state of florida department of transportation · 2019-07-01 · heffington & associates 911...

HEFFINGTON & ASSOCIATES

911 BEVILLE ROAD, STE. 8 / DAYTONA BEACH, FL 32119 / (386) 760-7601 / FAX (386) 760-5161

APPRAISAL REPORT

PIERSON ELEMENTARY SCHOOL

LOCATED AT 116 W. FIRST AVE. PIERSON, FL 32180

PREPARED FOR

MS. SARALEE MORRISSEY, FAICP DIRECTOR FOR PLANNING

VOLUSIA COUNTY SCHOOLS 3750 OLSON DRIVE

DAYTONA BEACH, FL 32124

AS OF

MAY 20, 2019


911 BEVILLE ROAD, STE. 8 / DAYTONA BEACH, FL 32119 / (386) 760-7601 / FAX (386) 760-5161

RAYMOND H. HEFFINGTON R. TODD HEFFINGTON, MAI CERT GEN RZ100 CERT GEN RZ2368

May 30, 2019 Ms. Saralee Morrissey, FAICP Director For Planning VOLUSIA COUNTY SCHOOLS 3750 Olson Drive Daytona Beach, FL 32124 Dear Ms. Morrissey:

In accordance with your request, I hereby submit an Appraisal Report of:

PIERSON ELEMENTARY SCHOOL LOCATED AT

116 W. FIRST AVE. PIERSON, FL 32180

As defined by the client, the purpose of the appraisal is to estimate the Market Value of the above referenced property, at its highest and best use, to a single purchaser on a cash equivalent basis, assuming a reasonable marketing period. In addition, since the property is a special purpose property, the appraiser has been asked to estimate the “Value in Use” of the property as a school or public building. The property is appraised as a fee simple estate, subject to typical mortgage loan encumbrances and utility easements. The intended use of the report is for potential sale negotiations. The intended user of the report is the Volusia County Schools, c/o Ms. Saralee Morrissey. Please Note: The subject of this appraisal is an elementary school constructed in 1925 and 1983. The main school house is not on the national historic registry but is believed to be eligible to be. Due to the nature of the subject being a public school, portions of the school being historic, and, considering its remote location, potential users are limited. Depending on the potential user, renovation costs to uses other than public in nature would likely be cost prohibitive. With this in mind, the property’s market value may be the value of the raw land only. This will be discussed further in the Highest & Best Use section of the report. However, at the request of the client, the appraisers will also arrive at a depreciated cost of the improvements. The value estimate derived through the Cost Approach will be based on the existing use as a school, and, considering the construction type, building layout, building design, and historic properties of the improvements, the value derived will not be reflective of Market Value, but a “Value In Use” as a school.

Ms. Saralee Morrissey May 30, 2019 Page Two

It should be noted that "this appraisal assignment was not made, nor was the appraisal

rendered, on the basis of a requested minimum valuation, specific valuation, or an amount which would result in approval of a loan".

The valuation analysis contained herein is intended to adhere to the Uniform Standards

of Professional Appraisal Practice (USPAP) adopted by the Appraisal Standards Board of the Appraisal Foundation in effect as of the date of this report. Furthermore, the appraiser has complied with the competency provision under the Uniform Standards of Professional Appraisal Practice.

After careful investigation, it is my opinion that the estimated “Market Value” of the

subject, at its estimated highest and best use, as of May 20, 2019, was:

ESTIMATED MARKET VALUE

TWENTY-ONE THOUSAND DOLLARS

($21,000)

After careful investigation, it is my opinion that the estimated “Value in Use” as a school, as of May 20, 2019, was:

ESTIMATED “VALUE IN USE” OR “PUBLIC INTEREST VALUE”

TWO MILLION SEVENTY-ONE THOUSAND DOLLARS

($2,071,000)

The values contained within this letter are not valid unless attached to the accompanying Report. The value estimates are predicated on the assumption that there are no materials on, or in, the properties that would cause a loss in value. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required to discover them. The Appraisal Institute conducts a program of continuing education for its designated members. Those members who meet the minimum standards of this program are awarded periodic educational certification. I am currently certified under the program.

Ms. Saralee Morrissey May 30, 2019 Page Three

Should you have any questions concerning this report, please do not hesitate to contact

this office.

Respectfully submitted,


*R. Todd Heffington, MAI Cert.Gen. RZ2368 RTH/djs Enclosures

TABLE OF CONTENTS

CERTIFICATION ............................................................................................................. 1 ASSUMPTIONS AND LIMITING CONDITIONS .............................................................. 2 PHOTOGRAPHS OF THE SUBJECT PROPERTY ........................................................ 5 SUMMARY OF SALIENT FACTS AND CONCLUSIONS .............................................. 25 IDENTIFICATION OF THE SUBJECT PROPERTY ...................................................... 26 PURPOSE ..................................................................................................................... 26 INTENDED USE AND USER ........................................................................................ 26 VALUE DEFINITIONS ................................................................................................... 26 PROPERTY INTEREST APPRAISED ........................................................................... 27 SCOPE OF WORK ........................................................................................................ 27 MARKET AREA MAP .................................................................................................... 30 MARKET AREA ANALYSIS .......................................................................................... 31 SITE SKETCH .............................................................................................................. 35 DESCRIPTION OF THE PROPERTY ........................................................................... 36 BUILDING SKETCHES ................................................................................................. 38 HIGHEST AND BEST USE ANALYSIS ......................................................................... 46 ESTIMATED EXPOSURE TIME ................................................................................... 50 THE APPRAISAL PROCESS ........................................................................................ 51 SALES COMPARISON APPROACH ............................................................................ 52 COST APPROACH (ESTIMATED VALUE IN USE) ..................................................... 60 RECONCILIATION OF APPROACHES ........................................................................ 63 ADDENDUM PURCHASE ORDER BUILDING LAYOUT/IDENTIFICATION ZONING MAP ZONING DESCRIPTION FUTURE LAND USE MAP DEPRECIATED COST ESTIMATE REPORT QUALIFICATIONS OF THE APPRAISER

1

CERTIFICATION The undersigned do hereby certify that, except as otherwise noted in this appraisal report: To the best of my knowledge and belief: 1. The statements of fact contained in this appraisal report, upon which the analyses, opinions, and

conclusions expressed herein are based, are true and correct. 2. The reported analysis, opinions and conclusions are limited only by the assumptions and limiting

conditions and are my personal, impartial, and unbiased professional analysis, opinions, and conclusions.

3. I have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved.

4. I have no personal interest or bias with respect to the subject matter of this appraisal report nor the parties involved. My employment is not contingent on the amount reported.

5. My engagement in this assignment was not contingent upon developing or reporting predetermined results.

6. My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.

7. The reported analyses, opinions and conclusion were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and the Uniform Standards of Professional Appraisal Practice.

8. I have made a thorough inspection and careful investigation of the property herein described. 9. Unless stated herein, no one provided significant real property appraisal assistance to the person

signing this certification. 10. This appraisal report sets forth all of the limiting conditions (imposed by the terms of my

assignment or by the undersigned) affecting the analyses, opinions, and conclusions contained in this report.

11. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.

12. That, as of the date of this report, the undersigned has completed the requirements of the continuing education of the Appraisal Institute and is currently certified as a General Real Estate Appraiser by the State of Florida.

13. I certify that, to the best of my knowledge and belief, the reported analyses, opinions, or conclusions were developed and this report has been prepared in conformity with the requirements of the State of Florida for state-certified appraisals (Florida Statutes, Chapter 475, Part II). The use of this report is subject to the requirements of the State of Florida related to review by the Florida Appraisal Board.

14. The Appraisal Institute conducts a program of continuing education for its designated members. Designated members who meet the minimum standards of this program are awarded periodic educational certification. I, R. Todd Heffington, MAI, am currently certified under this program.

15. Heffington & Associates has not performed services as an appraiser or in any other capacity regarding the property that is the subject of this report within the three-year period preceding acceptance of this assignment.

R. Todd Heffington, MAI Cert Gen RZ2368 X Did □ Did Not Inspect Property

2

HYPOTHETICAL CONDITIONS None

EXTRAORDINARY ASSUMPTIONS/HYPOTHETICAL CONDITIONS 1 The subject of this appraisal is an elementary school constructed in 1925 and 1983. The

main school house is not on the national historic registry but is believe to be eligible to be. Due to the nature of the subject being a public school, portions of the school being historic, and, considering its remote location, potential users are limited. Depending on the potential user, renovation costs to uses other than public in nature would likely be cost prohibitive. With this in mind, the property’s market value may be the value of the raw land only. This will be discussed further in the Highest & Best Use section of the report. However, at the request of the client, the appraisers will also arrive at a depreciated cost of the improvements. The value estimate derived through the Cost Approach will be based on the existing use as a school, and, considering the construction type, building layout, building design, and historic properties of the improvements, the value derived will not be reflective of Market Value, but a “Value in Use” as a school.

2. The subject of this appraisal is a portion of a larger parcel, as defined by the client. The

appraiser has not been supplied with a survey, but has been supplied with a parcel sketch indicating the sites size. This appraisal is based on the extraordinary assumption that the site size information is accurate. I reserve the right to amend this report should a survey or other information be provided that has an effect on the value conclusions herein.

3. The subject currently has no zoning and a future land use designation of Public Use.

Because of the lack of zoning and the restrictive use of the Future Land Use, is reasonable to believe that the site could be rezoned if the Volusia County School Board agreed to the change. This appraisal is based on the extraordinary assumption that the site can be rezoned to a use similar to its surroundings.

4. Please note that all building and site improvement sizes and building and building

component ages have been supplied by the client. These sizes are assumed accurate and have been relied on in this report.

ASSUMPTIONS AND LIMITING CONDITIONS

1. This appraisal is intended to comply with the Scope of Work requirements enacted July 1,

2006 by the Uniform Standards of Professional Appraisal Practice. 2. No responsibility is assumed for legal or title considerations. Title to the property is

assumed to be good and marketable unless otherwise stated in this report. 3. The property is appraised free and clear of any or all liens and encumbrances unless

otherwise stated in this report. 4. Responsible ownership and competent property management are assumed unless

otherwise stated in this report.

3

5. The information furnished by others is believed to be reliable. However, no warranty is given for its accuracy.

6. All engineering is assumed to be correct. Any plot plans and illustrative material in this

report are included only to assist the reader in visualizing the property. The appraisers are not experts in engineering or construction and are not licensed constructions contractors.

7. It is assumed that there are no hidden or unapparent conditions on the property, subsoil,

or structures that render it more or less valuable but are not apparent. This appraiser can assume no responsibility for such conditions or for arranging for engineering studies that may be required to discover them.

8. It is assumed that there is full compliance with all federal, state and local environmental

regulations and laws unless otherwise stated in this report. 9. It is assumed that all applicable zoning and use regulations and restrictions have been

complied with, unless a nonconformity has been stated, defined, and considered in this appraisal report.

10. It is assumed that all required licenses, certificates of occupancy, or other legislative or

administrative authority from any local, state, or national governmental, or private entity or organization have been or can be obtained or renewed for any use on which the value estimates contained in this report are based.

11. Any sketch in this report may show approximate dimensions and is included to assist the

reader in visualizing the property. Maps and exhibits found in this report are provided for reader reference purposes only. No guarantee as to accuracy is expressed or implied unless otherwise stated in this report. No survey has been made for the purpose of this report.

12. It is assumed that the utilization of the land and improvements is within the boundaries or

property liens of the property described and that there is no encroachment or trespass unless otherwise stated in this report.

13. The appraiser is not qualified to detect hazardous waste and/or toxic materials. Any

comment by the appraiser that might suggest the possibility of the presence of such substances should not be taken as confirmation of the presence of hazardous waste and/or toxic materials. Such determination would require investigation by a qualified expert in the field of environmental assessment. The presence of substances such as asbestos, urea-formaldehyde foam insulation or other potentially hazardous materials may affect the value of the property. The appraiser's value estimate is predicated on the assumptions that there is no such material on or in the property that would cause a loss in value unless otherwise stated in this report. No responsibility is assumed for any environmental conditions, or for any expertise or engineering knowledge required to discover them. The appraiser's descriptions and resulting comments are the result of the routine observations made during the appraisal process.

14. Unless otherwise stated in this report, the subject property is appraised without a specific

compliance survey having been conducted to determine if the property is or is not in

4

conformance with requirements of the Americans with Disabilities Act ("ADA") which became effective January 26, 1992. The presence of architectural and communications barriers that are structural in nature that would restrict access by disabled individuals may adversely affect the property's value, marketability, or utility.

15. Any proposed improvements are assumed to be completed in a good workmanlike

manner in accordance with the submitted plans and specifications. 16. The distribution, if any, of the total valuation in this report between land and

improvements applies only under the stated program of utilization. The separate allocations for land and buildings must not be used in conjunction with any other appraisal and are invalid if so used.

17. Possession of this report, or a copy thereof, does not carry with it the right of publication.

It may not be used for any purpose by any person other than the party to whom it is addressed without the written consent of the appraiser, and in any event, only with proper written qualification and only in its entirety.

18. Neither all nor any part of the contents of this report (especially any conclusions as to

value, the identity of the appraiser, or the firm with which the appraiser is connected) shall be disseminated to the public through advertising, public relations, news sales, or other media without prior written consent and approval of the appraiser.

19. The appraiser, by reason of this report, is not required to give testimony or attend court or

any governmental hearing with reference to the property in question, unless arrangements have been previously made therefore.

5

SUBJECT PHOTOGRAPHS Photos taken by R. Todd Heffington, MAI

AERIAL VIEW OF SUBJECT PROPERTY

AREA APPRAISED IS THE SOUTHERN 6.16 ACRES OF THE OUTLINED AREA

OVERALL VIEW OF SUBJECT PROPERTY FROM US HIGHWAY 17

6


OVERALL VIEW OF SUBJECT FROM HIGHWAY 17

FRONT VIEW OF ADMINISTRATION BUILDING (1)

7


INTERIOR VIEW OF ADMINISTRATION BUILDING (1)

INTERIOR VIEW OF ADMINISTRATION BUILDING (1)

8


VIEW OF MOISTURE DAMAGE ON THE OUTSIDE OF BUILDING (1)

FRONT VIEW OF CLASSROOM BUILDING (2)

9


INTERIOR VIEW OF BUILDING (2)


10




11


VIEW OF MOISTURE DAMAGE ON BUILDING (3)


12




13



VIEW OF MEDIA CENTER BUILDING (6)

14


FRONT VIEW OF CAFETERIA BUILDING (7)

INTERIOR VIEW OF CAFETERIA BUILDING (7)

15


VIEW OF CAFETERIA KITCHEN

INTERIOR VIEW OF MEDIA BUILDING (6) – TAKEN THROUGH WINDOWS

16



INTERIOR VIEW OF CLASSROOM BUILDING (10)

17


FRONT VIEW OF RESTROOM BUILDING (11)


18



VIEW OF DEFERRED MAINTENANCE/WATER DAMAGE ON BUILDING (11)

19


FRONT VIEW OF ART ROOM BUILDING (14)

INTERIOR VIEW OF ART ROOM BUILDING (14)

20


VIEW OF PUMP HOUSE BUILDING (15)

FRONT VIEW OF GUIDANCE & CUSTODIAL SERVICES BUILDING (16)

21



VIEW OF DEFERRED MAINTENANCE/DAMAGE TO BUILDING (16)

22


VIEW OF DEFERRED MAINTENANCE TO BUILDING (16)

VIEW OF DEFERRED MAINTENANCE/WOOD DAMAGE TO BUILDING (16)

23


VIEW OF US HIGHWAY 17 (CENTER STREET) FACING NORTHERLY

VIEW OF US HIGHWAY 17 (CENTER STREET) FACING SOUTHERLY

24


VIEW OF 1ST STREET FACING WESTERLY

25

SUMMARY OF SALIENT FACTS AND CONCLUSIONS

EFFECTIVE DATE OF THE APPRAISAL May 20, 2019 DATE OF REPORT May 30, 2019

PROPERTY OWNERS NAME(S)

& ADDRESS School Board of Volusia County P.O. Box 2118 DeLand, FL 32721-2118

STREET ADDRESS OR LOCATION 116 W. 1st Ave Pierson, FL 32180 BRIEF LEGAL DESCRIPTION A portion of Lots 5 and 6, Kinnells Pierson, per

Map Book 14, Page 2, Public Records of Volusia County, FL

PROPERTY INSPECTION

Dates of Inspection: May 20, 2019 Parties Present At Inspection: R. Todd Heffington, MAI; Marian Ridgeway –

Volusia County Schools; Robert Brinson – Volusia County Schools

SITE SIZE 6.16 Acres per supplied sketches (A portion of the entire ownership)

ZONING No zoning classification within the Town of

Pierson. FUTURE LAND USE Public Use - Pierson ESTIMATED VALUE Market Value at Highest and Best Use: $21,000 Value in Use: $2,071,000

26

SUMMARY APPRAISAL REPORT ____________________________________________________________

IDENTIFICATION OF THE SUBJECT PROPERTY The subject is a portion of the Pierson Elementary School site located at 116 W. 1st Avenue, Pierson, Volusia County, Florida.

PURPOSE As defined by the client, the purpose of the appraisal is to estimate the Market Value of the above referenced property, at its highest and best use, to a single purchaser on a cash equivalent basis, assuming a reasonable marketing period. In addition, since the property is a special purpose property, the appraiser has been asked to estimate the depreciated cost of the improvements to arrive at a “Value in Use” of the property as a school or public building.

INTENDED USE AND USER

The intended use of the report is for potential sale negotiations. The intended user of the report is the Volusia County Schools, c/o Ms. Saralee Morrissey.

MARKET VALUE DEFINITION

A current definition of Market Value is: "The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: 1. Buyer and seller are typically motivated;

2. Both parties are well informed or well advised and each acting in what they consider their own best interests;

3. A reasonable time is allowed for exposure in the open market; 4. Payment is made in terms of cash in U.S. Dollars or in terms of financial

arrangements comparable thereto; and 5. The price represents the normal consideration for the property sold

unaffected by special or creative financing or sales concessions granted by anyone associated with the sale."1

OTHER VALUE DEFINITIONS “Public Interest Value” - According to the Appraisal of Real Estate, 13th Edition, “Public Interest Value is “a general term covering a family of value concepts that relate to the highest and best

1FDIC Interagency Appraisal and Evaluation Guidelines, December 2, 2010

27

use of property to noneconomic uses. Public Interest Value is driven by social, political, and public policy goals. It is not based on economic principals. Rather, Public Interest Value is based on a noneconomic highest and best use”. According to the Appraisal of Real Estate, 13th Edition, Value in Use or “Use Value” is described as “the value a specific property has for a specific use. In estimating use value, the appraiser focuses on the value the real estate contributes to the enterprise of which it is a part, without regard to the highest and best use of the property, or the monetary amount that might be realized from it sale.” In general, these two values are not market driven and are may not reflect “market value”

PROPERTY INTEREST APPRAISED

The subject is appraised as a Fee Simple Estate subject to typical mortgage loan encumbrances and utility easements. As defined in the Dictionary of Real Estate Appraisal published by the American Institute of Real Estate Appraisers, a fee simple estate is the "Absolute ownership unencumbered by any other interest or estate; subject only to the limitations of eminent domain, escheat, police power, and taxation."

SCOPE OF WORK, APPRAISAL DEVELOPMENT & REPORTING PROCESS “Scope of Work” is defined in the Uniform Standards of Professional Appraisal Practice (USPAP), as promulgated by the Appraisal Foundation, as follows:

“The amount and type of information researched and the analysis applied in an assignment. Scope of work includes, but is not limited to, the following:

- the degree to which the property is inspected or identified;

- the extent of research into physical or economic factors that could affect the property; - the extent of data research; and - the type and extent of analysis applied to arrive at opinions or conclusions.” Appraisal Assignment: As defined by the client, appraisal assignment is to estimate the Market Value of the defined subject property, at its highest and best use. In addition, since the property is a special purpose property, the appraiser has been asked to estimate the depreciated cost of the improvements to arrive at a “Value in Use” of the property as a school or public building. Inspection: Please note that an on-site inspection was conducted on May 20, 2019 to ascertain the physical and economic characteristics of the real estate appraised and to determine the appraisal problem at hand. The property was also identified with the use of Public Records including prior deeds and tax roll information. The legal description as depicted by the public records was relied upon for this report.

28

Data Researched: The appraiser(s) maintains a current and comprehensive database of sales and listings for the market area. In addition, market data acquired in the course of previous appraisal work is retained in the appraiser(s) work files. Other sources include but are not limited to the following: 1. Multiple Listing Services 2. Public Records 3. Interviews with brokers, buyers and sellers 4. Appraisal Files 5. Marshall & Swift building cost services 6. Published articles and surveys 7. Loopnet 8. Costar Type & Extent of Analysis Applied: The Highest and Best Use of the property was analyzed as a basic valuation premise after considering pertinent variables such as property characteristics, zoning, support facilities, economic and competitive units, and maximally productive use alternatives. Applicable zoning restrictions, the comprehensive land use plans, and exposure time were also considered in this Highest and Best Use Analysis. In this case, the highest and best use was determined to be redevelopment. As previously discussed, the subject of this appraisal is an elementary school constructed in 1925 and 1983. The main school house is not on the national historic registry but is believe to be eligible to be. Due to the nature of the subject being a public school, portions of the school being historic, and, considering its remote location, potential users are limited. Depending on the potential user, renovation costs to uses other than public in nature would likely be cost prohibitive. With this in mind, the property’s highest and best use was determined to be redevelopment. After the Highest and Best Use was determined, consideration was given to the applicability of each of the three approaches to value in this report. Considering the highest and best use as redevelopment, the subject will be appraised as vacant land, and only the Direct Sales Comparison Approach is considered applicable. However, at the request of the client, the appraisers will also arrive at a depreciated cost of the improvements. The value estimate derived through the Cost Approach will be based on the existing use as a school, and, considering the construction type, building layout, building design, and historic properties of the improvements, the value derived will not be reflective of Market Value, but a “Value in Use” as a school.

29

For the Direct Sales Comparison Approach, sales of comparable vacant properties having similar characteristics were researched, analyzed, and directly compared to the subject site to arrive at a value for the site as if vacant. For the depreciated replacement cost estimate, the appraisers have relied on the Core Logic Comprehensive Commercial Building Valuations and Property Risk cost estimator, a nationally recognized cost estimating service. Reporting Option: This appraisal is presented in an “Appraisal Report” format in accordance with standards rule 2-2(a) of the uniform standards of professional appraisal practice. This reporting format is consistent with the intended use of the appraisal. It is the intent of this appraisal report to comply with contemporary report writing standards as well as the standards and report writing requirements of the Appraisal Institute and the Uniform Standards of Professional Appraisal Practice.

30

MARKET AREA/NEIGHBORHOOD MAP

31

BRIEF AREA/MARKET AREA ANALYSIS GENERAL AREA DATA The subject property is located in a rural area considered to be Northwest Volusia County. Volusia County is situated on the east central coast of Florida, consists of 16 incorporated cities and comprises an area of approximately 1,207 square miles. The area is located approximately 50 miles northeast of Orlando, 140 miles northeast of Tampa/St. Petersburg, 260 miles north of Miami, and 90 miles south of Jacksonville. The county is convenient to all portions of the state via the excellent interstate highway system including Interstate 95 and Interstate 4. Limited-access highways in the Volusia/Flagler area include Interstate 95, the main highway through the area, which connects with Jacksonville to the north and Miami to the south; and Interstate 4, which has its eastern terminus at I-95 in Daytona Beach, and which travels west to connect with Orlando and eventually to Tampa on the west coast of Florida. Major surface highways include US 1, US 17 and US 92. Public bus transportation in Volusia County is provided by VOTRAN, which connects all the major cities. Commuter rail service is provided by SunRail, and the northern terminus is located in DeBary, in Volusia County. Volusia County is part of the Deltona-Daytona Beach-Ormond Beach metropolitan statistical area which now includes neighboring Flagler County. Based on the US Census Bureau ACS, the 2017 combined population for this MSA was approximately 649,202. Volusia County’s population has recently surpassed the 500,000 mark, according to figures released by the U.S. Census Bureau. The Census Bureau’s annual population estimates show Volusia County had 529,364 residents as of July 1, 2016, an increase of a little more than 4 percent from 2014, with an estimate of 507,231. The 2018 estimate for Volusia County is 535,884. Flagler County’s population has recently surpassed the 100,000 mark. The Census Bureau’s annual population estimates show Flagler County had 108,310 residents as of July 1, 2016, an increase of over five percent compared with 2014's estimated population of 102,408. The most recent estimate for Flagler County is 112,562. The Volusia/Flagler area is best known for its tourism industry, which attracts millions of visitors each year. Motorsports dominate the area, with several race track venues as magnets. The best known is Daytona International Speedway, where the headquarters of NASCAR is located. Other racing venues include New Smyrna Speedway and Volusia Speedway Park. Other motorsports events include Daytona Beach Bike Week, a massive biker rally that occurs each March with a smaller rally in October, along with several classic car shows throughout the year. The main natural attraction for tourists are the beaches of Volusia and Flagler Counties, with Daytona Beach, Flagler Beach, New Smyrna Beach, and Ormond Beach being the largest draws. Summer is usually the High Season for beach tourism in this area. The unemployment rate for the Volusia County Area is 3.7 percent, down from 4.2 percent in 2017. Volusia County’s economy continues to make slow, but steady improvements. As of 2017, the major employers in Volusia County are as follows:

32

Organization Industry Employment Volusia County Schools Education 7,443 Halifax Health Healthcare 4,384 Florida Hospital Volusia-Flagler Market Healthcare 4,690 County of Volusia Government 3,447 Publix Supermarkets, Inc. Grocery 3,179 State of Florida Government 2,007 Walmart Stores Retail 2,589 Daytona State College Education 1,416 Embry-Riddle Aeronautical University Education 1,326 US Government Government 1,259 NEIGHBORHOOD DATA The subject is located in a rural, agricultural area that may be described as Northwest Volusia and Southeast Putnam Counties. This market area extends through the Pomona Park Area and is bisected by U.S. Highway 17. The westerly boundary of this market area is established by the St. Johns River and Lake George. The southernmost area of Flagler County is included in this market area and makes up the northeastern neighborhood boundary. State Highway 11 runs along the easterly boundary, and State Road 44 runs east and west along the southerly boundary of the subject market area. Access to this area is considered good, with U.S. Highway 17 and U.S. Highway 11 running north and south through the subject neighborhood. U.S. Highway 17 connects this area with Palatka, Crescent City, and Pomona Park to the north and Deltona, DeBary, Orange City, Enterprise and Sanford to the south. U.S. Highway 11 connects the DeLand Area to Flagler County. Seville, Pierson, Barberville, Emporia, DeLeon Springs, and DeLand are located along U.S. Highway 17 in the north western section of Volusia County. Pomona Park and Crescent City are located along U.S. Highway 17 in the Putnam County Area. Both State Road 40 and State Road 44 run east and west through the subject area and connect this area with Ocala to the west and the Greater Daytona Beach Area to the east. County Roads 305, 308, and 309 also offer access to the market area. The area is primarily agricultural in nature with fern and other floral greens being the primary income generating crops. Other agricultural uses in the area include timber and cattle grazing. Leather leaf fern has been the staple crop; however, over the past decade, as a result of disease, overseas competition, and other factors, the fern industry has experienced a decline, eliminating some of the smaller growers in the area, and prompting many others to change their crops to more profitable foliage, including plumosus, ming, ginger, pittosporum, etc. As a result, many growers are still not increasing their land holdings, and some are changing their growing strategies to meet the current demands. Citrus was also significant crop in this area, however, freezes in the 1980’s, pests and disease have reduced the citrus industry in Volusia County to only a few growers. Conversations with John Price with the Volusia County Property Appraiser’s Office, Rodney Clouser of the University of Florida IFAS Extension, and other area appraisers and real estate brokers, revealed that the demand for improved citrus land in Volusia County has declined to nearly none. It was conveyed that active groves in good condition may offer some monetary value to

33

the current owners if they are able to market the fruit, but due to diseases such as Tristeza and Greening, the cost of maintaining a grove, including fertilizing, pesticides, irrigation, etc., generally leaves little profit remaining for the grower. The value of citrus crops in areas farther south may not be as affected as the subject’s area, but in general, all citrus values have fallen over the past few years. In terms of growth and demand in the area, this area has shown slow growth over the last several years. However, along with a reduction in the land areas used for ferneries, there was also an increase in demand for acreage home sites in this area. This demand helped to spur a significant increase in residential/agricultural land values. Demand for these types of properties peaked in late 2005, but experienced declines of 50 to 70 percent through 2012. The market appears to have stabilized as of 2012, and, based on recent sales activity, some increased demand and price escalations for residential/agricultural land has been noted. The area is generally rural, with limited commercial uses. Primary commercial uses are in the peripheral towns such as DeLand, Ormond Beach or Crescent City. Other commercial uses are generally centered on the major intersections and roadways within the smaller towns of DeLeon Springs, Pierson, Barberville, Seville, etc. Based on the limited growth and commercial development over the past couple of decades, it is apparent that there has been only limited demand for commercial uses, and there remains an abundance of commercial land available for purchase. Major employment, shopping, and medical facilities require a lengthy drive from the market area; however, access is considered good to all of the more urban areas of Volusia and Putnam Counties. There are no foreseeable major changes in the current market area characteristics with fern, floral greens, and other agricultural uses representing the major employers in the area. The overall prognosis for the area is for slow growth and value increases of both residential and agricultural uses. TOWN OF PIERSON The subject is located in the Town of Pierson. Pierson is touted as the Fern Capital of The World and is built around its agriculture. Based on the 2010 Census, The town of Pierson had a population of 1,736 people, with an estimated 2018 population of 1,852. The estimated population within a 5 mile radius of Downtown Pierson is 4,316 people with 1,501 households. The estimated population 10 miles is 9,918 people with 3,665 households. There are two public schools to service this area, including T. Dewitt Taylor Middle – High School and Pierson Elementary. The Town of Pierson has municipal water service but no sewer service. (The Schools have their own sewer service that is not accessible to any other properties). Due to its agricultural nature, and the relatively few job opportunities, the population of this area has remained relatively steady over the years. Due to the population size, and the rural nature of the community, commercial uses are relatively few in the immediate area, with most major shopping and support services being located in DeLand, nearly 15 miles to the south, the closest major population area.

34

Commercial development has been very slow, with the most recent major development being a Family Dollar store constructed in 2009. This Family Dollar subsequently failed and closed in 2015 or 2016 and was put up for auction in October 2018. The property did not sell at auction but eventually sold in January 2019 to a local grocery store. There have also been other properties vacated or foreclosed on in the past several years including the former Napa Auto Parts store. A good indication of the lack of demand for development in the Pierson Area is the amount of available commercial land. Currently there is over 38 acres of commercial land available for purchase within the Downtown Pierson Area. Most of this land has been available for purchase for years. A 9.3 acre parcel situated at the corner of US Highway 17 and 2nd Avenue was sold in 2005 at the peak of the real estate market, and has been for sale ever since. A parcel of land that was subdivided as Pierson Meadows includes five commercial lots, one of which was purchased for the aforementioned Family Dollar. The remaining lots were taken back by the mortgagee in 2012 and subsequently sold. Those remaining lots have been available for sale ever since. Based on this analysis, it is clear that there is little demand for new commercial development in the Pierson Area and, based on the area’s history, a change in demand is not expected in the foreseeable future.

35

SITE SKETCH

36

DESCRIPTION OF THE PROPERTY SITE Site Size, Usable Area: 6.16± acres as defined by the client. Site Shape: Generally rectangular. All dimensions not available. Please refer to the provided site sketch presented on a previous page. Site Topography: Mostly cleared and generally level, near road grade. Road Frontage/Access: Access to the site is from 1st Avenue and US Highway 17. Access appears to be good. Utilities: Municipal water is available to the site. A sewer system owned and operated by the Volusia County School Board is currently in use. However, it was conveyed by the owner that any potential buyer will not have access to this sewer system and will have to install their own septic system. Electric and telephone services are provided by publicly regulated companies. Flood Zone: Based on the available flood zone maps, Map Panel 12127C0300H, dated February 19, 2014, the subject is located in a Zone X, which is not designated as a special flood hazard area. Easements/Encroachments: According to the supplied survey of the overall parcel, there is an 8-foot wide easement in favor of Progress Energy to allow placement and service of a transformer. This easement runs from Washington Avenue on the north to the rear of Building 7. With the exception of typical right-of-way and utility easements, if any, there do not appear to be any adverse easements or encroachments on the defined subject site. Traffic Counts: According to the Florida Department of Transportation, the average daily traffic count fronting the subject property along US 17 is 7,400 cars. This is roughly only 300 cars greater than 2007. Census Tract: 901.02 Surrounding Uses: Surrounding uses include a public park to the north, limited retail uses to the east, a retail store and vacant land to the south, and single family residences and limited commercial to the west. Street Improvements: First Avenue is a 2-lane, asphalt paved, public right of way. US Highway 17 is a two lane, asphalt paved, federal highway fronting the subject. Soil Survey & Conditions: The soils appear to be sandy and adequate for development. However, no soil boring tests or composition analyses were supplied to determine the development potential or soil carrying capacity of the subject. A subsoil analysis is beyond the area of appraisal expertise; therefore, no responsibility is taken for the detection of hidden or unapparent subsoil conditions on the subject. The value opinion in this report is based on the assumption that the property is not negatively

37

affected by the existence of hazardous substances or detrimental environmental conditions. I lack the knowledge and experience with respect to the detection and measurement of hazardous substances. Therefore, this assignment does not cover the presence or absence of such substances as discussed in the General Underlying Assumptions section. However, any visual or obviously known hazardous substances affecting the property will be reported and an indication of its impact on value will be discussed. I suggest an environmental specialist be retained if desired. Zoning: Based on the available maps and conversations with Mr. Mark Karet, City Planner, the subject currently has no zoning. According to Mr. Karet, the Future Land Use designation is applicable until the Town can adopt a zoning classification for the subject. The Future Land Use Designation is Public/Institutional by the Town of Pierson. Permitted Uses within the Public/Institutional designation include but are not limited to: • Educational facilities • Places of worship, monasteries and convents • Hospitals and other public health care and Social service facilities • Nursing homes and homes for the aged • Cemeteries • Municipal, state and federal government buildings • Libraries, community and recreational centers, parks, fire and police stations • Publicly owned and operated transportation facilities There are no minimum standards at this time. The only other Public/Institutional properties in Pierson include the middle/high school site and the airport. However, if the site were to be sold on the open market, it would likely need to be rezoned. Conversations with the City Planner indicated that should a potential buyer of the subject site, as though vacant, decide to develop the site with something other than Public/Institutional, given the existing FLU map, it would be reasonable to assume the subject site could go through a small-scale comprehensive plan amendment to allow commercial development. Therefore, the subject site has been valued as a commercial site, with a deduction made for the cost of getting the Town's comprehensive land use plan changed to allow commercial uses.

38

BUILDING LAYOUT/SKETCHES

39

BUILDING IMPROVEMENTS

Please note that all building and site improvement sizes and building and building component ages have been supplied by the client. These sizes are assumed accurate and have been relied on in this report. Property Type: Special Purpose/School General Description: The overall subject parcel is improved with 13 permanent classroom and other school buildings, a large number of portable classrooms and associated site improvements, including paved parking areas, playgrounds, minimal landscaping and storm water retention. However, only a portion of the site is included in this valuation. The subject of this appraisal will include only 12 permanent structures and no portable buildings. Each of the subject buildings is a one-story structure. The following table summarizes the subject's building improvements included in this report. A description of each follows.

Building # Building Use Size (SF) Year Built Age Effective Age/

Est. Economic Life

Building 1 Admin Offices & Auditorium 5,859 1925 94 35/45Building 2 Classrooms 2,300 1974 45 25/40

Building 3 Classrooms 1,920 1951 68 30/40



Building 6 Media Center 4,282 1984 35 20/50

Building 7 Cafeteria 5,400 1974 45 25/40


Building 11 Restroom Building 560 1951 68 25/25

Building 14 Art Room/Storage 1,471 1947 72 30/40

Building 15 Pump House Not IncludedBuilding 16 Wooden Custodial Building 1,500 1936 83 35/35

Building - 1 Administration Building: This building contains the administrative offices, auditorium, nurse's office and restrooms. This is a masonry and stucco structure with a crawl space. The building has a flat roof over the administration offices and a pitched roof over the auditorium. The flat roof is assumed to have a built-up composition cover with the pitched roof having composition shingles. The floors are a combination of wood (hallways and auditorium), vinyl composition tile (offices) and ceramic tile (restrooms). The walls are generally painted drywall or plaster and the ceilings are generally suspended acoustical tile with recessed or surface-mounted fluorescent lighting fixtures. This building is air conditioned. Notable deferred maintenance, system ages, conformance concerns and overall condition are as follows:

Building is 94 years old

General deferred maintenance and cleanup from not being occupied

Noted areas of peeling paint and potential water damage

Building has limited accessibility to disabled persons in regards to egress and ingress.

40

Age of HVAC system is reported to be 25 to 29 years old.

Age of the roof is reported to be approximately 26 years old.

No improvements have been made to the plumbing, electrical, fire alarm and sewer in the last 25 to 29 years.

Building 2 - Classrooms: This is a painted concrete block building with a flat roof. The roof is assumed to have a built-up composition cover. There are 2 classrooms and one office between the classrooms. The classroom floors are a combination of carpet and vinyl composition tile, painted concrete block walls and suspended acoustical tile ceilings with recessed fluorescent lighting fixtures. Each classroom has a sink. The office has vinyl composition tile flooring, prefinished plywood paneled walls, suspended acoustical tile ceiling, surface-mounted fluorescent lighting fixtures and a sink. There is one one-way mirror looking into each classroom. There are two restrooms per classroom, with each having a ceramic tile floor, painted concrete block walls and suspended acoustical tile ceiling with incandescent lighting fixtures. This building is air conditioned. Notable deferred maintenance, system ages, conformance concerns and overall condition are as follows:




HVAC system is reported to be 18 to 20 years old.

Roof is reported to be approximately 22 years old.

No improvements have been made to the plumbing, electrical, fire alarm and sewer in the last 25 to 29 years.

Building 3 - Classrooms: This is a painted concrete block building with a pitched roof with composition shingles. There are 2 classrooms in this building, with each containing 2 restrooms. Each classroom contains a combination of carpet and vinyl composition tile flooring, painted drywall walls, suspended acoustical tile ceilings with recessed fluorescent lighting fixtures and a sink. Each restroom has one toilet and contains a ceramic tile floor and wainscot, painted drywall walls above the wainscot and painted drywall ceiling. This building is air conditioned. Notable deferred maintenance, system ages, conformance concerns and overall condition are as follows:



Building has limited accessibility to disabled persons in regards to egress and ingress

Age of HVAC system is reported to be 12 to 15 years old.


No improvements to the plumbing, electrical, fire alarm and sewer in the last 25 to 29 years.

Building 4 - Classrooms: This is a painted concrete block building with a pitched roof with composition shingles. There are 4 classrooms in this building, with each containing a

41

combination of carpet and vinyl composition tile flooring, painted drywall walls, suspended acoustical tile ceilings with recessed or indirect fluorescent lighting fixtures. There are no restrooms in this building. This building is air conditioned. Notable deferred maintenance, system ages, conformance concerns and overall condition are as follows:




Age of HVAC system is reported to be approximately 12 to 15 years old.



Building 5 - Classrooms: This is a masonry/stucco building with a flat roof. The roof is assumed to have a built-up composition cover. There are 4 classrooms in this building, each with one restroom. Each classroom contains a combination of carpet and vinyl composition tile flooring, painted concrete block walls, suspended acoustical tile ceilings with surface-mounted fluorescent lighting fixtures and ceiling fans. Each restroom has a ceramic tile floor and walls, suspended acoustical tile ceiling with incandescent lighting fixture, a toilet and wall sink. This building also has a custodial closet and a mechanical room. This building is air conditioned. Notable deferred maintenance, system ages, conformance concerns and overall condition are as follows:







Building 6 - Media Center: This is a painted concrete block and stucco building with a flat roof. The roof is assumed to have a built-up composition cover. This building has an open floor plan for the library/student area and the administrative area has several offices and storage rooms. The interior finishes include a combination of carpet and vinyl composition tile flooring, painted drywall walls, suspended acoustical tile ceilings with recessed fluorescent and recessed incandescent can lighting fixtures. There is one restroom with ceramic tile floor and wainscot, painted drywall walls above the wainscot, suspended acoustical tile ceiling with an incandescent lighting fixture, a toilet and wall sink. This building also has a custodial closet and a mechanical room. This building is air conditioned. Notable deferred maintenance, system ages, conformance concerns and overall condition are as follows:

42







Building 7 - Cafeteria: This is a masonry and stucco building with a flat roof. The roof is assumed to have a built-up composition cover. The dining area is an open floor plan with a small stage at the rear of the dining room. There is a room on either side of the stage. One room is an office and the other is currently used for storage but could easily be re-converted to an office. The dining room has vinyl composition tile flooring, a combination of prefinished plywood paneled walls, painted drywall walls and painted concrete block walls. It has a suspended acoustical tile ceiling with recessed fluorescent lighting fixtures. The kitchen has a clay tile floor, painted drywall walls, a suspended acoustical tile ceiling with recessed fluorescent lighting fixtures. There is an office and restroom in the kitchen area, as well as several other food service rooms. This building is air conditioned. Notable deferred maintenance, system ages, conformance concerns and overall condition are as follows:







Building 10 - Classrooms: This is a painted concrete block and stucco building with a flat roof. The roof is assumed to have a built-up composition cover. There are 8 classrooms and one music room in this building. The classrooms are set up in groups of 2, with each group sharing a teacher planning office and 2 restrooms. Each classroom contains a vinyl composition tile floor, painted concrete block walls and a suspended acoustical tile ceiling with recessed fluorescent lighting fixtures. Each restroom has a ceramic tile floor, painted drywall walls, suspended acoustical tile ceiling with incandescent lighting fixture, a toilet and wall sink. The music room has a carpeted floor, painted concrete block walls, suspended acoustical tile ceiling with indirect fluorescent lighting fixtures and ceiling fans. The music room has no restroom. This building is air conditioned. Notable deferred maintenance, system ages, conformance concerns and overall condition are as follows:



Age of HVAC system is reported to be approximately 15 years old.


43

No improvements to the plumbing, electrical, fire alarm and sewer in the last 10 years. Building 11 – Restroom Building: This Is a painted concrete block building with a pitched roof with composition shingles. One side of the building contains a staff (teacher) restroom and a boys' restroom, and the other half contains a teacher restroom and a girls' restroom. The boys' room contains 3 urinals, 2 toilets, 2 wall sinks and 2 electric hand dryers. The girls' room contains 3 toilets, 2 wall sinks and 2 electric hand dryers. Each teacher restroom contains a toilet and wall sink. The interior finishes include ceramic tile floors and wainscot, painted drywall walls above the wainscot, painted drywall ceilings and incandescent lighting fixtures. There is no heat or air conditioning in this building. Notable deferred maintenance, system ages, conformance concerns and overall condition are as follows:



Water/weather damage noted




Building 14 - Art Room: This is a painted concrete block building with a pitched roof with composition shingles. There is one large open classroom with several smaller storage rooms and 2 restrooms. The classroom and storage rooms have vinyl composition tile floors, painted concrete block walls and suspended acoustical tile ceilings with recessed fluorescent lighting fixtures. Each restroom has a ceramic tile floor and wainscot, painted drywall walls above the wainscot, painted drywall celling with surface mounted fluorescent lighting fixtures. The girls' room contains 2 toilets and 1 wall sink, while the boys' room contains 1 toilet, 1 urinal and 1 wall sink. This portion of the building is air conditioned. At the north end of the building is a small 2-room maintenance shop. This shop has a concrete floor, wood walls, painted drywall ceiling with surface mounted fluorescent lighting fixtures and no heat or air conditioning. Notable deferred maintenance, system ages, conformance concerns and overall condition are as follows:







44

Building 15 – Pump House: Building 15 is a metal shed building used to house the irrigation pump, etc. It is of minimal construction and offers no significant value to the site and has not been included herein. Building 16 – Wooden Custodial Building: This is a frame building with a crawl space, a pitched roof and composition shingles. The front part of the building contains 2 offices/classrooms and the rear, majority of the building contains the custodial office and storage rooms. The offices/classrooms contain carpet over wood floors, painted drywall walls, suspended acoustical tile ceilings with recessed fluorescent lighting fixtures and window air conditioners. The custodial office/storage rooms contain vinyl composition tile flooring, painted drywall walls and ceilings, surface-mounted fluorescent lighting fixtures and a large exterior wall-mounted package air conditioning system. There are no restrooms in this building, but there is a double stainless steel set of sinks in the custodial portion of the building. Notable deferred maintenance, system ages, conformance concerns and overall condition are as follows:



Water damage and significant wood rot noted



Age of the roof is reported to be approximately 25 to 30 years old.


Fire Sprinklers: None Site Improvements: Site improvement in the defined subject area are estimated to be as follows: Covered Walkways – 4,282 square feet Concrete sidewalks/patios – 2,520 square feet 6’ Chain Link Fencing – 1,900 Linear Feet Paved parking and drives – 27,510 square feet. There is also an irrigation pump and retention. ASSESSED VALUES, TAXES, & SPECIAL ASSESSMENTS The parent tract consists of one parcel number. The current assessed values and taxes are as follows: Parcel No. 4834-05-00-0050 Land Value - $ 146,112.00 Improvements Value - $3,243,765.00 Total Just Assessment - $3,389,887.00 Total Taxable - $ 0.00 2018 Taxes $ 0.00

45

The subject is owned by the Volusia County School Board and is not taxed. The assessed land value appears to be slightly above market indicators. However, the improvements value appears to be based on a depreciated cost, as the market value of the improvements would be minimal as described later in this report. In addition, the assessed value of the improvements appears to be increasing, while the improvements are getting older and are no longer occupied. This would appear to be contradictory to what the assessment should be doing. PROPERTY HISTORY Based on the available public records, there have been no transfers of the subject property within the last three years. The subject is not currently listed for sale.

46

HIGHEST AND BEST USE ANALYSIS

The Highest and Best Use of the subject property will be analyzed both in terms of its existing use as improved and as if it were vacant and ready to be put to use. Highest and Best Use can be defined as: "The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum profitability."1 A site is valued as though vacant in terms of its Highest and Best Use which may be defined as: "The use of a property based on the assumption that a parcel of land is vacant or can be made vacant through demolition of any improvements."2 The following narration highlights the process utilized in formulating a conclusion of appropriate Highest and Best Use. 1. Legally Permissible: Legal permissibility considers the effect of private restrictions,

zoning ordinances, building codes, historic district controls, land use regulations or any additional governing authority.

2. Physically Possible: The test for physical possibility considers those uses from among

legally permissible uses which could satisfactorily be accommodated on the subject property.

3. Financially Feasible: Is there economic or financial logic in pursuing any of the legally

permissible and physically possible uses which remain? 4. Maximally Productive: Of the legally permissible, physically possible and financially

feasible uses, which produces the highest land value or economic return to the land. The foregoing process applies specifically to the Highest and Best Use of land. "It is to be recognized that in cases where a site has existing improvements on it, the Highest and Best Use may very well be determined to be different from the existing use. The existing use will continue, however, unless and until land value in its Highest and Best Use exceeds the total value of the property in its existing use."3

1 The Dictionary of Real Estate Appraisal, Second Addition, Appraisal Institute, (Chicago, IL, 1993), Page 149.

2Ibid., Page 149.

3 Real Estate Appraisal Terminology, Revised Edition, Byrl N. Boyce, Ballinger Publishing Company, (Cambridge, MA,

1981), Page 127.

47

Highest and Best Use As Vacant Legally, as previously discussed, the subject site currently has no zoning but the Future land Use Map designates the site as Public/Institutional. Reference is made to my conversation with the Pierson Town Planner about the potential to amend the comprehensive land use plan should a potential owner desire to develop something other than a public or institutional use on this site, as though vacant. In this instance, based on this conversation, it is reasonable to assume that the subject's Future Land Use could be amended to a commercial zoning similar to surrounding properties. It is unlikely, considering the sites location at a main corner in the Downtown Pierson Area, that a residential or agricultural use would conform. Physically, the subject is located at the northwest corner of US 17 and First Avenue. The defined site contains approximately 6.16± acres, is generally level, near road grade and mostly cleared. The soil is sandy and the drainage appears adequate. The site is of adequate size and shape to allow development with one or more commercial uses that would be allowed under a commercial zoning similar to those surrounding the subject property. These uses would likely include general retail/commercial and/or offices. However, one limitation to potential commercial development in the area is the lack of municipal sewer. Septic tanks and drain fields will be required for any commercial development which likely limits the size and use of potential development. Feasibly, surrounding uses and market conditions must be considered. Surrounding uses include smaller, older retail and light industrial uses to the east, a small retail use and vacant commercial land to the south, a school to the north and residential uses to the west. Two of the other three corners of 1st Avenue are developed, with the southwest corner being vacant and available for purchase. Real estate market conditions have been strong over the past two to three years, but they appear to have stabilized and slowed as of the beginning of 2019. However, as discussed in the Market Area Analysis, the real estate market in the Pierson Area has been slow for some time. As previously discussed, due to the population size, and the rural nature of the community, commercial uses are relatively few in the immediate area, with most major shopping and support services being located in DeLand, nearly 15 miles to the south, the closest major population area. Commercial development has been very slow, with the most recent major development being a Family Dollar store constructed in 2009. This Family Dollar subsequently failed and closed in 2015 or 2016 and was put up for auction in October 2018. The property did not sell at auction but eventually sold in January 2019 to a local grocery store. There have also been other properties vacated or foreclosed on in the past several years including the former Napa Auto Parts store. A good indication of the lack of demand for development in the Pierson Area is the amount of available commercial land. The appraiser has been completing appraisals in the Pierson Area for over 20 years and has witnessed the trends in the area. Currently there is over 38 acres of commercial land available for purchase within the Downtown Pierson Area. Most of this land has been available for purchase for years. A 9.3 acre parcel situated at the corner of US Highway 17 and 2nd Avenue was on the market for many years and finally sold in 2005 at the peak of the real estate market, and has been for sale ever since. A parcel of land that was subdivided as Pierson Meadows, includes five commercial lots, one of which was purchased

48

for the aforementioned Family Dollar. The remaining lots were taken back by the mortgagee in 2012 and subsequently sold at a discount to a single buyer. Those remaining lots have been available for sale ever since. In addition, I have spoken to local brokers with good knowledge of the Pierson Area, one of which controls properties in the Pierson area. Conversations with these brokers revealed a lack of demand for commercial development in the area, and no major change to demand in the foreseeable future. It was stated that access to a municipal sewer system may help, but with the limited number of rooftops and small population (1,852 in Pierson), and the limited traffic counts (7,400 cars daily) on the major roadway through the area, that significant commercial development is unlikely. Based on this data, it is my opinion that demand for commercial development of the site would be some distance in the future. Therefore, it is my opinion that highest and best use of the subject site, as though vacant, would be to hold for future commercial development as demand dictates. Highest & Best Use As Improved As noted earlier, the subject is a public elementary school containing 12 permanent buildings ranging in age from 26 to 94 years, and associated site Improvements. While the buildings are functional for their intended use, they are designed for use as a school or other public use, and are not currently functional for alternative uses. The buildings were occupied until approximately 1 year ago, but are now vacated, and do reflect deferred maintenance. As improved, as previously noted, there is virtually no demand for private commercial properties in the current market. In addition, the layout of the buildings on the site, the overall size of the buildings and the required conversion costs would not be conducive to private commercial uses. First, the buildings are laid out in a campus setting, with the parking area proximate to only three of the 12 buildings. The remaining buildings can only be accessed between other buildings, which would be conducive to a single user or a public entity, but not to multiple uses and users. Second, the 12 buildings contain over 44,000 square feet of space. As previously discussed, there is little demand for commercial uses in the Pierson Area, and filling 44,000 square feet of space with any user other than a government entity is very unlikely. Third, consideration must be given to the age, condition, and conformity of the buildings to current codes. (Reference is made to the description of the improvements presented previously within this report.) Eleven of the 12 buildings are 35 years of age or older. Most of the buildings have HVAC systems that are at least 12 – 18 years old, some of which are in excess of 20 years old. Based on the Marshall Valuation Cost Handbook, HVAC systems should have a life expectancy of no more than 20 to 24 years, indicating that many of the systems will need replacing in the near future. Most of the buildings have roofs that are 18+ years old, some of which are in excess of 25 years old. Built-up or composition roofs have a life expectancy of 16 to 20 years, and composition shingle roofs have a life expectancy of 30 years, indicating that many of the roofs may need replacement in the near future. In addition,

49

most of the buildings would likely require some type of renovation for ADA compliant access and restrooms, which can be very costly. Consideration must also be given to conversion costs for other users. Many of the buildings are open class rooms or large open spaces. Most users would need to renovate to their specific use including constructing demising walls, etc. Considering this discussion, it is unlikely that conversion costs would be feasible, especially considering the lack of demand for commercial uses in the area. Not only would these renovations likely need to be completed for private occupancy, but, a new septic system and drain field would have to be created on site. The appraiser is not an engineer, but it is likely that the land area required for a septic system that could handle the 44,000 square feet of commercial space would be quite large, and the cost extensive. Considering that the majority of the defined site is already covered with buildings, parking and retention, buildings may have to be demolished to accommodate a septic system. Considering this discussion, it is unlikely that it would be feasible for any private user to justify the required renovations to occupy the property with a commercial use. Given the small size of this community, demand for the subject property for conversion to other public uses is very limited. However, I am aware that the Town of Pierson may be interested in the property for a Town Hall and possibly a consolidation of other town services into a central location. Considering the layout and design of the buildings, some conversation would likely be required, but likely significantly less than would be required by a private entity. Based on this discussion, it is my opinion that that the most likely and best use of the property is for conversion to another public use. However, please note that a public use may not reflect Market Value to a private entity, but a “Public Interest Value” or “Value in Use”. According to the Appraisal of Real Estate, 13th Edition, “Public Interest Value is “a general term covering a family of value concepts that relate to the highest and best use of property to noneconomic uses. Public Interest Value is driven by social, political, and public policy goals. It is not based on economic principals. Rather, Public Interest Value is based on a noneconomic highest and best use”. Value in Use or “Use Value” is described as “the value a specific property has for a specific use. In estimating use value, the appraiser focuses on the value the real estate contributes to the enterprise of which it is a part, without regard to the highest and best use of the property, or the monetary amount that might be realized from it sale.”

50

ESTIMATED EXPOSURE TIME Exposure Time may be defined as, “The estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective estimate based upon an analysis of past events assuming a competitive and open market.”4 The estimated exposure time for the subject on the open market is greatly dependent upon the following: 1) the market conditions in effect at the time of marketing; 2) the effort, influence and exposure applied to this marketing program; and 3) the availability of financing for this type of property. Exposure time is different for various types of real estate and value ranges and under various market conditions. In this case, due to the limited sales information, I was unable to accurately estimate exposure time. In this case, we were unable to accurately estimate exposure time from the available sales. The subject’s rural location, current use, site size and surrounding competition could significantly increase the exposure time. As discussed later in this report, there is little demand for commercial buildings, and, there is over 38 acres of commercial land proximate to the subject that is available for purchase. Based on this information, it is my opinion that the subject could have been on the market for several years prior to sale at the current date, if marketed at the indicated appraised value.

4 Standards Of Professional Appraisal Practice Of The Appraisal Institute, 1998 Edition, The Appraisal Foundation, 1998, Page 77.

51

THE APPRAISAL PROCESS

There are normally three approaches to value available for use in the estimation of Market Value. The three widely recognized approaches include the Cost Approach, the Income Approach, and the Direct Sales Comparison (Market Data) Approach. These three approaches to value result in preliminary indications of value which may be somewhat at a variance with each other. When this is the case, the relative significance, applicability and defensibility of the indications of value derived from each approach are weighed. This analysis leads to the selection of a final value estimate that, in the appraisers' professional judgment, best reflects the attitudes, responses, and behavior of the typically informed, rational purchaser in the market in question. In this case, as discussed in the scope of work, the highest and best use of the site is for redevelopment at such time as demand warrants. Therefore, the Direct Sales Comparison Approach is considered the most applicable approach to value. In addition, at the request of the client, an estimate of depreciated cost of the improvements will also be completed. This will be addressed following the land valuation.

52

SALES COMPARISON APPROACH (BEFORE) The Direct Sales Comparison Approach, or Market Data Approach as it is sometimes referred to, is an appraisal technique which utilizes recent transactions of similar comparable properties to derive an indication of value for the subject. These comparable properties are adjusted for variables to enhance their degree of comparability to the subject. Based upon those adjustments, supported by market evidence, the appraisers are then able to develop a clear indication of value for the subject. This technique is particularly accurate when there is an active and normal sales market of similar properties and when the details of the transactions can be verified by reliable sources involved in the sale. The Direct Sales Comparison Approach is based upon the principle of substitution in that a knowledgeable buyer will not pay any more for a particular property than what it would cost to purchase a duplicate property with equal utility. As previously discussed, the subject is being appraised as vacant commercial land. MARKET VALUATION OF THE DEFINED PARCEL In estimating the value of a vacant parcel of land with a highest and best use of commercial development, the most widely used units of comparison are the selling price per square foot or gross acre. In this case, the price per square foot will be used. The subject is a large parcel in a rural area with limited demand. For this reason, I have attempted to analyzed sales in more rural areas and compared them to the subject. Few sales of similar properties in the subject’s immediate area were able to be found. For this reason, I have relied on sales throughout Volusia County and surround areas. Most of the sales found are in superior locations. However, those sales used are believe to be the most similar and appropriate sales for utilization in the Direct Sales Comparison Approach. Percentage adjustments to the comparables were applied to reflect the differing characteristics and are shown on the grid sheet analysis chart. These adjustments are not supported by an exact quantitative analysis, but are based on what we believe would be the market's perception of the inferior, or superior qualities of the comparables as they relate to the subject. A location map and chart summarizing the comparables and their comparison to the subject may be found on the following pages. A brief narrative comparison of the sales to the subject follows.

53

COMPARABLE LAND SALES MAP

54

DESCRIPTION SUBJECT SALE NO. 1 SALE NO. 2 SALE NO. 3 SALE NO. 4 LISTING NO. 1 LISTING NO.2 LISTING NO. 3

O.R. BOOK/PAGE N/A 7534/468 7568/4405 7579/1112 7620/3291 N/A N/A N/A

SALE PRICE N/A $200,000 $65,000* $60,000 $279,000 $450,000 $95,000 $82,000

PRICE/SQUARE FOOT N/A $0.96 $0.37 $1.05 $0.95 $1.20 $0.46 $1.11

PROPERTY RIGHTS FEE SIMPLE FEE SIMPLE FEE SIMPLE FEE SIMPLE FEE SIMPLE FEE SIMPLE FEE SIMPLE FEE SIMPLE

ADJUSTMENT 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

ADJUSTED PRICE $0.96 $0.37 $1.05 $0.95 $1.20 $0.46 $1.11

FINANCING N/A NORMAL NORMAL NORMAL NORMAL N/A N/A N/A

ADJUSTMENT 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

ADUSTED PRICE $0.96 $0.37 $1.05 $0.95 $1.20 $0.46 $1.11

CONDITIONS OF SALE N/A NORMAL NORMAL NORMAL NORMAL N/A N/A N/A

ADJUSTMENT 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

ADJUSTED PRICE $0.96 $0.37 $1.05 $0.95 $1.20 $0.46 $1.11

SALE DATE N/A 04/17/2018 07/2018 07/2018 11/2018 CURRENT LISTING CURRENT LISTING EXPIRED LISTING

ADJUSTMENT 0.00% 0.00% 0.00% 0.00% -25.00% -25.00% -25.00%

ADJUSTED PRICE N/A $0.96 $0.37 $1.05 $0.95 $0.90 $0.34 $0.84

LOCATION US. HIGHWAY 17 SR 415 W. 1ST ST. US HIGHWAY 17 US 92 US HIGHWAY 17 W. 1ST ST. US HIGHWAY 17

PIERSON OSTEEN PIERSON DELEON SPRINGS DAYTONA BEACH PIERSON PIERSON PIERSON

ADJUSTMENT -25.00% 20.00% -10.00% -25.00% 0.00% 20.00% 0.00%

ACCESS CORNER/AVERAGE+ CORNER INTERIOR/AVERAGE INTERIOR/AVERAGE CORNER/AVERAGE+ CORNER/AVERAGE+ INTERIOR/AVERAGE INTERIOR/AVERAGE

ADJUSTMENT 0.00% 10.00% 10.00% 0.00% 0.00% 10.00% 10.00%

SIZE (SF) 268,330 207,781 174,240 57,064 292,505 376,405 207,001 73,612

ADJUSTMENT -5.00% -10.00% -20.00% 0.00% 10.00% -5.00% -20.00%

SHAPE RECTANGULAR/AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE

ADJUSTMENT 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

GROUND COVER CLEARED MOSTLY CLEARED PARTIALLY WOODED PARTIALLY WOODED PARTIALLY WOODED CLEARED PARTIALLY WOODED CLEARED

ADJUSTMENT 0.00% 5.00% 5.00% 5.00% 0.00% 5.00% 0.00%

TOPOGRAPHY LEVEL 1 ACRE LOW GENERALLY LEVEL GENERALLY LEVEL GENERALLY LEVEL GENERALLY LEVEL GENERALLY LEVEL GENERALLY LEVEL

ADJUSTMENT 10.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

UTILITIES MUNICIPAL WATER ALL AVAILABLE MUNICIPAL WATER NO MUNICPAL ALL NEARBY MUNICIPAL WATER MUNICIPAL WATER MUNICIPAL WATER

ADJUSTMENT -10.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

ZONING/LAND USE MUST BE REZONED OTC, VOLUSIA COUNTY COMMERCIAL, PIERSON B-4, VOLUSIA COUNTY B-4, VOLUSIA COUNTY COMMERCIAL,PIERSON COMMERCIAL,PIERSON COMMERCIAL,PIERSON

ADJUSTMENT -5.00% -5.00% -5.00% -5.00% -5.00% -5.00% -5.00%

IMPROVEMENTS NONE NONE OFFERING VALUE SEE * BELOW IMPACT FEE CREDITS NONE NONE NONE NONE

ADJUSTMENT 0.00% 0.00% -37.00% 0.00% 0.00% 0.00% 0.00%

SITE UTILITY AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE

ADJUSTMENT 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

ADJUSTED PRICE N/A $0.63 $0.44 $0.45 $0.72 $0.94 $0.43 $0.71

COMPARABLE LAND SALES ADJUSTMENT CHART

*SALE PRICE IS $100,000. BUILDING VALUE OF $35,000 DEDUCTED FROM PRICE TO ARRIVE AT ESTIMATED LAND VALUE

55

Discussion of Comparable Land Sales As previously discussed, the appraisal assignment includes a value of the subject site at its highest and best use, which was determined be redevelopment. In order to estimate the value of the subject site, I have analyzed sales and listings of vacant parcels having similar highest and best uses. I have attempted to uses sales and listings of properties situated outside of the major commercial hubs. There have been few recent sales of similar properties to use for comparison to the subject. However, I was able to find sales around Volusia County in less populated areas. I have also analyzed current and expired listings, for comparison to the subject. Market Conditions Adjustment While market conditions have improved over the past few years, there is insufficient information to estimate or justify a time adjustment for sales in rural areas. This can be demonstrated by the lack of sales in the immediate area and the length of time the active listings have been on the market. Therefore, no adjustments have been applied. Sale No. 1 is the transfer of a vacant commercially zoned parcel in the Osteen Area, just outside of Deltona. This property sold in April 2018 for $.96 per square foot. It was given adjustments for its superior location, smaller size, inferior topography, superior utilities, and superior zoning. This sale is located on SR 415, on the east side of Deltona. While this area has been slow to develop, SR 415 in this area is a heavily traveled roadway connecting Volusia County to Seminole County and the Orlando Area. Traffic counts fronting this site are at 19,800 cars per day, 12,400 more than in in front of the subject. This site is also located less than ½ mile from a Walmart Supercenter and the dense Deltona residential base. For these reasons, this sale was considered significantly superior to the subject and a negative adjustment was applied. This sale was 1.39 acres smaller than the subject and was given a negative adjustment based on the premise that the smaller a parcel the greater it’s per unit value, and vice versa. This sale was mostly cleared, similar to the subject, but included a small low area. For this reason, it was considered slightly inferior to the subject and a positive adjustment was applied. The subject has access to municipal water only. Its lack of municipal sewer will likely have a bearing on the intensity and type of development. This sale has direct access to all utilities and is considered superior for this factor. Therefore a negative adjustment was applied. As previously discussed, the subject will have to have the future land use changed and be rezoned for any type of development other than public use. Rezoning can take up to six months, and has a cost. Information provided by the City planner indicated it could cost up to $5,000. This sale was zoned commercial and did not require a rezoning. For this reason, this sale is considered superior to the subject and a negative adjustment was applied. No other adjustments have been applied. After adjustments, this sale reflects a value for the subject of $.53 per square foot.

56

Sale No. 2 is the sale of a commercial property situated on 1st Street in Pierson. This sale involved a small office building on a large commercial parcel. Based on conversations with the selling broker, a value of approximately $35,000 was applied to the building, indicating an adjusted sale price for the land of $65,000. This sale was given adjustments for its inferior location, inferior access, smaller size, inferior topography, and superior zoning. This sale was located proximate to the subject, but was situated on a secondary commercial street. The subject is located on a major thoroughfare. For this reason, this sale was considered inferior to the subject and a positive adjustment was applied. The subject is situated at a primary corner in Downtown Pierson. This sale was an interior site with inferior access. For this reason, it was considered inferior to the subject and a positive adjustment was applied. The subject is a cleared site. This sale was partially wooded. There is a cost to clearing and grading a site for development that must be considered. For this reason, this sale was considered inferior to the subject and a positive adjustment was applied. As with Sale No. 1, this sale already had a commercial zoning, and a negative adjustment was applied for this factor. No other adjustments have been applied. After adjustments, this sale reflects a value for the subject of $.44 per square foot. Sale No. 3 is the sale of a small commercial site in DeLeon Springs. This property was given adjustments for its superior location, inferior access, smaller size, inferior topography, superior zoning and impact fee credits. While this sale is located in the downtown of a rural area, similar to the subject, this sites location is closer to primary development and support services than the subject. DeLeon Springs is between the subject and the closest town. This site is situated on a four lane roadway and enjoys a much heavier traffic count than the subject. For this reason, this sale was considered superior to the subject and a negative adjustment was applied. As with Sale No. 2, this sale was an interior site with inferior access, and a positive adjustment was applied. As with Sale No. 2, this site was partially wooded, and a positive adjustment was applied. As with Sale Nos. 1 and 2, this sale did not require rezoning and a negative adjustment was applied. This site was vacant but had been previously developed with a convenience store. Based on conversations with the County Impact Fee Department, this site would have impact fee credits of approximately $22,314. For this reason, a negative adjustment equal to the impact fee credit has been applied. No other adjustments were applied. After adjustments, this sale reflects a value for the subject of $.45 per square foot.

57

Sale No. 4 is the sale of a similar sized site located on US 92 in the Daytona Beach Area. This sale was given adjustments for its superior location, inferior topography and superior zoning. This sale was also purchased by a Government agency which should be considered. Similar to Sale No. 1, this site is in a remote area, but is much closer to primary development, is on a four lane highway, and enjoys a traffic count of 11,000 more cars per day. This sale is also located on the primary roadway between DeLand and Daytona, and in an area offering excellent access to I-4 and I-95. For these reasons, this sale was given a significant negative adjustment. Similar to Sale No. 3, this sale was partially wooded and a positive adjustment was applied Similar to the other sales, this sale was commercially zoned, and a negative adjustment was applied. No other adjustments were applied. After adjustments, this sale reflects a value for the subject of $.67 per square foot. Listings I have included two listings and one expired listing in the Downtown Pierson Area. Listings help to define the current market and generally set an upper limit of value for similar properties in the area. All of the listings have been available for some time and none have had any significant activity. For this reason, they have been given negative adjustments to help reflect what they might sell for in the current market. Adjustments were also made for locations, sizes, access, etc. All three were proximate to the subject and all were zoned commercial After adjustments, these listings indicated adjusted values of $.43 to $.94 per square foot. Conclusion After adjustments, the comparable sales indicate values for the subject of $.44 to $.67 per square foot. The adjusted listings indicate values of $.43. to $.94 per square foot. Sale Nos. 2 and 3 are considered the best indicators of the subject’s value as they are located in the North Volusia County Area and are most reflective of that market. However, Sale Nos. 1 and 4 are also good indicators, but were located in much superior locations and required large location adjustments. The listings are only listings and have been on the market for some time or have expired. These listings have been included to help define the upper end of the subject’s potential value, but have not been weighed in the reconciliation of value. Therefore, placing weighted consideration on Sale Nos. 2 and 3, with some consideration given to sale Nos. 1 and 4, it is my opinion the subject has an estimated value of $.50 per square foot or:

58

268,330 Square Feet x $.50/Square Foot = $134,165 Rounded To $135,000 Demolition Cost Estimate However, as previously discussed, the Highest and Best Use of the subject was estimated to be for redevelopment. According to the client, a buyer would be responsible for the demolition of the buildings. Therefore, the cost of demolition must be considered and deducted from the estimated land value. The appraiser has considered three demolition estimates to arrive at an estimated demolition cost for the subject buildings. These three estimates include an actual estimate supplied by the client for similar buildings, an estimate supplied for an appraisal of a single building being demolished in the Daytona Beach Area, and an estimate derived through the Marshall & Swift valuation handbook. Based on an estimate supplied by the Volusia County School Board for demolition of another property in the summer of 2018, their cost for demolition approximated $2.55 per square foot. The actual demolition cost of an older 5,300 square foot apartment building in Daytona Beach in September 2018 was $15,350, or $2.90 per square foot. Based on an estimate derived through the Marshall & Swift commercial handbook. The cost of demolition for a Class C or Class D building, including all debris removal, etc., ranges from $3.35 - $5.90 per square foot. All of these estimates are for single or fewer buildings than the subject and it is possible that a discount per square foot may be applicable to multiple buildings (this has not been verified). Considering these estimates, the appraiser has relied on the lowest price estimate which was supplied by the client for a school type building. The total square footage of all of the school buildings approximates 44,674 square feet. Therefore the estimated demolition cost for the subject of this appraisal is: 44,674 Square Feet x $2.55/Square Feet = $113,919 Rounded To $114,000 Please note that this estimate does not include any potential salvage value, if any, which the appraiser is not qualified to estimate. Market Value Conclusion Therefore, based on this discussion, the estimated market value for the subject property, based on its estimated Highest and Best Use of redevelopment is:

59

Estimate Land Value $135,000 Less Demolition $114,000 Total Estimated Market Value $ 21,000

ESTIMATED MARKET VALUE


($21,000)

60


THE COST APPROACH The Cost Approach is the measure of the replacement cost new of the building less depreciation, plus the added contribution of the site improvements. To this is added the value of the site. Several basic principles are involved in the rationale of the Cost Approach. The principle of substitution is that an informed, rational purchaser will pay no more for a property than the cost to him of producing a substitute property, usually a replica, with the same utility as the subject property. The estimate of the replacement cost is based on the amount that a particular component including a site improvement, would contribute to the value of the entire property based on the principle of contribution. The principle of balance is involved in the relationship of the improvements to the site, as they can become either an over improvement or under improvement. Also, the site is valued as if vacant and available to be put to its Highest and Best Use. The methodology of the Cost Approach to Value is as follows: 1. Estimate the value of the site, as if vacant and unimproved; 2. Estimate the replacement costs new, of the improvements;

3. Estimate physical depreciation, functional or economic obsolescence and deduct total depreciation from replacement cost new of the improvements.

4. Add the value of the site to the total present worth of the improvements. The resulting total is the value indicated by the Cost Approach.

SITE VALUATION

The site valuation was completed previously in this report and will not be repeated here. REPLACEMENT COST OF IMPROVEMENTS Replacement cost is defined as “The estimated cost to construct, at current prices as of the effective appraisal date, a building with utility equivalent to the building being appraised, using modern materials and current standards, design, and layout.”1 As previously discussed, the subject improvements consist of school buildings constructed between 1925 and 1984. One building likely qualifying to be on the on the National Historic Register. Estimating a reproduction cost, which would estimate the cost to replace the exact improvements, including materials, layout, plumbing, electrical, etc., for this age building is not feasible. A replacement cost will not accurately depict the quality of construction or materials used in the construction of the improvements. However, at the request of the client, we have 1 Appraisal Institute, The Appraisal of Real Estate, 12th Edition, (Appraisal Institute, 2001) Page 358.

61

attempted to estimate a replacement cost for the subject buildings, using the cost estimators from the most similar building structures available through the Core Logic Commercial Express cost estimating service. This is a nationally recognized online based estimating service that generates a detailed report that will be included in the addendum to this report. Reference is made hereto. Please note that when using the Core Logic Commercial Express to estimate replacement cost new, that it estimates costs using todays building codes and materials, as you would not be able to reproduce the structures today, without meeting current codes etc. As such, the system generates costs using some default assumptions. Those assumptions that the appraiser was able to determine were inaccurate were adjusted, however, assumptions of components unknown to the appraiser were kept as they would reflect how the building would have to be constructed today. Total Replacement Cost New Based on the generated report, the replacement total replacement cost new of the subject buildings approximates: $4,897,090 Depreciation The estimated depreciation of the buildings can also be included in the Core Logic Commercial Express. The depreciation estimates used are based on the appraiser’s estimate of effective age, the estimated economic life as estimated through the Marshall Valuation Cost Estimating Service, and remaining economic life of the structures, based on the two previous estimates. The estimated effective age and estimated economic life of the subject buildings was presented in the chart in the description of the improvements. In order to estimate the depreciation of the buildings, the appraiser has chosen to use the age/life method which is calculated by dividing the effective age by the estimated economic life. Based on these calculations, the following depreciation estimates have been applied to the buildings:

Building # Year Built Age Effective Age/ Estimated

Est. Economic Life Depreciation

Building 1 1925 94 35/45 78%Building 2 1974 45 25/40 63%

Building 3 1951 68 30/40 75%

Building 4 1951 68 30/40 75%

Building 5 1984 35 20/40 50%

Building 6 1984 35 20/50 40%

Building 7 1974 45 25/40 63%

Building 10 1993 26 15/40 38%

Building 11 1951 68 25/25 100% (Used 90%)

Building 14 1947 72 30/40 75%

Building 15

Building 16 1936 83 35/35 100% (Used 90%)

Using the age/life method, the depreciation for Buildings 11 and 16 is 100 percent. Since the

62

buildings are in place, and could be used, I have applied a depreciation factor of only 90 percent. In addition, I have estimated the depreciated value of the site improvements. These site improvements have varying economic life estimates but all have exceeded those estimates. However, all are still functional for their intended uses. For this reason, I have applied a depreciation factor of 75 percent to all site improvements. The estimated depreciation factors have been used in the calculations of the depreciated replacement cost and are included in the generated report. Depreciated Replacement Cost Conclusion Based on the generated report presented in the addendum to this report, the total estimated depreciated value of the subject improvements is $2,048,384, rounded to $2,050,000 CALCULATION OF THE COST APPROACH Estimated Land Value: $ 21,000 Depreciated Improvements Value: $2,050,000 TOTAL $2,071,000



($2,071,000)

As previously discussed, the value estimate derived through the Cost Approach is a value to the existing owner at its existing use as a school. Considering the construction type, building layout, building design, and historic properties of the improvements, the value derived is not reflective of Market Value, but a “Value In Use” as a school. The estimated market value of the property was derived previously in this report.

63

RECONCILIATION OF APPROACHES

The reconciliation analysis is the process of correlating and integrating related factors contained within this report in order to form a cohesive and logical conclusion of the value of the subject property. An orderly connection of the independent elements previously introduced within this report is a prerequisite for a satisfactory reconciliation. A reevaluation of the specific data, procedures, and techniques utilized in estimating each separate value conclusion must be scrutinized. Each approach to value will be examined to ascertain its relevancy, adequacy, and reliability. During the reconciliation process "the appraiser weighs the relative significance, applicability, and defensibility of the indicator of value derived from each approach, and places most weight and reliance on the one which, in his professional judgment, best approximates the value being sought in the appraisal."1 Theoretically, each of these estimates of value should equate if the appraiser had unlimited data at his disposal, a perfect market, and was thus able to process the three approaches to value with exacting precision. However, appraising is not an exact science, and unlimited data is not available. The result is that the three approaches generally will not be identical, but should suffice to establish a reasonably close range of values. Once the value estimates by each of these approaches is derived, the appraiser must then consider the scope of the appraisal assignment, and the reasonableness, quantity, and quality of all the information obtained. The purpose of this final review and analysis is to evaluate each of the approaches to value and determine which of the approaches merits the greatest consideration, and solve the appraisal problem by arriving at a final value estimate for the subject property. In this case, only the Direct Sales Comparison Approach was completed. After considering all of the relevant factors involved, it is my opinion the estimated Market Values of the subject property, as of May 20, 2019, the effective date, was:

ESTIMATED MARKET VALUE AT THE HIGHEST AND BEST USE


($21,000)

AND



($2,071,000)

1 Real Estate Appraisal Terminology, Byrl N. Boyce, Ballinger Publishing Company, Cambridge, MA, 1975, Page 112.

*****************

A D D E N D U M

*****************

PURCHASE ORDER BUILDING LAYOUT/IDENTIFICATION

ZONING MAP ZONING DESCRIPTION

FUTURE LAND USE MAP DEPRECIATED COST ESTIMATE REPORT

QUALIFICATIONS OF THE APPRAISER

PURCHASE ORDER

BUILDING LAYOUT/IDENTIFICATION

ZONING MAP

ZONING DESCRIPTION

FUTURE LAND USE MAP

DEPRECIATED COST ESTIMATE REPORT

QUALIFICATIONS OF THE APPRAISER

R. TODD HEFFINGTON, MAI 911 BEVILLE ROAD, STE. 8

DAYTONA BEACH, FL 32119 [email protected]

BUSINESS AND PROFESSIONAL AFFILIATIONS Member, Appraisal Institute

State Certified General Real Estate Appraiser - State of Florida, License 2368 Florida Real Estate Salesman, License SL 0589200 Member DeLand-West Volusia Board of Realtors

EDUCATION

B.S. Degree Real Estate, University of Florida, 1992 Master Of The Arts Degree in Real Estate, University of Florida, 1994 Numerous continuing education courses and seminars

APPRAISAL EXPERIENCE

Clayton, Roper, and Marshall, May 1993 through August 1993 Heffington & Associates, September 1, 1993 to Present

Completed appraisals on Single Family Residences, Vacant Residential Land, Agricultural Land, Producing Agricultural Properties, Vacant Commercial Properties, Apartment Developments, Industrial Properties, Golf Courses, and Office Buildings

COURT QUALIFICATIONS Qualified as expert witness for Real Estate Valuation Provided testimony in court hearings for condemnation, deficiency judgments, etc.

PARTIAL LIST OF CLIENTS

BB&T City of Daytona Beach

Fairwinds Credit Union City of DeLand Farm Credit City of New Smyrna Beach Florida Capital Bank City of Ormond Beach Florida Community Bank City of Port Orange Friends Bank City of South Daytona Main Street Community Bank County of Volusia PNC Bank Florida Department of Transportation Regions Bank School Board of Volusia County Seacoast Bank TD Bank Wells Fargo

mailto:[email protected]

state of florida department of transportation · 2019-07-01 · heffington & associates 911...

Documents