HomeMy Public PortalAbout1991.05.29 Market Value Appraisal - Parcel #3PARCEL # 3
SITE DESCRIPTION
CONFIGURATION AND SIZE
As may be noted on the facing plat map, the subject Parcel # 3 is defined as all of that
parcel legally described as Lot 1, Block 5, Timberlost V Subdivision, which is a triangular-
shaped parcel having frontage on two public rights-of-way. While it is not the intent of the
parties involved to include the entire parcel, as described above, for consideration in the
exchange contemplated, the exact area required for exchange is not specifically known at this
time, and thus, requires that a unit value of the whole be established so that a portion of the
total can then be separated for exchange purposes. This is considered a reasonable approach
because portions of the parcel arbitrarily separated from the whole, should not be expected to
have a differing Highest and Best Use, and therefore, a portion of the property split off from
the whole at a later point in time can reasonably be expected to take on the unit square foot
value of the whole.
The parcel, as legally described, has frontage on Reedy Lane along its northern boundary
which extends a distance of approximately 385.92 feet from the right-of-way of Clements
Road, to the north east corner of the parcel. The western boundary line of the parcel extends
a distance from the Reedy Lane right-of-way of 589.83 feet, to a point at the southwest end
of the parcel. The southern boundary of the site extends a distance of 96.84 feet. The eastern
property boundary jogs twice from the southeast corner of the property to the northeast
corner of the property, as may be noted on the facing plat map.
As described, the land area within Parcel # 3 will be analyzed to contain approximately
2.970 acres, or 129,373 square feet.
TOPOGRAPHICAL CHARACTERISTICS
Based upon a physical inspection, the subject parcel is level to sloping near street grade
with Reedy Lane and Clements Road, but slopes up to a ridge area paralleling the western
boundary line of the parcel where it then slopes steeply to the western property line, which is
approximately 20 to 30 feet above grade with the 11th hole of the McCall Municipal Golf
Course. While the subject parcel is triangular in shape and has areas of steeply sloping
REAL ESTATE CONSULTING GROUP, INC. • 74
GOLF COURSE EXCHANGE PARCELS
estimated in a range of value from $51,500 to $69,000. If this parcel were marketed today,
considering all relative property features which exist, the lower end of the value range would
be most applicable to the parcel's most likely and achievable value in the marketplace.
Without any consideration to the cart path easement and the existence of Eagle Drive, 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 # 2 is most
reasonably seen in a range, depending on the condition (s) which are considered applicable
by the parties to the land exchange. " r
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REAL ESTATE CONSULTING GROUP, INC. • 73
GOLF COURSE EXCHANGE PARCELS
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REAL ESTATE APPRAISERS • INVESTMENT ADVISORS • CONSULTANTS
topography, the parcel is considered to have sufficient land area and desirable property
characteristics which will allow for development to its Highest and Best Use.
The parcel is marginally to heavily wooded throughout the site area and offers good
privacy potential and appeal.
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 Reedy Lane.
A Preliminary Title Report on the subject parcel has not been provided to Real Estate
Consulting Group, Inc., however, no known easements are believed to exist which would
adversely impact the development of the parcel to its potential Highest and Best Use.
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.
ACCESS AND VIEW
The subject parcel has developed paved road access via 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.
Clements Road is a gravel surfaced roadway and borders the parcel along its western
boundary line. This roadway is not developed past the intersection of Aspen Alley; however,
the right-of-way is acquired and is available for future development to Wooley Way.
As indicated, the subject parcel overlooks the western boundary of the fairway of the 1 lth
hole and golf green of the McCall Municipal Golf Course. Therefore, while the parcel is not
physically located on the golf course, the parcel does offer a potential view of the golf course
through development of the site, which would typically find good appeal and marketability in
the marketplace.
REAL ESTATE CONSULTING GROUP, INC. • 75
GOLF COURSE EXCHANGE PARCELS
DESCRIPTION OF IMPROVEMENTS
The parcel is unimproved as of the date of this analysis.
REAL ESTATE CONSULTING GROUP, INC. • 76
GOLF COURSE EXCHANGE PARCELS
TAKEN BY: TK SUBJECT PHOTOGRAPH; PARCEL #3 MAY 29, 1991
View of subject Parcel # 3 looking east from the corner of Reedy Lane and Clements Road.
TAKEN BY: TK SUBJECT PHOTOGRAPH; PARCEL # 3 MAY 29, 1991
View of the west side of the subject parcel # 3 looking south along Clements Road.
REAL ESTATE CONSULTING GROUP, INC. • 77
GOLF COURSE EXCHANGE PARCELS
TAKEN BY: TK SUBJECT PHOTOGRAPH; PARCEL # 3 MAY 29, 1991
View from the corner of Clements Road and Aspen Alley looking south along the west
property line of the subject parcel.
TAKEN BY: TK SUBJECT PHOTOGRAPH; PARCEL # 3 MAY 29, 1991
View of the north end of Parcel # 3 looking south from Reedy Lane.
REAL ESTATE CONSULTING GROUP, INC. • 78
GOLF COURSE EXCHANGE PARCELS
TAKEN BY: TK SUBJECT PHOTOGRAPH; PARCEL # 3 MAY 29,1991
View of Parcel # 3 looking southwest from the club house access road and Fairway Drive.
TAKEN BY: TK SUBJECT PHOTOGRAPH; PARCEL # 3 MAY 29,1991
View of the northeast corner of the parcel looking south from the club house access road.
REAL ESTATE CONSULTING GROUP, INC. • 79
GOLF COURSE EXCHANGE PARCELS
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T A K E N B Y : T K S U B J E C T P H O T O G R A P H ; P A R C E L # 3 M A Y 2 9 , 1 9 9 1
V i e w o f s o u t h e n d o f P a r c e l # 3 f r o m D i v o t L a n e l o o k i n g n o r t h .
R E A L E S T A T E C O N S U L T I N G G R O U P , I N C . " 8 0
G O L F C O U R S E E X C H A N G E P A R C E L S
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.12
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.13
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.
12The Appraisal of Real Estate, Eighth Edition, American Institute of Real Estate Appraisers, 1983, p. 270.
13The Appraisal of Real Estat, p. 214.
REAL ESTATE CONSULTING GROUP, INC. • 81
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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."14
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. Legally 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.15
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 # 3.
HIGHEST AND BEST USE, AS VACANT
The subject parcel is approximately three acres in size, and while it has gently to steeply
sloping topography along and paralleling its eastern property boundary, the physical
characteristics of the parcel do not appear to be limiting to the development of the site to its
theoretical Highest and Best Use. The parcel provides for an adequate building area in the
northwestern portion of the parcel, which is reasonably level to allow for site maximization
under the stated plan of Highest and Best Use Some leveling of the parcel, or movement of
14The Appraisal of Real Estate, p. 274.
15The Appraisal of Real Estate, pp. 274-276.
REAL ESTATE CONSULTING GROUP, INC. • 82
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earth to provide for an enlarged building area and increased view of the golf course, is likely
in order to achieve greater site appeal.
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 within this zoning classification.
Based on the size of Parcel # 3, a density of approximately 24 units is possible within the
B Zoning District. Considering the potential for a three level design, a foot print of a
building is possible for development on the ridge overlooking the golf course of sufficient
size to house approximately 24 units. The excess site area not required for the building foot
print could be utilized for required parking and additional site amenities, such as a tennis
court and swimming pool. 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 overlooking
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 single family residential
building sites. However, due to a large part of the parcel having steeply sloping topography,
approximately 40% of the parcel has limited development utility. On the other hand, a high
density use of the parcel allows for complete utilization of this area through density transfer,
and considering that the premium building site on this parcel is located on the ridge
overlooking the golf course, this type use appears more practical.
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 number of units
developable for each of the sales analyzed was considerably less than that contemplated for
the subject parcel, for the purpose of demonstrating the most feasible use of this parcel, I
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have conservatively utilized the middle of the indicated price range in order to clearly
demonstrate the most feasible use of the parcel. Therefore, utilizing $12,000 per unit, and
considering that the subject parcel could be developed with approximately 24 units, develops
an indication of the parcel's value under the stated plan for Highest and Best Use of
$288,000.
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 $259,500, at
an 11% discount rate; a two year marketing time indicates a value of $234,000. 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.
Single family residential lot development would result in approximately 8 lots
developable within the parcel. Based on the sale of non -fronting golf course lots within
Timberlost VI, the average lot value might reasonably be expected to be about $29,000, or
about $232,000. Even with a two year marketing period for the parcel used as a
condominium site, the value achievable appears to be greater for high density use. Again, it
is noted that the topography of the parcel would appear to better support a high density type
of development.
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 multi -family high density residential
development with approximately 24 units. Such use would likely take shape in the form of a
condominium development and would incorporate such site amenities as a tennis court and a
swimming pool, typical of other condominium developments in the area which have met with
good market acceptance.
REAL ESTATE CONSULTING GROUP, INC. • 84
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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.
Sale # 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 developable, to a high of $18,000 per unit.
The upper end of the per unit value range developed is represented by golf course 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 good proximity to the golf
course.
While the subject parcel does not front the golf course, it is situated topographically
above the golf course and offers distant views of both the fairway and the golf green of the
1 lth hole. While development along the golf course in front of this parcel is almost assured,
views of the course over these improvements will still be possible from the subject parcel.
Condominium Sale # 30 is located fronting the golf course near the tee box of the 7th golf
hole. The golf course view offered at this location is considered superior to the golf course
view enjoyed by the subject parcel; however, the subject has excellent proximity to the golf
course club house, and the # 1 hole of the golf course. Because the subject parcel has a golf
course view and good proximity, as discussed, the lack of golf course frontage is adjusted at
approximately 50% of the rate estimated for this superior property feature, or 30%.
Adjusting this sale downward by 30% indicates a per unit value for the subject parcel from
this sale of approximately $12,250.
REAL ESTATE CONSULTING GROUP, INC. • 85
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Condominium Sale # 31 consists of several condominium site sales demonstrating the
full range of value for golf course fronting parcels and non -fronting parcels alike. The
parcels within this sale are located fronting the golf course near the 12th fairway and within
the Aspen Village Condominium Project. Interestingly, the upper and lower end of the
depicted value range above are represented within this sale.
Tte parcels within this sale which best bracket the value of the subject parcel are the
parce$s known as Group J @ $8,000/unit and Group N @ $15,000/unit. Group J does not
offer a view of the golf course, while Group N offers a fairway view. Adjusting these two
sales by 30%; up in the case of Group J and down in the case of Group N, indicates a value
for the subject parcel from both sales of approximately $11,500 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 from the club house and # 1
tee of the golf course than the subject. Adjusting this sale upward by 30% for inferior golf
course view and proximity indicates a value of approximately $10,200/unit for the subject
parcel. Considering the fact that Davis Avenue is a major arterial, it is not surprising that this
sale sets the lower limit of value for the subject.
Considering the data and analysis presented, the subject parcel should reasonably be
anticipated to achieve a value near the $12,000 per unit buildable level. This develops the
following Fee Simple estimate of market value for subject Parcel # 3 as of May 29, 1991:
24 Units Buildable x $12,000/Unit = $288,000
Discounted at 11% for a two year marketing period develops the following:
$288,000 @.8116 = $233,747
Say - $234,000
TWO HUNDRED THIRTY FOUR THOUSAND DOLLARS
***$234,000***
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