HomeMy WebLinkAboutCT 06-15; TABATA RANCH; APPRAISAL; 2008-04-18APPRAISAL of an Approximately
2.90 Gross Acre Parcel of Land
Within the Tabata Ranch Subdivision
Located on the North Side of Poinsettia Lane
at its Intersection with Crystalline Drive
Carlsbad, CA 92011
DATE OF VALUE
April 1,2008
DATE OF REPORT
April 18,2008
APPRAISED FOR
Kevin J. Reisch, Esq.
DLA Piper US LLP
Tabata Family Trust
City of Carlsbad
APPRAISED BY
Hendrickson Appraisal Co., Inc.
3530 Camino del Rio North, Suite 205
San Diego, CA 92108
HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants
FilENDRICKSON
APPRAISAL COMPANY, INC.
Real Estate Appraisers • Consultants
3530 Camino del Rio North • Suite 205 • San Diego, California 92108 • (619) 282-0800 Fax (619) 282-1471 www.hendricl<sonappraisal,com
April 18, 2008
Mr. Kevin J. Reisch, Esq. Mr. Steve Bobbett
DLA Piper US LLP City of Carlsbad
401 B Street, Suite 1700 163 5 Faraday Avenue
San Diego, CA 92101 Carlsbad, CA 92008
Reference: Appraisal of an approximately 2.90 gross acre parcel of land within Tabata
Ranch, located on the north side of Poinsettia Land at its intersection with
Crystalline Drive in the City of Carlsbad, CA
Our File No. 2008103
Dear Mr. Reisch and Mr. Bobbett,
Pursuant to your request and authorization, the above referenced property and its environs have been
inspected and analyzed for the purpose of formulating an opinion of the market value of the subject
property, to assist the subject property owners in acquiring fee title to an area of slope easement
currently owned by the City of Carlsbad.
At your request, we have appraised the subject property to develop an opinion of the current fair market
value of the easement encumbrance currently held by the City. It is our understanding that the
acquisition of this easement area from the City will allow the property owners, who are currently
processing plans for an eight lot (five homesites and three HOA parcels) residential subdivision on the
property, to increase the usable size of three of the homesites. The property owners will also assume
the responsibility for maintenance and upkeep of the entire easement area being acquired.
The following narrative report, of which this letter is a part, describes the facts and reasoning upon
which our opinion is based. The analysis and final report have been prepared in compliance with the
Uniform Standards of Professional Appraisal Practice as adopted by the Appraisal Foundation and
Appraisal Institute. The appraisal process is considered to be fully complete and the findings are
reported in an expanded summary report. The value conclusion is subject to the Assumptions and
Limiting Conditions as stated in the body of this report.
Id
Based upon our investigations and analysis, it is our opinion that the market value of the City's
esement rights in a slope area to be acquired by the Tabata Family Trust, as of April 1, 2008, was:
$40,000
FORTY THOUSAND DOLLARS
Thank you for this opportunity to be of service. Please call at your convenience should you have
questions or if we may be of further assistance.
Respectfully submitted.
Ted G. Hendrickson, MAI
California State Certified - AG004974
Edward A. Beaver
California State Certified - AG009555
HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants
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TABLE OF CONTENTS
TITLE PAGE 1
LETTER OF TRANSMITTAL 2
TABLE OF CONTENTS 4
SUMMARY OF SALIENT FACTS AND CONCLUSIONS 5
ASSUMPTIONS AND LIMITING CONDITIONS 6
CERTIFICATE OF APPRAISAL 8
INTRODUCTION 9
LOCATION MAP 12
AREA DESCRIPTION 13
DISTRICT DESCRIPTION 14
PLAT MAP 15
SUBJECT PHOTOGRAPHS 16
DESCRIPTION OF THE SITE 19
PROPOSED TENTATIVE MAP 22
HIGHEST AND BEST USE 23
VALUATION ANALYSIS 26
DESCRIPTION OF THE PART TO BE ACQUIRED 32
ADDENDUM A-l
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LOCATION:
SUMMARY OF SALIENT FACTS AND CONCLUSIONS
North side of Poinsettia Lane at its intersection with Crystalline Drive in the
City of Carlsbad, CA 92011
PROPERTY
IDENTIFICATION:
LARGERPARCEL
ASSESSORS PARCEL
NUMBER:
OWNER OF RECORD:
DATE OF VALUE:
SITE DATA:
Size:
Zoning:
IMPROVEMENTS:
HIGHEST AND
BEST USE:
The subject property comprises three contiguous legal lots located on the
north side of Poinsettia Lane between Lonicera Street and Lemon Leaf
Drive in Carlsbad, CA.
The three legal lots being analyzed are contiguous, all have the same zoning
and land use designations, and are all held in the same ownership. Thus they
satisfy the requirements of being considered a "larger parcel", and we have
completed our analysis on that basis.
The three parcels are identified as Assessor's Parcel Numbers: 214-630-20,
214-631-20 and 214-631-21.
Noboru and Evelyn Tabata, co-trustees of the Tabata Family Trust.
April 1,2008
Approximately 126,304 square feet (2.90 Acres). The size of the parcel was
extracted fi-om Assessor's data. Plans currently being processed identify the
site as having 2.17 net developable acres.
L-C, City of Carlsbad. L-C is Limited Control zoning, an interim zoning
used until a more specific zone is assigned. The property is in an area in
which the land use designation is RM, Residential Medium which allows
6 units per acre with minimum 7,500 square foot lots.
One of the subject legal lots is currently improved with a single story, 2,103
square foot residence that, according to Assessor's data, was constructed in
1974.
As If Vacant - Residential subdivision.
As Improved - Residential subdivision.
CONCLUDED OPINION OF MARKET VALUE:
Value ofthe Whole Property $2,875,000
Value of the Easement Area to be Vacated $40,000
HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers - Consultants
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ASSUMPTIONS AND LIMITING CONDITIONS
This appraisal report is prepared subject to the following conditions and stipulations:
1. The appraisers were provided a copy of a Title Report prepared by First American Title Insurance
Company and dated February 11, 2008. The legal description provided therein is assumed to be
correct.
2. No responsibility is assumed for matters legal in character, nor do we render an opinion as to title,
which is assumed to be held in fee simple interest as of the date of valuation unless otherwise
stated.
3. It is assumed that the property is readily marketable and free of all liens and encumbrances except
any specifically discussed in this report.
4. Information, estimates, and opinions fumished by others and contained in this report are assumed
to be true, correct, and reliable. A reasonable effort has been made to verify such information;
however, no responsibility for its accuracy is assumed by the appraisers. Photographs, plats, and
maps fumished in this report are intended to assist the reader in visualizing the property.
5. No soils or geotechnical investigation report was provided by the client. As an assumption of this
analysis, it is presumed that there are no hidden or unapparent conditions of the property which
would render it more or less valuable than otherwise comparable properties. No responsibility is
assumed for such conditions or for engineering which might be required to discover such factors.
6. No opinion is rendered as to the value of sub-surface gas, oil or mineral rights, or whether the
property is subject to surface entry for the exploration or removal of such materials, except as is
expressly stated in this appraisal report.
7. All estimates of value are presented as the appraisers' considered opinion, based upon the facts and
data set forth in this report. The appraisers assume no responsibility for changes in market
conditions nor the inability of the owner to locate a purchaser within a reasonable time at the
appraised market value.
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8. Testimony or attendance in court or other hearing by reason of this appraisal, with reference to the
property in question, shall not be required unless arrangements have previously been made with
the client, relative to such additional employment. Additional pre-trial and court testimony work
is beyond the scope of this appraisal assignment and will be compensated for at the appraiser's
minimum standard hourly rate.
9. The date of value to which the opinions expressed in this report apply is set forth in the letter of
transmittal. The appraisers assume no responsibility for economic or physical factors occurring at
some later date which may affect the opinions herein stated. The appraisers reserve the right to
make such adjustments to the analyses, opinions and conclusions set forth in this report as may be
required by consideration of additional data or more reliable data that may become available.
10. The possession of this report, or a copy thereof, does not carry with it the right of publication, nor
may it be used for any purpose other than described in this report, without the previous written
consent of Hendrickson Appraisal Company, Incorporated.
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(1)
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II.
CERTIFICATE OF APPRAISAL
Certification: The undersigned certify that, except as otherwise noted in this appraisal report:
We have made a personal inspection of the subject property and each of the comparable sale properties.
We have no present or contemplated future interest in the real estate that is the subject of this appraisal
report, nor do we have any personal interest or bias with respect to the subject matter of this appraisal
report or the parties involved.
Our compensation for this appraisal is not contingent upon the reporting of a predetermined value or
direction in value that favors the cause of the client, the amount of the value conclusion, the attainment of
a stipulated result, or the occurrence of a subsequent event.
To the best of our knowledge, the statements of fact contained in this appraisal report, upon which the
analyzes, opinions, and conclusions expressed herein are based, are true and correct.
This appraisal report sets forth all of the limiting conditions affecting the analyzes, opinions, and con-
clusions contained in this appraisal report.
This appraisal report has been prepared in conformity with and is subject to the requirements of the Code
of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute and the
Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation.
All analyses, conclusions and opinions contained in this report are those of the undersigned.
The Appraisal Institute conducts a mandatory program of continuing education for its designated members.
Members of the Appraisal Institute - MAI's, who meet the minimum standards of this program are awarded
periodic educational certification. Ted G. Hendrickson, MAI is currently certified under this program.
Additionally, Ted Hendrickson and Ed Beaver have received certification from the State of Califomia as
Certified General Real Estate Appraisers.
The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly
authorized representative.
An original copy of this report is herein certified. Only an original can be certified to; an original copy will
be identified as having original signature(s) in blue ink with each signature page bearing Ted G.
Hendrickson's MAI seal. Any copy of this report which is not entirely in this form is not an original and
therefore should not be considered or used as an authentic report; nor will the appraiser(s) accept any
liability or responsibility for the use or reliance of such unauthorized copy.
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
thereof, does not carry with it the right of publication, nor may it be used for any purpose other than
described in the report, without the previous written consent of Hendrickson Appraisal Company, Inc.
Ted G. Hendrickson, MAI
California Certified General Appraiser
Certificate No. AG004974
Edward A. Beaver ^
California Certified General Appraiser
Certificate No. AG009555
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INTRODUCTION
IDENTIFICATION OF THE PROPERTY
The subject of this appraisal is an irregular shaped parcel of land that has an approximate gross site area
of 2.90 acres. The subject property is comprised of three contiguous legal parcels. It is located on the north
side of Poinsettia Lane at its intersection with Crystalline Drive in the City of Carlsbad, San Diego County,
State of Califomia. It is situated between Lonicera Street and Lemon Leaf Drive in Carlsbad.
LEGAL DESCRIPTION
The appraisers were provided a copy of a Title Report for the subject property prepared by First American
Title Insurance Company and dated Febmary 11,2008. The legal description contained in the Title Report
is presented in the addendum to this report.
ASSESSOR'S PARCEL NUMBERS
214-630-20, 214-631-20, 214-631-21
SCOPE OF THE APPRAISAL
The analysis included in this assignment is intended to be an "appraisal" as defined in the Standards of
Professional Practice of the Appraisal Institute, with the results of the analysis, opinions, and conclusions
being that of a disinterested third party.
All appropriate data deemed pertinent to the solution of the appraisal problem was collected, confirmed,
and reported in conformity with the Uniform Standards of Professional Appraisal Practice of the Appraisal
Foundation. These data include: neighborhood and district information, zoning and land use information,
subject property data, highest and best use data and research, and all market data used in the analysis of
the appraisal of this property. The appraisal process is considered to be fully complete and the findings of
the appraisal process are reported in an expanded summary appraisal report that is in compliance with
Standards Rule 2-2(b) of the Uniform Standards of Professional Appraisal Practice
The subject property was initially inspected on Febmary 21, 2008 by Ted Hendrickson and Ed Beaver of
Hendrickson Appraisal Company, Inc. Subsequent inspections were also conducted, the most recent being
April 1, 2008, which is our effective date of value. In addition to inspecting the subject property, the
comparable sale properties, and the surrounding environs were also inspected.
In an effort to develop an opinion of the subj ect property's value, a study was conducted to find recent sales
of similar properties located in the subject's immediate market area. The primary source of sales data was
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discussions with several knowledgeable brokers who are active in the subject market area, and have been
involved with sale transactions of vacant residential subdivision properties. Other sources researched and
used for market data were COMPS, Inc., a monthly service which summarizes sale activity throughout San
Diego County, the San Diego Realtors' Multiple Listing Service, and Assessor's recording information.
Each comparable sale property was inspected, and the buyer, seller, and/or broker involved in the sale was
interviewed to confirm the salient information regarding the transaction. All of the assumptions made
throughout the report have been well supported by market evidence and/or discussions with knowledgeable
individuals within the area of concem.
This appraisal report is prepared in conformance and fiill compliance 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 maimer that the results of the analysis, opinions, or conclusions are that of a disinterested third party.
PURPOSE OF THE APPRAISAL
The purpose of this appraisal is to provide an opinion of market value of a slope easement currently
encumbering the subject property for the purpose of assisting the property owners in acquiring fee
ownership of the easement area from the City of Carlsbad, the easement ovmer.
DEFINITION OF MARKET VALUE
Market value is the most probable price which a property should bring in a competitive and open market
under all conditions requisite to a fair sale, the buyer and seller each acting pmdently and knowledgeably,
and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation
of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
1. Buyer and seller are typically motivated;
2. Both parties are well informed or well advised, and acting in what they consider their own
best interests;
3. A reasonable time is allowed for exposure in the open market;
4. Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements
comparable thereto; and
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5. The price represents normal consideration for the property sold unaffected by special or
creative financing or sales concessions granted by anyone associated with the sale.
Source: Uniform Standards of Professional Appraisal Practice, Appraisal Foundation, 2006 Edition,.
MARKETING TIME / EXPOSURE PERIOD
The following opinion regarding marketing period for the subject property is based on information
obtained during our market research for this assignment. Based upon numerous discussions with
knowledgeable brokers specializing in parcels of land zoned for residential subdivision uses, as well as
buyers and sellers of similar land, it is our view that the marketing period for the subject property would
likely be approximately six to 12 months, assuming the property is marketed at its fair market value.
FUNCTION OF THE APPRAISAL
The fiinction of the appraisal is to assist the property owners in making an appropriate offer to the City
of Carlsbad for acquisition of fee title to a slope easement area currently owned by the City.
PROPERTY RIGHTS APPRAISED
The property rights appraised are the fee simple and easement interests in the subject property.
EFFECTIVE DATE OF VALUE
This appraisal reflects an effective date of value of April 1, 2008.
INTENDED USER OF THIS REPORT
This appraisal is intended for the sole use of the clients: the City of Carlsbad, Kevin J. Reisch, Esq, of
DLA Piper US LLB, and his clients, Nobom and Evelyn Tabata, co-tmstees of the Tabata Family Tmst.
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li LOCATION MAP
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FACTUAL DATA
AREA DESCRIPTION
The San Diego Region comprises a total of 4,261 square miles at the extreme southwest comer of both
the State of Califomia and the continental United States. It is botmded on the north by Orange and
Riverside Counties, on the east by Imperial County, on the south by Mexico and on the west by the
Pacific Ocean. The largest of the 18 incorporated communities in the region is the City of San Diego
which is located in the southwestern portion of the region, approximately 120 miles southeast of Los
Angeles. As of January 2007, the population of the region was estimated by SANDAG to be slightly less
than 3,100,000, an increase of approximately 10% since the 2000 census.
Carlsbad
The City of Carlsbad is located in north coastal San Diego County, approximately 35 miles north of
downtovm San Diego. It is bounded on the north by the Cities of Oceanside and Vista, on the east by San
Marcos, Encinitas and unincorporated San Diego County, on the south by the City of Encinitas and on
the west by the Pacific Ocean. Carlsbad was incorporated in 1952 and features a temperate coastal
climate and a wide variety of topography ranging from inland hills to coastal bluffs. Carlsbad has
approximately seven miles of coastline on the Pacific Ocean, and three lagoons. The city limits enclose
an area of approximately 39 square miles, or approximately 25,000 acres, a little over half of which is
allocated to residential uses at a variety of densities. Another 16% of the land is designated for non-
residential uses including commercial and industrial, and the remainder is set aside for open space,
govemment uses and roads.
As of January 2007, the latest data currently available, the population of the City was estimated by
SANDAG to be 101,337, an increase of a little more that 3.7% per year from the 78,247 counted in the
2000 census. The current population represents about 3.3% of the region as a whole. Rapid, uncontrolled
growth in Carisbad in the 1980's caused concem that public facilities would be unable to keep up with
the new residential development. As a result, the City adopted a Growth Management Plan in 1986, and
followed that with a city wide Mello Roos Community Facilities District in 1991. The result has been
that facilities fees are now collected earlier in the development process and public facilities
improvements keep pace with development.
Carlsbad has had among the highest growth rates in the county for the past few years, due in part to the
availability of developable land in the eastem parts of the City. Carlsbad is one ofthe most desirable
residential communities in San Diego County. Its coastal location near other up-scale communities, close
proximity to regional employment centers and convenience to quality retail and recreational services
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makes this City a highly desirable place to live. As a result it is also one of the communities in the county
with the highest median household incomes.
DISTRICT DESCRIPTION
The subject property is located in the northwest quadrant of the City of Carlsbad. It is on the north side
of Poinsettia Lane, a little less than a mile east of its interchange with 1-5. It is in a predominantly
residential area featuring residences of varying ages. Supporting commercial uses are generally located
along the 1-5 corridor to the west and in the master plaimed community of Aviara which is a short
distance to the east and southeast of the subject.
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PLAT MAP
09 un HID io»i' .laiojn av
214-63
SHT 1 OF 2 1" - 100' ca/T»/»» 01
1
MAP 14773-CARLSBAO TCT NO CT 98-14-02 THOMPSON/TABATA
09
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214-63 SHT 2 OF 2
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MAP 14773-CARLSBAD TCT NO CT 98-14-02 THOMPSOW/TABATA SEC 28-T12S-R4W - POR E 1/2 OF NE 1/4
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SUBJECT PHOTOGRAPHS
Entry to the subject development from Lonicera Street.
Looking west from the south end of the proposed development. The Pacific Ocean is in the
background.
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SUBJECT PHOTOGRAPHS
Looking generally west across Lots 4 and 5. The ocean is in the background.
Looking generally east toward Lots 1 and 2. The old SFR is visible in the background.
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HENDRICKSON APPRAISAL COMPANY. INC. Real Estate Appraisers • Consultants
SUBJECT PHOTOGRAPHS
Looking east on Poinsettia Lane. The subject slope easement is to the left.
Looking north toward the slope easement area. The proposed development is at the top of
the bank.
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DESCRIPTION OF THE SITE
LOCATION:
The subject property is located on the north side of Poinsettia Lane at its intersection with Crystalline
Drive in the City ofCarlsbad, CA. It is a little less than a mile east of the Poinsettia Lane interchange
with 1-5.
THOMAS BROTHERS MAP COORDINATES:
1127B
ASSESSOR'S PARCEL:
The subject comprises three contiguous parcels identified as parcel numbers: 214-630-20,214-631-20,
214-631-21.
ACCESS:
The subject property has two possible means of access. First, it is accessible via its frontage on Lonicera
Street, and second, via the west end of Lemon Leaf Drive which terminates approximately at the subject
property's eastem boundary. Both streets are asphalt paved, interior residential streets with typical offsite
improvements.
SIZE AND SHAPE:
Information relating to the size and shape of the subject parcel was extracted from San Diego County
Assessor's date. The property is irregular in shape and comprises a total area of approximately 2.90 gross
acres in size. Information gleaned from documents relating to a proposed subdivision ofthe property
indicates that the net developable size of the property is 2.17 acres.
TOPOGRAPHY/DRAINAGE:
The site is generally sloping in nature and will require grading in order to develop homesites on the
property. The slope is sufficient to elevate the developable portion of the property high enough to afford
potential homes in the development distant views of the Pacific Ocean to the west. Drainage on the site
appears to be adequate based on our physical inspection.
ZONING/PLANNING:
The subject property is zoned L-C, Limited Control, by the City of Carlsbad. Limited Control zoning is
intended for area in which planning for future land uses has not been completed or plans for development
has not been formalized. The General Plan land use designation for the area is Residential Medium, at
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a density of up to six dwelling units per acre on minimum 7,500 square foot lots. A request for a zoning
change has been submitted to the City in conjunction with development plans for the subject property
which are currently being processed.
UTILITIES:
All typical public utilities are operating either on or adjacent to the subject property, but will have to be
extended to individual homesites created as part of the proposed residential development.
STREET IMPROVEMENTS:
Both Lonicera Street and Lemon Leaf Drive are asphah paved residential streets with typical offsite
improvements in the City of Carlsbad.
EASEMENTS/ENCUMBRANCES:
The title report provided for the subject property identifies a total of either easements encumbering the
property, all for road or public utility purposes. One of them is the slope easement in favor ofthe City
ofCarlsbad which the property owner proposes to acquire as part of development ofthe subject property.
SOIL CONDITIONS:
No soils investigation (geotechnical study) report was provided by the client for the appraisers' review.
Lacking this information, it is assumed as part of this assignment that the soil condition ofthe site is
adequate to support any development with uses permitted under the current land use and zoning
requirement. No evidence of soil subsidence was observed upon inspection, and numerous other sites
in the immediate area have been improved with homes.
FLOOD HAZARD:
The subject property is in an area covered by Flood Insurance Map 060295 1031F with an effective date
of June 19,1997. The San Diego County Index Map identifies this flood panel as having not been printed
because the entire area is in white Zone X, which is outside the 500 year floodplain.
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PROPERTY TAXES/ASSESSED VALUES
PROPERTY TAX SUMMARY
Assessors Parcel No. 214-630-20 214-631-20 214-631-21 Totals
Tax Rate Area 09166 09166 09166
Tax Rate 1.04187% 1.04187% 1.04187%
Land Value $459,000.00 $31,023.00 $195,206.00 $685,229.00
Improvement Value $0.00 $73,098.00 $0.00 $73,098.00
Total Assessed Value $459,000.00 $104,121.00 $195,206.00 $758,327.00
Base 1% Tax $4,590.00 $1,041.21 $1,952.06 $7,583.27
Fixed Charges $354.12 $88.81 $116.72 $559.65
2004/2005 Taxes $4,944.12 $1,130.02 $2,068.78 $8,142.92
DEVELOPMENT STATUS
The subject property is currentiy improved with one single family residence that was constmcted in 1974
and which is considered to have reached the end of its economic life. Since mid 2006, the property
owners have been working with the City of Carlsbad in order to process plans for an eight lot (five
homesites and 3 open space lots owned by the homeowner's association) residential subdivision on the
property. According to Jason Goff, Associate Planner with the City, the initial plan was reviewed and
a letter was sent to the property owners in September 2007 identifying approximately 50 items relating
to the development plan that required either modification or correction. A recent conversation with Brian
Ardolino of Pasco Engineering, the owner's design firm, indicated that work on those items is nearing
completion and the proposed map is expected to be resubmitted shortly. Jason Goff estimated that two
to three months would be required for Planning Department review of the resubmitted map, and if fovmd
to be satisfactory, an additional two to three months for Plaiming Commission approval ofthe project.
Thus, the property owners are well on their way to perfecting a tentative map for the proposed
development, but final approval of the tentative map is likely six months or more away.
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TENT ATIVE MAF
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HIGHEST AND BEST USE
As used in this report. Highest and Best Use is defined as:
That reasonable and probable use which will support the highest present value as of the
date of the appraisal, and
That use from among reasonably probable and legal altemative uses, found to be
physically possible, appropriately supported, financially feasible, and which results in the
highest land value.
There are two distinct analyses in the highest and best use process; the highest and best use analysis of
the site as if it were vacant, and the highest and best use analysis of the site as if it is improved.
As if vacant, the highest and best use could be for immediate development of the property or holding for
future development. The second definition above deals with this scenario.
As improved, the highest and best use analysis considers the possibility of continuing the current use,
conversion to an altemative use or demolishing the existing improvements and constmcting another use
considered to yield a higher retum to the property. If a site is improved, and the highest and best use is
determined to be different from the existing use, the existing use will continue until such time as the land
value under the highest and best use scenario exceeds the sum of the value of the existing property plus
the cost of demolition.
The highest and best use of a property is determined by social, economic, govemmental, and
environmental forces. The relative weight that each of these forces carries in determining the highest and
best use of a property depends on the individual property.
themghes
The determination ofthe highest and best use of a property either improved or vacant, must consider the
following four criteria. Is the potential use: (1) legally permissible, (2) physically possible, (3) financially
feasible, and (4) maximally productive. These criteria should be considered in the above order, as
qualification under the latter criteria would be irrelevant if a use is legally or physically prohibited.
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HIGHEST AND BEST USE AS VACANT
Legally Permissible
The subject property is currentiy zoned L-C, Limited Control, by the City of Carlsbad. Limited Control
is an interim zoning classification applied to properties for which planning for future uses has not been
completed, or for which development plans have not been formalized. The general plan land use
designation for the area is RM, Residential Medium density, which allows for residential uses at a
density of up to six dwelling units per acre on minimum 7,500 square foot lots. Any proposed
development that meets the land use criteria would be considered a legally permissible use of the
property.
Physically Possible
The subject property is irregular in shape, but has site dimensions that potentially give it full utility. It
is also a sloping site, but there is adequate reasonably level area that individual homesites could be
graded as part of a residential subdivision. The appraisers are unaware of any abnormal site conditions
that would require extraordinary site development measures to develop the property. We have no reason
to suspect that the load bearing capacity of the property is any different from surrounding properties
which are already developed to residential uses. Thus, it would be physically possible to improve the
property with any legal improvements that might reasonably be proposed.
Financially Feasible and Maximally Productive
We have concluded that development of the subject to a residential use would be both legally permissible
and physically possible. The property is located in the coastal area of Carlsbad, a highly desirable
residential area, particularly considering that most of all of the homes in a proposed subdivision of the
property could have at least minimal views of the ocean a short distance to the west. As a result, even
though the overall residential market in the San Diego area has been flat to declining for the past two
years or more, it is our opinion that homes developed on the subject property would be highly desirable
and would be relatively easy to market. Properties offering potential views of the ocean are limited in
number and tend to be more saleable than those without ocean views. It is our opinion that development
of the subject property with a small residential subdivision represents a financially feasible and
maximally productive use of the subject property.
HIGHEST AND BEST USE AS IF IMPROVED
Legally Permissible
One ofthe three legal lots comprising the subject larger parcel is currently improved with an older single
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family residence that was constmcted in 1974. The current improvements are in conformance with the
general plan land use designation, and are considered to be a legally permissible use of the property.
Physically Possible
The existing home is situated on the highest portion of the subject property, and there is roughly two
acres of vacant, otherwise usable land on the property. In our analysis of highest and best use as if vacant,
we concluded that it would be physically possible to develop the property with a residential subdivision.
The use of the property for one single family residence satisfies the highest and best use of being
physically possible.
Financially Feasible and Maximally Productive
The existing use of the subject property for one single family dwelling is considered to be both legally
permissible and physically possible. It is also considered to be a substantial undemtilization of a 2.90
gross acre parcel located in coastal Carlsbad, particularly considering that the existing residence is in
average condition at best. The property is in an area in which the land use designation would permit a
small residential subdivision on the property, and developing it in that manner would be a more
productive use of the site. Thus, it is our opinion that the highest and best use of the subject property is
to remove the existing home, and subdivide the property into the maximum number of lots the City of
Carlsbad will permit.
Reconciliation of Highest and Best Use
Based on the analysis presented in the preceding paragraphs, it is our opinion that the highest and best
use of the subject property is to raze the existing older home on the property, and process plans for a
small residential subdivision on the property.
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VALUATION ANALYSIS
METHODOLOGY
In developing an opinion of the market value of a property, there are three generally recognized
approaches to value, the Income Approach, the Sales Comparison Approach and the Cost Approach. In
the valuation of vacant land, only the Sales Comparison approach is relevant.
The Sales Comparison Approach compares the subject property with similar properties which have sold
recently. Comparison of the similarities and dissimilarities of these comparable properties to the subject
provides an indication of value that is derived directly from the actions of buyers and sellers in the
marketplace.
The subject property is a uniquely desirable property in coastal Carlsbad. It is in an area in which the
underlying land use designation is for medium density residential development at a maximum of six
units per acre. The topography of the surrounding area and the subject property itself is sloping generally
upward from west to east, so a carefully designed small residential subdivision could afford most, if not
all, homes at least a minimal view of the Pacific Ocean in the distance to the west.
The primary source of comparable sales information was data published by CoStar/Comps. Recent sales
of properties considered similar to the property were investigated, verified and compared to that property.
When considering the comparable sales as they relate to the subject, the first step is to account for
differing market conditions at date of sale. This is done prior to consideration of differing physical
characteristics in order to develop an equal basis from which to make physical comparisons as of the date
of value. Once differing market conditions have been accounted for, the physical characteristics of the
comparable sales are compared to the subject.
Market Conditions - All of the comparable land sales transpired between February 2005 and December
2007. During the confirmation of these sales, we contacted brokers, buyers and sellers who make a
market in residential land in the subject area. All of them were asked their opinions of the market for this
type of land in the area, and the general consensus was that the market for residential land began to slow
about the middle of 2005, and has continued this downward trend as the general residential market has
declined. There have not been sufficient sales of vacant parcels of residential subdivision land to do a
meaningful trend analysis of selling prices. However, studying the selling prices for improved single
family homes in the area can yield an indication of the value of the underlying land. To that end, the
appraisers reviewed sales of single family residences in the subject zip code for the years 2005 through
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2007, and year to date in 2008. The analysis was done on the basis of selling price per square foot of
improvements in order to minimize the effect of differing improvement sizes on the results. It revealed
that average selling prices declined approximately 5% between 2005 and 2006, and have remained
relatively stable since that time. It is well established that the market for residential properties has been
declining, sometimes significantiy, in most of the San Diego County area since about the middle of2005.
However, the subject's unique and scarce coastal Carlsbad location has, at least until now, insulated it
from the sharply declining home values seen in other parts of the county. Thus, for the purpose of this
analysis, we will make a small downward adjustment for sales that occurred in 2005, and make no
adjustment to sales that occurred in 2006 or later.
Unit of Comparison - The imit of comparison used in this analysis is selling price per lot, as this is
typically the primary basis upon which residential sites are bought and sold.
Elements of Comparison - Elements of comparison used in this analysis are those typically considered
in residential land appraisals. They include location, parcel size, unit density, topography, view potential,
development status/potential, access and offsite improvements. Note that since unit values typically
decline as parcel size increases, a larger site is considered inferior on a unit basis to a smaller site.
Additionally, with respect to density, as the density increases, the value per lot declines. Appropriate
consideration was given to parcel size and density, as well as other physical characteristics in our
valuation of the subject property. Each comparable sale was compared to the subject property on the
basis of all of these factors to arrive at an indicated subject value for that comparable.
Comparable Selection - Our search for comparable sales focused on the most recently available sales
of residential subdivision land which are as similar as possible in size and density to the subject, and
which are in northem San Diego County locations. The comparable sales bracket the subject property's
size, density and development status.
When using these criteria to compare a comparable property to the subject, we will use the following
qualitative descriptions to indicate the degree of superiority or inferiority. In order of increasing
differences between the comparable and the subject they are:
Slightly Inferior/Superior
Inferior/Superior
Considerably Inferior/Superior
Substantially Inferior/Superior
Vastly Inferior/Superior
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HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants
PROPERTY INFORMATION Subject SALE NO. 1 SALE NO. 2 SALE NO. 3 SALE NO. 4
Property Location Poinsettia Lane El Camino Real Bracero Road 1007-21 Hermes Ave. 1021 Breakaway Dr
at Crystalline Dr S of Cmno Vida Roble N of Melba Road
Carlsbad Carlsbad Encinitas Encinitas Oceanside
Owner/Seller Tabata Fam Trust RE Collateral Mgt JDSK Investments LLC Staley Hearthstone
Buyer LC Greens 1.3 LLC Enc. Bracero Ventures 229-231 Coast Blvd, Inc WL Homes LLC
Assessor Parcel Number Several 213-110-18 258-371-52 Multiple Multiple
Recording Date 12/13/07 07/15/05 11/08/07 08/15/07
Sale Date (If significantly diff. Mid 2005
from recording date)
Land Area (Ac) 2.90 7.57 2.89 1.20 3.80
Number of Lots 5 38 7 10 25
Density (Lots/Ac) 1.7 5.0 2.4 8.3 6.6
Zoning L-C RS3 R3 R2 RM-A
Development Status/Potential T-Map in process Sold with no maps Approved T-Map ATOS Approved T-Map ATOS Approved T-Map ATOS
Proposed Use/ Near approval. Residential Residential Residential Residential
Highest & Best Use Sing Fam Resid Residential Residential Residential Residential
Comments Mostly vacant site. Raw land. Formeriy developed site Developed site Purchased as blue top
One older home No improvement value Imps contrib int value lots. Price determined
on property in 2005
Price $4,800,000 $4,350,000 $3,425,000 $7,509,000
Per Lot $126,316 $621,429 $342,500 $300,360
COMPARABILITY ANALYSIS
Conditions of Sale/Market:
Property Rights
Subtotal 126,316 621,429 342,500 300,360
Financing
Subtotal 126,316 621,429 342,500 300,360
Condition of Sale -10%
Subtotal 126,316 621,429 308,250 300,360
Market Conditions 0% -5% 0% -5%
Market Condition Adj. Price 126,316 590,358 308,250 285,342
Physical Characteristics:
Location Very Good Inferior Inferior Inferior Consid Inferior
Size (Ac) 2.90 Inferior Similar SIgt Superior Similar
Density (Lots per acre) 1.72 Inferior Similar Subst Inferior Subst Inferior
Topography Gently Sloping Inferior Superior Superior Superior
View Potential Excellent - Ocean Inferior Inferior Inferior Inferior
Development Status/Potential T-Map in process Consid Inferior Superior Superior Superior
Access Average Similar Similar Similar Similar
Offsites (Roads, Utilities) Available adjacent Similar Similar Similar Similar
Overall Comparability Vastly Inferior Gen Similar Consid Inferior Consid Inferior
tfl If Comparable Sales Comparison
The appraisers searched for recent sales of similar sized, residential subdivision land parcels in the
general area of the subject. The subject area is fully built out and a diminishing number of vacant sites
remain to be developed. We then expanded the search to include a wider radius to include other areas
of coastal north San Diego County considered to have moderately similar, but somewhat inferior
locational characteristics and found the sales shovm in the following table. These sales are considered
the most appropriate and available sales for comparison with the subject as they bracket the subject
property's size, density and development status characteristics.
The following table details the land sale properties.
LAND SALE COMPARABLES
Sale Address Date Size (Ac) # of Lots Price Units/Ac. $/Lot
1 El Camino Real, Carlsbad 12/13/07 7.57 38 $4,800,000 5.0 $126,316
2 Bracero Rd, Encinitas 07/15/05 2.89 7 $4,350,000 2.4 $621,429
3 Hermes Ave, Encinitas 11/08/07 1.20 10 $3,425,000 8.3 $342,500
4 Breakaway Dr, Oceanside Mid 2005 3.80 25 $7,509,000 6.6 $300,360
Sale 1 was unentitled. Sales 2,3 & 4 had approved tentative maps as of the date of sale.
Land Sale 1
This was the December 2007 sale of an approximately 7.57 acre parcel of residential zoned land located
on the east side of El Camino Real south of Camino Vida Roble in Carlsbad. The selling price was
$4,800,000, or $126,316 per lot. It was a cash to seller transaction. The property has relatively steep
topography and affords views of the surrounding area, but not to the ocean. The property was purchased
with the intention of developing it to a residential use, but there were no maps on the property as ofthe
date of sale. During an extended escrow, a tentative map was being processed by the buyer. The buyer
subsequently perfected a tentative map for 38 lots on the property which was approved by the City of
Carlsbad in April 2008. The resulting density is 5.0 units per acre. The property is identified as
Neighborhood 1.3 of the La Costa Greens master plan. The underlying land use is Residential Medium
Density, which allows residential development at a density of 6 units per acre. As of our inspection, the
tentative map had only very recently been approved, and no constmction had yet begun.
This sale property is considered inferior to the subject as to its specific location in the City ofCarlsbad,
its overall size on a unit value basis, its density on a dollars per lot basis, its steeper topography, and its
lack of ocean view potential, and considerably inferior relative to its development status as of the date
of sale. It is considered generally similar to the subject in other respects. Overall, this sale property is
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considered vastly inferior to the subj ect and indicates a subj ect value of substantially more than $ 126,316
per lot.
Land Sale 2
This was the July 2005 sale of an approximately 2.89 acre parcel of residential zoned land located on
the west side of Bracero Road north of Melba Road in Encinitas. The selling price was $4,350,000, or
$621,429 per lot. It was a cash to seller transaction. This property has relatively level topography, and
offers minimal views of the surrounding area. The property was purchased with the intention of
developing it to a residential use, and there was an approved tentative map for 7 lots on the property as
ofthe date of sale. The resulting density is 2.4 units per acre. This was a previously improved property,
however, the existing greenhouse on the site was not considered to contribute value by the buyer. It was
subsequently removed to allow development to proceed. As of our inspection, constmction was
underway on seven single family residences on the property. This sale transpired in 2005 and requires
a small downward adjustment to $590,358 per lot to account for the stronger market as of the date of
sale.
This sale property is considered inferior to the subject as to its lack of location in coastal Carlsbad and
its lack of ocean view potential. It is considered superior to the subject in terms of its level topography
and its approved tentative map as of the date of sale. It is considered generally similar to the subject in
other respects including its approved density. Overall, this sale property is considered generally similar
to the subject and indicates a subject value in the range of $590,358 per lot.
Land Sale 3
This was the November 2007 sale of an approximately 1.20 acre parcel of residential zoned land located
on the west side of Hermes Avenue north of Leucadia Boulevard in Encinitas. The selling price was
$3,425,000, or $342,500 per lot. It was a cash to seller transaction. It is a relatively level site which offers
minimal views. The property was purchased with the intention of developing it to a residential use, and
there was an approved tentative map for 10 units on the property as of the date of sale. The resulting
density is 8.3 units per acre. This property was improved with 12 older residential units at date of sale
which the buyer considered to add value to the property because they would continue to generate interim
income until such time that they have to be removed to permit redevelopment of the site. As of our
inspection, the original improvements were still in place and no constmction had commenced. Based on
conversations with confirming sources and review of Assessor's data, this sale was adjusted downward
10% to $308,250 per lot to account for the value added by the existing improvements as of the date of
sale.
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This sale property is considered inferior to the subject as to its Encinitas location and its lack of ocean
view potential. It is substantially inferior relative to its much higher density on a dollars per lot basis. It
is superior in terms of its level topography, and as to its approved tentative map as of the date of sale,
and slightly superior relative to its smaller overall size on a unit comparison basis. It is considered
generally similar to the subject in other respects. Overall, this sale property is considerably inferior to
the subject primarily due to its much higher density, and indicates a subject value of considerably more
than $308,250 per lot.
Land Sale 4
This was the sale of an approximately 3.80 acre parcel of residential zoned land located on both sides
of Breakaway Drive near the Arrowood Golf Course in northem Oceanside. The sale recorded in August
2007, but was the exercise of an option for which the price had been established in 2005. The selling
price was $7,509,000, or $300,360 per lot. It was a cash to seller transaction. This property has relatively
level topography, and offers some views of the surrounding area. The property was purchased with the
intention of developing it to a residential use, and there was an approved tentative map for 25 lots on the
property as of the date of sale. The resulting density is 6.6 lots per acre. The lots were in blue top
condition but without streets and other offsite improvements. As of our inspection, streets were in place,
but no constmction of homes had commenced. This selling price was determined in 2005 and this sale
requires a small downward adjustment to $285,342 per lot to account for the stronger market as of the
date of sale.
This sale property is considerably inferior to the subject as to its north inland Oceanside location and
inferior relative to its lack of ocean view potential. It is substantially inferior in terms of its much higher
density on a dollars per lot basis. It is considered superior to the subject in terms of its level topography
as well as its approved tentative map and partially finished lots as of the date of sale. It is considered
generally similar to the subject in other respects. Overall, this sale property is considerably inferior to
the subject and indicates a subject value of considerably more than $285,342 per lot.
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The following table arrays the sale properties from inferior to superior to the subject property.
LAND SALE COMPARABLES
Sale Address Date Size (Ac) Price $/Lot* Comparability
1 El Camino Real S of Cmno Vida Roble, Chad 12/13/07 7.57 $4,800,000 126,316 Vastly Inferior
4 1021 Breakaway Drive, Oceanside Mid 2005 1.20 $7,509,000 285,342 Consid Inferior
3 1007-21 Hermes Ave, Encinitas 11/08/07 2.89 $3,425,000 308,250 Consid Inferior
Subj Poinsettia Lane at Crystallme Drive, Cbad X 2.90 X 575,000
2 Bracero Rd N of Melba Rd, Encinitas 07/15/05 3.80 $4,350,000 590,358 Gen Similar
*Selling prices adjusted for market conditions or conditions of sale as needed.
Based upon the comparisons presented in the preceding paragraphs, and since Sale 2 is the most similar
to the subject in terms of both overall size and density, it is our opinion that the per unit land value of
the subject property is near the upper end of the range of indicated values, or $575,000 per lot. Extending
that per unit value to the entire five lots yields the following value for the subject property.
Land Value 5 Lots x $575,000/Lot = $2,875,000
DESCRIPTION OF THE PART TO BE ACQUIRED
The subject property is currently encumbered by a slope easement that was granted to the City of
Carlsbad in 1989. The easement is basically triangular in shape, and according to information provided
by Brian Ardolino of Pasco Engineering, totals approximately 16,990 square feet. The encumbered area
includes the bank that extends up from Poinsettia Lane to the more level portion of the subject property,
as well as portions of three of the homesites shown on the tentative map. The property owners wish to
have a portion of the slope easement vacated in order to be able to grade that area to gain added back
yard area for those three proposed lots. The portion of the slope easement to be vacated is irregular in
shape, and is at the top of the existing bank that extends up to the property from Poinsettia Lane.
According to Brian Ardolino of Pasco Engineering, the area to be vacated totals approximately 10,536
square feet in size. Please refer to the proposed tentative map included in the report.
When determining the value of an easement area, the severity of the reduction in the property owner's
bundle of rights must be considered. Road easements, in which the property owner essentially loses full
control of the encumbered area are considered to be the most severe loss of rights, and are generally
considered to be 100% of fee value. Utility and drainage easements are typically less severe, because the
areas encumbered can still be used by the property owner for things other that constmction of major
improvements in the area. It is a generally accepted appraisal practice to value these easements in the
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range or 40%) to 60%) of the fee value of the land. Slope easements are generally considered to be an even
smaller loss of the ovmer's bundle of rights to the encumbered area since the area is unlikely to be dug
up by the easement owner in the course of performing maintenance or repairs, as could be the case with
a utility easement. Slope easements are typically valued at 10%) to 25% of the underlying fee value of
the land.
In the case of the subject property, all three of the proposed lots that extend into the current slope
easement area are significantly larger than the 7,500 square foot minimum lot area required by the land
use designation. The appraisers, in the course of completing numerous other appraisal assignments, have
made several studies of residential lot values. These studies have all shovm that, other factors being
equal, differences in lot size over and above the minimum required size make relatively small differences
in overall property values. These findings were also corroborated through conversations with residential
real estate brokers.
The appraisers were not provided data relating to exactly how much of each of the three affected lots is
in the existing easement area. However, review of the proposed tentative map suggests that all of the
easement area in Lots 3 and 5, and most or all of the easement area in Lot 4 are in the "excess" lot area
over and above the minimum 7,500 square feet. Since our research indicates that this excess area
contributes value to the property at a significantly lower rate than the unit value of the required minimum
lot area, 7,500 square feet in this case, it is our opinion that a slope easement encumbrance in that area
would be a relatively small loss in the ovmer's bundle of rights. Offsetting that to some extent in this
instance, however, is the fact that the acquiring property ovmers are actually gaining usable lot area for
the three affected lots. As a result, we have concluded that the existing slope easement represents a loss
of the ovmer's bundle of rights in the range or 15% to 20% of the underlying fee value of the land. Since
the easement area is provided in square feet, we must first convert the subject value to a per square foot
value as follows:
Subject Value/SF $2,875,000 - 126,304 SF - $22.76/SF
At a 15%) reduction in ovmer's bundle of rights, the easement area to be vacated would be valued as
follows:
Value of Easement Area 10,536 SF x $22.76/SF x 15% = $35,970
At a 20% reduction in owner's bundle of rights, the area would be valued as follows:
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Value of Easement Area 10,536 SF x $22.76/SF x 20% - $47,960
Based on the foregoing analysis, we have concluded that the market value of the easement area to be
vacated by the City of Carlsbad is:
$40,000
FORTY THOUSAND DOLLARS
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MARKET DATA ADDENDUM
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Land Comparable 1
213-11 SHT 1 OF 3
....
——
'
SHT 2
MAP 14543- CARLSBAD TCT NO 99-03 LA COSTA GREENS
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Location:
APN:
Size & Shape:
Topography:
Zoning:
Density:
Utilities:
Access/Off Sites:
Improvements:
Sale Price:
Terms:
Transaction:
Buyer:
Seller:
Confirmed By:
Comments:
Land Comparable 1
El Camino Real south of Camino Vida Roble, Carlsbad, CA. Thomas Brothers
1127E4
213-110-18
Approximately 7.57 acres; 329,749 square feet, irregular in shape.
Sloping to rolling raw land.
RS-3, City of Carlsbad. Land use in this area permits medium density residential
at a density of six units per acre.
The buyer perfected a tentative map at a density of 5.0 units per acre.
Utilities are available to the site.
This property is accessible from either direction on El Camino Real. All typical
offsite improvements were in place.
None at the time of sale.
$4,800,000 ($126,316/Lot)
Cash to seller.
Document Number: 2007-0777221
Recording Date: 12/13/2007
Transfer Tax: Not disclosed
LC Greens 1.3 LLC
Real Estate Collateral Management Co.
Dan Gabriel, buyer rep; public records.
This property was purchased as essentially raw land with no entitlements. During
a long escrow, tentative maps were being processed. The buyer subsequently
perfected a tentative map for 38 units (5.0 units per acre) which was approved by
the City of Carlsbad in April 2008. The property is Neighborhood 1.3 of the La
Costa Greens master plan.
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Land Comparable 2
MAP 15245 - ENCINITAS TCT NO 03^18
SEC 15 T13S - R4W - POR NE 1/4 OF SE 1/4
ROS 4267,12e60.13282.13523.15593.18134.18480
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Location:
APN:
Size & Shape:
Topography:
Zoning:
Density:
Utilities:
Access/Off Sites:
Improvements:
Sale Price:
Terms:
Transaction:
Buyer:
Seller:
Confirmed By:
Comments:
Land Comparable 2
Bracero Road north of Melba Road, Encinitas, CA. Thomas Brothers 1147E7
258-371-26 through 32
Approximately 2.89 acres; 125,888 square feet; generally rectangular.
Level, previously developed (finished) lot.
R3, Encinitas, permits residential development.
2.4 units per acre, based on an approved tentative map.
Utilities are available to the site.
This property is accessible from either direction on Bracero Road. All typical
offsite improvements are in place.
This is a previously developed lot which was purchased for land value as part of a
redevelopment project.
$4,350,000 ($621,429/Lot)
Cash to seller.
Document Number: 2005-0600840
Recording Date: 07/15/2005
Transfer Tax: Not disclosed
Encinitas Bracero Ventures, LLC
JDSK Investments LLC
Jim Basiger, buyer representative; public records.
This property was a previously developed site which was purchased for land value
as part of a redevelopment project. An existing greenhouse on the property had no
contributory value in the mind of the buyer and was removed to permit
redevelopment of the site to a residential use. Constmction of seven single family
residences on the property was nearing completion as of our inspection.
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HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers - Consultants
Land Comparable 3
19
DOC
in (Mt 1)
MAP 12304-ENCIN'TAS TCT NO. 4614-1 CaJOO
BOS 9459, 9724, 9906, 10022,16782.18441 19135 18879
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HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants
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Location:
APN:
Size & Shape:
Topography:
Zoning:
Density:
Utilities:
Access/Off Sites:
Improvements:
Sale Price:
Terms:
Transaction:
Buyer:
Seller:
Confirmed By:
Comments:
Land Comparable 3
1007-21 Hermes Avenue, Encinitas, CA. Thomas Brothers 1147B4
254-325-43, 44, 45
Approximately 1.20 acres; 52,272 square feet; irregular in shape.
Level finished lots.
R2, Encinitas, permits residential development.
8.3 units based on an approved tentative map for 10 units on the property.
Utilities are available to the site.
This property is accessible from either direction on Hermes Avenue. All typical
offsite improvements are in place.
Sold as finished lots with no major improvements.
$3,425,000 ($342,500/Lot)
Cash to seller.
Document Number: 2007-0711428
Recording Date: 11/08/07
Transfer Tax: $3,767.50 FV
229-231 Coast Blvd Inc.
Jed L. Staley
Kevin Stephens, buyer representative; public records.
This property was purchased as level, mapped finished lots with many of the offsite
improvements in place. The buyer intends to develop the property with single family
residences. At the time of sale, the property was improved with 12 residential imits
which the buyer considered to contribute value to the property due to their ability to
generate interim income during the planning process for the single family homes. As
of our inspection, the existing units were still in use.
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HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants
1^1 If Land Comparable 4
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122-57
SHT 2 OF 3
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SOUTH HILL
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MAP 15397-MORRO HILLS VIUAGES "H" & T
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HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants
li Land Comparable 4
Location:
APN:
Size & Shape:
Topography:
Zoning:
Density:
Utilities:
Access/Off Sites:
Improvements:
Sale Price:
Terms:
Transaction:
Buyer:
Seller:
Confirmed By:
Comments:
1021 Breakaway Drive, Oceanside, CA, Thomas Brothers 1067B4
122-571-06 through 29; 122-572-46
Approximately 3.80 acres; 165,602 square feet; irregular in shape.
Level finished lots.
RM-A, permits single family residential development.
6.6 units per acre based on an approved tentative map for 25 units on the property.
Utilities are available to the site.
The property is accessible from either direction on Breakaway Drive. Offsite
improvements will be completed as part of the residential subdivision development.
None at time of sale.
$7,509,000 ($300,360/Lot)
Cash to seller.
Document Number: 2007-0557387
Recording Date: 08/15/07
Transfer Tax: Not disclosed
WL Homes, LLC
Hearthstone Multi-asset Entity B, LP
Anthony Botte, seller representative; public records.
This sale was an incremental purchase of land purchased with the intention of
developing a residential subdivision surrounding the Arrowood Golf Course in
northem Oceanside. Although the sale recorded in late 2007, the selling price was
based on an option price that was determined in mid 2005. This property was
purchased as blue top lots, fully mapped, but without streets or other offsite
improvements in place. As of our inspection, streets and other offsites had been
added, but constmction of the homes had not commenced.
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HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants
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GENERAL ADDENDA
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HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants
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HENDRICKSON APPRAISAL COMPANY. INC.
Hendrickson Appraisal Company, Inc. is a mid sized appraisal firm that was incorporated in 1986 to
provide professional consultation on matters relating to valuation of real estate and real property. The
firm specializes in valuation of commercial, industrial, entitled and imentitled vacant land, and
subdivision properties.
Appraisers within the firm provide valuation consultation and expert witness testimony relating to
several legal matters involving: eminent domain property acquisitions, estate matters, real property
misrepresentation matters and partnership disputes, bankmptcy and foreclostire matters, and
diminution of value matters involving constmction defects, soils subsidence and hazardous waste
issues. 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,
neighborhood retail centers, regional power centers, industrial properties, restaurants, auto service,
multi-use properties, special use properties, large vacant land holdings, many of which involve
sensitive habitat issues, and residential subdivision and golf course oriented plaimed residential
developments. Detailed sensitivity analysis, including discounted cash flow analysis on income
producing properties (offices, retail and industrial) and multi-phased residential subdivision cash flow
analysis, is a specialty area of the firm.
In addition to valuation of properties based upon their highest and best use as developed from market
analysis, Hendrickson Appraisal Company, Inc. provides consulting services relating to altemative uses
for various properties, under differing use scenarios.
Following is a brief summary of the organization of the company. Ted G. Hendrickson, MAI, the
principal valuation expert within the firm has over 25 years of appraisal experience, primarily oriented
toward commercial and subdivision appraising. He has extensive expert witness experience having
testified many times in arbitration and court proceedings. Associate appraisers in the company are
either MAI designated or advanced candidates for the MAI designation and are State of Califomia
Certified General appraisers. The average experience level of the firm's staff appraisers is 15 years,
with primary emphasis on appraisal of all types of commercial properties, large land holdings and
residential subdivisions at various densities.
HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants
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TED G. HENDRICKSON. MAI PROFESSIONAL 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 also served as valuation expert
and arbitrator in arbitration hearings involving property valtiation and lease negotiations with the Port of
San Diego and in other public and private corporate real estate matters.
Mr. Hendrickson's appraisal experience includes valuation of the 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 (residential and industrial) using discoimted cash flow sensitivity analysis.
Mr. Hendrickson holds the highest designation in the appraisal field, the MAI designation. He is past
President of the San Diego Chapter of the Appraisal Institute and has served as chairman and member of
several appraisal committees.
HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants
li QUALIFICATIONS
TED G. HENDRICKSON, MAI
APPRAISAL EXPERIENCE:
1986-Present Hendrickson Appraisal Company, Inc,
President; Real estate appraiser, reviewer, consultant, analyst, and expert witness
Full range of Appraisal/Consulting services, including mediation and arbitration services
Right of Way Eminent Domain Valuation Specialist
1984-1986 Independent 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 of Transportation. 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
Industrial 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
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 Commimities/Land Planning
Mitigation Land Analysis
Cash Equivalency
Valuation of Lease Interests
Eminent Domain Law
University of Southern California (Graduate School of Business)
University of Washington (Graduate School of Business)
PROFESSIONAL: Membership and Service
MAI Designation (#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 of the International Right of Way Association (#1148112)
Chairman and member of several Appraisal Institute committees
Past President of the 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. Real Estate Appraisers • Consultants
QUALIFICATIONS
EDWARD A. BEAVER
APPRAISAL EXPERIENCE:
1987-Present Associate Appraiser, Hendrickson Appraisal Company, Inc.
Residential: Appraisal of all types of residential properties ranging from senior citizen condominiums to
large custom estate properties, both existing and proposed. Appraisal of all 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 muUi-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 acquishion 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 of Califomia Certified General Appraiser #AG009555.
EDUCATION:
Elmhurst College. Elmhurst. Illinois B.S. degree in Mathematics.
National University. 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 Estate Appraisers • Consultants-
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PRIVATE CORPORATIONS
Aetaa Life Insurance Company
Allstate Life Insurance Company
American Express
American General Life Company
Apollo Produce Company
Bank of Califomia
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 National Bank
Coldwell Banker
Collins Development
Cuyamaca Bank
Dokken Engineering
Donald Bren Company
Eckel Development
Emerson Intemational
Equitable Life Insurance Company
Equitable Real Estate
FCI Constmctors
Federal Express
First Interstate Bank
First National Bank
Fluor Daniel
Fresh Express Intemational
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 Commimities
Metropolitan Life Insurance Company
Midas Intemational
Nationwide Mutual Insurance
Nations Bank
Nations Financial
Otay River Constmctors
Pacific Bell
Pacific Mutual Life Company
Pacific Southwest Mortgage
Pacific Homes
Pardee Constmction
Pathfinder Mortgage
Peninsula Bank
Pmdential Insurance
J. R. Horton Development
Safeco Insurance of America
Safeway
Scripps Bank
SDG&E
SDSU Foundation
Sempra Energy
Sickles Development
Southem CaUfomia 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
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GOVERNMENT AGENCIES
CaUfomia Dept. of Transportation
Cathedral City Redevelopment Agency
Centi-e City Development Corp. (CCDC)
City ofCarlsbad
City of Chula Vista
City of El Cajon
City of Encinitas
City of Escondido
Cityoflndio
City of National City
City of Oceanside
City of Pahn 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
Coimty of San Diego
Coimty of Los Angeles
County of Orange
Department of the Navy
Department of Fish and Game
Fallbrook Water District
F.D.LC.
Gillespie Field Airport
Immigration and Naturalization 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 Distiict (NCTD)
Otay Water District
Palomar Airport
Riverside County Transportation Comm.
San Diego Community College District
San Diego Coimty Water Authority
San Diego Unified Port District
San Diego Assoc. of Governments (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
Wildlife 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, Kirmey 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, Worley and Garrat
Tuttle and Taylor
Weeks, Rathbone, Robertson and Johnson
HENDRICKSON APPRAISAL COMPANY, INC. Real Estate Appraisers • Consultants