require legal or other specialized expertise, investigation, or knowledge beyond that customarily employed by appraisers in the evaluation of real estate or businesses. 11. Unless specific conditions are brought to the appraiser's attention, the appraiser will assume that there are no hidden or unexpected conditions of the asset to be appraised that would adversely affect or enhance the value. 12. Hazardous substances, if present within a property or business operation, may result in an actual or potential liability that will adversely affect the marketability and value of the asset. Such liability may be in the form of immediate recognition of existing hazardous conditions or future liability that could stem from the release of currently known hazardous contaminants. In the development of the opinion of value, no consideration will be given to such liability, or its impact on value, unless Shenehon Company is specifically retained to perform or prepare an environmental or toxic contamination analysis. Nonetheless, in the event that such a report is prepared, the client releases the appraiser from any and all future environmental liability. 13. If Shenehon Company is compelled to produce documents or testify regarding work performed, the client will reimburse the appraiser for all costs and expenses incurred. 14. In consideration for performing the services rendered at the fee charged, Shenehon Company expressly limits its liability to five (5) times the fee amount paid or $100,000, whichever is less. 15. Shenehon Company expressly disclaims liability as an insurer or guarantor. Any persons seeking greater protection from loss or damage than is provided for herein should obtain appropriate insurance. 16. The client will indemnify and hold Shenehon Company and its employees harmless against all claims by any third party or any judgment for loss or damage relating to the performance or nonperformance of any services by the appraisal firm. 17. In the event of a dispute involving interpretation or application of this agreement, the parties agree that this agreement will be governed under the laws of the state of Minnesota. 18. Shenehon Company reserves the right to assess interest charges on all unpaid accounts. 19. Shenehon Company reserves the right to refuse an assignment if a party other than the addressee of the letter signs the engagement letter. 20. Shenehon Company reserves the right to assess for any collection time incurred. 21. Liability for appraisal fees is the responsibility of the party signing the appraisal contract or the organization on whose behalf the individual is signing. 2 22. Shenehon Company and/or the appraisers are not qualified to render expert opinions regarding structural issues, water damage, environmental assessments (such as mold), engineering/mechanical issues, ADA and/or building code compliance, land planning, architectural expertise, soil conditions, audit/accounting opinions, legal opinions, credit opinions, or federal/state tax matters. If requested, Shenehon Company will recommend qualified experts in these fields to assist the client and/or advance the appraisal process. INFORMATION AND DOCUMENT REQUEST 1. Legal descriptions 2. Contact information for property inspections 3. Most current real estate tax statements 4. Land size and/or site survey, with building layouts 5. Year built for each building 6. Year of any additions or remodeling 7. Gross building areas for each building 8. Blueprints or building plans 9. Breakdown of space by use (for example, office, warehouse, garage) 10. Financial statements for the current and preceding five years of the real estate 11. Operating budget for 2014 12. Summary of capital improvements for the past five years 13. Capital improvement budget 14. Summary of any functional or operational problems 15. Any previous appraisals 16. Any environmental studies 17. Copies of any purchase agreements, closing statements, listings, or offers within the past three years 18. Any restrictions, easements, or encumbrances affecting the property City Council Minutes Work Session Meeting CALL TO ORDER ROLL CALL (IMP. PROJECT #926tem 11.1 CITY OF NEW HOPE 4401 XYLON AVENUE NORTH NEW HOPE, MINNESOTA 55428 August 18, 2014 Parks and Recreation Conference Room The New Hope City Council met in work session pursuant to due call and notice thereof; Mayor Hemken called the meeting to order at 6:30 p.m. Council present: Kathi Hemken, Mayor John Elder, Council Member Andy Hoffe, Council Member Eric Lammle, Council Member Council absent: Daniel Stauner, Council Member Staff present: Kirk McDonald, City Manager Jeff Algers, Community Development Assistant Jerry Beck, Communications Coordinator Aaron Chirpich, Community Development Specialist Valerie Leone, City Clerk Chris Long, City Engineer Bob Paschke, Director of Public Works Jeff Sargent, Director of Community Development Steve Sondrall, City Attorney Stacy Woods, Assistant City Attorney Also present: Jason Aarsvold, Ehlers Stacie Kvilvang, Ehlers Jean McGann, Abdo, Eick & Meyers, LLC Joel Dunning, Wold Architects Ashley Kohler, Wold Architects Mayor Hemken introduced for discussion Item 11.1, Update on space needs study (project no. 926). Mr. Kirk McDonald, city manager, stated staff would like to obtain feedback from Council regarding the draft presentation and the next steps of the space needs study. He stated the powerpoint presentation is a joint effort between Jerry Beck, communications coordinator, and Joel Dunning of Wold Architects. He stated the presentation could be used to share with the public to identify needs for a new police facility/city hall. Mr. Joel Dunning, Wold Architects, introduced a co-worker Ashley Kohler who is assisting with the project. Mr. Dunning pointed out the powerpoint will cover the deficiencies of the current facility. He stated city hall was constructed in 1968 and has undergone four remodeling projects since that time. Using illustrations within the powerpoint Mr. Dunning explained the conditions of the exterior, HVAC, and City Council Work Session August 18, 2014 Page 1 interior space. He addressed the aging/deteriorating roof noting it would cost $200,000 to replace the rubber roof; exterior walls are poorly insulated, brick mortar is due for tuckpointing; basement has had water seepage into storage areas; inefficient windows with rotting frames; front automatic doors are maintenance issues; boilers lack the code -required shut off switch; chillers operate on outdated R-22 refrigerant; piping deteriorated and leaks; chiller cannot keep up so a sprinkler is used; rooftop mechanical systems are beyond life expectancy; thermostats inoperable; HVAC maintenance costs $80,000 over past two years; lack of maintenance/custodial storage area; no dedicated electrical room; backup generator is in a location that disturbs the theatre; branch electrical panel boards are full (lack of outlets); inefficient lighting fixtures, diffusers, and switches; accessible entrance but unwelcoming approach with elevator off to side; server room has insufficient cooling; visible cable runs especially in lower level; electrical usage average $29,000 per year and gas usage $7,500 (20% less efficient than new building). Mr. Wold reviewed the programmatic deficiencies in each department, council chambers, plan storage room, and conference rooms. It was also noted a gymnastics space is rented outside the city and costs over $20,000 annually. Council Member Lammle pointed out the low points in the front public lobby counter that contains an overhang where tall individuals may strike their heads and suggested inclusion in the powerpoint. Council Member Elder suggested omitting the smaller items and focusing on the major deficiencies. Council Member Hoffe recommended a comparison of costs to correct the deficiencies. Mr. Dunning stated it would cost approximately $1.4 million to upgrade the maintenance items (not a remodeling). Mr. Kirk McDonald, city manager, updated the Council on the joint facility concept and stated he and Mr. Dunning have met with district 281 staff. He indicated the school district would like a proposal from the city to purchase school district property. Mr. McDonald recommended Council authorize an appraisal be obtained and that staff work with Ehlers to develop a potential financing plan. He noted there are a number of issues that would come into play with a joint facility. It was noted a long-term commitment from the school district would be necessary. Council was informed an appraisal would cost approximately $7,500. Council agreed to an appraisal if the cost was shared 50/50 with the school district. Council also requested parallel finance plans (to construct a facility on the school district property and to construct a facility on city -owned property) along with the redevelopment potential at both sites. IMP. PROJECT #893 Mayor Hemken introduced for discussion Item 11.2, Update on the city center Item 11.2 redevelopment activities (project no. 893). Mr. Jeff Sargent, community development director, explained there are several activities that staff would like to review with Council which need to occur in conjunction with the Hy -Vee plan to help solidify the vision of the area. Mr. Nate Ekhoff from Stantec reviewed various streetscape designs including street sections, gateway entrance, lighting styles, storm water design, open air canopies, and city hall plaza. City Council Work Session August 18, 2014 Page 2 mlow�l OAQ Originating Department City Manager Kirk Update on space needs study (prof ect 926) Request for Action Approved for Agenda August 18, 2014 Kirk McDonald Agenda Section Work Session Item No. 11.1 Requested Action Staff requests to present an update on the police facility/city hall space needs study and receive feedback and direction from the Council. Staff continues to work with Wold Architects on data to identify the need for a new facility, and have started the preparation of a preliminary presentation which will be reviewed with the Council. Staff has also continued discussions with District 281 and Wold regarding a potential joint city/school district facility, and staff wants to update the Council and seek direction on next steps. Representatives from Wold Architects will be present. Policy/Past Practice Staff provides updates to, and seeks direction from the City Council on a number of projects. The City Council previously approved a police department/city hall space needs analysis study with Wold Architects, and several work sessions have also been held with the District 281 Board regarding a potential joint facility. Background I. Td need for new police derarimentl r� 11 facility Staff has been working with Wold to better define the need for a new police department/city hall facility. Per the attachments, staff met with Wold on June 23 to develop a plan to gather data related to the current facility needs. The group met again at the end of July, and Wold presenter} an outline of facility infrastructure deficiencies and programmatic deficiencies. The communications coordinator has prepared a preliminary power point presentation to coordinate with the Wold outline, and staff would like to review the presentation with the Council to see if we are on the right track and get your feedback. Per the meeting outline I prepared, we will need to include community members and conduct open houses in the future if a new facility will be constructed, so we are considering this as a start to that process. Staff has met several times with a representative from District 281 and representatives from Wold Architects, representing both the city and District 281, in follow up to the direction provided at the May 13, 2014, joint work session between the two entities. The concept of a joint facility was also discussed at a July work session of the District 281 Board. The feedback received from that meeting is as follows: Motion by To: L62 U.;J Mr crit I:/RFA/Cityhianagesj2014/¢Update8paceNeedsStudy 081814 Second by 9 Request for Action, page 2 August 18, 2014 • The District is agreeable and interested in continuing discussions with the city regarding the potential of a joint facility. • The District wants the city to make a proposal to purchase the school District property. • The District is interested in the city building the joint facility with the District leasing their portion of the building • The bus garage would either be relocated or discontinued. That decision would be up to the District. If the garage was relocated, the city would assist in identifying potential relocation sites. • If the city purchased the entire site, and the bus garage was relocated, and a new joint facility constructed on the south portion of the property, the current administration building could be demolished, with that corner location available for redevelopment. Wold Architects has prepared the attached correspondence outlining the benefits of a joint facility, and the potential cost savings that could be achieved. If the City Council wants to continue to pursue the joint facility alternative, staff recommends the Council provide direction to staff as follows: 1. Seek quotes for appraisals on the school district property and present to the Council at a regular council meeting in the future, or the action to direct staff to seek quotes could be placed on a regular council agenda. 2. Authorize staff to work with Ehlers and Wold on a potential financing plan, based on the feedback received from the District, with the city acquiring the property, building the facility and leasing a portion to the District. Demolition and environmental cleanup costs for both the bus garage and administration building would also need to be taken into consideration. Attachments Wold Architects correspondence Leone Valerie From: Sent: Leone Valerie To: Thursday. October 16, 2014 5:15 PM Cc: 'Steve Hosch' Subject: McDonald Kirk IRE. Quote for Appraisals; 4148 and 4124 Winnetka Steve, At its meeting of October 13, 2014, the New proceed and contact me if you have h 'Hope City Council accepted your y questions. Thank quotation for these two appraisals, ppraisals. Please Valerie Leone, City Clerk City of New Hope (763)531_5117 vleone@ci.new mn.us From: Steve Hosch [mailto:shosch hoscha sisal com] Sent: ThursdayOctober 02, 2014 6:33 PM To: Leone Valerie Cc: Steve Hosch Subject: Quote for Appraisals: 4148 and 4124 Winnetka Hi Ms. Leone: Hosch Appraisal &Consulting, Inc. could complete these two a to proceed for the following estimated fees complete assuming appraisals within vi days of receiving formal authorization we would be hired to provide both appraisals: 4148 Winnetka Avenue (-0002): $2,750 to $3,250 4124 Winnetka Avenue (-0018): $2,750 to $3,250 The above fees include preparation of electronic narrative appraisal reports completion. If hard copies are requested, there would be an additional ch ese fees also assume information and building plans are available and that requested p is that would be emailed to you upon rnformat'rongcould e. hbe provided in a timelb We appreciate you considering our firm for this possible assignment. I loo y mkgroundanner earliest convenience. k fo Thanks, Steve Stephen T. Hosch, MAI President Hosch Appraisal & Consulting, Inc. 11172 Zealand Avenue North Minneapolis, MN 55316 (612) 331-1688 - Telephone rward to hearing back from you at your (763) 208-1670 - Fax www.hosr-happraisal.com This e-mail message, including all attachments, is for the sole use of the intended recipient(s) and may contain confidential and privileged information. Unless you are the intended recipient(s), you may NOT use, disclose, copy or disseminate this information. If you are not the intended recipient, please contact the sender by reply e-mail immediately. Please destroy all copies of the original message and all attachments. Leone Valerie From: Steve Hosch [shosch@hoschappraisal.com] Sent: Thursday, October 02, 2014 6:33 PM To: Leone Valerie Cc: Steve Hosch Subject: Quote for Appraisals: 4148 and 4124 Winnetka Hi Ms. Leone: Hosch Appraisal & Consulting, Inc. could complete these two appraisals within 30 days of receiving formal authorization to proceed for the following estimated fees assuming we would be hired to provide both appraisals: 4148 Winnetka Avenue (-0002): $2,750 to $3,250 4124 Winnetka Avenue (-0018): $2,750 to $3,250 The above fees include preparation of electronic narrative appraisal reports that would be emailed to you upon completion. If hard copies are requested, there would be an additional charge. These fees also assume background information and building plans are available and that requested information could be provided in a timely manner. We appreciate you considering our firm for this possible assignment. I look forward to hearing back from you at your earliest convenience. Thanks, Steve Stephen T. Hosch, MAI President Hosch Appraisal & Consulting, Inc. 11172 Zealand Avenue North Minneapolis, MN 55316 (612) 331-1688 - Telephone (763) 208-1670 - Fax www.hoscha raisal.coni This e-mail message, including all attachments, is for the sole use of the intended recipient(s) and may contain confidential and privileged information. Unless you are the intended recipient(s), you may NOT use, disclose, copy or disseminate this information. If you are not the intended recipient, please contact the sender by reply e-mail immediately. Please destroy all copies of the original message and all attachments. THE W.IMWWtALMM G R 0 U P A DIVISION OF KLIN12 INTERNATIONAL 3N1 Premier Commercial & Residential Real Estate Valuation Services September 19, 2014 Ms, Valerie Leone, CMC City of New Hope—City Clerk 4401 Xylon Avenue North New Hope, Minnesota 55428-4898 Detailed Real Estate Market Value Appraisal Assignment Robbinsdale Public School District #281 parcels 4148 Winnetka Avenue North (P.I.D. #17-118-21-23-0002) 4124 Winnetka Avenue North (P.I.D. #17-118-21-23-0018) Dear Ms. Leone: This letter is in response to a letter from you, as City Clerk, dated September 18, 2014, wherein you invite me to submit a proposal for Appraisal Services on the above - noted parcels of real estate owned by the Robbinsdale Public School District #281. I would recommend a single Detailed Appraisal Report depicting a separate value for each of the two parcels. All three traditional approaches to value would be analyzed in estimating market value—Cost Approach, Sales Comparison Approach, and Income Approach. A separate value of land and building improvements for each parcel would be further delineated. The fee for this assignment shall be a total of $7,500. Report delivery shall be no later than five weeks from confirmed contract to proceed. A retainer fee of 50% ($3,750) is required, along with a signed contract, to begin work on this assignment. This assignment is for purposes of estimating market value for an "arms -length" purchase offer to be made by the City of New Hope to the Robbinsdale Public School District. Report delivery shall comprise two (2) hard copies along with a digital copy downloaded to a computer disk or memory stick. The client will assist in providing for inspection of the property by the appraiser and any supporting information such as rentals, operating expenses, and summary of capital improvements. The research and analysis relating to this assignment and report shall conform to the Uniform Standards of Professional Appraisal Practice (USPAP) of the Appraisal Foundation. If you are in agreement with the terms and conditions of this proposal, please acknowledge by signing where indicated on the following page along with a Retainer fee of $3,750. Retain one copy for your files and send the other back to us as soon as possible to: The Appraisal Group Ltd. Daniel T. Boris, MAI, CCIM, SRA 11212 -86th Avenue North Maple Grove, MN 55369-4552 11212 - 86th Avenue North, Suite A, Maple Grove, MN 55369 Visit our web site at Phnr r 7fii-SdS-Il(;91) Tnll Frpp R89-777-717.5 P,)v 71i'1-.543-3890 ......... 46 - q .+ - .. — — Please call me at 763-545-0690, ext 110 should you have any further questions. — �Wd- 7�A � �4 Daniel T. Boris, MAI, CCIM, SRA ; Vice President, Litigation/Consultation Division Date: 09/19/2014 Valerie Leone, CMC, City Clerk City of New Hope, Minnesota Date Tim September 18, 2014 Mr. Daniel Boris The Appraisal Group 11212 8611, Avenue North, Suite A Maple Grove, MN 55369 Subject: Quote for Appraisals The city of New Hope is looking to acquire by "direct purchase" and not by condemnation the adjacent properties currently owned by the Independent School District #281 located as follows: 4148 Winnetka Avenue — PID# 17-118-21-23-0002 4124 Wi.n.netka Avenue - PID# 17-1.18-21-23-0018 These properties are 281's Administration Buil ding and Bus Garage located at 42,,d Avenue North and Winnetka Avenue North in New Hope. We are seeking an experienced appraisal .firm knowledgeable in appraising commercial real estate to provide the city with an appraisal for determining the market value of these properties. The appraisals will be used by the city in conveying an offer to purchase these properties from Robbinsdale School District in an arm's length transaction. If you are interested in this assignment, please provide us with a separate quote for providing each appraisal and an estimated date when the appraisals can be completed. Responses would be appreciated by Friday October 316 and can be submitted to me by letter or e-inail (vleonepci.new-hope.mn.us). Thank you, Sincerely, Valerie Leone, CMC City Clerk CITY QF NFW HOPE 44:01 Xylon A -refute North + New Ilope, Minnesota 55428-4898 « caww. dnew-hope.mn.us City Hall.: 763-531-5100 + Police (ton-ernergenc.y): 763-531-5170 « Public Works: 763-592-6777 + TDD: 763-531-5109 Cite Hall Fax: 763-531-5136 + Police Fax: 763-531-5174 + Pub. lic Works Fax: 763-592-6776 A DIVISION OF (CLINE INTERNATIONAI,. The 'I'AG Team- - Real Estate Valuation Specialists *MARADaniel T,Boris _\ -• 11212-86`h Avenue North MAI, CCIM, SRA Maple Grove, MN 55369-4552 Vice President, Litigation Division T 763.545,0690 F 763.543.3880 DBorls@tagmn.com Areas of Specialization Appraisal, Consultation, Market Analysis, Litigation, Feasibility Analysis Clients Served Corporate appraisal clients: 3M Company, American Express Financial Advisors, Andersen Window Company, Baker Square Restaurants, Bank of America, Bethany Eldercare, Borg-Warner Chemical Company, Briggs and Morgan Law Firm, Butler Paper Company, C. B. Richard Ellis, Cargill Company, Chicago -Northwestern Railway Company, Cintas Corporation, Citicorp, Dana Corporation, Dex Media, Dorsey & Whitney Law Office Downtown Council of Minneapolis, Eastman Kodak Company, Employee Transfer Company, Faegre & Benson Law Office Flanagan Bilton and Branigan Law Firm, Fredrikson & Byron Law Office Gittleman Company, Glasrud Associates Real Estate Company, Grand Casinos, Inc, I.B.M, Imaglnel Print Solutions, I.N.A. Insurance Company, IRET Properties, Kimco Corporation, Kinney & Lange Law Office, KKE Architects, K -Mart, Kohl's Department Stores, Land 0' Lakes, Cooperative, Leonard Street & Delnard Law Office M & I Corporate Trust Services, MacMillan Bloedel Limited, Mellon Bank of Houston, Meritex Corporation, Metropolitan Life Insurance Company, Midland National Life Insurance Resource Group, Minneapolis Public School District S-1 Northwestern Bell Telephone Company, Onan Corporation, Owens-Corning Fiberglass, Penske Trucking Company, Pittsburgh Plate Glass (P.P.G.), Principal Mutual Life Insurance Company, Public School District No, 287, Robert Hill and Associates Law Office, Target Corporation, U -Haul Corporation, Unisys Corporation, US Postal Service, Wal-Mart, Walgreens, Welcome Furniture Company, Westfield Insurance Company and Xcel Energy, Government Appraisal performed for; Hennepin County Probate Court, Ramsey County Probate Court, Hennepin County Family Court, Ramsey County Family Court, Hennepin County Park Reserve District, Scott County Housing and Redevelopment Authority, Dakota County Housing and Redevelopment Authority, Minnesota State Tax Court, the U.S. Department of Veterans Affairs (V.A.), the City of Saint Louis Park, Minnesota, Minneapolis Public Schools, University of Minnesota, State of Minnesota Department of Land Management and numerous condemning authorities. Mortgage appraisals performed for: Agstar Financial, American National Bank of St. Paul, American Residential Mortgage Corporation, Amerus Mortgage, Atlantic Mortgage of Jacksonville, Atlantis Mortgage of Florida, BancPlus Mortgage of San Antonio, Bell Mortgage Company, Bishop Cendant Mortgage, BMO Harris Bank Centennial Mortgage, Chemical Bank of New York, Citibank N.A., Citizens State Bank Columbia National Mortgage, Commonwealth United Mortgage Company, Community State Bank of Bloomington, Countrywide Home Loan, CTX Mortgage Company, Edina Financial Services Corporation, Elan Financial Advisors, Evergreen Mortgage Company, F,B.S. Mortgage Company (U.S. Bank System), Family Bank of Mankato, First Federal Savings and Loan of Rochester, First National Bank of Saint Peter, First National Bank of Waconia, First Republic Mortgage, First State Bank of Excelsior, Firstar Home Mortgage, Forest Lake State Bank, G.E. Capital Credit Corporation of San Bernandino, GMAC Mortgage Corporation, Great Lakes Mortgage Company, Helgl Mortgage & Financial Corporation, Hometown Mortgage, Homeside Lending of Jacksonville, Florida, Homestead Mortgage, Huntington Mortgage of Columbus, Ohio, ICM Mortgage Corporation, Inland Mortgage, Investors Mortgage, Irwin Mortgage, Knutson Mortgage Corporation, Lakeland Mortgage Corporation, M&I Bank, Margaretten & Company, Marquette Bank, Marshall & Ilsley Trust, Merrill Lynch Mortgage, Metmor Financial Corporation, Metropolitan Federal Bank, Meridian National Bank, Mid-America Mortgage Corporation, Midland Mortgage Company of Oklahoma City, Moneylink Mortgage, Mortgage Direct of Santa Ana, National City Bank of Minneapolis, Northeast State Bank Northern Federal Savings Bank of Saint Paul, Northern Mortgage Company, Northwest Mortgage Corporation, PHH Mortgage, Pet Dairy Employees Federal Credit Union, Premier Mortgage Corporation , Presidential Bank, Prime Mortgage Corporation , Principal Mortgage Corporation, Pro -Action Mortgage Corporation, Residential Mortgage Group, River City Mortgage, Ryland Mortgage Corporation, Saint Paul Postal Employees Credit Union, Sears Mortgage Company, Sierra Mortgage, LLC, Standard Federal Savings Association of Gaithersburg, Maryland, Sterling Mortgage Corporation, TCF Mortgage Corporation, Village Bank Voyager Mortgage Corporation Wells Fargo Mortgage, Western Mortgage Corporation, United Mortgage, U,S. Bank and U.S. Home Mortgage Corporation, Education University of Minnesota, B.A. in Political Science Industry Leadership North Star Chapter of the Appraisal Institute 2011 President Appraisal Institute Region III Ethics and Review Counseling National Committee member, Certified Real Property Appraiser, Minnesota State Department of Commerce, License 44000357, Saint Paul, Minnesota. Registered Appraiser -Federal National Mortgage Association (FNMA) License #11085993, Chicago, Illinois. Fee Appraiser -U.S. Department of Veterans Affairs (VA), Saint Paul, Minnesota Regional Office, Fee Appraiser-U.S, Department of Housing and Urban Development (H.U.D), Minneapolis, Minnesota Regional Office, 1st Place Award from the Minnesota Creative Computer Symposium for development of a computer program which analyzes and calculates cash equivalency of non -market financial instruments International Right -Of -Way Association, Member Minnesota Employee Relocation Council, Member Minneapolis Building Owners and Managers Association (BOMA), Member National Association of Mortgage Brokers, Member Professional Designations Received GRI designation (Graduate, Realtors Institute), Minnesota Association of Realtors, December, 1974. Received CMA designation (Certified Minnesota Assessor), Minnesota State Board of Assessors, August, 1977. Received SAMA designation (Senior Accredited Minnesota Assessor), Minnesota State Board of Assessors, January, 1988. Received SRPA designation (Senior Real Property Appraiser) from the International Society of Real Estate Appraisers, Chicago, Illinois, September, 1988. Received MAI designation from the Appraisal Institute, Chicago, Illinois, May, 2005, Received CCIM designation from CCIM Institute, Chicago, Illinois, May, 2007. Teaching Experience Instructor of Real Estate Appraisal, William Mitchell College of Law, Saint Paul, Minnesota. Instructor of Real Estate Appraisal, Minnesota Institute of Legal Education, Minneapolis, Minnesota. Instructor of Real Estate Appraisal, Duluth Area Vocational Technical Institute (D,A,V,T.I). Instructor, "Expert Witness Testimony—Preparing for Court," Minnesota Association of Assessing Officers, Instructor, "Discounted Cash Flow Analysis," Minnesota Association of Assessing Officers, Saint Cloud, Minnesota, Continuing Education o Completed Course d101, "An Introduction to Appraising Real Property", sponsored by the Society of Real Estate Appraisers, University of Wisconsin at Madison, 1974, o Completed Course #201, "Principles of Income Property Appraising", sponsored by the Society of Real Estate Appraisers, University of Oklahoma at Norman, March, 1975. o Completed "Real Estate Law", University of Minnesota at Minneapolis, June, 1976. o Completed Course A, "Tax Assessment Laws and History", sponsored by the Minnesota Department of Revenue and the University of Minnesota, August, 1977. o Completed Course H301, "Special Applications of Appraisal Analysis", sponsored by the Society of Real Estate Appraisers, University of Nebraska at Lincoln, August, 1978. o Completed Course B, "Techniques of Mass Appraisal', sponsored by the Minnesota Department of Revenue and the University of Minnesota, April, 1979. o Completed "Computer -Aided Assessment and Ratio Studies", sponsored by the Minnesota Department of Revenue and the University of Minnesota, February, 1980. o Completed International Association of Assessing Officers (IAAO) Course In "Assessment Administration", Saint Paul, Minnesota, August, 1980. o Completed "Capitalization Theory and Techniques", sponsored by the American Institute of Real Estate Appraisers, University if Minnesota, September, 1983. o Completed "Appraisal Analysis and Report Writing", sponsored by the American Institute of Real Estate Appraisers, University of Minnesota, September, 1984. o Completed "Lotus 1-2-3 Spreadsheet Analysis", sponsored by Ameridata Institute, Minneapolis, Minnesota, December, 1985, o Completed "Calculator, Segregated, and Computerized Cost Estimating", sponsored by Marshall -Swift Company, Bloomington, Minnesota, July, 1987. o Completed "Standards of Professional Practice and Professional Ethics", sponsored by the American Institute of Real Estate Appraisers and the University of Minnesota, January, 1988. o Completed "Business Valuation and Real Estate Seminar", sponsored by the American Institute of Real Estate Appraisers and the University of Minnesota, May, 1989. o Completed "Real Estate Extraction and Investment Analysis", sponsored by the Appraisal Institute and the University of Arizona at Tucson, February, 1991. o Completed "Appraising Troubled Properties", sponsored by the Appraisal Institute and the University of Minnesota at Saint Paul, December, 1991. o Completed "Americans with Disabilities Act and Real Estate", sponsored by the Minnesota Mortgage Bankers Association, Bloomington, March, 1992. o Completed "Mortgage Foreclosure Procedures", sponsored by the Minnesota Institute for Legal Education, Bloomington, Minnesota, April, 1992. o Completed "Eminent Domain Real Estate Valuation", sponsored by the Minnesota Institute for Legal Education, Bloomington, Minnesota, November, 1992. o Completed "Comprehensive Appraisal Review Seminar", sponsored by the Appraisal Institute and Boston University, Boston, Massachusetts, July, 1993. o Completed "Real Estate Property Tax Appeals", sponsored by the Minnesota Institute for Legal Education, Bloomington, Minnesota, November, 1993. o Completed "Mortgage Underwriting Review Seminar", sponsored by the Minnesota Mortgage Bankers Association, Minneapolis, Minnesota, February, 1994, o Completed "Discounted Cash Flow Analysis", sponsored by the Appraisal Institute and the University of Saint Thomas, Minneapolis, Minnesota, March, 1994, o Completed "Understanding Limited Appraisals Assignments", sponsored by the Appraisal Institute and the University of Saint Thomas, September, 1994. o Completed "The Underwriter's Perspectives on the Universal Residential Appraisal Report", sponsored by Norwest Mortgage Corporation, Bloomington, Minnesota, September, 1994. ca Completed "Appraising Contaminated Real Estate", sponsored by the Minnesota Department of Revenue, Saint Cloud, Minnesota, December, 1994. o Completed "Appraising FHA -Insured Property", sponsored by the Appraisal Institute and the Department of Housing and Urban Development, Minneapolis, Minnesota, January, 1995. o Completed "Fair Lending and the Appraiser", sponsored by the Appraisal Institute and the University of Saint Thomas, Minneapolis, Minnesota, January, 1996. o Completed "Hotel/Motel Valuation Seminar", sponsored by the Appraisal Institute and the University of Saint Thomas, Minneapolis, Minnesota, April, 1996. o Completed "Tax Increment Financing", sponsored by Minnesota Institute for Legal Education, Minneapolis, Minnesota, November, 1996. o Completed "Case Studies In Professional Appraisal Practice and Ethic Standards", sponsored by the Appraisal Institute and Arizona State University, Tempe, Arizona, September, 1997. o Completed "Real Estate Investment Trusts (REITs)", sponsored by the Appraisal Institute and the University of Colorado, Boulder, Colorado, April, 1999. o Completed "Case Studies In Commercial Highest and Best Use" sponsored by the Appraisal Institute and Arizona State University, Tempe, Arizona, August, 1999. o Completed "Internet Technologies in Real Estate Appraisal", sponsored by Ala Mode Software and University of Chicago, Chicago, Illinois, April, 2000. o Completed "Partial Interest Valuation" sponsored by the Appraisal institute and University of Washington, Seattle, Washington, August, 2001. o Completed "2003 National USPAP Update", sponsored by the Appraisal Institute and University of Saint Thomas, Minneapolis, Minnesota, January, 2003. o Completed "Separating Business Enterprise Value and Personal Property from Real Estate", sponsored by the Appraisal Institute and Southern Methodist University, Dallas, Texas, September, 2003. o Completed "Appraising Manufactured Housing", sponsored by the Appraisal Institute and University of Minnesota, Saint Paul, Minnesota, March, 2004, o Completed "Evaluating Commercial Construction", sponsored by the Appraisal Institute and University of Minnesota, Saint Paul, Minnesota, January, 2005. o Completed "Commercial Real Estate InvestmentAnalysls", sponsored by University of Iowa, Iowa City, Iowa, September, 2006. o Completed "User Decision Analysis of Commercial Real Estate", sponsored by Ohio State University, Columbus, Ohio, February, 2007. o Completed "Nursing Home and Assisted Living Appraisal", sponsored by Northwestern University, Evanston, Illinois, May, 2008. o Completed "Business Practices and Ethics", sponsored by University of Minnesota, Saint Paul, Minnesota, July, 2008. o Completed "Real Estate Trends", sponsored by University of Minnesota, Saint Paul, Minnesota, May, 2009. o Completed "Appraisal Curriculum Overview" sponsored by the University of Nebraska, Lincoln, Nebraska, April, 2010. o Completed "Appraising the Appraisal", sponsored by the University of Saint Thomas, Saint Paul, Minnesota, November, 2011. DANIEL T BORIS 11212 86TH AVENUE NORTH, SUITE A MAPLE GROVE, MN 55369.4552 STATE OF MINNESOTA The Undersigned COMMISSIONER OF COMMERCE for the State of Minnesota hereby certifies that DANIEL T BORIS 11212 86TH AVENUE NORTH, SUITE A MAPLE GROVE, MN 55369-4552 has complied with the laws of the State of Minnesota and is hereby licensed to transact the business of Resident Appraiser : Certified General License Number: 4000357 unless this authority is suspended, revoked, or otherwise legally terminated. This license shall be In effect until August 31, 2015. IN TESTIMONY WHEREOF, I have hereunto set my hand this July 23, 2013. A v k1 eew4lt 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: Continuing Education: C,E Re r CE Required Hours Total - Appraiser 30.00 USPAP 7.00 Contlnulni Education: 16 hours Is required in the first renewal period, which includes a 7 hour USPAP course. 30 hours Is required or each subsequent renewal period, which Includes a 7 hour USPAP course. Appraisers. You must hold a licensed Resldenllal, Cerlifled Residenlfal, or CertlFied General quallfication In order to penorm appraisals for federally -related lransactlons. Trainees do not qualify. For further detalls, please visit our website at comm erce.slate. mn.us. Form ®9 Request for Taxpayer Give Form to the (Rev, August 2013) Dspatt!mt of the Treasury Identification Number and Certification requester. Do not send to the IRS. Iritsr., Revenue Service Name (as Shawn on your income lax return) The Appraisal Group_ t`i _ T f4u160101s namaydiaregarded enlity name, if different from above m rn M °' c Check appropriate box for federal tax classification: Exemptions (see instructions); ❑ Indlvldual/sole proprietor ✓ C Corporation S Corporation p ❑ Tiusuestale P P ❑ P ❑ P ❑ Pa tnershl OL o Exempt payee code (if any) oc ❑ Limited liability company. Enter the lax classification (C=C corporation, S=S corporation, P=partnership) a Exemption from FATCA reporting code (If any) c pc ❑ Other (see irr%[ruetions) u Address (number, shoal, and apt. orsullano.) Requester's name arld address (optional) a 11212 --86th Avenue North W �i City, stale, and ZIP code Maple Grove, MN 55369.4552 List account number(s) here (optional) Tax a f:r tri®rttificatjon Number 1.1N _ Enter your TIN In the appropriate box. The TIN provided must match the name given on the "Name" line Social aeourlty "umbar , - [I] However, for a For disregarded this Is your social security number n page re avoid backup le proprietor, resident alien, sate proprietor, ordlsraparded entity, see the Part I Instructions on page 3. Forvther entities, It Is your employer identification number (EINI. If you do not have a number, see Now toast a TIN on page 3. Note, If the account Is in more than one name, see the chart on page 4 for guidelines on whose E+npfoyer ldentfllaaltan number to enter. M41 Under penalties of perjury, I certify that: 1. The number shown on Ibis form is my correct taxpayer Identification number (or I am waiting for a number to be Issued to me), and 2. 1 am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and 3. 1 am a U.S. citizen or other U,S, person (defined below), and 4. The FATCA code(s) entered on this form (If any) Indicating that I am exempt from FATCA reporting Is correct. Certification Instructions, You must cross out Item 2 above If you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return, For real estate transactions, Item 2 does not apply, For mortgage Interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an Individual retirement arrangement (IRA), and generally, payments other lhan)nt@rest and dividends, ou arena[ tubed to sign the certification, but you must provide your correct TIN, See the Instructions on papa 3. 1- \ / l calul rI Signature of Here U.s.person► General Instructions /r Date. 0� -- /6 .l ilhholding lax on foreign partners' share of effectively connected Income, and Section references are to the Internal Revenue Code unless otherwise{/A�noted. Future developments, The IRS has created a page on IRS.gov for information about Farm W-9, at www.Irs.govArv9. Information about any future developments affecting Farm W-9 (such as legislation enacted after we (eleaso II) will be pooled on that page. Purpose of Form A person who Is required to file an information return with the IRS must obtain your correct taxpayer Identification number (TIN) to report, for example, Income paid to you, payments made to you In settlement of payment card and thkd party network Irenaacilons, real estate transactions, mor(gago interest you paid, acquisition or abandonment of secured properly, cancellation of debt, or cenlributions you made to an IRA, Use Form W-9 only If you era a U.S. person (including a resident alien), to provide your correct TIN to the person requesting it (the requester) and, when applicable, to: 1, Certify that the TIN you are giving Is correct (oryou are waiting for a number to be issued), 2. Certify thal you are not subject to backup withholding, or 3. Claim exumpllon from backup withholding if you are a U.S, exempt payee. If a Ilcable uc -1 1 11 t Us II I sir f 4. Certify that FATCA code(s) entered on this form (if any) Indicating that you are exempt from the FATCA reporting, Is correct. Note. If you are a U.S, person and a requester gives you a form other than Form W-9 to request your TIN, you must use the requester's form If it is substantially similar to this Form W-9, Definition of a U.S. person. For federal tax purposes, you are considered a U.S. person if you are; • An Individual who Is a U,S. citizen or U.S, resident alien, • A partnership, corporation, company, or assoclolion created or organized In the United Slates or under Ilse laws of the United Stales, • An estate (other than a foreign estate), or • A domestic trust (as defined in Regulations section 301.7701-7). Special rules for partnerships. Partnerships that conduct a trade or business in the United Stales are generally required to pay a withholding tax under section 1446 on any foreign pariners`share of effectivelyax connected table income from such. business, Further, In certain cases where a Form W-9 has not been received, the rules under section 1446 require a partnership to presume that a partner Is a foreign person, and pay the section 1446 withholding lax. Therefore, If you are a U.S. person that Is a partner In a partnership conducting a trade or business In the Unitod States, provide Form W-9 to the partnership to establish your U.S. status and avoid section 1446 withholding on your share of partnership Income, pp yo ere a(sa e y no to as a . . parson, your a ace- a ,are o any partnership Income from a U.S, trade or business Is not subject to Ilia Cal, No. 10231X Form W-9 (Rev. 8-2013) Leone Valerie From: Jim Wise DWise@ebHerman.com] Sent: Friday, October 03, 2014 4:26 PM To: Leone Valerie Cc: MAI Ellen B. B. Herman MAI Subject: Appraisal RFP's Attachments: New Hope Admin Bldg Prpsl.pdf; New Hope Bus Garage Prpsl.pdf Dear Valerie, Ellen Herman has requested that I forward our bid for appraisal services for the direct acquisition of the Independent School District 281 administrative building and the bus garage properties by the City of New Hope. Attached to this email in pdf format is our proposal for appraisal services for each of the properties. We thank you for the opportunity to respond to your bid request and appreciate your consideration. If you have any questions regarding our proposals, please contact Ellen or myself, Jim Wise James J. Wise, CPA, JD Vice President E.B. Herman Companies Herman Appraisal Services, Inc Herman Agency 222 South Ninth Street Suite 3230 Minneapolis, MN 55402 Telephone: 612-630-8077 Facsimile: 612-630-8075 www.ebHerman corn Our Credibility is Your Advantage TM EBfl E MAN C 0 .moi P FA Inti E October 3, 2014 Valerie Leone, CMC Re: Proposal for Real Estate Appraisal Services City Manager City Acquisition City of New Hope 4401 Xylon Avenue North Subject Property: School District #218 New Hope, MN 55428 Administrative Building Property 4148 Winnetka Avenue North Sent via email: New Hope, Hennepin County, Minnesota vlgone ci.new-hope.mn.us PID #17-118-21-23-0002 Client: City of New Hope Dear Ms. Leone: Thank you for contacting EB Herman Companies/Herman Appraisal Services, Inc. (the Firm) about providing appraisal services to the City of New Hope (City). Based on your September 18, 2014 Request for Proposal (RFP) letter, it is our understanding that the City requires a market value appraisal of the above referenced property for acquisition purposes. The valuation services provided by the Firm will fully comply with the requirements of the Code of Professional Ethics and the Standards of Professional Practice of the Appraisal Institute and the Uniform Standards of Professional Appraisal Practice (USPAP) adopted by the Appraisal Standards Board of the Appraisal Foundation. Intended use of the appraisal and appraisal report is to determine the offering price for the acquisition of the subject property from the Robbinsdale School District in an arm's length transaction. The intended users of the appraisal and report are the Client and other authorized users by the Client. The Firm is fully qualified to perform the work requested by the RFP. The Firm's expertise includes the valuation of all types of real estate and closely held business interests. Our work frequently involves government and private sector acquisitions and dispositions. Ellen Herman, MAI, CNE, founder and CEO/president of the Firm, will be responsible for all work, and valuation opinions and conclusions developed for this assignment and will be the primary signatory of the report. For further information about the Firm please visit our website www.ehherman.coni_). Our proposed fee for the above-described services is $4,950. The Firm will deliver the report in 4 to 6 weeks after being award the contract, unless you require an earlier delivery date. This fee proposal and delivery date is based on the scope of the assignment as described in your RFP. HERMAN APPRAISAL SERVICES, INC. I THE HERMAN AGENCY OUR (;I EJ)IBILITY IS l'OUR. .01.TVAN'1".1GE ": 222 South Ninth Street, Suite ;230, Minneapolis, MN 55402 T: 612.630-8077 1 F: 61.2-6301-8075 1 ehherinanxorn RE: Proposal for Real Estate Appraisal Services Acquisition of ISD #281 Administrative Building Valerie Leone, CMC City Manager City of New Hope October 3, 2014 Page 2 We thank you for providing us with an opportunity to respond to your proposal request. We greatly appreciate your consideration and hope to work with you on this interesting matter. EBH:jmj Very truly yours, EB HERMAN COMPANIES Ellen B. Herman, MAI, CNE President EB HERMAN COMPANIES I-IERri1AN APPRAISAL SERVICES, INC. I T111', HERMAN AGENCY OUR CREDIBILITY IS YOUR ADVANTACE'Is, 0 ", 0 P-1 P A N 1 E October 3, 2014 Valerie Leone, CMC Re: Proposal for Real Estate Appraisal Services City Manager City Acquisition City of New Hope 4401 Xylon Avenue North Subject Property: School District #218 New Hope, MN 55428 Bus Garage Property 4124 Winnetka Avenue North Sent via email: New Hope, Hennepin County, Minnesota vleone c ci.new-hpe.mn.us PID #17-118-21-23-0018 Client: City of New Hope Dear Ms. Leone: Thank you for contacting EB Herman Companies/Herman Appraisal Services, Inc. (the Firm) about providing appraisal services to the City of New Hope (City). Based on your September 18, 2014 Request for Proposal (RFP) letter, it is our understanding that the City requires a market value appraisal of the above referenced property for acquisition purposes. The valuation services provided by the Firm will fully comply with the requirements of the Code of Professional Ethics and the Standards of Professional Practice of the Appraisal Institute and the Uniform Standards of Professional Appraisal Practice (USPAP) adopted by the Appraisal Standards Board of the Appraisal Foundation. Intended use of the appraisal and appraisal report is to determine the offering price for the acquisition of the subject property from the Robbinsdale School District in an arm's length transaction. The intended users of the appraisal and report are the Client and other authorized users by the Client. The Firm is fully qualified to perform the work requested by the RFP. The Firm's expertise includes the valuation of all types of real estate and closely held business interests. Our work frequently involves government and private sector acquisitions and dispositions. Ellen Herman, MAI, CNE, founder and CEO/president of the Firm, will be responsible for all work, and valuation opinions and conclusions developed for this assignment and will be the primary signatory of the report. For further information about the Firm please visit our website (www.ebherman.com). Our proposed fee for the above-described services is $4,950. The Firm will deliver the report in 4 to 6 weeks after being award the contract, unless you require an earlier delivery date. This fee proposal and delivery date is based on the scope of the assignment as described in your RFP. HERMAN APPRAISAL, SERVICES, INC. I THE HERMAN AGENCY 01 R C1'ZED!B1IXFY IS YOUR ADVAl`J'I'AC;Ei 222 South Ninth Street, Suite 3230, Minneapolis, MN 55402 1 T: 6.12-630-8077 1 L': 612-630-8075 1 ebherman.com RE: Proposal for Real Estate Appraisal Services Acquisition of ISD #281 Bus Garage Building Valerie Leone, CMC City Manager City of New Hope October 3, 2014 Page 2 We thank you for providing us with an opportunity to respond to your proposal request. We greatly appreciate your consideration and hope to work with you on this interesting matter. EBH:jmj Very truly yours, EB HERMAN COMPANIES Ellen B. Herman, MAI, CNE President EIS HERMAN COMPANIES HERMAN APPRAISAL STAIVICES, INC,. I 'I'III?, HERMAN AGENCY OUR CREt JIBIIXF` IS YOUR ADVANTAGE �,' Leone Valerie From: Laura Wisneski [Iwisneski@shenehon.com] Sent: Friday, September 26, 2014 3:40 PM To: Leone Valerie Subject: Proposal: Appraisals of ISD #281 Buildings in New Hope Attachments: ISD 281 Buildings, New Hope.pdf Good afternoon, Ms. Leone: Please find attached our proposal to prepare market value appraisals of the Independent School District #281 properties at 4148 and 4124 Winnetka Avenue in New Hope, Minnesota. Hard copies of this document are available at your request. Thank you, and have a great weekend. Laura Wisneski £ Administrative Coordinator 88 South 10th Street, Suite 400 Minneapolis, MN 55403 612.767.9452 "i 612.333.6533 612.344.1635 shenehon.com The information contained in this message is confidential intended only for use by the individual or entity named above. If you are not the addressee, note that any disclosure, copying, distribution, or use of the contents of this message is prohibited. If you have received this transmission in error, please destroy it and notify us immediately at 612.333.6533. September 26, 2014 Ms. Valerie Leone City Clerk City of New Hope 4401 Xylon Avenue North New Hope, MN 55428-4898 SHENERON COMPANY RE: Proposal for Market Value Appraisals of the Properties Owned by Independent School District #281 at 4148 and 4124 Winnetka Avenue in New Hope, Minnesota Dear Ms. Leone: We are pleased to submit a proposal to appraise the above -referenced properties for the intended use in a direct purchase from Robbinsdale School District. The valuation date of the appraisals will be October 1, 2014. Please keep in mind that an appraisal of the same property with a different valuation date constitutes a new assignment. We understand that you are our client in this matter and responsible for ensuring our fees are paid in a timely manner. SCOPE OF THE ASSIGNMENT We will identify the problem to be solved and determine the appropriate scope of work to produce credible assignment results. Scope of work is the type and extent of research and analysis for the appraisal assignment. Determining the scope of work is an ongoing process in an assignment. Information or conditions discovered during the course of an assignment might cause the appraiser to reconsider the scope of work. The appraisals will comply with the requirements and guidelines of the Uniform Standards of Professional Appraisal Practice (USPAP). APPRAISAL REPORTS Shenehon Company will prepare an Appraisal Report for each property using all relevant approaches to value to estimate the market value of the subject properties. An Appraisal Report is one of the two written report options; the essential difference between the reports is the content and level of information provided. Our reports will summarize all information significant to the solution of the appraisal problem, with supporting data retained in our workfiles. You may review the workfiles at any time. Sl)l1'11:1 "!'1i1€71:1 SI€ai?rl C1€E: J00ivi111N1::;;f'C)LIr= MINNESOTA 5.54,. I Gl2%.33aG5:3,:3 r X: 612/3; 4" 163:) l;:'4Y�'V.�IIiiNCi}iO�J.C;'t)hS a ?"n,Vtill.; �;r�[.Uf�i°iliFl1:}SON.1�{)��,1 +s..:<nfR or 'N:'. IMiF'.C'.. r:::;i':'. It,Y 11 .f; FF.'S Ms. Valerie Leone Page 2 September 26, 2014 APPRAISAL FEE STRUCTURE Our fees for this engagement are not contingent upon any predetermined appraised value or the results of our services. Rather, our fees will be based on our hourly rates. Our estimated fees for these services are below. Note these are estimated fees, and our actual fees may differ. In the event we encounter unusual circumstances that would require us to expand the scope of the engagement or if we anticipate our fees will significantly exceed the estimated amount, we will advise you accordingly. An electronic copy and two hard copies of the written appraisal report are available, with additional copies available at our cost. In addition, you agree to reimburse us for any of our out-of-pocket costs incurred in connection with the performance of our services, including, but not limited to, travel expenses, color copies, and long-distance telephone calls. Appraisal Report — Administration Building $6,500 Appraisal Re ort — Bus Garage $7.800 Total $14,300 The fee is due and payable upon completion of each assignment. Invoices unpaid 30 days past the billing date may be deemed delinquent and any balance owed may be subject to interest charges at the annual rate allowed by law. A retainer is not necessary because of a previous client relationship. We anticipate that our appraisals will be completed within 45 days after we have received the retainer, written authorization, and all information and documents (see attached list). DESCRIPTION OF FIRM Shenehon Company is a real estate and business valuation firm serving both the public and private sectors throughout the United States, although our geographic concentration is the Upper Midwest. We have worked in over 40 states and are qualified to work in any state. If a property is in a state where we are not permanently licensed, we can secure a temporary license to appraise in that state. Shenehon Company is dedicated to providing its clients with quality valuations prepared by knowledgeable appraisers and analysts. Staff members incorporate extensive and ongoing education with practical experience performing a wide variety of real estate and business valuations. TECHNICAL QUALIFICATIONS Many of our appraisers hold professional designations that are highly regarded in the appraisal industry. Our appraisers are also active members of various boards and trade associations. Our senior appraisers serve as review appraisers, arbitrators, mediators, commissioners, special magistrates, and lecturers. Over the years, our appraisers have published articles in local and national trade journals. Ms. Valerie Leone Page 3 September 26, 2014 SPECIAL QUALIFICATIONS We have previously valued school properties similar to the subject property, giving us the knowledge and experience to meet the competency provision outlined in USPAP. Shenehon appraisers have testified for many purposes, such as condemnation actions, property tax appeals, special assessment appeals, marriage dissolution proceedings, and the like. We have represented clients in state and federal courts, as well as arbitration panels and public service commissions. Appraisal reports prepared for litigation comprise a significant portion of our practice. Our methods are recognized and respected, and our analyses are relied upon by the courts. We have enclosed a copy of our company brochure and most recent newsletter, along with resumes of our principals. For more information on Shenehon Company, please visit our website at www.shenehon.com. If this proposal and attached appraisal contract conditions are acceptable, please indicate your approval below and return it to the undersigned. Thank you for considering Shenehon for your appraisal needs. We look forward to working with you. Sincerely, SHENEHON COMPANY AUTHORIZATION TO PROCEED Signature: Name: Robert J. Strachota, MAI, CRE®, MCBA, FIBA Date: President, Shareholder Minnesota License No. 4000882 Certified General Appraiser /law Enclosures APPRAISAL CONTRACT CONDITIONS Shenehon Company warrants that the services will be performed in a professional manner, in accordance with established appraisal industry standards. The firm makes no further warranty of any kind, expressed or implied. 2. Disclosure of the contents of this appraisal report is governed by the bylaws and regulations of the professional appraisal organizations with which various appraisers in the firm are affiliated. These include the Appraisal Institute, the Institute of Business Appraisers, the American Society of Appraisers, and The Counselors of Real Estate. 3. Shenehon Company will preserve the confidential nature of information received from the client, in accordance with established appraisal industry standards. The client agrees to preserve the confidential format and content of the appraisal report. The report and the appraiser's identity may not be used in whole or part, outside the client's organization, without prior written approval, except for review by auditors and legal counsel, and by the representatives of taxing authorities. 4. The persons authorizing the engagement on behalf of the client and Shenehon Company are empowered to do so. 5. The client agrees that Shenehon Company does not, by entering into this contract or by performing the services rendered, assume, abridge, abrogate, or undertake to discharge any duty of the client to any other entity. 6. Any use of the appraisal report, by the client, is conditioned upon payment of all fees in accordance with the agreed terms. 7. The fee charged for the appraisal is not contingent upon values concluded by Shenehon Company or any future event such as the securing of financing. 8. The proposed delivery schedule indicated in the engagement letter (unless otherwise stated) assumes that: a. Written authorization and/or the retainer are received by a specified date or in a timely manner. b. All information requested by Shenehon Company is readily available or provided by the client in a timely manner. C. The appraisers employed by Shenehon Company will have ready access to the property to be appraised. 9. All fees set forth in the engagement letter are due and payable upon completion of the specified assignment regardless of whether the valuation conclusions reached coincide with the client's expectations. 10. No opinion is intended to be expressed for matters that require legal or other specialized expertise, investigation, or knowledge beyond that customarily employed by appraisers in the evaluation of real estate or businesses. 11. Unless specific conditions are brought to the appraiser's attention, the appraiser will assume that there are no hidden or unexpected conditions of the asset to be appraised that would adversely affect or enhance the value. 12. Hazardous substances, if present within a property or business operation, may result in an actual or potential liability that will adversely affect the marketability and value of the asset. Such liability may be in the form of immediate recognition of existing hazardous conditions or future liability that could stem from the release of currently known hazardous contaminants. In the development of the opinion of value, no consideration will be given to such liability, or its impact on value, unless Shenehon Company is specifically retained to perform or prepare an environmental or toxic contamination analysis. Nonetheless, in the event that such a report is prepared, the client releases the appraiser from any and all future environmental liability. 13. If Shenehon Company is compelled to produce documents or testify regarding work performed, the client will reimburse the appraiser for all costs and expenses incurred. 14. In consideration for performing the services rendered at the fee charged, Shenehon Company expressly limits its liability to five (5) times the fee amount paid or $100,000, whichever is less. 15. Shenehon Company expressly disclaims liability as an insurer or guarantor. Any persons seeking greater protection from loss or damage than is provided for herein should obtain appropriate insurance. 16. The client will indemnify and hold Shenehon Company and its employees harmless against all claims by any third party or any judgment for loss or damage relating to the performance or nonperformance of any services by the appraisal firm. 17. In the event of a dispute involving interpretation or application of this agreement, the parties agree that this agreement will be governed under the laws of the state of Minnesota. 18. Shenehon Company reserves the right to assess interest charges on all unpaid accounts. 19. Shenehon Company reserves the right to refuse an assignment if a party other than the addressee of the letter signs the engagement letter. 20. Shenehon Company reserves the right to assess for any collection time incurred. 21. Liability for appraisal fees is the responsibility of the party signing the appraisal contract or the organization on whose behalf the individual is signing. OA 22. Shenehon Company and/or the appraisers are not qualified to render expert opinions regarding structural issues, water damage, environmental assessments (such as mold), engineering/mechanical issues, ADA and/or building code compliance, land planning, architectural expertise, soil conditions, audit/accounting opinions, legal opinions, credit opinions, or federal/state tax matters. If requested, Shenehon Company will recommend qualified experts in these fields to assist the client and/or advance the appraisal process. INFORMATION AND DOCUMENT REQUEST 1. Legal descriptions 2. Contact information for property inspections 3. Most current real estate tax statements 4. Land size and/or site survey, with building layouts 5. Year built for each building 6. Year of any additions or remodeling 7. Gross building areas for each building 8. Blueprints or building plans 9. Breakdown of space by use (for example, office, warehouse, garage) 10. Financial statements for the current and preceding five years of the real estate 11. Operating budget for 2014 12. Summary of capital improvements for the past five years 13. Capital improvement budget 14. Summary of any functional or operational problems 15. Any previous appraisals 16. Any environmental studies 17. Copies of any purchase agreements, closing statements, listings, or offers within the past three years 18. Any restrictions, easements, or encumbrances affecting the property September 18, 2014 [name] [company] [address] [City/state/zip] Subject: Quote for Appraisals The city of New Hope is looking to acquire by "direct purchase" and not by condemnation the adjacent properties currently owned by the Independent School District #281 located as follows: 4148 Winnetka Avenue — PID# 17-118-21-23-0002 4124 Winnetka Avenue - PID# 17-118-21-23-0018 These properties are 281's Administration Building and Bus Garage located at 42nd Avenue North and Winnetka Avenue North in New Hope. We are seeking an experienced appraisal firm knowledgeable in appraising commercial real estate to provide the city with an appraisal for determining the market value of these properties. The appraisals will be used by the city in conveying an offer to purchase these properties from Robbinsdale School District in an arm's length transaction. If you are interested in this assignment, please provide us with a separate quote for providing each appraisal and an estimated date when the appraisals can be completed. Responses would be appreciated by Friday October 311 and can be submitted to me by letter or e-mail (v1eone@ci.new-ho12e.mn.u5). Thank you. Sincerely, Valerie Leone, CMC City Clerk CITY OF NEW HOPE 4401 Xylon Avenue North • New Hope, Minnesota 55428-4898 • www. ci.new-hope.mn.us City Hall: 763-531-5100 • Police (non -emergency): 763-531-5170 • Public Works: 763-592-6777 • TDD: 763-531-5109 City Hall Fax: 763-531-5136 • Police Fax: 763-531-5174 • Public Works Fax: 763-592-6776 Quotations for appraisals of 281's property requested from the following eight companies Mr. Stephen Hosch Hosch Appraisal & Consulting, Inc. 11172 Zealand Avenue North Minneapolis, MN 55316 Mr. Daniel Boris The Appraisal Group 11212 861h Avenue North, Suite A Maple Grove, MN 55369 Mr. Terrence M. Johnson 1221 Nicollet Mall, Suite 700 Minneapolis, MN 55403 The Valuation Group, Inc. 3655 Plymouth Blvd., Suite 105 Plymouth, MN 55446 Mr. Kevin Meeks Meeks Appraisal & Consulting 3144 Hennepin Avenue, Suite 202 Minneapolis, MN 55408 Ms. Ellen Herman Herman Appraisal Services, Inc., Suite 3230 Campbell Mithun Tower, 222 South Ninth Street Minneapolis, MN 55402 Mr. Robert Stracohta Shenehon Company 88 South 10th Street, Suite 400 Minneapolis, MN 55403 Mr. Jeff Johnson Integra Realty Resources 8012 Old Cedar Avenue South Minneapolis, MN 55425 air Originating Department Community Development By: Eric Weiss, CD Assistant Curtis Jacobsen, Director of CD COUNCIL Request for Action Approved for Agenda July 25, 2011 Kirk McDonald, Ci Agenda Section ,ment & I Item No. 8.5 Motion to select Terrence Johnson, MAI for appraisal of 4200 Xylon Avenue North and 4300 Xylon Avenue North Requested Action Staff requests the Council approve a motion selecting Terrence Johnson, MAI for an appraisal of 4200 Xylon Ave (Wells Fargo drive-thru) and 4300 Xylon Ave (Kmart property). Policy/Past Practice It is the practice of the city to solicit quotes whenever an appraisal of property within the city is required or desired. Background At the work session on June 20 the Council authorized staff to begin the process of contacting the property owners of various selected parcels in the city for possible acquisition. A meeting was held June 27 with Gator Investments regarding the Kmart property. The next step in the process would be to obtain a current market appraisal for the property. At the June 27, 2011, meeting, the Council authorized staff to proceed with soliciting quotes. A total of four quotes were received. Company 4200 X lon Ave (Wells Far o) 4300 Nylon Ave (Kmart) Terrence Johnson, MAI $2,000-2,500* $2,000-2,500* Hosch Appraisal $2,495 $3,295 The Appraisal Group $3,500 $3,500 The Valuation Group $4,500 $7,000 *Not to exceed the latter Motion by YL/x/"t Second by To: I: RFA\COMM DEV\Development\ Select Appraisal Kmart -Wells Fargo7-25-11.doc Weiss Eric From: Dan Boris [dboris@tagmn.com) Sent: Tuesday, July 12, 20112:19 PM To: Weiss Eric Subject: RE: New Hope Request for Quotes Attachments: Dan Boris _ qualifications page.pdf Categories: City Center This communication is in response to your request forT proposal regarding appraisals on the below -listed parcels for acquisition. We could perform a detailed summary appraisal report for each property at $3,500 each ($7,000 total for both properties). We would delivery 3 hard copies of each report in addition to digital copies (in pdf format). In terms of delivery, we will commit to complete the reports within 4 weeks of formal engagement to proceed. A shorter timeframe is possible, if necessary, for an additional $500 (to reflect the need to work over the weekends) to complete the assignment. The reports would be a document that could be shared with the owners and reviewed for accurac}e- and negotiation purposes. Should such acquisition require any court hearing or testimony on behalf of the appraiser, a separate fee would be charged and negotiated with the City of New Hope (typically $150/hour subject to a stated maximum). We have performed numerous acquisition appraisals of all types of similar commercial properties on behalf of municipalities and private owners as well. Most recently I performed an appraisal for a north suburban school district for sale of their excess real estate inventory to a private party. I currently am a court-appointed commissioner in Scott County (my location of residence) for such acquisitions. References from Scott County are available upon request. I have attached my qualifications for your review. I have acted in the capacity of expert witness in over 100+ cases of real estate valuation litigation. A well-prepared report, however, normally will not require litigation when data is well-documented and analyzed. I also am the 2011 President of the North Star Chapter of the Appraisal Institute (Minnesota, North Dakota, South Dakota). Please let me know if you have any further questions. We look forward to the opportunity to working with you on this project. Daniel T. Boris, MAI, CCIM, SRA Vice President, Litigation Division The Appraisal Group 11212 -86th Avenue North, Suite A Maple Grove, MN 55369-4552 Phone #763-545-0690, extension 110 3655 Plymouth Boulevard, Suite 105 Plymouth, MN 55446 763-525-0000 main 763-525-8875fax 763-398-1130 senders direct www commercial-appraisal-gro up, com July 15, 2011 Eric Weiss, Community Development Assistant City of New Hope 4401 Xylon Avenue North New Hope, MN 55428 JF THE IO GROUP, INC. Principals Paul G. Bakken, MAI, MS, CCIM Cletus C. Liedl, MAI Thomas j, Day, MAI, SRA David S. Reach, MAI VIA EMAIL RE: Proposal for appraisal services on the Kmart and Wells Fargo properties at 4300 and 4200 Xylon Avenue North, New Hope, Minnesota Dear Mr, Weiss: I am pleased to submit this proposal for appraisal services. Following are the details: Client and intended tale a, The City of New Hope would be the client and intended user. There are no other intended users. No other party may use or rely upon any part of the appraisal report. lntended 1_ e: Reportedly, the City is interested in acquisition and redevelopment of the subject parcels. The intended use of the appraisals would be for acquisition purposes, Differing Intended users and appraisal problems/assignments involve different assignment conditions, scope of work, and reporting requirements. Hence, the appraisal as developed and reported is MIS for the intended users and stated use. Neither the appraisers nor The Valuation Croup, Inc. assume responsibility for any reliance by un- intended users or uses of the appraisal, ApRraisers- Myself along with some staff appraisers (all hold MN Certified General Real Property Appraiser licenses) would work on this project, All work will be directly supervised by myself. See attached background on myself and our firm. Feel free to visit our web site at www.valgroup,net for background on myself, our firm, and our experienced staff apprais- ers, We have the knowledge and experience to complete the assignment competently. I have not completed any services pertaining to the subject property within the prior three years, as an appraiser or in any other capacity. I have been appraising real estate for over 30 years, have experience in central business district appraisals, hold an MAI designation from the Appraisal Institute, office in nearby Plymouth, and have served a number of munielpali- ties. Projects I have worked on include redevelopment sites near the MSP airport in Bloomington„ 98th and Lyndale Stephen T. Hosch, MAI President Hosch Appraisal & Consulting, Inc. 11172 Zealand Avenue North Minneapolis, MN 55316 (612) 331-1688 - Telephone (763) 208-1670 - Fax www.hoschappraisal.com This e-mail message, including all attachments, Is for the sole use of the intended recipient(s) and may contain confidential and privileged information. Unless you are the intended reciplent(s), you may NOT use, disclose, copy or disseminate this information, If you are not the Intended recipient, please contact the sender by reply e-mail immediately. Please destroy all copies of the original message and al! attachments. From: Weiss Eric jmailto:eweiss�cjj new -hope mn usi Sent: Tuesday, July 05, 20113:14 PM Subject: New Hope Request for Quotes Hello, The city of New Hope is seeking two separate quotes for appraisals of two separate, but adjacent, properties. Those properties include: 4300 Xylon Avenue N (Kmart building) PID 18-118-21-11-0013 4200 Xylon Avenue N (Wells Fargo drive thru) PID 18-118-21-11-0012 The city is seeking the company's experience, project cost and proposed timeline. Please be sure to list the cost and timeline for each property separately. Responses are appreciated by Friday, July 15th at 4:30 p.m. and can be submitted electronically. Thank you, Eric Weiss Community Development Assistant City of New Hope, MN P: 763-531-5196 F: 763-531-5136 www.ci.new-ho e,mmus www.newhopemarket.oriz Stephen T. Hosch, MAI President Hosch Appraisal & Consulting, Inc. 11172 Zealand Avenue North Minneapolis, MN 55316 (612) 331-1688 - Telephone (763) 208-1670 - Fax www.hoschappralsal.com This e-mail message, including all attachments, is for the sole use of the intended recipient(s) and may contain confidential and privileged information. Unless you are the intended reciplent(s), you may NOT use, disclose, copy or disseminate this information. If you are not the Intended recipient, please contact the sender by reply e-mail immediately. Please destroy all copies of the original message and all attachments. From: Weiss Eric rmailto•ewelss1. new -hope mn usl-- Sent: Tuesday, July 05, 20113:1.4 PM Subject: New Hope Request for Quotes Hello, The city of New Hope is seeking two separate quotes for appraisals of two separate, but adjacent, properties. Those properties include: 4300 Xylon Avenue N (Kmart building) PID 18-118-21-11-0013 4200 Xylon Avenue N (Wells Fargo drive thru) PID 18-118-21-11-0012 The city is seeking the company's experience, project cost and proposed timeline. Please be sure to list the cost and timeline for each property separately. Responses are appreciated by Friday, July 15th at 4:30 p.m. and can be submitted electronically. Thank you, Eric Weiss Community Development Assistant City of New Hope, MN P: 763-531-5196 F: 763-531-5136 www.c!.new-hqpL.rnn.us www.newhop-emarket.org Inartulr September 14, 2011 Mr. Curtis Jacobsen TERRENCE M. JOHNSON, MAI, SRA REAL ESTATE APPRAISER, CONSULTANT MEMBER, APPRAISAL INSTITUTE 1221 Nicollet Mall Suite 700 Minneapolis, MN 55403 Telephone: (952) 835-5014 • Fax: (612) 340-1848 Director of Community Development City of New Hope 4401 Xylon Avenue North New Hope, MN 55428-4898 RE: WELLS FARGO BANK 4200 XYLON AVENUE NORTH NEW HOPE, MINNESOTA Dear Mr. Jacobsen: 1�pn+trtl 1«.erhtry In accordance with your letter of authorization, I personally viewed the above -referenced property for the purpose of estimating its Market Value in the attached Complete Appraisal, Summary Report. Based upon my study and viewing on August 10, 2011, I have as of that date estimated the Market Value of: FOUR HUNDRED FORTY THOUSAND DOLLARS- -$440,000- Special assessments, liens, and other encumbrances, if any, are assumed as paid by the seller prior to transfer of title. No investigation has been made, nor am I aware of any toxic waste within the Subject. I am not an expert on such matters and am not qualified to detect such substances. The absence of any such toxic material is an underlying assumption of this Report. Also, I am not qualified to verify compliance with requirements of "The Americans with Disabilities Act." The value estimate presumes compliance. The appraisal has been prepared for our client, the City of New Hope. It may not be relied upon by anyone other than the client for any purpose whatsoever without the express written consent of the appraiser and the client. Weiss Eric From: Terrance Johnson [tjsin1@yahoo.com] Sent: Friday, July 15, 2011 10:27 AM To: Weiss Eric Subject: K -Mart and Wells Fargo Mr Weiss I propose to prepare two appraisals on the K -Mart store on 42nd Avenue and also on the Wells Fargo facility on the corner. Both appraisals are for a fee estimated to range $4,000 - $5,000 but not to exceed the latter. They will be completed as soon as possible but no later than 30 days. Please note that Pat Crough whom you know has a background in civil engineering and mortgage banking and will be working with me on the projects. InSeptember,1971 I appraised the subject K -Mart and the one in Brooklyn Center off plans and specs when I was an appraiser at Farmers And Mechanics Savings Bank. They were the first two K -Marts in town. In addition, I appraised the shopping center at the northwest quadrant of 42nd Ave and Winnetka Ave several years ago. I am an MAI member of the Appraisal Institute and am licensed in Minnesota and Wisconsin. Thank you for this opportunity. Terrence M Johnson MAI, SRA New Hope )n Avenue North Minnesota 55428 neoposa" j,,, FIRST--' A-- $000.435 Mr. Terrence M. Johnson 7400 Metro Blvd., Suite 100 Minneapol 114n' 11,"0 RETJV,N TO SENDER 11R1�S1' T4 FORWARD t C—. 5S42848989 `t!3lE3- t�lfti9-,tom-� t �t �%jiLsi i.-1—�ll�i,l�ii11l1f�li��l September 18, 2014 Mr. Terrence M. Johnson 7400 Metro Blvd., Suite 100 Minneapolis, MN 55439 Subject: Quote for Appraisals The city of New Hope is looking to acquire by "direct purchase" and not by condemnation the adjacent properties currently owned by the Independent School District #281 located as follows: 4148 Winnetka Avenue — PID# 17-118-21-23-0002 4124 Winnetka Avenue - PID# 17-118-21-23-0018 These properties are 281's Administration Building and Bus Garage located at 42nd Avenue North and Winnetka Avenue North in New Hope. We are seeking an experienced appraisal firm knowledgeable in appraising commercial real estate to provide the city with an appraisal for determining the market value of these properties. The appraisals will be used by the city in conveying an offer to purchase these properties from Robbinsdale School District in an arm's length transaction. If you are interested in this assignment, please provide us with a separate quote for providing each appraisal and an estimated date when the appraisals can be completed. Responses would be appreciated by Friday October 3rd and can be submitted to me by letter or e-mail (vleone@ci.new-hope.mn.us). Thank you. Sincerely, Valerie Leone, CMC City Clerk CITY OF NEW HOPE 4401 Xylon Avenue North • New Hope, Minnesota 55428-4898 • www. ci.new-hope.mn.us City Hall: 763-531-5100 • Police (non -emergency): 763-531-5170 • Public Works: 763-592-6777 . TDD: 763-531-5109 City Hall Fax: 763-531-5136 • Police Fax: 763-531-5174 • Public Works Fax: 763-592-6776