HomeMy Public PortalAbout1991.05.29 Market Value Appraisal - Parcel #1PARCEL # 1
SITE DESCRIPTION
CONFIGURATION AND SIZE
As may be noted on the facing plat map, the subject parcel is an irregularly-shaped parcel
forming the shape of a lazy "Z". Because of the parcel's irregular shape, maximum utility
would initially appear difficult to achieve. According to the legal description provided by the
client, the parcel contains about 2.365± acres (103,019 ± sf). However, this legal description
includes the right-of-way of both Reedy Lane and Fairway Drive. Also included in this legal
description, is the land area underlying the cart path easement between the 12th and the 13th
golf holes of the McCall Municipal Golf Course.
Discussions with the City of McCall, together with documentation which they have
provided, indicates that the city has been deeded the right-of-way, by the Timberlost V Home
Owners Association, of Reedy Lane from Clements Road to Fairway Drive, as well as the
right-of-way of Fairway Drive from Reedy Lane to Timberlost V Subdivision. Thus, for
purposes of this analysis, the area of this right-of-way has been deducted from the land area
set forth in the legal description provided by the client for Parcel # 1.
As such, the land area within the public right-of-way of Reedy Lane and Fairway Drive
as originally included in the legal description of Parcel 1, has been calculated at
approximately 19,819 square feet. This area (19,819 sf) does not include the land area with
the cart path easement between golf holes 12 and 13. Thus, the land area underlying this cart
path will also be included in the valuation of Parcel # 1, since it was originally a contiguous
part of the parcel. After deducting the street right-of-way, as described above, Parcel # 1 will
be analyzed to contain approximately 1.910 acres, or 83,200 square feet.
TOPOGRAPHICAL CHARACTERISTICS
Based upon a physical inspection, the subject parcel is level to sloping, following the
contour of the topography of the 12th fairway and green on the McCall Municipal Golf
Course. The parcel is reasonably level along the frontage of Fairway Drive at its western
boundary, but slopes moderately to a level area at the east end of the parcel. Due to the
irregular shape and sloping topography of the parcel, the subject parcel is considered to have
some limiting property characteristics.
REAL ESTATE CONSULTING GROUP, INC. • 45
GOLF COURSE EXCHANGE PARCELS
While the parcel is sparsely wooded today, prior to the development of the new club
house access road, the parcel was moderately to heavily wooded.
Soils conditions appear to be typical of the immediate area, comprised of a
sandy/gravelly soil, with several large rocks noted on the parcel, as well as in the general
vicinity. While no developmental restrictions due to soils conditions are known to exist, no
soils tests have been provided to Real Estate Consulting Group, Inc. regarding the subject, or
any other property(s) in the area.
UTILITIES AND EASEMENTS
From my investigations, the subject parcel has public electricity, sewer, water and
telephone service available to it along Fairway Drive.
While a Preliminary Title Report on the subject parcel has not been provided to Real
Estate Consulting Group, Inc., known easements of record include a cart path access in favor
of the city. Additionally, it is typically the desire of utility companies to allow for the
greatest possible flexibility when initiating feeder distribution lines so that no developmental
restrictions result. This possible limitation is noted, and should be verified if of further
concern.
At the request of the client, no consideration is given to the existing cart path easement
paralleling the 12th golf hole, as it could theoretically be re-routed over the parcel to allow
for development of the parcel to its Highest and Best Use. However, from a practical
standpoint, a cart path easement through, or fronting a parcel, is less than desirable as
compared with those parcels which do not have such an easement.
The land area underlying the cart path easement between holes 12 and 13 will be
considered relative to its contribution to the larger parcel under the concept of density
transfer, as discussed above. It should be recognized, however, that practically speaking, this
land area is not developable and really has limited utility in the marketplace.
ACCESS AND VIEW
The subject parcel has developed paved road access via Fairway Drive and Reedy Lane,
which connects with Davis Avenue to provide year around access to downtown McCall and
the Interstate Highway System. Stated road access is publicly maintained by the City of
McCall.
REAL ESTATE CONSULTING GROUP, INC. • 46
GOLF COURSE EXCHANGE PARCELS
The subject parcel borders along its north boundary the fairway and golf green of the 12th
hole of the McCall Municipal Golf Course. Therefore, the parcel offers both a golf course
view and direct proximity to the golf green from the west end of the parcel, which would
typically find good appeal and increased marketability in the marketplace.
REAL ESTATE CONSULTING GROUP, INC. • 47
GOLF COURSE EXCHANGE PARCELS
DESCRIPTION OF IMPROVEMENTS
The parcel is improved with the access road to the new clubhouse from Fairway Drive, as
well as portions of the practice putting green and paved parking area for the clubhouse;
however, at the request of the client, these improvements have not been considered within the
scope of this assignment. Therefore, the parcel is being valued as if vacant, prior to the
removal of any trees and natural habitat which were removed to allow for the development of
the above noted improvements.
REAL ESTATE CONSULTING GROUP, INC. • 48
GOLF COURSE EXCHANGE PARCELS
TAKEN BY: TK SUBJECT PHOTOGRAPH; PARCEL #1 MAY 29, 1991
View of subject Parcel # 1 looking southwest from the 12th fairway and temporary green.
TAKEN BY: TK SUBJECT PHOTOGRAPH; PARCEL # 1 MAY 29, 1991
View of the east end of subject parcel where a portion of the club house parking lot is located.
Note: 12th green in distant background.
REAL ESTATE CONSULTING GROUP, INC. • 49
GOLF COURSE EXCHANGE PARCELS
TAKEN BY: TK SUBJECT PHOTOGRAPH; PARCEL # 1 MAY 29, 1991
View from Fairway Drive looking east at the club house access road through center of parcel.
TAKEN BY: TK SUBJECT PHOTOGRAPH; PARCEL # 1 MAY 29, 1991
View of the east end of Parcel 1 looking west toward the location of the new putting green.
REAL ESTATE CONSULTING GROUP, INC. • 50
GOLF COURSE EXCHANGE PARCELS
TAKEN BY: TK SUBJECT PHOTOGRAPH; PARCEL # 1 MAY 29, 1991
View of Fairway Drive looking south toward the club house access road and Reedy Lane.
Subject Parcel # 1 on left side of Fairway Drive.
TAKEN BY: TK SUBJECT PHOTOGRAPH; PARCEL # 1 MAY 29, 1991
View of the west end of Parcel # 1 looking southeast from Fairway Drive.
REAL ESTATE CONSULTING GROUP, INC. • 51
GOLF COURSE EXCHANGE PARCELS
TAKEN BY: TK SUBJECT PHOTOGRAPH; PARCEL # 1 MAY 29, 1991
View of cart path looking west toward the 13th tee box from Fairway Drive.
Note: Golf course maintenance shop on left side of photograph bordering cart path.
TAKEN BY: TK SUBJECT PHOTOGRAPH; PARCEL # 1 MAY 29, 1991
View of cart path looking east toward Fairway Drive from the 13th tee box.
REAL ESTATE CONSULTING GROUP, INC. • 52
GOLF COURSE EXCHANGE PARCELS
HIGHEST AND BEST USE
In common appraisal practice, the concept of highest and best use represents the premise
upon which a value estimate is based:
The highest and best use of a specific parcel of land does not depend on subjective
analysis by the property owner, the developer, or the appraiser; rather, highest and
best use is shaped by the competitive forces within the market where the property is
located. Therefore, the analysis and interpretation of highest and best use is an
economic study of market forces focused on the subject property.
Market forces also shape market value. The general data that are collected and
analyzed to estimate property value are also used by the appraiser to formulate an
opinion of the property's highest and best use as of the appraisal date. In all valuation
assignments, value estimates are based on use. The highest and best use of property
to be appraised provides the foundation for a thorough investigation of the _
competitive positions of market participants. Consequently, highest and best use can
be described as the foundation on which market value rests.4
The determination of highest and best use is the result of the appraiser's judgment and
analytical skill. The reader is cautioned, however, that highest and best use of a property is
not necessarily its most likely use. Furthermore, the use determined from analysis represents
an opinion, not always a "fact" to be found.
Highest and best use can be defined as:
That reasonable and probable use that will support the highest present value as of the
effective date of the appraisal.
Alternatively, that use, from among reasonably probable and legal alternative uses,
found to be physically possible, appropriately supported, financially feasible, and which
results in the highest present land value.5
The definition immediately above applies specifically to the highest and best use of
undeveloped land. It is to be recognized that in cases where a site has existing improvements
on it, the highest and best use may very well be determined to be different from the existing
use. The existing use will continue, however, unless and until land value in its highest and
best use exceeds the total value of the property in its existing use.
4The Annraisal of Real Estate, Eighth Edition, American Institute of Real Estate Appraisers, 1983, p. 270.
5The Annraisal of Real Estate, p. 214.
REAL ESTATE CONSULTING GROUP, INC. • 53
GOLF COURSE EXCHANGE PARCELS
In practical application, the determination of highest and best use of a property is
analyzed, both as vacant, and as currently improved, subject to the following four criteria:
"The highest and best use must be 1) physically possible, 2) legally permissible, 3)
financially feasible, and 4) maximally productive."6
1. Physically Possible: Considers what uses are possible or are prohibited for physical
reasons. Elements such as size, shape, assemblage, soil, topography, grading, and
availability of utility hook-ups are considerations in this realm.
2. Lggally Permissible: Considers what uses are possible in terms of such considerations as
laws, codes, environmental regulations, long term leases, deed restrictions, and the
possibility of changes in zoning.
3. Financially Feasible: Considers, among uses that meet the first two criteria, which uses
are likely to produce an income or return greater than the amount needed to satisfy
operating expenses, financial obligations, and capital amortization. All uses that are
expected to provide a positive return are regarded as financially feasible.
4. Maximally Productive: Considers which use, among the feasible uses, will produce the
highest net return or the highest present worth.?
The number of property uses are usually limited by the market to a few logical choices. Each of
those choices is then analyzed according to the above criteria, considered in sequence. Only
when a possible use meets a lower level criterion should consideration progress to the next level.
Following is my opinion of the Highest and Best Use of Parcel #1.
HIGHEST AND BEST USE, AS VACANT
While the subject parcel is approximately two acres in size, its irregular shape and
sloping topography will likely reduce its developability, at least from the point -of -view of the
ease of site utilization . As discussed in the Site Description Section preceding, the parcel's
shape is in the form of a lazy "Z", thus the configuration of the parcel is believed to offer less
than optimal utility for site maximization. However, it should be recognized that through
density transfer, some of the awkwardness of the parcel's configuration will be minimized, if
6The Apnraisal of Real Esta, p. 274.
7The Annraisal of Real Estate, pp. 274-276.
REAL ESTATE CONSULTING GROUP, INC. • 54
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not entirely eliminated. Nonetheless, the parcel's configuration is considered to be a limiting
property characteristic which will likely be recognized in the marketplace, and adjusted
accordingly by market participants as compared with less restrictive competing parcels
available for purchase.
The subject parcel is within the Medium Density Residential Zoning District B within the
City Limits of McCall. As discussed in the Zoning Section of the report, the average
minimum lot size in this zoning classification is the same as the A District, or 10,000 square
feet. Since the subject parcel is substantially larger than this minimum, it may reasonably be
expected that the parcel will be developed to a higher density than other parcels which are
under this minimum size requirement within this zoning classification. However, as
discussed above, the configuration of the parcel is a limiting property feature, and this is
magnified by the parcel's moderately sloping topography.
Based on the size of the parcel, a density of approximately 15 units is possible within the
B Zoning District. Considering the potential for a three level design, a foot print is possible
on the west end of the site that would allow for a building of sufficient size to house
approximately 15 units. The excess site area not required for the building foot print could be
utilized for required parking, as well, there appears to be enough additional site area at the
east end of the parcel to allow for a tennis court. While the configuration of the parcel is
certainly awkward, it is nonetheless possible. Considering such, the parcel appears capable
of development to a potential level achieving site maximization under the legal limitations of
its designated zoning classification.
Based on the parcel's size, zoning, and its location in a recreational setting fronting on the
McCall Municipal Golf Course, high density residential use of the site is considered one of
the possible uses of the parcel as of appraisal date. Demand for this type property has
recently been increasing from the obvious over -supply of just a few years ago. However,
based on my recent analysis of this market, available supply (land) is still believed to exceed
existing demand levels as of appraisal date.
Another possible use of the parcel is for further subdivision into approximately five (5)
single family residential building sites ranging in size from around 10,000 square feet to
about 15,000 square feet. Such use of the parcel would require that a small access road be
developed along the parcel's southern border, in order to provide access to the east end of the
parcel. While more lots would theoretically be possible in this size parcel, the parcel's
configuration and access reasonably limit any more lots from being developed.
REAL ESTATE CONSULTING GROUP, INC. • 55
GOLF COURSE EXCHANGE PARCELS
Based on the sale of golf course lots in Timberlost VI which have taken place over the
preceding 12 months, the average retail lot value would reasonably not exceed $45,000 per
lot for the five potentially developable lots within the subject parcel. After considering the
development costs required to develop these lots, a raw land value of approximately
$125,000 for the subject parcel is indicated. This value represents an average price per
square foot of about $1.50 for the subject parcel, which is substantially lower than the low
end of the square foot price range achieved for golf course lots within Timberlost VI
Subdivision to date, but again, the parcel's irregular shape and topography reduces the net
developable/useable area within the parcel. Additionally, considering the parcel's size and
developmental considerations, the square foot price indication is within a reasonable range of
the other sales analyzed. -
Condominium lot sales with golf course frontage analyzed in this analysis ranged in price
from approximately $9,300 to $18,000 per developable unit. While the subject parcel offers
green frontage, its configuration is limiting for the development of necessary site
improvements required to bring about a successful project. Therefore, I have estimated a unit
value of approximately 25% less than the value demonstrated for golf course fronting parcels
with green frontage, or $14,000 per unit. Considering that the subject parcel could be
developed with approximately 15 units, an indication of the parcel's value under the stated
plan for Highest and Best Use would be approximately $210,000.
Considering the lack of effective demand at the current time, a marketing period from one
to two years for a condominium site must not be overlooked in the analysis of the subject
parcel's Highest and Best Use. If the more optimistic one year marketing time were utilized,
the present value of the parcel as a condominium site would be approximately $189,000, at
an 11% discount rate; a two year marketing time indicates a value of $170,000. The two year
marketing time period is certainly the more reasonable estimate to rely upon in developing
this opinion, and the practical reality is that it could be longer.
Even though condominium development of the parcel will require a longer marketing
time, through density transfer, the limited utility of the parcel due to its awkward
configuration becomes less impacting. As a result, the net value achievable appears greater
through this type of development.
REAL ESTATE CONSULTING GROUP, INC. • 56
GOLF COURSE EXCHANGE PARCELS
Therefore, considering the above factors and conditions, it is my opinion that the Highest
and Best Use of the parcel as of appraisal date is for the development of 15 condominium
units overlooking the 12th green of the McCall Municipal Golf Course.
REAL ESTATE CONSULTING GROUP, INC. • 57
GOLF COURSE EXCHANGE PARCELS
PARCEL VALUATION
Not all of the comparable sales presented have been directly compared to the subject site
in developing an opinion of this parcel's market value. However, where applicable, all have
contributed in the development of reasonable adjustments and estimates, which in turn have
been factored into the analysis presented. Comparable Condominium Sale #'s 30, 31, and 32
were considered to be the best direct comparison to the subject parcel in developing an
estimate of value, of all the sales considered in the analysis. These sales develop the
following time adjusted per unit buildable value indications, before making any additional
adjustments which are required for various differences in property features between the
subject and the comparables.
S ale # 30 $15, 890/Unit
Sale # 31 $6,000 to $18,000/Unit
Sale # 32 $7,140/Unit
The above time-adiusted condominium sales with golf course influence, range in value
from a low of $6,000 per unit buildable, to a high of $18,000 per unit.
The upper end of the per unit value range developed is represented by golf course
condominium parcels having frontage on a fairway or a golf green. The lower end of the per
unit value range is represented by a non -fronting golf course parcels which have proximity to
the golf course.
While the subject parcel fronts the golf course, its configuration and topography are
limiting to its developability. However, from my analysis of the parcel, it would appear that
15 units are physically possible for development overlooking the 12th green of the McCall
Golf Course. On site amenities such as a tennis court may be possible on this parcel, but will
necessarily be located away from the improvements due to the parcel's awkward
configuration, thus, some reduction in the parcel's desirability must be recognized in the
marketplace.
Furthermore, while the client has requested that the cart path easement through the parcel
be ignored for valuation purposes, the practical reality is that such an easement further
reduces the desirability of the parcel in the marketplace as it obviously reduces the privacy
and appeal of the parcel.
REAL ESTATE CONSULTING GROUP, INC. • 58
GOLF COURSE EXCHANGE PARCELS
Condominium Sale # 30 is located fronting the golf course near the tee box of the 7th golf
hole with distant view of the 6th golf green. The golf course view offered at this location is
considered slightly inferior to the golf course view enjoyed by the subject parcel; however, as
discussed, the subject has an awkward configuration which will not only increase its
development costs, but will also reduce its marketability. The subject parcel does have
excellent proximity to the golf course club house, and the # 1 hole of the golf course, which
are considered to be superior attributes as compared to this sale.
Adjusting the sale property down by 10% for the nt difference between the view offered
and the subject's awkward configuration results in an indication of the per unit value for the
subject parcel of approximately $14,500
Condominium Sale # 31 consists of several condominium site sales demonstrating the
full range of value for golf course fronting parcels and non -fronting parcels alike. The
parcels within this sale are located fronting the golf course near the 13th fairway and also
within the Aspen Village Condominium Project. Interestingly, the upper and lower end of
the depicted value range set forth by the comparables presented are fully represented within
this sale.
The individual sale parcels within this comparable which best bracket the value of the
subject parcel are the parcel's known as Group J @ $8,000/unit and Group P @ $18,000/unit,
as the later parcel fronts on the 13th green of the McCall Golf Course. Since Group J does
not offer a view of the golf course, it requires an upward adjustment of approximately 65%;
however, a downward adjustment of 25% for superior parcel configuration results in a nP
upward adjustment of 40%, or a value indication for the subject parcel from Group J of
approximately $13,300/unit.
Group P, as indicated, fronts the green of the 13th hole of the McCall Municipal Golf
Course. Adjusting this comparable downward by 25% for superior parcel configuration
indicates a value for the subject parcel of $14,400 per unit buildable.
Condominium Sale # 32 is located on the opposite side of Davis Avenue from the golf
course, and is considered to have an inferior view of the golf course as compared to the
subject parcel. Additionally, this parcel is located much further form the clubhouse and # 1
tee of the golf course than the subject. However, this parcel also has a superior configuration
as compared with the subject parcel and requires a downward adjustment of 25% for this
REAL ESTATE CONSULTING GROUP, INC. • 59
GOLF COURSE EXCHANGE PARCELS
superiority. Adjusting this sale upward by a net adjustment of 50% for these differences,
indicates a value of approximately $14,250/unit for the subject parcel.
Considering the data and analysis presented, the subject parcel should reasonably be
anticipated to achieve a value near $14,000 per buildable unit. This develops the following
Fee Simple estimate of market value for subject Parcel # 1, based on the conditions
discussed, as of May 29, 1991:
15 Units Buildable x $14,000/Unit = $210,000
Discounted at 11% for a two year marketing period develops the following:
$210,000 @.8116 = $170,436
Say - $170,500
Considering the practical reality that the parcel is encumbered with a cart path easement
which affects its market appeal, and that the land area from the cart path between the 12th
and the 13th holes has been included in the total density achievable for the parcel (since by
itself this cart path area would have a nominal value), the value of the parcel would
reasonably be something less if these two considerations were factored into the analysis.
The cart path area contains approximately 4,250 square feet. While this area by itself is
insufficient to provide a building unit within the B Zoning District, combined with subject
Parcel # 1 it allows for an additional building unit for the two parcels combined. Therefore,
its contributory value to the whole is the approximate value of one unit buildable, or $14,000.
The cart path easement is seen as a negative property feature which would likely impact
the value of the parcel accordingly. I have estimated a 5% downward adjustment for the
presents of a cart path easement through the parcel. This develops the following estimate of
market value in Fee Simple Title for subject Parcel # 1, under the conditions set forth above,
as of May 29, 1991:
Value estimate w/o above noted conditions $170,500
Less: Contributory value of cart path land area ($ 14,000)
Less: Adverse impact of cart path easement L$ 8.500)
Value w/ restrictions and conditions $148,000
Say $148,000
REAL ESTATE CONSULTING GROUP, INC. • 60
GOLF COURSE EXCHANGE PARCELS
Because of the unique circumstances surrounding this appraisal assignment relative to the
contemplated land trade, as has been discussed herein, the value for subject Parcel # 1 is
estimated in a range of value from $148,000 to $170,500. If this parcel were marketed today,
considering all relative property features which exist, the lower end of the value range is most
applicable to the value achievable by the parcel in the marketplace.
Without any consideration to the cart path easement, and including the land area of the
cart path between the 12th and 13th holes of the golf course, under the concept of density
transfer, the upper end of the value range, as depicted above, is the most reasonable estimate
of value for the subject parcel as of the valuation date. Therefore, the value of Parcel # 1 is
most reasonably seen in a range, depending on the condition (s) which are considered
applicable by the parties to the land exchange.
REAL ESTATE CONSULTING GROUP, INC. • 61
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REAL ESTATE APPRAISERS • INVESTMENT ADVISORS • CONSULTANTS