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HomeMy WebLinkAbout3190; Rancho Santa Fe Rd La Costa Meadows Dr; Rancho Santa Fe Rd La Costa Meadows Dr; 2003-04-20APPRAISAL OF FIVE PARCELS OF LAND LOCATED ALONG Rancho Santa Fe Road in the Vicinity of La Costa Meadows Drive Carlsbad, California 92009 EFFECTIVE DATE OF VALUE April 1, 2003 DATE OF REPORT April 20, 2003 APPRAISED FOR Carrie Loya Smalley Senior Civil Engineer City ofCarlsbad APPRAISED BY Hendrickson Appraisal Conipany, Inc. 10992 San Diego Mission Road, Suite 203 San Diego, CA 92108 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants lilENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultatits 10992 San Diego Mission Road • Suite 203 • San Diego, Califomia 92108 • (619) 282-0800 Fax (619) 282-1471 hacinc@worldnet.att.net April 20,2003 Carrie Loya-Smalley Senior Civil Engineer City ofCarlsbad 1635 Faraday Avenue Carlsbad, CA 92008 Re: Five properties (four larger parcels) located along Rancho Santa Fe Road in the vicinity of its intersection with La Costa Meadows Drive in the cities of Carlsbad and San Marcos, CA. Hendrickson Appraisal Company File No. 2002130 Dear Ms. Loya-Smalley, At your request and authorization, the above referenced properties and their environs have been inspected and analyzed to provide an opinion of values of the portions being acquired in conjunction with a Rancho Santa Fe Road improvement project. It is our understanding that the purpose of this assignment is to assist in developing acquisition offers to the property owners. The date of value is April 1, 2003. As requested, the appraisal process and analysis has been fully complete, while the reporting ofthe findings and conclusions of value are corrmiunicated in a Summary appraisal report format. This reporting format is intended to complywith the reporting requirements set forth under Standards Rule 2-2(b) ofthe Uni form Standards of Professional Appraisal Practice of the Appraisal Foundation relating to summary reports and is in full compliance with the Appraisal Institute. All of the appraisals are presented in one report comprising a single introduction section, a single addendum containing all of the comparable sales used and four individual property analysis sections. The two properties vested in the La Costa Meadows Industrial Center were carefully analyzed and determined to satisfy the requirements for being considered a single larger parcel for acquisition purposes. Based on our investigation and analysis, and by virtue of our experience as real eslale analysis and appraisers, it is our opinion that the Market Values ofthe portions of the properties being acquired, as of April 1, 2003 were as indicated in the following table. APN Owner Acquisition Value Just Compensation 223-030-56 Pasquaie Oliver, et al Fee $11,100 $11,100 223-030-62 La Costa Meadows Industrial Ctr. Tenporary Easement $30,700 $30,700 223-030-46 Robert L. & Alice P. Smith, et al Permanent Easement $15,634 223-030-46 Robert L. & Alice P. Smith, et al Tenporary Easement $6,900 $22,500 223-031-31 Brookfield University Commons Permanent Easement $1,452 223-031-31 Brookfield University Commons Temporary Easement $2,800 $4,300 Note: The numbers in the Just Conpensation column are rounded. 2003130.INT HENDRICKSON APPRAISAL COMPANY, INC. Rcal Estaie Appraisers • Consultants This appraisal is subject to certain additional assumptions and limiting conditions that are made a part of this report. Acceptance and use of this report by the client or any other party constitutes acceptance of these assumptions and limiting conditions. Thank you for this opportimity to be of service. Should you have any questions relating to this assigrmient, please call at your convenience. Respectfully submitted, Ted G. Hendrickson, MAI Califomia State Certified General Appraiser Certificate No. AG004974 Edward A. Beaver Califomia State Certified General Appraiser Certificate No. AG009555 !002I30,1NT ii HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants li TABLE OF CONTENTS TITLE PAGE LETTER OF TRANSMITTAL i TABLE OF CONTENTS ii SUMMARY OF SALIENT FACTS AND CONCLUSIONS iv ASSUMPTIONS AND LIMITING CONDITIONS v INTRODUCTION 1 AREA MAP 5 NEIGHBORHOOD MAP 6 AREA DESCRIPTION 7 INDIVIDUAL PROPERTY SECTIONS ADDENDUM A-l !002130,1NT HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants li Location Thomas Bros Legal Descriptions Dateof Valuation Date of Report SUMMARY OF SALIENT FACTS AND CONCLUSIONS Five parcels (four larger parcels) located in the vicinity of the intersection of Rancho Santa Fe Road and La Costa Meadows Drive, Carlsbad, CA 92009. 1128A5, A6 See individual property sections. April 1,2003 April 20, 2003 Property Rights Appraised Fee Simple and Easement. Zoning Highest and Best Use Improvements Property Values Three ofthe parcels (two larger parcels) are zoned for Light Industrial use, the other two are designated as open space. See individual property sections. The three industrial zoned properties are all improved with multi tenant industrial improvements. The two open space parcels are vacant. APN Owner Acquisition Value Just Compensation 223-030-56 Pasquaie Oliver, et al Fee $11,100 $11,100 223-030-62 La Costa Meadows Industrial Ctr. Temporary Easement $30,700 $30,700 223-030-46 Robert L. & Alice P. Smith, et al Permanent Easement $15,634 223-030-46 Robert L. & Alice P. Smith, et al Ten5>orary Easement $6,900 $22,500 223-031-31 Brookfield University Commons Permanent Easement $1,452 223-031-31 Brookfield University Commons Tenporary Easement $2,800 $4,300 Note: The numbers in the Just Conpensation coliunn are rounded. I002130.INT IV HENDRICKSON APPRAISAL COMPANY. INC. Real Estate Appraisers • Consultants li ASSUMPTIONS AND LIMITING CONDITIONS This appraisal analysis is based upon the following general assimiptions: 1) Title to the properties are assumed to be good and marketable; opinions of value herein were arrived at without regard to question of title. 2) The properties are free and clear of any or all liens or encumbrances unless otherwise stated. 3) Responsible ownership and competent property management are assumed. 4) No survey or staking of the boundaries of the properties have been conducted, although the acquisition areas were staked to assist in identifying their boundaries. All areas and dimensions fumished are assumed to be correct as identified in information provided by the client or extracted from public records. 5) There are no hidden or unapparent conditions of the properties' subsoil or structures that render them more or less valuable; diat the soil conditions are adequate to support standard construction consistent with the highest and best use. No soil analysis or soil engineering study was conducted and no responsibility is assumed for such conditions or for obtaining the engineering studies for such discovery. 6) The properties demonstrate compliance with all applicable federal, state and local environmental regulations and laws, unless the lack of such compliance is stated and considered. 7) The properties conform to all applicable zoning and use regulations and restrictions unless a nonconformity has been identified, described and considered. 8) Any and all required licenses, certificates of occupancy, consents or other legislative or administrative autiiority from any local, state or federal govemmental or private entity have been or may be obtained or renewed for any use on which the value opinion contained herein, is predicated. 9) Information, estimates, and opinions fumished by others and contained in this report were obtained fixjm soim;es considered reliable and believed to be true and correct; no responsibility is assumed for errors or omissions, nor for information not disclosed which might otherwise affect the valuation estimate. The right is reserved to reevaluate such information at the time of its disclosure. 10) Disclosure ofthe contents ofthis appraisal report is govemed by the By-Laws and Regulations of the Appraisal Institute. 11) Sketches, maps or photographic views in this report are included for the purpose of assisting the reader in visualizing the properties; no responsibility for accuracy of these exhibits is assumed. 12) There are no environmental nor ecological reasons which would prevent the economical and feasible development ofthe properties to their concluded highest and best use. 13) No toxic or hazardous waste report was made available for review. No known hazardous materials were discovered during the site inspection ofthe property. The presence of such materials may affect the value ofthe properties, if discovered after testing by an expert in this field. The value !M2130.INT V HENDRICKSON APPRAISAL COMPANY. INC. Real Estate Appraisers • Consultants li estimates herein are predicated on the assumption that there is no such material on or in the properties that would cause a loss in value. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required to discover them. 14) Some of the subject properties have significant landscaping and site improvements in the acquisition areas. Based on a conversation with Doug Helming of Helming Engineering we have assumed as a limiting condition of this assignment tiiat any landscaping or other site improvements damaged or destroyed in the course of completing the project will be replaced in kind as part ofthe project. 15) The appraisers are not to be subject to liability for any conditions tiiat may be at variance with the assumptions and limiting conditions herein set forth. 16) By acceptance and use ofthis report, the user agrees that any liability for error, omissions or judgement oftiie appraiser is limited to the amount ofthe fee charged for the appraisal. Anyone acting in reliance upon the opinions, judgements, conclusions or data contained herein, who has the potential for monetary loss due to the reliance thereon, is advised to secure an independent review and verification of all such conclusions and/or facts. The user agrees to notify the appraisers, prior to any loan or irrevocable investment decision, of any error which could reasonably be determined from a thorough and knowledgeable review. 17) The appraisers, by reason of tiiis appraisal, are not required to give further consultation or testimony or be in attendance in court, hearing or deposition with reference to the property in question or any matters relating to any components of this report unless additional contractual arrangements have been made. 18) Unless otherwise stated, the fair market value herein reported is effective only on the date of value specified. The Fair Market Value of real estate is affected by national and local economic conditions and, consequently, will vary with future changes in such conditions. 19) Neither all nor any part ofthe contents ofthis report (especially any conclusions as to value, the identity of the appraisers or the firm with which they are connected, or any reference to the Appraisal Institute) shall be disseminated to die public tiu-ough advertising media, public relations media, news media, sales media or any other public means of communication without the prior written consent and approval ofthe authors. 20) Possession of tiiis report, a copy thereof, or any portion thereof does not carry with it the right of publication. It may not be used for any purpose by any person other than tiie party to whom it is addressed without the expressed written consent of Hendrickson Appraisal Company, Inc., and in any event only with the proper qualification and only in its entirety. !002l30.iNT VI HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants 1^1 If CERTIFICATE OF APPRAISAL The imdersigned do hereby certify that, except as otherwise noted in this appraisal report: 1) The statements of fact contained in this report are true and correct; 2) The reported analyses, opinions and conclusions are limited only by the reported assumptions and limiting conditions and are our personal, unbiased, professional analyses, opinions and conclusions; 3) We have no present or prospective interest in the property that is the subject of this report, and we have no personal interest with respect to the parties involved; 4) We have no bias with respect to the properties that are the subjects of this report or to the parties involved with this assignment; 5) Our engagement in this assignment was not contingent upon developing or reporting predetermined results; 6) Our compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors tiie cause of the client, tiie amount of the opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directiy related to the intended use ofthis appraisal; 7) Our analyses, opinions and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice; 8) We have made a personal inspection ofthe property that is the subject ofthis report and the owners were afforded the opportunity to accompany us at the inspections; 9) No one other than the undersigned provided significant professional assistance to the persons signing this report; 10) Ted G. Hendrickson, MAI is certified under the continuing education program of the Appraisal histitute; 11) The use of tiiis report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representative; 12) An original copy of this report is herein certified. Only an original can be certified to; an original copy will be identified as embossed with the official MAI seal and with original signatures in blue ink. Any copy of this report which is not in this form is not an original and therefore should not be considered or used as an authentic report; nor will the appraiser accept any liability or responsibility for the use or reliance of such unauthorized copy. n. Restriction Upon Disclosure and Use: The undersigned MAI appraiser is a Member of the Appraisal Institute. The Bylaws and Regulations of the Institute require all Members to control the use and distribution of each appraisal report signed by them. Therefore, the possession of this report, or a copy tiiereof, does not carry with it tiie right of publication, nor may it be used for any purpose other than described in the report, witiiout the previous written consent of Hendrickson Appraisal Company, Inc. Ted G. Hendrickson, MAI CA Certified General Appraiser No. AG004974 Edward A. Beaver CA Certified General Appraiser No. AG009555 mZI30.INT Vll HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants li m INTRODUCTION IDENTIFICATION OF THE SUBJECT PROPERTIES The subjects ofthis appraisal are five parcels of land in the vicinity ofthe intersection of Rancho Santa Fe Road and La Costa Meadows Drive in the Cities ofCarlsbad and San Marcos. The properties vary in size and zoning classification. Three of the parcels are zoned for light industrial use, the other two are designated as open space. LEGAL DESCRIPTION Legal descriptions ofthe individual properties are fumished in the individual property sections ofthe report. PROCESS AND REPORTING The appraisal process has been fully complete and extensive, and is in full compliance with the Uniform Standards of Professional Appraisal Practice (USPAP). The reporting ofthe findings of this analysis has been presented in a Summary Appraisal Report format consistent with Standard Rule 2-2(b) of USPAP. PURPOSE OF THE APPRAISAL The purpose ofthis appraisal is to develop opinions of the market values ofthe subject properties as of April 1,2003. DEFINITION OF MARKET VALUE The term "market value" as used in this report, is defined in Section 1263.320 of the Califomia Code of Civil Procedures as: (a) "The fair-market value of the property taken is the highest price on the date of valuation that would be agreed to by a seller, being willing to sell but under no particular or urgent necessity for so doing, nor obliged to sell, and a buyer, being ready, willing and able to buy but under no particular necessity for so doing, each dealing with the other with full knowledge of all the uses and purposes for which the property is reasonably adaptable and available. (b) The fair-market value of the property being taken for which there is no relevant market is its value on the date of valuation as determined by any method of valuation that is just and equitable." 1 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants li PROPERTY RIGHTS APPRAISED The property rights appraised are those arising from the fee simple and easement interests in the subject property. DEFINITIONS The following definitions are from The Dictionary of Real Estate. Third Edition, published by the Appraisal Institute in 1993. Fee Simple: "Absolute ownership unencumbered by any other interest or estate; subject only to the limitations imposed by the govemmental powers of taxation, eminent domain, police power and escheat." For purposes of this report, this definition is expanded to include recorded easements, and covenants, conditions and restrictions (CC&R's), if any exist. Easement: "An interest in real property that conveys use, but not ownership, of a portion of an owner's property." DATE OF VALUE The date of value is April 1,2003. DATE OFREPORT The date oftiie report is April 20, 2003. HISTORY OF OWNERSHIP History of ownership is discussed in the individual property sections of the report. FUNCTION OF THE APPRAISAL It is our understanding that this appraisal will be used to aid in the process of acquiring all or part of the subject properties in conjunction with a realignment and widening of Rancho Santa Fe Road. SCOPE OF THE APPRAISAL The analysis included in this assignment is intended to be an "appraisal" as defined in the Standards of Professional Appraisal Practice of the Appraisal Institute, with the results of the analysis, opinions, and conclusions being those of a third party. !002130.INT 2 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants li 1) AU appropriate data deemed pertinent to the solution ofthe appraisal problem was collected, confumed, and reported in conformity with the Uniform Standards of Professional Appraisal Practice ofthe Appraisal Foundation. These data include: Site Analysis - documentation of the physical characteristics of the subject properties and their surroundings. Property History - current and proposed uses, prior uses, any sales and lease information. Regional and Local Area Analysis - pattems of use, trends in development, nature of existing and anticipated population, economic influences, and demographic characteristics oftiie Carlsbad and San Marcos area and surrounding community. Land Use Analysis - discuss with various city representatives the present status and proposed future potential uses for the subject properties. Highest and Best Use - Uses permitted on the subject properties are govemed by the Cities of Carlsbad and San Marcos via the General Plans and the Zoning Ordinances. The uses specified in those documents are considered to be tiie Highest and Best Uses of tiie properties. 2) The subj ect properties were inspected on August 20,2002 and subsequent dates by Ed Beaver and Ted Hendrickson of Hendrickson Appraisal Company, Inc. hi addition to inspecting the subject properties, the surrounding environs were also inspected. The properties were also reinspected on several subsequent occasions. 3) In an effort to develop opinions ofthe subject properties' fair market values, the appraiser reviewed available sales and escrows of properties intended for industrial and open space uses in San Diego County. 4) Each comparable property was inspected, and the buyer, seller or broker involved in selling the property was interviewed to confirm the salient information regarding the transaction. All ofthe assumptions made throughout the report have been well supported by market evidence and/or discussions with knowledgeable individuals in the area of concem. !002I30,INT 3 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants li 5) This appraisal report is prepared in full comphance with the Uniform Standards of Professional Appraisal Practice (USPAP), as published by the Appraisal Foundation and adopted by the Appraisal Institute. It is intended throughout this appraisal process that this appraisal be performed in such a manner that the results of the analysis, opinions, or conclusions are that of a disinterested third party. INTENDED USERS AND USE OF THIS REPORT This appraisal report is intended for the sole use of the City ofCarlsbad for property acquisition purposes. ;002I30.INT 4 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants li AREA MAP MA IIO •'t. CANTON \- ^fj !002I30.INT HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants li NEIGHBORHOOD MAP ; : • • !002I30.INT 6 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants li AREA DESCRIPTION The subject properties are located on the border between the cities of Carlsbad and San Marcos. Four of the properties are located in San Marcos, the fifth is in Carisbad. Rancho Sanla Fe Road is the dividing line between the two cities in the subject area. The City ofCarlsbad is located in north coaslai San Diego Counly aboul 35 miles north of downtown San Diego. It is bounded on the north by the City of Oceanside, on the east by the Cilies of Visla and San Marcos and portions of unincorporated San Diego Counly, on the soulh by the Cily of Encinilas and on the west by the Pacific Ocean. The city comprises a total area of a little over 42 square miles, has a currently estimated population of approximately 88,000, and has a median household income of aboul $64,000. The City of San Marcos is located in north inland San Diego Counly about 40 miles north of downtown San Diego. Along with Vista and Oceanside it is one of the "Tri-Cities" in north counly. ll is bounded on the west by the Cities of Vista and Carisbad, on the east by the Cily of Escondido, and on the north and south by unincorporated San Diego Counly. The city comprises a total area of a little over 24 square mi les, has a currently estimated population of approximately 60,800, and has a median household income of about $46,000. Both of these cities are primarily residential communities, bul bolh offer employment opportunities in the immediate area. Among those employment opportunities are various industrial oriented developments in both cities - in Carlsbad primarily in the vicinity of Palomar Airport and in San Marcos mainly along Stale Route 78, although the subject area has several induslrial properties along La Costa Meadows Drive. Other commercial development in the two cities include large shopping malls and outlet centers, numerous automobile dealerships as well as recreation/tourist oriented businesses including hotels and golf resorts. A number of high tech and biomedical firms are also locaied in the area. The immediate subject area is in the eastem section of Carisbad and the southwestem portion of San Marcos, a short distance southwest of Lake San Marcos. The subject properties are in a developing area with a number of vacant sites in the area, although the induslrial park along La Costa Meadows Drive is mostly built out. There is commercial developmenl a short distance north on Rancho Santa Fe Road, and a variety of residential development in the immediate area on both sides of Rancho Santa Fe Road. HENDRICKSON APPRAISAL COMPANY, INC. Real Hstale Appraisers • ("onsullanis li PROJECT DESCRIPTION The project for which the acquisitions are needed involves the realignment of Rancho Santa Fe Road and mass grading proposed by the City of Carlsbad and Fieldstone/La Costa Associaies. The City has determined that the realignment is necessary to accommodate the construction of Rancho Santa Fe Road as a six lane prime arterial. The Circulation Element of the Carisbad General Plan currently designates Rancho Santa Fe Road as a six lane prime arterial, however, curreni thinking is lhal the section belween Melrose Drive and Questhaven Road (San Elijo Road) may ultimately be construcied to eight lanes to accommodate anticipated traffic volume generated by proposed residential development in southwestern San Marcos. The realignment ofthe roadway involves the area between Melrose Drive on the north end and La Cosla Road on the south end. For much ofthat distance, the new Rancho Sanla Fe Road alignment will be about a quarter mile east of its present location. However, in the immediate vicinity of the subject properlies the roadway will actually be shifted a little to the west of ils present localion. A new bridge over San Elijo Creek will be constmcted to the west ofthe existing bridge as part of the project. The road and bridge constmction that immediately affects the subject properties is identified in the Final EIR for the project as being Phase III B ofa three phase project. Eariier phases involve a major grading project and constmction ofthe southerly portion of the new section of Rancho Sanla Fe Road. During the constmction ofthe earlier phases of the subject project, the City of San Marcos is expected to complete a constmction project involving Melrose Drive lo the north of the subjeci properties. That project involves redesigning the intersection of Melrose Drive and Rancho Santa Fe Road as well as extending Melrose Drive eastward along the northem side of the La Cosla Meadows industrial park, then southward to an intersection with San Elijo Road. It will also provide another means of access lo the La Costa Meadows industrial park via intersections with interior streels in the developmenl including Patton Slreel. The Melrose Drive project is expected to be completed prior lo commencement of constmction of Phase ni B ofthe Rancho Santa Fe Road widening project. For the period of time lhal the Rancho Santa Fe Road, La Costa Meadows Drive intersection is closed, Melrose Drive is expected to provide an altemative route into the industrial park and the subjeci properties locaied there. The following pages contain an artists conception of what Rancho Santa Fe Road will look like afler the project is complete, and amap showing the new alignment of Rancho Sanla Fe Road relative to its existing alignment in the vicinity of the subject properties. 8 HENDRICKSON APPRAISAL COMPANY, INC. Real Estaie Appraisers • C onsullanis li JRCE DurteK S AssoriHles Proposed View Existing and proposed views of subject area looking generally north. The subject properties are on the far side of the road in both views. !002130,INT HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants li Melrose Drivo Corlniln Sireo Projeci Boundary Assessment DIstrici Boundary future Roadway Existing Roadway L«lsiino La Costa Meadows Urive Sloiifis > |S% Archaoological Silos Muilla Clevelandii Oal" Rioarlan Woodlands Quesihaven Road eslhaven Road o ^ ) Interred Homo Ranges ol the Calilomia Gnatcatcher (idonlilied Dy MBA) Inlorred Homo Ranges ol Calilornia Gnntcalchef^ (identiliod by S'weetvvatoi Environmental Biologists) !002130.1NT 10 HENDRICKSON APPRAISAL COMPANY, INC. Real Eslale Appraisers • Consullanis li VALUATION - TEMPORARY CONSTRUCTION EASEMENTS Compensation for a temporary easement typically amounts to compensation lo the owner for loss of use ofthe area for the period of time that its utiHty is lost, hi essence, the city is leasing a portion ofthe property from the owner for the specified time. A common method of determining appropriaie compensation is to develop a monthly rental rate for the easement area, then calculate the present value of a stream of monthly rental payments for the duration of the easement. The monthly rental rate is typically developed using a land rate of retum based upon the market value ofthe land. Land Rate of Return - Typically, ground lease rates are determined by applying a land rate of retum lo the value ofthe land being leased to derive an appropriate rental rate. Ideally, in an active market, sufficienl market data is available to extract an appropriate rate of retum directly from the markel. The appraisers have significant experience in dealing with ground leases of a variety of property types such as commercial or industrial land, and have conducted extensive land lease rate studies in all areas of San Diego County as well as up and down the entire west coast. It is interesting to note that for the vast majority of these studies, irrespective of property type or current condition of the market, the land rate of retum used to determine rental rates does not vary much. Only in unusual cases is the rate of retum lo the land below 9% or above 10.5%. It is much more common for changes in land value to drive changes in the rental rale, than for changes in the land rate of retum to drive changes in the rental rale. The appraisers have conducted numerous land lease rate studies over the past several years in which the staled lease rate varies very little either between property types or with time. Based on our surveys and analysis, we have concluded that a land rate of retum of 10% is appropriate for estimating a fair rental rate for the subject easement area. Duration of the Easement - hiformation provided to the appraisers by Doug Helming of Helming Engineering indicates that the temporary constmction easements on the subject properties will be in place from June 1,2003 until January 1,2005, a period of 19 months. Once the project has been completed, the city will no longer need the easements on the subjeci properties and is likely to release the them back to the property owners. Depending on the actual scheduling of constmction, the easement rights could be released prior to their anticipated expiration dates. However, experience has shown that schedules and priorities change from time to time, particularly for large, complex projects such as the one in the subjeci area. The project may or may not be completed ahead of schedule, and, in fact, the exact completion dale is impossible to predict at this eariy date. Therefore, we believe it is appropriate to assume that the temporary easement rights will remain with the city until the presently anticipated expiration dale of January 1, 2005. 2002I30,INT HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants li Discount Rate - The process of determining appropriate compensation for the property owner involves developing an opinion ofthe fair monthly rental rate for the property, then projecting that rental rate into the future as a series of cash flows to the owner for the duration of the easement. In order to account for the time value of money, cash flows projected to be received in the future must be discounted lo determine their present value. In typical real estate transactions, discount rates in the range of 11% to 12% are common. These rates include an allowance for the investor's perception of risk as it relates to the durability ofthe income stream, hi the case ofthe subject properties, on the other hand, the owners are not investing in real estate transactions, and to use a discount rate which includes an allowance for the risk involved in those transactions is considered inappropriate. In our opinion, a "safer" rate is considered more appropriaie and we researched CD and short term bond rates. Those rates currently range generally from aboul 1.8% to 3.5%. We have concluded that a discount rate between real estate investment rates and CD's and short term bonds is appropriate and we will use 6% in our analysis. Present Value Factor - Since the compensation to the owner is typically an up front lump sum paymeni rather than a series of monthly rent payments, it is necessary to calculate the present value ofthat series of cash flows. The most direct method is to determine the Present Value Factor, which is the amount by which a monthly rental rate must be multiplied to determine the present value ofa specified number of cash flows discounted at a particular rate. The Present Value Factor varies depending on the number of cash flows, the discount rate and the number of periods before the cash flows are scheduled to commence. Note that since rent payments are typically made at the beginning of the month, the present value faclor musl be calculated on the basis of beginning of period payments. The Present Value Faclor for 19 periods, beginning 2 months in the future, at a 6% discount rate is 17.99. The parameters developed in the preceding paragraphs will be used in our analysis of the temporary constmction easements being imposed on the subject properties. That analysis is discussed in the individual property sections of the report. 2002130 INT 12 - HENDRICKSON APPRAISAL COMPANY. INC. Real Estate Appraisers • Consultanis 3 PLAT MAP !002l30-4a.rpt Smith/Anthony -1 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants 0 SITE DESCRIPTION Location: The subject property is located at the southeast comer of Rancho Santa Fe Road and La Costa Meadows Drive in the southwestem San Marcos. Rancho Santa Fe Road is the approximate dividing line between San Marcos and Carlsbad in this area. TB Map Code: 1128A5 Legal Description: Lot 1 of Rancho Santa Fe hidustrial Park, in the County of San Diego, State of Califomia, according to Map Thereof No. 7736, filed in the Office ofthe County Recorder of San Diego County, September 5, 1973. Owners: Robert L. Smith and Alice P. Smith, undivided 1/2 interest; Thomas L. Anthony and Julia F. Anthony, tmstees, undivided 1/2 interest. APN 223-030-46 Real Property Taxes/Assessments: APN 223-030-46 Tax Rate Area: 13066 Tax Rate: 1.02842% Assessed Land Value: $ 76,656.00 Assessed Improvement Value: $ 482,981.00 Personal Property $ 0.00 Total Assessed Value: $ 559,637.00 Base 1% Tax: $ 5,755.40 Fixed Charges: $ 34.98 Total Tax: $ 5,790.38 !002l30-4a.rp« Smith/Anthony - 2 HENDRICKSON APPRAISAL COMPANY. INC. Real Estate Appraisers • Consultants li The property taxes are reported as having been paid on the Tax Collector's intemet site. Access: The property has direct frontage on La Costa Meadows Drive and is directly accessible via a driveway in that frontage. It also fronts on the right of way for Rancho Santa Fe Road, however, in this area the actual roadway does not extend all the way to the edge of the right of way. There is a paved area between the edge ofthe actual roadway and the westeriy property line ofthe subject that is used to provide access to the subject via two driveway cuts in this area. Size and Shape: According to San Diego County Assessor's data, the subject property is 1.52 acres, or approximately 66,211 square feet in size. It is irregular in shape. Please refer to the Plat Map. Topography: The subject property is generally level and offers full utility. Drainage: Based on our physical inspection, the subject property appears to offer adequate drainage. Flood Zone: Review of FEMA Flood Map 06073C1051F, dated June 19, 1997 as well as San Diego Geographic Information System Natural Features mapping indicates that the southerly portion ofthe subject property is in Flood Zone A. The northeriy portion of the site, in which the building is located, is in Flood Zone X, !002130-4a.rpt Map source: San Diego Geographic Information System. Smith/Anthony - 3 HENDRICKSON APPRAISAL COMPANY. INC. Real Estate Appraisers • Consultants outside the 500 year flood plain. Toxic or Hazardous Materials: No toxic or hazardous waste report was available for review, and a thorough physical investigation ofthe property is beyond the scope ofthe assignment. No known hazardous materials were observed during our inspection ofthe property. The Subject Property is appraised as if free from hazardous materials. Geologic Conditions: Most of Southem Califomia including San Diego County is subject to a potential earthquake. There are no major earthquake faults affecting the immediate subject area, but within ten miles the Rose Canyon fault, a short distance offshore, could create a damaging earthquake. Map No. 6 of the Califomia Geologic Data Map Series indicates that neither this fauh, nor other minor fauhs in the area, have shown evidence of displacement during either historic or Holocene time(during the past 10,000 years). Title Report: A prehminary Titie Report prepared by First American Title Company and dated August 7, 2000 was provided to the appraisers for review. The Title Report identifies easements and encumbrances considered typical for a property such as the subject. None of these encumbrances is considered to limit the subject's development to its Highest and Best Use. Zoning: The subject property is currently zoned L-M, Light hidustrial by the City of San Marcos. This classification permits light industrial improvements on the subject property similar to those found on other properties in the immediate area. The Land Use element ofthe San Marcos General Plan identifies this area for Lighl hidustrial use. No changes to either the zoning or land use classification are anticipated in the foreseeable future. Current Uses: The subject property is currently improved with a concrete tilt up, multi-tenant industrial building which is considered to be in average condition. The acquisition areas do not affect the building improvements on this property. Utilities: All typical utilities are available and operating to the site with adequate capacity to support the existing :oo2i3o-4a.p. Sfliith/Anthony - 4 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants I -,0 or potential uses. Electricity and natural gas are provided by San Diego Gas and Electric, water is provided by the Vallecitos Water District, telephone service is provided by Pacific Bell and others. Street Improvements: The two public streets which front the subject property are asphalt paved streets. Rancho Sanla Fe Road is a main arterial in the area. The entire subject frontage is improved with concrete curbs, gutters and sidewalks, although the opposite side of Rancho Santa Fe Road has no such improvements. Easements/Encumbrances: Mapping provided to the appraisers identifies an easement for access by the San Diego Flood Control District along the southeriy end of the subject property. This easement is not considered lo limil development of the subject property to its Highest and Best Use. Environmental Issues: There are no known environmental issues affecting the subject property. Improvements: The subject property is currently improved with a single story, concrete tilt-up light industrial building which appears to be leased to multiple tenants. The building is estimated to be approximately 25 years old and appears to be in average condition. The major improvements are not affected by the acquisition areas. Site Improvements: Site improvements on the subject property include asphalt paved driveways and parking areas, concrele walks, and landscaping around the periphery of the site. The landscaping includes grass areas, flowers and other shmbs as well as mature trees. The Vallecitos Water District easement is in an asphalt paved area ofthe site. The TCE area includes areas of pavement as well as significant portions ofthe landscaping. According to Doug Helming of Helming Engineering, major signs and mature trees on the property will be avoided during completion ofthe project. Any other landscaping and pavemenl damaged or destroyed during completion of the project is to be restored to its original condition as part of the projeci. Accordingly, we have not considered replacement costs of these items in our analysis. DESCRIPTION OF PART BEING ACQUIRED hiformation provided to the appraiser indicates that two areas of this property are being acquired. The first is an irregular shaped area that mns generally along the westem property line and approximately the westem half of the northem property line ofthe subject property. Please refer to Acquisition Map 1 which ioo2i3o-4arp, Smith/Authouy - 5 HENDRICKSON APPRAISAL COMPANY. INC. Real Estate Appraisers • Consultants follows, hiformation prepared by Aguirre and Associates provided to the appraisers indicates lhat this temporary easement area comprises approximately 0.138 acre, or approximately 6,007 square feet in size. The majority ofthis area is landscaped areas along the perimeter of the site, although small areas of asphalt pavement in the driveway/parking area are also included. This area is being acquired as a temporary constmction easement which is to commence June 1, 2003 and expire January 1, 2005, a duration of 19 months. The second area being acquired is also irregular in shape and comprises a total of 0.087 acres, or approximately 3,790 square feet. Please refer to Acquisition Map 2. This easement will encumber a portion ofthe existing driveway and parking area at the front of the building on the property. The entire area of this easement is currentiy paved with asphalt and is used as a driveway.. It is being acquired as a permanent access easement to the Vallecitos Water District. Comparison of the two acquisition maps provided has allowed us to calculate that approximately 935 square feet of the two easement areas overiap each olher. There are no major improvements in either of these acquisition areas. foo2i3o^arpt Smith/Authony - 6 HENDRICKSON APPRAISAL COMPANY. INC. Real Estate Appraisers • Consultants li Subject property looking southeast across Rancho Santa Fe Road at La Costa Meadows Drive. >002l30-4a.rpl Subject property looking northeast across Rancho Santa Fe Road. Smitii/Anthony - 7 HENDRICKSON APPRAISAL COMPANY. INC. Real Estate Appraisers • Consultants Looking south into the subject driveway from across La Costa Meadows Drive. The stakes do not delineate acquisition areas. Looking south along the westerly property line. Rancho Santa Fe Road is to the right. The extra Rancho Santa Fe Road right of way is to the right ofthe sidewalk. !002l30-4a.rpt Smith/Anthony - 8 HENDRICKSON APPRAISAL COMPANY. INC. Real Estate Appraisers • Consultants : li Looking north along the west side of the subject. The TCE extends from the sidewalk to the stake adjacent to the tree trunk in the photo. >002130-4arpl Looking east along the north side of the subject. All of the landscaping is in the TCE. Smith/Anthony - 9 HENDRICKSON APPRAISAL COMPANY. INC. Real Estate Appraisers • Consultants : I I I li Looking northeast into the subject driveway. The lines delineate the approximate boundaries ofthe Vallecitos Water District access easement. Looking south into the subject driveway. The lines delineate the approximate boundaries ofthe Vallecitos Water District access easement. !002l30-4a.rpt Smith/Anthony -10 HENDRICKSON APPRAISAL COMPANY. INC. Real Estate Appraisers • Consultants . li ACQUISITION MAP 1 Temporary Constmction Easement !002l30-4a.rpt Smith/Anthony -11 HENDRICKSON APPRAISAL COMPANY, INC. Real Estaie Appraisers • Consullanis li !002130-4a.rpt ACQUISITION MAP 2 PAR. A ^EADOV^ DRIVE RANCHO SANTA F£ JNDUSTRIAL PARK EXHIBIT "A SHT. 2 OF 2 OT 5-1 APN 223-031-31 JVlAP 13156 VALLECITOS WATER DISTRICT DATE: 6-12-02 SCALE; AS SHOW 223-030-46 GRANT OF RIGHT-OF-WAY SMITH AND ANTHONY FAMILY TRUST POR. LOT 1. MAP 7736 DRAWN BY: DOC. NO. VM) CK: Vallecitos Water District Utility Easement Smith/Anthony - 12 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants li HIGHEST AND BEST USE AS THOUGH VACANT - The determination of the Highest and Besl Use ofa property as though vacant is contingent upon the proposed use being legally permissible, physically possible, financially feasible and maximally productive. Legally Permissible - The subject property is locaied in the Questhaven/La Cosla neighborhood ofthe City of San Marcos, in the southwestem portion of the cily adjacent lo the Carlsbad cily line. The land use element ofthe San Marcos General Plan identifies the subjeci for light industrial use. The property is zoned L-M, light industrial, by the City. This zoning classification is intended lo "provide districts for the grouping together of light industry wholesale and professional uses, service commercial uses, and stand alone/retail showrooms in an environment which will be beneficial to such uses and to provide protection for surrounding uses". Permitted uses in the L-M zone are primarily industrial, but may include uses w hich are accessory to the induslrial use, such as communily facilities, commercial uses, and other uses clearly recognized as necessary to the primary industrial uses. Among permitted uses are manufacturing and assembly, warehousing, wholesale and distribution establishments, metal working shops, furniture manufacturing and repair, blueprinting, printing and lithography as well as others. A variety of additional uses maybe permitted subject to major or minor conditional use permits. Use of the subjeci property for any of these uses would constitute a legally permissible use. Physically Possible - The subject property totals approximately 1.52 acres in size. It is somewhat irregular in shape and is generally level and usable. The southerly portion of the property is in Flood Zone A, however, the remaining portion of the site is of ample size lo accommodale industrial improvements, lhe subject property meets minimum lot size, lol widlh and lot depth requirements of 20,000 square feci. 05 feet and 150 feet, respectively. No soils report was provided lo the appraisers for review, however, we have no reason to suspect that the load bearing capaciiy of the site is inadequate lo support typical industrial improvements. The property satisfies the Highest and Best Use requiremeni of being physically possible. Financially Feasible and Maximally Productive - The curreni zoning classification and land use designations for the subject property are intended lo accommodale lighl induslrial development. The supply of industrial zoned land, particularly sites in induslrial parks in the north San Diego Counly area, continues to dwindle. As a result, even in a somewhat sluggish economy, feasibility of developing induslrial properties such as the subject remains good - new industrial improvements are currently under construction in several north county industrial parks. Use of the subject property for any legally permissible development would constitute a feasible and productive use of the property. !oo2i3o-4afT>t Smith/Authony - 13 HENDRICKSON APPRAISAL COMPANY, INC. Real Eslale Appraisers • Consullanis AS IMPROVED - The subject property is currently improved with a single slory, concrele till up, multi tenant industrial building which is estimated to be approximately 25 years old and appears lo be in average condition. It is a legal use of the subjeci property. RECONCILIATION OF HIGHEST AND BEST USE The subject property has a land use designation of lighl industrial uses, il is zoned for lighl industrial use and no changes to either the zoning or the land use designation are aniicipated. It is also improved with a multi tenant industrial building. The value of the subject property as improved is substantially higher than as vacant and we have concluded that its current industrial use represents the Highest and Besl Use ofthe property. !oo2i3o-4a.rpt Smith/Anthouy - 14 HENDRICKSON APPRAISAL COMPANY, INC. Real Estaie Appraisers • Consullanis li VALUATION ANALYSIS Methodology The subject is an improved light induslrial property which is a legal use under curreni zoning and land use designation in the City of San Marcos. Information provided lo the appraisers indicates that thc Rancho Santa Fe Road improvement projeci requires two easement acquisitions affecting the property - a permanent utility easement to the Vallecitos Waler Dislrict and a temporary construction easement. Neither of these easement areas impacts the major improvements on the property. As a result, we have concluded that just compensation to the property owner can be determined on the basis of only the land value. As noted in the Scope section of this report, the Sales Comparison Approach was used to develop an opinion of the land value of this property, and the process of deiermining j ust compensation to the properly owner requires several steps. First the value of the entire property is developed. Second, the value ofthe pan being acquired is developed by applying the per unil value of the whole property determined in the firsl step. Third, the value ofthe remainder as part ofthe whole is determined by deducting the value of the pan being acquired from the value of the whole property. Fourth, the value of the remainder after thc acquisition is determined. Fifth, the value of the remainder after the acquisition is compared to the value of the remainder as part of the whole to determine if severance damages or benefits exist. Lasl. just compensation is calculated by adding the value of the part being acquired to the value ofany net severance damages. The appraisers searched for recent sales of industrial land parcels in the general subject area. Primary data sources were CoStar, a firm which specializes in publishing real estaie sales dala and conversations vv iih brokers and buyers of industrial land. In all, five comparable sale propenies considered most similar to the subject were used in this analysis to develop an opinion of value for the subject propeny Unit of Comparison The unit of comparison employed in this analysis isthe price per square foot as this isthe measure typically used by participants in the market for industrial land. Market Conditions The industrial market in the subject area and in San Diego County in general has been strong during the past several years, and we have given upward price consideration for this faclor in our analysis. The market, however, appears to have topped out in the middle pan of 2002, aboul the time Sale 3 recorded. Upward adjustment of 1% per month for improved market conditions has been applied lo Sale 5. thc only sale which recorded prior to the markel leveling off. !oo2i3o-4arpt Smith/Authony -15 HENDRICKSON APPRAISAL COMPANY, INC. Real Eslale Appraisers • Consullanis li Items of Comparison The comparable sale properties were compared to the subjeci on the basis of the following items: location, overall parcel size, access and exposure, topography (including flood zone area), site development status, utilities and off site improvements, shape and site utilily, and zoning and potential use. Wilh respect to parcel size, when considering a property on a dollars per square fool basis, larger parcel sizes arc considered inferior to smaller parcel sizes and lower densities. Value ofthe Whole Before the Acquisition Several properties intended for developmenl wilh industrial improvemenls were researched in order to develop an opinion of the fair market value of the subjeci property. Of those, the following comparable properties were considered to be most appropriate in valuing the subject. These sale propenies were compared to the subject property on the basis of the items of comparison noted in the previous paragraph. The following table arrays the comparabies and presents a summary of details relating to each comparable. The unit of comparison used in this analysis is dollars per square foot, as lhal is typically the unil used by potential buyers of industrial land. COMPARABLE LAND SUMMARY Comp No. Sale No. Location Sales Date Sales Price Size (AC) Price SK 1 14 Grand Ave SE of Cades Way, Vista 12/10/02 $835,000 3.18 $6.03 2 15 Cades Way S of Grand Ave, Vista 7/15/02 $713,000 1.96 $8.35 3 4 S side La Costa Meadows, San Marcos 9/19/02 $1,053,000 2.93 $8.25 4 16 2435 Cades Way, Vista 11/06/02 $567,000 1.68 $7.75 5 6 SEC Industrial & Carmel, San Marcos 02/26/02 $324,000 l.OS $0.80 Note: Land Sale numbers are keyed to the Land Sale numbers in the addendum and may not be sequential in this table !002130-4a.rp« Smith/Anthony - 16 HENDRICKSON APPRAISAL COMPANY, INC. Real Estaie Appraisers • ( onsullanis LAND COIVIPARABLE SUMMARY & ANALYSIS GRID 11 PROPERTY INFORMATION Subject Compl (LSI) Comp 2 (LS2) Comp 3 (LS4) Comp 4 (LSS) Comp5(LS6) Property Localion 1945 Rho Santa Fe Rd San Marcos Grand Ave SE of Cades Way \As\a Cades Way S of Grand Ave Vista S side La Costa Mead. E of Rho Sanla Fe San Marcos 2435 Cades Way Visia SEC Induslrial and Carmel St San Marcos Owner/Seller Buyer Smith Trust N/A opmet LLC Buchanan/Focus Vista Judd Lot E LLC Focus Real Estate Nittan, Inc. San Elilo Bus Ctr LLC Axiom. Inc. Jury & Clark Hardin. Trustees James Assessor Parcel Number 223-130-46 217-253-08 217-252-05 223-030-47.48 217-252-01 220-200-46 Recording Dale 12/10/02 07/15/02 09/19/02 ll/06rt)2 02I26IQ2 Land Area (Ac) Zoning Highest a Besl Use Comments Price Per SF 1.52 Light Industrial Light Industrial Site is improved wilh cone tilt up bldg Part in ftood zone 3.18 Ml, Vista Industrial Uses Purchased for industrial development. Finished $835,000 $6.03 1.96 R-L-1, Vista Industrial Uses Purchased for industrial development. Finished $713,000 $8.35 2.93 L-M. San Marcos Induslrial Uses Purchased to build a spec indust bldg. Finished $1,053,000 $8.25 1.68 M. Visla Induslrial Uses Purchased for induslrial development. Finished $567,000 $7.75 1.08 M. San Marcos Industrial Uses Purch lo build a whse showroom Finished $324,000 $6.89 COMPARABILITY ANALYSIS Conditions of Sale/Market: Property Rights Financing Condiiion of Sale/Bonds Markel Condilions Fee Similar Similar Similar Similar $6.03 Similar Similar Similar Similar $6.35 Similar Similar Similar Similar $8.25 Similar Simitar Similar Similar $7.75 Similar Similar Similar 5% $7.23 Physical Characteristics; Location Size (Ac) Access/Exposure Topography/Flood Zone Site Oevelopment Status Utilities/Offsites Shape/Ufility Zoning/Potential Use San Marcos 1.52 Adequate Level/Flood Zone A Finished All operatiiig Irreg Reel/Good ; , IL/Lighl Industrial Similar SI Inferior SI Inferior SI Superior Similar Similar Similar Similar Similar Similar SI Inferior SI Superior Similar Similar Similar Similar Similar SI Inferior Similar SI Superior Similar Similar Similar Similar Similar Similar SI Inferior SI Superior Similar Similar Similar Similar Inferior Similar Simitar SI Superior Similar Similar SI Inferior Similar Overall Comparability SI Inferior Similar Similar Similar SI Inferior i « 1 1 1 1 Vlll llll llll llll 1 1 1 llll llll If Comp 1 (Land Sale No. 14) This is the December 2002 sale of an approximately 3.18 acre finished industrial site located on Grand Avenue southeast of Cades Way in Vista approximately three miles north of the subject. The selling price was $835,000, or approximately $6.03 per square fool. All typical utilities were available to the site as of the dale of sale. Grand Avenue is an asphalt paved street wilh curbs, gutters or sidewalks adjacent lo this sale property. The property was purchased with the intention of constructing four industnai buildings on the site. This property is accessible from eiiher direction on Grand Avenue. It is a level site, approximately at streel grade and with good utility. This sale property is considered slightly inferior to the subjeci relative lo ils larger size on a dollars per square foot basis and also as to ils access and exposure. It is considered slightly superior lo the subject in terms of its topography/flood zone. It is considered to be generally similar to the subjeci in other respects. Overall, this property is considered slightly inferior to the subjeci and indicates a subject value ofgrcaier than $6.03 per square foot. Comp 2 (Land Sale No. 15) This is the July 2002 sale of an approximately 1.96 acre finished industrial lot located on Cades Way south of Grand Avenue in Vista, approximately three miles north of the subject. The selling price was $713,000, or approximately $8.35 per square foot. The property was purchased with the intention of constructing four small industrial buildings on the site. This property is accessible from either direction on Cades Way and is adjacent lo the intersection of Birch Street. Both streets are asphalt paved and have concrele curbs, gutters and All typical utilities are available to the site. sidew iilks. This sale property is slightly inferior lo the subjeci relative lo its access and exposure. It is considered shghtiy superior to the subject in terms of ils topography/flood zone. It is considered to be generally simi lar to the subject in other respects. Overall, this property is considered generally similar to the subject and indicates a subject value in the range of $8.35 per square foot. >002130-4a.rpl Smith/Anthony -18 HENDRICKSON APPRAISAL COMPANY, INC. Real Estaie Appraisers • Consullanis : li Comp 3 (Land Sale No. 4) This is the September 2002 sale of an approximately 2.93 acre finished industrial lot on the south side of La Costa Meadows Drive east of its intersection with Rancho Santa Fe Road. It is adjacent to the east side of the subject. The selling price was $1,053,000, or approximately $8.25 per square foot. This is a generally level site with good utility. This property is accessible from either direction on La Costa Meadows Drive, an asphalt paved street in the area, with concrete curbs, gutters and sidewalks along the frontage of this sale property. All typical utilities are available to the site. This comparable property is slightly superior to the subject in that virtually none of it is in Flood Zone A. It is possible that a very narrow sliver along the southerly property boundary is in the flood zone. It is slightiy inferior to the subject as to its larger size on a dollars per square foot basis. It is considered generally similar to the subject in other respects. Overall, this property is generally similar to the subject property and indicates a subject value in the range of $8.25 per square foot Comp 4 (Land Sale No. 16) This is the November 2002 sale of an approximately 1.68 acre finished industrial lot located at the west comer of Grand Avenue and Cades Way in Vista, approximately three miles north of the subject. The selling price was $567,000, or approximately $7.75 per square foot. The property was purchased with the intention of constructing an approximately 21,000 SF industrial building on the site. This property is accessible from either Grand Avenue or Cades Way. Both streets are asphalt paved with concrete curbs, gutters and sidewalks. All typical utilities were available to the site as of the date of sale. This sale property is considered slightly inferior to the subject relative to its access and exposure. It is slightly superior to the subject in terms of its topography/flood zone. It is considered to be generally similar to the subject in other respects. Overall, this sale property is considered generally to the subject and indicates a subject value in the range of $7.75 per square foot. >002130-4a.rpt Smith/Anthony -19 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants If Comp 5 (Land Sale No. 6) This is the February 2002 sale of an approximately 1.08 acre previously developed industrial site locaied al the p» southeast comer of Industrial Streel and Carmel Street in San Marcos. The selling price was $324,000, or approximately $6.89 per square foot. All typical utilities are available to the site. Industrial Street is a fully improved, asphalt paved streel with concrele curbs, gutters and sidewalks adjacent lo this sale property. The property was purchased with the intention of developing an approximately 21,000 square foot warehouse and showroom on the site. As of our inspection, construction had not yet commenced. This property is accessible from either direction on Induslrial Slreet. It is a generally level site, approximately at slreel grade. Ils site utility is somewhat limited by ils long, narrow configuration (dimensions of approximately 100' by 470'). This sale transpired in a somew hat weaker market and the sellingprice has been adjusled lo a markel condition price of $7.23 per square foot. This sale property is considered slightly inferior to the subjeci relative to its site utility, and inferior as lo its lack of business park appeal. It is slighlly superior lo the subjeci as to ils topography as it is not in a flood zone. It is considered to be generally similar to the subjeci in other respecis. Overall, this propeny is considered slightly inferior to the subject and indicates a subjeci value of more than $7.23 per square foot. The following table arrays these sales in order from most inferior lo most superior. COMPARABLE LAND SUMMARY Conq) Location Sales Date Sales Price Size (AC) Price/SF Comparability 1 Grand Ave SE of Cades Way, Vista 12/10/02 $835,000 3.18 $6.03 Slgt Inferior 5 SEC Industrial & Carmel, San Marcos 02/26/02 $324,000 1.08 $7.23 .Slgt Inferior 4 2435 Cades Way, Vista 11/06/02 $567,000 1.68 $7.75 Gen Similar 3 S side La Costa Meadows, San Marcos 09/19/02 $1,053,000 2.93 $8.25 Gen Similar Subj 1945 Rancho Santa Fe, San Marcos 1.52 $8.25 2 Cades Way S of Grand Ave., Vista 07/15/02 $713,000 1.96 $8.35 Gen Similar !002130-4a.rpl Smith/Anthony - 20 HENDRICKSON APPRAISAL COMPANY, INC. Real Estaie Appraisers • Consullanis li The sales listed above are considered to be the best available sales for use in developing an opinion ofthe market value of the subject land. Four are sales of properties in industrial parks such as the subject - one of them is adjacent to the subject. The overall industrial market in San Diego County as a whole has been very good with upward pricing trends, and we have given some consideration to that factor in our analysis. Based on our analysis of these comparable properties and considering the limited supply of industrial sites, we have concluded that the fair market value of the subject property is $8.25 per square foot. Extending this per square foot value to the entire 66,211 square foot subject property yields the following calculation. Value ofthe subject land 66,211 SFx$8.25/SF $546,241 Value of the Part Being Acquired Permanent Easement to Vallecitos Water District Information provided by Aguirre and Associates indicates that the access easement rights being acquired for Vallecitos Water District total 3,790 square feet. The easement area encumbers a portion of the site currently used as a driveway with parking spaces on both sides. The easement area affects only the driveway portion. Information provided to the appraisers indicates that this area is being permanently encumbered as an access easement. In the after condition the area will be essentially unchanged from ils status in the before condition, but no buildings will be permitted and the property will no longer have exclusive use of the area, having to share the use of the easement area with the easement owner. As a result, this area will have less utility to the property owner even though he will still hold ownership ofthe underlying fee simple interest. In our opinion, this easement represents a loss of 50% of the owner's bundle of rights to this area. The value of the easement rights can then be calculated as follows. Value of Part Acquired 3,790 SF x $8.25/SF x 50% $15,634 Value of the Remainder as Part of the Whole The value ofthe remainder as part of the whole is calculated by deducting the value of the part being acquired from the value of the whole before the acquisition as follows. Value of the whole property $546,241 Value of the part being acquired —15,634 Value of the remainder as part of the whole $530,607 ioo2i3o^aT5t Smith/Anthouy - 21 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants li Value of the Remainder After the Acquisition After the acquisition, the subject property will be changed only very slightly from its before condition. It will be the same size as in the before condition, bul 3,790 square feet will be encumbered by an access easement. The easement area does not impact any of the major improvemenls on the property. We previously concluded that the easement encumbrance represents a 50% loss in the owner's bundle of righls to the encumbered area. It is reasonable to conclude that the value of the subjeci land can be deiermined using the same comparable sales as were used in the before condition analysis, and that the per unil land value would be the same as it was in the before condition - $8.25 per square foot. Extending this per square foot value to the subject property in the after condition yields the following calculation. Value of remainder after acquisition Unencumbered area 62,421 SF x $8.25/SF $514,973 Access easement area 3,790 SF x $8.25/SF x 50% 15.634 Total $530,607 Severance Damages The existence of severance damages or benefits is determined by comparing the value of the remainder after the acquisition before benefits to the value of the remainder as part of the whole. In this instance, the value of the remainder in the after condition is identical to the value of the remainder as part of the whole. In the after condition the property is the same total size il was in the before condiiion, and il can be developed with similar improvements. We have concluded that no severance damages accrue lo the property. Benefits The subject property is essentially the same in the after condition as it was in the before condiiion. A 3,790 square foot area will be encumbered with an access easement, however, this easement is in an area currently used as a driveway. It has no effect on any of the major improvements. We have concluded lhat no benefits accrue to the property as a result of the project. Value of the Temporary Construction Easement As noted in the description of the acquisition areas, the use of a portion of the property is needed for the completion of the Rancho Santa Fe Road improvement project. This area is being acquired as a temporary construction easement. Information provided to the appraisers by Aguirre and Associates indicates lhal the temporary construction easement totals 6,007 square feet in size. The area is primarily along the westem and a portion of the northem edges of the subjeci site. Please refer to Acquisition Map 1 presented >oo2i3o-4a^n>t Smitli/Anthony - 22 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultanis I -III If previously. This area does not affect any of the major improvements on the property. The lemporary construction easement area is improved with landscaping and some paved areas. Based on comparison of the two acquisition maps provided, we have calculated that approximately 935 square feet ofthis easement overlaps the Vallecitos Water District easement noted above. According lo Doug Helming of Helming Engineering, any major signs or mature trees in the easement area will be avoided during construction, and any other landscaping damaged or destroyed during construction will be restored lo their original condiiion as part ofthe project. Accordingly, we have not considered the replacement cost of these site improvements as part of this analysis. Valuation ofa temporary construction easement is generally based on the premise that the owner ofthe easement rights, in this case the City of Carlsbad, is leasing the easement area from the property owner for a specified period of time. An opinion of the monthly rental rate is developed, and compensalion lo the property owner is the present value of the proposed stream of monthly rental paymenls. All parameters other than the value ofthe land underlying the easement area were developed in the introduction seclion of the report and included: Land Rate of Retum 10% Duration of Easement 19 months, from June 1, 2003 to January 1, 2005 Discount Rate 6% Present Value Factor 17.99 The only remaining factor needed to determine the value of the temporary construction easement is the value ofthe land encumbered bythe easement. We previously concluded that the value ofthe subject land parcel is $8.25 per square foot. The temporary construction easement encumbers an area totaling 6,007 square feet, ofwhich approximately 935 square feet is also being encumbered by the Vallecitos Water District easement. The value ofthat encumbrance was previously determined to be 50% ofthe underlying land value. The land value of the TCE is calculated as follows: Unencumbered land area 5,072 SF x $8.25/SF $41,844 Encumbered land area 935 SF x $8.25/SF x 50% 3,857 Rounded: $45,700 The value ofthe temporary construction easement can be calculated as follows. oo2i3o^aT,c Smith/Anthouy - 23 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants li Annual Rental Rate = Monthlv Rental Rate = Present Value of the Income Stream Land Value x $45,700.00 X $4,570.00 Annual Rent ^ $4,570.00 - $380.83 Monthly Rent $380.83 $6,900.00 Rate of Retum 10% Months/Year 12 X Present Value Faclor X 17.99 (Rounded) According to Doug Helming of Helming Engineering, during the course of the project the westerly driveway entrance on La Costa Meadows Drive will be closed for a short period of time. The closure is expected to be for six months or less. By the time the closure is needed, the City of San Marcos is expected to have completed its Melrose Drive project. That project includes the extension of Melrose Drive eastward from Rancho Santa Fe Road along the north side of the La Costa Meadows industrial park with an intersection at Patton Street. This project will provide a new access route lo the subject via Pation Slreet and La Costa Meadows Drive. There is an additional driveway inlo the subject property from farther east on La Costa Meadows Drive which is unaffected by either project. The subject has an interior driveway which provides access to the parking lot in front of the building via a paved bul unused portion of Rancho Santa Fe Road. Mr. Helming stated that access to the front parking lol would be available during the construction phase of the project. The subject is a multi tenant industrial building, ll is not anticipated that any tenants will seek rent reductions resulting from inconvenience caused by conslruclion ofthe project and the temporary driveway closure, and the subject property is not considered lo be damaged by the project. !002130-4a.rpt Smith/Anthony - 24 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultanis Just Compensation Since neither severance damages nor benefits exist, just compensation to the property owner comprises the value ofthe part ofthe property being acquired, plus the value of the temporary construction easement. Permanent Access Easement $15,634 Temporary Construction Easement $ 6,900 Just Compensation $22,534 Rounded: $22,500 :oo2i3o^arp, Smith/Anthony - 25 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants : li PLAT MAP o !002130-2a.rpt La Costa Meadows - 1 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants li SITE DESCRIPTION Location: The subject property is located at the northwest comer of Rancho Santa Fe Road and La Costa Meadows Drive in the southwestem San Marcos. Rancho Santa Fe Road is the approximate dividing line between San Marcos and Carlsbad in this area. TB Map Code: 1128A5 Larger Parcel: When appraising multiple parcels of real estate, one of the first determinations to make is whether the property meets the criteria for consideration as a "larger parcel". In order to be considered a larger parcel, the property must satisfy three unities; unity of use, unity of ownership and unity of contiguity. All ofthe parcels under consideration must have the same use potential, they must all be vested in the same owners, and, with very limited exceptions, they must be physically contiguous. The following paragraphs address the subject parcels in terms of their consideration as a larger parcel. The subject property comprises two legal lots (two assessor parcels), both of which are owned by La Costa Meadows Industrial Center. According to information contained on mapping provided to the appraisers and Assessor's data, they total approximately 10.43 acres in size, and they are physically contiguous. Both are in an area identified for light industrial use in the land use element of the San Marcos General Plan, and both are zoned L-M, Light Industrial by the City of San Marcos. The two parcels have been developed together as the La Costa Meadows Industrial Center. These two parcels satisfy all three requirements to be considered as a single larger parcel for the purposes of this analysis. Future references to the subjeci parcel or the subject property will mean the entire 10.43 acre property comprising both legal lots. Legal Description: Parcels A and B of Parcel Map No. 12104, in the City of San Marcos, County of San Diego, State of Cahfomia, filed in the Office ofthe County Recorder of San Diego County, May 12, 1982 as File No. 82-141500 of Official Records. Owners: La Costa Meadows Industrial Center, Ltd., a Limited Partnership. ;oo2i3o-2irpj La Costa Meadows - 2 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants li APN: 223-030-62, 63 Real Property Taxes/Assessments: APN 223-030-62 223-030-63 Total Tax Rate Area: 13066 13066 Tax Rate: 1.02842% 1.02842% Assessed Land Value: $ 265,650.00 $ 539,898.00 $ 805,548.00 Assessed Improvement Value: $ 1,805,311.00 $ 3,875,940.00 $ 5,681,251.00 Personal Property $ 0.00 $ 0.00 $ 0.00 Total Assessed Value: $ 2,070,961.00 $ 4,415,838.00 $ 6,486,799.00 Base l%Tax: $ 21,298.16 $ 45,413.36 $ 66,711.52 Fixed Charges: $ 200.28 $ 179.74 $ 380.02 Total Tax: $ 21,498.44 $ 45,593.10 $ 67,091.54 The property taxes are reported as having been paid on the Tax Collector's intemet site. Access: The property has direct frontage on La Costa Meadows Drive and is directly accessible via driveways in that frontage. It also fronts on Rancho Santa Fe Road and has driveway access from that street as well. Size and Shape: According to San Diego County Assessor's data, the subject property is 10.43 acres, or approximately 454,331 square feet in size. It is irregular in shape. Please refer to the Plat Map. Topography: The subject property is generally level and offers fijll utility. Drainage: Based on our physical inspection, the subject property appears to offer adequate drainage. Flood Zone: Review of FEMA Flood Map 06073C1051F, dated June 19, 1997 as well as San Diego Geographic >002130-2a.rpl La Costa Meadows - 3 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants hiformation System Natural Features mapping indicates that the subject property is in Flood Zone X, outside the 500 year flood plain. Toxic or Hazardous Materials: No toxic or hazardous waste report was available for review, and a thorough physical investigation ofthe property is beyond the scope ofthe assignment. No known hazardous materials were observed during our inspection ofthe property. The Subject Property is appraised as if free from hazardous malerials. Geologic Conditions: Most of Southem Califomia including San Diego County is subjeci to a potential earthquake. There are no major earthquake faults affecting the immediate subject area, bul wilhin ten miles the Rose Canyon fault, a short distance offshore, could create a damaging earthquake. Map No. 6 ofthe Califomia Geologic Data Map Series indicates that neither this fault, nor other minor faults in the area, have shown evidence of displacement during either historic or Holocene time(during the past 10,000 years). Title Report: Preliminary Title Reports prepared by First American Title Company and daled July 27, 2000 were provided to the appraisers for review. The Title Report identifies easements and encumbrances considered typical for a property such as the subject. None of these encumbrances is considered lo limil the subject's development to its Highest and Best Use. Zoning: The subj ect property is currently zoned L-M, Light hidustrial bythe City of San Marcos. This classification permits light industrial improvements on the subject property similar to those found on other properties in the immediate area. The Land Use element ofthe San Marcos General Plan identifies this area for Lighl hidustrial use. No changes to either the zoning or land use classification are anticipated in the foreseeable future. Current Uses: The subject property is cun-ently improved with a multiple building industrial park comprising multi-tenant industrial buildings which are considered to be in average condition. The acquisition area does nol affect the building improvements on this property. Utilities: All typical utilities are available and operating to the site with adequate capacity to support the existing boo2i3o-2arp. Costa Mcadows - 4 HENDRICKSON APPRAISAL COMPANY, INC. Real Estaie Appraisers • Consultanis If or potential uses. Electricity and natural gas are provided by San Diego Gas and Electric, water is provided by the Vallecitos Water District, telephone service is provided by Pacific Bell and others. Street Improvements: The two public streets which front the subject property are asphalt paved streets. Rancho Santa Fe Road is a main arterial in the area. The entire subject frontage is improved with concrete curbs, gutters and sidewalks, although the opposite side of Rancho Santa Fe Road has no such improvemenls. Easements/Encumbrances: Mapping and title reports provided to the appraisers identify the existence of several easements encumbering the subject larger parcel. These easements are not considered lo limit developmenl ofthe subject property to its Highest and Best Use. Environmental Issues: There are no known environmental issues affecting the subject property. Improvements: The subject property is currently improved with an industrial park comprising multiple, multi-tenant buildings. The buildings are typically concrete tilt-up constmction and appear lo be leased lo multiple tenants. The buildings are estimated to be approximately 20 years old and appear lo be in average condition. The major improvements are not affected by the acquisition areas and were not closely inspected for this analysis. Site Improvements: Site improvements on the subject property include asphalt paved driveways and parking areas, concrele walks, and landscaping around the periphery of the site. The landscaping includes grass areas, flowers and other shmbs as well as mature trees. The temporary construction easement area includes areas of pavement as well as significant portions of the landscaping. According to Doug Helming of Helming Engineering, major signs and mature trees on the property will be avoided during completion ofthe project. Any olher landscaping and pavement damaged or destroyed during completion of the projeci is lo be restored lo ils original condition as part of the project. Accordingly, we have nol considered replacement costs of these items in our analysis. DESCRIPTION OF PART BEING ACQUIRED Information provided to the appraiser indicates that only lemporary constmction easement righls are being foo2i3o-2arp« La Costa Meadows - 5 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consullanis li acquired. The TCE area is an irregular shaped area that mns generally along the southem and western property lines. Please refer to the Acquisition Map which follows. Information prepared by Aguirre and Associates provided to the appraisers indicates that this temporary easement area comprises approximately 0. 625 acre, or approximately 27,222 square feet in size. The majority of this area is landscaped areas along the perimeter ofthe site, although small areas of asphalt pavement in the driveway/parking area are also included. This area is being acquired as a temporary constmction easement which is to commence June 1, 2003 and expire January 1, 2005, a duration of 19 months. t.oo2i3o-2a.p. La Costa Meadows - 6 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants li Subject property looking northeast across Rancho Santa Fe Road at La Costa Meadows Drive. The sign and all landscaping are in the TCE. Looking east on La Costa Meadows Drive, the subject is to the left. 3 !002130-2a.rpt La Costa Meadows - 7 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consullanis I li Subject, looking northeast across Rancho Santa Fe Road. All visible landscaping is in the TCE. North end of subject frontage on Rancho Santa Fe Road. Most visible landscaping is in TCE. 3 !002130-2a.rpt La Costa Meadows - 8 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants li I Looking southeast at subject at Melrose Drive. All visible landscaping is in the TCE. South end of subject frontage on Rancho Santa Fe Road. All visible landscaping is in the TCE. !002130-2a.rpl La Costa Meadows - 9 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants ; li ACQUISITION MAP Temporary Constmction Easement !002l30-2a.rpt La Costa Meadows - 10 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consullanis i9 HIGHEST AND BEST USE AS THOUGH VACANT - The determination ofthe Highest and Best Use of a property as though vacant is contingent upon the proposed use being legally permissible, physically possible, financially feasible and maximally productive. Legally Permissible - The subject property is located in the Questhaven/La Costa neighborhood ofthe City of San Marcos, in the southwestem portion of the city adjacent to the Carlsbad city line. The land use element of the San Marcos General Plan identifies the subject for light industrial use. The property is zoned L-M, light industrial, by the City. This zoning classification is intended to "provide districts for the grouping together of light industry wholesale and professional uses, service commercial uses, and stand alone/retail showrooms in an environment which will be beneficial to such uses and to provide protection for surrounding uses". Permitted uses in the L-M zone are primarily industrial, but may include uses which are accessory to the industrial use, such as community facilities, commercial uses, and other uses clearly recognized as necessary to the primary industrial uses. Among permitted uses are manufacturing and assembly, warehousing, wholesale and distribution establishments, metal working shops, fumiture manufacturing and repair, blueprinting, printing and lithography as well as others. A variety of additional uses may be permitted subject to major or minor conditional use permits. Use ofthe subject property for any of these uses would constitute a legally permissible use. Physically Possible - The subject property totals approximately 10.43 acres in size. It is somewhat irregular in shape and is gently sloping but fiilly usable. The site is of ample size to accommodale industrial improvements. The subject property meets minimum lot size, lot width and lot depth requirements of20,000 square feet, 65 feet and 150 feet, respectively. No soils report was provided to the appraisers for review, however, we have no reason to suspect that the load bearing capacity ofthe site is inadequate to support typical industrial improvements. The property satisfies the Highest and Best Use requirement of being physically possible. Financially Feasible and Maximally Productive - The current zoning classification and land use designations for the subject property are intended to accommodate light industrial development. The supply of industrial zoned land, particularly sites in industrial parks in the north San Diego County area, continues to dwindle. As a result, even in a somewhat sluggish economy, feasibility of developing industrial properties such as the subject remains good - new industrial improvements are currently under constmction in several north county industrial parks. Use of the subject property for any legally permissible development would constitute a feasible and productive use of the property. ^oo2i3o-2a ipt La Costa Meadows - 11 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants li AS IMPROVED - The subject property is currently improved with a multi-building induslrial park comprising primarily concrete tilt up, multi tenant industrial buildings The buildings are estimated to be approximately 20 years old and appear to be in average condition. The industrial park is a legal use of the subject property. RECONCILIATION OF HIGHEST AND BEST USE The subject property has a land use designation of light industrial uses, it is zoned for lighl industrial use and no changes to either the zoning or the land use designation are anticipated. It is also improved with multi tenant industrial buildings. The value as improved is substantially higher than the value as vacant, therefore we have concluded that its current industrial use represents the Highest and Besl Use of the property. !OO2130-2a.rp« La Costa Meadows - 12 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants li VALUATION ANALYSIS Methodology The subject is an improved light industrial property which is a legal use under curreni zoning and land use designation in the City of San Marcos. Information provided to the appraisers indicates lhal the Rancho Santa Fe Road improvement project requires a temporary easement acquisition affecting the property. This easement area was designed to avoid the major improvements on the property. As a result, we have concluded that just compensation to the property owner can be determined on the basis of only the land value. As noted in the Scope section of this report, the Sales Comparison Approach was used to develop an opinion of the land value of this property. Normally, the process of determining just compensalion lo the property owner requires several steps. However, in this instance, no permanent acquisitions are being made - only temporary constmction easement rights are being acquired. According to Doug Helming of Helming Engineering, at the completion of the project the easement area will be retumed to the property owner having been restored to its original condition. As a result, the property is not damaged by the acquisition and just compensation to the property owner comprises the value of the temporary conslmclion easement. Since the value of the TCE is a function of the value of the underlying land, the first step is to develop an opinion of the land value. The appraisers searched for recent sales of industrial land parcels in the general subjeci area. Primary dala sources were CoStar, a firm which specializes in publishing real estate sales dala and conversations with brokers and buyers of industrial land. In all, seven comparable sale properties considered most similar to the subject were used in this analysis to develop an opinion of land value for the subjeci property Unit of Comparison The unit of comparison employed in this analysis is the price per square fool as this is the measure typically used by participants in the market for industrial land. Market Conditions The industrial market in the subject area and in San Diego County in general has been strong during the past several years, and we have given upward price consideration for this factor in our analysis. The market, however, appears to have topped out in the middle part of 2002, about the time Sale 4 recorded. Upward adjustments of 1% per month for improved market conditions have been applied lo each ofthe sales with the exception of Sales 2, 3 and 4 which are fairiy current transactions. t!oo2i3o-2arpt La Costa Mcadows -13 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultanis li Items of Comparison The comparable sale properties were compared to the subjeci on the basis of the following items: localion, overall parcel size, access and exposure, topography (including flood zone area), site development status, utilities and off site improvements, shape and site utility, and zoning and potential use. With respecl to parcel size, when considering a property on a dollars per square foot basis, larger parcel sizes are considered inferior to smaller parcel sizes and lower densities. Subject Land Value Several industrial zoned properties were researched in order to develop an opinion ofthe fair markel value of the subject property. Of those, the following comparable properties were considered to be most appropriate in valuing the subject. These sale properties were compared to the subjeci property on the basis of the items of comparison noted in the previous paragraph. The following table arrays the comparabies and presents a summary of details relating to each comparable. The unit of comparison used in this analysis is dollars per square foot, as that is typically the unit used by potential buyers of industrial land. COMPARABLE LAND SUMMARY Comp No. Land Sale Location Sales Date Sales Price Size (AC) Price/SF 1 1 Armoriite W of las Posas, San Marcos 01/31/02 $520,000 2.13 $5.60 2 2 2936-48 S Santa Fe, San Marcos 06/27/02 $590,000 3.96 $3.42 3 14 Grand Avenue SE of Cades Way, Vista 12/10/02 $835,000 3.18 $6.03 4 4 S side La Costa Meadows, San Marcos 09/19/02 $1,053,000 2.93 $8.25 5 5 NWC Twin Oaks & Borden, San Marcos 12/21/01 $1,000,000 4.48 $5.12 6 7 Armoriite E of Las Posas, San Marcos 10/23/01 $1,975,000 9.19 $4.93 7 8 Corte de la Pina, Carlsbad 02/23/01 $3,500,000 14.72 $5.46 Note: Land Sale niunbers are keyed to the Land Sale numbers in the addendiun and are not sequential in this table. !002130-2a.rpt La Costa Meadows - 14 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants LAND COMPARABLE SUMMARY & ANALYSIS GRID PROPERTY INFORMATION Subfect Compl (LSI) Comp 2 (LS21 Comp 3 (LSI 4) Comp 4 (LS41 Comp 5 (LS5) Comp6(LS7) Comp 7 (LS81 Propetly Location NEC Rho Santa Fe Rd and La Costa Meadows San Marcos Aiborlile west of Las Posas San Marcos 2936-4B S Santa Fe San Marcos Giand Ave SE ot Cades Way Visla S side La Cosla Mead. E ol Rho Santa Fe San Marcos NWC Twin Oaks Valley and Borden San Marcos Aitnorlite E of Las Posas San Marcos Code de La Pina E Ot Yartow Caflsbad Ownef/Selier Buyer La Costa Mead indust N/A Pioneer Mills Collins Trust ETCR Inc Walker Trust Opmet LLC Buchanan/Focus Vista Nittan, Inc. San Elijo Bus Ctr LLC DEVCO Hotrocks Invest. Copley Press Pacific Bell W9/LNP Real Eslate CarRas Co Assessor Parcel Number 223-130-62. 63 219-122-29 217-161.03, 06 217-253-08 223-030-47,48 218-110-08.18 219-162-10,13.14 213-100-09 thru 12 riecofding Date 01/31/02 06/27/02 12/10/02 0S/ig/02 12/21/01 10/23/01 02/23A)l Land Area (Ac) Zoning Highest & Dest Use Comments Price PerSF 10.43 Lighl Industrial Lighl Industrial Site is improved wilh an induslrial park 2.13 M. San Marcos Industrial Uses Purchased for future development Finished S520.000 $5.60 3.96 M7, San Marcos Induslrial Uses Purchased (or future development Raw land $590,000 $3.-12 3 18 Mt. VIsta Industtial Uses Purchased for industrial devetopment Finished $835,000 $6.03 2.93 L-M, San Marcos Irtduslfial Uses Purchased to build a spec iftdusl bldg. Finished $1,053,000 $8.25 4 4B M. San Maf cos Industtial Uses Purctiased to build an industtial park. Finished $1,000,000 S5.12 919 M, San Marcos Irtduslfial Uses Purchased ten 1 ruck/equip Glorage Raw land $1,975,000 $4.93 14 72 M. Carlsbad Irtduslfial Uses Purchased lo buisd a plafvted iftdusl devet Finished kHs $3,500,000 $S.4S COMPARABILITY ANALYSIS Conditions of Sale/Market: Propert/ Rights FinarKing Condiiion o( Sale/Bonds Markel Conditions Fee Similar Similar Similaf 6% $5.94 Similaf Similar Similar Simitar $3.42 Similar Sifnilai Similar Similar $6.03 Similar Similar Similar Similaf S8.25 Similar Similaf Similaf 7% $5,48 Similar Sitnilaf Similar 9% $5.37 Similat Simdai Similaf 10% $6.01 Physical Characteristics: Location Size (Ac) Access/Exposure Topography/Flood Zone Site Developmenl Status Ulililies/Otfsites SliapeAJIility Zoning/Polentia! Use San Marcos 10.43 Adequate Sip but usable/No F2 Finished All operating Irreg Rect/Good lULight Industrial Inferior Superior Inferior Inferior Simitar tnlerior Similaf Similaf Inferior SI Superior Similar Inferiof Conskf Inferior InFefior Similar Similar Similar Slgt Superior Inferior Similaf Similar Similar Similar Similar Simitar SI Superior Similaf Similar Similar Similar Similaf Similar Sitnilaf SI Supefiof Similaf Inlerioi Infernt SimHar Similar Similar Inferior Similar Similaf Simitar Con&id Inferior Sl InfefMf Similar Similaf SI Supetiof SifDtlaf SimHaf Inferiof Sifnilar Similar Intefior Similat Overall Comparabitity Inferior Subsl Interior Slgt Inferior SI Superior Inferkii Consid Inlefiof tnfenof I m z a 2 n ^ o z > -a -a I > r-o o 2 > Z -< n o VI to a. o fififiiiiiiiiifiiiiiifrii wm w~m wm r i : Comp 1 (Land Sale No. 1) This is the January 2002 sale of an approximately 2.13 acre finished industrial site locaied al the end of Armoriite Drive west of its intersection with Las Posas Road in San Marcos. The selling price was $520,000, or approximately $5.60 per square fool. All typical utilities are available to the site. Armoriite Drive is an asphalt paved street with no curbs, gutters or sidewalks adjacent to this sale property. The owner will be required lo improve the end of the cul-de-sac as part of developing the property. The property was purchased by the owner of a local business who needed a larger site for business expansion, li will eventually be improved wilh an industrial building, but is currently being used for truck and equipment storage. Approximately the westem one-third of this properly is in Flood Zone A. This property is accessible at the end of the cul-de-sac at the west end of Armoriite Drive. The north side of this property is adjacent to the AT&SF Railroad tracks which, in lum are adjacent lo Mission Road. No access is available to this property across the railroad right of way. Il is a level site, approximately al street grade and with good utility. This sale transpired in a weaker markel and has been adjusled upward for inferior market conditions to an adjusted price of $5.94 per square foot. This sale property is considered superior to the subject in terms of ils overall size on a dollars per square foot basis. It is considered inferior to the subject relative lo its access via the end of a cul-de-sac, ils flood zone influence and also due to the lack of off-site improvemenls along ils frontage. Il is also inferior relative to specific location, lacking the subject's business park appeal. Il is considered lo be generally similar to the subject in other respects. Overall, this property is considered inferior lo the subjeci and indicates a subject value of greater than $5.94 per square foot. Comp 2 (Land Sale No. 2) This is the June 2002 sale of an approximately 3.96 acre parcel of raw, industrial zoned land located al 2936-48 South Santa Fe Avenue in San Marcos. The selling price was $590,000, or approximately $3.42 per square fool. The property was purchased by the owner of the adjacent business for possible business expansion purposes, but he has no immediate plans to do so. This property is accessible from either direction on South Sanla Fe Road, >002130-2a.rpl La Costa Meadows - 16 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants : a major street in the area. South Santa Fe Avenue is an asphalt paved, major street in the area, but there are no curbs, gutters or sidewalks along the frontage of this sale property. All typical utilities are available to the site. This sale property is considered slightly superior to the subject in terms of its smaller overall size on a dollars per square foot basis. It is considerably infenor to the subject relative to its lack ofdevelopment status - it is raw land. It is inferior to the subject due to its sloping topography, inferior as to its lack of off- sites and also inferior as to its specific location which is not in a desirable business park.. It is considered to be generally similar to the subject in other respects. Overall, this property is considered substantially inferior to the subject and indicates a subject value of substantially greater than $3.42 per square foot. Comp 3 (Land Sale No. 14) This is the December 2002 sale of an approximately 3.18 acre finished industrial site located on Grand Avenue southeast of Cades Way in Vista approximately three miles north of the subject. The selling price was $835,000, or approximately $6.03 per square foot. All typical utilities were available to the site as of the date of sale. Grand Avenue is an asphalt paved street with curbs, [ gutters or sidewalks adjacent to this sale property. The property was purchased with the intention of constmction four industrial buildings on the site. This property is accessible from either direction on Grand Avenue. It is a level site, approximately at street grade and with good utility. This sale property is considered slightly superior to the subject relative to its smaller size on a dollars per square foot basis. It is considered inferior to the subject as to its access and exposure. It is considered to be generally similar to the subject in other respects. Overall, this property is considered slightly inferior to the subject and indicates a subject value of slightly greater than $6.03 per square foot. !0O2130-2a.rpl La Costa Meadows - 17 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Comp 4 (Land Sale No. 4) This is the September 2002 sale of an approximately 2.93 acre finished industrial lot on the south side of La Cosla Meadows Drive east of its intersection with Rancho Santa Fe Road. It is across the street from the subject. The selling price was $1,053,000, or $8.25 per square fool. This is a generally level site with good utility. This property is accessible from either direction on La Costa Meadows Drive, an asphalt paved street in the area, with concrete curbs, gutters and sidewalks along the frontage of this sale property. All typical utilities are available lo the site This comparable property is slightly supenor to the subject in terms of ils smaller overall size on a dollars per square foot basis, li is considered generally similar to the subjeci in olher respecis. Overall, this property is slightly superior to the subject property and indicates a subject value of slighlly less lhan $8.25 per square foot Comp 5 (Land Sale No. 5) This is the December 2001 sale of an approximately 4.48 acre finished industrial lot located al the northwest comer of Twin Oaks Valley Road and Borden Road in San Marcos. The selling price was $1,000,000, or approximately $5.12 per square foot. The property was improved with an old industrial building as of the dale of sale that was removed to make room for an induslrial park. This property is accessible from Borden Road. A small portion of the east end of this property was in Flood Zone A, however, as of our inspection it appears as if this area has been raised to an elevalion above the flood zone. All typical utilities were available to the site as ofthe date of sale. Both Twin Oaks Valley Road and Borden Road are improved, asphalt paved streels with curbs, gutters and sidewalks along lhe frontage ofthis sale property. This sale transpired in a weaker markel and has been adjusled upward for inferior market conditions to an adjusted price of $5.48 per square foot. This sale property is considered slightly supenor to the subject relative to its smaller overall size on a dollars per square foot basis. It is considered infenor lo the subject as to its flood zone influence and !002130-2a.rpt La Costa Meadows - 18 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consullanis : If inferior to the subject in terms of development status due to the need to remove existing improvements. It is considered to be generally similar to the subject in other respects. Overall, this sale property is considered inferior to the subject and indicates a subject value of greater than $5.48 per square foot. Comp 6 (Land Sale No. 7) This is the October 2001 sale of an approximately 9.19 acre parcel of raw industrial zoned land located on the north side of Armoriite Drive east of Las Posas in San Marcos. The selling price was $1,975,000, or approximately $4.93 per square foot. All typical utilities are available to the site. Armoriite Drive is an improved, asphalt paved street with concrete curbs, gutters and some sidewalks adjacent to this sale property. The property was purchased with the intention of constmcting a central office equipment building on the property. Those plans are currently on hold due to more significant environmental issues with the property than were known at the date of sale. As of our inspection, constmction had not yet commenced. This property is accessible from either direction on Armoriite Drive. It is a generally level to gently sloping site, approximately at street grade. This sale transpired in a weaker market and has been adjusted upward for inferior market conditions to an adjusted price of $5.37 per square foot. This sale property is considerably inferior to the subject relative to its lack of development status - it is raw land. It is also inferior in terms of its specific location which is not in a desirable business park, and slightly inferior to the subject as to its off site improvements and environmental issues affecting the property. It is considered to be generally similar to the subject in other respects. Overall, this property is considerably inferior to the subject and indicates a subject value of considerably more than $5.37 per square foot. Comp 7 (Land Sale No. 8) This is the Febmary 2001 sale of an approximately 14.72 acre parcel comprising four finished industrial lots. It is located at the east end of Corte de la Pina, east of Yanow Drive in Carlsbad a short distance south of Palomar Airport. The selling price was $3,500,000, or approximately $5.46 per square foot. All typical ufilifies !002130-2arpt La Costa Meadows - 19 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants I Ig are available to the site. Corte de la Pina is an improved, asphalt paved streel with concrete curbs, gutters and sidewalks adjacent to this sale property. The property was purchased with the intention of constmcting an industrial park on the property. As of our inspecfion, those improvements were nearing complelion. This property is accessible via the cul-de-sac at the end of Corte de la Pina. The site comprises finished lots which are above the grade of Corte de la Pina with banks that accommodate the elevalion differences. Site utility is impacted by the existence of access easements on the property. This sale transpired in a weaker market and has been adjusted upward for inferior market conditions lo an adjusled price of $6.01 per square foot. This sale property is considered slightly superior to the subject as lo ils localion near Palomar Airport, ll is considered inferior to the subject relafive lo its sloping topography and loss of site utility lo access easements. It is considered to be generally similar lo the subjeci in other respecis. Overall, this property is considered inferior to the subject and indicates a subject value of more than $6.01 per square fool. The following table anays these sales in order from most inferior to most superior. COMPARABLE LAND SUMMARY Sale Location Sales Date Sales Price Size (AC) Price/SF* Comparability 2 2936-48 S Santa Fe, San Marcos 06/27/02 $590,000 3.96 $3.42 Subst Inferior 6 Armoriite E of Las Posas, San Marcos 10/23/01 $1,975,000 9.19 $5.37 Consid Inferior 5 NWC Twin Oaks & Borden, San Marcos 12/21/01 $1,000,000 4.48 $5.48 Inferior 1 Armoriite W of Las Posas, San Marcos 01/31/02 $520,000 2.13 $5.94 Inferior 7 Corte de la Pina E of Yarrow, Carlsbad 02/23/01 $3,500,000 14.72 $6.01 Inferior 3 Grand Avenue SE of Cades Way, Vista 12/10/02 $835,000 3.18 $6.03 Slgt Inferior Subj 1645 Rancho Santa Fe, San Marcos 10.43 $7.50 4 S side La Costa Meadows, San Marcos 09/19/02 $1,053,000 2.93 $8.25 Slgt Superior *Price/SF adjusted for market conditions. The sales listed above are considered to be the best available sales for use in developing an opinion ofthe market value of the subject land. They are considered to bracket the subjeci property in bolh physical characteristics and selling price. Based on our analysis of these comparable properties and discussions wilh knowledgeable market participants, we have concluded that the fair markel value of the subjeci property is $7.50 per square foot. !002130-2a.rpl La Costa Meadows - 20 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consullanis If Value of the Temporary Construction Easement As noted in the description of the acquisition areas, the use of a portion of the property is needed for lhe completion of the Rancho Santa Fe Road improvement projeci. This area is being acquired as a lemporary constmcfion easement. Informafion provided to the appraisers by Aguine and Associaies indicales lhal ihc temporary constmcfion easement totals 27,222 square feel in size. The area is primarily along lhe weslem and southem edges of the subject site. Please refer to the Acquisition Map presented previously. This area does not affect any of the major improvements on the property. The lemporary conslruclion easemenl area is improved with landscaping and some paved areas. Accordingto Doug Helming of Helming Engineering, any major signs or mature trees in the easemenl area will be avoided during conslruclion, and any olher landscaping damaged or destroyed during constmction will be restored lo Iheir original condiiion as part of the project. Accordingly, we have not considered the replacement cost of Ihese siie improvemenls as part of this analysis. Valuation of a temporary constmction easement is generally based on the premise lhal lhe owner of ihc easement rights, in this case the City of Carlsbad, is leasing the easemenl area from lhe property owner for a specified period of time. An opinion of the monlhly rental rale is developed, and compensalion to lhe property owner is the present value of the proposed stream of monthly rental paymenls. All parameters other than the value of the land underlying the easemenl area were developed in the introduction section of the report and included: Land Rate of Retum 10% Duration of Easement 19 months, from June 1, 2003 lo January 1, 2005 Discount Rate 6% Present Value Factor 17.99 The only remaining factor needed to determine the value of the temporary construction easemenl is the value of the land encumbered by the easement. We previously concluded thai the value of the subjeci land parcel is $7.50 per square foot. The temporary conslruclion easemenl encumbers an area totaling 27,222 square feet. Extending the per square foot value to the entire easemenl area yields the following calculation. Value ofTCE land area 27,222 SF x $7.50/SF $204,165 Rounded: $204,200 ^oo2i3o-2a.rpt La Costa Mcadows - 21 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consullanis lg The value of the temporary constmcfion easemenl can be calculated as follows: Annual Rental Rate = Monthlv Rental Rale Present Value of the Income Stream Land Value x $204,200.00 X $20,420.00 Annual Rent $20,420.00 - $1,701.67 Monlhly Rent x $1,701.67 X $30,700.00 Rale of Return 10% Months/Year 12 Present Value Factor 17.99 (Rounded) According to Doug Helming of Helming Engineering, during the course of the projeci the southerly driveway entrance on Rancho Santa Fe Road and the westerly driveway entrance on La Cosla Meadow s Drive will be closed for short periods of fime. The closures are expected lo be for six months or less. By the time either ofthe closures is needed, theCily of San Marcos is expected lo have completed its Melrose Drive project. Melrose Drive is to be extended eastward along the north side of the La Cosla Mcadows industrial park and will be connected with other streets in the park including Patton Slreel (see plat map). This connection will provide an access route to thesubject via Patton Slreel and LaCosta Meadows Drive. In addition to the two affected driveway entrances, there are two additional driveways inlo the subject property which are unaffected by either project. The subjeci has an extensive system of interior driveways which provide access to the entire industrial park via either of those entrances. The subject is a multi building, multi tenant industrial park. It is not aniicipaled lhal any tenants will seek rent reductions resulting from inconvenience resulfing from the projeci and the lemporary driveway closures, and the subject property is not considered to be damaged by the projeci. Just Compensation Since neither severance damages nor benefits exist, just compensalion lo the property owner comprises the value of the temporary constmction easemenl. Just Compensafion S3().7()() !002130-2a.rpt La Costa Meadows - 22 HENDRICKSON APPRAISAL COMPANY, INC. Real Eslale Appraisers • ( onsullanis lg I 3 PLAT MAP !002130-latpt 1 HENDRICKSON APPRAISAL COMPANY, INC. Real Eslale Appraisers • Consullanis Ig 11 SITE DESCRIPTION Location: The subject property is located on the east side of Rancho Santa Fe Road a short distance south of the intersection of La Costa Meadows Drive. It is part of the University Commons planned community. TB Map Code: 1128A5 Legal Description: Lot 6-1 of City of San Marcos Tract No. 371, in the City of San Marcos, County of San Diego, State of Califomia, according to Map Thereof No. 13156, filed in the Office of the County Recorder of San Diego County on October 27, 1994. Excepting therefrom that portion lying Northeasterly of the Southeasterly line of that portion of Section 29, Township 12 South, Range 3 West, San Bemardino Meridian, in the County of San Diego, State of Califomia, according to the Official Plat thereof, described as follows: Beginning at the North Quarter Comer of said Section 29; thence along the North line thereof; South 88M6'25" East 1327.86 feet to the Northeast comer ofthe West half of the Northeast comer of said Section; thence along the East line thereof. South 00°2r33" East (Record South 00°20'30" East), 875 Feet to the Tme Point of Beginning, being the Southeasterly comer of the land described in deed to H. C. Tiffany recorded may 4, 1956 in Book 6088, Page 245 of Official Records, thence continuing South 00*'21'33" East along the East line to and along the East line of the West half of the Southeast Quarter of said Section 29, a distance of2448.00 feet; thence North 58M5'33" West 944.69 feet to a Poinl "A" ofthis descripfion: North 58M5'33" West 990.21 feet to a point in the Southeasteriy line of said Tiffany land; thence along said southeasterly line North 48*'36'35" East 2184.66 feet to the Tme Point of Beginning. Owners: Brookfield University Commons, Inc. !002l30-la.rpl 2 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consullanis APN 223-031-31 Real Property Taxes/Assessments: A representafive ofthe City of San Marcos stated that this property has no development potential and that it has been dedicated to permanent open space. County Tax Collector information shows that the property is neither assessed nor taxed. Access: The property has direct frontage on Rancho Santa Fe Road and San Elijo Road, however the site is secured with barbed wire fence along those frontages. Access to the property is cunently provided via parking lots of industrial properties on La Costa Meadows Drive. The property is cunently used as a privale park for employees of those businesses, and will eventually also be reserved for use by residents ofthe University Commons development when it is completed. Size and Shape: According to San Diego County Assessor's data, the subject property is 70.86 acres, or approximately 3,086,662 square feet in size. It is inegular in shape. Please refer to the Plat Map. Topography: The subject property is generally level to gently sloping and offers good utility. Drainage: Based on our physical inspection, the subject property appears to offer adequate drainage. 2002130-la.rpt 3 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig Flood Zone: Review of FEMA Flood Map 06073C1051F, dated June 19, 1997 as well as San Diego Geographic Map source: San Diego Geographic Information System. Informafion System Natural Features mapping indicates that more than half ofthe subjeci property is in Flood Zone A. Most of the southerly portion of the property is in Flood Zone X, ouiside the 500 year floodplain. Toxic or Hazardous Materials: No toxic or hazardous waste report was available for review, and a thorough physical invesfigafion ofthe property is beyond the scope of the assignment. No known hazardous materials were observed during our inspection of the property. The Subject Property is appraised as if free from hazardous materials. Geologic Conditions: Most of Southem Califomia including San Diego County is subject to a potenfial earthquake. There are no major earthquake faults affecting the immediate subject area, but within ten miles the Rose Canyon fault, a short distance off shore, could create a damaging earthquake. Map No. 6 ofthe Califomia Geologic Data Map Series indicates that neither this fault, nor other minor faults in the area, have shown evidence of displacement during either historic or Holocene time(during the past 10,000 years). Title Report: A preliminary Title Report prepared by First American Title Company and dated Augusi 1, 2000 was provided to the appraisers for review. The Title Report identifies easements and encumbrances considered !002l30-la.rpi HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig typical for a property such as the subject. None of these encumbrances is considered to limit the subject's development to its Highest and Best Use. Zoning: The subject property is cunently zoned as Open Space by the City of San Marcos. The property is included in the University Commons Specific Plan, and under that plan is intended for use as a private park and open space. The Land Use Element of the San Marcos General Plan identifies the subject property as open space and notes that a portion of it is cunently used as a park. No changes to either the land use or the zoning are anficipated in the foreseeable future. Current Uses: The subject property is cunently used as a private park for the use of employees of businesses on the South side of La Costa Meadows Drive. According to the University Commons Specific Plan, once the University Commons master planned community is completed, residents of the development will also be permitted to use the park. Utilities: All typical utilifies are available in and around the subject property. Street Improvements: The two public streets which front the subject property are asphalt paved streets. Rancho Santa Fe Road is a main arterial in the area. Neither Rancho Santa Fe Road nor San Elijo Road has curbs, gutters or sidewalks along the subject frontage. Easements/Encumbrances: Mapping and other documents provided to the appraisers identify a number of easements encumbering the property. Most of them are public road or utility easements typically associated with relatively large properties. One of the road easements encumbers the westerly 30 feet of both of the easement areas being acquired. Two additional easements encumber the property; one for "recreational and game preserve and incidental purposes", and a second "to develop a park-like game preserve and recreational area". Considering the zoning and land use classifications of the subject, none of these easements are considered to limit development of the subject property to its Highest and Best Use. One of the easement encumbrances noted above is a road easement in favor of San Diego County which crosses the southwesterly portion of the property for "Questhaven Road". Although we have not been able ^002130-larpt 5 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig to definitively determine that the easement was or is to be vacated, we considered the following in our analysis. 1) The easement was recorded in 1966 at a time when the area was part of unincorporated San Diego County. The area has subsequently been annexed into the City of San Marcos. 2) Questhaven Road has never been constmcted and the City of San Marcos has no plans to build it. 3) The easement alignment does not match the alignment of existing Rancho Santa Fe Road which already serves the area. 4) The easement alignment does not match the alignment of proposed Rancho Santa Fe Road. 5) The project plans show a new Questhaven Road intersecting with Rancho Santa Fe Road to the south of the subject property. In our opinion, it is reasonable to conclude that Questhaven Road, as shown in the easement, will very likely never be constmcted and does not limit the viability of the subject for use as open space. Environmental Issues: There are no known environmental issues affecting the subject property. Improvements: The subject property is cunently a vacant parcel of land. Site Improvements: Site improvements on the subject property include large areas of maintained lawn, some concrete walkways and a channelized creek. The easement acquisitions being made as part of the project affect some of the lawn area, but no hardscape items. The majority of the easement areas encumber portions of the property which are unimproved, although a number of mature trees are in the area. According to Doug Helming of Helming Engineering, major signs and mature trees on the property will be avoided during completion of the project. Any other landscaping and pavement damaged or destroyed during completion of the project is to be restored to its original condition as part of the project. Accordingly, we have not considered replacement costs of these items in our analysis. DESCRIPTION OF PART BEING ACQUIRED Information provided to the appraiser indicates that two areas of this property are being acquired, both of which encumber the extreme westerly portion of the property. The first is an inegular rectangle shaped area that mns along the Rancho Santa Fe Road frontage and extends approximately 86 feet into the subject property. Please refer to Acquisifion Map 1 which follows. Informafion prepared by Aguine and Associates provided to the appraisers indicates that this temporary easement area comprises approximately 1.24 acres, or approximately 54,222 square feet in size. The majority ofthis area is unimproved scmb and creek bed, although the area does include some lawn area at the west end of the park. This area is being acquired as !0O2130-la.rpt 6 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig a temporary constmction easement which is to commence June 1, 2003 and expire January 1, 2005, a durafion of 19 months. The second area being acquired is generally rectangular in shape and also lies along the Rancho Santa Fe Road Frontage. It extends into the subject property an average distance of approximately 42 feet and the enfire area comprises unimproved scmb and creek bed area. It is a total of 0.426 acres, or approximately 18,556 square feet in size. Please refer to Acquisifion Map 2. This area is being acquired as a permanent sewer easement to the Vallecitos Water District. b002l30-la.fpl HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants lg Subject property lookmg north across San Elijo Road. Rancho Santa Fe Road is to the left. !002130-la.rpt Subject property looking east from Rancho Santa Fe Road across the TCE. 8 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants if I >002130-larpt Looking southeast across west end of the subject toward Rancho Santa Fe Road. The TCE area is in the backgroimd. Looking north on Rancho Santa Fe Road from San Elijo Road. The subject is to the right. HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig Looking south along the east (inside) line of the TCE at the north end of the subject property. !002130-la.rpt Looking south along the east line of the TCE at the south end of the subject property. 10 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig Looking south at the north end of the Vallecitos Water District easement. The orange stakes mark the comers of the easement. !002130-la.rpl Looking north at the south end of the Vallecitos Water District easement. The orange paint and stake mark the comers ofthe easement area. 11 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig ACQUISITION MAP 1 Temporary Construction Easemenl !002I30-Iarpl 12 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers •Consulianb Ig ACQUISITION MAP 2 Vallecitos Water District Ufility Easement >002130-la.rpl 13 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants tg HIGHEST AND BEST USE AS THOUGH VACANT - The determinafion of the Highest and Besl Use of a property as though vacant is contingent upon the proposed use being legally permissible, physically possible, financially feasible and maximally productive. Legally Permissible - The subject property is located in the southwestern portion of the Cily of San Marcos, in an area covered by the University Commons Specific Plan. The land use element of the San Marcos General Plan identifies the subject for existing park and open space use. The University Commons Specific Plan identifies the property for recreafion and open space use. The intent of Open Space uses in San Marcos is to reserve properties for natural open space areas, for ouldoor recreation, for preservation of natural resources and for public health and safety uses. The University Commons Specific Plan idenfifies the area as the San Marcos Creek Recreafion Area and notes lhal il is a privale passive park which contains a channelized creek bed, pedestrian walkways, bridges, turf and landscaping. Il also notes that it is reserved for the exclusive use of the employees of the La Cosla Meadows Induslrial Park and lhat, once the University Commons development is completed, the subject park will also be available lo residents and guests of the project. Open space and recreafion are the only legal uses of the subjeci property. Physically Possible - The subjeci property totals approximately 70.86 acres in size. Il is inegular in shape and is generally level and usable. More than half of the property is in Flood Zone A. No soils report was provided to the appraisers for review, however, we have no reason to suspect lhal the load bearing capaciiy of the site is inadequate to support any legally permissible improvements on the property. The property safisfies the Highest and Best Use requirement of being physically possible. Financially Feasible and Maximally Productive - The subject property has zoning and land use classificafions for open space and recreational purposes. As such, it is not a property intended to generate income and an analysis of financial feasibility is not relevant. By providing open space and recreation area to the associated master planned community, it can enhance the feasibility of the residenlial portion ofthat project. AS IMPROVED - The subjeci property is cunently improved as a privale park. It is a legal use ofthe subject property. ^002130-la.rpt 14 HENDRICKSON APPRAISAL COMPANY, INC. Real Eslale Appraisers • Consullanis I 13 If : : RECONCILIATION OF HIGHEST AND BEST USE The subject property has a land use designation for recreation and open space, and no changes to either the zoning or the land use designation are anticipated. It is also cunently improved as a privale park. We have concluded that its cunent park use represents the Highest and Best Use of the property. : I !002l30-la.rpl 15 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consullanis Ig ii VALUATION ANALYSIS Methodology The subject is designated as an open space/recreation area and is cunently improved with a privale park. Ideally we would be able lo locate sales of park properties, however none were available. As an altemative, we located and verified sales of properties that were purchased with the intention of setting Ihem aside as open space. As noted in the Scope section of this report, the Sales Comparison Approach was used lo develop an opinion of the land value of this property, and the process of deiermining just compensalion to the property owner requires several steps. First the value of the entire property is developed. Second, the value of the part being acquired is developed by applying the per unil value of the whole property determined in the first step. Third, the value of the remainder as part of the whole is determined by deducting the value of the part being acquired from the value of the whole property. Fourth, the value of the remainder after the acquisition is determined. Fifth, the value of the remainder afler the acquisition is compared to the value of the remainder as part of the whole to determine if severance damages or benefits exist. Last, just compensation is calculated by adding the value of the part being acquired lo the value of any net severance damages. The appraisers searched for recent sales of open space land parcels in the general subjeci area and found limited sales. The search area was then expanded to include the northem half of San Diego Counly. Primary data sources were CoStar, a firm which specializes in publishing real eslale sales dala and conversafions with brokers and buyers of open space land. In all, five comparable sale properties considered most similar to the subject were used in this analysis to develop an opinion of value for the subject property Unit of Comparison The unit of comparison employed in this analysis is the price per acre as this is the measure typically used by participants in the market for open space or mitigation land. Market Conditions Only one ofthe sales used in this analysis recorded in 2002. The other four all recorded in 1999 and 2000. Comparing the two sales in San Marcos, one of which recorded in August 1999 and the olher in April 2002, suggests an annual increase in value of approximately 8%. This is considered lo be a reasonable indicator in that both sales are in San Marcos, and both are adjacent to residential developments. Bolh of these characteristics are similar to the subjeci. Conversafions with confirming sources also suggests lhal this is a reasonable appreciafion rate for open space properties in the subjeci area, and we will use lhal rale ^002130-la.rpt 16 HENDRICKSON APPRAISAL COMPANY, INC. Real Estaie Appraisers • Consultanis Ig in our analysis. All sales, with the excepfion of the fairly recent Sale 1, have been adjusted upward for improving market condifions unfil mid 2002, at which fime we believe market prices leveled off Items of Comparison The comparable sale properties were compared to the subjeci on the basis of the following items: localion, overall parcel size, access and off sites, topography, site development status, utilities, and developmenl potenfial. All of the comparable sale properties are considered superior lo the subjeci in lerms of development potential as all of them have zoning classifications that permil residential developmenl on one acre lots. All were purchased to set aside as open space, but other buyers could have had different plans for them. With respect to parcel size, when considering a property on a dollars per acre basis, larger parcel sizes are considered inferior to smaller parcel sizes and lower densities. Value of the Whole Before the Acquisition Several properties purchased to sel aside as open space were researched in order lo develop an opinion of the fair market value of the subject property. Of those, the following comparable properties were considered to be most appropriate in valuing the subject. These sale properties were compared lo the subject property on the basis of the items of comparison noted in the previous paragraph. The following table anays the comparabies and presents a summary of details relating lo each comparable. The unil of comparison used in this analysis is dollars per acre, as that is typically the unit used by potential buyers of open space properties. COMPARABLE LAND SUMMARY Comp No. Land Sale Location Sales Date Sales Price Size (AC) Price/Acre 1 9 S of Via Del Corvo, San Marcos 04/05/02 $271,500 20.88 $13,003 2 10 W of Del Roy Drive, San Marcos 08/13/99 $554,000 52.33 $10,587 3 11 S of Artesian, W of Rio Vista, San Diego 03/08/00 $1,976,000 95.43 $20,706 4 12 N of Mast, W of Medina, San Diego 10/29/99 $525,000 35.00 $15,000 5 13 Spring Canyon NW of Mast, San Diego 09/16/99 $1,194,500 59.75 $19,992 Note: Land Sale numbers are keyed to the Land Sale numbers in the addendum. 2002130-la.rpt 17 HENDRICKSON APPRAISAL COMPANY, INC. Real Estaie Appraisers • Consullanis LAND COMPARABLE SUMMARY & ANALYSIS PROPERTY INFORMATION Subject Comp 1 (LS9) Comp 2 (LSI 0) Comp 3 (LS11) Comp 4 (LSI 2) Comp5(LS13) Property Locatibn E side of Rho Santa S of Via Del Como W of Del Roy Drive S of Artesian N of Mast Blvd Spring Canyon NW Fe @ San Elijo W r Rio Vista Wof Medina of Mast Blvd San Marcos San Marcos San Marcos San Diego San Diego San Diego Owner/Seller Univ. Commons San Marcos Lnd HIdngs Rupe Santa Fe Vievirs Roy Salmu Buyer Ctr for Natl Land Mgt Environmental Trust Nature Conservancy Poway Schoot Disl Poway School Dist Assessor Parcel Number 223-031-31 222-030-48 182-111-02 267-142-25 366-080-23 366-040-32 218-330-20 269-100-17 Recording Date N/A 04/05/02 08/13/99 03/08/00 10/29/99 09/16/99 Land Area (Acres) 70.86 20.88 52.33 95.43 35.00 59.75 Zoning OS. San Marcos Rl, San Marcos A-1. San Marcos S87. SD County Rl-40, San Disgo Rl-40. San Disgo Highest & Besl Use Open Space/Rec Resid/Open Space Ag. 1 du per acre max Spec use Resid/Holding Resid/Holding Comments Improved as private Purch with intent to Purch with inteni to Purch wiih intent lo Purch for open space Purch for open space park set aside as open spc. set aside as open spc. set aside as open spc. and mitigation and mitigation Price $271,500 $554,000 $1,976,000 $525,000 $1,194,500 Per Acre $13,003 $10,587 $20,706 $15,000 $19,992 COIWPARABILITY ANALYSIS Conditions of Sale/Market: Property Rights Similar Similar Similar Similar Similar Financing Simitar Similar Similar Similar Similar Condiiion of Sale Similar Similar Similar Similar Similar Market Condilions Similar 23% 19% 22% 23% Market Cond. Adj. Price $13,003 $13,022 $24,640 $18,300 $24,590 Physical Characteristics; Location San Marcos Similar Similar Subst Superior Superior Superior Size 70.86 Similar Similar Similar Similar Similar Access/Offsites Paved access Inferior Inferior Inferior Infeiior Inferior Topography Level to sloping Inferior Inferior Inferior Inferior Inferior Ulililies Xvail in area Similar Similar Similar Similar Similar Shape Irregular Similar Similar Similar Similar Simitar Development Potential/Timing O/S only Superior Superior Superior Superior Superior Overall Comparability Inferior Inferior Superior Similar Similar X m Z O o z > -D 13 > r- O O 2 > Z < 2 p w_ m if g > •a I I I r I I I > I II 11 I I ( I f I 11 rn wm 1 J I J 11 t 1 [ 1 Ig Comp 1 (Land Sale No. 9) This is the April 2002 sale of an approximately 20.88 acre parcel of vacant, raw land located south of Via Del Corvo east of Rancho Santa Fe Road in San Marcos. This property was zoned R-l as of the date of sale, however it was purchased with the intention of setting it aside as open space. It is a hilltop site that sunounds a property with water tanks on it. The selling price was $271,500, or approximately $13,003 per acre. All typical ufilities are available in the area. No public streels extend to this property. This sale property is considered inferior to the subjeci relafive lo ils lack of paved slreet access and also inferior as to its rolling topography. It is considered to be superior lo the subject in lerms of ils development potential as ils zoning as of the date of sale would permil residenlial development. It is considered to be generally similar to the subjeci in olher respecis. Overall, this property is considered inferior to the subject and indicates a subjeci value of greater lhan $13,000 per acre. Comp 2 (Land Sale No. 10) This is the August 1999 sale of an approximately 52.33 acre parcel of vacant, raw land located wesl of Del Roy Drive and Twin Oaks Valley Road in San Marcos. This property was zoned A-l as of the date of sale, an agricultural zone that permits residences on one acre lots, however it was purchased with the intention of setting it aside as open space. It is a rolling site lhat is adjacent to a developed residenfial subdivision. The selling price was $554,000, or approximately $10,587 per acre. All typical utilities are available in the area. No public streets extend to this property. This sale occuned in Augusi 1999 and has been adjusted for differing market condilions to a selling price of $13,022 per acre. This sale property is considered inferior to the subject relative to its lack of paved street access and also inferior as to its rolling topography. It is considered lo be superior lo the subject in lerms of ils development potenfial as its zoning as of the date of sale would permil residenlial development. It is !002I30-Ia.rpl 19 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consullanis Ig considered to be generally similar to the subject in other respecis. Overall, this property is considered inferior to the subject and indicates a subject value of greater than $13,000 per acre. Comp 3 (Land Sale No. 11) This is the March 2000 sale of an approximately 95.43 acre parcel of vacant, raw land located south of Artesian Road and west of Rio Vista, adjacent to the Fairbanks Ranch area of unincorporated San Diego County. This property was zoned S87 as of the date of sale, a special zone that permits residences on acreage lots, however it was purchased with the intention of setting it aside as open space. It is a rolling site that has Lusardi Creek mnning through it. The selling price was $ 1,976,000, or approximately $20,706 per acre. All typical utilities are available in the area. No public streets exlend lo this property. This sale occuned in March 2000 and has been adjusled for differing markel conditions lo a selling price of $24,640 per acre. This sale property is considered inferior to the subjeci relative lo ils lack of paved slreel access and also inferior as to its rolling topography. It is considered to be superior lo the subject in lerms of ils development potenfial as its zoning as of the dale of sale would permil residenlial developmenl. It is substantially superior to the subject as lo its localion adjacent lo Fairbanks Ranch. Il is considered lo be generally similar to the subjeci in other respects. Overall, this property is considered superior lo the subjeci and indicates a subject value of less than $24,500 per acre. Comp 4 (Land Sale No. 12) This is the October 1999 sale of an approximately 35.00 acre parcel of vacant, raw land located north of Masl Boulevard and west of Medina in the East Elliot area of San Diego. This property was zoned Rl-40 as of the dale of sale, a residenfial/holding zone that permits residences on one acreage lots, however it was purchased with the intention of setfing it aside as open space. It is a hillside site a short distance west of residenfial development in the Santee Lakes area. The selling price was $525,000, or approximately $15,000 per acre. All typical ufilifies are available in the area. No public streets extend lo !002I30-Ia.rpl 20 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consullanis lg this property. This sale occuned in October 1999 and has been adjusted for differing market conditions to a selling price of $18,300 per acre. This sale property is considered inferior to the subject relafive lo its lack of paved streel access and also inferior as to its rolling topography. It is considered to be superior to the subject in terms of its development potential as its zoning as of the date of sale would permit residential development, and superior to the subject as to its locafion in central San Diego. Il is considered lo be generally similar to the subject in other respects. Overall, this property is considered generally similar to the subject and indicates a subject value in the range of $18,000 per acre. Comp 5 (Land Sale No. 13) This is the September 1999 sale of an approximately 59.75 acre parcel of vacant, raw land located in Spring Canyon northwest of Masl Boulevard in the East Elliot area of San Diego. This property was zoned Rl-40 as of the date of sale, a residenfial/holding zone lhat permits residences on one acreage lots, however il was purchased with the intention of setting it aside as open space. Il is a hillside site a short distance west of residenlial development in the Santee Lakes area. The selling price was $1,194,500, or approximately $ 19,992 per acre. All typical utilities are available in the area. No public streets extend to this property. This sale occuned in Seplember 1999 and has been adjusted for differing market condifions to a selling price of $24,590 per acre. This sale property is considered inferior to the subjeci relative to ils lack of paved streel access and also inferior as to its rolling topography. It is considered to be superior to the subject in terms of its development potential as its zoning as of the date of sale would permit residential developmenl, and superior to the subjeci as to its location in central San Diego. Il is considered lo be generally similar lo the subject in other respects. Overall, this property is considered generally similar lo the subjeci and indicales a subject value in the range of $24,000 per acre. The following table anays these sales in order from most inferior to most superior. !002130-la.rpc 21 HENDRICKSON APPRAISAL COMPANY. INC. Real Estate Appraisers • Consultanis lg COMPARABLE LAND SUMMARY Comp Location Sales Date Sales Price Size (A( ) Aclj $ Ac ("i)niparahili!\ 1 S of Via Del Corvo, San Marcos 04/05/02 $271,500 20.88 $13,003 Inlcnoi 2 W of Del Roy Drive, San Marcos 08/13/99 $554,000 52.33 $13,022 IIIILTIOI 4 N of Mast, W of Medina, San Diego 10/29/99 $525,000 35.00 $18,300 (ien .Similar Subj E side Rancho Santa Fe Rd, San Marcos 70.86 $24,000 5 Spring Canyon NW of Mast, San Diego 09/16/99 $1,194,500 59.75 $24.5')0 (ien .Similar 3 S of Artesian, W of Rio Vista, San Diego 03/08/00 $1,976,000 ^^\43 $24.()4() Superior The sales Hsted above are considered lo be the best available sales for use in developing an opinion ofthe market value of the subject land. They are considered to bracket the subject property in both physical characterisfics and selling price. Based on our analysis of these comparable properties we have concluded that the fair market value of the subjeci property is $24,000 per acre. The subject parcel is reported lo bc 70.86 acres in size, however, the 30 feel slrip along the westerly property line is encumbered w ith a countv road easement that appears lo have been improved as Rancho Santa Fe Road. In our opinion, ihis represents a 100% loss of the owner's bundle of righls lo that area, and thc area will bc deducted Irom ihc total prior to extending the per acre value lo the site as a whole. Mapping prepared by .^giiinc aiui Associates permits calculafing the size of lhal easemenl area as approximately 18.304 square feci, or approximately 0.42 acres. Deducting this area from the whole leaves a subject si/c of 70.44 acrcs. Extending the per acre value of $24,000 lo the entire 70.44 acre subject property yields thc following calculation. Value ofthe subjeci land 70.44 Ac x $24,000/Ac S1 .()')(i.5()() Value of the Part Being Acquired Permanent Easement to Vallecitos Water District Information provided by Aguine and Associaies indicales that the easemenl rights being acquired lor Vallecitos Water District totals 0.426 acres. Of this area, 0.305 acres was previously encumbered w iih a road easement and improved wilh Rancho Sanla Fe Road. Since the road easement area was deducted when calculating the value of the whole, il musl also be deducted from the area being encumbered by thc utility easement. The new easemenl encumbers an additional 0.121 acres ofthe property. Thc utility easement area encumbers a portion of the site lhal is mainly scrub and creek bed. Information pro\ ided to >002130-larpl 22 HENDRICKSON APPRAISAL COMPANY. INC. Real I slalc Appraisers • ( onsulianb Ig the appraisers indicates that this area is being permanently encumbered as a utilily easement. In our opinion, this area will have less ufility to the property owner even though he will still hold ownership of the underlying fee simple interest. We believe this easemenl represents a loss of 50% of the owner's bundle of rights to this area. The value of the easement rights can then be calculated as follows. Value of Part Acquired 0.121 Ac x $24,000/Ac x 50% $1,452 Value of the Remainder as Part of the Whole The value of the remainder as part of the whole is calculated by deducfing the value of the part being acquired from the value of the whole before the acquisifion as follows. Value of the whole property $ 1,690,560 Value of the part being acquired 1,452 Value of the remainder as part of the whole $ 1,689,108 Value of the Remainder After the Acquisition After the acquisition, the subject property will be changed only very slightly from its before condiiion. It will be the same size as in the before condition, but 0.121 acres will be encumbered by a utility easemenl. The easement area does not impact any of the existing park improvemenls on the property. We previously concluded that the easement encumbrance represents a 50% loss in the owner's bundle of righls lo the encumbered area. It is reasonable to conclude that the value of the subjeci land can be deiermined using the same comparable sales as were used in the before condifion analysis, and that the per unit land value would be the same as it was in the before condition - $24,000 per acre. Extending this per square fool value to the subject property in the after condition yields the following calculation. Value of remainder after acquisition Unencumbered area 70.319 Ac x $24,000/Ac $1,687,656 Utility easement area 0.121 Ac x $24,000/Ac x 50% 1,452 Total $1,689,108 Severance Damages The existence of severance damages or benefits is deiermined by comparing the value of the remainder after the acquisition to the value of the remainder as part of the whole. In this instance, the value of the remainder in the after condition is identical to the value of the remainder as part of the whole. In the afler !002130-la.rpt 23 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig condition the property is the same total size it was in the before condition, and it has the same utility. We have concluded that no severance damages accme to the property. Benefits The subject property is essentially the same in the after condition as il was in the before condiiion. A 0.121 acre area will be encumbered with a utility easement, however, this easemenl is in an area lhal is essentially raw land. It has no effect on any of the park improvements. We have concluded that no benefits accme to the property as a result of the project. Value of the Temporary Construction Easement As noted in the description of the acquisition areas, the use of a portion of the property is needed for the completion of the Rancho Santa Fe Road improvement project. This area is being acquired as a lemporary constmction easement. Informafion provided to the appraisers by Aguine and Associaies indicales lhal the temporary constmction easement totals 1.245 acres in size. The area is along the westem edge of the subject site. Please refer to Acquisition Map 1 presented previously. The temporary constmction easemenl area does have a number of mature trees and a small amount of lawn area, bul is mainly scmb and creek bed. According to Doug Helming of Helming Engineering, any mature trees in the easement area will be avoided during constmction, and any other landscaping damaged or destroyed during conslruclion will be restored to their original condifion as part of the project. Accordingly, we have not considered the replacement cost of these site improvements as part of this analysis. Valuation of a temporary constmction easemenl is generally based on the premise lhal the owner ofthe easement rights, in this case the City of Carlsbad, is leasing the easemenl area from the property owner for a specified period of time. An opinion of the monthly rental rate is developed, and compensalion lo the property owner is the present value of the proposed stream of monlhly rental paymenls. All parameters other than the value of the land underlying the easement area were developed in the introduction seclion of the report and included: Land Rate of Retum 10% Durafion of Easement 19 months, from June 1, 2003 to January 1, 2005 Discount Rate 6% Present Value Factor 17.99 The only remaining factor needed to determine the value of the temporary construction easemenl is the value of the land encumbered by the easement. We previously concluded that the value of the subjeci land f002130-la.n)l 24 HENDRICKSON APPRAISAL COMPANY, INC. Real Estaie Appraisers • Consultants Ig parcel is $24,000 per acre. The temporary constmction easemenl encumbers an area totaling 1.245 acres, but 0.420 acres of this area is encumbered by the road easement for Rancho Sanla Fe Road and will be deducted from the easement area. In addifion, the sewer easemenl in favor of Vallecitos Waler Dislrici noted previously encumbers an additional 0.121 acres of the property. We previously concluded lhal the sewer easement represented a 50% reduction in value of the easemenl area lo the owner ofthe underlying fee interest. The land value of the TCE area can be calculated as follows: Unencumbered area 0.704 Ac x $24,000/Ac $16,896 Encumbered area 0.121 Ac x $24,000/Ac x 50% 1.452 $18,348 Rounded: $18,300 The value of the temporary constmction easemenl can be calculated as follows: Annual Rental Rate = Monthlv Rental Rate = Present Value of the Income Stream Land Value x $18,300.00 X $1,830.00 Armual Rent ^ $1,830.00 - $152.50 Monthly Rent x $152.50 X $2,800.00 Rate of Retum 10% Months/Year 12 Present Value Faclor 17.99 (Rounded) !002130-la.rpt 25 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultanis Ig Just Compensation Since neither severance damages nor benefits exist, just compensation to the property owner comprises the value of the part of the property being acquired, plus the value of the temporary construction easemenl. Permanent Ufility Easement $1,452 Temporary Constmction Easement $2,800 Just Compensation $4,252 Rounded: $4,300 f002130-la.tpt 26 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultanis Ig PLAT MAP DETAfL- PM 10179 !002130-3a.rpt Oliveri - 1 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants ! li I SITE DESCRIPTION Location: The subject property is located on the west side of Rancho Santa Fe Road adjacent to the intersection of La Costa Meadows Drive in the City of Carlsbad. TB Map Code: 1128A5 Legal Description: That portion of Parcel 4 of Parcel Map No. 10179, in the City of Carlsbad, County of San Diego, State of Califomia, filed in the Office of the County Recorder of San Diego County, July 27, 1980 as File No. 80-204502 of Official Records. Lying Southwesterly of the Southwesterly Line of Rancho Santa Fe Road and Northeasterly of the Northeasterly Line of Questhaven Road in the Northwest Quarter of Section 29, Township 12 South, Range 3 West, San Bemardino Base and Meridian, in the City of Carlsbad, in the County of San Diego, State of Califomia, according to United States govemment survey. Owners: Pasquaie Oliver, Sanot Oliveri and Gaspare Oliveri, as tenants in common. APN 223-030-56 !0O2l30-3arpt Olivcri - 2 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig Real Property Taxes/Assessments: APN 223-030-56 Tax Rate Area: 09076 Tax Rate: 1.02842% Assessed Land Value: $ 1,101.00 Assessed Improvement Value: $ 0.00 Personal Property $ 0.00 Total Assessed Value: $ 1,101.00 Base l%Tax: $ 11.32 Fixed Charges: $ 32.84 Total Tax: $ 44.16 Access: The property has direct frontage on Rancho Santa Fe Road. The legal descriplion indicales lhal the property also has frontage on Questhaven Road, however, Questhaven Road is a paper streel which does nol exist. The property is accessible from either direction on Rancho Santa Fe Road. A westerly extension of La Costa Meadows Drive bifurcates this property, although it does not show on any mapping provided to the appraisers. Size and Shape: According to mapping provided by Aguine and Associates and San Diego County Assessor's dala, the subject property is 0.855 acres, or approximately 37,228 square feet in size. It is inegular in shape. Please refer to the Plat Map. Topography: The subject property slopes downward to the west from its frontage on Rancho Sanla Fe Road. Drainage: Based on our physical inspecfion, the subject property appears to offer adequate drainage. !002130-3a.rpt Oliveri - 3 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consullanis : lg Flood Zone: Review of FEMA Flood Map 06073C1051F, dated June 19, 1997 as well as San Diego Geographic Informafion System Natural Features mapping indicates that more lhan half of the subject property is in Flood Zone A. Map source: San Diego Geographic Informalion System. Toxic or Hazardous Materials: No toxic or hazardous waste report was available for review, and a thorough physical investigation ofthe property is beyond the scope of the assignment. No known hazardous malerials were observed during our inspection of the property. The Subjeci Property is appraised as if free from hazardous malerials. Geologic Conditions: Most of Southem Califomia including San Diego County is subjeci lo a potential earthquake. There are no major earthquake faults affecting the immediate subject area, bul wilhin len miles the Rose Canyon fault, a short distance off shore, could create a damaging earthquake. Map No. 6 of the Califomia Geologic Data Map Series indicates that neither this fault, nor other minor faults in the area, have shown evidence of displacement during either historic or Holocene time(during the past 10,000 years). Title Report: A preliminary Title Report prepared by Firsl American Tille Company and daled Augusi 1, 2000 was provided to the appraisers for review. The Title Report identifies easements and encumbrances considered typical for a property such as the subjeci. None of these encumbrances is considered to limil the subject's development to its Highest and Best Use. !002130-3a.rpt Oliveri - 4 HENDRICKSON APPRAISAL COMPANY, INC. Real Estaie Appraisers • Consullanis Ig Zoning: The subject property is cunently zoned as Open Space by the City of Carlsbad. The Carisbad General Plan idenfifies the area of the subject property for Planned Community use, however, a City representative indicated that the subject property is designated to be set aside as open space even under the planned community designafion. No changes to either the zoning or land use designation are anticipated in the foreseeable fiiture. Current Uses: The subject property is cunently vacant, raw land. Utilities: All typical ufilities are available in and around the subject property. Street Improvements: Rancho Santa Fe Road is an asphalt paved, main arterial in the area. There are no curbs, gutters or sidewalks along the subject frontage. Easements/Encumbrances: Mapping and other documents provided to the appraisers identify several easements encumbering the property, typically for road or utility purposes. Considering the open space zoning and land use restrictions ofthe subject, none of these easements are considered to limit use of the subject property. Environmental Issues: There are no known environmental issues affecting the subject property. Improvements: The subject property is cunently a vacant parcel of land. Site Improvements: There is a low quality asphalt paved road that crosses the subject property across from La Costa Meadows Drive. DESCRIPTION OF PART BEING ACQUIRED hiformation provided to the appraiser indicates that the entire subject property lies in the proposed Rancho Santa Fe Road right of way, and the entire property is being acquired in fee. t002130-3arpt OUvCri - 5 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig Looking south approximately along the eastem property line. Rancho Santa Road is to the left. >002130-3a.rpt Looking north approximately along the eastem property line. Rancho Santa Fe Road is to the right. Oliveri - 6 HENDRICKSON APPRAISAL COMPANY, INC. Real Estaie Appraisers • Consultanis Ig • ---- . --^ • Looking approximately west across the subject. The near stake marks fhe eastem property line. The far stake marks the westem property line. Looking approximately south along the westem property line ofthe subject. !002130-3a.rpl Oliveri - 7 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig Looking approximately north along the westem property line of the subject. >0O2130-3a.rpt Looking approximately west at the south end ofthe subject - in the San Marcos Creek bed. The photo was taken from the Rancho Santa Fe Road bridge over San Marcos Creek. Oliveri - 8 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig ACQUISITION MAP Temporary Constmction Easement !002130-3a.rpt Oliveri - 9 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig HIGHEST AND BEST USE AS THOUGH VACANT - The determination of the Highest and Besl Use of a property as though vacant is contingent upon the proposed use being legally permissible, physically possible, financially feasible and maximally productive. Legally Permissible - The subject property is located in the east central portion of the Cily of Carlsbad. The land use element of the Carlsbad General Plan identifies the subjeci area for planned community development. A representafive of the Carlsbad Planning Departmenl indicaled that the subject property is identified for Open Space use, and staled lhat no development would be pemiitted on this property. Thc intent of Open Space uses in Carlsbad is to provide for open space and recreational uses which have been deemed necessary for the aesthetically attractive and orderly growth of the community, as well as to designate high priority resource areas at lime of developmenl that, when combined would creale a logical and comprehensive open space system for the communily. Open space is the only legal use ofthe subject property. Physically Possible - The subject property totals approximately 0.855 acres in size, ll is irregular in shape and is generally level and usable. More than half of the property is in Flood Zone A and the southern portion of the property is in the San Marcos Creek bed. There are some auxiliary uses pennissibie for Open Space zoned properties that permit stmctures, however, the long and nanow configuration ofthe subject property, combined with the area of the property lhal is in Flood Zone A eliminates those uses from being physically possible. Open space is considered lo be the only physically possible use ofthe property. The value of the property as open space could come inlo question as a result ofthe existence ofa road easement in favor of San Diego County abutting the westerly side ofthe property for "Quesihaven Road". Although we have not been able to defmifively determine lhal the easemenl was or is to bc vacated, w c considered the following in our analysis. 1) The easemenl was recorded in 1966 al a lime when the arca was part of unincorporated San Diego County. The area has subsequently been annexed into the Cily of Carlsbad. 2) Questhaven Road has never been constructed and the Cily ofCarlsbad has no plans to build it 3) The easement alignment does nol malch the alignment of exisling Rancho Sanla Fe Road w hich already serves the area. 4) The easement alignment does nol malch the alignment of proposed Rancho SantaFe Road. 5) The project plans show a new Questhaven Road intersecting wilh Rancho Sanla Fc Road to the south of the subject property. In our opinion, il is reasonable lo conclude that Questhaven Road, as shown in the easement, will very likely never be constructed and does nol limil the viability ofthe subjeci for use as open space. !0O2l30-3a.rpl Olivcri - 1 0 HENDRICKSON APPRAISAL COMPANY, INC. Real Eslale Appraisers • Consullanis Ig Financially Feasible and Maximally Productive - The subject property has zoning and land use classifications for open space and recreafional purposes. As such, it is nol a property inlended to generate income and an analysis of financial feasibility is nol relevant. AS IMPROVED - The subject property is cunently unimproved, vacant land. RECONCILIATION OF HIGHEST AND BEST USE The subject property has a land use designation for open space, and no changes to either the zoning or the land use designation are anticipated. Its configuration is such lhal uses wilh structures lhat would otherw isc be permitted in an open space zone are nol physically possible. We have concluded lhat the Highest and Best Use ofthe property is as a low quality, open space buffer parcel. !OO2130-3a.rpt Oliveri -11 HENDRICKSON APPRAISAL COMPANY, INC. Real Estaie Appraisers • Consullanis Ig 11 VALUATION ANALYSIS Methodology The subject is designated as an open space and is cunently vacant. Ideally we would be able to locale sales of similar open space properties, however none were available. As an altemative, we locaied and veri fied sales of properties that were purchased with the intention of selling them aside as open space. As noled in the Scope section of this report, the Sales Comparison Approach was used lo develop an opinion ofthe land value of this property. The appraisers searched for recent sales of open space land parcels in the general subject area and found limited sales, all of which were significantly larger than the subject. The search area was then expanded to include the northem half of San Diego County. Primary dala sources were CoStar. a firm w hich specializes in pubHshing real estate sales dala and conversations wilh brokers and buyers of open space land. In all, five comparable sale properties considered suitable for developing an opinion of subject \ aluc were used in this analysis. Unit of Comparison The unit of comparison employed in this analysis is the price per acre as this is the measure typically used by participants in the markel for open space or mitigation land. Market Conditions Only one of the sales used in this analysis recorded in 2002. The olher four all recorded in 1999 and 2()()(). Comparing the two sales in San Marcos, one of which recorded in Augusi 1999 and the other in April 2002, suggests an annual increase in value of approximately 8%. This is considered lo be a reasonable indicator in that both sales are in San Marcos. Conversations wilh confirming sources also suggests that this is a reasonable appreciation rate for open space properties in the subject area. All sales w ith the exception of the fairly recent Sale 1 have been adjusted upward for improved markel condilions to nnd 2002, the point at which we believe markel prices leveled off Items of Comparison The comparable sale properties were compared lo the subjeci on the basis of the follow ing items: location, overall parcel size, shape and ufility, access and off siles, topography, site development status, uti lilies, and development potential. All ofthe comparable sale properties are considered superior to thesubject in terms of development potential as all oflhem have zoning classifications that pemiit residenlial development on one acre lots. All were purchased to set aside as open space, bul olher buyers could have had di ffcreni plans ^002130 3arpl OliVCri - 1 2 HENDRICKSON APPRAISAL COMPANY, INC. Real Eslale Appraisers • ( onsullanis Ig for them. With respect to parcel size, when considering a property on a dollars per acre basis, larger parcel sizes are typically considered inferior to smaller parcel sizes. In this case the subject property is a very small parcel of property zoned for open space, and ils small size is considered to limit its desirability for an open space use. As a result, even though the comparabies, all of which are larger than the subject, w ould normally be adjusted upward to account for the size difference, we have nol made those adjustments. Value of the Whole Before the Acquisition Several properties purchased to set aside as open space were researched in order to develop an opinion of the fair market value of the subject property. Of those, the following comparable properties were considered to be most appropriaie in valuing the subject. These sale properties were compared to the subject property on the basis of the items of comparison noled in the previous paragraph. The following table anays the comparabies and presents a summary of details relating to each comparable. Thc unit of comparison used in this analysis is dollars per acre, as lhal is typically the unil used by potential buyers of open space properties. COMPARABLE LAND SUMMARY Comp No. Land Sale Location Sales Date Sales Priee Size (AC) Pnce /Xcie 1 9 S of Via Del Corvo, San Marcos 04/05/02 $271,500 20.88 $13,003 2 10 W of Del Roy Drive, San Marcos 08/13/99 $554,000 52.33 $10,587 3 11 S of Artesian, W of Rio Vista, San Diego 03/08/00 $1,976,000 95.43 $20.7()(» 4 12 N of Mast, W of Medina, San Diego 10/29/99 $525,000 35.00 $15,000 5 13 Spring Canyon NW of Mast, San Diego 09/16/99 $1,194,500 59.75 Note: Land Sale numbers are keyed to the Land Sale numbers in the addendum. !002130-3a.rpl OHveri- 13 HENDRICKSON APPRAISAL COMPANY, INC. Real Eslale Appraisers • Consullanis z • O H- n LAND COMPARABLE SUMMARY & ANALYSIS PROPERTY INFORMATION Subject Comp 1 {LS9) Comp2(LS10) Comp 3 (LSI 1) Comp4(LS12) Comp5(LSU) Property Localion W side of Rho Santa S of Via Del Coivo W of Del Roy Drive S of Artesian N of Mast Blvd Spring Canyon NW Property Localion Fe @ La Cosla Meadows W f Rio Visla W of Medina of Mast Blvd Carlsbad San Marcos San Marcos San Diego San Diego San Diego Owner/Seller Oliver/Oliveri San Marcos Lnd HIdngs Rupe Santa Fe \^ews Roy Salmu Buyer Clr for Natl Land Mgt Environmental Trust Nature Conservancy Poway School Disl Poway School Disl Assessor Parcel Number 223-030-56 222-030-48 182-111-02 267-142-25 366-080-23 366^M0-32 218-330-20 269-100-17 Recording Date N/A 04/05/02 08/13/99 03/08/00 10/29/99 09/16/99 Land Area (Acres) 0.85 20.88 52.33 95.43 35.00 59.75 Zoning OS. Carlsbad Rl. San Marcos A-1. San Marcos S87, SD County Rl-40, San Disgo Rl-40. San Disgo Highest & Best Use open Space/Buffer Resid/Open Space Ag, 1 du per acre max Spec use Resid/Holding Resid/Holding Comments Raw land. Purch wilh intent lo Purch with inteni lo Purch vnih intent to Purch for open space Purch for open space set aside as open spc. sel aside as open spc. set aside as open spc. and mitigation and miligatkm Price $271,500 $554,000 $1,976,000 $525,000 $1,194,500 Per Acre $13,003 $10,587 $20,706 $15,000 $19,992 COMPARABILITY ANALYSIS Conditions of Sate/Market: Property Righls Similar Similar Similar Similar Similar Financing Similar Similar Similar Similar Simitar Condiiion of Sale Similar Similar Similar SIm'dar Similar Market Conditions Similar 23% 19% 22% 23% Markel Cond. Adj. Price $13,003 $13,022 $24,640 $18,300 $24,590 Physical Characteristics: Localion Carlsbad Similar Similar Subsl Superior Superior Superbr Size ' 0.85 Similar Similar Similar Similar Similar Access/Offsites Paved access Inferior Inferior Inferior Inferior Inferior Topography Level lo sloping Inferior Inferior Inferior Inferior Inferior Utilities Avail in area Similar Similar Similar Similar Similar Shape/Utility Narrow sliver • Superior Superior Superior Superior Superior Development Potenlial/Timing O/S only Superior Superior Superior Superior Superior Overall ComDarabititv Similar Similar Subsl Superior Consid Superior Superior f i f 1 1 1 1 1 1 1 1 9 11 r 1 r 1 wm ir^ 1 1 1 lili Ig Comp 1 (Land Sale No. 9) This is the April 2002 sale of an approximately 20.88 acre parcel of vacant, raw land located south of Via Del Corvo east of Rancho Santa Fe Road in San Marcos. This property was zoned R-l as of the dale of sale, however il was purchased with the intention of setting il aside as open space. It is a hilltop site that sunounds a property with water tanks on it. The selling price was $271,500, or approximately $13,003 per acre. All typical ulililies are available in the area. No public streets extend lo this property. This sale property is considered infenor lo the subject relative lo its lack of paved slreet access and also inferior as to its rolling topography. It is considered lo be supenor to the subject in temis of its development potenfial as its zoning as of the dale of sale would permil residential developinent. It is also superior to the subjeci in lerms of its shape and utility. Il is considered lo be generally similar to the subject in other respecis. Overall, this property is considered generally similar lo the subjeci and indicales a subject value of about $13,000 per acre. Comp 2 (Land Sale No. 10) This is the August 1999 sale of an approximately 52.33 acre parcel of vacant, raw land locaied wesl of Del Roy Drive and Twin Oaks Valley Road in San Marcos. This property was zoned A-l as of the date of sale, an agricultural zone that permils residences on one acre lots, however it was purchased with the intention of selling il aside as open space. It is a rolling site lhal is adjacent lo a developed residenfial subdivision. The selling price was $554,000, or approximately $10,587 per acre. All typical ufilifies are available in the area. No public streets exlend lo this property. This sale occurred in 1999 and has been adjusled for differing markel condilions lo a selling pnce of S13,022 per acre .A u uust This sale property is considered inferior lo the subject relative to ils lack of paved slreet access and also inferior as to its rolling topography, li is considered lo be supenor to the subject in terms of its development potenfial as ils zoning as of the dale of sale would permil residential development. It is also !002130-3a.rpl Oliveri -15 HENDRICKSON APPRAISAL COMPANY, INC. Real Eslale Appraisers • ( onsullanis Ig superior to the subject in terms of its shape and utility. It is considered to be generally similar to the subject in other respects. Overall, this property is considered generally similar to the subject and indicates a subject value of about $13,000 per acre. Comp 3 (Land Sale No. 11) This is the March 2000 sale of an approximately 95.43 acre parcel of vacant, raw land located south of Artesian Road and west of Rio Vista, adjacent to the Fairbanks Ranch area of unincorporated San Diego County. This property was zoned S87 as of the date of sale, a special zone that permits residences on acreage lots, however it was purchased with the intention of setting it aside as open space. It is a rolling site that has Lusardi Creek mnning through it. The selling price was $1,976,000, or approximately $20,706 per acre. All typical ufilifies are available in the area. No public streets extend to this property. This sale occuned in March 2000 and has been adjusted for differing market conditions lo a selling price of $24,640 per acre. This sale property is considered infenor to the subject relative to its lack of paved street access and also inferior as to its rolling topography. It is considered to be superior to the subject in terms of its development potential as its zoning as of the date of sale would permit residential developmenl. Il is also superior to the subject in terms of its shape and utility. It is substantially superior to the subjeci as lo its location adjacent to Fairbanks Ranch. Il is considered to be generally similar to the subject in other respects. Overall, this property is considered substantially superior to the subject and indicates a subject value of substantially less than $24,500 per acre. Comp 4 (Land Sale No. 12) This is the October 1999 sale of an approximately 35.00 acre parcel of vacant, raw land located north of Masl Boulevard and west of Medina in the East Elliot area of San Diego. This property was zoned Rl-40 as of the date of sale, a residential/holding zone that permits residences on one acreage lots, however it was purchased with the intention of setting it aside as open space. It is a hillside site a short distance west of residential development in !002130-3a.rpt Oliveri - 16 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultanis Ig the Santee Lakes area. The selling price was $525,000, or approximately $15,000 per acre. All typical utilities are available in the area. No public streets exlend lo this property. This sale occuned in Oclober 1999 and has been adjusted for differing market condilions lo a selling price of $ 18,300 per acre. This sale property is considered inferior lo the subject relative to ils lack of paved slreel access and also inferior as to its rolling topography. It is considered lo be superior lo the subjeci in terms of ils development potential as its zoning as of the dale of sale would permil residenlial development, and superior to the subject as lo its localion in central San Diego. Il is also supenor to the subject in terms of its shape and utility. It is considered to be generally similar lo the subject in olher respecis. Overall, this property is considerably superior lo the subject and indicales a subject value of considerably less lhan $18,000 per acre. Comp 5 (Land Sale No. 13) This is the September 1999 sale of an approximately 59.75 acre parcel of vacant, raw land locaied in Spring Canyon northwest of Masl Boulevard in the East Elliot area of San Diego. This property was zoned Rl-40 as of the date of sale, a residential/holding zone lhal permils residences on one acreage lots, however il was purchased with the intention of setting it aside as open space. Il is a hillside site a short distance west of residenlial development in the Santee Lakes area. The selling price was $1,194,500, or approximately $ 19,992 per acre. All typical uli lilies are avai lable i n the area. No publ ic streets extend to this property. This sale occuned in Seplember 1999 and has been adjusted for differing market conditions to a selling price of $24,590 per acre. This sale property is considered inferior to the subjeci relative lo ils lack of paved streel access and also inferior as to its rolling topography. It is considered lo be superior lo the subject in ternis of its development potential as its zoning as of the dale of sale would permit residenlial developmenl, and superior to the subject as to its location in central San Diego. Il is also superior lo the subject in ternis of its shape and utility. It is considered lo be generally similar lo the subjeci in olher respects. Overall, this property is considered superior to the subjeci and indicales a subjeci value less lhan $24,000 per acre. The following table anays these sales in order from most inferior lo most superior. >002130-3a.rpt Oliveri - 17 HENDRICKSON APPRAISAL COMPANY. INC. Real Eslale Apprai.scrs • ( onsullanis : lg COMPARABLE LAND SUMMARY Comp Location Sales Dale Sales Price Size (AC) Adj $/Ac Comparability 1 S of Via Del Corvo, San Marcos 04/05/02 $271,500 20.88 $13,003 Gen Similar 2 W of Del Roy Drive, San Marcos 08/13/99 $554,000 52.33 $13,022 Gen Similar Subj W side Rancho Santa Fe Rd, Carlsbad 0.85 $13,000 4 N of Mast, W of Medina, San Diego 10/29/99 $525,000 35.00 $18,300 Consid Superior 5 Spring Canyon NW of Mast, San Diego 09/16/99 $1,194,500 59.75 $24,540 Superior 3 S of Artesian, W of Rio Vista, San Diego 03/08/00 $1,976,000 95.43 $24,640 Subsl Supenor The sales Hsted above are considered lo be the besl available sales for use in developing an opinion ofthe market value of the subject land. The subjeci property is a very small, narrow sliver of land zoned for open space use. Due to its small size and very nanow shape, il is considered to be of only limited value, even for an open space use. As a result, il is our opinion lhal the subject value is al the low end ofthe range indicated above. Based on our analysis of these comparable properties we have concluded that the fair market value of the subject property is $13,000 per acre. Value of the subject land 0.855 Aex $13,000/Ac SI I.l 15 Just Compensation Since this is a fiill acquisition, just compensafion to the property owner comprises the fee simple value of property. Subject Value .... Just Compensation SI 1.115 SI 1.1 15 Rounded: SI 1.100 !002130-3a.rpl Ohveri- 18 HENDRICKSON APPRAISAL COMPANY, INC. Real Eslale Appraisers • Consullanis I lg ADDENDUM HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig PACIFIC OCEAN A-2 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig LAND SALE NO. 1 A-3 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig Location: Thomas Bros: Assessor's Parcel: Size & Shape: Topography: Zoning: Utilities: Access: Improvements: Sale Price: Terms: Transaction: Buyer: Seller: Confirmed by: Comments: LAND SALE NO. 1 Armoriite west of Las Posas, San Marcos, CA 1108E6 219-122-29 Approximately 2.13 acres, 92,783 square feet. The site is irregular in shape. This is a generally level site which required only finish grading. It is approximately at the grade of Mission Road and Armoriite Drive. M, City of San Marcos. This zoning classification pennits industrial developmenl. Public water, sewer, telephone, natural gas and electric are installed and available to the site. The property is accessible via Armoriite Drive which ends at the property. The northem boundary of this site is adjacent to the AT&SF RR right of way which is adjacent lo Mission Avenue, however, no access to this property is available across the railroad nghl of way. This property was vacant as of the date of sale. $520,000 ($5.60 per square foot) $156,000 down payment; $364,000 commercial TDI. Document Number: 2002-84906 Recording Date: January 31, 2002 Marcus Collins, Tr., et al Pioneer Mills Kay Archibald, broker (0/02) This property was purchased for future development. In the interim it is being used as parking and storage for trucks and equipment. The buyer reportedly owns a nearby business and purchased this property for expansion. Approximately the westerly one third of this property is in Flood Zone A. The remainder is outside the 100 year fioodplain. A-4 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consullanis Ig LAND SALE NO. 2 A-5 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultanis Ig Location: Thomas Bros: Assessor's Parcel: Size & Shape: Topography: Zoning: Utilities: 1 • Access: 1 Improvements: Sale Price: Terms: Transaction: Buyer: Seller: Confirmed by: Comments: LAND SALE NO. 2 2936-48 South Santa Fe Avenue, San Marcos, CA. 1108D5 217-161-03,08 Approximately 3.96 acres, 172,497 square feet. The site is inegular in shape. This sale property slopes upward to the north fi'om South Santa Fe Avenue. M, City of San Marcos. This zoning classificafion permits general industrial uses. Public water, sewer, telephone, natural gas and electric are installed and available to the site. This property is accessible fi"om either direction on South Santa Fe Avenue. This property was vacant as ofthe date of sale. $590,000 ($3.42 per square foot) All cash sale. Document Number: 2002-543119 Recording Date: June 27, 2002 M/M Tony Walker, Tr. E.T.C.R. hic. David Pinnegar, broker (9/02) This property is located in an area of older improvements and vacant, industrial zoned sites. It was purchased by the owner of the adjacent woodworking business for possible future expansion of his business. There are no immediate plans to develop the property. A-6 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig LAND SALE NO. 3 J • P0« VIST* MOBILt HOMt . «OB VIS I* MtAOOWS MOU ILf HOMU P/ (J£t 5HT 3) &-•"•»" i o.aa At •1 («) OtiV. 1 _0 3) A-7 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig Location: Thomas Bros: Assessor's Parcel: Size & Shape: Topography: Zoning: Utilities: Access: Improvements: Sale Price: Terms: Transaction: Buyer: Seller: Confirmed by: Comments: LAND SALE NO. 3 2982 South Santa Fe Avenue, San Marcos, CA. 1108D5 217-161-05,219-114-23 Approximately 7.29 acres, 317,552 square feet. The site is inegular in shape. This property slopes gently upward to the north fi-om South Santa Fe Avenue. M, City of San Marcos. This zoning classificafion permits general industrial uses. Public water, sewer, telephone, natural gas and electric are installed and available to the site. This property is accessible from either direction on South Santa Fe Avenue. This property was vacant as of the date of sale. $950,000 ($2.99 per square foot) $700,000 down payment; $250,000 commercial TDI. Document Number: 2001 -061836 Recording Date: February 2, 2001 Las Floras Santa Fe (LLC) Morris Steiman, Tr. Trent France, broker. (9/02) This property was purchased for development at a future date. The confirming broker indicated that the buyer also owns a large parcel just to the north ofthis acquisition and may attempt to process a zoning change on this property to permit the development of low income apartments on the site. A-8 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig LAND SALE NO. 4 SHT 2 »<-IK?C It AccAAaa T,-: n,t» sc.s .ss=.<w= sterns A-9 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig Location: Thomas Bros: Assessor's Parcel: Size & Shape: Topography: Zoning: Utilities: Access: Improvements: Sale Price: Terms: Transaction: Buyer: Seller: Confirmed by: Comments: LAND SALE NO. 4 South side of La Costa Meadows Drive east of Rancho Santa Fe Road, San Marcos. CA. 1128A5 223-030-47, 48 Approximately 2.93 acres, 127,630 square feet. The site is inegular in shape. Generally level and approximately at the grade of La Costa Meadows Drive. L-M, City of San Marcos. This zoning classification pennits light industrial development. Public water, sewer, telephone, natural gas and electric are installed and available to the site. The site is accessible from either direction on La Costa Meadows Drive, a fully improved asphalt paved street. As of the date of sale this property was vacant. $ 1,053,000 ($8.25 per square foot) Cash to seller from the proceeds of a development loan. Document Number: 2002-804445 Recording Date: September 19, 2002 San Elijo Business Center, LLC Nittan, Inc. David Pinnegar, broker. (9/02) This property is located in the subject industrial park, in immediate proximity to the subject. It is being purchased with the intention of constructing a spec industrial building on the property. A very small strip of the southem end of this property is in Flood Zone A. A-10 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consullanis Ig LAND SALE NO. 5 .T7rto A-11 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consullanis Ig Location: Thomas Bros: Assessor's Parcel: Size & Shape: Topography: Zoning: Utilities: Access: Improvements: Sale Price: Terms: Transaction: Buyer: Seller: Confirmed by: Comments: LAND SALE NO. 5 NWC Twin Oaks Valley Road and Borden Road, San Marcos, CA. 1108H6 218-110-08, 18 Approximately 4.48 acres, 195,149 square feet. The site is an inegular rectangle in shape. This is a generally level, previously developed property, li is at to above the grade of Twin Oaks Valley Road and Borden Road. M, San Marcos. This zoning classificafion pennits general industrial development. Public water, sewer, telephone, natural gas and electric are installed and available to the site. The site is accessible fi-om both Twin Oaks Valley Road and Borden Road. As of the date of sale this property was improved with an old residence and a shop building. The buyer has removed those improvements at a cost of approximately $25,000. $ 1,000,000 ($5.12 per square foot) $25,000 down payment; $875,000 private TDI and $100,000 private TD2, both at market rates. Document Number: 2001 -947707 Recording Date: December 21, 2001 Hotrocks Investments LLC DEVCO Development, hic. Gerald Sebby, buyer representative. (9/02) This property was purchased with the intention of constmcting an industrial park on the site. As of our inspecfion, concrete block buildings were under constmction. The project is expected to be complete by December 2002. A-12 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig LAND SALE NO. 6 A-13 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig Location: Thomas Bros: Assessor's Parcel: • Size & Shape: Topography: Zoning: Utilities: Access: Improvements: Sale Price: Terms: Transaction: Buyer: Seller: Confirmed by: Comments: 1 tm LAND SALE NO. 6 Industrial Street between Carmel and Enterprise, San Marcos, CA. 1128J1 220-200-46 Approximately 1.08 acres, 47,045 square feet. The site is generally rectangular in shape. This is a gentiy sloping site with good utility. It is approximately at the grade of Industrial Street. M, San Marcos. This zoning classificafion permits general industrial development. Public water, sewer, telephone, natural gas and electric are installed and available to the site. The site is accessible fi-om either direction on Industrial Street. This property was vacant as ofthe date of sale. $324,000 ($6.89 per square foot) $199,000 down payment; $125,000 private TDI at market rates. Document Number: 2002-162100 Recording Date: Febmary 26, 2002 M&M Deimis James Robert and Heather Hardin, Tr., et al Public records. There were no brokers involved in this transacfion and phone calls to the buyer were not retumed. This property was purchased with the intention of constmcting an approximately 21,000 square foot warehouse/showroom on the site. As of our inspection, construction had not yet begun. A-14 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig LAND SALE NO. 7 A-15 HENDRICKSON APPRAISAL COMPANY, INC. Real Eslate Appraisers • Consultants Ig Location: Thomas Bros: Assessor's Parcel: Size & Shape: Topography: Zoning: Utilities: Access: Improvements: Sale Price: Terms: Transaction: Buyer: Seller: Confirmed by: Comments: LAND SALE NO. 7 Armoriite east of Las Posas, San Marcos, CA 1108E6 219-162-10, 13, 14 Approximately 9.19 acres, 400,316 square feet. The site is inegular in shape. This is a generally level site to gently sloping with good utility, li is at to above the grade of Armoriite Drive. M, San Marcos. This zoning classificafion permits general industrial development. Public water, sewer, telephone, natural gas and electric are installed and available to the site. This property is accessible from either direcfion on Armoriite Drive. This property was vacant as of the date of sale. $1,975,000 ($4.93 per square foot) All cash sale. Document Number: Recording Date: 2001-767880 October 23, 2001 Pacific Bell Telephone Company The Copley Press, Inc. Linda Rankin, buyer's representative. (9/02) The buyer owns other property in the area and purchased this property for business expansion. The buyer plans to constmct a central office equipment building on the property, however, those plans are cunently on hold due to environmental issues on the property. The buyer was aware of possible environmental concems at the time of purchase, but not to the degree that eventually tumed out. They expect to spend approximately $100,000 on an EIR as a result of the existence of fairy shrimp on the property. It is presently uncertain as to when development will proceed. A-16 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig LAND SALE NO. 8 A-17 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Location: Thomas Bros: Assessor's Parcel: Size & Shape: Topography: Zoning: Utilities: Access: Improvements: Sale Price: Terms: Transaction: Buyer: Seller: Confirmed by: Comments: LAND SALE NO. 8 Corte de la Pina east of Yanow Drive, Carisbad, CA 1127E3 213-100-09, 10, 11, 12 Approximately 14.72 acres, 641,203 square feet. The site is inegular in shape. This site comprises level finished lots situated well above the grade of Corte de la Pina. It was reported that access easements limit the ufility ofthis site. M, City ofCarisbad. This zoning classification permits general industrial uses. Public water, sewer, telephone, natural gas and electric are installed and available to the site. This property is accessible via the cul-de-sac at the east end of Corte de la Pina. This property was vacant as ofthe date of sale. $3,500,000 ($5.46 per square foot) All cash sale. Document Number: 2001-103534 Recording Date: Febmary 23, 2001 Caritas Company (LP), et al W9/LNP Real Estate (LP) Chuck McNary, broker. (9/02) This property was purchased with the intention of constmcting a planned industrial development on the property. As of our inspecfion, the project was under construction. A-18 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants : : lg LAND SALE NO. 9 ; : : ] A-19 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Location: Thomas Bros: Assessor's Parcel: Size & Shape: Topography: Zoning: Utilities: Access: Improvements: Sale Price: Terms: Transaction: Buyer: Seller: Confirmed by: Comments: LAND SALE NO. 9 South of Via Del Corvo, San Marcos, CA. 1128B4 222-030-48 Approximately 20.88 acres, 909,533 square feet. The site is inegular in shape. Rolling, hilltop topography. R-l, San Marcos. This zoning classificafion permits residenfial improvements. Utilities are available in the area but have not been extended to this property. No paved streets extend to this property. The site is a short distance south of Via Del Corvo. This property was vacant as of the date of sale. $271,500 ($13,003 per acre) All cash sale. Document Number: 2002-286901 Recording Date: April 5, 2002 Center for Natural Lands Management San Marcos Land Holdings Sherry Teresa, buyer representative. (9/02) This is a hilltop site that wraps around a water supply tank. It was purchased with the intenfion of keeping it as open space. A-20 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants 0 LAND SALE NO. 10 CH*H&fS . .!.„ .II... ; r - A-21 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig Location: Thomas Bros: Assessor's Parcel: • Size & Shape: Topography: Zoning: - Utilities: Access: : Improvements: mm Sale Price: Terms: Transaction: Buyer: Seller: -Confirmed by: Comments: LAND SALE NO. 10 West ofthe North End of Del Roy, San Marcos, CA. 1108H3 182-111-02,218-330-20 Approximately 52.33 acres, 2,279,495 square feet. The site is inegular in shape. Rolling hillside property. Open space, San Diego County Ufilities are available in the area but have not been extended to this property. This property is adjacent to a residential subdivision, but no paved streets reach the site. This property was vacant as of the date of sale. $554,000 ($10,587 per acre) All cash sale. Document Number: 1999-561683 Recording Date: August 13, 1999 The Environmental Tmst, Inc. Arthur M. Rupe, Tr. Jim Carter, buyer representative. (9/02) This property is rolling raw land adjacent to an existing residential subdivision. It was purchased with the intention of leaving it as open space. A-22 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig LAND SALE NO. 11 k 4 , •a I*'"" ;|.;- ~^rr:i ! A-23 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Location: Thomas Bros: Assessor's Parcel: Size & Shape: Topography: Zoning: Utilities: Access: Improvements: Sale Price: Terms: Transaction: Buyer: Seller: Confirmed by: Comments: LAND SALE NO. 11 South of Artesian, west of Rio Vista, San Diego County 1168J3 267-142-25,269-100-17 Approximately 95.43 acres, 4,157,931 square feet. The site is inegular in shape. Rolling hillside property. S87, San Diego County Ufilities are available in the area but have not been extended to this property. This property is in an area of private property which is secured by electronic gates. Only dirt roads reach the property. This property was vacant as of the date of sale. $1,976,000 ($20,706 per acre) All cash sale. Document Number: 2000-118263 Recording Date: March 8, 2000 The Nature Conservancy Santa Fe Views Unlimited (LP) Arm Van Lier, buyer representative. (9/02) This property was purchased with the intention of setting it aside permanently as open space. A-24 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig LAND SALE NO. 12 / I. \ •sL I I J A-25 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig Location: Thomas Bros: Assessor's Parcel: Size & Shape: Topography: Zoning: Utilities: Access: Improvements: Sale Price: Terms: Transaction: Buyer: Seller: Confirmed by: Comments: LAND SALE NO. 12 North of Mast Boulevard west of Medina, San Diego, CA. 1230H4 366-080-23 Approximately 35.00 acres, 1,524,600 square feet. The site is inegular in shape. Rolling hillside property. RMO, San Diego. This is a rural residential zone, also used as a holding zone for properties not yet ready for development. Ufilities are available in the area but have not been extended to this property. No public roads lead to this property. It is a short distance west of a residenfial subdivision in the City of Santee. This property was vacant as of the date of sale. $525,000 ($15,000 per acre) All cash sale. Document Number: 1999-725227 Recording Date: October 29, 1999 Poway Unified School District Harry Roy, Tr. Robert Ball, buyer representafive. (9/02) This property was purchased as mifigafion for a Poway School District project and has been set aside as permanent open space. A-26 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig LAND SALE NO. 13 A-27 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants 0 LAND SALE NO. 13 Location: Thomas Bros: Assessor's Parcel: Size & Shape: Topography: Zoning: Utilities: Access: Improvements: Sale Price: Terms: Transaction: Buyer: Seller: Confirmed by: Comments: Spring Canyon northwest of Mast Boulevard, San Diego, CA. 1230H3 366-040-32 Approximately 59.75 acres, 2,602,710 square feet. The site is inegular in shape. Rolling hillside property. RMO, City of San Diego. This is a mral residential zone, also used as a holding zone for properties not yet ready for development. Utilities are available in the area but have not been extended to this property. No public roads lead to this property. This property was vacant as ofthe date of sale. $1,194,500 ($19,992 per acre) All cash sale. Document Number: 1999-636609 Recording Date: September 16, 1999 Poway Unified School District M&M Hikmat Salmu Robert Ball, buyer representative. (9/02) This property was purchased as mitigation for a Poway School District project and has been set aside as permanent open space. A-28 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig LAND SALE NO. 14 rA.. A-29 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig LAND SALE NO. 14 Location: Thomas Bros: Assessor's Parcel: Size & Shape: Topography: Zoning: Utilities: Access: Improvements: Sale Price: Terms: Transaction: Buyer: Seller: Confirmed by: Comments: Grand Avenue east of Cades Way, Vista 1108A6 217-253-08 Approximately 3.18 acres, 138,521 square feet. The site is an inegular rectangle in shape. Generally level pad with some banks. Ml, City of Vista. This zoning classification permits industrial development. Ufilifies are available at the site. This property is accessible from either direction on Grand Avenue. This property was vacant as of the date of sale. $835,000 ($6.03 per square foot) Cash to seller from the proceeds of a development loan. Document Number: 2002-1117829 Recording Date: December 10, 2002 Buchanan/Focus-Vista (LP) Opmet (LLC) Andy Melzer, broker. This property was purchased with the intention of building four, 10,800 square foot industrial buildings on the site. As of our inspection, no constmction had yet started. A-30 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig 12 LAND SALE NO. 15 217 — 25 SHT 2 OF 5 1 I ' - 200' 5/M/M MM: -HH ---HH A-31 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig LAND SALE NO. 15 Location: Thomas Bros: Assessor's Parcel: Size & Shape: Topography: Zoning: Utilities: Access: Improvements: Sale Price: Terms: Transaction: Buyer: Seller: Confirmed by: Comments: Cades Way southeast of Grand Avenue, Vista 1108A6 217-252-05 Approximately 1.96 acres, 85,378 square feet. The site is an inegular rectangle in shape. Generally level pad with some banks. Ml, City of Vista. This zoning classification pennits industrial development. Utilities are available at the site. This property is accessible from either direction on Cades Way. This property was vacant as of the date of sale. $713,000 ($8.35 per square foot) All cash sale. Document Number: 2002-590003 Recording Date: July 15, 2002 Focus Real Estate (LP) Judd Lot E (LLC) Joe McDermott, broker. This property was purchased with the intention of building four, 7,000 to 9,000 square foot industrial buildings on the site. As of our inspection, no construction had yet started. A-32 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants lg LAND SALE NO. 16 ; : : I I I I I I 12 I I 1 217-25 1 SHT 2 Of 5 S 1 • 20O' "l~-i ••- - r--i I A-33 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants Ig LAND SALE NO. 16 Location: Thomas Bros: Assessor's Parcel: Size & Shape: Topography: Zoning: Utilities: Access: Improvements: Sale Price: Terms: Transaction: Buyer: Seller: Confirmed by: Comments: Cades Way at Grand Avenue, Vista. 1108A6 217-252-01 Approximately 1.68 acres, 73,181 square feet. The site is an inegular rectangle in shape. Generally level pad with some banks. Ml, City of Vista. This zoning classification permits industrial development. Utilities are available at the site. This property is accessible from either direction on Cades Way. This property was vacant as ofthe date of sale. $567,000 ($7.75 per square foot) Cash to seller from the proceeds of a development loan. Document Number: 2002-993771 Recording Date: November 6,2002 Jury & Clark Development, LLC Axiom, Inc. Chuck McNary, broker. This property was purchased with the intention of building a 21,000 square foot industrial building on the site. As of our inspection, the improvements were under constmction. A-34 HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants :ig TED G. HENDRICKSON. MAI PROFESSTONAL QUALIFICATIONS Ted G. Hendrickson, MAI is the president and principal valuation expert of Hendrickson Appraisal Company, Inc., a mid sized appraisal firm specializing in valuation of commercial, industrial, large vacant land holdings and land subdivision properties. Mr. Hendrickson has over 30 years of experience as a real estate appraiser and consultant, primarily specializing in valuation of commercial properties. Mr. Hendrickson is a qualified expert witness, having given testimony on several occasions in Superior Court and in the Federal Court system. Mr. Hendrickson has testified in several cases involving: eminent domain property acquisitions, estate matters, real property misrepresentation matters and partnership disputes, bankmptcy and foreclosure matters, and diminution of value matters involving constmction defects, soils subsidence and hazardous waste issues. Mr. Hendrickson has aiso served as valuation expert and arbitrator in arbitration hearings involving property valuation and lease negofiations with the Port of San Diego and in other public and private corporate real estate matters. Mr. Hendrickson's appraisal experience includes valuation ofthe following property types: commercial, retail, office, industrial, multi-residential, special use properties, vacant unentitled land with sensitive habitat issues, and subdivision land with detailed highest and best use analysis. He has extensive experience in valuing large office buildings and other income producing properties, as well as land subdivisions (residenfial and industrial) using discounted cash flow sensitivity analysis. Mr. Hendrickson holds the highest designation in the appraisal field, the MAI designation. He is past President ofthe San Diego Chapter ofthe Appraisal Institute and has served as chairman and member of several appraisal committees. HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants tg QUALIFICATIONS TED G. HENDRICKSON, MAl APPRAISAL EXPERIENCE: 1986-Present Hendrickson Appraisal Company, Inc. President; Real estate appraiser, reviewer, consultant, analyst, and experl witness Full range of Appraisal/Consulting services, including mediation and arbitration services Right of Way Eminent Domain Valuation Specialist 1984-1986 IndependenI Appraiser specializing in appraisal and feasibility analysis of commercial, industrial, offices, multi-phased subdivisions and income properties. 1973-1983 Home Federal Savings and Loan Association: 1973-1979 - Appraiser Analyst specializing in appraisals of subdivisions, commercial, retail centers, office and industrial properties. 1979-1983 - Appraisal Dept. Manager, Vice President. Responsible for reviewing and appraising commercial, residential, and industrial properties. 1970-1973 California Department ofTransportation. Staff appraiser specializing in valuation of residential and commercial properties for right of way eminent domain purposes. EDUCATION: Undergraduate and post graduate professional studies California State University, Northridge • B.S. degree in Real Estate Finance Appraisal Institute Courses and Seminars: (Courses taken at various universities throughout the U.S.) Valuation of Easements Impact of Hazardous Substances on Real Estate Highest and Best Use Analysis Market Land Use Analysis Financial Forecasting Environmental and Biological Issues Cost Analysis Master Planned Communities/Land Planning Mitigation Land Analysis Cash Equivalency Valuation of Lease Interests Eminent Domain Law Industria! Appraising Appraisal of Income Properties Investment Analysis Capitalization Theory Litigation Testimony Skills of Expert Testimony Real Estate Risk and Analysis Discounted Cash Flow Analysis Valuation of Partial Interests Subdivision Analysis and Feasibility Analysis of Money Market Rates Standards of Professional Practice University of Southern California (Graduate School of Business) University of Washington (Graduate School of Business) PROFESSIONAL: Membership and Service MAI Desienation (#6603) with the Appraisal Institute California Certified General Appraiser (AG004974) Arizona Certified General Appraiser (#31084) California Real Estate Broker's License (^^530471) Member of the San Diego Board of Realtors (#7407) Member ofthe International Right of Way Association (# 1148112) Chairman and member of several Appraisal Institute committees Past President ofthe San Diego Chapter of the Appraisal Institute COURT EXPERIENCE: Qualified Expert Witness Testified in Califomia State Superior Court and U.S. Federal Court Testified in Arbitration and Mediation Proceedings - govemment agencies and private corporations HENDRICKSON APPRAISAL COMPANY, INC. Rcal Estate Appraisers • Consultants 1^ Ig QUALIFICATIONS EDWARD A. BEAVER APPRAISAL EXPERIENCE: 1987-Present Associate Appraiser, Hendrickson Appraisal Company, Inc. Residential: Appraisal ofall types of residential properties ranging from senior citizen condominiums to large custom estaie properties, both existing and proposed. Appraisal ofall types of residential properties for public acquisition under eminent domain law including full and partial fee acquisitions, permanent and temporary easement acquisitions and analysis of just compensation for severance damages and benefits. Income property: Appraisal of large residential income properties, multi-phased planned industrial park properties, vacant land intended for multi-unit residential properties, improved industrial properties, commercial/retail properties, proposed residential subdivision properties and appraisal of leasehold interests. Appraisal of complex commercial and residential income properties for public acquisition under eminent domain law including full and partial fee acquisitions, permanent and temporary easement acquisitions and analysis of just compensation for severance damages and benefits. Experience includes giving swom testimony during arbitration proceedings. PROFESSIONAL: Advanced Candidate for MAI membership in the Appraisal Institute. State ofCalifornia Certified General Appraiser #AG009555. EDUCATION: Elmhurst College. Elmhurst. Illinois B.S. degree in Mathematics. National Universitv. San Diego. Califomia MBA degree with emphasis in Computer Management. Appraisal Institute Courses/Seminars: Basic Valuation Procedures Standards of Professional Practice B Capitalization Theory and Techniques B Appraising from Blueprints and Specs Apartment Valuations OREA Laws and Regulations Environmental Risk and Analysis Master Planned Communities Expert Witness Testimony Eminent Domain Law Standards of Professional Practice A Capitalization Theory and Techniques A Case Studies in Real Estate Valuation Planning and Land Use Analysis Appraisal Regulations of Federal Banking Agencies Applying Economic Forecasts Property Profile of Operating Expenses Easement Valuation Leasehold Analysis Litigation Valuation -HENDRICKSON APPRAISAL COMPANY, INC. Real Eslale Appraisers • Consultants- lg HFNnRTrKSON APPRAISAL COMPANY. INC. Hendrickson Appraisal Company, Inc. is a mid sized appraisal firm that was incorporated in 1986 to ^rovtrp'feVlonal consultLn on matters relating to valuation of real estate and real property. The fim specializes in valuation of commercial, industrial, entitled and unentitled vacant land, and subdivision properties. Appraisers within the firm provide valuation consultation and expert witness testimony relating to STeiTltters involving: eminent domain property acquisitions, estate matters, real property misrepresentation matters and partnership disputes, bankruptcy and foreclosure matters and onTalue matters involving construction defects, soils subsidence and hazardous w^te iss^L In addition to court testimony, arbitration and mediation services are provided to facilitate settlement on valuation issues, as appropriate. The firm specializes in appraisal of office buildings including mid and high rise office complexes, LtghbTrhood r tail centers, regional power centers, industrial properties, restaurants, auto service. 3-use properties, special use properties. large vacant land holdings, many of which involv^^^ Tensitive habitat issues, and residential subdivision and golf course onented planned residential rvetopment Detailed sensitivity analysis, including discounted cash flow analysis on income ;S ptpertles (offices. re,!il and industrial) and multi-phased residential subdivision cash flow analysis, is a specialty area ofthe firm. In addition to valuation of properties based upon their highest and best use as developed from market llysiSd^^^^^^^ Appraisal Company, Inc. provides consulting services relating to alternative uses for various properties, under differing use scenarios. Following is a brief summaiy of the organization of the company. Ted G. Hendrickson, MAI. the SnZfvl uation expert ^thin the fiL has over 25 years of appraisal experience, primarily onentod towrcor^mfrcial and subdivision appraising. He has extensive expert witness expenence having t^^ffied maS times in arbitration and court proceedings. Associate appraisers in the comp-y^e ei he MAI designated or advanced candidates for the MAI designation and are State of California C r^fiToene a^^^^^^^^^ The average experience level ofthe finn;s f appra^ers is 15 years, SprTmary emphasis on appraisal ofall types of commercial properties, large land holdings and residential subdivisions at various densities. HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers - Consultants Ig PRTVATF CORPORATIONS Aetna Life hisurance Company Allstate Life Insurance Company American Express American General Life Company Apollo Produce Company Bank of Cahfomia Bank of America Bank One Boston Capital Boyle Engineering Bumham Pacific Cal Federal Bank Cal Pacific Homes Calif. Transportation Ventures (CTV) Chase Manhattan Bank Chevron USA Chiquita Fmpac, Inc. City Corp. Bank City Nafional Bank Coldwell Banker Collins Development Cuyamaca Bank Dokken Engineering Donald Bren Company Eckel Development Emerson Intemationai Equitable Life Insurance Company Equitable Real Estate FCI Constructors Federal Express First Interstate Bank First National Bank Fluor Daniel Fresh Express Intemationai G.E. Capital General Motors GMAC Commercial Mortgage Goldman Sachs & Company Home Investment and Loan J.P. Morgan John Hancock La Salle Bank Main America Capital Massachusetts Mutual Life McMillin Communities Metropolitan Life Insurance Company Midas Intemationai Nationwide Mutual Insurance Nations Bank Nations Financial Otay River Constructors Pacific Bell Pacific Mutual Life Company Pacific Southwest Mortgage Pacific Homes Pardee Construction Pathfinder Mortgage Peninsula Bank Pmdential Insurance J. R. Horton Development Safeco Insurance of America Safeway Scripps Bank SDGifeE SDSU Foundation Sempra Energy Sickles Development Southem Califomia Housing Sumitomo Metal Mining Sun America Sunroad Enterprises Texaco Tokai Bank Union Bank Von's Companies Washington Group Washington Mutual Bank Westem Bank Wells Fargo Bank Westem Pacific Housing HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants If GOVERNMENT AGENCIES Califomia Dept. ofTransportation Cathedral City Redevelopment Agency Centre City Development Corp. (CCDC) CityofCarlsbad City of Chula Vista City of El Cajon City of Encinitas City of Escondido City of Indio City of National City City of Oceanside City of Palm Desert City of Poway City of Rancho Mirage City of San Diego City of San Marcos City of Santee City of Temecula City of Vista County of Riverside County of San Diego County of Los Angeles County of Orange Department ofthe Navy Department of Fish and Game Fallbrook Water District F.D.LC. Gillespie Field Airport Immigration and Natiuralization Service (INS) Intemal Revenue Service L.A. County Beaches & Harbors Metropolitan Transit District Board (MTDB) Montgomery Field Airport National City Comm. Devel. Comm. (CDC) North County Transit District (NCTD) Otay Water District Palomar Airport Riverside County Transportation Comm. San Diego Community College District San Diego County Water Authority San Diego Unified Port District San Diego Assoc. of Govemments (SANDAG) San Diego Unified School District Southeast Econ. Development Corp. (SEDC) U.S. Army Corp. of Engineers (Los Angeles/ Sacramento/Albuquerque) U.S. Department of Defense U.S. Department of Interior U.S. Department of Justice U.S. Marshall Wildhfe Conservation Board LAW FIRMS Altheimer & Gray Asaro, Keagy, Freeland & McKinley Adams, Duque and Hazeltine Best, Best and Krieger Borton, Petrini, & Conron Brobeck, Phleger and Harrison Circuit, McKellogg, Kinney and Ross Daley and Heft Detisch and Christensen Duke. Gerstel and Shearer Duckor, Spradling and Metzger Ewing, Johnson, Graves and Driskill Gray, Cary, Ware, and Freiderich Harris & Reedhead Higgs, Fletcher and Mack Hilding, Kipnis, Lyon, and Kelly Hillyer and Irwin Corporation Hovey and Kirby Luce, Forward, Hamilton and Scrippa McDougal, Love, Eckis, and Smith Mower, Koeller, Nebeker and Carlson Nebenzahl, Kohn, Davies, and Leff Post, Kirby, Noonan and Sweat Robbins and Keehn Schall, Boudreau and Gore Sonnenchein, Nath and Rosenthal Stephenson, Woriey and Garrat Tuttle and Taylor Weeks, Rathbone. Robertson and Johnson — HENDRICKSON APPRAISAL COMPANY. INC. Real Estate Appraisers • Consultants