Jacques O. Tuchler & Associates REAL ESTATE APPRAISERS & CONSULTANTS Cae» Sa Te Nes VON TET + Fn TET ERSTE November 6, 2008 Charles 8. Webb, Ill, Esa, Berger & Webb, LLP 1633 Broadway, 46" Floor New York, NY 10019 ‘Subject: Street on Pacific Street between 5" to 6" Avenue, Brookivn, NY 11247. Dear Mr. Webb: ‘At your request on behalf of your client, Empire State Development Corporation (CESDC"), we have prepared this Phase |1 appraisal for the subject street for the purpose Of providing an opinion of a range of Market Value as of our Sept. 24, 2009 inspection. This 40,250 square foot street is part of the 22-acre proposed Atlantic Yards project, bounded by Flatbush, Atlantic and Vanderbilt Avenues and Dean Street, together with & portion of Site 5 of the Atlantic Terminal Urban Renewal Plan, on a block bounded by Flatbush & 4” Avenues & Pacific Street. The legal description for ‘he site itself follows: BEGINNING at the comer formed by intersection ofthe eastery side of S* Avenue withthe westerly side of Pacific Stret: Running Thence eastery along the norteriy side of Pacific Sireot 375 feet to the westery she of 5" Avenue; Thence southery Parallel with S® Avenue, 70 feet to the southery side of Pacific Street; Thence eastery ‘along the southery side of Paci Street, 575 feet to a point; Therce northery parallel with 5" Avenue, 70 feet tothe point or place of beginning {As is typical, this street is not zoned and, like other streets, has imited ultlty for any use. Because nearby properties have commercial, residential or mixed zoning, the zoning ofthe sales analyzed is similar, except that they had far areater utility. The site is located in Prospect Heights with the Atlantic Center enclosed shopping mal across Flatbush Avenue, a busy commercial thoroughfare that runs the full length of Brooklyn. Also nearby aré P.C. Richard and Modell. It has easy access via MTA trains and buses, Manhattan and Brooklyn Bridges, and the Brooklyn Queens Expressway. ContinuedCharles S. Webb, I, Esq, November 8, 2008 Borger & Webb, LLP Page 2-Pacite Steet Based upon an investigation and analysis of all avaiable data pertinent to value, especialy prices paid for other land in the market area, recognizing the superonty of the sales in terms of uy, is my opinion that the range and specific value forthe subject street as of September 24, 2008s, ‘Specifically ‘Three Hundred Stety Thousand Dollars ‘This leter isthe final phase of an agreed to Phase Il appraisal. Descriptions ofthe propertys region distri, neighborhood and sto, as well as furthor documentation ‘supporting my opinions and conclusion, are in my fds and willbe fertheoming F and when requested. This submission complies with the request of my client, and {guidelines of the Uniform Standards of Professional Appraisal Praca (USPAP), the Appraisal institute's ‘oae of Profeasional Choe eStandards of Professional Practice, and other organizations with jurisdiction over this professionAssumptions & Limiting Conditions No opinion is intended to be expressed for legal or other matters which would require specialized investigation or knowledge beyond that ordinarily employed by real estate appraisers, although such matters may be discussed herein. 'No opinion regarding title is rendered. Title data and the legal description were: obtained from sources deemed reliable. Title is assumed to be marketable and free. and clear of all liens and encumbrances, easements, and restrictions, except those. specifically discussed in the report. The property is appraised as though available. {or its highest and best use. . The appraiser has not made an engineering survey. Except as specifically stated, sizes and areas were taken from sources deemed reliable, No encroachment of real Property improvements is assumed to exist, unless otherwise stated in this report Maps, plats and exhibits included herein are for illustration only, as an aid in visualizing matters discussed within the report. They should net be considered as ‘surveys, oF relied upon for any other purpose. The information fumished by others is believed to be reliable. No warranty, however, is given for its accuracy. Unless otherwise stated In this report, the appraiser is not aware of any hidden or inapparent conditions of the site, subsoil or structures rendering the property more or less valuable, and assume no obligation for arranging engineering studies that may be required for discovery. Full compliance with all applicable federal, state, and local environmental regulations and laws are assumed, unless noncompliance is stated, defined and considered. It is assumed that all applicable zoning and use regulations ard restrictions have been complied with, unless nonconformity is stated, defined, and considered in the ‘appraisal report. . It is assumed that all required licenses, certificates of occupancy. consents, or other legislative oF administrative authority from any local, state, or national goverment or private entity, etc. have been or can be obtained or renewed for any use on which the reported opinion of value is based. Jacques 0. Tuchler & Associates10. 1. 12, 13, 14, 18, 16. 1. ‘Assumptions & Limiting Conditions Projections herein used to assist in the valuation process are based on market conditions and anticipated short term supply and demand factors as of the effective date ofthe appraisal and a continued stable economy. ‘Thus, they are subject to changes in future conditions that cannot be accurately predicated by the appraiser, and which could affect future income or value projections. ‘The areas discussed were calculated in accord with standards developed by The American Standards Association (Real Estate Appraisal Terminology). ‘The appraiser is not qualifed to detect the existence or extent of exiting potentially hazardous material on or near the site, Existence of such substances usually has an effect on the value of real property. Therefore, no consideration is iven in the analysis to any diminution in value for the cost to remove such hazardous materials thoy do exist. Possession ofthis report, or @ copy, does not cary with it the right of publication It may not be used for eny purpose by any person other than the addressee without the writen consent of the appraisers and, in any event, only with properly written qualification, and only in its entirety. The appraiser, by reason of this appraisal, snot required to give further consultation, testimony, or attend court as to this property unless prior arrangements have been made. Disclosure of the contents of this report is govemed by the By-Laws and Regulations ofthe Appraisal Institute. Neither all nor pat of this report (especialy the value conclusion, identty of the appraiser, or firm with which the appraser is connected) shall be disseminated to the public through advertising, public relations, news, sales, or other media without the appraiser's prior written consent. Acceptance or use of this appraisal report constitutes acceptance of these ‘Assumptions and Limiting Conditions, and the statements in “Certification ‘This appraisal is made under the reasonable assumption that the subject street is not buildable, I information tothe contrary is provided, the appraiser reserves the 3 if so justified after negotiating a new appraisal fee. right to reappraise the Jacques 0. Tuchler & Associates:Salient Property Data Pacific Street between 5" & 6” Avenues Brooklyn, New York 11217 Property Interest: Fee Simple Estate Location: Between 5" & 6” Avenues ‘The Site: City street with 40, 250 Square Feet. Frontages: (On Pacific Street as well as both 5" and 6" Avenues Zone: ‘Assumed similar to the sales — Residential/Commercial Census Tract: 0129.02 Flood Zone: FEMA Panel #360497-62B. Zone X: Not Flood Hazard Area Neighborhood: Prospect Heights: Predominantly middle-income residential neighborhood served by adequate community services, good vehicular and mass transit ‘access, and other urban amenities (schools, churches, health care, ‘shopping, etc.), a8 well as ongoing demand for housing, Residential or mixed commercialresidentil Market Value: Fee Simple Estate as of September 24, 2009 By Sales Comparison Approach $3.70 Per Buildable Square Foot x 97,808 + = Say $360,000 Jacques 0. Tuchlor & Associates: 5‘Sales Comparison Approach ‘The land sales considered most comparable to the subject are analyzed on a price per buildable S/F basis based upon permissible maxmum FAR for residentially zoned sites (highest and best use of the subject). Since there were no reasonably recent sales of similarly sized parcels in Prospect Heights, our search was expanded to nearby areas and also included sales of smaller residential lotsin competitive neighborhoods. Due to the slow-down in the residential development market from 2008 to the effective date of valuation, Sales #2 & #3 are adjusted downward 10% for time, Because the sales were all cash or conventionally financed, they do not require financing adjustments. Zoning adjustments are made - zoning is already reflected in price per buildable square foot. Other adjustments considered in this analysis are: Location: Desirability for residential uses, rate of neighborhood growth, access, and local supply/demand factors as compared to the subject. Comparable #1 is, in a superior location on a more desirable residential street, while the location of Sales #2 & #3 are slightly inferior. Size: The sales are all much smaller than the subject. Appropriate adjustments are made because higher unit prices are typically paid for smaller sites. Other: Alter all the other adjustments are made, a 95% downward adjustment is ‘made to the adjusted unit prices to reflect superiority in terms of buildabiity. ‘Comments: Range of Unit Prices for the Sales is $3.15 to $4.35 PSF of Bulldable Area, Estimated for The Subject: 97,808 Buildable S/F @ $370 = $361,890, Say Three Hundred Sixty Thousand Dollars ($360,000) As of September 24, 2009 Jacques 0. Tuchler & Associates 6Sales Comparison Approach Jacques O. Tuchlor & Associatos60625 ove'ze xe eowesyiwte-z9 260104 2 aisser'ts vevezes srgeseciog ‘weg rosung fenwye onus 2023 soejoosey 9 sajyont 0 senboer ‘o1gepana ion (oreo 988 verzounsey ‘sonvony wog Uo of as oszior 2 eoue vn soning cberny stupseeVacant Land Sale #4 101-103 Boerum Place Brooklyn, New York Jacques 0. Tuchler & Associates 9Location: Zone: Plot Size: Plot Ares Buildable SIF: Deed: Grantor: Grantee: ‘Vacant Land Sale #4 401-103 Boerum Place, Boerum Hill E/S 20' S/O Pasific Street Block 187 Lots 6 & 7, Brooklyn, N.Y. R6 Residential” (2.43x) 40! x 60' (Combined) 2,400 SIF (Total) 5,832 SIF (as per zoning) Dated: 5/6/09 Recorded: 6/1/08 Transfer Tax: $3,300.00 Gerald Kaplan & Linda Weiss, Executors, clo Estate of Yetta Kaplan 101 Clark Street, Brookiyn, NY John & Jil Boratoglou 114 Bergen Street, Brooklyn, NY Indicated Consideration: $825,000 All Cash Price Per Bulldable SIF: $141.46 Verified: By deed. Comments: Grantee filed plans to bull a 4-story, 1 femily dwelling on part ofthe site. Jacques 0. Tuchler & Associates 10‘Vacant Land Sale #2 181 Withers Street Brooklyn, New York Jacques 0. Tuchler & Associates "1Location: Zone: Plot Size: Plot Area: Buildable S/F: Deed: Grantor: Grantee: Vacant Land Sale #2 161 Withers Street, East Williamsburg INNIS 71” E/O Graham Avenue Block 2740 Lot 101, Brooklyn, N.Y. C2-3"Commerciaf” Overtay in R6 “Residential” (2.43) 29x52" 1,508 SIF 3,664 SIF (as per zoning) Dated: 2/14/08 Recorded: 2/22/08 Transfer Tax: $1,700.00 Withers Property Plaza, LLC clo Joseph Verdi, Managing Member 181 Withers Street, Brookiyn, NY 181 Withers St,, LLC clo Emesto Cuoco & Krzysztof Rostek, Members. 60-43 Maspeth Avenue, Maspeth, NY Indicated Consideration: $425,000 All Cash Price Per Buildable SIF: Verified: Comments: Grantee subsequently obtained a $1,430,000 mortgage from Maspeth Federal Savings Bank $115.99 By deed. Grantee fled plans to build a 4-story, 7-unit apartment building, ‘Construction is underway. Jacques 0. Tuchlor & Associates 2Vacant Land Sale #3 14 Conselyea Street Brooklyn, New York ‘Jacques 0. Tuchler & Associates, 8Location: Grantor: Grantee: Vacant Land Sale #3 14 Conselyea Street, East Williamsburg SIS 125' E/O Union Avenue Block 2756 Lot 8, Brooklyn, N.Y. C2-3 "Commercial" Overtay in R6 “Residential” (2.43x) 25x75" 1,875 SIF 4,856 SIF (as per zoning) Dated: 6/2/08 Recorded: 8/1/08 Transfer Tax: $2,408.00 M& J Plaza Realty Comp, lo Maryann Tenaglia, President 895 Metropolitan Avenue, Brooklyn, NY Guarantee Construction LLC clo Yusef Aberjel, Manager 41059 Fulton Street, Brooklyn, NY Indicated Consideration: $602,000 1" Mortgage: $1,267,400 Benjamin Funding Price Per Buildable S/F: $132.13 Verified: Comments: By deed & Grantee Grantee filed plans to build a 4-story, 4-unit apartment building Jacques O. Tuchler& Associates 4Sale #4 942 62” Street aka 6202 Ft. Hamilton Parkway Brooklyn, New York Jacques 0. Tuchler & Associates 18Location: Plot Area: Zone: Site: Deed: Grantor: Grantee: ‘Sale #4 942 62"! Street aka 6202 Ft. Hamilton Parkway Block 5729 Lot 24, Brookiyn, N.Y. 11,185 SIF. Buildable 2x or 22,370 SIF 1-3 ‘Commercial” in R5B “Residential” District ‘One-story, 4,245 si, brick/concrete block, circa 1961, Class °G9*, garage building. Dated: 5/28/09 Recoded: 6/15/09 ‘CRFN 200000181078 Frances Coles Defined Benefit Retirement Plan Frances Cole, Trustee 410 East 67" Street New York, NY 10022 New York City School Construction Authority 30-30 Thompson Avenue Long Istand City, NY 11101 Indicated Consideration: $3,000,000 All Cash Price PSF Buildable: Comments: $134.11 Purchased by Grantee for the construction of a public school. Existing building to be demolished. Jacques 0. Tuchler & Associates 16Certification Certification | Dots Ser, cary that, to thebestof my knowledge and beef | have personaly inspected the subject ste ‘The statements of fact contained nti report ae tue and cored. ‘The reported anaiyses, opinions and conclusions are ited only by the reported sumptions and lnng condone, and are 4 - sseumptans wd ii Ty personal, unbiased protsslralanaiyees, My analyses, cpnione, and conculons were developed, ana ins report has been ‘Prepared in corona wih the Uniform Standards of Professional Aporacel Practica, ‘As of the date of thie report, | have competed the Appraieal Ineute's Continuing Education requirments, and have MAI recaicaton, "nave no preset or contemplated intrest in the property that le the sutoct ofthis report, nor personal terest or ies wi respect othe interested pares. My compensation is not contingent upon the repartng ofa predetermined vale or direction In alu that favere the cause te cont, the amount ofthe value esta, the amend ofa stpulated resul othe occurrence ofa subwoquent event | am in compares with the Compatency Provision in Unform Standarce of Profesional ‘Appaital Pracices as adopted bythe Board of Governors of the FederalReserve Syston Lunde Thle XI cf the FIRREA 1980 (ae amended), and have sfceat educator and ‘experience to perfor the appraisal fhe subject propery. ‘This appraisal report was propared in conformly wih and i subject te requirements of LUSPAP ae adored by FIRREA 1080 and ae amended, and the Code ef Professional Ethics and he Sardarés of Professional Practice ofthe Appraial Insite, and sujet torevow by ts Gay authorize representatives, Noone provided me wih significant professional assistance, ‘Tie appraisal assignment was not based on a requested minimum ban valuation, @ ‘speci valuation oF the approval of loan Bors Siber| NYS Cetied RE. General Appraiser Jacques 0. Tuchler & Associates tt Jacques O. Tuchlor & Associates 47Jacques O. Tuchler & Associates Real Estate Appraisers, Reviewers & Consultants 26 Court Street, Suito 2301 Brooklyn, New York 11242 Phone 718) 625-2080 « Fax (718) 797-5631 » Email tuchlerassocietes@attnet This firm was established over fity (50) years ago by Jacques 0. Tuchler, MAI, SRPA, and, since February 1990, has been under sole proprietorship of Doris Silber, MAI, who has been associated with the firm for over twenty-five (25) years, and a general partner since 1986. ‘As one of the oldest professional real estate appraisal firms in New York City, Jacques O. Tuchler & Associates serves banks, insurance companies, law firms, utility companies, goverment agencies, and individuals requirng evaluations, consultations and appraisals of real estate throughout metropolitan New York, and Nassau, Suffolk & Westchester counties. Property Type: Existing and proposed retall, commercial, office, medical, industrial, residential, specialty, community facility, and mixed-use buildings; cooperativelcondominium developments, garden apartment complexes; gasoline sales and service stations; hotels, motels; shopping centers; houses of worship: theaters; nursing homes, assisted living facilities, and vacant land. Projects involving convertional or special governrrent financing, 3 party transfers, real estate tax exemptions and/or abatements, tax credits, IDA, ICIP, 42, J51, among others. cial. & Appr: Pr + Ciy-owned sites involved in part of South Street Seaport Urban Renewal Area, + The Loews Kings, Pavion, and Fortway movie theatres, among others + Investment evaluation of altemate use of a dormitory facity for Pratt Insitute + 20 metropolitan banking institutions and branches for Federal Home Loan Bank Board, as well as other headquarters and branches for other clients. ‘+A weekend retreat, senior citizen residence, churches, and other community use fcittes for the Roman Catholic Diocese of Breokly.Jacques O. Tuchler & Associates ‘School sites, headquarters, housing, a gymnasium and recreation center in Brooklyn and Long Island for The Sisters of Mercy. Bungalow colonies in the Catskill Mountains ragion, ‘SROs, Class B hotels, theaters, schools, nursing homes, assisted living facilities, landmarked sites, community use facilties, and building shells proposed for rehabilitation and/or conversion for various governmental and not-for-profit agencies. "New York City Partnership Home projects scheduled for construction in the boroughs of Bronx, Brooklyn, Manhattan, and Queens. Industral, residential and rrixed-use properties, and used auto facility and gas stations in Sunset Park, Brooklyn, NY for the New York City School Construction Authority. ‘Third Party Transfer residertial properties for JPMorgan Chase Bank and Citibank, Fulton Ferry Fireboat House parcels for NYC Economic Development Corporation. ‘Appraisals for the City of New York in matters of bankruptcy and certiorari. Appraisals, conferences and expert testimony for New York City Law Department, (Condemnation & Tort Divisions) in urban renewal and capital projects; examples are Brooklyn Williamsburg II, Caribe Vilage, Columbia Street, East New York Industrial, Broadway Triangle, Saratoga Square, Coney Istand, ‘Atlantic Terminal, Brooklyn Center, Flatbush Commercial Revitalization, Municipal Parking Sites, and Newtown Creek. Queens Louis Armstrong Memorial Project, Springfield Gardens Road Widening, and Barnwell Replacement Site, Bronx Gun Hill Road, Bronx River Avenue, Major Deegan Expressway. Manhattan Pueblo Nuevo Houses, Lower East Side Phases | & II, West Village Houses, HarlemiEast Harlem, Piers 16 & 17. Staten Island Conference House Park Addition (Biddle House),Partial List rved ‘Abacus Bank ‘Amalgemated Bank of New Yerk ‘American Savings and Loan ‘Anchor Savings Bank Atlantic Liberty Savings, FA Banco 2opular Bank o% New York Bank of Tokyo Bank of Venezuela JPMorgan Chase Citibank, NA ‘Cohoes Bank Columtia Federal Savings Bank New York Community Bank ‘Country Bank. Dime Savings Bank DPD Bank Federal Home Loan Bank Board Fidelity Bank First Netionwide Bank Gotham Bank of New York Greater New York Savings Bank Independence Community Bark Lehman Brothers Lincoln Savings Bank Lockport Savings Bank Manufacturers Hanover Trust Marine Midland Bank Orix USA Peoples Bank of Pennsylvania Queens County Savings Bank Roosevelt Savings Bank Republic National Bank ‘Seamen's Bank for Savings Yasuda Trust and Banking Co., Ltd Equitable Life Assurance Society * Some have since consolidated or were taken over.Partial List of Clients Served (Cont'd) Pratt institute Roman Catholic Diocese State of New York Mortgage Agency State of New York Dormitory Authority New York State Office of Mental Health NYS Facilities Development Corporation City of New York, Law Department City of New York, Public Development Corporation City of New York Economic Development Corporation City University of New York New York City School Construction Authority Public Administrator, Kings County & New York County Housing Preservation & Development Corporation US. Attomey's Office - Easter District of New York US. Goverrment, Veterans Administration US. Goverrment, General Services Administration US. Department of Commerce Port Authoriy of New York & New Jersey Exxon Standard Ol Company Gulf Oil & Refining Company Chas. Pfizer & Company Brooklyn Union Gas Company Consolidated Edison Federal Derosit Insurance Corporation Health Inourance Plan of Greater New York Kodak Corporation Maimonides Hospital Midland Loan Services Corp. Resolution Trust Corporation Toyota Moter Credit Corporation Trotter-Kent. nc. Urban Markets, Inc.DORIS SILBER, MAI REAL ESTATE APPRAISER & CONSULTANT/REVIEW APPRAISER Education: Continuing ‘The Appraisal Institute: MAI Designation in 1991 ‘Mandatory Continuing Education requirements completed to 2011, Brooklyn College: Real Estate Salesperson Course h College of Businoss Admi Standards of Professional Appraisal Practice Hotel & Motel Valuation Federal Income Tax & Real Estate Certiorari Proceedings in New York ‘Comprehensive Real Estate Appraisal Workshop Understanding Limited Appraisals & Appraisal Reporting Options/General Dynamics of Office Building Valuation Appraising for Litigation Purposes Appraising Special Purpose Properties Intemational Valuation Sophisticated Techniques of Real Estate Finance Valuation of Affordable Housing New York City Apartment Buildings Real Estate Analysis and Consulting in the Future - What To Expect Uniform Standards of Professional Practice (Parts A & B) Current Issues in Real Estate Finance Real Estate Value Cycles State of the Market (Post Sept. 11) Rebulding New York City Case Studies in Limited Partnerships & Common Tenancy Valuation Financial Feasibilty Analysis; Marketing, Financing & Investing in Real Estate Uniform Standards of Professional Appraisal Practice Course 400-2003, ‘Attacking and Defending an Appraisal in Litigation / Part It Uniform Standards of Professional Appraisal Practice Update / 400-2005 Trends & Projections Affecting Real Estate Values Brooklyn Chamber of Commerce Brownfield Re-Development Conference AIIRICS Joint Valuation Conference 3/2006 Business Practices & Ethics Course 1142N (#420) / 2006 ‘Supporting Capitalization Rates AIRICS Intemational Conference: Global Valuation Excellence / 3/2007: Challenges of Development in New York Appraiser as an Expert Witness Issues: Legislation, Incentives, Community Boards & What To Build In Today's Climate Forecasting Revenue / 2008 ‘Appraisal of Nursing Facilities 2512-09 8/2008 National USPAP Update Course 1400 / 2009Panels: Licenses & Certifications: Professional Atiiations: Testimony: DORIS SILBER, MAI Jacques 0. Tuchler & Associates Sole proprietor of the firm: responsibilities include day-to-day management, real property appraisals anc review, and client development. Valuation and consultation services for all property types for over twenty-five (25) years. NYC Law Department, Tax Certiorari & Condemnation Divisions NYC School Construction Authority Resolution Trust Corporation ‘Metropolitan Transportation Authority United States General Services Administration New York State General Services Administration NYS Real Estate Salesperson NYS Certified R.E. General Appraiser #46-2801 NYS Certified R.E. Instructor, All Categories NYCINYS Certified Woman-Owned Business Enterprise National Association of Female Executives ‘Women impacting Public Policy Brookiyn Chamber of Commerce Real Estate Board of New York, Inc. ‘American Women Economic Development ‘Member Brooklyn Museum of Art MAI Designation, The Appraisal Institute Continuing Education Requirements Completed, and Currently Recertified as an MAI Qualified Real Estate Expert in matters including arbitration, bankruptcy, tax certiorari, condemnation, and divorce.