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HomeMy Public PortalAboutORD15223SUBSTITUTE Substitute Bill 2013-126 Page 1 BILL NO. 2013-126 SPONSORED BY COUNCILMAN Schulte ORDINANCE NO. 15223 AN ORDINANCE APPROVING A PETITION FOR THE ESTABLISHMENT OF THE CAPITAL MALL COMMUNITY IMPROVEMENT DISTRICT, INCLUDING THE APPOINTMENT OF THE CID BOARD OF DIRECTORS. WHEREAS, Sections 67.1401 to 67.1571, RSMo as amended (the “CID Act”) authorizes the governing body of any municipality, which term includes counties, upon receipt of a proper petition requesting the establishment and after a public hearing, to adopt an ord inance establishing a community improvement district; and WHEREAS, the City of Jefferson, Missouri (the "City"), is a city of the third classification and a political subdivision of the State of Missouri, duly created, organized and existing under and by virtue of the laws of the State of Missouri; and WHEREAS, on November 1, 2013, pursuant to the CID Act, a Petition to the City of Jefferson, Missouri, for the Establishment of the Capital Mall Community Improvement District (“Petition”), signed by: (1) property owner(s) collectively owning more than fifty percent (50%) of the assessed property value or real property; and (2) more than fifty percent (50%) of the per capita owners of all real estate within the boundaries of the proposed Capital Mall Community Improvement District (the “District”) was filed with the City Clerk; and WHEREAS, the City Clerk verified that the Petition substantially complied with the CID Act, submitted the verified Petition to the City Council, and set a public hearing with all proper notice being given in accordance with the CID Act or other applicable law; and WHEREAS, none of the signatures of the signers of the Petition were withdrawn within seven days after the filing of the Petition with the City Clerk; and WHEREAS, all the real property included in the District is entirely located within the City; and WHEREAS, the City Council, following notification by the City Clerk, conducted a public hearing on January 6, 2014, after publishing the notice specified in Section 67.1431.3 of the CID Act, copies of which publication and mailed notices are on file with the City Clerk; and WHEREAS, all persons interested in the formation of the Capital Mall Community Improvement District were allowed an opportunity to speak at the public hearing before the City Council; and Substitute Bill 2013-126 Page 2 WHEREAS, the Petition to establish the District being fully heard before the City Council, the City Council now desires to establish the District and make such other findings as necessary. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF JEFFERSON, MISSOURI, AS FOLLOWS: Section 1. All terms used in this Ordinance shall be construed as defined in the CID Act, and the Petition. Section 2. The City Clerk has verified that the Petition substantially complies with all submission requirements of the CID Act. Section 3. The District is hereby approved and shall be established within the City as a political subdivision of the State of Missouri, as provided in the Petition filed with the City Clerk on November 1, 2013, a copy of which is attached hereto as Exhibit 1 and incorporated herein by this reference. The District includes the contiguous tracts of real estate as described in Exhibit 2, and shown on a map as depicted in Exhibit 3, both of which are incorporated herein by reference. Section 4. That the District shall have all the powers and authority authorized by the Petition and by the CID Act, and that the District shall expire forty (40) years from the effective date of this Ordinance, unless sooner terminated in accordance with the CID Act. Section 5. The District shall be governed by a board of directors consisting of five (5) members. The names and terms of office of the initial Board of Directors were provided in the Petition and the following individuals are her eby appointed by the Presiding Commissioner with the consent of the City Council to serve as the Board of Directors for the District for the initial terms set forth below: Bud Farmer – Director, 4 years Mike Farmer – Director, 4 years Jamie Reed – Director, 2 years Chuck Pierce – Director, 2 years Ron Fitzwater – Director, 2 years Section 6. The District’s Board of Directors shall have authority to impose a sales tax in an amount not to exceed one percent (1%), as set forth in the Petition an d in conformance with the CID Act. Section 7. Based on the evidence provided in the Blight Study Report dated July 30, 2013, and prepared by Valbridge Property Advisors and submitted as Exhibit D of the Petition, the City Council hereby finds that the property located within the District is a blighted area because it suffers from a predominance of a combination of factors including defective and inadequate street layout, insanitary and unsafe conditions, deterioration of site improvements, improper subdivision and obsolete platting , and the existence of conditions which endanger life or property by fire or other causes, which factors have constitutes an economic and social liability and a menace to the public health, safety, morals and welfare in its current condition . Considering this finding, the District shall have all of the powers of blight remediation provided to it by the CID Act. Section 8 . The District shall have and possess without limitation, such powers authorized under the CID Act and as set forth or otherwise limited in the Petition and as agreed in a cooperative agreement between the City and the District. Section 9. The City Clerk is hereby directed to prepare and file with the Missouri Department of Economic Development (the "Department") the report specified in subsection 6 of Section 67.1421 of the CID Act, substantially in the form provided by the Department, which is attached hereto as Exhibit 4. Section 10. It is hereby declared to be the intention of the City Council that each and every part, section and subsection of this Ordinance shall be separate and severable from each and every other part, section and subsection hereof and that the City Council intends to adopt each said part, section and subsection separately and independently of any other part, section and subsection . In the event that any part, section or subsection of this Ordinance shall be determined to be or to have been unlawful or unconstitutional , the remaining parts , sections and subsections shall be and remain in full force and effect, unless the court making such finding shall determine that the valid portions standing alone are incomplete and are incapable of being executed in accord with the legislative intent. Section 11 . That this Ordinance shall be in full force and effect from and after the date of its passage and approval. PASSED, APPROVED AND ADOPTED by the City Council of the City of Jefferson, Missouri, on this 21st day of January, 2014. Presiding Officer Mayor City Counselor Substitute Bill201 3-126 Pag e3 Substitute Bill 2013-126 Page 4 EXHIBIT 1 PETITION TO ESTABLISH THE CAPITAL MALL COMMUNITY IMPROVEMENT DISTRICT SEE ATTACHED SUBSTITUTE Substitute Bill 2013-126 Page 5 EXHIBIT 2 LEGAL DESCRIPTION OF THE CAPITAL MALL COMMUNITY IMPROVEMENT DISTRICT Part of the South Half of Section 4, and part of the Northeast Quarter of the Northwest Quarter and part of the West Half of the Northwest Quarter of the Northeast Quarter of Section 9, all in Township 44 North, Range 12 W, in the City of Jefferson, Cole County, Missouri, more particularly described as follows: BEGINNING at the northeast corner of the West Half of the Northwest Quarter of the Northeast Quarter of said Section 9; thence S4°26’19”E, 760.31 feet to the northerly line of Old U.S. Route No. 50 (now Country Club Drive); thence S4°44’37”E, crossing said Country Club Drive right-of-way, 101.20 feet to a point on the southerly line thereof and said corner being the northwest corner of a tract of land described by deed of record in Book 136, page 132, and on the easterly boundary of a tract described by deed of record in Book 239, page 903, Cole County Recorder’s Office; thence S4°34'31"E, along the easterly boundary of said tract described in Book 239, page 903, 375.37 feet to the southeasterly corner thereof, said corner being on the northerly line of U.S. Route No. 50; thence S75°33'03"W, along the northerly line of said U.S. Route No. 50, 77.73 feet; thence N88°24'20"W, along the northerly line of said U.S. Route No. 50, 125.05 feet to the southeasterly corner of a tract of land described by deed of record in Book 362, page 519, Cole County Recorder’s Office; thence N7°57'56"W, along the easterly boundary of said tract described in Book 362, page 519, 346.95 feet to the northeasterly corner thereof, said corner being on the southerly line of the aforesaid Country Club Drive; thence S77°59’08”W, along the southerly line of said Country Club Drive, 334.21 feet to the northwesterly corner of a tract of land described by deed of record in Book 315, page 773, Cole County Recorder’s Office; thence S14°07'00"E, along the westerly boundary of said tract described in Book 315, page 773, 273.73 feet to the southwesterly corner thereof, said corner being on the northerly line of the aforesaid U.S. Route No. 50; thence N88°24'20"W, along the northerly line of said U.S. Route No. 50, 765.43 feet; thence S75°24'00"W, along the northerly line of said U.S. Route No. 50, 36.12 feet to the southeasterly corner of a tract of land described by deed of record in Book 298, page 83, Cole County Recorder’s Office; thence N3°07'58"W, along the easterly boundary of said tract described in Book 298, page 83, 96.22 feet to the northeasterly corner thereof, said corner being on the southerly line of the aforesaid Country Club Drive; thence continuing N3°07'58"W, 102.09 feet to the northerly line of said Country Club Drive; thence S78°00’23”W, along the northerly line of said Country Club Drive, 104.04 feet to the most easterly corner of the U.S. Highway 50 connection right-of-way described by deed of record in Book 240, page 660, Cole County Recorder’s Office; thence, along the northerly line of said connection right-of-way, the following courses: N85°29'44"W, 264.86 feet; thence N49°07'58"W, 230.71 feet; thence N47°05'00"W, 313.86 feet to the easterly line of West Truman Boulevard (formerly known as North Ten Mile Drive); thence N8°34'28"E, along the easterly line of said West Truman Boulevard, 490.41 feet; thence N6°37'21"E, along the easterly line of said West Truman Boulevard, 401.12 feet to the northerly end of the aforesaid connection right-of-way; thence N79°05’18”W, 36.28 feet to the centerline of West Truman Boulevard (as described in Parcel 1 of the deed of record in Book 626, page 565 Cole County Recorder’s Office); thence, leaving the aforesaid connection right-of-way line, described in Book 240, page 660, N3°27’09”E, along the centerline of West Truman Boulevard (as per said Parcel 1 description), 113.55 feet; thence N23°44’10”E, along the centerline of West Truman Boulevard (as per said Substitute Bill 2013-126 Page 6 Parcel 1 description), 233.03 feet to the southerly end of the property deeded to the City of Jefferson for the street right-of-way, now known as West Truman (formerly known as North Ten Mile Drive) as per deed of record in Book 275, page 214, Cole County Recorder’s Office; thence N85°03'03"E, along the southerly line of said property described in Book 275, page 214, and along the southerly boundary of the property described by deed of record in Book 555, page 698, along the southerly boundary of El Mercado Development, Section 1, as per plat of record in Plat Book 11, page 402 and along the southerly boundary of those properties described by deeds of record in Book 529, page 947 and in Book 462, page 649, Cole County Recorder’s Office, 1461.95 feet; thence N86°11'11"E, along the southerly boundary of said property described in Book 462, page 649 and along the southerly boundary of the property described by deed of record in Book 546, page 150, Cole County Recorder’s Office, 692.99 feet to the southeasterly corner of said property described in Book 546, page 150 and said corner being on the westerly boundary of Monticello Acres, Section Nine, as per plat of record in Plat Book 11, page 859, Cole County Recorder’s Office; thence S3°59'18"E, along the westerly boundary of Monticello Acres, Section Nine, 700.95 feet to the southwesterly corner thereof, being a point on the south line of said Section 4, Township 44 North, Range 12 West, at the southeasterly corner of the property described by deed of record in Book 629, page 196, Cole County Recorder’s Office; thence S86°32'02"W, along the Section Line, 389.43 feet to the POINT OF BEGINNING. Substitute Bill 2013-126 Page 7 EXHIBIT 3 MAP OF DISTRICT BOUNDARIES Substitute Bill 2013-126 Page 8 EXHIBIT 4 CID NOTICE OF ESTABLISHMENT FORM SEE ATTACHED PETITION FOR ESTABLISHMENT OF THE CAPITAL MALL COMMUNITY IMPROVEMENT DISTRICT CITY OF JEFFERSON, MISSOURI OCTOBER 2013 PETITION FOR THE CREATION OF THE CAPITAL MALL COMMUNITY IMPROVEMENT DISTRICT T o the Mayo r and C ity Co un c il o f th e C ity o f Jefferson, Missouri : The unders igned rea l prop erty owners (the "Petiti o ners "), be in g th e owner coll ecti vely o wning (I ) m o re th a n fifty p e rcent (5 0%) by assessed va lu e o f the r ea l prop ert y and (2) m o re than fi fty p e rcent (50%) per ca pita o f all owners o f rea l prop e rty within the bo undari es of the hereina f ter d escrib ed co mmuni ty improvement di s tri ct , d o h ere by p e titi on and requ est that the C ity Coun c il o f the C ity of J efferso n, Missouri create a communi ty improve ment di s tri ct as describ ed h erein und er th e auth o ri ty o f Secti o ns 67.I40 1 to 67.1571, R SM o (the "C ID A c t"). In s upp ort o f thi s petiti o n, the P etitio ners se ts fo rth th e fo ll owin g info rm a ti o n in co mpliance w ith the C ID A ct: I . Distri ct Nam e. The name fo r the pro posed co mmunity improvem e nt di stri ct ("CID" o r "District") is : Capita l Ma ll Co mmunity lmprovem ent Di stri ct 2. Le ga l Descriptio n and Ma p . A lega l desc ripti o n and ma p gene rally d e pi c ting th e b oundari es o f th e proposed Di s tri ct are attached h ereto as Exhibit A a nd Exhibit B , r especti ve ly. The pro posed di stri ct cons ists o f 78.26 +/-ac res and is located entirel y w ithin th e C ity of J efferso n, Mi ssouri . 3. Fi ve-Y ear Pla n. A fi ve-year pl an as required by th e C ID Act i s a ttached her e to as Exhibit C (th e "Five Y ear Plan"). 4 . Fom1 of Distri ct. The prop osed di s tri ct w ill be esta blis hed as a po li t ical s ubdi v is io n o f th e State of Misso uri under the C ID A c t. 5. Board o f Directo rs. a. N umber. The Di stri ct s ha ll be govern ed by a B oard o f Directors (th e "Board ") cons1stmg of fi ve (5) members , w ho s ha ll be appo inted by the muni c ip ality in acco rda nce w ith thi s petiti o n . O ne (I) m ember sha ll b e eithe r an e lected o r appointed o ffi c ia l of the C ity o f J e fferso n, Missouri, as d et ermined by the C ity Administra to r o r hi s d es ignee. b. Qua lifications. In additi on to th e requirem ent that o ne (1) m em ber shall b e either an elected o r a ppo inted offi c ia l of th e C ity o f Jefferson, Missouri , as de termined by th e C ity Adminis trato r o r hi s d esignee, each Me mber of the B oard ("Directo r") shall meet th e fo ll owing require m ents: (I ) be at leas t 18 yea rs of age; (2) be and mu st d eclare to be either a n owner of real pro perty w ithin the Distri ct ("O w ner") or a n authorized r epresentati ve o f an Own e r, an own er o f a business opera tin g w ithin the Distri ct ("Ope ra to r"), o r a register ed vote r ("R esid ent") res iding within the Distri ct , as provid e d in th e C ID A c t; (3) be and have b een a res id e nt o f th e S tate o f Mi ssouri fo r a t least o n e year imme di a tel y preced in g th e d at e upo n w hi ch h e o r sh e tak es o ffi ce in a cco rd an ce with Article VII , Secti o n 8 o f the Misso uri Cons tituti o n; a nd ( 4 ) except fo r the initi al directo rs na m ed in thi s Pe titi o n, b e no mina te d according to a s la te s ubmitted a s d escribed in thi s Pe titi o n . c . tniti a l Directo rs. T he initi al directo rs ("Initia l D irec to rs") a nd the ir r esp ective term s s ha ll b e as fo ll ows: ( 1) Bud Fa rm e r fo ur (4 ) year te rm (2 ) Mike Farm er fo ur (4 ) year te m1 (3) Jamie R eed two (2) year te rm (4 ) C huc k Pi e rce two (2) year te rm (5) C ity Admini s trato r D es ig nee purs u a nt to Secti o n 5(a) two (2) year te nn d . Term s . Each Initia l Directo r nam ed a bove s ha ll serve for the te rm set fort h opposit e hi s/h e r na m e o r until hi s/h e r s uccessor is a pp o in ted in acco rd a nce w ith this P e titi o n . Each Su ccessor Directo r s ha ll serve a fo ur ( 4) yea r te rm or until his/h er s u ccessor is appo inted in accord a nce w ith thi s P e titi o n . I f, for an y reaso n , a Directo r is n o t a bl e to serv e hi s /he r term, the re m a ining Direc to rs sha ll e lec t a n Inte rim Directo r to fill th e vacan cy of th e unexpired te rm . Notw ith sta nding a n ything to the contrary, a n y Directo r 's fa ilure to m eet th e qua lifi c atio n require m e nts set fo rth a b ove, e ithe r in a Di recto r 's indi v idual cap ac i ty o r in a Director 's representa ti ve cap ac ity , s ha ll co n stitute cau se fo r th e Board to tak e a ppro priate acti o n to r em ove said Directo r . e. Su ccessor Directo rs. S u ccessor Directo rs s ha ll b e appo inte d b y the M ayo r w ith th e con sen t of th e C ity Council b y reso lu tio n according to a s late s ubmitted b y th e Executi ve Director of th e Distri ct to th e C ity o f Jeffe rson , Misso uri 's C ity Cl erk (th e "City C le rk"). U p o n receipt o f a slate o f S uccesso r Directo rs, the C ity C le rk sh a ll promptly d e li ver the s la te to th e M ayor fo r con sid e ra ti o n b y th e C i ty Counc il. 6. A s sessed V a lu e. T h e to tal a ssessed va lu e o f a ll rea l p ro p e rt y in th e Di stri c t is $7,527,872. 7. Dura ti o n o f Dis tri c t. T he pro p osed m ax imum le ng th of tim e fo r the exis te nce of the di stric t is forty (40 ) yea rs fro m the date of the o rdinan ce a pproving th e Pe titi o n . The Dis tri c t m ay be te rmina te d prio r to th e e nd o f s uc h max imum fo rty (40) year te rm in accord an ce with the 2 provisions of the C ID Act, and the forty ( 40) yea r te rm s hall not b e extended unle ss a new petition is submitted a nd approved purs uant to the terms of th e C ID Act. 8. R eal Property and Business Li cense Taxes. The Di stri ct will no t have th e power to impo se a real pro perty tax levy or bu s ines s li cense ta xes. 9. Special Assessments. The Di strict will not ha ve the power to impose special assessments. I 0. S a les Tax. Qua lifi ed voters o f the Di strict may be asked to approve a sales tax of up to o ne percent (I %) ("District S a les Tax"), in accordance with the CID Act, to fund certain improvements within the Di strict and/o r to pay th e costs of servic es provid ed by the Dis tri ct. Additi onal details about the Di s tri c t Sales Tax are set forth in the Five Year Plan attached here to as Exhibit C. 11 . Borrowing Limits. Pe titione r does not seek limita ti o ns on the borrow in g capacity of the Di s tri ct. 12. R evenue Limits. Pe titi o ne r d oes no t seek limitat ions o n the re venu e generatio n of th e Di stri c t. 13. Future Five Year Plans. The Di stri ct s hall submit future Five (5) Year Pl ans meeting th e requirements of S ec tion 142 1.2(3)(d), RSMo (as amended o r replaced from time to time) to the C ity for comment and review no earl ier than 180 da ys and n o later than 90 da ys pri o r to the ex piration of each then-c urrent F ive (5) Year Plan . 14 . Authority Limits. Petitioner d oes not seek limitati o ns on the authority o f the Dis tri ct , except as set fo rth in thi s Petiti o n. 15 . Blight. P e titi oner requ ests a finding by th e C ity of J e fferson, Mi sso uri C ity Counc il th at th e pro perty is bli ghted, b y reason of th e predominance of d e fe c tive o r inadequate s treet layout, insanitary or un sa fe co nditio ns, d e teri o ration of s it e improvements, improper s ubdi vis io n o r obsolete platting, or the existence of conditions w hi c h endanger life or prope rty by fire and other causes, o r any combination of s uch fa ctors, the Di strict constitutes an economic or social li ab ility or a menace to the public health, safety , mo ral s or welfare in its present condit ion a nd use. Attached as Exhibit D is a Bli ght Study covering the Di stric t, which provid es evidence o f the above bli g ht conditio ns. A lt ernative ly, Pe titi o ner seeks a fmding that th e Distri ct has been d eclared blighted b y the City of Jefferson, Missouri C ity Co unci l und er Sections 99.800 to 99.865, RSMo. 16. Revocation of Signatures. THE PETITIONER ACKNOWLEDGES THAT THE SIGNATURE OF THE SIGNER OF THIS PETITION MAY NOT BE WITHDRAWN FROM THIS PETITION LATER THAN SEVEN (7) DAYS AFTER THE FILING HEREOF WITH THE CITY CLERK. WHEREFORE, Petiti oner res pectfull y requests that the C ity Co un cil establis h the requested Capita l Mall Community Improvement Di strict in accordance with th e info rmatio n set forth in this Pe tition and tha t th e Mayor appoint and the City Co unc il con sent to th e proposed members for the Board o f Directo rs as set fo rth in thi s P etiti o n, and take all other appropriate and necessar y action tha t is cons istent with th e C ID Act to establish th e requested dis trict. 3 EXECUTION PAGE FOR PETITION FOR THE CREATION OF THE CAPITAL MALL COMMUNITY IMPROVEMENT DISTRICT Name of owner: Capital Mall JCl, LLC, a Missouri limited liab ility company Owner's telephone number: (573) 635-2255 Owner's address: c/o Fanner Holding Company, 221 Bol ivar Street, Suite 400, Jeffers on City, Missouri 65101 IF SIGNER IS DIFFERENT FROM OWNER: Name of signer: Title: Signer's telephone number: Signer's mailing address: ~------------------------------- If owner is an individual: ___ Single ___ Married If owner is not an individual, state what type of entity (Mark Applicable Box): Corporation General Partnership Limited Par1nership -X Limited Liability Company Partnership Urban Redevelopment Corporation Not-for-Profit Corporation Other Map (see Exhibit B) and parcel number(s): 10-02-09-0002-001-001 Total Assessed value : $ i!,9~3.'i'~ t l. 'l."s-... 'll.. By execwting this petition, the undersigned represents and warrants that he/she is authorized to execute this petition on behalf of the property owner named Immediately below. STATE OF MISSOURI ) ) ss: COUNTY OF Capital Mall JCl, LLC, a Ml1sourl limited Uablllty company On thi~ny o 2013, before me appeare to me penonally lcnown, wbo , being by mo duly sworn did say that he/she is th I Mall JCl, LLC, a Missouri limited liability company, and that said instrument wa signed on ehalf of id limited liability company, and said limited liability company acknowledged said instrument to be tho free act and deed of said entity. WITNESS my hand and official seal thi~ day of Qf ~ MyCommi88ionExpires:1l()!.r (X.7; o;o) 6 Not JEAN MACK Notary Public -Nolary Seal STATE OF MISSOURI County of Cole My Commission Expires 11127/2015 Commleelo n * 11500009 EXECUTION PAGE FOR PETITION FOR THE CREATION OF THE CAPITAL MALL COMMUNITY IMPROVEMENT DISTRICT Name of owner: Cap ital Mall JC2 , LLC, a Missouri limited liability company Owner's telephone number: (573) 635-2255 Owner's address : c/o Farmer Holding Company, 221 Bolivar Street, Suite 400, Jefferson City, Missouri 6510 l IF SIGNER IS DIFFERENT FROM OWNER: Name of signer: Title: Signer's telephone number: Signer's mailing address: If owner is an individual: ___ Single Married If owner is not an individual, state what type of entity (Mark Applicable Box): Corporation General Partnership Limited Partnership X Limited Liability Company Partnership_ Urban Redevelopment Corporation Not-for-Profit Corporation Other Map (see Exhibit B) and parcel number(s): 10-02-04-0003-002-036 Total Assessed value: ~ 2 e46 '5:i .A. Q I ":\-4\ I ~ "\ 'i , ' I I By exec•ting this petitJon, the undersigned repre..ents and warrants that he/she is authorized to execute this petition on behalf of the property owner named immediately below. COUNTY OF Capital MaU JC2, LLC, a Mlaourl Umited liability company ~~:~ Ti tl e: ~'t£0 ~£41e->4'riK STATEOFMIS~SOURI ~ ss : On this~ay o 2013, before me app eared _ to me personally known, who , being by me duly sworn did say that he/she is the I Mall JC2, LLC, a Missouri limited liability company, and thalsaid instrument was signed on f of s id limited liability company, and said limited liability company acknowledged said instrument to be the free act and deed of said entity. WITNESS my band and official seal this ~day of Q r..../.daaA My Commission Expire8:11Ata1 1 020 ( JEANMACKNE Notary. Publlo -Notary Seal STATE OF MISSOUR I County of Col e My Commission Expires 11/2712015 Commission## 11500009 EXECUTION PAGE FOR PETITION FOR THE CREATION OF THE CAPITAL MALL COMMUNITY IMPROVEMENT DISTRICT Name of owner: Capital Mall JC3, LLC, a Missouri lim ite d liability com pany Owner's telephone number : (5 73) 635-2255 Owner's address: c/o Farmer Holding Company, 22 1 Bolivar Street, Suite 400 , Jefferson City, Missouri 65101 IF SIGNER IS DIFFERENT FROM OWNER: Name of signer: Title : Signer's telephone number: Signer's mailing address: If owner is an individual: ___ Single ___ Married If owner is not an individual, state what type of entity (M ark Applicable Box): Corporation Limited Partnership Partnership Not-for-Profit Corporation Map (see Exhibit B) and parcel numb cr(s): Total Assessed val ue: X General Partnership Limited Liability Company Urban Redevelopment Corp oration Other 1 0-02-04-0004-000-025.003 $28 1,024 By executing this petition, tbe undersigned represents and warrants that he/s he Is authorized to execute this petition on behalf of the property owner named immediately below. STATE OF MISSOURI ) Capital Mall JC3, LLC, a Missouri limited liability company CO UNIT OF ~~ l ss Ont!m~dayof =<}\QM., 2013, bofore mo opp...,d~, to mo po"oMlly known, who, being by me duly sworn did say that he/she is the · C tal Mall JC3 , LLC, a Mis souri limited liability company, and th at said instrument was signed on beilaifOf s id limited liability company, and said limi ted liability co mpany acknowledged said instrument to be th e free act and deed of said entity. WITNESS my hand and official seal thi~ day of ~ , 2013. My Commission ExpiresM1J)tJ a{, a0 15 J8AN MACKNEY Notary Pub11o. Not~ry Se al STATE OF MISSOURI County of Coi8' · My Co mm ission Expires 11/27/2015 Commission# 11500009 EXECUTION PAGE I'OR PETITION FOR THE CREATION OF THE CAPITAL MALL COMMUNITY IMPROVEMENT DISTRICT Name of owner: Capital Mall JC4, LLC, a Missouri limited liability company Owner's telephone number: (573) 635-2255 Owner's address : c/o Farmer Holding Company, 22 1 Bolivar Street, Suite 400, Jefferson City, Missouri 65101 IF SIGNER IS DIFFERENT FROM OWNER: Name of signer: Title: Signer's telephone number: Signer's mailing address: If owner is an individual : ___ Single ___ Married If owner is not an individual, state what type of entity (Mark Applicable Box): Corporation General Partnership Limited Partnefllhiv X Limited L iabilitv Comoanv --Partnership Urban Redevelopment Cornoration Not-for-Profit Corporation Other Map (sec Exlubit B) and parcel number( a): 10~2~-0 004-~025 Total Assessed value: $ 13;31~~ ~ I or" ' By executing tbis petition, the undersigned represents and warrants that he/she ts authorized to execute this petition oo behalf or tbe property owner named Immediately below. STATE OF MISSOURI ) ) ss : COUNI'YOF Capital Mall JC4, LLC, a Missouri Umlted Uabfllty company On this~ day of 2013, before me appearc to me personally known, who, being by me duly sworn did say that he/she is Ut Cap• Mall JC4, LLC, a Missouri limited liability company, and Utat said instrument was signed on be alf of said limited liability company, and aaid limiled liability company acknowledged said instrument to be the free act and deed of said entity. WITNESS my haod and official seal thi~:;.2 day of& to""-" My Commission Expires'il.ott 20 020(5 JEAN MACKNEY Notary Publlo ·Notary Seal STATE OF MISSOURI County of Cole My Commleelon Explrea11/27/2015 Commlnlonl# 111500009 EXECUTION PAGE FOR PETITION FOR THE CREATION OF THE CAPITAL MALL COMMUNITY IMPROVEMENT DISTRICT Name of owner: Capital Mall JC5 , LLC, a Miss ouri limited liability company Owner's telephone number: (573) 635-2255 Owner's address: c/o Farmer Holding Company, 221 B olivar Street, Suite 400, Je ffe rson City, Miss ouri 65101 IF SIGNER IS DIFFERENT FROM OWNER: Name of signer: Title : Signer's telephone number: Signe r's mailing address : If owner is an individual: ___ Single ___ Married If owne r is not an individual, sta te what type o f entity (Mark Applicable B ox): Corporation Limite d Partnership Partnershi p Not-fo r-Profit Corpo ration Map (see Exhibit B) and parc el number(s): Total Assessed value: X G e neral Partnership Limited Liability Company Urban Redevelopment Corporation Othe r 10-02-09-0001-001-022 $320 By executing this petition, the undersigned represents and warrants that be/she is authorized to execute this petition on behalf of the property owner named immediately below. STATE OF MISSOURI ) Capital MaU JCS, LLC, a Missouri limited liability company By:~~"~ Name: ~a J(r ... c-.a ... ~'1 Title: ""'~~ ?ct.rt~ ... ~ COUNTY OF r 1\ ~g_ ~ ss: ~ On tiU•~yo~, 20!3, befo re me "PP"" (o ~ro me P""omilly known, who, being by me duly sworn did say tha t he/she is tb ~{)1 Ca pi Mall J C5 , LLC, a Missouri limited liability c ompany, and tha t s aid instrument was signed on b alf o f said limite d li ab ility c ompany , and said limited liability company acknowledged said instrument to be the free act and deed of said entity. WITNESS my hand and officia l seal thi~ day oWd Jo CaJA. , 20 13 . My Commission E xpiresi](Jt i ~7, 020) JEAN MACKNEY Notary Publlo-Notary Seal STATE OF MISSOURI County of Cole My Commission Expires11/27/2015 Comm lsslon # 11500009 EXECUTION PAGE FOR PETITION FOR THE CREATION OF THE CAPITAL MALL COMMUNITY IMPROVEMENT DISTRICf Name of owner: Capital Mall JC6, LLC, a Missouri limited liability company Owner's telephone nu mber: (573) 635-2255 Owner's address: c/o Farmer H olding Comp an y, 22 1 Bolivar Street, Suite 400, Jefferson City, Missouri 65 101 IF SIGNER IS DIFFERENT FROM OWNER: Name of signer: T itle: Signer's telephone number: Signer's mailing address: If owner is an individual: ___ Single ___ Married If owner is not an individual, state what type of entity (Mark Appli cable Box): Corporation Limited Partnership Partnership Not-for-Profit Corporation M ap (see Exhibit B) and p arcel number(s): Total Assessed value: X General Partnership L imited Liability Company Urban Redeveloomeot Comorati on Other l0-02-09-000 I -002-01 1 $35,200 By executing this petition, the undersigned represents and warrants that he/s he ls authorized to execute this petition on behalf of the property owner named immediately below. COUNTY OF Capital Mall JC6, LLC, a Missouri limited liability company By:~~..___, Name: loB G~"'"'i!-'=1 T itle: A.n~r:CJu:t::~ ~~C1ooln+nucS STATEOFMIS~SOURI ~ ss: On tbis~yo 2013, before me appear to me personally known, who, being by m e duly sworn did say that h e/she is the all JC6, LLC, a Missouri limited liability company, and that said instrument was signed on b alf of sad limited liability comp any, aod said limited liabiJ ity company acknowledged said instrument to be the free act and deed of said entity. WITNESS my hand and offic ial seal this~y of Q~ 20 13. My Commission Ex pires~ 1 02.0 ~ 5 JEAN MA CK NEY Notary Pub llo-Notar y Sea l STATE OF MI SSO URI Cou nty of Cole My Commiss ion Expi res 11/27/2015 Comm ission# 115000 09 EXECUTION PAGE FOR PETITION FOR THE CREATION OF THE CAPITAL MALL COMMUNITY IMPROVEMENT DISTRICT Name of owner: Capital M all JC7, LLC, a Missouri limited liability company Owner's telephone number: (573) 635-2255 Owner's address: c/o Farmer Holding Company, 22 1 B o livar Street, Suite 400, Jefferson City, Missouri 65101 IF SIGNER IS DIFFERENT FROM OWNER: Name of signer: Title: Signer's telephone number: Signer's mailing address: lf owner is an individual: ___ Single ___ Married If owner is not an individual, state what type of entity (Mark Applicable B ox): Corporation Limited Partnership Partnership. N ot-for-Profit Corporation Map (see Exhibit B) and parcel number(s): Total Assessed value: X General Partnership Limited Liability Company U rban Redevelopment Corporation. Other 10-02-09-0001-001-024 $ 63,13 6 By executing this petition, the undersigned represents and warrants that be/s he is authorized to execute tb.is petition on behalf or the property owner named immediately below. STATE OF MISSOURI Capital MaU JC7, LLC, a Missouri limited liability company B y: ~~dir~..,. I Name: &x ..:t ... ...s1J'J~'1 Tille: Aoo-n>iolt.t'U",... 8:-RJte;..~ ~n11C COUNTY OF (\()~ ~ ss: On ~ay o~ 2013, before me appeare to me personaUy known, who, being by me duly sworn did say that he/she is tb a! Mall J C7, LLC, a Missouri limited li a bility company, and that said instrument was signed o ehal o s a id limited liabiJity company, and said limited liability company acknowledged said instrument to b e the free act and deed of said entity. WITNESS my hand and official seal thi~day o f~ , 2013 . ~Uoct~ My Commi,.ion Expttc.~l, OW jEbifu JEAN MACKNEY Notary Public -Notary Seal STATE OF MISSOUR I County of Cole My Commission Expires 11 /27/20 15 Commission# 11500009 EXECUTION PAGE FOR PETITION FOR TilE CREATION OF THE CAPITAL MALL COMMUNITY IMPROVEMENT DISTRICT Name of owner: Capital Mall JC8, LLC, a Missouri limited liabil ity company Owner's telephone number: (573) 635-2255 Owner's address: c/o Farmer Holding Company, 221 Bolivar Street, Suite 400, Jefferson City, Missouri 65101 IF SIGNER IS DIFFERENT FROM OWNER: Name of signer: Title: Signer's telephone number: Signer's mailing address: If owner is an individual: ___ Single ___ Married lf owner is not an individual, state what type of entity (Mark Applicable Box): Corpomtion Limited Partnership Partnership Not-for-Profi t Corporation Map (see Exhibit B) and parcel number(s): Total Assessed value: X Geneml Partnership Limited Liability Company Urban Redevelopment Corporation Other l 0-02-09-0002-00 l-004 $ 145,024 By executing this petition. the undersigned represents and warrants that he/she Is authorized to execute this petition on behalf of the property owner named immediately below. Capital Mall JC8, LLC, a Missouri limited liability company STATEOFMIS~SOURI ~ ss: COUNfYOF ) On ~'Yo , 2013, before me oppe"'"'L ~ to mo P"""""llY known, who, being by me duly sworn did say that he/she is th u&J f C it l Mall JC8, LLC, a Missouri limited liability company, and that said instrument w~ned ~d liability company, and said limited liability company acknowledged said instrument to be the free act and deed of said entity. WITNESS my hand and official seal this~ day of Q.ci-c0.~, 2013. JEAN MACK ~ Notary Publlc -Notary Seal STATE OF MISSOURI County of Cole My Commission Exp ires 11/27/2015 Commlaa lon # 11500009 EXECUTION PAGE FOR PETITION FOR THE CREATION OF THE CAPITAL MALL COMMUNITY IMPROVEMENT DISTRICT N ame of owner : Capital Mall JC9, LLC, a Misso uri limited liability company Owner's telephone number: (573) 635-2255 Owner 's address: c/o Farmer Holding Company, 22 1 Bo livar Street, Suite 4 00, Jefferson City, Missouri 65101 IF SIGNER IS DIFFERENT FROM OWNER: Name of signer : Title: Signer's telephone number: Signer's mailing address: Jf owner is an individual : ___ Single ___ M arried If owner is not an individual, state wha t type of entity (Mark Applicable Box): Corporation Limited Partnership Partnershii>. Not-for-Profit Corporation Map (s ee Exhi bit B) and parcel number(s): Total Assessed value: X General P artnership Limited Liability Company U rban Redevelopment Corporation Other 10-02-09-0002-001 -002 $ 70,848 By executing this petition, the undersigned represents and warrants that he/s he Is authorized to execute this petition on behalf of the property owne r named imme di a tely below . Capital MaU JC9, LLC, a Missouri limited liability company :::::FMISr~Oo ~ ss: On thi~ay o~ 2013, before me appeared , to me personally known, who , being by me duly sworn did say that heJshe is the 1 I Mall JC9, LLC, a Missouri limited liability company, and that said instrument was signed on b lf of s id limited liability company, and said limited liability company acknowledged said instrument to be the free ac t and deed of said entity. WITNESS my band and official seal this~~ay or ~JciDRA , 2013 . My Commission ExpiresJ1D1t d71 ~ JEA CKNEY Notary Publ lo ·Notary Seal STATE OF MIS SOURI County of Cole My Commiss ion Expires 11/27/2015 Commlsalon ·t~11500009 EXECUTION PAGE FOR PETITION FOR THE CREATION OF THE CAPITAL MALL COMMUNITY IMPROVEMENT DISTRICT Name of owner: Capital Mall JClO, LLC, a Missouri limited liability company Owner's telephone number: (573) 635-2255 Owner's address: c/o Fanner Holding Company, 221 Bolivar Street, Suite 400, J efferson City, Missouri 65101 IF SIGNER IS DIFFERENT FROM OWNER: Name of signer: Title: Signer's telephone number: Signer's mailing address: If owner is an individual: ___ Single ___ Married If owner is not an individual, state what type of entity (Mark Applicable Box): Corporation Limited Partnership Partnership Not-for-Profit Corporation Map (see Exhibit B) and . parcel number(s): Total Assessed value: X General Partnership Limited Liability Company Urban Redevelopment Corporation Other 10-02-09-0002-001-006 $ 184,4 80 By executing this petition, the undersigned represents and warrants that be/she is authorized to execute this petition on behalf of the property owner named immediately below. STATE OF MISSOURI ) ) ss: COUNTY OF Capital Mall JClO, LLC, a Missouri limited liability company On~ day of 2 013, before me appeare~~· to me personally known, who, being by me duly sworn did s ay that he/she is the ~Mall JC10, LLC, a Missouri limited liability company, and that said instrument was signed on fiehalf of said limited liability company, and said limited liability company acknowledged said instrument to be the free act and deed of said entity. WITNESS my hand and official sealthis~ay of lQ r Wfo£A, 2013 . .. My Commission Expires'{\ OJ oit1 c;£) \ JEAN MACKNEY Notary Publio-Notary Seal STATE OF MISSOURI County of Cole My Commission Expires 11127/2015 Commission# 11500009 EXECUTION PAGE FOR PETITION FOR THE CREATION OF THE CAPITAL MALL COMMUNITY IMPROVEMENT DISTRICT Name of owner: Capital Mall JC ll, LLC, a Missouri limited liability company Owner's telephone number: (573) 635-2255 Owner's address: c/o Farmer Holding Company, 221 Bolivar Street, Su ite 400, Jefferson City, M issouri 65101 IF SIGNER IS DIFFERENT FROM OWNER: Name of signer: Title: Signer's telephone number: Signer's mailing address: If owner is an individual: ___ Single ___ Married If owner is not an individual, s tate what type of entity (Mark Applicable Box): Corporation Limited Partnership X Partnership Not-for-Profit Co_l])_oration Map {see Exhibit B) and parcel number(s): Total Assessed value: General Partnership Limited Liability Company Urban Redevelopment Corporation Other 10-02-09-0002-001 -005 $322,624 By executing this petition, the undersigned represents and warrants that he/she is authorized to execute this petition on behalf of the property owner named immediately below. STATEOFMISSOURI ) Capital Mall JCll, LLC, a Missouri limited liability company B y: -:Jiiif~ Name: Jl,.2 J(~ .. £<::1 Tille: ~11~a.&O ~-<61~ ... 6 COUNTY OF CtJ._ ~ '" On this~y ofQf ~ 2013, before me appear , to me personally known, who, being by me duly sworn did say that he/she is th ital Mall JC11 , LLC, a Missouri limited liability company, and that said instrument was signed behalf said limited liability company, and said limited liability company acknowledged said ins tru men~ be ~he :e act and deed o f said entity. WITNESS my hand and official seal this~ay of ~.Qfb-2013. JEAN MACKNEY Notary Public-Notary Seal STATE OF MISSOURI County of Cole My Commission Expires 11/27/2015 Commission# 11500009 EXHIBIT A LEGAL DESCRIPTION OF THE CAPITAL MALL COMMUNITY IMPROVEMENT DISTRICT Part of the South Half of Section 4, and part of the North east Quarter of th e Northwest Quarter and part of the West Half of the Northwest Quarter of the Northeast Quarter of Section 9, all in Township 44 North , Range 12 W, in the City of Jeffe rson, Cole County, Missouri, more particularly described as follows : BEGINNING at th e northeas t comer of the West H a lf of the Northwest Quarter of the Northeast Quarter of said Section 9; thence S4°26' 19"E, 760.31 feet to th e northerly line of Old U.S. Route No. 50 (now Country C lub Drive); thence S4°44 '37"E, crossing said Country Club Drive right-of-way, 101.20 feet to a point on the so utherly line thereof and said comer being the northwest comer of a tract of land described by deed of reco rd in Bo o k 13 6, page 132, and o n the easterly boundary of a tra c t de scribed by deed of record in Book 239, page 903 , Cole County Recorder's Office; thence S4°34'3 1 "E, a long the easterly boundary of said tract de scribed in Book 239, page 903, 375.37 feet to the southeasterly comer thereof, said comer being on the northerly line of U.S. Route No. 50 ; thence S75°33'03"W , along the northerly line of sa id U.S. Route No. 50, 77.73 feet ; thence N88°24'20"W, along the northerly line of sa id U.S. Route No. 50, 125 .05 feet to the so utheasterly comer of a tract of land described by deed of reco rd in Bo ok 362, page 519, Cole County Recorder 's Office; thence N7°57'56"W, a long the easterly boundary of sai d tract desc ribed in Book 362, page 5 19 , 346.95 feet to the northeas terl y comer thereof, said comer being on the southerly line of the aforesaid Country C lub Dri ve; thence S77°59 '08"W , along the southerl y line of said Country Club Drive, 334.21 feet to the northwesterly comer of a tra ct of land described by deed of record in Book 315, page 773 , Cole County Recorder 's Office; then ce S 14°07'00"£, along the westerly boundary of sa id tract described in Book 315 , page 773 , 273.73 feet to the south westerly comer thereof, said co m er being o n the northerly line of the aforesaid U.S. Route No. 50; thence N88 °24'20"W, alo ng the northerly line of said U.S . R oute No. 50, 765.43 feet; thence S75 °24'00"W, along the northerly line of said U.S. Route No. 50, 36.12 feet to the southeas terl y comer of a tract of land described by deed of record in Book 298 , page 83, Cole County Recorder 's Office ; thence N3 °07'58"W , along the easterly boundary of said tract de scribed in Book 298, page 83 , 96.22 fe et to the northeasterly comer th ereof, said comer being on the southerly line of the aforesaid Country C lub Drive; thence continuing N3 °07'58"W, I 02.09 feet to the northerl y line of said Country C lub Drive; thence S78°00'23"W, along th e northerly lin e of said Country Club Drive, 104.04 feet to the most easterly comer of the U.S. Highway 50 connection ri ght-of-way described by deed of record in Book 240 , page 660, Co le County Rec o rd er 's Office; thence, a lo ng the northerly line of said co nnection right-of-way, the fo ll owing courses: N85 °29'44"W, 264.86 feet ; thence N49°07'58"W, 230.71 feet ; thence N47 °05'00"W, 313 .86 feet to the easterly line of West Truman Boulevard (formerly known as North Ten Mile Drive); thence N8°34'28"E, along the easterly line of said West Truman Boulevard, 490.41 feet ; thence N6°37'21 "E, along the eas terl y line of said West Truman Boulevard, 401.12 feet to the northerly end of the aforesaid connection right-of-way; thence N79°05'18"W, 36.28 feet to the centerline of West Truman Boulevard (as described in Parcel 1 of the deed of record in Book 626, page 565 Cole County Recorder 's Office); thence, leaving the aforesaid connection right-of-way line, described in Book 240, pa ge 660, N3 °27'09"E, along the centerline of West Truman Boulevard (as per sa id Parcel 1 description), 113 .55 feet; thence N23 °44'10"E, along the centerlin e of West Truman Boulevard (as per sa id EXHIBIT A-1 Parcel 1 descripti on), 233 .03 fee t to the southerl y end o f the property d eed ed to the C ity of J efferson for the stree t ri ght-o f-way, now known as West Truman (fo rmerly known as North T en Mil e Dri ve) as per d eed o f record in Book 275, page 214, Co le Coun ty Reco rd er 's O ffice ; th ence N85 °03 '03"E, alo ng the so utherl y lin e o f said pro perty de scrib ed in Book 275, page 2 14, and a long the so utherl y bound ary o f th e property d escrib ed by d eed o f reco rd in Boo k 55 5, page 698 , alo ng the south erl y bo und ary o f El M ercado Deve lo pm ent, Sec ti o n I, as per pl at o f reco rd in Plat Book 11 , page 402 and al o ng th e southerly bo undary of tho se properti es described by d eed s of reco rd in Book 529, page 94 7 and in Bo ok 462 , page 649, Co le Co unty Record er 's O ffi ce, 14 6 1.95 feet ; thence N86 ° 11 '11 "E , a lo ng the so uth erl y boundary o f sa id prop erty desc rib ed in Book 462 , page 649 and along the so uth erl y b oundary o f th e pro perty d escri bed by d eed o f reco rd in Book 546 , page 150, C o le Coun ty R ecorder 's Office, 692.99 feet to the so utheas te rl y co rn er of sa id pro perty described in Book 546, pa ge 150 and said corner be in g o n th e westerl y bo undary of M onti cell o A c res, Section N ine , as per pl at o f rec o rd in Pla t Boo k 11 , page 85 9 , Cole County Record e r's Office; th ence S3 °59'1 8"E , al o ng the wes ter ly bound ary o f Mo nti cell o Ac res, Secti o n Nine, 7 00.9 5 feet to the south wes terl y corner thereof, be in g a po int o n th e so uth line of said Sec ti o n 4 , T ow nship 44 North , Range 12 W est , at the so utheasterl y co rn er of the pro perty described by d eed of reco rd in Book 629 , page 196, Co le Co unty Reco rd er 's O ffice; th ence S86 °32'02 "W , along th e Section Line, 3 89 .4 3 fee t to th e POINT OF BEGINNING. EXHIBI T A-2 ~~ ~ ..... -. / I I EXHIBIT B BOUNDARY MAP OF THE CAPITAL MALL COMMUNITY IMPROVEMENT DISTRICT AND PROPERTY OWNERSHIP MATRIX .. -=.:T.::.-. ---- t'"-~ .._, ...... .,._ EXHIBIT B-1 I .. -·-w•_,_,....,.._.., -----· ·--...... ---... ___...... __ _ -----·---------------=-----....... -.... PROPERlY IIOUNOARY SURVEY ~cl hc.tai!W. Jelllnon Oly. Mo 4 ---......... ... ~~~~~=-::::~ ___ .. __ ._.,.,_ ~.:.~: =-:.::r.-: .. _ ... ,"' .. ___ ..... _ :.. -:.. "..!:::..!!'.:::.:::!:. "=""' --·-~--:::_ .. ~ ... -..: .":"".:. '1:"-'"C. ,,.._ .. _..__,,_ --~ =::-::,. _..,_.zJ,..,.~ ...... ·-"--·--...:&--.a.... ---~-..... ~ PROPER TY O WNER S HIP MATRI X TOTAL ASSESSED VALUE $ 7,527,872 TOTAL PETITIONER-OWNED ASSESSED VALUE $ 5,161,088 PERCENTAGE OF PETITIONER-OWNED ASS ED VALUE OVER TOTAL ASSESSED VALUE 69% NUMBER OF OWNERS 15 NUMBER OF PETITIONER -OWNED PARCELS 11 PERCENTAGE OF PETITIONER-OWNED PARCELS OVER TOTAL NUMBER OF PARCELS 73% EXHIB IT B-2 EXHIBITC FIVE YEAR PLAN (Attached) EX HIBI T C FIVE YEAR DISTRICT MANAGEMENT PLAN OF THE CAPITAL MALL COMMUNITY IMPROVEMENT DISTRICT CITY OF JEFFERSON, MISSOURI The information and details outlined in the following pages represent the strategies, and activities that it is anticipated wiU be undertaken during the initial five-year duration of The Capital Mall Community Improvement District in Jefferson City, Missouri. It is an integral and composite part of the petition to establish The Capital Mall Community Improvement District. E XHIBIT C-1 Introduction The Capital Mall Com munity Improvement District (the "District") is created pursuant to Section 67.1401 through 67.1571 of the Revised Statutes of Missouri (the "CID Act"). Section 67 .1421 , RSMo, requires that the petition for the creatio n of the District be accompanied b y a five-year plan which includes a description of the purposes of th e pro posed district, the serv ices it will provide, the improvements it will m ake and an estimate of the costs of these services and improve ments to be incurred. This Five-Year Di strict Management Plan (the "Plan") is intended to sati sfy thi s statutory r eq uirement, and is append ed to the Petition for Formation of th e District as an integral part thereof. Section 1 -Why Create a Community Improvement District? The Di strict will e ncompass a proposed mixed-use de ve lopment located at the northeas t comer of Highway 50 & S. Country Club Dr./W . Truman Blvd. in Jefferso n City, Missouri in Jefferson City, Missouri (the "Development"). The purpose of th e Di stri ct is to und e rtake certain public and private improvements and provide services w ithin the Di strict, as di scussed below, and to use or make available its reven ue to pay the costs thereof, including without limitation debt service on any notes, bonds or othe r o bligatio ns issued and outstanding from time to time to finance all o r any of s uch costs. Section 2 -What is a Community Improvement District? A community improvement di strict is an entity that is separate from the City of Jefferso n and is formed by the adoption of an ordinance by the City Council following a publi c hearing before the City Council regarding formation of the Di s trict. A CID may take the form of a politi cal subdivis ion of the State of Missouri, or a nonpro fit corporation that is formed and operated under Missouri corporation law s. CIDs are empowered to provide a variety of services and to construct and/or finance a number of different public improvements (and in a blighted area, private improvements). CIDs derive their revenue from taxes and assessments levied within the boundaries of th e CID. Such revenues are then used to pay the costs of the services or improvements. ACID is operated and managed by a board of directors, whose members may be appointed or e lected. Board members serve for a des ignated period of time, and the B oard positions are again elected or appointed at the expiration of each term . Section 3 -Management Plan Summary The District in this case will take the form of a sep a rate political subdivision of the State of Missouri, which wi ll be governed by a Board of Directo rs that will consist of five (5) members appointed by the Mayor of Jefferson City with the co nsent of the City Council pursuant to a s late submitted in accordance with the Petiti o n. EX HIBIT C-2 District Formation: C fD formation req uires submiss ion of sign ed petitions from a group of property owners: • co llectively owning more than fifty percent (50%) by assessed va lu e of the real property within the District, and • representing mo re than fifty percent (50%) per capita of all owners of rea l property w ithin the Dis tric t. ln this case, the P etiti on to w hich this Pl an is attached has been signed by the owners of over 50% of th e assessed va lu e and over 50% of the per capita property owners within the District. Location : The Development co nsists of ±78.26 acres a nd is located at the northeast comer of Hig h way 50 & S . Country C lub Dr./W. Truman Blvd. in Jefferson City, Missouri . The District wi ll include th e exi sting and expanded commer cia l d evelo pment. Assessed Valu e of District: The total assessed va lue of the properties w ithin the District on the date of the Petiti o n is $8,597,182. Improvements, Services, Formation and Operation Costs: The purpose of the Di strict is to provide funding for the construction of certain public and private improvements, provid e, at th e discretion of the Board, certa in services w ithin the District 's boundaries, and o th erwise carry o ut the powers set forth in Sectio n 67.140 1 to 67.157 1, RSMo. • Improvem ents: The public and private improvements initially co ntemplated to be in curred by the Distric t include repaving, reno va ting, resurfacing, installing adequate lighting and repa iring ex isting lighting to the parking lots, re novatin g and r ehab ilitating the Capit al M all structure and re lated pri vate improvements, and constru c ting, recon s tru c ting, ins tallin g, repairing, maintaining and equipping certa in public improvements w ithin the Di s trict (the "Improvements"), s uch Improvements to include, without limitation: (a) renovating, reconstructing and repairing improvements to the exteri o r, inte rior and w ithin common areas of the Capita l M all building and the Di stri c t, (b) installing, repairing, and, as a pplicable, resurfa c ing commo n driveways, access roads, s id ewalks, curbs, sig ns, streetli ghts, la nd scaping and pa rking areas, and (c) repairin g and replac ing sto rm sewers. The p a rti c ul ar item s in c lud ed within the Improvem ents m ay be increased o r amended from time to time and the costs of the Improvements to be fman ced by th e Distri ct shall include all associated d esign, architecture, eng ineerin g, financing , pri va te inte rest carry, lega l and admini strative costs of sa me. EXHIB IT C-3 • Services: The Di stric t ma y also fund the pro v iSIOn of services within its bo undaries for the benefit of th e owner and tenants o f the Di s tri ct (the "Services"). Subj ect to the di scretio n of the Di stri ct's Board of Direc to rs, those Services a nd costs are not presentl y contemplated to be incurred w ithin th e first fi ve (5) years of the Distri ct 's existence. Servi ces contemplated herein ma y include, w ith out limitatio n : (a) maintaining the co mmo n driveways and access roa d s, s idewalks, curbs, sign s, s tree tli g hts, land scaping a nd parking a r e as; (b) cau sin g the necessary eng ineerin g and planning to be perfo rm ed in co nn ectio n with the Services; (c) pro viding for the services of s treetscaping, gardenin g and landscaping (i ncluding but not limited to purchasing, in stalling and maintaining trees, s hrubs, fl owers a nd o th e r vegetation, mainta inin g pots and planters, planting and re pl aci ng trees located a lo ng or adjacent to publi c ri g hts-of-way and pri vate drive s, in sta lling and maintain ing li ghting, public art, mowing , seeding a nd fertili z ing g rass and o the r vegetation); (d) m a in ta ining, re pa iring o r rep lacing irrigation syst em s and fire pro tect io n systems; (e) mainta ining o r repairing sanitary and sto rm sewers; (f) repairin g, lighting, re stripin g, and resurfacing th e parking lo ts; (g) p rov idin g or co ntra ctin g fo r the pro vis io n of cl eaning a nd maintenance services for exterior commo n areas in o rder to improve the appea rance and im age o f the Dis trict , including but not necessaril y limited to litter rem oval, purchase and maintenance of tra sh receptacles, cleaning and sweeping of s id ewalks, s treets, parking areas, private drives, and gutters; (h) providing fo r s now and ice remova l; (i) providing fo r trash , ga rbage, and o the r refus e re moval ; U) r epairing and mai ntaining directi o na l and pylo n s igns; (k) repaintin g and repairing exterior areas; (I) r epair, replace and maintenance of exterior building and canopy li g hting system s and comp o nents; (m) maintenance of roofs , gutters, d ownspo uts, fa sc ia and co lumns; (n) the cost of non- administrative perso nnel (including, w ithout limitation, workers comp ensa tion insura nce) to impleme nt such services; (o) employing or contractin g for th e provis ion of personnel to assist land owne rs, o ccupants, and users to improve security and safety conditi o ns within the Di s trict , including but n ot limited to addressing public safety concern s, identifying and re po rting public nui sances, a nd (if deemed advisable by the Distri ct) conducting securi ty patro ls; (p) hiring o r contracting for perso nnel to staff and provide servi ces to th e Di s tri ct, a nd (q) contract in g for , procuring, and paying fo r ten ant re locati o n costs in an effo rt to recruit businesses to the Distri ct and retain bus inesses w ithin the Di stri c t. The Dis tric t anticipates prov iding Services to assist in reducing the hi g h o perat ing cos ts within th e Di strict. • Formation and Operation Costs: The Di strict may a lso provide funding for the Di stric t 's fo rmat ion costs and o ngoin g operatio n and administration costs o n an annual bas is (resp ec tively, "Fo rm ati o n Costs" and "Operating Costs"). Fo rmatio n Costs shall includ e a ll , including atto rne y's fees, associated w ith th e prepar atio n of the CID Petition and negotiation and drafting o f any ag reeme nts to form the District or furth e r the Di stri ct 's purpose, a nd s uch costs sh a ll be reimbursed to the advancing part y, o r paid direc tl y, fro m fund s generated by the Di strict. Ongoing Operation Costs include, w itho ut limitatio n, co ntractin g for the e mpl oyment o r employing managerial , engineering, lega l, techni ca l, clerical, EXHIBIT C -4 a ccounting o r o ther a ssis tance a s deemed a d v isabl e by th e Board, and m ay be include d a s a n annua l exp e n se ite m b y th e CID Board . Method of Financin g: It is p ro p osed th a t th e Dis tric t w ill impose a o ne pe rcen t (I %) sales a nd u se tax (the "Distri ct Sa les T ax"), w hi ch is in additio n to an y o the r s ta te, county o r c ity sales and u se tax. The Dis tric t S a les T ax is p aya bl e o n the sam e re ta il sa les that are subj ec t to taxati o n purs u a nt to Secti on s 144.0 10 to 144.52 5, RSMo, except sales of m o tor vehi c les, tra il e rs, b oats or outboard m ot o rs, and sal es to o r b y public utilities a nd provid e rs of communicatio ns, cable, o r v id eo servi ces. All costs o f the Dis tri c t s h a ll b e fin a n ced in the m a nn er a nd a m ount d e te rm ined b y the Board o f Directo rs fro m th e a m o unts o n d e posit w ith th e C TD . Am o unts a d vanced to th e Distri ct b y the P e titio n e r , o r its s uccessors o r ass ig ns, to cover th e costs conte mplated he re und e r w ill b e re imbursed b y th e Di stri c t upo n the ava il a bility o f fund s. A ll fm a ncing cost s, in cl uding inte rest costs, assoc iate d with any lo an o bta in e d b y th e Distri ct, o r n o tes, b o nds, o r othe r o bligatio n s issued by Distri ct to fin an ce Improvem e nts and/o r Serv ices m ay b e p a id from C ID Sa les Tax reve nues. Estimated Costs: A ttache d a s Exhibit A to thi s Plan is a ta bl e setting fo rth the es tima te d cost of th e Improvem e nts, a nd a ta ble setting forth the proj ected cash fl ow fo r t he first fi ve years of th e Di s tri c t 's ex is te nce. City Services: The C ID Act manda tes that exis ting C ity serv ices w ill con t in u e to be p rov id ed w ithin a C ID at the s ame level as b efore th e Dis tri c t was c re ated (unless services a r e decreased thro u g ho ut th e C ity) and tha t Dis tric t se rv ices s ha ll b e in a ddi t io n to ex is ting C ity serv ices. T h e Di stri c t a nti c ipates tha t City serv ices w ill co ntinue to b e p rovid ed w ithin the Di stri ct a t th e same level a s befo re the Di stri c t was create d , a nd th e Distric t w ill no t ca u se the level of C it y servi ces w ithin the Dis tri c t to dimini s h . D urat io n : The Dis tri c t w ill o p e ra te fo r a m aximum te rm o f fo rty ( 4 0) years fr o m the da te of th e o rdina nce approv ing the Petitio n . Notwiths tanding that the District is a t the time providing Se rvices, but s ubj ect to th e contractual ri ghts o f a ny third parties, the Di stri ct may b e te rminated prio r to the end o f su c h m ax imum fo rty (40 ) year term if th e Improvem ents h ave been compl e ted a nd the costs th e reo f p ai d for or r e imbu rsed in full w ith C ID Sa les T ax revenu e. T he p etitio n p rocess mus t b e rep eated for the Distri ct to continue beyond forty ( 40) y ear s. Section 4 District Boundaries The legal d escriptio n o f the Dis tric t is attac h ed as Ex hibit A to the Petitio n . EX HIBIT C-5 Section 5 Facilities and Services to Be Provided As explained a b ove, during th e first five years, th e purpose of the District is to provide revenue sources in s upport of contracting w ith an y pri vate property owner to effectuate the lmprovements, and prov iding o r contractin g for th e Services. Section 6 Governing the Community Im provement District City Council: Following th e s ubmission of th e P etiti on, the Cit y Counci l wi ll conduct a p u b li c h ea ring and th en cons id e r an o rdinan ce to c re ate the Di strict. Board of Directors .for Distric t: T he Di strict w ill be governed b y a Board of Director s that w ill con s ist of five m embers a ppo inted by the Mayor o f Jefferso n C ity w ith th e co nsent of the C ity Co uncil. It is anticipated that if the Dis tri c t s ubmits nam es of s uggested s uccessor di rectors to the City in writing at least thirty (30) d ays prior to the ex pira ti o n date of the terms of the appli cab le directo rs, the Mayor sha ll a pp o int such directors as successor directo r s, w ith the consent of the C ity Coun cil , unless th e M ayo r provide s the Distri ct w ith a re aso na bl e w ritten exp lanation that such suggested successo r directo rs d o no t meet applicable lega l requirem ents or lack the co mpetency to serve as directors. Annual Budget: The Di strict's budgets w ill b e pro posed a nd a pproved a nnua ll y, w ithin the limi tatio ns set fo rth in th is Plan, by th e Di s tric t 's B oard o f D irecto rs. Bud gets w ill be submitted annuall y to the C ity Co unci l of th e C ity of Jefferson City fo r review and comme nt in accordance w ith the C ID Act. T he Distri ct w ill o pe ra te a t all tim es in accordance w ith the District Rul es and R egulati ons (Section 7) and th e B y laws of the Di stri ct. Cooperation Agreement: It is anticipated tha t the Distric t wi ll e nt er into a Cooperatio n Agreement w ith th e Petitio ner and th e City effe c tuating the terms of the C ID Petiti on and thi s Plan, and o th erwise governin g the operation of the Distri ct and the impositi o n a nd coll ectio n of the Di s trict Sales T ax (th e "Cooperation Agreement"). EXHIB IT C-6 Section 7 District Rules and Regulations I . The Di s tri c t shall operate at all times in acco rd a n c e with B y laws that may b e ad o pted by the Board of Direc to rs. The Di stri ct sh a ll at all tim es co nduct it s proceedings in acco rdance w ith R o bert 's Rul es of Orde r, exce pt as o therwise provided in a n y Bylaws. 2. The Bo ard of Direc to rs o f th e Di stri ct will mee t at least o n a n annua l bas is. END OF DOCUMENT EXHIBIT C -7 EXHIBIT A TO FIVE YEAR PLAN OF THE CAPITAL MALL C OMMUNITY IMPROVEMENT DISTRI CT ESTIMATED COSTS OF IMPROVEMENTS 1 Tot1l Project CID 1% Development Costs Costs S1les Tu Land Acquisition $ 11,000,000 $ - Hard Construction Costs $ 20,316 ,500 $ 4,091 ,537 Parking Lot Renovations $ 1,500 ,000 $ - So lar Panels $ 115,000 $ - Colll'l"On Area HVAC Uni1s $ 202 ,500 $ 101 ,250 Replacement RMUs $ 500 ,000 $ 250 ,000 Wa~rproofing $ 18,000 $ - Ex1erior Landscap ing $ 150,000 $ - ln~rior CAM Painting $ 45 ,000 $ - Colll'l"On Area Ceiting /Lighting $ 300 ,000 $ - lnerior Landscaping $ 100,000 $ - ln ~r ior F urni1ure Seati ng Area $ 36 ,000 $ - Mall En1rances $ 1,000 ,000 $ 1,000 ,000 Exerior Improvements $ 1,000 ,000 $ 500 ,000 ln erior F a~ade Imp roveme nts $ 750 ,000 $ - Pylon Sig ns $ 250 ,000 $ - Roofing Replacement $ 1,200 ,000 $ 684 ,867 Replace Colll'l"On Area Floor $ 850 ,000 $ 425 ,000 Annual Maint/Repairs $ 2,300 ,000 $ - CA and Tl lmp rovement $ 10 ,000 ,000 $ 1,130,420 Soft Renovation Costs $ 3,115,825 $ 1,000 ,000 Archiec1ura l & Engineering $ 350 ,000 $ 125 ,000 General Conditions $ 100,000 $ 50 ,000 Taxes , Insu rance, Appra isa l $ 50 ,000 $ 25 ,000 Financing Costs/Const lnerest $ 1,000 ,000 $ 200 ,000 Admnis1rative /Overhead $ 300 ,000 $ 268 ,618 Legal $ 250 ,000 $ 75 ,000 Survey $ 50 ,000 $ 25 ,000 Developer Fee $ 1,015 ,825 $ 231 ,382 Contingency $ 2,451 ,650 $ - Hard Cost Con ting ency (10%) $ 2,031 ,650 $ - Soft Cost Contingency (20%) $ 420 ,000 $ - Total Development Costs $ 36 ,883 ,975 $ 5,091 ,537 1 Th ese costs a re estimates and may flu ctuat e based on actu a l costs in c urred fo r purposes pe rmitted unde r the C ID Act. EXHIB IT C-8 EXHIBIT A TO FIVE YEAR PLAN OF THE CAPITAL MALL COMMUN ITY IMPROVEMENT DISTRICT CASH FLOW PROJECTIONS YEAR1 YEAR2 YEAR3 YEAR4 (2014) (2015) (2016) (2017) ESTIMATED REVENUE2 $378,9 14 $400,8 16 $42 1,67 1 $44 3,37 1 ESTIMATED EXPENSES ($378 ,9 14) ($400,8 16) ($42 1,67 1) ($443 ,37 1) Estimated Formation Costs ($75,000) Estimated Oeeration Costs ($10,000) ($10,000) ($10,000) ($10,000) Imerovements ($293,914) ($390,816) ($4 ll,671) ($433,37 1) YEARS (2018) $465,287 ($465 ,287) ($10,000) ($455,287) 2 A n y annual re venu e generated wi ll be utilized to pay any costs of the Di s tri c t in the disc retion of the Board of D ire ctors. Above is an estimate of the revenu es and ex penses for the Dis tri ct, w hi ch is subjec t to c hange as re ve nue is received and expenses are inc urred . EX HIBIT C-9 . ' (~. ..4 ' EXHIBITD BLIGHT STUDY (Attached) EXHIBIT D Valbridge Property Advisors I Shaner Appraisals, Inc. 10990 Quivira Road Suite 100 Overland Park, Kansas, 66210 913 451 1451 913 529 4121 fax valbridge.com Val bridge PROPERTY ADVISORS Shaner AppraiSals, Inc July 30, 2013 Mr. Rob Kingsbury Farmer Holding Company 221 Bol iver Street, Suite 400 Jefferson City, M issou ri , 65101 Re : Bl ig ht analysis of the Capital Mall located at the 3600 Country Club Dri ve in Jefferson City, Cole Co unty, M issouri 65 109. Shaner File Number: 12 638 Dear Mr. Kingsbury: I am pleased to tran smi t the attach ed Blight Study Rep o rt tha t has been prepared for the above ref eren ced property. The purpose of thi s report is t o determine whether the Study Are a is b lighted, as defined in Secti o n 353 .020 , Section 67 .140, and Section 99.805 Revise d Statutes of Mi sso uri . Thi s anal ysis represents an accumulation of my find ings based on research and invest igations performed as of the report's effective date, Dece mber 9, 2012. Th e attached report sets f orth the data, research , in ves tigations, analyses, and co nclu sio n s for thi s report. The Study Area is co mprise d of 14 parcels with a total site area of 78.27 ac res of land . Th e Study Area is presently a co mbination of both unimproved land and improved structure s that are being utilized for retail purposes such as banking, fo od service, and other general retail uses. As determined in the foll owing study, it is my o pini o n that the Stud y Area represents a "blighted area " as is defined i n Section 353 .020 of the Missouri Rede ve lopment Corporations Law and in Section 99 .805 of the Real Property Tax Increment All ocatio n Redevelopment Act of the Revise d Statutes of Missouri. Pr im ary bl ighting factors include: • Age and o bs o les ce nce • Inadequate or outmoded d esi gn • Phy sical deterioration/deterioration of site improvements • Defective or inadequate street layout • Unsanitary or un safe co nditions • Improper subdivision and/or obsolete platting • Conditions endangering life or property by fire and other causes As a result of the age, obso lescence, inad equate and ou tmoded d esign and physical deterioration the Study Area ha s b ecome and economic and social liabi lity and those co nd itions are co ndu cive to the inability to pay reasonable ta xe s. Therefore, it is my opinion that the Study Area is a blighted area as defined i n Section 353 .020 of the Revi se d Statute s of M issouri . Furth er, it is my op inion that the Study Area is a blighted area as d efined in Section 99 .805 of the Revised Statutes of Missouri because the Study Area suffers from the predominance of defective and inadequate street layout, unsa nitary and unsafe con ditions, improper subdivis ion and obsole te p latti ng, deterioration of site improvements, and 4 24 15698 .4 Mr. Rob Kingsbury July 30, 2013 Page 2 conditions endangering life and property by f ire and other causes and as a resu lt of such factors the Study Area constitutes an economic and social liability and a menace to the public health and sa f ety in its present condi tion and use . I have reac hed these co nclu sions ba sed on the fact s shown in the foll owi ng repo rt. This letter is invalid as an op inion o f blight if d eta ched from the report, which contain s the text, ex hibits and Add end a. Sincerely, Shaner Appraisa ls, Inc. Jason Roo s, MAl Director State Certified General Appraiser, Missouri No . 2009011367 42415698.4 Capital Mall Blight Study Certification I certify that, to the best of my knowledge and belief • The statements of fact contained in this report are true and correct. • The reported analyses, opi nions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, impartial and unbiased professional analyses, opinions and conclusions. • I have no present or prospective interest in the pro perty t hat is the subject of t his report, and no persona l interest with respect to the parties involved. • I have no bias with respect to the p roperty that is t he subject of this report or to the parties involved with this assignment. • My engagement in th is ass ignment was not con tingent upon develop i ng or reporting predetermined results . Furthermore, my engagement was not conditioned upon the report producing a specific opinion of blight or the approval of any public incentives or the approval of a loan. • My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined opinion of blight that favors the cause of the client, the attainment of a stipulate d result, o r t he occ u rrence of a subse q uent event directly rela t ed to the intended use of this report. • The reporte d analyses, opin ions, and conclus ions were deve loped, and this report has been prep ared , in conformity with the requi rements of the Code of Professio nal Et hics and Standards of Professional Practice of the Appraisa l I nstitute, which include the Uniform Standards of Professiona l Appraisal Practice . • The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized rep r esen t atives . • Laird Goldsborough, MAl, MRE provided assistance to the person(s) signing this certification. • Jason Roos, MAl made a personal i nspection of the pr ope rty that is the subject of t his report. • As of the date of this report, Jason Roos , MAl has completed the continuing education program of the Appra isal Inst itute. • I have performed no services, as an appraiser or in any other capacity, regarding the property that is the subject of this repo rt within the t h ree-year pe riod immediately preceding acceptance of this ass ign me nt. Jason Roos, MAl State Certified General Appraiser, Missouri No. 2009011367 SHANER APPRAISALS, INC. 4241 56 98 .4 Certification Capital Mall Blight Study EXTRAORDINARY ASSUMPTIONS AND HYPOTHETlCAL CONDffiONS Extraordinary Assumption: An assumption , directly related to a specific assignment , wh ich , if found to be false, could alter the appraiser's opinions or conclusions. Extraordinary assumptions presume as fact oth erwise uncerta i n information ab out physica l, legal, or econo m ic characteristics of the subject property; or about conditions external to the property such as market conditions or trends; or about the integrity of data used in an analysis. There are no extraordinary assumptions employed in this report. Hypothetical Condition: That which is contrary to what exists but is supposed for the purpose of analysis. Hypothetical conditions assume conditions contrary to known facts about physica l, legal , or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysi s. There are no hypothetical conditions employed in t his report . 1. None SHANER APPRAIS ALS, INC . 4 241 5698 .4 OTHER CONDffiONS Extraordinary Assumptions and Hypothetical Conditions Parcel 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Capital Mall Blight Study INTRODUCTION Identification of the Property Description The subje ct co nsis t s of 14 parcels located generally near 3600 Country Club Drive, Jefferson City, Cole County, Misso uri, although each parcel has a separate address. The subject contains fou r parcels of vacant land and seven parcels that have been improved with retai l buildings. The following table summarizes the 14 parcels. Address Parcei iD Number Parcel Size Parcel Size Z . Building Current Status S Acres on•ng Size S 3600 Country C l ub D rive 1002090002001001 1,225 ,343 28.13 C-1 290,407 Improved with Capital Mall 3546 Co untry Club Drive 1002040004000025 355,450 8.16 C-1 Vacant Land 355 0 Co untry Club Drive 1002040004000025003 219 ,5 42 5.04 C-1 26,390 Improved w i th Movie Theater 3524 Cou ntry C lub Drive 1002090001001024 65 ,776 1.5 1 C-1 Vacant Land 3530 Co untry C lub Drive 1002090002001004 31,799 0.73 C-1 2,415 Improved with Restaura nt 35 16 Country C l ub Drive 100209000100102 2 105,851 2.43 C-1 Vacant Land 3536 County C lub Drive 1002090002001002 29,62 1 0.6 8 C-1 Ground Lease with Restaurant 3721 Wes t Truman Blvd. 1002040003002036 353 ,272 8.11 C-1 Ground Le ase wi th Grocery Store 3601 Co untry C l ub D ri ve 1002090002001006 55,321 1.27 C-1 3,820 Improved with Restaurant 3533 Country Club D ri ve 1002090002001005 84,071 1.93 C-1 4 ,285 Improved with Bank 3515 Co untry Club Drive 1002090001002011 74 ,923 1.72 C-1 Vacant Land 3600 Co untry Club Drive 100204000300203 7 328,743 7.55 C-1 61 ,940 JC Penney's 3600 Co untry Club Drive 1002040004000025001 182 ,594 4.19 C-1 Improv ed with Parking 3600 Co untry Club Drive 1002090001001023 297,118 6.82 C-1 73 ,238 Dillard Tot al 3,409,423 78.27 462,495 Identification of the Problem Purpose The purpose of this blight study is to investigate and determine if b light conditions exist in the propose d Study Area according to Missouri 's Urban Redevelopment Corporations Law and Real Property Tax Increment Allocation Redevelopment Act as defined below. Definitions Missouri Urban Redevelopment Corporations Law, Section 353.020 (2), RSMo. -"Blighted area", that portion of the city within which the legislative authority of such city determines that by reason of age, obsolescence, inadequate or outmoded design or physical deterioration have become economic and socia l liabilities, and that such conditions are conducive to ill health, tran smiss ion of disease, crime or inability to pay reaso nable taxes . Missouri Real Property Tax Increment Allocation Redevelopment Act, Section 99.805(1), RSMo.-"an area which , by reason of the predominance of defective or inadequate street layout, unsanitary or unsafe condit ions, d eteriorat ion of si t e improvements, improp er subdivision or obsolete platting, or the existence of conditions which endanger life or property by f ire and other causes, or any comb i nation of such factors, retards the provision of housing accommodations or constitutes an economic or social liability or a menace to the public health, sa fety, morals , or welfare in its present con dition and use." SHANER APPRAISALS, INC . 42415698.4 Introduction • 1 Capital Mall Blight Study Effective Date The effective date of this blight study is De ce mber 9, 2012 . The property was inspected by Jason Roos, MAl on December 9, 2012. Date of Report Th e date of this report is January 31 , 2013. A comparison of the date of the report to the effective date of the bl ight study indicates that our conclusions are reflective of current market cond itions. Use or Function This blight study was prepared for the sole and exclusive use of Farmer Holding Company to assist in determining if the Study Are a is blighted and eligible for tax abatement and/o r TIF and CID. It is not to be relied upon by any third parties for any purposes , whatsoever; provided, however, this Report may be submitted by Farmer Holding Company or its affiliates or agents to any governmental entity or agency for the purpose of making a recommendation of a finding that the Study Area is blighted or a legislative determination and/or finding that the Study Area is blighted. Appraiser Competency No steps were necessary to meet the competency provisions establ ished under USPAP. Our firm ha s completed many blight studies in the past seve ral years, and we have adequate experience and qualifications to complete the study. Please refer to the Appraiser Qualifications at the end of our report. Sources of Information Market data was obtained from a number of sources, including but not limited to the following : • The Site-To -Do -Business • The Cole County Assessor's Office • Jefferson City on line databa ses • Cole County online databases • Jefferson City Chamber of Commerce • Jefferson City Economic Development department • The Labor of Bureau Stati stics • The U.S. Cen su s Bureau • Loopnet, CoStar, Mu ltiple Listing Service (MLS), and in -house database SHANER APPRAISALS, INC . 424 15698.4 Introduction • 2 Capital Mall Blight Study AREA AND NEIGHBORHOOD Area Overview The subject is located in the western portion of Jefferson City, Cole County, Missouri. Jefferson City is the state capital of Missouri and is located approximately midway between Kansas City and St. Louis . Major highway access in the community is provided by US Highway 50 , whi ch run s east/west through the community and US Highway 63 w h ich runs north/south. Acc ording to the Site to Do Business , Jefferson City had an estimated 2012 population of 43,506 p eople with a median hou sehold income of $46 ,525 . Thi s represents a population increase in Jefferson City of 0.44% annually from 2010 to 2012 . In comparison , the Kansas City metro has a median housing income of $51 ,835 in 2012 and a reported population growth of 0.60 % annual ly since 2010 . The following analysis focuse s on the social , economic, government, and environmental forces that form the elements of supply and demand and subsequently affe ct local rea l estate values . , . . ......,.,.,. ... ....,... " ..... . --... ·--.fU ll ,. ·-· M-.. U NI T ED .c....... Jih.IOn ·~ v ... hl ... MISSOURI ·"'' ·-. ··-·,~. au,.,., .. -•.... ...... ..... 1141 .. 4 Market Area Overview ~, l .. \ ·-" .... ~' '" \ ·--- .~ ........... n ··- _c.....,, According to Market Analysis for Real Estate, published by the Appraisal Institute, the trade/market area is delineated by physical , political , and socioeconomic boundaries or by the time -distance relationship re pres ented by travel times to and from common destinations. A market area is an area in which alternative , similar properties effective ly compete with the subject in the minds of probable , potential SHANER APPRAISALS , INC . Area and Neighborhood • 3 Capital Mall Blight Study users. It is further stated that the t i me-distance re lationship to employment and support facilities is the primary determination for retail properties. Therefore, for the purposes of this report, the market area boundaries are considered to be the entire city of Jefferson City. The market area is shown on the following map. Market Area Ma \ -I Land Use Land use in the immediate area of the subject includes mostly commercial and sing le family residential. The main commercial corridor in the subject's neighborhood is West Truman Blvd. an d US Hig h way 50, which intersect at the so ut hwest corner of the su bj ect property. Significant la nd use characte ristics are summarized in the following table for the immediate area. Predominant Aqe of Improvement s 30 years Predominant Quality and Condition Averaqe Approximate Percent Developed (estimate) >75% with vacant sites being located throuqhout the area Li fe Cycle St age Second, a period of stabi lity I nfrastr uctur e/P lanning Average Prevailing Direction of Growth West Immediate Surrounding Land Use North Commercial --South Hiqhway East Residential West Commercial SHANER APPRAISALS , INC. Area and Neighborhood • 4 Capital Mall Blight Study Access Regional access to and from the local market area is good due to the presence of US Highways 63 and SO. US Highway SO run s east/west through the area and connects with Interstate 470 and Kansas City to the west and Interstate 44 and St. Lou is to the east. US Highway 63 runs north/south through the area and connects with Interstate 70 and Columbia , Missouri to the north and Interstate 44 and Rolla, Missouri to the south. Outlook and Conclusions I am cautiously optimistic about both the short and long-term outlooks of the subject market area . Jefferson City is the state capi tal of Missouri and as suc h, will continue to have a solid employment base of government jobs. Although that is the case, there is still a risk factor involved that includes the potential cut i n government spending , which would have a negative impact. The location along two US Highways is also a positive for the community and the market will remain stable for the foreseeab le future with few changes occu rring . SHANER APPRAISALS , INC. Area and Neighbor hood • 5 PROPERTY DATA Site Description Identification Location-Main Parcel Abbreviated L al Ph . IF t lYSICa ea ures Size (11 Parcels Combined} Source: Configuration Topography Drainage Flood Plain Community Panel # Flood Zone Flood Insurance Utilities Environmental Ground Stability Le al Zoning Designation Statement of Intent Conformance Easements, Encumbrances, Moratoriums Encroachments SHANER APPRAISALS , IN C. Capital Mall Blight Study Approximately 78.27 acres, or 3,409,423 square feet County Records Irregular (see following maps, aerials and si te plans) Basically le vel Adequate at the time of inspection 29051C0109E, effective November 2, 2012 Zone X, "Areas of 0.2 % annual chance flood ; areas of 1% annual chance flood with average depths of less than 1 foot or with drainage areas less than 1 square mile; and areas protected by levees from 1 %annual chance flood." Not typically required within Zone X Adequate utilities are available and in place at the site. Our physical inspection of the subject property did not reveal any indication of environmental hazard . However, we were not provided with a Phase I report t o verify. It is recomme nded tha t a competent third party prepare a Phase I to confirm. We were not provided a soil report to review. We assume that the soil's load bearing capacity is sufficient to support the existing st ru ctures. We did n ot observe any evidence to the contrary during our physical in spection o f the property. PUD , Planned Unit Develo ment 1 C-1, Nei hborhood Commercial The zoning of property is Planned Unit Development. The pu r pose of this district is to provide land use and design fl exibility in exchange for long term community benefits where streets and utilities are adequate and w here proposed development is compatible with existing and lanned deve lo menton ad ·acent ro ert . Property Data • 6 Capital Mall Blight Study SHANER APPRAISALS , INC. Property Data • 7 SHANER APPRAISALS, INC. 0 g ~-----­ ~ Je'fe rson C.ty Zontng D e-l ·C-2 ·C-3 ·C-4 O c-o ·M-1 ·M-2 ·M-3 D N-0 • RA -2 .RC .RO D RS-1 D RS -2 D RS-3 D RS -4 O Ru Capital Mall Blight Study Property Data • 8 Flood Map "~\ ST08(!)NLIN E.com ~· \:::.1 FLOOD SOURCIE / ;l:i:~ FLOODSCAPE"' • SHANER APPRAISALS , INC. Capital Mall Blight Study PROPERTY ADDRESS: 3600 Country Cub Dr , Jefferson Cily 'v!O , 65 109 No rth Flood l *nd • -iigh 'lood r;slt • '•lod.ra:e ~ r~k -<:NI 'loocl r s STDB onlmt' .corn 409 574.1234 Property Data • 9 Capital Mall Blight Study Site Conclusions The subject site is functional for its legally permissible use of a retai l development. The si t e is favorable for its current retail use and has good genera l access to main transportation routes in Jefferson City and utilities. The use of the property is consistent with the surrounding development. SUBJECT PHOTOS View of exterior of Capital Mall SHANER APPRAISALS, INC . Subject Photos • 10 Capital Mall Blight Study View of exterior of Capital Mall , View o f exterior of Capital Mall SHANER APPRAISALS, INC . Subject Photos • 11 Capital Mall Blight Study View of exterior of Capital Mall View o f exterior of Cap ital Mall SHANER APPRAISALS, INC . Subject Photos • 12 Capital Mall Blight Study View of exterior of Capital Mall SHANER APPRAISALS, IN C. Subject Photos • 13 Capital Mall Blight Study View of interior of Capital Mall SHANER APPRAISALS, INC . Subject Photos • 14 Capital Mall Blight Study View of interior of Capita l Mall SHANER APPRAISALS, INC. Subject Photos • 15 Capital Mall Blight Study View of interi or of Capital Ma ll SHANER APPRAISALS, INC. Subject Photos • 16 Capital Mall Blight Study View of interior of Capital Mall SHANER APPRAISALS, INC. Subject Photos • 17 Capital Mall Blight Study View of interior of Capital Ma ll SHANER APPRAISALS , INC . Subject Photos • 18 Capital Mall Blight Study View of Wendy's outparcel SHANER APPRAISALS, INC . Subject Photos • 19 Capital Mall Blight Study View of Hardee 's outpar ce l SHANER APPRAISALS , INC. Subject Photos • 20 Capital Mall Blight Study Vi ew of vacan t land SHAN ER APPRAISALS, INC. Subject Photos • 21 Capital Mall Blight Study SHANER APPRAISALS, INC. Subject Photos • 22 Capital Mall Blight Study View of vacant land SHANER APPRAISALS, INC. Subject Photos • 23 Capital Mall Blight S tudy BLIGHT ANALYSIS Bl i ght Defi ned As presented earl ier, Section 353.020 (2) R.S.Mo of Mis souri's Urban Redeve lopment Co r porations Law defines a "bl ighted area " as fo ll ows: • "Blighted area", t hat p o rtion of the city within w hich the legis la tive authority of such city determines that by reason of age, obsolescence, inadequate or o utmoded design or physica l deterioration have become economic and socia l liabilities, and that such con d itions are co n ducive to ill health, tran smiss ion of disea se, cr ime or inabi lity to pay reasonable taxes. We also presented the definition of blight from the Mi sso uri Rea l Property Ta x Increment Allocation Redevelopment Act, Section 99.805(1), RSMo whic h defines a "b lighted area " as f ol lows: • an area wh ich, by reason of the predomina nce of defect ive or inadequat e street la yout, unsanitary o r unsafe co ndi tions, deterioration of site improvements , imprope r subdi vis ion or obsolete platting, or the existence of co nditions whic h endange r life or prope rty by f ire and other causes , or any combination of such factors, retards t he provision of housing accommo dati ons or constitutes an economic o r socia l liability o r a menace to the public h ea lth, safety, mo rals , or welfare in its present co ndition and use . The above definitions serve as t he basis for further discuss ion concerning whether the proposed Study Area is blighted . Chapter 353 --Factors # 1 and 2 -Age and Obsolescence The Stu dy Area i ncludes both im prove d and unimp rove d sites. For the unimproved si tes, since land does not depreciate or age over ti me similar to improved pro perty, and age is not cons idered to be a significant indication of blight fo r t hese parce ls. There are nine structures on the 14 parcels. Ea ch of these st ru ctures was built in a different year and is subject to d ifferent amounts of depreciation. The Capital Mall pa rcel (Parcel 1) contains the majority of the buildi ng area in the Study Area at approximately 63% and was built in 1978 . In o ur inspection of this building, th ere were a number of areas that had dated improvements. Th ese i nclu de the floo r tile t h rough out the common areas and t he tile in the restrooms . Th ere are severa l places in the mall that ha ve tiles that are misma t ch ed in co lor, possib ly due to the lack of similar tile t o repa i r areas of the floor. Ph otos o f these items can be seen on the f ollowing pages. The Merriam -Webster Dictionary defines "obsolesce nce" as "the process of becoming obso le te o r the condi ti o n of being nearly obsolete" and "ob so lete" as "of a kind or sty le no longer current: o ld - fashioned." In a retai l shopping ce nter similar to the subject, keeping the common areas updated appeals to both the sho ppers and the tenants. Shoppers generally have more desire to be at a center that appears "newer" and that has more up-to-date ame nities. By making the su bje ct mall more aesthetically plea sing t o these shoppers, traffic to the mall should in crease and may i nc rease th e occupancy with tenants that would appea l to these sho p pers. Tired and outdated mal ls have d ifficu lt y attracting tenants that wi ll draw shoppers to the mall. SHAN ER APPRAISAL S, IN C. Bl ight Analysis • 24 Capital Mall Blight Study An article was rev iewed that addresses this matter spec ifica l ly. It was written by John Simpson , MAl who has authored all or parts of four Appraisal Institute books and 11 Appraisal Journa l articles, and he ha s over 20 years of commercial appraisal experience. In his online appra isal blog "Appraisa l Matters", he wrote about older regio nal malls. In it , he stated that these properties "face a quandary." He goes on to note "they need to be renovated t o keep competitive with newe r regiona l malls , yet this is a very expensive proposition that rarely is financially feasib le." Additio nally, the artic le states "Older regional ma lls that have not been modernized t o current leve ls have great difficu lties attracting t h e high credit anchors they wan t." M r. Simpson states "typica lly renovat ions that have occurred over the prior five to ten years are cosmetic and do little t o increase foot traffic." Mr. Simpson finishes his article with the fo ll owing conclusion: So older regiona l malls have lower sales per square foot and higher common area maintena nce costs. Frequent ly traffic volume and traffic patterns reduce the rad i us it ca n draw from. So even if t h e ma ll is renovated , it is extremely difficult to recoup the cost, hence what we see are partial renova tions t hat focus on cos metics. The p ro b lem is t hat prospective retail tenants recogn ize the dynamics and even with a face lift, they are very hesitant to commit. Their response is "s how me higher ave rage sales vo lumes", which is a Catch 22 with on ly cosmetic renovations . Even if sa les volumes in crease, the higher costs associated wit h t h e mall result in a lower negotiated rent. So again, mall owners are faced with a difficulty in justifying the costs of a full renova tion. That's why they need one or more new anchors, ye t the particu lar location mat rix of an anchor wil l gene rally p recl ude a regio nal mall pe rceived as a "locals " ma ll. Based on our inspection of the subject property along with the data that ha s been obtained from the article noted above, it appears that the age o f the subject property contributes to the indication of blight for the Study Area. SHANER APPRAISALS , IN C. Blight Analysis • 25 Capital Mall Blight Study SHANER APPRAISALS, INC . Blight Ana lysis • 26 Capital Mall Blight Study SHANER APPRAISALS, INC . Blight Analysis • 27 Cap ital Mall Blight Study Chapter 353 Factor # 3 -Inadequate or Outmoded Design The majority o f the Study Area is improved with a regi ona l shopping cen t er. In general , current views are that the de sign s of regi o na l shopp ing cente rs are co n sidered both inad equate and o utmoded. The layout of an older mall pro perty like t he subj ect is considered a problem to some investo rs as the buildings have long wi ng s that connect to the various anchors. This is a concern becau se each wing in a shopping center typically requires an HVAC system whic h can help to eliminate economies of scale, increase repair and repla ce ment costs, and reduce the energy effic ien cy of the facility. A layout of the subject's facil ity tha t sh ows the var ious wings at the subject sh opping center ca n be see n la ter in this section. As shown by the pictures on page 31, the entrance wings have l ittle to no physical o r visual activi t y rendering the de sign to be ou t -of -s t yle and ina dequ ate by t o da y's standards. Th e ma in entrance to the subject site from Tru man Bo ule vard enters wi th a view of the service and loading area of the Sears tenant and not to o ne of the main entrances to the shopping cen ter, which ca n be found primaril y on the south side of the subject build ing near the food court. By today's standa rds service areas are shielded f rom public view. The two entrances nearest to Trum an Bou le va rd are, fo r the most part , void of any significant leasable space rendering the d esign to be i nad equate and outmoded. CoStar publi shed a three part se ries in October 20 12 titled "The De -M aili ng of Am erica: What's Ne xt fo r Hundreds of Outmoded Mall s?" In t his article, it notes that RE!T s like Simon Property Group and General Growth Prope rtie s (the prior owner of the subject property), w hic h are the nation's larg est mall operators, are divesting lesse r -pe rfo rm i ng properties. Investors have been purchasing these properties at these low pri ces and be lie ve that they can reposition these malls o r ra ze them to gain land for apartmen ts or other uses. Th e article goes on to note that that the issues that face distressed malls and large shopping centers ranges from changing ne ighbo rh oods, i ncreased competi t ion from online retailers, the appeal of newer li fe style and power ce nters, conso lidation of anch or st ores, and sharp downsizing by in-l in e tenants. I n a report from Green Street Ad viso rs, it was forecast that 10% of the nati o n's 1,000 enclosed malls will fail by 2022 and will eve ntually be converted to uses other than retail. Chapter 353 Factor # 4 -Physical Deterioration We have been provided a r epo rt completed by Jam ie Reed, General Manager for the subject property. Thi s report shows tha t there are a number of it ems of physical deterioration an d potent ial safety issues within the subjec t property. Th e descr iption of these items from t hi s report are included below with the full re port being in clude d in the addendum o f this report. SHANER APPRAISAL S, IN C. Bl ight Analysis • 28 Capital Mall Blight Study I. Facades The fa~;Ude of the mall propert} IS 111 poor condttion m several places. St:c enclo!>ed ptcture I for an example of typ1ca l fa9ade condihons. 2. Roo f The roof is in poor condihon tn e'verrtl plnccs . There u rc a substant ial numb'-r of acttve roof leaks and c;igns of a h1story of roof leaks in 14 (If 30 of the tenant areas observed. In addition, substantial repairs will be needed to the roof rmrapet. Sec cnclo!>cd picture 2 to II fo r evidence of the roof condition and leaks found. 3. HVA C-The HVAC system is in poor condition. It has bocn recommended th at II I I V AC units be replaced in the short tcnn due to thei r substantial deterioration. age and obsolescence. 4. Steel Senice Doors Dnc-half of the steel !>cr'v tce duOJs ate ru.ted and de teriorated a long the door jambs See enclosed picture 12 for an tllustratio11 of the typical rusted s teel doo r S. Pamte<l fmisbes Several tenant entries arc in need of immedi ate painting . 6. Elf·S Damage wa obsmed to the underlying I:IF S (fa~adc) at sc,eral of the tenam entries, mo t notably at vacant spaces at the southern end of the bui ld tng. See enclosed pi ct ures l3 lo 16 . See also picture 17 for typtcal dried and cracked control joint J.ealant found on the throughout the fa~;Ude. 7. Suspect Mo ld Vtsual ~igns of suo;pect mo ld ha\'C hccn id ent ifi ed two tenant areas. See t:ncloscd ptcturc H and II. Ilu!> ts a safety an d hea lt h t~ue, 111 addttion to a deterioration issue. R. Pavement As you nlread} notod the parking lot payment ts h1ghly tk1t.norutt:d und m need of replacement Sec t.-nclost.-d ptcturcs 18, 19 and 20 for recen tl y taken of the parking pavement condi tions . 9. Curbs-The cut bs are detenorntlllg in several pl aces throughout the propcny. Soc enclosed pi cture 21 of a damaged curb on the propcrt} that -was typically obset"\ed 10. Tri p Hazard At west side of J(' Penney a tnp hazard was idcn ltfied. See enclo ed pictun: 22 . II . Sc..'l"\icc Entry Lights There arc sc,cral damaged at hghts O\ er service en try doors. Soc enclosed pi ctu re 21 for typical mi~sing light~ over sen1ce entry doors. This is a ~fcty issue as much a'! a deterioration tssuc. 12. Windows Replacement needed at <;mall anchor tenant at south end of building. See enclosed picture 24 . In addition to these items, the reader is referred to the discussion of physical deterioratio n on page 33 under "Deterioration of Site Improvements." Chapter 99 Factor # 1 -Defective and Inadequate Street Layout Conditions associated with defective or inadequate street layout include poor vehicular access and/or interna l circulation ; substandard driveway definition and parking la yout (e.g. lack of curb cuts, awkward entrance and exit points); offset or irregular intersecti ons; and substandard or nonexistent pede st ria n circulation and lack of signage. The lack of signage can create uncertainty and a pot ential for ac ciden t s for drivers who are unfamiliar with the area . SHANER APPRAISALS, INC. Blight Analysis • 29 Capital Mall Blight Study One of the cond itions that was common throughout the Study Area was that of non -existent pedestrian circulation. The only sidewalk s found within the Study Area were located around the perimeter of the bui ld ings, and no sidewalks linked the redevelopment area with adjoining area s. None of the streets in the Study Area have sidewa l ks. Additionally, there are no sidewa l ks along West Truman Road or along Country Club Drive. The lack of sidewalks creates a dangerous environment fo r pedest rians within the Study Area. Creating pedestrian linkages with major activity hubs such as the Capital Mall is often a planning priority of most communities. Chapter 99 Factor# 2-Unsanitary or Unsafe Conditions There are widesp read location s within the Study Area exhibiting unsafe or unsanitary condition s. The most prevalent Study Area conditions considered unsafe or insan itary include numerous potholes throughout the parking areas, poor d rai nage throughout the parking areas , the existence of cracked or uneven sidewalks, poor drainage, life safety issues and outdated building systems . The numerous potholes throughout the area lead to unsafe co nd itions to veh icular traffic and espec ially t o pede strian access to and fr om the pa r king areas. Chapter 99 Factor # 3 -Improper Subdivision or Obsolete Platting There are speci f ic condi tions that can be used to dete rmine the ex isten ce of improper subd ivision or obsolete platting. Among t hese con d itions are irregu la r or faulty lot shape and/or layout, inadequate lot size , poor access, as well as conformity of use. Field study and review of public records suggest these conditions present throughout and are predominate within the Study Area . Lot layout is deemed to be faulty if the configu rat ion relat ive to the street is contrary to what is desi red for development. Lot shape is considered faulty if the shape is unu sua l to an extent that it deters or constrains development options. The Study Area cons ists of 14 parcels that are irregularly configured, making it difficult to undertake a coordi nated approach to redevelopment of the property so as to bring it up to modern development sta nd ards. Each of the department stores together with its ancillary parking ha s be en sepa rate ly platted, resulting in the plats hav i ng highly irregular sha p es. Such platt ing results i n the creation of a numbe r of le gal and financial obsta cl es to development. Th e GIS map on page 7 of this Report illustrates improper subdivision or obsolete p latting i n the Study Area. Of the 3.409.423 square feet cont ained in the Study Area , 100% of the property i n the Study Area refle cts this condi t ion. The Study Area predominantly suffers from im prop er subd ivision and obsolete platting. Th ere are several additional evi d entiary factors that support this. The first is that t he ma in entran ce to the subject site from Trum an Boulevard en ters with a view of the service and loading area of the Sears tenant and not to one of the main entrances to the shopping cente r, which can be found primari ly on the south side of the subject building near the food court. The two entrances nearest to Truman Boulevard are, for the most part, void of any significant leasable space. A photo of the two entrance wings is below. In addition, although it is not owned by the same entity as the ma ll , Dillard 's has poor visib il ity and acce ss from b oth Country Club Drive and Truman Boulevard. Th is can be seen on the site plan that f oll ows i n this section . SHANER APPRAISALS , INC . Blight Analysis • 30 Capital Mall Blight Study A second factor that evidences improper subdivisio n of the overall Study Area is that the shopping cente r and subject land is not built out 100%, even though the center was constructed nearly 35 years ago. There is one pad site (Parce l 4) that is 1.51 acres and has frontage along Country Club Drive. This pad site SHANER APPRAISALS , IN C. Blight Ana lysis • 31 Capital Mall Blight Study remains vacant. The re are also three parcels (Parcels 2, 6 and 11) that are considered "buffers" from the residentia l development that exists to the east. Although this buffer is required by zon i ng , it consists of slightly over 20 % of the total site area in the Study Area , which is considered to be excessive. Within the Study Area , the platting is also considered to be inefficient and obsolete by today's standards as JC Penney and Dillard's have been separately platted. The division of space has resulted in the plats having very irregular shapes. These anchors (JC Penney and Dil lard's) are owned by a different entity than the remainder of the shopping center. This presents major problems relating to the development of a plan for any redevelopment or adaptive reuse of the property as we ll as legal and financia l hurdles to development. The shopping center and site plans that were referenced earlier in this sect ion can be seen below and on the following page. Page 7 of this report shows the layout of the various parcels and their irregular shape and location on the site. -· - -· - SHANER APPRAISALS , INC . VI . ... • Q VI 0::§ :1 . ..J 0 c " Blight Analysis • 32 Capital Mall Blight Study All of these components i ndicate that the subject property suffers from an inadequate and outmoded design as well as improper subdivision and obsolete platting, and these are considered to be an indication of blight. The fact that one pad site remains vacant evidences the limited demand in the area and results in an economic liability to the city. In addition, the parcels that are currently used as buffers between the shopping center and the residential development to the east are useful for their current purpose, but in th is capacity do not generate significant taxes for the city. Chapter 99 Factor # 4-Deterioration of Site Improvements At the Study Area, there are a number of items of physical deterioration that are present, however, it does not appear that any of these items are significant. They include damaged parking areas and damaged interior tiles. On the interior of the mall , the building itself is dated with several places in the building that have floor tiles that are mismatched as well as some evidence of damaged floor t i les. There was nothi ng specific that was identified as major deterioration, such as evidence of foundation damage, HVAC obsolescence, roof leaks, or improper drainage around the mal l's exterior, however as noted previously, there was an overall dated appearance to the facility. One issue with the Study Area is the interior of the shopping center and the damaged floor tile. It does not appear that there is any remaining matching tile for the majority of the building. As noted previously, areas of the common floor have been rep laced with lighter color tiles. Because of this , it is possible that the cost to update the flooring throughout the building's common areas woul d be a detriment to developers from a cost -benefit standpoint. SHANER APPRAISALS , INC. Blight Analysis • 33 Capital Mall B li ght Study My inspect ion also found that the parking lot was nearing the end of its usefu l life and is in need of resealing and restriping, and repair of potholes. Severa l curbs are deteriorating and need repairs throughout the area as well. The fo llowing pictures sh ow a sample of the damaged tile as well as the damage i n the parking area. SHANER APPRAISALS, INC . Blight Analysis • 34 Capital Mall Blight Study SHANER APPRAISALS, INC. Blight Analysis • 35 Capital Mall Blight Study SHANER APPRAISALS, INC. Blight Analysis • 36 Capital Mall Blight Study Therefore, given the reason s outlined above, physical deterioration is co nsidered to be an indication of blight. Chapter 99 Factor# 5-Conditions which Endanger Life or Property by Fired and Other Causes According to the property co ndition rep ort re ceived from Jamie Reed , the fire sprinkler system has not been tested sin ce October 2009. The se systems are supposed to be tested on an annual basis. Because of the lack of fire sys tem testing sta t ed in the property cond ition report, there is an potential that the fire sys tem may not operate co rrectly in the event of a fire. This ca n be co nsidered a condition that would endanger life and property by fire. BUGHT STUDY CONCLUSIONS The following factors of the blight defi nition are present i n the proposed Study Area. ht Factors Yes No X Ob so lescence X X X The f orego ing analysis demonstrates that four o ut of the four Chapter 353 blighting factors are present throughout the Study Area . In accordance with Missouri 's Urban Redevelopment Corporation s Law definition of Blight Section 353.02 0(2). RSMo ., the Study Area is blighted if the governing body of the city determines that by reason of age, obsolescence, inadequate or outmoded design or physical deterioration the area have be come economic and socia l liabilities, and that such co nditions are conducive to ill health, transmission of disease, crime or inability to pay reasonable taxes . Because of the four present blighting factors above, the Study Area ha s become both an economic and social liability and these conditions are co ndu cive to the inability to pay reasonable ta xes as defined in Se ction 353.020(2), RSMo . See below for a full eva luation of economic liability, soci al liability and the inability to pay reasonable ta xes . Yes No X X X X X The forego i ng analysis demonstrate s that five o ut of the five Chapter 99 b lighting factor s are present in the Study Area and the combinat ion of t hese co ndi t ions are predominant in t he Study Area. Under the Missou ri Rea l Property Tax In crement Allocation Redeve lopment Act, Section 99 .805(1), RSMo . the Study Area is a blighted area if by rea so n of the predominan ce of de fective or inadequate street layout , un san itary or unsafe conditions, deterioration of si te improvements, improper subdivision or obsolete platting, or the existence of conditions which endanger life or property by fire and other causes, or any combination of such factors, retard s the provision of housing accommodations or const itutes an SHANER A P PRAISALS, IN C. Bl ight Study Conclusions • 37 Capital Mall Blight Study economic o r social liability o r a menace to th e pub l ic heal t h, safet y, morals, or we lfare in its prese nt condition and use . By reason of the predominance of the fi ve present blighting factors above, the Stud y Area, in its pre sent condition and use , cons titutes both an economic as defined in Section 99.805(1), RSMo. See below for a full eva lu ation of both economic liabi li ty and socia l liabi lity. Inability to Pay Reasonable Taxes A speci fic de f i niti on that clear ly defi nes "the inability to pay reasonable taxes " was not found in the Missouri Statues. In the real es t ate field, the inability t o pay reasonab le taxes can simply be that that property value as it c urren tly sits is less that the potential va lu e of the property as renovated or rehabbed. Th ere is substantial evidence that t he p roperty is unable to pay reasonable taxes which result directly from th e age, obsolescence, inadequate an d outmoded design and physical deteri oratio n o f the property. Th e subject pro perty was recen tly purchased in Dece mber 20 12 fo r a sa les price of $11,000,000. In th e cou rse of that purchase , an appraisal was comp let ed by Cushm an and Wak ef ie ld . The appraisers that signe d this report were Thomas S. Helm , MAl, MRICS, who is a Senior Director and Richard Latella, MAl, FRICS , w ho is the Execu tive Managing Director an d Americas Prac ti ce Leader for the co mpany. The value co nclu sions from this report ca n be see n in the chart below. Value Conclusions Appraisal Premi se Market value As-Is Prospective Market Value Upon Stabilization Comp•ted oy Cus~man & Wake/'ie.'ct or 11uno1s Inc. RN I Property Interest Leased Fee leased Fee Date Of Value 1215!2612 1/1/2015 ' I Conclusion s11 .2oo .666 $12.900 .000 In t hi s report, it was noted that the "as is " va lu e of the property, which accounts for the tenants that were in place as of their in spection date of December 5, 2012, was $11,200 ,000. They also provi ded an "as stab i li ze d" value as of January 1, 2015 of $12,900,000. The value dif f ere nces between the "as is " and "as stabilized" val ues is du e to the fact that the app raisers fe lt that t he subj ect was not at a sta bi lized occ upancy. It was est ima t ed tha t approximately 10,842 square feet would requ ire lease-up to long term tenants, and that 12,229 square f eet woul d be occup ied by temporary t enants. Thi s would bring the subj ect's occupancy up to a typical market level for a regional shoppi ng mall. Because the subject property is not conside red to be cu rrently stabi li zed , its fair market va lu e, which is wha t the assessors in Missouri base their values , is below that of a stabilized shoppi ng center. Given th is fac t , the subject property is not p ayin g reasonab le t axes. We have also been provided th e hist orica l ope rat ing st at ements from the property owner for 2009, 2010, 2011, thei r 2012 budget, and where they are as of January 1, 2013. This can be seen below. SHAN ER APPRAISALS, IN C. Blight Study Conclus ions • 3 8 Capital Mall Blight Study 2009 2010 2011 2012 Curr~t Actual Actu .. Actual Budtlet In Place INCOME 1/1/2013 Contract ual M inimum Rent s $2,576,309 $2,230,042 $2,154,764 $2,135,350 $1,756,616 Lease Te rm ination I ncome $50,000 so $27,110 so so Re;mbursement Income $1,072,185 S870,690 $769,591 $697 779 $432,050 Marketing/Promotion $55,091 $25,714 $13,433 $14,396 so Other Tenant Re im bu rsement $15,173 $12,098 $9,812 $3,57 1 S392,456 Overage Rent $14 5,812 $177,037 $190,432 $195,613 $449,9 48 Other Income 597,741 $48,3 75 570.206 $69.377 $69.377 TOTAL INCOME $4,012,311 $3,363,956 $3,235,348 $3,116 ,086 $3,100,447 EXPENSES Marl..eting $55,091 $49,782 $46,558 $55,968 $55,450 Ope rations $257,965 $247,988 $186,739 $2 12,154 $205,400 Ut ilit ies $34 3,469 $401,232 $449,375 $506,722 $501,500 Cleaning $241,322 $268,79 1 $311,351 $286,908 $285,650 La ndscaping 517,791 $17,352 $12,285 $11,900 $11 ,900 Security $159,629 $160,362 $164,712 $164,103 $163,900 Other $187,290 $176,179 $180,672 $166,292 S168,880 Management Fee $58,828 $68,949 $0 $0 so Real Estate Ta xes $288,603 $284,21 2 $203,225 $195,055 $182,715 I nsu rance $47.508 $38.454 $26,5 14 S27,660 $27.660 TOTAL EXPENS ES $1,657,496 $1,713,301 $1,581,431 $1,626,762 $1,603,055 NET OP ERATING INCOME $2,354,815 $1,650,655 $1,653,917 $1,489,324 $1,497,392 As can be see n in thi s chart, the net o perat ing income f o r the subject property dropped nearly 30% between 200 9 and 2011 , which is the last year that actual numbers were provided . If the in place estimate of net operating income as of January 1, 2013 were consi dered, the net operating in come would have declined by over 35% f ro m 2009 . Through the three years of actual income and expense s that we have, the expenses at the subject property have remained fairly stable. Th e total income of the property has d ecli ned from $4 ,0 12,3 11 in 2009 to the current in place total income of $3 ,100,447, a d ecline of nearly $900,000. Based on t he historical f igures, thi s appears to be du e t o the decline in the co ntract minimum rents . Regiona l shopping ce nters li ke the subje ct are al most always purcha sed f o r the i r in co me generating potential. If the net income that would be available to the property owner has declined by approximately 35%, that would have an effe ct on the market value of th e subject property. Given th at the cou nty assessor is to value the subject property for taxation purposes at its fair market value , assuming the mill levy remained co nstant, it is logi ca l t o ass um e that the ta xes that would be paid on th e property would decrease , which wou ld support the blighting factor of i nability to pa y reason ab le ta xes. In addition to the information above, the 14 parcels that make up the Study Area are currently assesse d and taxed as various county par cels. A summary of the parcel s in volved and t heir cu rrent ta x amounts follows. SHANER APPRAISALS, INC . B l ight Study Conclusions • 39 Capital Mall Blight Study Taxes Parcel Parcel 2008 2009 2010 2011 2012 1 $284,188.32 $274 ,156.42 $269,985.04 $169 ,647.15 $169,508 .72 2 $2 ,318.32 $2 ,236.48 $2,202.45 $2 ,2 02 .65 $2 ,000.85 3 $18,013.68 $17,377 .80 $17 ,113.39 $17,114.93 $17,100.96 4 $8,551.76 $8 ,249.89 $8,124 .36 $6 ,965 .32 $6,959.63 5 $7 ,665.43 $7 ,394.84 $7,282 .32 $7 ,997.72 $7 ,991.1 9 6 $18.58 $17 .93 $17.66 $17.65 $17 .64 7 $4 ,112.49 $3 ,967.33 $3,906.96 $3,907.32 $3 ,904.13 8 $174,800.20 $168 ,629.71 $166,063 .96 $11 3,598.12 $113 ,505.42 9 $8 ,828 .65 $9 ,101.03 $8,962 .56 $10,173.89 $10,165.58 10 $21,470.27 $20,712.36 $20,397.21 $20,399.06 $20,382.42 11 $4 ,086.37 $3 ,942 .12 $3,882 .13 $3,882.49 $3,879 .32 12 $53,865 .76 $51,964.28 $51 .173.64 $49,785.78 $49,745 .15 13 $15,385.42 $14,842.31 $14 ,616.48 $11,394.89 $11 ,385 .59 14 $63,617.32 $61,371.62 $60,437 .84 $49,094.20 $49,054.14 Total $666,922.57 $643,964.12 $634,166.00 $466,181.17 $465,600.74 Tax Table Assessment County County Current Taxes Current Taxes Parcel Rate% Appraised Assessed (2012) 2008 Taxes %of 2008 Value Value Tax Amount 1 32 % $9,613,000 $3 ,076,160 $169 ,508 .72 $284,188.32 59 .65 % 2 32 % $124 ,800 $39,940 $2 ,2 00.85 $2 ,318.32 94.93 % 3 32% $969,800 $310,3 40 $17,100.96 $18,013.68 94.93 % 4 32 % $394,700 $126,3 00 $6 ,959 .63 $8,551.76 81.38 % 5 32 % $453,200 $145,020 $7 ,99 1 .19 $7,665.43 104 .25 % 6 32% $1 ,000 $320 $17 .64 $18 .58 94.94% 7 32% $221,400 $70,850 $3 ,904.13 $4,112.49 94.93 % 8 32% $6,437 ,000 $2 ,059,840 $113 ,505.42 $174,800.20 64.93 % 9 32% $576 ,500 $184,480 $10,1 65.58 $8,828.65 115.14% 10 32% $1 ,155,900 $369 ,890 $20,382.42 $21,470 .27 94.93 % 11 32% $220,000 $70,400 $3 ,879.3 2 $4,086.37 94.93 % 12 32% $902,750 $288 ,880 $49,745 .15 $53 ,865.76 92.35 % 13 32% $206,620 $66,118 $11,385.59 $15 ,385.42 74.00% 14 32% $890,210 $284,867 $49,054.14 $63 ,617.32 77.11% Totals $22,166,880 $7,093,405 $465,800.74 $666,922.57 69 .84% The subject property ha s been operated for a number of years and ha s been generating taxes. However, t h e taxes generated by the county have been fa lling as t he pro perty ages, income drops, and vacan cie s inc rease. Th e appraise d val ue by t he co u nt y for t h e p ropertie s with in the St udy Area is $22 ,166 ,880 and re s ults in taxes of $465,800.74 for the 2012 tax year. We have researched the historical t ax amounts of the properties within the St udy Area. In g e neral , th e records available go back five years. The total taxes generated by the parcels in the Study Area in 2008 was $666,922.57. Thi s compares to a tota l tax generated in 2012 for those parcels of $465 ,800.74. Thi s SHANER APPRAISALS , INC. Blight Study Conclusions • 40 Capital M all Blight Study suggests that the real estate taxes generated by the properties is now on ly roughly 69.84% of that generated in 2008 . This has resulted in a sig nificant loss in property taxes for Jefferson City. The tax revenues generated at the subject are lower than they were in 2008 as a result of the decline in the subject mall 's revenues, along w ith the decline in mall properties around the country referenced earlier in this report. Th e continued deterioration of the subject pro perty both physi ca ll y with the near term deferred maintenance and economically with the potential continued decline in revenues will continue to see the taxes generated from thi s property decrease. One common way to view the potential future for a shopping center is t o look at the mall sales per square foot. Gerard V. Ma so n, executive managing director of Savil ls US, stated that high quality malls sho uld take in $400 per square foot, while decent B-class malls should yield about $350 a square f oot. Anytime that a mall's sa le s fall below $300 per square foot, it is likely in very serious trouble. According to the historical sales data that has been provided, the total tenant sales per square foot are $161.88. A healthy mall anchor store should have at least $200 per square foot and any retailer that is below $100 per square foot is probably in danger of closing. Based on the information that we have been provided, severa l retailers fit this test and add to a fear o f closing. Another critical factor is a store 's h ea lth ratio, which is also known as occupancy cos t, and is calculated by dividing the annual rent by total sales for the year . Healthy mall store ratios average about 11% to 12%. Any ratio above 15% will likely land a store on a watch list and if it is above 20% the store is probably de stined to go dark. Based on the marketing packet, there were ten retailers that had health ratios that were above 13%. The se are shown be low: Health Ratios of In line Stores Wil so n's Total Fitness 20.61% Claire's 15.40% CJ Banks 14.77% Modern Nails 48.22% Stir Fry_ 33.15% Christopher and Banks 28.71% DEB 13.10% Hal l mark 13.29% Pretze l maker 33.89% Mastercuts 16.81% Given the low sales per squa re foot and the large number of tenants that have a health ratio above 13%, there is a possibility that there may be store closings in the subject center if the sales throughout the mall do not increase. Renovation of the property would likely result in a higher value due to an increase i n traffic and renewed interest by retailers to locate in the mall , and would therefore generate a higher tax base. Renovation of the property would also resul t in increased emp loyme nt, personal property, utility, and sa le s ta xes . In my opinion, the blighted elements noted previously have resulted in the inability of the affected properties to pay the ir reasonable share of taxes . Econom ic Liabi l ity The city and other taxing districts are high ly dependent on real property ta xes, personal property ta xes, utility taxes and sales taxes generated in its commercial areas. As discussed in detail above the Study SHANER APPRAI SALS,IN C. Blight Study Conc lusions • 41 Capital Mall Blight Study Area in generating substantially less in rea l property taxes in the last several years and its rea l property tax generation continues to decline. The real property tax generation of the Study Area has decrea se d to 69.84% of the total that was see n in 2008. Without redevelopment it is expected that the real property tax generation will continue to decline. Although there is no detailed study of sales tax revenues for the Study Area rent revenue s which are tied dire ct ly to sales in retail centers ha s substantially declined leading to the inevitable conclusion that sa le s tax revenues from the Study Area have al so substantially declined and the evidence leads to the co nclu sion that these revenue s will continue to decline without redeve lopment. Clearly the Study Area is not generating the amount of tax revenues to its potentia l and thu s resu lts in an economic liability. The decline of the tax revenues is a re su lt of reason of age , obsolescence, inadequate and outmoded design and physical deterioration of the Study Area and thus by reason of these factors the Study Area is an economic liabi lity. The decline of the tax revenues is also results from the predominance of the combination of defective and inadequate st reet layout, unsafe conditions, deterioration of site improvements, improper subdivis ion and obso lete platti ng, and thus by reason of t hese factors the Study Area in an economic liability in its present condition and u se. The Study Area consists of an underutilized property and has not been subject to acceptable growth and development through private enterprise. The existence of the blighting factors present inadequate or outmoded design and physical deterioration, when taken as a whole, clearly indicates that the Study Area constitutes an economic liability in its present condition and use. Be cause of this and the other blighting factors, it is unl ikely that the Study Area will be redeve loped without assistance. Thi s co ncep t of an economic liabi l ity or the economic underutilization of a property as a basi s for blight ha s been upheld by the Mi sso uri Supreme Court. The Court has determined that "the conce pt of urban redevelopment has gone far beyond 's lum cle arance' and the concept of econom ic underutilization is a valid one." Blight exists to the extent an area is operating less than its potential. The co mmunity is harmed by the foregone tangible and intangible benefits resulting from underperformance. The following are reference to the Mi sso uri Supreme Court Cases. • Parking Syst ems. Inc. v. Kansas City Downtown Redeve lopment Corporation, 518 S.W.2d 11, 15 (Mo.1974). The courts determined that it is not necessary for an area to be what commonly would be considered a "slum " in order to be blighted. • Crestwood Commons Redevelopment Corporation v. 66 Drive -I n, Inc.. 812 S.W. 2d 903, 910 (MO. App. E.D .1991). The courts determined that an otherwise viable use of a property may be considered blighted if it is an economic underutilization of the property. • State ex. Re i Atkinson v. Planned Industrial Expan sion Auth ority, 517 S.W .2 d 36 at 46 (Mo. bane 1975). The courts determined that blight may also be found if the redevelopment of an area "co uld promote a higher level of economic activity, increased employment, and greater services to the public." SHANER APPRAISALS , IN C. Blight Study Conclus ions • 42 Capital Mall Blight Study Social liability To our knowledge the term social liability has not been defined in Missouri 's statutes or in Missouri cases . The followi ng is the ordinary meaning of the term "social " as found in the di ctionary: • "Of, relating to, or concerned with the welfare of human beings as members of society" and "of or relating to the interaction of the individual and the group." Liability is defined as : • "Somet hing that works as a disadvantage ." Based on th e two definitions, "socia l liab il ity" can be anything that works to the disadvantage of the welfare of members of a given community or of interaction among such members. Th e welfare of the commu nity is substantially based on job opportunities and adequate amenities such as shopping and community services provided by various taxing jurisdictions from its ta x revenue sources . As vacancies increase and sales decrease the Study Area is le ss able to provide job opportunities for members of the comm unity as wou ld be expected from commercia l areas of this nature. Likewi se, a r educ tion in tax revenues reduces the ability of taxing districts to provide educational and other community serv ices to its community members. Taken together these factors lead to the conclusion that the Study Area by reason of the blighting factors constitutes a socia l liability in its present co nditi on and use. As discussed in thi s report, the Study Area is affected by age and obsolescence , inadequate or outmoded design , and improper subdivis ion and platting, among the severa l other blighting factors rev iewed in this Report. Age and obsolescence can be seen with the overall dated appearance of the subject property. Ba sed on data presented earlier, a regional shopping center is typical considered to be an outmoded design. The majority of shopping centers that have been built recently have been open-air centers . This benefits the land lord be ca use people enjoy these shopping districts and it also lowers the utility and repair cost as there is no common area to heat and cool. Ba sed on the data and information contained in this report, I have determined that as of December 9, 2012 , the Study Area constitutes both a "social liability" and an "economic liability" and meets the definition of a "blighted area " according to the definition provided in Missouri's Urban Redevelopment Corporations Law (Sectio n 353 .020 (2) R.S . Mo.) as well as Section 99. 805(1) of the Real Property Tax Increment Redevelopment Act. Further I have determined from my examination of each individual parcel of the Study Area that more than 50% of the Study Area is a blighted area pursuant to Sections 353.020(2) and 99.805(1), RSMo and consequently, a preponderance of the Study Area , as a whole is a blighted area under Sections 353.020(2) and 99 .805(1), RSMo. SHANER APPRAISALS , INC. Blight Study Conclusions • 43 ADDENDA • A p pr aiser Qualific a ti o n s • A r ea D em ogr aphic s • G lossary • A dditi o n al Info rma ti o n SHANER APPRAISALS , INC. APPRAISER QUALIFICATIONS SHANER APPRAISALS, INC . Qualifications of Jason Roos, MAl Director -Industrial Valuation Valbridge Property Advisors I Shaner Appraisals, Inc. Indep endent Valuations f or a Va ria ble World State Certifications State o f Kansas State of Missouri State of Iowa State of Nebraska State of North Dakota Education BBA Univers ity of North Dakot a Contact Details 913-451 -1451 (o) 913-647-4095 (d) Valbridge Property Advisors I Shaner Appraisals, Inc. 10990 Quivira Road Suite 100 Over land Park , KS 66210 www.va l br id q e.com jroos@va lbri d ge.com Membership/Affiliations: Member: Treasure r: Appraisal Institute -MAl Designation Appra isal Institute-Kansas City Chapter Appraisal Institute & Related Courses : Bus iness Practices & Ethics Uniform Standards of Appraisal Practice Advanced Income Capitalization Advanced Sales Comparison & Cost Approaches Report Writing and Va l uation Analysis Advanced Applications A Debate on t he Allocation of Hotel Tot al Assets Fundamentals of Separating Rea l Property, Personal Property, and Intangible Business Assets Appraising the Appraisa l: Appraisal Review-General Ana lyzing Tenant Credit Risk and Commercia l Lease Ana lysis Condemnation Appraising: Principles and Applications Experience : Director -Industrial Valuation Va lbridge Property Advisors I Shaner Appraisa ls, Inc. (2007-Present) Appraisal/valuation and consulting assignments include: industrial buildings, o ffice bui ldings, retail bui ldings, and hotels and motels. Industrial properties appraised include a wide variet y of warehouse and manufactu r ing facilities located ac ross the Midwest. Assign m ents have been concentr ated i n the Kansas City Metrop olit an area, but assignments have been comp lete d across t he country on specialized manufacturing and warehouse properties. COMPANY PROFILE SHANER APPRAISALS, INC. 10990 Quivira, Suite 100 Overland Park, Kan sas 6621 0 Ph o ne (913) 451-1451 I Fax (913) 529-4121 www.s hanerapprai sal s.c om Shaner Appraisals, Inc. is a ful l-service real estate valuation and consulting firm located in Overland Park, Kansas. Found ed in 1978, Shaner Appraisals ha s established a solid reputation for professional real estate services. The firm employs eighteen full-time appraisers , including five MAl and one SRA designated member of the Appraisal I nstitute. Our profess ionals represent over 100 years of va lu ation and related experience, and three past presidents of the Kansas City Chapte r of the Appra isa l In stitute. The f irm's primary market is Kansas and Misso uri , but Shaner Appraisals has also compl eted assignments throughout the United States. The firm provides Market Studies, Feasibility Analyses, Litigation Support and Valuation Services for all types of property from multi-famil y residences to shopping centers, office bu ildings and industr ial complexes. Shaner Apprai sa ls also ha s extensive exper ience in eminent domain matters and in valu ing special purpose properties such as nursing homes , underground storage facilities, mi c rowave towers , and rock quarri es. All assignments are completed o r reviewed by an MAl designated appraiser. LIST OF SERVICES Commercial property appraisals Residential property appraisals Eminent domain appra isa ls Expert witness testimony Property tax appeals Market studies Fea si bility studies Litigation support Due diligence research Appraisal review Partial interest va luation Conservation easement va luation Rent studies VALUATION I COUNSELING PURPOSE S Financing Ad va lorem tax disputes Trusts and esta tes Condemnation Investment analysis Arbitration Portfolio va luation Co l lateral assessment Right of way acq ui sition Financia l structurin g Blight studies Genera l rea l estate co un se l ing PROPERTY TYPES APPRAISED Office buildings-si ngl e/mu lti-tenant, standard office, med ica l office, surgery cen ters Retail ce nters-single/m ulti-tena nt, neighborhood , community, reg ional shoppi ng centers In dustrial buildings-flex, R&D , distribution , manufacturing , underground, se lf-storage Land -A ll type s Multi-family apartmen t complexes, LIH TC , HUD Nursing homes Hotels, motels, exte nd ed stay fac il ities Single family homes, condominiums, duplexes Ch u rches Easement corridors PARTIAL CLIENT LIST Government Agencies/Municipalities Unified Government of Wyandotte County/ Kansas City, Kansas City of Ga rdner C it y of Overland Park City of Leawood City of Lee 's Summit City of Lene xa City of In dependence Ci ty of Olathe City of Sha wnee City of Wichita Ci ty of St. josep h Dept. of H o usin g & Urban Developm ent (H UD) Eudora Sch ool Di strict Olath e School District DeSoto Sc hoo l Dist ri ct Blue Va lley Sc hool District Gardner Schoo l Distric t Shawnee Mission Sc hool District johnson County Airport Commiss ion j o hnso n County Appra i se r's Office johnson County Board o f County Comm iss ioners Johnso n County Park s and Recreation Dept. Joh n so n County Wastewater D i strid Kansas Department of T ran sportation Ka n sas Highway Patro l U.S. D epartm ent of Ju st ice U.S. Po stal Serv ice GSA Lending Institutions Bank One Bank Midwest, N .A. Ban k of America Bank of Blu e Va lley Blu e Ri dge Bank & Trust Berk sh ire Mortgage Financial Bridger Commercia l Funding Capi to l Federal Sav i ngs Ce ntral Bank of Kansas G randbridge Rea l Estat e Ca pital G rea t Southern Bank Heartland Bank Hillcres t Bank Intru st Bank Key Bank Co mmerc i al Mortgage LaSalle Bank Metcalf Bank Midland Lo an Services Misso uri Bank & Tru st MuniMae Midland, LL C Newman Fina ncia l Services North Ameri ca n Sav ings Bank Northmarq Capi tal , In c. Peop l es Bank Commerce Bank Country Cl ub Bank Cred it Sui sse First Bos to n EF&A Funding First Federa l Bank First Kan sas Ba nk First Mortgage Investment Corporat ion First National Bank of Olath e GMAC Commercial Mort gage M&l Bank Q uantum First Capital Red Mortgage Capital, Inc. Sec urity Bank of Kan sas Sou th ern Pacific Bank South wes t Bank Tri ad M o rt gage & Rea lty U MB Ba nk U ni o n Bank U nited Misso uri Bank US Bank Valley View State Bank Washi ngton Mortgage Wells Fargo Th elman Financ i al Corporations, Developers and Institutional Clients Allianz Life In suran ce Compan y A llstate Insurance St. Luke's H ealth Sys tem Boy Sco uts o f America Bu rl ingto n N o rth ern CALPERS Cess n a A irc raft Compan y Colliers Turley M artin Tu c ker Copake n, W hite & Blitt Exce l Corporati o n FMC Corpo rati o n G E Capital Gen eral Serv ices A dmin istrati o ns Grubb & Ellis H allmark Card s Hunt Midwest ].A. Pete rso n Com pan y Prin cip al Life In surance Compan y Prin cipal Mutua l Life Armstro ng Teas d ale Sc hl afl y & D av i s Husch , Bl ackwell, Sa nd ers C raft, Fridk in & Rh y n e D elo itte & To uc he Ferree, Bunn, O 'G rad y & Runberg So nnensch ein, Nath & Rose nthal , LLP Lathrop & G age McAnany Va nC leave & Phill i ps, P.A. MHM Property Tax Co nsultants Mitch e ll, Kri st! & Li eb er Ern st & Yo ung Schlagel , Gord o n & Kin ze r LL C Ameri ca n States I nsura nce Pro pe rt y Tax Re sea rch Compa ny Pro tect ive Li fe Insurance Com pany Sa lvati o n A rmy Savage & Brown i ng Se ntinel Rea l Estate Company Shawnee M iss ion Medi cal Center Shelter In su ran ce Jeffrey Smith Compa ny Sta te Farm Fire and Casua lty Insu rance Stern Brothers Stephens & Company, Inc. Terra Ve nture, Inc. TRI Capital Wai-M art Sto res, Inc. Was hingto n Capita l Weinga rt Fo undation Ya rco Companies YWCA Z immer Rea l Es tate Services Ac counting and law Firms N o rto n, H ubbard, Ruz ic k a & Krea m er Payn e & Jo nes O rri c k & Associates Po l sinelli Shugart PC Pri cewaterh ou se Coopers Sh ook Hardy & Baco n Spe nce r Fane Britt & Browne Stinson M orri so n H ecker W allace, Saunders, A ust in , Brown & Enochs AREA DEMOGRAPHICS SHANER APPRAISALS, INC . Population 2000 Population 2010 Population 2012 Population Executive Summary Jefferson City Jefferson City, MO (2937000) Geography: Place 2017 Population 2000-201 0 Annual Rate 2010-2012 Annual Rate 2012-20 17 Annual Rate 2012 Male Population 2012 Female Population 2012 Median Age Pr epared by Laird Go ldsboroughMAI Jefferson City, MO (29370 ... 41,960 43,079 43,506 44,636 0.26% 0.44% 0.51% 50.7% 49.3% 37.7 In t he identified area , t he curren t yea r population i s 4 3,506. In 2010, the Censu s co unt i n the area was 43,079. The rate of change since 20 10 was 0.44% annually. The five-year projection for the population in the area is 44,636 representing a change of 0.51% annually from 2012 to 2017. Currently, the popu lation is 50.7% ma le and 49.3% female. Me d ian Age The median age in this area is 37.7, compared to U .S. median age of 37.3. Race and Ethni ci ty 20 12 White Alone 2012 Bla ck Al one 2012 American I ndian/Alaska Native Alone 20 12 Asia n Alone 2012 Pacific I slander Alone 20 12 Other Ra ce 2012 Two or More Ra ces 20 12 Hi spanic Origin (An y Ra ce) 78.6% 16.2% 0.3% 1.7% 0 .1% 0.9% 2.3% 2.9% Pe rsons of Hispanic origi n represent 2.9% of the population in the identified area compared to 16.9% of the U.S. population. Persons of Hispanic Origin may be of any race . Th e Diversity I ndex, which measures the probabil ity that two people from the same area will be from different race/ethnic groups, is 39.3 in the i dentified area, compared to 61.4 for the U.S. as a whole. Households 2000 Households 2010 Househo lds 2012 Total Households 2017 Total Households 2000-2010 Annual Rate 2010-2012 Annual Ra te 2012-2017 Annual Rate 2012 Avera ge Household Size 16,403 17,278 17,432 18,001 0.52% 0.40% 0.64% 2.25 The household cou nt in this area ha s changed from 17,278 In 2010 to 17,432 in the cu rrent year, a change of 0.40% annually. The five-year projection of households is 18,001 , a change of 0.64% annua l ly from the current year total. Average house hold size is currently 2.25, compared to 2.21 in the year 20 10. Th e number of fami l ies in the current year is 10,100 in the specifie d area. Data No t e: I ncom e Is expressed on cur rent dollar s Source: U.S. Ce nsus Bureau, Ce n sus 20 10 Su m mary File 1. Es ri forecasts for 2012 and 2017. Esro converted Censu s 2000 d ata i nto 2010 geo graphy. January 29, 2013 Median Household Income Executive Summary Jefferson City Jefferson City, MO (2937000) Geography: Place 2012 Median Hou sehold I ncome 2017 Median Household Income 2012-2017 Annual Rate Average Household Income 2012 Average Household Income 2017 Ave r age Household I ncome 2012-2017 Annual Rate Per Capita Income 2012 Per Capita Income 2017 Per Capita Income 2012-2017 Annual Rate Households by Income Prepared by Laird GoldsboroughMAI Jefferson City, MO (29370 ... $46,525 $55,537 3.60% $58,464 $64,945 2.12% $25,845 $28,630 2.07% Current median hou seho ld income is $46,525 in the area, compared to $50,157 for all U.S. household s. Median household income Is projected to be $55,537 in five years, compared to $56,895 for all U.S. households Current average household i ncome is $58,464 in this area, compared to $68,162 for all U.S households. Average household income is projected to be $64,945 in five years, compared to $77,137 for all U.S. households Current per capita income is $25,845 In the area, com pared to the U.S. per capita income of $26,4 09. The per capita income is projected to be $28,630 in five years, compared to $29,882 for all U.S. households Housing 2000 Total Housing Units 2000 Owner Occupied Housing Units 2000 Owner Occupied Housing Un its 2000 Vacant Housing Units 2010 Total Housing Units 2010 Owner Occupied Housing Units 2010 Renter Occupied Housing Units 2010 Vacant Housing Un its 2012 Total Housing Un its 20 12 Owner Occu pied Housing Units 20 12 Renter Occupied Housing Units 2012 Vacant Housing Units 2017 Total Housing Units 2017 Owner Occupied Housing Units 2017 Renter Occupied Housing Units 2017 Vacant Housing Units 17,580 9,895 6,509 1,176 18,852 10,085 7,193 1,574 18,951 10,196 7 ,237 1,519 19,394 10,610 7,390 1,393 Currently, 53.8% of the 18,951 housing units in the area are owner occupied; 38.2%, renter occupied; and 8.0% are vacant. Cu rrently, in the U.S., 56.5% of the housing units in the area are owner occupi ed; 32.1% are renter occupied; and 11.4% are vacant. In 2010, there were 18,852 housing units In the area -53.5% owner occupied, 38.2% renter occupied , and 8.3% vacant. The annual rate of change in housing units since 2010 is 0.23%. Med ian home value in the area i s $133,265, compared to a median home value of $167,749 for the U.S. I n five years, median va lue is projected to change by 2.29% annually to $149,256. Data Note: Income is expressed in current dollars Source: U.S. Census Bureau, Census 2010 Summary File 1. Esri forecasts for 2012 and 2017. Esrl converted Census 2000 data Into 2010 geography. January 29, 20 13 GLOSSARY SHANER APPRAISALS, INC. GLOSSARY Unless otherw ise noted, the following definitions are taken from The Dictionary of Real Estate Appraisal , Fourth Edition, published by the Appraisal Institute i n 2002. Accrued Depreciation The difference between the reproduction or replacement cost of the improvements on the effective date of the appraisal and the market v alue of the improvements on the same date. (p. 4) Appraisal (n .) The act or process of developing an opinion of value; an opin ion of value. (adj.) Of or pertaining to app ra ising and related functions such as appraisal pract ice or appraisal services. (US PAP , 2002 ed.) (p. 15) Extraordinary Assumption An assumption, directly related to a spec ific assignment, which , if found to be false , co ul d alter the apprai ser's opinions or conclusions. Extra o rd i nary ass umptions presume as fact otherwise uncertain information about physica l, legal , or economic characteristics of the subject property; or about cond itions externa l to the property , such as market conditions or trends; or about the integri t y of data used in an anal ys is. An ex t raordinary assumption m ay be used in an ass ign ment on ly if: • It is required to p roperly develop credible opin ions and conclusions; • The appraiser has a reasonable basis for the extraordinary assumption ; • Use of the ext raordinary assumpt ion results in a credible analysis; and • The appra ise r compli es w ith the disclosure requirements set forth in USPAP for extraordinary assumptions. (USPAP , 2002 ed.) (p. 107) Fee Simple Estate Absolute ownership unencumbered by any other interest or estate, subject only to the l imitations imposed by the governmental powers of taxation , eminent domain, pol ice power, and escheat. (p. 113 ) Highest and Best Use The reasonably probab le and legal use of vacant land or an improved property, w h ich is physically possib le, appropriately supported , financially feasib le, and t hat resu lts in the h ighest va lue. The four cri t eria the highest and best use must meet are legal permiss ibi l ity, physical possibility, fina ncial feasibility , and maximum profit ability. (p. 135) Hypothetical Condition That w h ich is con t rary to what exists bu t is supposed for the purpose of analysis . Hypotheti cal conditions assume co nditions contrary to known facts about physical , legal, or economic characteristics o f the subje ct property; or about cond itions externa l to t he property, such as market co nd it ions or trends; or about the integrity of data used in an analysis. A hypothetical condition may be used i n an assignment on ly if: • Use of the hypothetical condition is clearly required for legal purposes , for purposes of reasonable ana lysis, or for pu rposes of comparison; • Use of the hypot hetical condition results in a credib le analysis; and • The apprai se r co mpli es with th e disclos ure requirements set forth in USPAP for hypoth et ica l co ndition s. (USPAP , 2002 ed.) (p.141) Investment Value Th e spec ifi c va lue of an i nvestm en t to a particular investo r or cla ss of investors ba sed o n individual investment requirements; di stingui shed from market va lu e, w hi c h is impersonal and detached. See al so Market va lu e (p . 152) Leased Fee Interest An ownership interest held by a landlord with the rights of use and occupancy conveyed by lease to others. Th e rights of the lesso r (t he lease d fee owner) and th e lea see are spec ified by co ntract terms co nta i ned within th e lease. (p. 16 1) Leasehold Interest The interes t held by th e lessee (th e tenant or renter ) through a lease transferrin g th e right s of use and occ upancy for a stated term under ce rt ain co nditions. See al so Negati ve lease hold; Po sitive lease hold . (p. 162) Market Value Th e most probable price which a property wi ll bring in a co mpetiti ve and open ma rket und er all conditions requisite to a fai r sale, th e bu yer an d se ll er eac h acting prud entl y and knowl edgea bl y, and assumi ng th e pri ce is not affected by und ue stimu l us. Implic it in thi s d efinition is the co nsumma ti on of a sa le as of a speci fied da te and th e pass i ng of titl e from se ll er to buyer und er conditions wh ereby: 1. buyer and se ll er are typica ll y mot iva ted ; 2. both parties are well informed or we ll adv ised and acting in what th ey consid er thei r own best in tere sts; 3. a reasonab le tim e is a ll owed for exposure in the ope n market; 4. payment is m ade in term s o f cas h in US. doll ars or in terms of fin ancia l arrangements comparab le th ereto; and 5. th e pri ce repre se nts th e norm al cons id erati on for th e property so ld un affect ed by spec ial or crea ti ve fin anci ng or sa les co ncess ions granted by an yone associa ted with th e sa le. (12 C.F.R. Part 34.42(g); 55 Federal Register 34696 , August 24, 1990, as amended at 57 Fed era l Register 12 202, Apri l 9, 1992; 59 Federa l Regis ter 29 499, Jun e 7, 1994) (p. 1 77) Negative Leasehold A lease situation in whic h th e mark et rent i s less th an th e co ntract rent. (p. 193) Neighborhood A group of complementary land uses; a congru ous groupi ng of inhabitants, buildings, or bu siness enterprises. (p. 193) Positive Lea sehold A lease situ ation in which th e market rent is grea ter th an th e contract rent. (p. 2 15) Replac ement Cost Th e es t im ated cost to co nstru ct, at current pri ces as of th e effect ive appra isa l d ate, a building w ith utility eq uivalent to th e building being appraised, using modern materials and cu rrent standa rd s, d es ign and layo ut. (p. 244) Reproduction Cost The esti mated cost to constr uct, at current prices as of the effe ctive date o f the appra isa l , an exact dupli cate or repl ica of the bui lding be in g ap praised, using t he sa me material s, constru ction standards, d es ign , layout, and quality of workman ship an d embody ing al l th e deficiencies, supera deq uacies, an d obsolescence of the subj ect building. (p. 244 ) Use Value Th e va l ue a spec ific property has for a spec ific use; may be the highest and bes t use of th e property o r so m e other use spe c ified as a co ndition of th e appraisal; may be used where legis lation ha s been enacted to prese rve farmlan d, timberland, or other open space land on urban fringes. (p. 303) ADDITIONAL INFORMATION SHANER APPRAISALS, INC . July 24, 2013 Jason Roos 10990 Quivira, Suite 100 Overland Park , KS 66210 jroos@valbridge.com Re: Capital Mall Property Conditions Dear Mr. Roo s, Jamie Reed General Manager Covington Realty P artners 573) 893-5437 (Office) (573) 893-5447 (Fax) jrccd@covin gtonrealtypartners.com Covington Realty Partners is the property manager for the Capital Mall property in Jefferson City, Missouri. On June 11, 2013, I personally toured the Capital Mall to view the property conditions on behalf of the prope rty owner. During my tour I noted the following property conditions that appear to b e relevant to your work in updating the bli ght study for the Capital Mall: Physical Deterioration and Potential Safety Issues. 1. Facades-The fa~ade of the mall property is in poor condition in several places. See enclosed picture I for an example of typical fa~ade conditions. 2. Roof-The roof is in poor condition in several places. There are a substantial number of active roof leaks and signs of a history of roof leaks in 14 of 30 of the tenant areas observed. In addition, sub stantial repairs will be needed to the roof parapet. See enclosed pictures 2 to 11 for evidence of the roof condition and leaks found . 3. HVAC-The HVAC system is in poor condition. It has been recommended that 11 HVAC units be replaced in the short term due to their substantial deterioration , age and obsolescence. 4. Steel Service Doors-One-half of the steel servi ce doors are ru s ted and deteriorated along the door jambs. See enclosed picture 12 for an illustration of the typical rusted steel door. 5. Painted Finishes-Several tenant entries are in need of immediate painting. 6. EIFS-Damage was observed to the underlying EIFS (fa9ade) at several of the tenant entries, most notably at vacant spaces at the southern end of the building. See enclosed pictures 13 to 16 . See also picture 17 for typical dried and cracked control joint sealant found on the throughout the fa9ade . July 24 , 2013 Page2 7. Suspect Mold-Visual signs of suspect mold have been identified two tenant areas. See enclosed picture 8 and II. This is a safety and health issue, in addition to a deterioration issue. 8. Pavement-As you already noted the parking lot payment is highly deteriorated and in need of replacement. See enclosed pictures 18, 19 and 20 for recently taken of the parking pavement conditions. 9. Curbs-The curbs are deteriorating in several places throughout the property. See enclosed picture 21 of a damaged curb on the property that was typically observed . 10. Trip Hazard-At west side of JC Penney a trip hazard was identified. See enclosed picture 22. 11. Service Entry Lights-There are several damaged at lights over service entry doors. See enclosed picture 23 for typical missing lights over service entry doors. This is a safety issue as much as a deterioration issue. 12. Windows-Replacement needed at small anchor tenant at south end of building . See enclosed picture 24. Fire Safety. The fire sprinkler system has not been tested since October 2009 and it is supposed to be tested annually. Picture 25 shows the sprinkler riser with expired inspection tag. Clearly lack of testing is a fire safety issue. ADA Conformance. Although we have not had a full ADA review there are some known non- conformance issues. Some identified issues are: 1. ADA parking not properly marked . For example, one posted stgn for multiple handicapped accessible spots. See enclosed picture 26. 2. No signage for wheel chair acces sible facilities. Please contact me should you have any questions. / f SincerelJ ~ ~;;;ie Reed ll- Enclosure 458552 16.2 Capital Mall Pictures -June 11 , 2013 1. Typical fa.yade condition. 2. Roof s urface. 4. Damaged roof and worn surface. 458552 16.2 6. South side of roof with ponded water and vegetation growth. 458552 16.2 8. Stained ceiling tile with mold in tenant 52. 4 58552 16.2 10. Typical stained ceiling tiles. 458552 16.2 458552 16.2 14 . Damaged EIFS and paint at southern side of building. 458552 16.2 16 . Damaged EIFS and paint at southern side of building. 458552 16 .2 17. Dried and cracked control joint sealant. 18. Damaged asphalt pavement at entry to service area. 458552 16.2 20. Damaged asphalt pavement. 4 58552 16 .2 • 21. Typical damaged concrete curb. 22. Trip hazard adjacent to JC Penney. 458552 16.2 24 . Damaged window with water infiltration at vacant minor anchor tenant. 458552 16.2 25. Fire sprinkler riser with expired inspection tag. 26. Accessible parking with one sign for three spaces. 458552 16.2 ~~· News: National Rral £.stm Information Octo ber 0 3, 2012 Written by Randyl Drummer (rdrummer@costar.com) The De-Mailing of America: What's Next for Hundreds of Outmoded Malls? Strained by Online Commerce, Changing Shopper Preferences and Trendier Competition, Many Outmoded Malls Face Bleak Future The widening gap between strong malls with rising sales and failing malls that are hemorrhaging retailers, sales dollars and foot traffic has led to dire forecasts by some analysts for the future of older enclosed malls as changing demographics and buying habits suck the life from aging and poorer quality properties. Many trade areas are unabl e to support multiple malls, with dominant properties increas ingly attracting retailers and shoppers at the expense of outmoded centers. Some of these properties, memorably documented on web sites like Deadma ll s.com, are so devoid of shoppers and stores that they may be suitable only for demol ition or as sets for an episode of "The Walking Dead." REITs like Simon Property Group (NYSE: SPG) and General Growth Properties (NYSE: GGP), the nation 's largest mall operators, have gotten the message and are busy divesting lesser-performing properties. Meanwhile, emboldened by low prices fo r these older ma ll s, investors are beginning to snap up the properties, confident they can reposition and turn around malls that are on life support, or raze it to gain access to the often-valuable land to bui ld apartments or other uses. The litany of issues facing distressed malls and large shopping centers is well documented, with ills ranging from changing neighborhoods, increased competition from online sales, the appeal of newer lifestyle and power centers, consolidation of anchor stores and sharp downsizing by in-line tenants. In a widely quoted report, Green Street Advisors has forecast that 10% of the nati on's 1,000 enclosed malls will fai l by 2022, eventually converting to uses other than reta i l. Editor's Note: This is the first of a two-part CoStar series on aging and d istressed malls. Next week: What strategies have been effective as communities and owners try to reclaim a growing inventory of obsolete retail space? Age appears to be a contributing factor. Of more than 200 mal ls and large U.S . shopping centers with 250,000 rentable square feet or higher that are hampered by vacancy rates of 35% or hi gher --a clear marker for shopping center distress --86.5% were bui lt before 2000, according to CoStar Group data. Of these distressed regiona l mall, power center and community center properties, 43.5% were built i n the 1970s and '80s, another one-quarter were built in the 1990s, and 17.5 % were bu ilt in the 1960s and prior. The average center in the distressed group was built in 1983 and had a vacancy rate of 50.6%. Among the 44 regional and super-regional ma ll s (usua ll y ma ll s of 1 million square feet or above) with distressed vacan cy, the average rate was 54.5%, with older super regional properties built from 1960 to 1990 averaging just under 60% vacant. We're Not Overbuilt, We're Under-Demo l ished "I don 't think we 're overbui lt, I think we're under-demol ished," said Daniel Hurwitz, president and CEO of Copyright (c) 20 12 CoStar Rea lty Informatio n, Inc . All rights rese rved . CONTINUED: The De-Mailing of America : What's Next for Hundreds of Outmoded Malls? DDR Corp., a Cleveland-based REIT, during ICSC's r ecent Western States conference in San Diego. "When you have [tenants] looking for space and nothing new being built, and we're sitting at mid -9 0 % occupancy levels, it's hard to argue we're overbui lt when they're scrambling to find 10,000 square feet." "There is a sense of reality that we all have to come to that there are projects that are not going to lease. Retail has a finite lifespan and once you reach that lifespan , you can put up all the signs you want, and charge as low rent as you want, but that doesn't make [tenants] want to take the space." Follow Randy Drummer on T witter for li ve news updates . As DDR's Hu rwitz makes clear, shopper's preferences have changed and demand for large enclosed malls is quite different than it was 20 years ago . Changes i n shopping patterns and preferences is also readily apparent in the shrinking number of department stores and the consolidation among traditional shopping center anchors like Sears Holding s, Kmart, Best Buy , The Gap and Office Max. All of those chains ha ve announced plans to shut down stores in 2012 . The announced closures for these five retailers alone could add another 15 million square feet of mostly mall and power center space to the market this year, according to analysis from Property and Portfolio Research (PPR), CoStar's real estate analytics and fore casting company. But analysts also see the closings and repositionings as a healthy process. As market forces cu ll weaker properties, successful malls grow stronger. "Mal ls and bu ildin gs age. We don't design for the life -cycle of buildings like we used to 50 or 60 years ago," said Robert Yuricic, an architect with Greenbergfarrow, a retail-oriented design f i rm and the se con d- largest re staurant architect in the country. "Malls are designed for a much shorter shelf span and they need to be refreshed ." Many of the earliest malls were buildings connected by pedestrian walkways and common areas, similar to today's lifestyle center. Many malls began to turn inward in the 1960s and '70s, with the typical suburban mall composed of department stores and smaller shops connected by a roof, essential ly forming an air-conditioned cave, Yuricic noted. Walking into such malls is "like going into the bowels of a casino, where the door seems to disappear and you can't find your way out," he said . "People want to go to what's new and shiny and if you don't give it a facelift, it becomes old and tired and not able to attract the younger, more chic crowd with more disposible income," Yuricic sa id. Kristin Mueller, executive vice president and director of retail business development with Jones La ng LaSalle in Atlanta, has a simple message to those who would write thei r obituary : Malls are not dead. "The vast majority of the malls in the U.S. wil l continue to be incredibly r e levant and are thriving," Mueller said. "There are many indicators that show malls are going very strong; you see it in their sales performance and in the REIT stocks of those that own two-thirds of the malls i n this country. "There are many different ways that we as an industry are working with malls to make sure they're relevant for their shoppers and commun ities, usually through a combination of new retail and other alternative uses," Mueller said. Mueller acknowledged that some, "perhaps more than a handful," of the country's stock of 1,200 to 1,400 enclosed ma lls are in serious trouble . "Those malls have usually been unfavorably impacted by thei r surrounding communities, or they 've been outflanked by bigger, better competition" from l ifestyle and power centers, Mueller said . Copyright (c) 2012 CoStar Rea lty Information, Inc. All rights reserved. CONTINUED: The De-Mailing of America: What's Next for Hundreds of Outmoded Malls? Distress is sti ll a significant factor for these properties, even as the bear market fo r r etail i nvestment appears to be comi ng to an end and transacti on activity is now at par with the average annual volume of the past decade. About 11% of tota l dea l volume by do llar value over the past four quarters was from forced sales, down from nearly 20% in early 2011 but we ll above the average 1% from 2000 to 2008, according to PPR . It appea r s almost certain that the pipeline of distressed retail property will con tinue to flow, with plenty of commercial mortgage -backed securities (CM BS ) loans backed by co l lateral that's behind on payments and carryin g thin debt service coverage ratios. Th ese distress dea ls often reflect financing issues rather than prevailing market conditions. Not surprisingly, their troubles have drawn the attention of Wall Street rating agencies that are sufficiently worried enough about the widening gap between the country 's best and worst performing malls to put out warnings that could further affect the suppl y of cred it and f inancing to the mal l sector. Fitch Ratings said its "very cautious" outlook on U.S. mal ls h as prevented the agency from r ating some CMBS transa ctions this year. While it's fairly easy to und erstand the dynamics of the best and worst properties, the condition of the second-tier malls in the middle is more difficult to parse, Fitch said in a recent report . Fitch-rated deals include about 1,150 retail loans of over $20 million, many secured by ma l ls. Of these, 126 are already in special serv icing and 44 assets are rea l estate owned (REO) and many are among the largest contributors to Fitch Ratings' overa ll expected deal losses. Who Will Buy A Dying Mall? In its own report last summe r , Moody's Investors Service a lso noted the widening performance gap between stronger and weaker malls. When a marginal mall defau lts, l osses can well surpass those typical for a commercial property loan . "Renovati n g or reconfiguring a n underperforming mall may cos t m any mill ions of the dollars," sa id T ad Phil ipp, director of Moody's CRE r esearch . "What's more, shoul d th e loca tion lose its viability for retai l altogether, the va lue t o revert to land less demolition cost [wi ll produ ce] an even greater loss." Overa ll, however, mall investment has actually been stronger over the past few years as a percentage of total retail investment than it was during the peak of the last cycle, said PPR real estate economist and retai l specialist Ryan McCullough. CoStar COMPs data for the larg est U.S. markets s hows that mall i nvestment compr ised 34% of total shopping center transaction dollar vo lume from 2010 to the present, up from 28% between 2005 and 2007. "I don't think that investor s have necessari ly been scared off from malls due to the obsolescence of a subse t of the catego ry," McCullough said . "Investors, however, are pickier ab out the quality of the mall properties purchased today, which is showing up in the pricing data." On a dollar-per-squa r e-foot basis, ma ll s with a vacancy rate of 5% or less trad ed at a 45% p r em i u m over those with higher than 5% vacancies from 2010 to present. During the 2005-07 market peak, the premium was a negligible 2%, he noted. "The short of it is that investors are recognizing quality malls --those with high occupa ncies, solvent anchor tenants, good popu lati on density and access to affluent shoppers --as stable, low-risk, income- producing assets and will pay up fo r th em today ," McC ulloug h said. Copyright (c) 2012 CoStar Realty Information , Inc. All rights reserved. CONTINUED: The De-Mailing of America: What's Next for Hundreds of Outmoded Malls? "Poor quality malls, on the other hand, are ei ther not trading or se l ling at a steep discount, and perhaps are sche dul ed for demolition or conversi on." "As an industry, we're not going to start throwing up malls as the economy recovers," added JLL's Mueller. "In fact we stopped bui l ding malls a while ago and started to bu i ld lifestyle centers in niche infill locations between malls ." Instead, real estate services providers li ke Mueller and her JLL team are focusing on creative redevelopment and r epositioning strategies for distressed properties. Often means changing out the type and size of th e retail--or conside r ing non -r etai l uses, such as a university or health care facility. Mega- churches have taken over former anchor spaces. Others have become call centers and government offices. Even malls that continue to thrive are being redesigned as town squares -addi ng more entertainment and service elements. Simon Property is remodeling 15 to 20 malls a year, add ing such amenities as electric- car charging st ations and stadium-seating theaters. Malls today h ave to "pro v id e a unique set of shopping, dining and entertainment experiences," Simon's Pr esident and COO Richard Sokolov told the New York Times, including scheduling 20,000 events a year to draw traffic, such as cooking demonstrations. As the mall's 50 -year reign as the ultimate shopping destination appear to be com i ng to an end, CoStar News will look at examples of successful mal l adaptations in a fol low up story next week. Follow Rand y Drummer on Tw itter for live news updat es. Copyright (c) 2012 CoSta r Realty Information , Inc . All rights reserved . ~~· News: National Rut Estate Information Octo ber 10, 2 0 12 Written by Randyl Drummer (rdrummer@costar.com ) Can This Mall Be Saved? Elements Needed for a Turnaround Include Lower Debt , Deep Pockets Despite Major Risks, Some Gutsy Owners and Investors Are Hoping To Cash In On Value-Add 8-Ma/1 Turnarounds and Repositionings Last week, CoStar News reported on the daunting challenges faced by hundreds of outmoded malls in remaining relevant in a increasingly Darwinian retai l environment. In this, the second of a three-part series, we look at the signs that may signal a mall's days may be numbered, and how some gutsy investors are taking on the challenge of reviving moribund properties. According to retail property experts, changes in a couple of key vital signs often provide the first signs that a mall may be in trouble. Consistent declines in retai l sales per square foot over an extended time is one big warn i ng sign, according to Gerard V. Mason, veteran retai l specialist and executive managing director of Savills US. Higher quality class A malls should take in at least $400 per square foot, while a decent B-class mall will yield about $350 a square foot. Any time a ma ll 's sa les fal l below $300 per square foot, it's likely in very serious trouble, according to Mason. Likewise, a healthy mall anchor store should log $200 at least per square foot, and any anchor that falls below $100 a square foot is probably in imminent da nger of closure. Another critical factor is a store's so-ca ll ed health ratio, also known as occupancy cost, which is calcu lated by dividing the annua l rent by total sales for the year. Healthy mall store ratios average about 11 % - 12%. Any ratio above 15% wi ll likely land the store on a land l ord's tenant watch list, and above 20%, the store is probably destined to go dark. Once one or more anchors o r junior anchors close, it sets off a chain reaction of reduced shopping traffic, increased financia l pressure on sma ll er in-line stores and decreased revenue for maintenance and operations that can quickly send a mall --along with many surrounding businesses that benefit from mall traffic --into a death spiral. "The retail business is ver y Darwinian. Fo r mats come and go, and right now is a very dangerous time to be invested in B malls," Mason said. "A lot of them wi ll survive, but the competition has become almost overwhelming ly stronger than before the downturn ." Cavernous Gap Between the Have's and Have-Nots On paper, U.S. regiona l ma ll s are among the strongest perform i ng types of assets for real estate investors. Total returns fo r publicly t r aded regional mall compan i es increased 48.5% at the end of the third quarter from a year ago, the highest among all retai l types, according to the FTSE NAREIT US Equity REIT Index. But a cavernous gap divides the performance of top-tier ma ll s that attract the trendiest retailers and rents are on the rise, and older, lower-grade enclosed properti es that str uggle to attract foot traffic. Only about one-third of the 1,300+ ma l ls in the U.S. qua l ify as high-growth, investment-grade properties, according to Savi l ls' Mason. "The recovery has been uneven across mall quality types," said Mason. "In the Midwest and other lagging Copyrigh t (c) 20 12 CoStar Realty Information , Inc . All right s reserve d. CONTINUED: Can This Mall Be Saved? Elements Needed for a Turnaround Include Lower Debt, Deep Pockets areas, the second mall in a three-mall town may be on the brink of not being worth its debt. The recession has exacerbated the gap between the mall haves and have-nots." As retailers review th ei r sa les performance per sto r e with an eye on trimming costs, the under-performers at have-not malls are especia ll y vulnerab le to a round of closings. The ongoing trend among reta ilers toward smaller stores also contributes to the widening gap. Mall staples such as Old Navy, which used to occupy 25,000-square-foot stores, are now comfortable in 10,000 square feet. Even t h e mal l in-l ine tenants have downsized to smaller, more productive stores. Vacancies from down-sizing retailers are often welcomed at successful malls as they provide an opportunity to sign more retailers at higher rents. But for a struggling mall, the empty spaces just reinforce a negative perception among shoppers. Meanwhi le some retailers are simply forego ing B mall locations altogether, including Lulu lemon Athl etica, a company specializing in high-end yoga-style exercise apparel. "We have focused on only being in very strong malls," said Christine M. Day, president and CEO, of Lul ulemon Athletica during a recent conference call with investors . "We've had a real estate strategy of not bundling or taking weaker malls, and we go to [lifestyle] cen ters or streets, which al low us to really drive our busi n ess th r ough community." Sifting the Viable from Lost Causes In many cases, the prospects for reviving a dead mall as a viable reta il property are not good. The best option may be to demoli sh and start over with a different use that does have demand , such as residential apartments. Howe ver, in cases where an older property has been over-shadowed by new competition, and the location continues to enjoy strong demographics capable of supporting a large retail presence, investors have been successful in repositioning former failed malls. In general, these successful turn-arounds appear to involve a combination of three main elements: deleveraging, 'de-mail ing' and deep pocke ts. Buying over-leveraged but otherwise viable malls out of foreclosure can provide investors with an opportunity to acquire the property at a basis low enough to justify paying for capital improvements and attra cting retailers with lower rents . Rouse Properties Inc., (NYSE: RSE) and CBL & Associates Properties (NYSE: CBL) have both stepped up to buy B-class suburban ma ll s, particularly where they can find so-called "o nly game in town "-type properties . Foll ow Randy Drummer on T witter for live news updates . Earlier this year, Rouse acquired Grand Traverse Mall , a 590,000-square-foot enclosed mall in Grand Traverse, MI, out of r eceivership for $66 mi llion. The mal l was formerly owned by the upstart REIT's former parent GGP, which handed nearly a dozen malls back t o its lender last year. In another recent example, West Manchester Mall , a 742,000-square-foot enclosed cen ter built in York, PA, in 1981, r ecently so ld to M&R Investors after spending more than a year on the market for $17.5 million --less than $24 per square foot and far below the price the previous owner, The Lighthouse Group, paid several years ago . Mason , whose firm represented the se ller, said the sale involved "a classic de-mailing scenario." The 62% occupied mall faced competition from York T own Center, a CBL & Asso cia tes-owned power center that opened a few miles away. After the power cen ter opened in 2007, JCPenn ey and Value City Copyright (c) 2012 CoStar Realty Information, Inc. A ll rights reserved . CONTINUED: Can This Mall Be Saved? Elements Needed for a Turnaround Include Lower Debt, Deep Pockets stores went dark at West Manchester, but Lighthouse was able to lease the spaces to Wai-Mart and Kohl's. A Macy's department store and Regal Cinemas theater also anchor the center. How ever, sales at the in- line shops gradually fell and several national chains left the mall. The remaining shops have been converted to month-to-month leases and the in -line space wi ll like ly be demolished and converted to a big -box power cen ter. "It was a class i c case of too mu ch mall GLA [gross leasing area] in a one-mall town," Mason said. "But it still had a reason to exist, w ith an excellent location, and there was a need for big box stores in the area." Many malls haven't aged very well and shoppers want to go where it's shiny and new. A ny successful turnaround often requires a major property makeover. This may be even more true in highly competitive retail market s, such as Santa Monica. Before Mace r ich Co. removed the roof and comp lete ly remodeled and re-tenanted w ith interesting shops and restaurants, Santa Monica Place located at the bottom of the Third Street Promenade in Santa Monica, CA, was one of those old-school B malls with B t enants, noted Southern California retail property expert Steve Jaffe, executive v ice president and general counsel with BH Properties . "Macerich has deep pockets and spent a lot of money and was able to raise the stakes and go upscale, but they already owned the mall ," Jaffe said, conceding that new ownership might have a difficult time obtaining financing for such a venture. "It's one th ing if you already own it an d want to demolish, it's another to step into it as a new owner. Until the financing market heats up across the board, lenders won't read i ly finance what effect ively would be vacant retail rehab p r ojects without tenants lin ed up ." NEXT WEEK : CoStar spotlights 'have -n ot' malls that are using innovative strategies and drafting unconventional tenants to revive former troubled mall properties. Copyright (c) 2012 CoStar Realty Information , Inc . All rights reserved . MISS URI DEPARTMENT OF ECONOMIC DEVELOPMENT COMMUNITY IMPROVEMENT DISTRICT NOTICE OF ESTABLISHMENT 67 .142 1.6 RSMo "Upon th e c reati on o f a Distr ic t, th e Muni c ipa l C lerk shall re port in writing the creati on of suc h Di stri ct to the Mi ssouri Departm ent of Economic Devel opment." To the Director , Mis souri Department of Economic Development: You are officially notified in accordance with Section 67.1421.6 RSMo the Governing Body of the municipality of City of Jefferson , Mi sso uri ha s established a Community Improvement District by its adoption of Ordnance No . 15223 on the 21 da y of January 20 14 ------------------~-------' ---- Said Co mmunity Improvement Di strict is kn own as: Capital Mall Community Improvement District and is establi shed and shall be govern ed in accordance with the laws of the State of Mi ssouri , specificall y Se ction s 67.1401 through 67 .1571 RSMo S igned thi s _27 ____ day of January C le rk of the Municipali ty of _C_i....:.ty_o_f_J_e_ff_e_r_so_n _______________ , Mi ss ouri . Send this notice to: Missouri Department of Economic Development Attn: Community Improvement District Notice of Establishment P .O. Box 118, 301 W. High Street Jefferson City, MO 65102 Fax: 573-526-8999 Email: cd@ ded.mo .gov For furth er information or assis tance call th e Inc entives Team at 5 73-52 6-0 748.