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Full of bad data, contrived figures + the appraiser, Dr. Vince Barrett - owns property adjacent to Spaceport - skewed figures to sell 6 ACRES for $1.2M!!!!
Titolo originale
7/14 Spaceport TorC Visitors Welcome Center LAND appraisal!
Full of bad data, contrived figures + the appraiser, Dr. Vince Barrett - owns property adjacent to Spaceport - skewed figures to sell 6 ACRES for $1.2M!!!!
Full of bad data, contrived figures + the appraiser, Dr. Vince Barrett - owns property adjacent to Spaceport - skewed figures to sell 6 ACRES for $1.2M!!!!
Six Acres of Commercial Land Site of Proposed Spaceport America Welcome Center Within The New Hot Springs Retail Center A Commercial Subdivision Truth or Consequences, Sierra County, New Mexico
July 2014
Prepared for: New Mexico Spaceport Authority 901 E. University Ave., Suite 356L Las Cruces, NM 88001 And New Mexico Finance Authority 207 Shelby Street, Santa Fe, NM
Prepared by G. Vincent Barrett, Ph.D., MAI NM Certification 506-G
BAS, LLC
Approximate Area of Commercial Subdivision and Subject Site
Approx HSRC Area Wal-Mart Site Subject 6 Ac Area ii
July 10, 2014
Ms. Christine Anderson, Executive Director NM Spaceport Authority 901 E. University Ave., Suite 356L Las Cruces, NM 88001
Letter of Transmittal
RE: Proposed location of Spaceport America Welcome Center a 6 acre Commercial Site located in Truth or Consequences Sierra County, NM
Dear Ms. Anderson: At your request, Barrett Appraisal Services, LLC has completed an appraisal and arrived at an estimated market value for the six acre site planned as the future site of the Spaceport America Welcome Center that is located within the 39.945 platted and approved commercial subdivision, known as the New Hot Springs Retail Center that is to be located on the SEC of I-25 and Date Street within the City limits of Truth or Consequences, NM. The property is accessed from Date Street. The objective of this appraisal is to estimate the current market value of the six acres within the subdivision. The 39.945 acre site including the six acre subject is currently under the ownership of Ashbaugh Construction Co. Inc. as recorded in WD Book 102 pg 1659-1660 recorded 17 December 2004 and WD Bk 106 pg 130-134 recorded 20 April 2006 and WD book 94 pages 2659 in the Clerks Office of Sierra County, NM. The original subdivision involved a total of 65 +- acres, the subject subdivision being a remaining portion of that total. The value determined, in the course of the analysis is based on the existing condition that the subject commercial subdivision parcels are undeveloped lots as zoned and platted and that the value represents the current market value of the subdivided six acre site. The attached complete narrative appraisal report describes the data, methodology and reasoning used in the analysis. The analysis is subject to the assumptions and limiting conditions detailed in the report. The assumptions and limiting conditions should be carefully reviewed as they may affect the conclusions drawn and the final estimate of market value. The research and analysis indicates the following market value of the subject property. Effective Date: July 5, 2014 Market Value: $1,244,000 iii
This is a summary report, which is intended to comply with the reporting requirements set forth under Standards Rule 2 of the Uniform Standards of Professional Appraisal Practice. As such, it may only present descriptive discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraisers opinion of value. Where not presented directly in the report, then supporting documentation concerning the data, reasoning, and analyses is retained in the appraisers file. The depth of discussion contained in this report is specific to the needs of the client and for the intended use as stated herein. The appraiser is not responsible for unauthorized use of this report. In preparing the report, the conduct of the appraiser and all research associates has been governed by the professional standards and code of ethics of the Appraisal Institute and the Appraisal Foundation. My compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the attainment of a loan, the amount of the value estimate, the attainment of stipulated result or the occurrence of a subsequent event. The analysis contained in this appraisal may be based upon hypothetical assumptions, and estimates that are subject to uncertainty and variation. These estimates may be based on data obtained in interviews with third parties or documents obtained from third parties, and such data may not always be completely reliable. In addition, the analysis makes assumptions as to the future behavior of consumers, and the general economy, which are highly uncertain by their nature. It may be that some assumptions will not materialize and that unanticipated events may occur which will cause actual achieved results to differ from the analysis contained in this report, and these differences may be material. Therefore, while the analysis was conscientiously prepared on the basis of prudent research of the available data no warranty can be made of any kind that the projected results will, in fact, be achieved. Additionally, Barrett Appraisal Services, LLC has not been engaged to evaluate the effectiveness of management/marketing, and is not responsible for future management/marketing efforts and actions upon which actual results may depend. We did not ascertain the legal, engineering, and regulatory requirements that may be applicable to the property, including zoning certification and other state and local government regulations, permits and licenses. No effort has been made to determine the possible effect on the property of present or future federal, state or local legislation, including any environmental or ecological matters or interpretations thereof. With respect to market demand analysis, our work did not include analysis of the potential impact of any unanticipated rise or decline in local or general economic conditions. It is the opinion of the appraiser, based on the assumptions employed in the investment parameters for the subject, that the value conclusion represents a market value achievable within 18-24 iv
months exposure on the open market. No responsibility for any event, condition, or circumstance affecting the market that may take place subsequent to the last day of our fieldwork, i.e., July 5, 2014. The appraiser has satisfied all competency requirements of USPAP and the Appraisal Institute and states that he is qualified to conduct the appraisal assignment. All FIRREA and USPAP research and reporting guidelines have been meet. This letter is invalid as an opinion of value if detached from the report, which contains the text, exhibits, and addenda. Barrett Appraisal Services, LLC appreciates the opportunity to be of service to you. Should you or any other authorized user of this appraisal have further questions arising from the report, they will be welcomed.
Barrett Appraisal Services, LLC
G. Vincent Barrett, Ph.D, MAI, NM General Certification 506-G v
TABLE OF CONTENTS Number Page TABLE OF CONTENTS ......................................................................................................................... V EXECUTIVE SUMMARY .................................................................................................................... VI SECTION I PREFACE ........................................................................................................................... 2 SECTION II INTRODUCTION .......................................................................................................... 18 SECTION III GENERAL AREA ANALYSIS ................................................................................... 26 SECTION IV SITE DATA ................................................................................................................... 42 SECTION V VALUATION ................................................................................................................... 46 SECTION VI CERTIFICATION ......................................................................................................... 61
vi
EXECUTIVE SUMMARY Appraisal Assignment: Determine the current market value of 6 acres that are contained within the existing New Hot Springs Retail Center which is a commercial subdivision located in Sierra County within the SEC of the intersection of Date Street and I-25.
Client: Ms. Christine Anderson, Executive Director NM Spaceport Authority 901 E. University Ave., Suite 356L Las Cruces, NM 88001 And New Mexico Mortgage Finance Authority 207 Shelby Street Santa Fe, NM
Intended Use: For the client to use for asset valuation and in the mortgage loan review process. Intended User: The intended user of this report is the above client and their assignees including the NM Finance Authority and no others. This appraisal is not to be relied upon by any other third parties for any purpose, whatsoever. No third parties are authorized to rely upon this report for any reason without the express written consent of the appraiser. A third party being defined as anyone but the client and assignees. The above client is an experienced user of appraisals and is considered the responsible party for payment of the appraisal fee. Ownership Interest: Fee Simple Appraiser Interest: The appraiser has no current, past or future anticipated interest in the subject 6 acre site. Improvements: The subject is within an existing platted, commercial subdivision with Phases 1through 5. The original size was 65.208 acres and the remaining unsold acreage is approximately 39.945 acres. Access roads are in with all utilities to the lots. vii
Locational Data: The subject property is located within the City limits of Truth or Consequences, Sierra County, NM within the SEC of the Intersection of Date Street and I-25. Highest & Best Use: The highest and best use analysis indicates that the highest and best use is to developed as the location of a commercial site. Zoning: The subject is within the zoning jurisdiction of Truth or Consequences and is zoned C-1 general commercial. Valuation Method: The valuation method used is the estimation of per square foot values using the sales comparison approach leading to the formulation of a current market value. Market Value Estimate $1,244.000
Section I
Preface 2
SECTION I - PREFACE The preface to the report contains the various maps and photographs that relate to the property and its environment. They should be reviewed prior to the reading of this report. They will be referenced by figure number where appropriate throughout the narrative part of the appraisal. Detailed maps and other figures are contained in the body of the report where necessary for clarification or illustrative explanation.
Figure Subject Page 1-1 Regional Location 3 1-2 Relative Location 3 1-3 Neighborhood Location 4 1-4 Illustrative Site Plan 5 1-5 Plat Map 6 1-6 Flood Zone 7 1-7 Aerial Photo A 9 1-8 Aerial Photo B 9 1-9 Welcome Center Site Location Map 10 1-10 Site Survey 10 1-11 Photos of Subject Site 11
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FIGURE 1-1 REGIONAL LOCATION MAP
FIGURE 1-2 RELATIVE CITY LOCATION 4
FIGURE 1-3 NEIGHBORHOOD MAP
5
FIGURE 1-4 ILLUSTRATIVE SITE PLAN OF HSRC WITH SUBJECT INDICATED
Subject Area 6
FIGURE 1-5 PLAT MAP
Holiday Inn Spaceport Welcome Center 6 Ac 7
FIGURE 1-6 FLOOD ZONE MAP PANEL 350073-0005C 7/16/1996
Area of Subject 8
Moderate to Low Risk Areas In communities that participate in the NFIP, flood insurance is available to all property owners and renters in these zones: ZONE DESCRIPTION B and X (shaded) Area of moderate flood hazard, usually the area between the limits of the 100- year and 500-year floods. Are also used to designate base floodplains of lesser hazards, such as areas protected by levees from 100-year flood, or shallow flooding areas with average depths of less than one foot or drainage areas less than 1 square mile. C and X (unshaded) Area of minimal flood hazard, usually depicted on FIRMs as above the 500-year flood level.
High Risk Areas In communities that participate in the NFIP, mandatory flood insurance purchase requirements apply to all of these zones: ZONE DESCRIPTION A Areas with a 1% annual chance of flooding and a 26% chance of flooding over the life of a 30-year mortgage. Because detailed analyses are not performed for such areas; no depths or base flood elevations are shown within these zones. AE The base floodplain where base flood elevations are provided. AE Zones are now used on new format FIRMs instead of A1-A30 Zones. A1-30 These are known as numbered A Zones (e.g., A7 or A14). This is the base floodplain where the FIRM shows a BFE (old format). AH Areas with a 1% annual chance of shallow flooding, usually in the form of a pond, with an average depth ranging from 1 to 3 feet. These areas have a 26% chance of flooding over the life of a 30-year mortgage. Base flood elevations derived from detailed analyses are shown at selected intervals within these zones. AO River or stream flood hazard areas, and areas with a 1% or greater chance of shallow flooding each year, usually in the form of sheet flow, with an average depth ranging from 1 to 3 feet. These areas have a 26% chance of flooding over the life of a 30-year mortgage. Average flood depths derived from detailed analyses are shown within these zones. AR Areas with a temporarily increased flood risk due to the building or restoration of a flood control system (such as a levee or a dam). Mandatory flood insurance purchase requirements will apply, but rates will not exceed the rates for unnumbered A zones if the structure is built or restored in compliance with Zone AR floodplain management regulations. A99 Areas with a 1% annual chance of flooding that will be protected by a Federal flood control system where construction has reached specified legal requirements. No depths or base flood elevations are shown within these zones.
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FIGURE 1-7 AERIAL PHOTO
FIGURE 1-8 AERIAL PHOTO PROPOSED WELCOME CENTER LOCATION
Location of WC Building 10
FIGURE 1-9 WELCOME CENTER LOCATION WITHIN HSRT
FIGURE 1-10 SITE SURVEY
Subject 11
FIGURE 1-8 PHOTOS OF SUBJECT SITE
1. Entrance Street to Hot Springs Retail Center subdivision from Nth Date Street, i.e., H.R. Ashbaugh Dr
. 2. View North from intersection of Buck Greer St and H.R. Ashbaugh Dr. 12
3. View East along H.R. Ashbaugh Drive from intersection with Sanford Wilson Dr.
4. View west along proposed entrance rd to welcome center from Sanford Wilson Rd. 13
5. View east from between Block 5 and 6 towards Wal-Mart. Note Elevation.
6. View North from proposed welcome center site. Holiday Inn Express in foreground. 14
7. Location of proposed welcome center building. Sign to be removed.
8. VIEW SOUTH FROM INTERSECTION OF F.G. AMIN ST AND BUCK GREER ST.
15
9. VIEW NORTH FROM WEST LINE OF SUBJECT ALONG I-25
10. VIEW NORTH FROM INTERIOR OF SUBJECT SITE. HOLIDAY INN EXPRESS IN DISTANCE 16
11. View south along I-25 from welcome center building site.
12. View North along I-25 from welcome center building site. 17
Section II
Introduction 18
SECTION II - INTRODUCTION
1. IDENTIFICATION OF THE SUBJECT PROPERTY The subject of this report is a six acre site located within the 39.945 remaining acres of the New Hot Springs commercial subdivision. The subject original acreage was 65.208 of which 25.263 acres have been sold or are under contract to be sold. The County records show that 10 parcels have been platted into Blocks and lots ranging in size from .45 acres to 2.491 acres. Two of the smaller lots are for utility and access only. One larger parcel of 8.81 acres has been subdivided into two parcels one of 6 acres which is the subject site and a second parcel of 2.81 acres as well as 26.93 acres that are not yet subdivided. The general area of the subject is on the east side of Interstate 25 and west of Date Street (I- 25 Business Loop) at exit 79 which is the intersection of I-25 and Date Street in Truth or Consequences, Sierra County, NM. The following Table 2-1 illustrates the subject lots and parcels. The highlighted BAS # 11 is the original 8.81 acres from which the six acre subject has been subdivided.
TABLE 2-1 SUBJECT LOTS & PARCELS BAS # Owner Prop ID Map Code Legal Size Ac. Size sf 1 AC Co. Inc 18179 3022077021202 Blk 1 Lot 2 0.45 19,602 2 AC Co. Inc 18181 3022077120113 Blk 3 Lot 1-A 0.98 42,689 3 AC Co. Inc 18182 3022077136101 Blk 3 Lot 2-A 0.83 36,155 4 AC Co. Inc 18981 3022077160132 Blk 4 Lot 1 0.534 23,261 5 AC Co. Inc 18987 3022077159119 Blk 4 Lot 2 0.534 23,261 6 AC Co. Inc 18988 3022077159105 Blk 4 Lot 3 0.534 23,261 7 AC Co. Inc 18989 3022077158092 Blk 4 Lot 4 0.534 23,261 8 AC Co. Inc 18990 3022077147068 Blk 4 Lot 5 1.892 82,416 9 H. I. 18991 3022077121069 Blk 4 Lot 6 -2.491 -108,508 10 AC Co. Inc 18992 3022077085074 Blk 4 Lot 7 0.408 17,772 11 AC Co. Inc 16585 3022077144172 S2,NE4,S28,T13S, R4W 8.81 383,764 12 AC Co. Inc 18008 3022077100235 S28,T13S, R4W 26.93 1,173,071 Totals 39.945 1,740,004
2. ZONING The subject is within the City limits of Truth or Consequences and zoned C-1 Commercial. The subdivision is encumbered with Covenants, Restrictions and Conditions. The commercial Covenants, Restrictions and Conditions are in place to accommodate appropriate commercial development and to maximize the commercial developmental values. 19
3. LEGAL IDENTIFICATION The original subject subdivision site contained a total of approximately 65.208 acres and is legally identified by metes and bounds as contained on the warrantee deed which is contained in the Addenda. Each remaining lot is identified by the block and lot number within the subdivision as illustrated above. The subject six acres is platted and recorded as a summary replat of Plat of Parcel 1 and Parcel 2 (subject), New Hot Springs Retail Center as recorded 26 September, 2013 in Book 122 Page 1736, Sierra County, NM. The subject tract lies within the Section 28, Township 13 south, Range 4 west, NMPM.
4. HISTORY OF OWNERSHIP The subject acreage is currently under the ownership of Ashbaugh Construction Co. Inc. as recorded in WD Book 102 pg 1659-1660 recorded 17 December 2004 and WD Bk 106 pg 130-134 recorded 20 April 2006 and WD book 94 pages 2659 in the Clerks Office of Sierra County, NM.
5. PURPOSE AND SCOPE OF WORK THE APPRAISAL The purpose of this appraisal is to determine the current market value of a specific six acre site that is located within the new Hot Springs Retail Center and that is proposed to be purchased and developed as the site of the future Spaceport Welcome Center in Truth or Consequences, New Mexico. The intent of this appraisal is to determine the current market value of the subject property in its as is condition, which is unimproved but with some public roads and all trunk utility infrastructure in place and as subdivided in accordance with the platted and recorded Summary Plat of Parcel 1 and Parcel 2 (subject), New Hot Springs Retail Center as recorded 26 September, 2013 in Book 122 Page 1736, Sierra County, NM. The scope of work of the appraisal is to analyze the physical, economic and legal dimensions of the subject parcel and then to conduct an analysis of the supply and demand sides of comparable properties. One purpose of which is to find those sales of comparable properties that will best reflect the characteristics of the subject. Those sales chosen, as the most representative will be analyzed and their sale prices adjusted so that they reflect the physical, legal and economic conditions of the subject parcel.
6. DEFINITION OF MARKET VALUE Market Value 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 whereby: Buyer and Seller are typically motivated. 20
Both parties are well informed or well advised, and each acting in what he considers his own best interest. A reasonable time is allowed for exposure in the open market. Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and 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. Source: Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), Federal Register, Vol. 55, no. 163 August 22, 1990 Pg. 34228 and 34229
7. PROPERTY RIGHTS APPRAISED The property right appraised is the market value of the fee simple ownership. 8. EFFECTIVE DATE OF APPRAISAL AND DATE OF REPORT The effective date of this appraisal is July 5, 2014. The date of the report is July 10, 2014. 9. COMPETENCY TO PERFORM The appraiser involved in this assignment has past experience in appraising this property type and in addition is actively engaged in appraisal work in the geographical area of the subject property. All steps necessary to acquire adequate data on this area for similar properties has been taken, resulting in adequate knowledge of the property type and location to meet the competency requirements of USPAP (Uniform Standards of Professional Appraisal Practice). 10. EXPOSURE TIME AS DEVELOPED Exposure time is assumed to be 18 to 24 months. Exposure time is the estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal: a retrospective opinion based on an analysis of past events assuming a competitive and open market.
11. ASSUMPTIONS AND LIMITING CONDITIONS
This appraisal is made subject to the following assumptions and limiting conditions: It is assumed that all lot release agreements or release clauses have been agreed to by the developer/owners and any lending institution that may hold a mortgage or have other financing arrangements regarding the subject property.
The valuation of the subject property is based, in part, on the conceptual specific land use plan put forth by Ashbaugh Construction Co., Inc. It is further assumed that all 21
governmental approvals have been granted to allow such a plan. I reserve the right to alter the conclusion of the estimated values contained in this report in the event that any change in the development costs occur or there is a change in the specific land use plan as to the number of units/lots or acreage or change in any one of the zoned/defined land uses. The appraiser has examined the available flood maps that are provided by the Federal Emergency Management Agency (or other data sources) and has noted in the appraisal report whether the subject site is located in an identified Special Flood Hazard Area. Because the appraiser is not a surveyor, he or she makes no guarantees, express or implied regarding the determination. The valuation is based on the approval of the final subdivision development plat as may be submitted to and approved by the relevant Planning Department prior to recording. Improvements are assumed to be completed as defined in any structures building specifications that may be provided, a copy of which may be located in the Addenda of this report. Improvements are assumed to be designed and constructed using appropriate market standards. New Mexico is non-public disclosure State and as such the comparable sales data used in the analysis are believed to be reasonably correct. Where certain holes in the data cannot be filled from available documents or confirmed by grantee or grantor then it may be necessary to extrapolate certain figures. The appraiser makes no guarantees, express or implied regarding the exactness of the data so obtained. The data so obtained is used solely to assist the appraiser in forming an opinion of value and more or less weight may be given to any comparable data. The appraiser is not a licensed real property inspector. This report should not be relied upon to disclose any conditions present in the subject property. The appraisal report does not guarantee that the property is free of defects. A professional property inspection is recommended, if this is of concern to the client. No responsibility is assumed for matters that are legal in nature, nor is any opinion of title rendered. The appraiser is not qualified to conduct a title search or land survey and is not responsible for flaws in the title or any interests that may exist in the subject that have not been specifically identified and provided to him. No survey of the property has been made by the appraiser. No responsibility is assumed in connection with such matters. Sketches in this report may not be to scale and are included only to assist the reader in visualizing the property. Barrett Appraisal Services, LLC is unaware of any cross easements or any covenants, conditions or restrictions impacting the subject property. We assume adequate ingress 22
and egress to the property and we assume any reasonable sale of the property would not be inhibited by any covenants, conditions, or restrictions. Liens against the property, if any, have been disregarded, and the property is appraised as though free and clear, under responsible ownership and competent management. Any rights or interest claimed by any grantees under existing contracts for sale are disregarded. Information furnished by others and contained in this report is so noted and is believed to be reliable, but no responsibility is assumed for its accuracy. No responsibility is assumed for the accuracy of diagrams, sketches, or maps included in this report. These are for illustrative purposes only and provided solely for the purpose of assisting the reader to visualize the subject property being appraised. It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or structures which would render it more or less valuable. No responsibility is assumed for such conditions or for arranging for engineering studies that may be required to discover them. It is assumed that there is full compliance with all applicable federal, state, and local environmental regulations and laws unless noncompliance is stated, defined, and considered in the appraisal report. It is assumed that all applicable zoning use regulations and restrictions have been complied with, unless nonconformity has been stated, defined, and considered in the appraisal report. It is assumed that all required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state or national government or private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is based. It is assumed that the utilization of the land and improvements is within the boundaries of the property lines of the property described and that there is no encroachment or trespass unless noted in the report. Land area calculations derived from recorded documents are considered correct. Any distribution of the value in this report between land and improvements applies only under the stated program of utilization. The separate valuations for land and improvements must not be used in conjunction with any other appraisal and are invalid if so used. The appraisal of any interest less than the whole fee simple estate relates only to the fractional interest defined. The value of such a fractional interest plus the value of all other fractional interests may or may not equal the value of the entire fee simple estate considered as a whole. 23
The liability of Barrett Appraisal Services, LLC and employees and affiliated independent contractors is limited to the client only and to the fee actually received by the appraiser for this appraisal. Further, there is no accountability, obligation, or liability to any third party. The Contract for appraisal, consultation or analytical service is fulfilled, and the total fee is payable upon the completion of the report. The Appraiser or those assisting in the preparation of the report will not be asked or required to give testimony in court or hearings because of having made the appraisal, in full or in part, nor engage in post appraisal consultation with client or third parties, except under separate and special arrangements, and at additional fees. If testimony or deposition is required because of any subpoena, the client shall be responsible for any additional time, fees, and charges regardless of the issuing party. 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. Neither all, nor any part of the contents of this report shall be disseminated to the public through advertising, public relations, news, sales, or other media without the prior written consent and approval of the appraiser. Unless otherwise stated in this report, the existence of hazardous substances, including without limitation asbestos, polychlorinated biphenyl's, petroleum leakage, or agricultural chemicals, which may or may not be present on the property, or other environmental conditions, were not called to the attention of the appraiser, nor did I become aware of such during my inspection. The appraiser has no knowledge of the existence of such materials on or in the property unless otherwise stated. The appraiser is not qualified to test such substances or conditions. The presence of such substances, such as asbestos, urea formaldehyde foam insulation, or other hazardous substances or environmental conditions, may effect the value of the property. The value estimated is predicted on the assumption that there is no such condition on or in the property or in such proximity there-to that it would cause a loss in value. No responsibility is assumed for any such conditions, nor for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in this field, if desired. The Americans with Disabilities Act ("ADA") became effective January 26, 1992. We have not made a specific compliance survey and analysis of this property, as proposed or existing, to determine whether or not it is in conformity with the various detailed requirements of the ADA. It is possible that a compliance survey of the property, 24
together with a detailed analysis of the requirements of the ADA, could reveal that the property is not in compliance with one or more of the requirements of the Act. If so, this fact could have a negative effect upon the value of the property. Since we have no direct evidence relating to this issue, we did not consider possible compliance with the requirements of ADA in estimating the value of the property.
The following Section III presents the general population, economic and real estate market conditions impacting the subject site.
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Section III
General Area Analysis 26
SECTION III GENERAL AREA ANALYSIS
The general area analysis is provided to the reader so that they may have a clearer understanding of the socio/ economic environment within which the subject property must operate. Although in some cases much of the analysis may not appear to be linked directly to the subject, there is always an indirect linkage through the aggregated larger social and economic influences in the community that should be of interest as well as helpful to the reader. The subject property is located just north of the downtown commercial business district of Truth or Consequences, NM in an area locally known as the north business district. The site is in the SEC of the intersection of North Date Street and I-25. The commercial districts in T or C run the length of Main Street/Broadway and Date Streets north and south through T or C and for approximately three miles east west along Third Street. The City of Truth or Consequences is the County seat and dominant market area in Sierra County, NM. Truth or Consequences is estimated to have a current population of approximately 8,500. Sierra County is largely a low density county with approximately 13,500 in population. The economy depends largely on agriculture and tourism at Elephant Butte Lake State Park three miles east of Truth or Consequences, which is the largest nearby City. The subject is approximately 80 miles northeast of the dominant trade area, Las Cruces, which is to the south in Dona Ana County. The City of Las Cruces forms the principal trade area and provides the economic base of the region. The City of Truth or Consequences is geographically positioned near the center of Sierra County and is the county seat. Truth or Consequences is bisected from north to south by I-25. The New Mexico/Texas Border is approximately 120 miles south of the city. Also located along the eastern portion of Sierra County is the White Sands Missile Range and Military Reservation. Elephant Butte is currently one of the newest cities in New Mexico with a year round population of approximately 1,500. During weekend holidays the population will swell to 100,000 +- with the visitors to Elephant Butte State Park and Lake. Truth or Consequences has a population of approximately 8,000. Also located in Sierra County are the small rural communities of Garfield, Derry, Arrey, Hillsboro, Kingston, Las Palomas, Williamsburg, Engle, Cuchillo, Hermosa, Winston, Chloride, Placita and Monticello. Elephant Butte NM, adjoins Truth or Consequences, New Mexico on the northeast boundary of T or C. The City of Truth or Consequences is the County seat and dominant market area in Sierra County, NM. The City is estimated to have a current population of approximately 8,500. The economy of the County depends largely on agriculture and tourism at Elephant Butte Lake State Park three miles east of Truth or Consequences. Truth or Consequences was originally named Hot Springs. In 1950, NBC television and radio producer Ralph Edwards requested a name change from Hot Springs to the 27
name of his nationally recognized Truth or Consequences radio program. The entire downtown area of Truth or Consequences is located over a supply of hot mineral water, which is available at the surface through wells or pools. Temperatures range from 98 to 115 degrees. In the early 1880s, businesses arose around these mineral hot springs, which were locally considered medicinal for both mental and physical healing. In addition to the several minerals within these waters, there is a small percentage of radium, which is considered by many as one of the most healing elements known. Even though a small percentage, the radium content is reportedly much higher than average. Elephant Butte has a year round population of approximately 1,500. During weekend holidays the population will swell to 100,000 +- with the visitors to Elephant Butte State Park and Lake. Elephant Butte Lake is the largest lake within the State. This reservoir was primarily constructed during four-year time frame (1912 1916) for irrigation purposes for surrounding farms and ranches. Elephant Butte Reservoir heads a large network of dams, rivers and irrigation canals built to store and carry water to approximately 115,000 acres of land, extending 200 miles along the Rio Grande from the reservoir in Socorro County, through Sierra and Dona Ana Counties in New Mexico, as well as El Paso County Texas. The project area reportedly extends from 100 miles northwest to 40 miles southeast of the City of El Paso, with 88,000 acres of land in New Mexico and 67,000 acres in Texas. In addition to the recreational amenities of Elephant Butte Lake, Caballo Lake State Park also offers numerous aspects of outdoor recreation, and is located roughly 14 miles south of Truth or Consequences. The park also hosts a reservoir with its original design capacity of 42,831 acre-feet of water. It is one of a series of reservoirs created to control the erratic flow of the Rio Grande. There are 8,880 acres of irrigated farmland and approximately 146 ranches with livestock in Sierra County. The County has over a million and a half acres of grazing land, which is divided up among both large ranches and modest spreads. Chile has become the major crop for farmers in Sierra County. With this increase in crop production, processing plants have been developed in the Rio Grande Valley near Truth or Consequences.
1. POPULATION The city of Truth or Consequences is approximately 60% Anglo, 39% Hispanic and 1% other ethnic groups. The ethnic mix gives the city a rich cultural heritage. Spanish and English are both spoken as Truth or Consequences is a bilingual community. At the heart of all demand is population. Sierra County experienced an approximate 33.9% growth rate between census years 1990 and 2000, New Mexico as a whole experienced a growth rate of 20.1% percent for the same period. Estimated 2000 population for the county was estimated to be 13,270. City population of Truth or Consequences for census year 2000 was 7,289. Located directly south of T or C is Williamsburg with a 2000 census population of 527. The following Table 3-1 28
indicates the T or C relative ranking in terms of population within the state. Table 3-2 illustrates the population estimates for Sierra County 1970-2010.
TABLE 3-2 NM COUNTYS POPULATION AND HOUSING 1970-2010
Although the population is continuing to slowly expand, the age distribution within the overall population figures is changing and the median age is increasing. The changing age composition of the population structure will have an effect on housing and commercial demand, but it is uncertain at this time what that effect will be. The fastest growing age component of the population is the 45-75 age group. This age group historically has not been the prime home purchasing market, but may foster a need for retirement units. 3. ECONOMY-INCOME AND EMPLOYMENT Located on I-25 and the edge of Elephant Butte Lake the economy of Truth or Consequences has historically been tied to tourism, transportation and agriculture. Employment figures for the town of Truth or Consequences are reported as part of Sierra County. Based upon January 2013 employment figures that were released by the New Mexico Department of Labor, nonagricultural employment for the county has remained stable with current employment of 6,060 persons while unemployment for Sierra County is approximately 6.3%, which is below the 2012 figure of 7.3%. Statewide New Mexico unemployment for the period is approximately 7.1%, down from 7.9% for the same period in 2012. Sierra County currently has one of the lowest unemployment rates of any county in New Mexico. The following Table 3-3 indicates the relative slow rate of employment growth in Sierra County from 2000 thru 2013.
During the summer months the population within the T or C and Elephant Butte market area increases dramatically due to the recreational attraction of Elephant Butte Lake. On the primary holidays such as the 4 th of July and Labor days the population will increase to more than 100,000 persons. The annual attendance approaches 1.8 million. Although the nature of the economic base of the community tends to protect it somewhat from down swings in the national economy, there is a cost. Table 3-4 indicates the median income of the 50 US States. New Mexico ranks in the lower 25% but also ranks third among states with the fastest per- capita income growth over the previous five years and first among southwestern states. The community, as a result of the generally low household income as a whole is price sensitive. This in turn leads to price competition in all sectors of the local economy. The result is a lower than average cost of living in the community. This lower cost of living including housing, commercial services and property taxes is seen as an attraction to those planning on moving from other parts of the country. 31
Table 3-4 Median Incomes U.S. 2010 United States 50,740 Alabama 40,554 Alaska 64,333 Arizona 49,889 Arkansas 38,134 California 59,948 Colorado 55,212 Connecticut 65,967 Delaware 54,610 District of Columbia 54,317 Florida 47,804 Georgia 49,136 Hawaii 63,746 Idaho 46,253 Illinois 54,124 Indiana 47,448 Iowa 47,292 Kansas 47,451 Kentucky 40,267 Louisiana 40,926 Maine 45,888 Maryland 68,080 Massachusetts 62,365 Michigan 47,950 Minnesota 55,802 Mississippi 36,338 Missouri 45,114 Montana 43,531 Nebraska 47,085 Nevada 55,062 New Hampshire 62,369 New Jersey 67,035 New Mexico 41,452 New York 53,514 North Carolina 44,670 North Dakota 43,753 Ohio 46,597 Oklahoma 41,567 Oregon 48,730 Pennsylvania 48,576 Rhode Island 53,568 South Carolina 43,329 South Dakota 43,424 Tennessee 42,367 Texas 47,548 Utah 55,109 Vermont 49,907 Virginia 59,562 Washington 55,591 West Virginia 37,060 Wisconsin 50,578 Wyoming 51,731 Puerto Rico 17,741 State Median income
Source: U.S. Bureau of Economic Analysis 32
5. CLIMATE The climate of Truth or Consequences is semi-arid which provides for very mild winters and hot, dry summers. Truth or Consequences has an average daily high/low temperature of 74 and 46 degrees and an average rainfall of 12.0 inches annually. Mild climate is a major appealing factor to many retired citizens of the community and others that may be contemplating moving to the area. 6. GOVERNMENT The governments of Elephant, Truth or Consequences and Sierra County are similar to most communities in New Mexico. The Cities of Elephant Butte and Truth or Consequences have a mayoral form of government with a City Council. The five member City Council is elected as is the mayor. The County is run by an elected county commission consisting of three members. 7. UTILITIES Following is a list of utility suppliers to the residents of Sierra County. Electricity City of T or C/ Sierra Electric Coop Natural Gas Gas Company of New Mexico Water City of Truth or Consequences/GarfieldWater Assoc./ Lakeshore/National Utility Company/ Rincon Water Sewers City of Truth or Consequences & Elephant Butte Telephone Windstream, Verizon Sanitation City of Truth or Consequences 8. HOUSING Housing is relatively affordable in the community. Housing as compiled from the 2010 Census included 8,356 dwelling units. The median value of an existing single family home is approximately $130,000. Conversations with city personal indicate a reasonably active commercial building market with several new projects having been completed during 2005-2013 and several new projects currently under construction. 9. SCHOOLS The Truth or Consequences Public School System 2012 enrollment was approaching 2,000 students. The Truth or Consequences School System consists of. A) One high school B) One middle school C) Two elementary schools Also located Truth or Consequences Western New Mexico University distant learning center, which offers several college credit courses per semester. Located within commuting distance in Las Cruces New Mexico is New Mexico State University.
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10. TRANSPORTATION Transportation in and out of Truth or Consequences is good with Interstate 25 (north-south) at its center. Greyhound Bus Lines provides passenger service to and from Truth or Consequences. The nearest major commercial air service available to Truth or Consequences is located in El Paso, TX approximately 120 miles south and Albuquerque approximately 130 miles north. Currently no local public transit system is available to Truth or Consequences residents. 11. MEDICAL FACILITIES Located within the community of Truth or Consequences is Sierra Vista hospital with 43 beds, emergency room and skilled nursing unit. Sierra Vista Hospital provides helicopter ambulance service to both Las Cruces and Albuquerque hospitals. Also located in the community is the Ben Archer Health Center, Sierra Health Care Center nursing home with 110 beds and the New Mexico Veterans Home with 170 beds. The nearest regional hospitals are located in Las Cruces, NM approximately 80 miles south and Albuquerque which is approximately 140 miles north. Sierra Vista Hospital provides helicopter ambulance service to both Las Cruces and Albuquerque hospitals. 12. RECREATION Truth or Consequences municipality provided sports facilities include baseball and softball fields, basketball courts, and picnic areas. Located just east of the city is Elephant Butte Lake State Park with over one million visitors in 2013. Other travel destinations located within a one hour drive of the city are Caballo Lake and Percha Dam State Parks, Gila National Forest and Bosque Del Apache National Wildlife Refuge. 13. CHURCHES Most major denominations are available to serve the religious preferences of the community. 14. MORTGAGE MARKET FACTORS Located within the city are four banks and one savings bank. The local lending institutions have sufficient deposits to handle the level and nature of growth predicted for the area. Existing local lenders are considered to be in good financial shape. One reason is the diversified nature of the local commercial loan portfolio. In the Truth or Consequences market area, most business tend to be small and locally owned. These small, locally owned businesses are entrepreneurial responses to the increasing population and its varied demands. These small businesses do not require a great deal of space. Hence, there are numerous small commercial buildings for retail and office space. The underlying loans are individually relatively small and the total is well diversified. The local mortgage market for residential as well as commercial and other type of loans until recently has been rather isolated from the volatility in the national and international markets. However, local lenders have been forced, as a result of competition and liquidity requirements, to become more integrated with secondary market operations. Local lenders are now adept at pooling mortgages for 34
resale in the secondary markets and using pools of residential and commercial mortgages for the collateralization of securities sold in the capital markets. As a result of this activity, local interest rates move with the same volatility as they do in the national and international capital markets.
15. NEW COMMUNITY DEVELOPMENTS
The New Mexico Spaceport America In 2006 two studies commissioned by the New Mexico Economic Development Department reported their findings. The reports were similar in their observations and projections. One of those studies conducted by the Arrowhead Center at New Mexico State University reported that by the fifth year of operation, the spaceport would sustain close to $1 billion in new revenues creating approximately $350 million in new payroll and generating over 4,970 new jobs. For Sierra County this provides dramatic growth potential. Truth or Consequences/Elephant butte is the metropolitan area closest to the Spaceport and despite the smaller community size, and a reasonably estimate is that 40% of the holders of new jobs would choose to live in Sierra County because of the nearness to the job site and recreational amenities available. Based on an estimated total of 4,970 new jobs by 2016 this percentage would equate to approximately 1,988 new jobs in Sierra County. Given an historic employment to population ratio of 2.6 this would result in a population increase of 5,168 m/l due to the Spaceport alone. Forty percent of the new jobs related to building and road construction, i.e., (992) could similarly add 2,579 additional persons during the 2014/2020 period. Super Wal-Mart In December 2005 Wal-Mart announced plans to construct a Super Store near Exit 79 on I-25 in Truth or Consequences. This represented a $30 million, 110,000 square foot facility, construction project. The facility is now in operation and has added over 300 new jobs (Est. 780 increase in population) and significantly increased GRT. Hot Springs Land Development The Hot Springs Land Development, LLC is expected to bring economic development to New Mexico and Sierra County through the combined economic strength of Spaceport America support industries, auto racing, business aviation, national security and associated R & D activities along with residential development. HSLD has identified a logistical opportunity to create a permanent industrial complex to include shops, garages, parts warehouses and tracks for testing and education to support all races west of the Mississippi as well as support and supply facilities for the developing Spaceport America. Currently nearly 7,388 acres, or about 12 square miles bracketing Interstate 25 have been assembled for the express purpose of the HSLD PUD. The appraiser estimates of employment in the development will be on the order of 2,500 with a population of 16,000 +_ in the next 25-30 years. The necessary land swaps and leases between the State, BLM and the County have been completed and development could be expected to begin in late 2016 to mid 2017. 35
Illustrative Development Plan for HSLD
Sierra Del Rio Resort and other Developments Sierra Del Rio Resort is being developed on over 1,049 acres of land in Elephant Butte. An 18- hole championship golf course intended by the development company to be the premier golf experience in New Mexico. Lots range in prices from $47,000 to $250,000. Approximately 120 lots have been sold. Approximately 75% of the buyers are from out of the area. At the present time approximately a dozen homes have been started surrounding the operating golf course. Sierra Vista Hospital Replacement Facility Project The Hospital Board and community leaders are actively working towards the funding of a new $28,000,000 hospital facility that will replace the existing facility on a 15 to 20 acre site. Construction on the new emergency facility and physical is to begin in the second quarter of 2014. Truth or Consequences Community Golf Course Expansion and other Developments The City of Truth or Consequences is currently planning for the expansion of its nine- hole community course to 18 holes. There are several small retail/office centers in the planning process. An expanding art community is rejuvenating the downtown area of Truth or Consequences. 36
Lake levels although low are continuing to bring in more recreational visitors and permanent residents that are attracted to the lake. The County airport is scheduled for expansion. New Hot Springs Retail Center the location of Wal-Mart is also the location of a newly developed Holiday Inn Express. A copper mine is in the process of opening near Hillsboro with an initial investment in excess of $300,000,000. Operational in late 2015 early 2016. An alge/biofuel plant is being planned for developed for $250,000,000 over the next three to four years near Spaceport America. A new motel is being discussed for construction that is to be leased by Virgin Galactic for its space clients. The 6,000 sf Spaceport Welcome Center located in T or C is to begin construction in late of 2015 within the Hot Springs Retail Center. Ted Turner recently purchased the Sierra Grande Lodge in anticipation of future developments. There is clear evidence that the new developments are having an effect on the market place and generating effective demand for the subject. The City of Truth of Consequences is a gateway city for the States $210M Spaceport and Virgin Galactic space tourism operation. Recently the Governor of NM, while in T or C, signed the informed Consent Legislation into Law. This widely anticipated legislation is already creating opportunities for both commercial and residential expansion in the area as a result of Spaceport Americas need for supply chain contractors who do not currently have a presence in the area. In addition to this it has been confirmed that the near term construction of two major employers in the area as outlined above will require housing and support business structures for professional engineers and high end technical personnel. These companies include the Copper Flat Mine and an alternative Bio Fuel production plant and refinery in Sierra County. These two companies alone may provide an additional 250 + high net technical and engineering jobs in Sierra County in the immediate future. Changing Real Estate Market Demand The housing demand and supply in Sierra County appeared to be in reasonable balance during the period 01/01/02 through 01/01/04. However, from 2004 through 2009 the market shifted upward. The Sierra County Multiple Listing Service (of which this appraiser is a member) indicated total residential sales during 1/1/2002-12/31/2006 of 994 out of which 523 were site built, 432 manufactured housing and 39, one to four family. The median price of all sf site built sales in 2002 was $62,356, by the end of 2008 this figure has risen to $133,505. In 2009 the figure dropped to $130,027 but jumped in 2011 to $165,000. The following Table 3-5 illustrates the changes in total sales as well as residential sales. Brokers have reported that the drop in single-family sales in 2006-2008 was not due to demand but rather the lack of supply on the market that was available to sell. However, 2009 also saw a drop in 37
demand which has continued thru 2013. For 2013 the figure was 210 DOM. The year 2013 saw a further decline in the real estate market sales. The actual number of total sales in 2013 was only 26% of the total sales in 2006. Additionally total sales in 2013 of 8,565,370 represent the lowest volume of sales passing through the MLS since 2002. Any increase in 2014 is generally believed to be tied to the development of Spaceport America.
TABLE 3-5 HOUSING SALES 2002-- 2013 Year Total # of all MLS Sales Total # Residential Sales SF Site Built Dwelling Mfg Housing multi family Avg Sale Price Site Built % Change in Avg Price 2013 94 74 36 44 0 $124,371 -2.91% 2012 130 96 52 44 0 $128,102 -22.36% 2011 76 40 19 21 0 $165,000 23.57% 2010 87 66 31 35 0 $133,531 2.69% 2009 141 118 60 57 1 $130,027 -2.61% 2008 210 162 92 66 4 $133,505 19.91% 2007 276 203 114 81 7 $111,334 2.39% 2006 400 104 104 103 10 $108,733 -7.74% 2005 342 243 135 101 7 $117,860 18.09%
Although it is impossible to determine with a great deal of specificity at this time as to what the newly developing economic environment in Sierra County will bring in terms of population and income growth it is speculated that growth will occur at a rate not historically seen in Sierra County. This impending growth rate can be seen in the surge of real sales in the last few years leading up to 2006. As the overall local economy slumped in 2007-2013 so did real estate sales. Based on data through December 2013 real estate sales were nearly 73% below 2006.
The following Table 3-7 illustrates the deposit base of the Countys banks and provides another indicator of the communitys economic growth. It can be seen that the total deposit base has fluctuated over the last ten years from between $80,598,000+- to $121,400,000 +-. Although there are variations, there is a slow but discernible upward growth of approximately 2.83% per year. During the period 6/30/2011 to 6/30/2013 total deposits in local banks increased by a significant 11%.
It is the appraisers opinion, based on the known developments mentioned above and the current expected expansion, as well as a review of Chamber of Commerce inquiries, gross receipts tax, lodgers tax, utility connections, bank deposits, and other indices, that the historic population annual growth rate seen above will move from current levels up to a reasonable estimate of 3% during the period 2014 to 2020 and 4% from 2020 to 2030. This rate is also less than but consistent with a recent study conducted by SMPC Architects for the Sierra Vista Hospital Replacement Facility Project. The following Table 3-7 reflects these projections. 39
Table 3-8 1980-2030 Sierra County Pop. Projections at 3% to 4% 2011- 2030
The above Table although general in structure indicates that in Sierra County proper, during the period 2011 through 2030 annual household formations could increase from 144 in 2011 to 367 in 2030. Each household formation will require an additional dwelling unit of some type to be added to the Sierra County housing stock. The impact on the subject should be that the subject should maintain its competitive position within the commercial land market as there does not appear to be any negative Year Population Total Annual Annual Projection Household Household Population Formations Formations Increase 1980 8,454 3,019 1981 8,589 3,068 48 135 1982 8,727 3,117 49 137 1983 8,866 3,166 50 140 1984 9,008 3,217 51 142 1985 9,152 3,269 51 144 1986 9,298 3,321 52 146 1987 9,447 3,374 53 149 1988 9,598 3,428 54 151 1989 9,751 3,483 55 153 1990 9,907 3,538 56 156 1991 10,003 3,705 35 95 1992 10,099 3,740 36 96 1993 10,196 3,776 36 97 1994 10,294 3,813 36 98 1995 10,393 3,849 37 99 1996 10,493 3,886 37 100 1997 10,594 3,924 37 101 1998 10,696 3,961 38 102 1999 10,799 4,000 38 103 2000 10,903 4,038 38 104 2001 11,008 4,077 39 105 2002 11,114 4,116 39 106 2003 11,220 4,156 40 107 2004 11,328 4,196 40 108 2005 11,437 4,236 40 109 2006 11,547 4,277 41 110 2007 11,658 4,663 44 111 2008 11,771 4,708 45 112 2009 11,884 4,754 45 113 2010 11,998 4,799 46 114 2011 12,358 4,943 144 360 2012 12,729 5,092 148 371 2013 13,111 5,244 153 382 2014 13,504 5,402 157 393 2015 13,909 5,564 162 405 2016 14,326 5,731 167 417 2017 14,756 5,903 172 430 2018 15,199 6,080 177 443 2019 15,655 6,262 182 456 2020 16,125 6,450 188 470 2021 16,770 6,708 258 645 2022 17,440 6,976 268 671 2023 18,138 7,255 279 698 2024 18,863 7,545 290 726 2025 19,618 7,847 302 755 2026 20,403 8,161 314 785 2027 21,219 8,488 326 816 2028 22,068 8,827 340 849 2029 22,950 9,180 353 883 2030 23,868 9,547 367 918 Rate of Growth 1.01599 to 1990 Rate of Growth 1.00962 to 2010 Rate of Growth 1.03 2011--2020 Rate of Growth 1.04 2021-2030 HH Size 2.8 to 1990 HH Size 2.7 to 2006 HH Size 2.5 2007 to 2030 40
external factors within the real estate market that would impact its locational attributes, nor are there any new development that would impact on its competitive position. Additionally it should be noted that there is another employment/population scenario that is based on very likely and known conditions that are scheduled to develop within the next 12-24 months and that is the final development of the Spaceport and its welcome center in T or C, the ongoing development of Copper Flat Mine, the initial phases of the Bio Fuel Plant, the new emergency room and physical plant at Sierra Vista Hospital as well as related developments. Table 3-9 below illustrate the potential impact on employment and population within the County as these commercial developments come on line. The associated population projections are based on an historic employment to population ratio of .42 which is also what it was in the 2010 census. It is unknown if this ratio will hold at the margin but is likely to be consistent with long run projections. New housing requirements are based on a household size of 2.75 persons. Bear in mind that the high point in historic employment in the County was in July of 2010 with an labor force of 6,256 and total employment of 5,885 according to NMD of Workforce Solutions-Economic Research and Analysis.
TABLE 3-9 SIERRA COUNTY EMPLOYMENT/POPULATION PROJECTIONS 2013--2020 Source/Year 2014 2015 2016 2017 2018 2019 2020 Copper Flat Mine 50 100 150 50 0 0 0 Bio Fuel 50 100 150 25 0 0 0 Spaceport America & Related Industries 50 100 160 200 250 300 350 Health and Related 10 10 10 10 12 12 12 Other Services 10 10 10 10 12 12 12 Government 5 5 5 5 5 5 5 Other Industrial Sectors Increase in Employment 175 325 485 300 279 329 379 Projected Employment(Dec 2000 5408) 5583 5908 6393 6693 6972 7301 7680 Annual Percentage Change 1.00% 5.82% 8.21% 4.69% 4.17% 4.72% 5.19% Estimted Population (.42 emp/pop) 13,293 14,067 15,221 15,936 16,600 17,383 18,286 Percentage Change 5.82% 8.21% 4.69% 4.17% 4.72% 5.19% New Housing Requirements @2.75 pph 114 118 176 109 101 120 138
The following Section IV presents details of the subject site. 41
Section IV
Site Data
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SECTION IV SITE DATA 1. SITE DESCRIPTION The subject is located in the northern business district of Truth or Consequences in the SEC of the intersection of Nth Date Street and I-25. The site is generally rectangular with observed elevation variations of 10 more or less in some areas. The entire property is within the New Hot Springs Retail Center and adjoins the Super Wal-Mart site on its East and Interstate 25 on its West. To the immediate North and South are undeveloped parcels. The entire site is within the City limits of Truth or Consequences. The original HSRTC development is broken into five phases. Phases 1 through 4 are on the north end of the tract while Phase 5, a 26 +- acre tract, is on the south side of the area and sits approximately 12 to 15 feet higher in elevation. The north portion of the subdivision is platted and approved and broken into Blocks and Lots. The subject is on the SWC of the Northern portion.
2. TOPOGRAPHY AND SOILS The subject in its natural state is made up almost entirely of high mesa desert grazing lands with sparse vegetation and six to eight inches of rain fall per year. The animal unit grazing allotment is typically 6 to 7.2 per section (640 acres). The undulating and shifting elevation of the topography of the site is common to the region and surrounding land uses. The region is generally undulating to steep slopes with mild rock outcroppings and generally sloping towards the east and south into natural arroyos that ultimately wind their way to the Rio Grande to the east. The soil is typical for the area and should pose no problem for future improvements. Discussions with the US Soil Conservation Service indicates that no comprehensive soil survey of Sierra County has been made.
3. DRAINAGE FEATURES AND FLOOD ZONE The area drains naturally to the east and south into undeveloped natural drainage areas extending through natural arroyos to the Rio Grande. However, the developer has equipped the subdivision with a fully functioning underground storm water system that drains the entire area. The drainage appears to be adequate and poses no problems to further development. The site is not in a FEMA hazardous flood zone. See the flood map in the preface.
4. UTILITIES AND ACCESS The area is within the City limits of Truth or Consequences and is serviced with City power, via overhead power lines and underground through the subdivision. Power is underground to the lots. Sewer will be by City sewer. Water is provided by City water. Gas is provided by New Mexico Gas Company. Current access to the site is via North on Date Street to H.R. Ashbaugh Drive then West to Sanford Wilson Rd. The site is located on the NWC of H.R. Ashbaugh Dr and Sanford Wilson Road. 43
The regional access is easily available from I-25 Exit 79 to the immediate north from which the proposed visitor center building will be imminently visible from I-25 both North and South Bound.
5. SETBACKS AND EASEMENTS There are no unusual setbacks, easements or encroachments on the deeded acres noted on the plat at the County Assessors Office, nor were any observed. However, there are utility easements as well as covenants and deed restrictions put in place to maintain the quality and architectural styles and values of the area.
6. SURROUNDING IMPROVEMENTS The surrounding land uses to the North and East of the subject are all commercial activities consisting of an existing Wal-Mart, three motels as well as restaurant and auto fueling stations. To the SE of the site is a high school and public golf course. To the West across I-25 and the immediate south is vacant land. There are no negative external factors resulting from the immediately surrounding land uses.
7. PROPERTY TAXES The following Table 4-1 is a breakdown of the subject propertys assessed and market values for the subject land as determined by the Sierra County Assessors office for the 2013 tax year. The subdivided parcels 1 and 2 of the 8.81 acre lot have yet to be assessed separately by the County Assessors office.
TABLE 4-1 SUBJECT PROPERTY FULL AND TAXABLE VALUE 2013 Owner Prop ID Legal Size Ac. Size sf Bk Pg Assessor's Full Value Taxable Value Est Tax 2013 AC Co. Inc 18179 Blk 1 Lot 2 0.45 19,602 NHSRC $63,939 $21,313 $520 AC Co. Inc 18181 Blk 3 Lot 1-A 0.98 42,689 NHSRC $137,496 $45,832 $1,118 AC Co. Inc 18182 Blk 3 Lot 2-A 0.83 36,155 NHSRC $116,751 $38,917 $949 AC Co. Inc 18981 Blk 4 Lot 1 0.534 23,261 NHSRC $74,475 $24,825 $606 AC Co. Inc 18987 Blk 4 Lot 2 0.534 23,261 94 2659 $74,619 $24,873 $607 AC Co. Inc 18988 Blk 4 Lot 3 0.534 23,261 NHSRC $74,499 $24,833 $606 AC Co. Inc 18989 Blk 4 Lot 4 0.534 23,261 94 2659 $74,400 $24,800 $605 AC Co. Inc 18990 Blk 4 Lot 5 1.892 82,416 94 2659 $263,706 $87,902 $2,144 H.I. 18991 Blk 4 Lot 6 2.491 108,508 94 2659 $347,241 $115,747 $2,823 AC Co. Inc 18992 Blk 4 Lot 7 0.408 17,772 94 2659 $28,434 $9,478 $231 AC Co. Inc 16585 S2,NE4,S28,T13S, R4W 8.81 383,764 102 1659 $654,555 $218,185 $5,322 AC Co. Inc 18008 S28,T13S, R4W 26.93 1,173,071 106 130 $411,978 $137,326 $3,350 44.927 1,957,020 $1,910,115 $636,705 $18,881
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These taxes are reasonable and in line with other commercial properties and undeveloped land in the same area. All the taxes are current.
8. IMPROVEMENT ANALYSIS Paved access roads have been constructed and power, gas, sewer and water are to each lot line and immediately available to the larger tracts. A drainage plan is in place and an underground storm water system is on site.
9. ENVIRONMENTAL CONSIDERATIONS The appraiser has made a personal inspection of the site and did not uncover any apparent signs of hazardous materials. Hazardous materials may or may not be present on the site, but the appraiser is not qualified to detect such substances. The presence of substances such as asbestos, urea formaldehyde foam insulation, leaking oil or gas tanks, or other potentially hazardous materials may effect the value of the property. The value estimate is predicted on the assumption that there is no such material on or in the property that would cause a loss of value. No responsibility is assumed for any such conditions or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in this field, if desired.
The following Section V discusses the market environment of the subject and its relative position within the commercial land market within the County and T or C. 45
Section V
Valuation 46
SECTION V - VALUATION
The following Section V develops the reasoning and methodology utilized in arriving at a determination of highest and best use and a valuation conclusion for the subject commercial parcel.
1. HIGHEST AND BEST USE
Highest and best use of land is 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 Appraisal of Real Estate, Tenth Edition, 1992.) In order to estimate the highest and best use, there are essentially four points of analysis. These are as follows:
I. Physically Possible Use of the Site - What uses are physically possible, given the size, shape, and topography and location of the site?
II. Legally Permissible Uses of the Site - among the physically possible uses, what uses are legally allowed given the zoning, easements, and deed restrictions?
III. Financially Feasible Uses of the Site - among the uses, which are physically possible and legally permissible? What uses would provide a reasonable residual net return to the land?
IV. Most Productive Use of the Site - among the financially feasible uses, which use would result in the greatest net return to the land?
PHYSICALLY POSSIBLE USES Constraints imposed on the possible use of the property relate to the physical aspects of the site itself. The size, shape, topography, and physical location influence ultimate development. The physical aspects of the property would allow a multitude of possible uses. Given the physical location of the property and its proximity to Date Street and I-25 as well as nearby commercial development, only commercial uses are physically probable.
LEGALLY PERMISSIBLE USES The subdivision is zoned C-1 Commercial. Legal restrictions as they apply to the subject are the common restrictions of utility easements, public zoning ordinances, and deed restrictions. The subject site is an existing platted commercial subdivision. Restrictions prohibit mobile home, industrial, commercial or residential uses. All lots are encumbered with deed restrictions and protective covenants. The main thrust of the restrictions and covenants is to provide a legal framework for the preservation, maintenance, and control of the character of the development. The restrictions and covenants are 47
beneficial in protecting the development character and future property values for a commercial subdivision. The restrictions are assumed to be in conformity with the sites existing zoning and development plan. The possible permissible uses for the subject tract are retail/commercial. Therefore, the only physically and legally possible use of the site is as a commercial/retail/office development.
FINANCIALLY FEASIBLE USES The financially feasible uses of the site are restricted to those that are physically possible, legally permissible and that produce a positive economic return to the land. The most probable financially feasible use of the site is for commercial development. Of the legally permitted uses that would be likely users of the site, the most probable one that would have market acceptance at that site and not be restricted by the current supply of existing similar activities, is a retail/office facility catering to the traffic on Date Street and Interstate 25. Note worthy is the fact that Wal-Mart and Holiday Inn Express have already located within the commercial subdivision. Given the reality of the development of Spaceport America located 35 miles south and the current activities of Virgin Galactic and Space X as well as the expressed desires of other space related firms locating their businesses at the Spaceport together with the national and international interest in Spaceport America it highly likely that the projected number of visitors to the proposed facility would make it a financially feasible use. Additionally studies that have been commissioned by the Spaceport Authority have demonstrated that the financial feasibility of the Spaceport Welcome Center as proposed on the subject site is positive.
MOST PRODUCTIVE USE OF SITE AS THOUGH VACANT The most productive use of the site as though vacant is the physically possible, legally permissible, and financially feasible use that would return the highest net return to the land. The site as proposed to be developed fits the criteria of highest and best use. The most logical financially feasible use of the site is as proposed i.e., the future site of the Spaceport America Welcome Center.
2. VALUATION METHODOLOGY The subject land is valued according to the determined highest and best use, i.e., the future site of the Spaceport America Welcome Center. Comparable sales analysis is employed in the determination of the retail market value of the commercial six acre on a sf basis. The analysis uses the average lot sale / contract prices of available recent commercial lot sales within the subject neighborhood both outside and inside of the subjects commercial subdivision. The average psf retail value serves as the base retail sale price used to determine the market value of the subject.
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3. COMPARABLE SALES ANALYSIS The Sales Comparison or Market Approach is based upon the principle of substitution. The process produces an estimate of value of the property by comparing it with similar properties of the same type, class, and location that have sold recently or are currently offered for sale in the same or competing areas. The process of comparison involves judgment concerning their similarities with respect to several factors such as location, physical condition, terms of sale, and conditions of the subject property. The comparable sales are compared to the subject property and ranked as equal, superior or inferior to the subject. Qualitative adjustments are then made to the sale prices for differences between comparables. The value range as indicated by the final adjusted sale price is then correlated into a final indicated value for the subject property. The common denominator of the dollar sale price per square foot is used as unit of comparison. A search of the current commercial land sales in the area turned up several representative comparables that are appropriate and that are used to assist the appraiser in forming his opinion of value. The following is a descriptive list of the comparables used in the analysis. The comparable sales that are used reflect the demand side of the market while the active listings are proxies for the supply side of the market. Figure 6-1 illustrates the location of the comparables and Table 6-2 demonstrates adjustments to their prices.
FIGURE 6-1 LAND SALE COMPARABLES LOCATION MAP
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COMPARABLE LAND SALE # 1 1920 N DATE STREET T OR C Date of Sale: August 2009 Recording: Sierra County Grantor: Neudecker Grantee: Citizens Bank Agent: NA Sale Price: $750,000/ $14.50 psf//Additional development cost demolition $28,000, Size: 1.187 Ac./ 51,724 SF Terms: Cash Zoning: C1 Location: NWC of Date Street and New School Road Comments: Level site of Dairy Queen and Car wash purchased for land only. Demolition and dirt work required. Flood zone: X Utilities: Power , Water, Sewer to site. Intended Use: New Citizens bank development Confirmed By: Grantee COMPARABLE LAND SALE # 2 CBD AUSTIN STREET Date of Sale: 8/20/2009 Recording: MLS 20104741 Grantor: Grinsted Grantee: NA Agent: Susan Lowe Sale Price: $96,000/ $12.96 psf// Size: .17 Ac./7,405 SF Terms: Cash Zoning: C1 Legal Description: blk 8 lot 27, 28, e2 of lot 29 Palomas Hotsprings Location: Austin between Foch and Daniel. South side of Austin middle of block. Comments: Commercial Small lot level all utilities Flood zone: X Utilities: Power , Water, Sewer to site. Intended Use: Parking or commercial development Confirmed By: MLS 20104741/ agent COMPARABLE LAND SALE # 3 NWC 3 RD AND DATE , T OR C Listing: 7/2014 Source: Grantor Grantor: Anderson Grantee: NA Sale Price: $450,000, $ 10.76 psf Size: .9599Ac./ 41,816 sq. ft. Terms: Cash to Seller Zoning: C-1 Legal Description: Lots 11-12 Block 63 La Vista Addition Location: East Side of Date Street, Signaled intersection Comments: Level all utilities Intended Use: Commercial-Mfg home sales lot Confirmed By: Grantor to BAS
COMPARABLE LAND SALE # 4 NEW HOT SPRINGS RETAIL CENTER Active Listing: 7/2014 Source: Grantor Grantor: Barking Dog Mesa Land Co. Grantee: NA List Price: $589,000, $ 8.00 psf Size: 1.69 Ac./ 73,616 sq. ft. Terms: Cash to Seller Zoning: C-1 Legal Description: Block 2 Lot 1 New Hot Springs Retail Center Location: SWC H.R. Ashbaugh Drive and Buck Greer Street Comments: Level all utilities, adjacent to Wal-Mart site on East Side and just Nort of planned Spaceport welcome Center site. Intended Use: Commercial-Development. Confirmed By: Grantor Barking Dog Mesa Land Co. (Barrett) 50
COMPARABLE LAND SALE # 5 NEW HOT SPRINGS RETAIL CENTER Sold: 6/2007 Source: Grantor Grantor: Ashbaugh Construction Co. Grantee: Crowson Sale Price: $552,123, $ 7.54 psf Size: 1.69 Ac./ 73,616 sq. ft. Terms: Cash to Seller Zoning: C-1 Legal Description: Block 2 Lot 1 New Hot Springs Retail Center Location: SWC H.R. Ashbaugh Drive and Buck Greer Street Comments: Level all utilities, adjacent to Wal-Mart site on East Side and just Nort of planned Spaceport welcome Center site. Original sale of site from developer. Intended Use: Commercial-Development. Confirmed By: Grantor
COMPARABLE LAND SALE # 6 NWC 3 RD AND DATE , T OR C Date Sold: 2/2007 Source: Grantee Grantor: NA Grantee: Anderson Sale Price: $250,000, $ 5.98 psf Size: .9599Ac./ 41,816 sq. ft. Terms: Cash to Seller Zoning: C-1 Legal Description: Lots 11-12 Block 63 La Vista Addition Location: East Side of Date Street, Signaled intersection one of two in community. Comments: Level all utilities. Intended Use: Commercial-Mfg home sales-owner retired and site currently listed for $450,000 see comparable # 3. Confirmed By: Grantee
COMPARABLE LAND SALE # 7 I-25 HUBBLE , T OR C Listing: 7/2014 Source: MLS 20131077 Grantor: Rogers Grantee: NA List Price: $1,500,000, $ 5.74 psf Size: 6.0Ac./ 261,360 sq. ft. Terms: Cash to Seller Zoning: C-1 Legal Description: Tract 4 Just east of Water tank at I-25 Exit 79 Location: West of I-25 across from planned Spaceport Welcome Center West of Date Street Signaled intersection Comments: Hilly Topo Driveway to City Street near City golf Course back nine as planned. Intended Use: Commercial development Confirmed By: Grantee COMPARABLE LAND SALE # 8 905 DATE STREET, T OR C Date of Sale: 6/2009 Recording: Sierra County Grantor: Lockhart Grantee:NA Sale Price: $264,023, $5.27 psf, plus demolation cost of $15,000 Effective sale price for land only is est at $279,023 or $5.57 sf. Size: Approximately 50,000 sf Terms: Cash to seller Zoning: C-1 Legal Description: Lots 5 & 6 Block 12 Country Club Heights Location: East Side of Date Street Site of Old Sonic. Comments: Interior, level parcel w/all utilities available on site. Located in Zone X (outside 500 yr. flood zone) The buyer demolished the old Sonic and the purchase was for the land only. The intended use is for an retail auto parts facility. Intended Use: Commercial Development Confirmed By: C-21 D. Hogan 505 894 6611 51
COMPARABLE LAND SALE # 9 NEW HOT SPRINGS RETAIL CENTER Date of Sale: 10/2011 Recording: Sierra County Grantor: Ashbaugh Construction Co. Grantee: Holiday Inn Express Size: 2.491 Acres Sale Price: $600,000, $5.53 psf, Terms: Cash to seller Zoning: C-1 Legal Description: Lot 4 Block 6 New Hot Springs Retail Center Location: North end of Cul de Sac F.G. Amin Street Comments: Interior, level parcel w/all utilities available on site. Located in Zone X (outside 500 yr. flood zone) The site is on the north most point of the NHSRC and can be seen fro I-25 and Date Street. Purchased for site of new Holiday Inn Express. Intended Use: Three story HIE Confirmed By: Grantor
COMPARABLE LAND SALE # 10 1980 N DATE ST, T OR C Active Listing: 7/2014 Source: MLS 20141169 Grantor: Campbell Grantee: NA List Price: $950,000, $ 4.00 psf Size: 5.46 Ac./ 237,837 sq. ft. Terms: Cash to Seller Zoning: C-1 Location: One lot south of SWC Nth Date and Lake Way Loop Comments: Hilly Cobby Terrain, utilities nearby, NE corner frontson Date Street, close to I-25 near Wal-Mart, Dennys,McDonalds, K-Bobs, Comfort Inn, Motel 6 and new Holiday Inn Express. Intended Use: Commercial-Development. Confirmed By: MLS 20141169
COMPARABLE LAND SALE # 11 NEW HOT SPRINGS RETAIL CENTER Date Sold: 7/2012 Source: Grantor Grantor: Citi Bank El Paso (REO). Grantee: Barking Dog Mesa Land Co. List Price: $257,000, $ 3.50 psf Size: 1.69 Ac.m/l Terms: Cash to Seller Zoning: C-1 Legal Description: Block 2 Lot 1 New Hot Springs Retail Center Location: SWC H.R. Ashbaugh Drive and Buck Greer Street Comments: Distress sale, purchased from bank after foreclosure. Bank held for considerable time. Level all utilities, adjacent to Wal-Mart site on East Side and just North of planned Spaceport welcome Center site. Intended Use: Commercial-Development. Confirmed By: Grantor (Barrett)
COMPARABLE LAND SALE # 12 1502 DATE ST T OR C Date of Sale: February 2008 Recording: Sierra County Grantor: Blake Chanslor Revocable Trust Grantee: NAPA Agent: NA Sale Price: $179,000/ $3.25 psf Size: 1.262 Ac./ 54,973 SF Terms: Cash to Seller Zoning: C1 Legal Description: Length Metes Bounds Location: 1502 Date St T or C 52
Comments: Flood zone X. Cobby topography with large drainage area on north line. Estimated cost of dirt work and box culvert is $100,000 for an effective sale price of a buildable site of $5.08 sf. Power , Water, Sewer to site. Intended Use: Commercial development Confirmed By: BAS Contract Review
COMPARABLE LAND SALE # 13 1748 E 3RD, T OR C Active Listing: 7/2014 Source: MLS 20118400 Grantor: Alex Arrow Grantee: NA List Price: $575,000, $ 2.43 psf Size: 5.429 Ac.m/l Terms: Cash to Seller Zoning: C-1/R3 Location: East on 3 rd past Pine Knot Bar Comments: Level to medium slop all utilities nearby. Driveway to City Street Intended Use: Commercial-Development. Confirmed By: MLS 20118400
ELEMENTS OF COMPARISON The nine common elements of comparison which are considered in the sales comparison analysis in Table 6-1 are as follows: Real Property Rights Conveyed Financing Terms Conditions of Sale Market Conditions Location Physical Characteristics Economic Characteristics Intended Use Non-Realty Components of Value Under ideal circumstances, each adjustment would be supported by a paired set analysis; i.e. two comparables being exactly the same except for one variable which would then account for the difference in sale price. However, adequate paired sets seldom exist, even in the simple residential market. The more complex the property the less likely it is that any type of paired set analysis would produce reasonable or reliable results. Therefore, in the absence of reliable paired set analysis qualitative adjustments may be employed. Qualitative adjustments are used to adjust the sales price of any given comparable sale so it will more accurately reflect the market value of the subject property. A qualitative adjustment is used on elements of comparison that differ between the subject and the comparable sale. The use of qualitative adjustments is also expected to narrow the range between the sale prices of the comparables and the resultant range of the final adjusted sale prices. If a comparable has a superior characteristic relative to the subject, it is adjusted downward i.e., a negative adjustment. The reason being that if it were superior in this one characteristic, it would have logically sold for more than could be expected of the subject property. An inferior rating would warrant an upward adjustment following the same logic. 53
The determination of the rating specific qualitative adjustment used is largely the result of four factors; the result of any quantitative analysis that can be made from the data available, the experience of the appraiser, the judgment of the appraiser and the test of reasonableness. In the final analysis, do the adjustments make sense? Are they reasonable? Do they lead to a logical and reasoned conclusion for the final estimate of market value. Thus the relative comparison analysis, using a ranking process, is where an appraiser studies the relationships indicated by market data without recourse to quantification. The normal approach for the appraiser to follow is to analyze comparable sales in order to determine whether their characteristics are inferior, superior or equal to those of the subject property. The process is similar to paired set analysis without the quantitative analysis. Ranking analysis arrays properties according to their degree of similarity to the subject. The application of qualitative adjustments involves separating the comparables into those that are superior overall and those that are inferior overall. Ideally, the ranking of the prices of these two groups brackets the probable value range of the subject. The analysis leads the appraiser to conclude a single value indication for the subject property. The transactions that are used in the following analysis are believed to be the best representative comparables. The following factors are considered in the qualitative analysis. Real Property Rights Conveyed The real property interest conveyed is Fee Simple for all comparables. Financing Terms All comparables used in the analysis were sold for cash or other market equivalent condition. Thus no adjustment is warranted. Conditions of Sale This element of comparison relates to the nature of the parties to the transaction and their relationship. Where sales are not believed to be totally arms length or otherwise influenced transactions, they may require adjustment for this variable. Market Conditions An adjustment for market conditions is used to show market price trends over time. Although the generally stable market conditions since 2000 do not reflect conclusive evidence of precise price increases over time, BAS' in house file data does provide some evidence for a positive time adjustment. Locational Characteristics All comparables are within the same general market area as the subject, with similar locational characteristics. However, locational adjustments are necessary for selected comparables. UTILITIES Not all comparables are equal with respect to the cost of the provision of utilities, which are fully available to the subject site. Therefore, adjustments for utilities are required.
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ACCESS All comparables have similar but not equal access to Broadway or Date Street, the main thoroughfare of T or C. TOPOGRAPHY Topography is an important factor in a community with steep bluffs and hillside developments. There are differences in topography that may affect the cost of development and may be adjusted for. Frontage All of the comparables have substantial frontages, as does the subject, on a major thoroughfare. Therefore, no positive or negative adjustment is appropriate for the subject. Flood Zone The subject appears to be located in FEMA Flood Zone X areas outside the 500 year flood plain. Some of the FEMA maps are unclear and if this is of concern to the reader then an elevation study should be requested. Although some flood zone classifications may exert a negative influence on a sites value, in general it is not as immediately apparent as is the impact of size. All flood zone classifications are equal to the subject and no adjustment is required. Size The general trend in this market area is that within ranges as the size of the land tract increases, the price per SF declines. Although it is not unusual to have a size factor offset by location or other considerations. Comparable #1 is the sale of a 1.19 acre parcel located at 1920 Nth Date St. The comparable consisted of two lots with a DQ on one and an older car wash on the other. Citizens bank purchased the property for $750,000 for the land only. The purchase price and demolition give an effective sale price of $778,000 or $15.09 sf. The site is rated as over all superior to the subject due to the very visible location on Date Street and proximity to the signaled intersection. Thus the net rating is superior due primarily to the location and improvements involved and the overall adjustment is negative. Comparable #2 is the sale of a .1722 acre parcel located in the middle of the block on Austin within the CBD of T or C. The comparable consisted of one lot with no improvements. The purchase price was $96,000 or $9.47 sf. The site is rated as over all superior to the subject due to the much smaller size and CBD location. Also the purchase by the adjoining land owner. Thus the net rating is superior due primarily to the smaller size and CBD location and the overall adjustment is negative. Comparable #3 is the current listing for $450,000 or $10.76 psf of a commercially zoned .9599 acre site on the NWC of Date Street and 3rd Street which is one of the two signaled intersections in Truth or Consequences. The site is level and at street grade. The seller is retiring from the mobile home sales business and selling the site. The comparable is considered generally superior due to the much smaller size, the corner location at a signaled intersection and the listing status. The net adjustment to the list price psf of $10.76 psf is negative. 55
Comparable #4 is the current listing of a 1.69 acre parcel located just north of and adjoining the subject site within the New Hot Springs Retail Center on the SWC of H.R. Ahbaugh Drive and Buck Greer Street and just West of the Wal-Mart site. The comparable is a current listing consisting of one commercial lot with no improvements. The listing price is $589,000 or $8.00 sf +-. The site is rated as over all superior to the subject due to the corner location, visibility, smaller size and listing status. Thus the net rating is superior and the overall adjustment is negative. Comparable #5 is the prior sale of comparable 4 which is a 1.69 acre parcel located just north of and adjoining the subject site within the New Hot Springs Retail Center on the SWC of H.R. Ahbaugh Drive and Buck Greer Street and just West of the Wal-Mart site. The site sold in 2007 for $552,123 or $7.54 psf. The sale was the original sale from the developer. The purchase price was financed and the site was subsequently foreclosed upon. The site is rated as over all superior to the subject due to the corner location, visibility, smaller size and listing status. Thus the net rating is superior and the overall adjustment is negative. Comparable #6 is the 2007 sale for $250,000 or $5.98 sf of a commercially zoned .9599 acre site on the NWC of Date Street and 3rd Street which is one of the two signaled intersections in Truth or Consequences. The comparable is the prior purchase of comparable #3 listing by the current owner. The site is level and at street grade and fully serviced with all utilities. The site was purchased by the lessee as part of the lease agreement. The comparable is considered generally superior due to the much smaller size the corner location at a signaled intersection as well as the influenced nature of the sale. The net adjustment to the sale price psf of $5.98 psf is negative. Comparable #7 is a current listing of a commercially zoned 6.00 acre site on the West side of I- 25 across from the proposed Spaceport Welcome center site. The site is North of Date Street and East of the water tank. The site is hilly with a driveway to Date Street. The site is listed for $1,500,000 or $5.74 psf. The comparable is considered on average overall superior due primarily to the listing status which more than outweighs the inferior location and the net adjustment to the sale price psf of $5.74 psf is negative. Comparable #8 is the recent sale of a commercially zoned 1.15 acre site one lot north of the NEC of Marr and Date St with a street address of 905 Date Street. The site was sold for $264,023 with an addition $15,000 estimated for demolition. The site was the former location of the old Sonic drive in The site is sloped to the east and above street grade. The site was purchased for the land only and the old Sonic has been demolished. The comparable is considered overall as generally superior to the subject due to the smaller site and improvements involved. The intended use is for a auto parts store. The net adjustment to the sale price psf of $5.57 psf is negative. Comparable #9 is the sale of a 2.491 acre parcel located 2 blocks north of the subject site within the New Hot Springs Retail Center on the North end of F.G. Amin Street and just Northwest of the Wal- Mart site. The site sold in 2011 for $600,000 or $5.53 psf. The sale was the original sale from the 56
developer to the buyers for the development of a new Holiday Inn Express Motel. The site is rated as over all superior to the subject due to the overlook location, visibility and smaller size. Thus the net rating is superior and the overall adjustment is negative. Comparable #10 is a current listing of a commercially zoned 5.46 acre site on the West side of Date Street across from the intersection of Nth Date Street and Lakeway Loop. The site is on the West side of Date Street and adjoins the Wal-mart site on the comparables West line. The site is hilly and cobby with a driveway to Date Street on its NEC. The site is listed for $950,000 or $4.00 psf. The comparable is considered on average overall inferior due to the inferior terrain, location and inferior utilities more than offsetting the listing status and the net adjustment to the list price psf of $4.00 psf is positive. Comparable #11 is the 2012 sale of comparable 4 which is a 1.69 acre parcel located just north of and adjoining the subject site within the New Hot Springs Retail Center on the SWC of H.R. Ahbaugh Drive and Buck Greer Street and just West of the Wal-Mart site. The site sold in July of 2012 2007 for $257,000 or $3.50 psf +-. The sale is considered a distress sale as it was purchased from Citi Bank El Paso which had obtained the property through foreclosure proceedings. The bank had held the property for some time and was anxious to sell. The site/sale is rated as over all inferior to the subject due to the bank owned status of the property and the influenced sale. Thus the net rating is inferior and the overall adjustment is positive. Comparable #12 is the sale of a 54,973 sf parcel located at 1502 Date Street. The comparable was sold for $179,000 or $3.25 psf. The site is very cobby with an arroyo along the north line. The site will require considerable dirt work and a box culvert in the arroyo. The cost of which is estimated at $100,000 bringing the possible effective sale price to $289,000 or $5.08 psf. The location is also considered inferior to the subject. Thus the overall net rating for the actual purchase price is inferior and the overall adjustment is positive. Comparable #13 is the current listing of a 5.429 acre parcel located at 1748 E. 3 rd Street. The comparable is a current listing consisting of one lot with no improvements. The list purchase price is $575,000 or $2.43 sf. The site is rated as over all inferior to the subject due to the inferior commercial location as well as inferior terrain and utilities availability more than outweighing the listing status. Thus the net rating is inferior and the overall adjustment is positive.
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Table 6-1 Land Sale Ranking Analysis Grid
ITEM Subject COMP NO. 1 COMP NO. 2 COMP NO. 3 COMP NO. 4 COMP NO. 5 COMP NO. 6 Address 6 Acres Hot Springs Retail Center 1920 Nth date St Austin Street NWC 3rd and Date St. New Hot Springs Retail Center New Hot Springs Retail Center NWC 3rd & Date Source Grantor 20104741 Grantee Grantor Grantor Grantee Proximity to Sub 2miles NW 3/4 mile south 3 miles South Adjoins on North Adjoins on North 3 miles South Sales Price NA $750,000 $96,000 $450,000 $589,000 $552,123 $250,000 Adj Sale Price $750,000 $96,000 $450,000 $589,000 $552,123 $250,000 Price per Ac NA $631,845 $564,706 $468,799 $348,521 $326,700 $260,444 Price psf $14.51 $12.96 $10.76 $8.00 $7.50 $5.98 Conditions ofSale Normal Normal Listing Listing Normal Normal Adjustment No Adj No Adj Negative Negative No Adj No Adj Data Source Coldwell Banker MLS 20104741 Grantee/Anderson Grantee/Anderson Ciodwell Banker Howell Asso DESCRIPTION DESCRIPTION DESCRIPTION DESCRIPTION DESCRIPTION DESCRIPTION DESCRIPTION Date of Sale/List 8/1/2009 9/1/2009 7/1/2014 7/1/2014 6/1/2007 2/1/2007 Adjustment No Adj No Adj No Adj No Adj No Adj No Adj Size Acres 6 1.19 0.1700 0.96 1.69 1.69 0.96 Size SF 261,360 51,706 7,405 41,813 73,616 73,616 41,813 Adjustment sm/sup/neg Sm/sup/neg Sm/sup/neg Sm/sup/neg Sm/sup/neg Sm/sup/neg Location Good Superior Superior Superior Superior Superior Superior Adjustment Negative Negative Negative Negative Negative Negative Site/View City similar similar similar similar similar similar Adjustment No Adj No Adj No Adj No Adj No Adj No Adj Topo level Similar Similar Similar Similar Similar Similar Adjustment No Adj No Adj No Adj No Adj No Adj No Adj Utilities/water All on Site similar similar similar similar similar similar Adjustment No Adj No Adj No Adj No Adj No Adj No Adj Irrigated none similar similar similar similar similar similar Adjustment No Adj No Adj No Adj No Adj No Adj No Adj Flood Zone FEMA Zone X similar similar similar similar similar similar Adjustment No Adj No Adj No Adj No Adj No Adj No Adj Improvements Rds Utilities Demo similar similar similar similar similar Adjustment sup/neg No Adj No Adj No Adj No Adj No Adj Easements Normal similar Similar similar similar similar similar Adjustment No Adj No Adj No Adj No Adj No Adj No Adj Access Good Superior Similar Similar Similar Similar Similar Adjustment Negative No Adj No Adj No Adj No Adj No Adj Utility of Use Good Similar Similar Similar Similar Similar Inferior Adjustment No Adj No Adj No Adj No Adj No Adj Positive Net Rating Superior Superior Superior Superior Superior Superior Net Adj. Negative Negative Negative Negative Negative Negative Ind. Value of <$14.51 <$12.96 <$10.76 <$8.00 <$7.50 <$5.98 58
ITEM Subject COMP NO. 7 COMP NO. 8 COMP NO. 9 COMP NO. 10 COMP NO. 11 COMP NO. 12 COMP NO.13 Address 6 Acres Hot Springs Retail Center 1-25 & Hubble 905 Nth Date New Hot Springs Retail Center 1980 N Date Street New Hot Springs Retail Center 1502 Date Street 1748 E 3rd Street Source 20131077 Grantee Grantor 20141169 Grantee Grantor 20118400 Proximity to Sub 1/4 mile Nth 3/4 mile NW 2 blocks north 1 block East 2 blocks north 3/4 mile south 3 miles SE Sales Price NA $1,500,000 $264,023 $600,000 $950,000 $257,000 $179,000 $575,000 Adj Sale Price $1,500,000 $264,023 $600,000 $950,000 $257,000 $179,000 $575,000 Price per Ac NA $250,000 $229,585 $240,867 $174,312 $152,071 $141,838 $105,913 Price psf $5.74 $5.27 $5.53 $4.00 $3.49 $3.26 $2.43 Conditions ofSale Listing Normal Normal Listing Bank REO Normal Listing Adjustment Negative No Adj No Adj Negative Positive No Adj Negative Data Source Coldwell BankerGrantee-O'Riely'sColdwell BankerMLS 20104741 Ciodwell Banker Howell Asso Grantee/Anderson DESCRIPTION DESCRIPTION DESCRIPTION DESCRIPTION DESCRIPTION DESCRIPTION DESCRIPTION DESCRIPTION Date of Sale/List 7/1/2014 6/1/2009 10/1/2011 7/1/2014 7/1/2012 2/1/2008 7/1/2014 Adjustment No Adj No Adj No Adj No Adj No Adj No Adj No Adj Size Acres 6 6.00 1.15 2.49 5.4500 1.69 1.26 5.43 Size SF 261,360 261,360 50,094 108,508 237,402 73,616 54,973 236,487 Adjustment similar sm/sup/neg sm/sup/neg similar Sm/sup/neg Sm/sup/neg similar Location Good Inferior Superior Superior Inferior Inferior Inferior Inferior Adjustment Positive Negative Negative positive positive positive positive Site/View City similar similar similar similar similar similar similar Adjustment No Adj No Adj No Adj No Adj No Adj No Adj No Adj Topo level inferior inferior inferior inferior inferior inferior inferior Adjustment Positive Positive Positive positive positive positive positive Utilities/water All on Site inferior similar similar similar similar similar similar Adjustment Positive No Adj No Adj No Adj No Adj No Adj No Adj Irrigated none similar similar similar similar similar similar similar Adjustment No Adj No Adj No Adj No Adj No Adj No Adj No Adj Flood Zone FEMA Zone X similar similar similar similar similar similar similar Adjustment No Adj No Adj No Adj No Adj No Adj No Adj No Adj Improvements Rds Utilities Inferior similar similar Inferior Inferior Inferior Inferior Adjustment positive No Adj No Adj Positive Positive Positive Positive Easements Normal similar similar similar Similar Similar Similar Similar Adjustment No Adj No Adj No Adj No Adj No Adj No Adj No Adj Access Good Inferior Similar Similar Inferior Inferior Inferior Inferior Adjustment Positive No Adj No Adj positive positive positive positive Utility of Use Good inferior Similar Similar inferior inferior inferior inferior Adjustment positive No Adj No Adj positive positive positive positive Net Rating Superior Superior Superior Inferior Inferior Inferior Inferior Net Adj. Negative Negative Negative Positive Positive Positive Positive Ind. Value of <$5.74 <$5.27 <$5.53 >$4.00 >$3.50 >$3.25 >$2.43 59
TABLE 6-2 RANKING ANALYSIS
Comparable Status Size Ac. $ psf Rating Overall Net Adj 1 Sold 1.187 $14.50 Superior Negative 2 Sold 0.170 $12.96 Superior Negative 3 Listing 0.960 $10.76 Superior Negative 4 Listing 1.690 $8.00 Superior Negative 5 Sold 1.690 $7.50 Superior Negative 6 Listing 0.960 $5.98 Superior Negative 7 Listing 6.000 $5.74 Superior Negative 8 Sold 1.150 $5.27 Superior Negative 9 Sold 2.491 $5.53 Superior Negative Subject UC 6.000 $4.76 Equal Equal 10 Sold 5.450 $4.00 Inferior Positive 11 Sold 1.690 $3.50 Inferior Positive 12 Sold 1.262 $3.25 Inferior Positive 13 Listing 5.429 $2.43 Inferior Positive
The above analysis indicates that the subject market value should fall between comparable nine of $5.53 sf and comparable 10 with a value of $4.00 psf the mean value of which is approximately $4.76 psf. Thus it is the appraisers opinion that the subjects market value on a psf basis is at or near $4.76 psf. The resultant market value is calculated to be ($4.76 X 261,360sf) = $1,244,073. Round to $1,244,000.
4. MARKETING TIME The marketing time for the subject property sale is estimated to be 18 to 24 months from the time the subject is on the market. Absorption rates experienced by recent commercial sales and the current new developments in the community would lead to a marketing time within 18-24 months. Therefore, it could reasonably be expected that an investor/developer would purchase the site within a 18-24 month period (assuming appropriate marketing and management) after it was put on the market in order to take advantage of the future demand for commercial lots.
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Section VI
Certification 61
SECTION VI CERTIFICATION This is to certify that effective July 5, 2014 the estimated market value of the respective property, that is the subject of this report, is: $1,244,000 1) To the best of our knowledge and belief, the statements of fact contained in this report are true and correct. 2) The reported analysis, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are the personal, unbiased professional analysis, opinions and conclusions of the undersigned appraisers. 3) The appraiser has 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) The undersigned appraiser has no present or prospective interest in the property that is the subject of this report nor a personal interest or bias with respect to the parties involved with this assignment. 5) Compensation is not contingent on any action or event resulting from the analyses, opinions, or conclusions in, or the use of, this report. 6) The appraisers compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction of value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result or the occurrance of a subsequent event that is directly related to the intended use of this appraisal. 7) The appraisal assignment was not based on a requested minimum valuation, a specific valuation or approval of a loan. 8) To the best of our knowledge and belief, the reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. 9) The use of this report is subject to the requirement of the Appraisal Institute relating to review by its duly authorized representatives. 10) As of the effective date of this report, Dr. G. Vincent Barrett, MAI, has completed the requirements of the continuing education program of the Appraisal Institute. 11) The appraisers analysis, opinions, and conclusions are developed, and this report has been prepared in conformity with the Uniform Standards of Professional Appraisal Practice. 12) Dr. G. Vincent Barrett has made personal inspections of the property that is the subject of this report. 13) This appraisal was prepared by the undersigned appraiser with no other professional assistance. 14) The appraiser has not conducted an appraisal of the subject property nor any other appraisal services regarding the subject property within the last three years.
Barrett Appraisal Services, LLC
Dr. G. Vincent Barrett, MAI NM Certified Appraiser No. 000506-G 62
Addenda
ITEM PAGE
A. Letter of Engagement ........................................................................................................... 63 B. Legal & Tax Documentation ................................................................................................ 65 E. Appraiser Qualifications ....................................................................................................... 74
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Letter of Engagement
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Legal & Tax Documentation 66
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Owner Prop ID Map Code Legal Size Ac. Size sf Bk Pg Assessor's Full Value Taxable Value AC Co. Inc 18179 3022077021202 Blk 1 Lot 2 0.45 19,602 NHSRC $63,939 $21,313 AC Co. Inc 18181 3022077120113 Blk 3 Lot 1-A 0.98 42,689 NHSRC $137,496 $45,832 AC Co. Inc 18182 3022077136101 Blk 3 Lot 2-A 0.83 36,155 NHSRC $116,751 $38,917 AC Co. Inc 18981 3022077160132 Blk 4 Lot 1 0.534 23,261 NHSRC $74,475 $24,825 AC Co. Inc 18987 3022077159119 Blk 4 Lot 2 0.534 23,261 94 2659 $74,619 $24,873 AC Co. Inc 18988 3022077159105 Blk 4 Lot 3 0.534 23,261 NHSRC $74,499 $24,833 AC Co. Inc 18989 3022077158092 Blk 4 Lot 4 0.534 23,261 94 2659 $74,400 $24,800 AC Co. Inc 18990 3022077147068 Blk 4 Lot 5 1.892 82,416 94 2659 $263,706 $87,902 AC Co. Inc 18991 3022077121069 Blk 4 Lot 6 2.491 108,508 94 2659 $347,241 $115,747 AC Co. Inc 18992 3022077085074 Blk 4 Lot 7 0.408 17,772 94 2659 $28,434 $9,478 AC Co. Inc 16585 3022077144172 S2,NE4,S28,T13S, R4W 8.81 383,764 102 1659 $654,555 $218,185 AC Co. Inc 18008 3022077100235 S28,T13S, R4W 26.93 1,173,071 106 130 $411,978 $137,326 44.927 1,957,020 $1,910,115 $636,705 74
Appraiser Qualifications
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VITAE: G. Vincent Barrett, Ph.D., MAI MAIN OFFICE ADDRESS: CITIZENSHIP: U.S.A. 505 HWY 195, P.O. BOX 1244. RESIDENT AUSTRALIA ELEPHANT BUTTE, NM 87935 PHONE: GENERAL CERTIFICATION #: OFFICE: (575) 644 2306 NEW MEXICO 00506-G MOBILE: (575) 644-2306 FAX: (575) 993 5336 E MAIL GVINCENT4@HOTMAIL.COM Military Service United States Navy: U.S.Navy ,(Submarine Service), September 1957 to October 1961. Honorable Discharged. Education Ph.D. Texas A&M University, College Station, Texas. (Urban and Regional Planning), 1973. Emphasis Urban and Regional Economic Development. Dissertation title: "A Planning Methodology for Large Scale Real Estate Projects--A Case Study of Industrial Park Development". M.A. University of the Americas, Mexico City, Mexico. Economics, 1969. Emphasis Economic Development. B.A. Florida Atlantic University, Boca Raton, Florida. Economics, 1966. Emphasis Economic Development. M.A.I Member of the Appraisal Institute (MAI) Awarded October 20, 1989. Recipient: Mortgage Bankers Association of America Faculty Fellowship. Class I Stanford University, Class II University of Florida, RECENT SEMINARS and CLASSES ATTENDED
Advanced Regulatory Training-Public & and Private Water & Sewer Utilities 10/18/2013 Regression Analysis Methodology 4/10/2013 USPAP Update 2/01/2013 National Asso of Realtors Code of Ethics 12/28/2012 Report Writing UAD 7/29/2011 Conservation Easements-IRS/Appraisal Institute 6/18/2011 Appraisal of Nursing Facilities Appraisal Institute 7/ 2/2011 Valuing Commercial Green Buildings Appraisal Institute 2/2011 USPAP Update No 101 The Columbia Institute 12/17/2010 Practice of appraisal Review FHA Protocol #145 The Columbia Institute 12/16/2010 Eminent Domain and Condemnation-Appraisal Institute 1/2009 Appraising Convenience Stores and Gas Stations 2/2009 Site Valuation and Cost Approach 2/2009 National USPAP Update 1/02/2008 Advanced Real Estate Appraisal Methods 3/3/2008 Uniform Appraisal Standards for Federal Land Acquisitions 02/2008 Code of Professional Ethics and Standards of Professional Appraisal Practice 4/2008 Professional Designations and Organizations MAI (Member of the Appraisal Institute: Asso. 1978-1989 Awarded MAI October 1989). Appraiser, General Certification- State of New Mexico, State of Texas, State of Arizona Licensed Real Estate Broker - State of New Mexico. New Mexico State Certified Real Estate Instructor. AIVLA (Member of the Australian Institute of Valuers and Land Administrators Since1989) Commander, American Legion 2007-2011 Post 44, Elephant Butte NM Member American Legion Riders 2007-2011 Member Veterans of Foreign Wars (VFW) Post 1349 Elephant Butte, NM Chairman of the Board, Elephant Butte Chamber of Commerce 2006-2007 Board President /Member, Sierra County Board of Realtors 2000-2011 Board Member/President, Sierra County Economic Development Organization 2004-2010 (SCEDO) Professional Activities 1974-PRESENT 1990-Current Barrett Appraisal Services, LLC : President/CEO, Las Cruces, New Mexico, December 1989 to present. Specializing in subdivisions, land, motels and all other commercial income producing properties as well as market and feasibility studies throughout New Mexico, West Texas, and Eastern Arizona. 1990-Current Barrett School of Real Estate & Appraisal: Owner/Instructor, Las Cruces, New Mexico - December 1990 to 2009. A New Mexico State accredited school offering pre-licensing and continuing education courses in appraisal and real estate sales. The school is fully accredited by the New Mexico Real Estate Commission as well as the New Mexico Appraisal Board. 1981-91 New Mexico State University, Las Cruces, New Mexico (USA) - July 1981 to August 1991. Tenured, Full Professor/Director,-Center for Real Estate and Land Resource Research, College of Business Administration and Economics. 1988-90 University of Technology, Sydney, Australia - Summer 1985 and December 1988 to January 1990. (Leave of absence- NMSU). Professor/Head of Department of Land Economics.. 1984-85 University of Western Sydney, Richmond, New South Wales, Australia. June 1984-January 1985. (Leave of absence- NMSU). Professor/Head of Department, Land Studies Division. 1980-81 DePaul University, Department of Finance, College of Commerce, Chicago, Illinois (USA). Associate Professor, August 1980-June 1981. 1974-80 University of Wisconsin, Milwaukee, Wisconsin (USA) - School of Business Administration. March 1974-July 1980. Assistant Professor, of Real Estate and Finance. Publications Include numerous Books and Professional Journal Articles.
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