HomeMy WebLinkAbout; Right of Way 869 Square Foot Parcel Licensed Drainage Facility Appraisal Report; LICENSED DRAINAGE FACILITY; 2014-01-31APPRAISAL REPORT
RIGHT OF WAY
869 SQ. FT. PARCEL
LICENSED DRAINAGE FACILITY
CARLSBAD, CALIFORNIA
APPRAISED FOR
Ms. Beth Freeman
Real Estate Coordinator
North County Transit District
810 Mission A venue
Oceanside, CA 92054
DATE OF VALUATION
January 22, 2014
DA TE OF REPORT
January 31 , 2014
APPRAISED BY
Anderson & Brabant, Inc.
353 West Ninth Avenue
Escondido, California 92025
File No. 14-004
January 31, 2014
Ms. Beth Freeman
Real Estate Coordinator
North County Transit District
810 Mission Avenue
Oceanside, CA 92054
ANDERSON & BRABANT, INC.
REAL ESTATE APPRAIS~RS AND CONSULTANTS
353 W. NINTH A VENUE
ESCONDIDO, CALIFORNIA 92025-5032
TELEPHONE (760) 741-4146
FAX (760) 741-1049
RE: Appraisal of 869 Square Foot Right of Way
Licensed Drainage Facility
Carlsbad CA 92008
P.O. # 31307-000-OP
Dear Ms. Freeman:
As requested, we have personally inspected and appraised the above-referenced land parcel
which is an 869 square foot Right of Way (ROW) portion of 7.14 acres Assessor Parcel Number
203-054-28-00, owned by the North County Transit District. The ROW parcel is located in the
northwest portion of the larger parcel, on the southwest side of the A. T. & S.F. Railroad Tracks,
contiguous to the easterly boundary of a property at 2550 Carlsbad Boulevard and the athletic
field of the Army & Navy Academy immediately south of that property. The purpose of our
analysis is to estimate the fair market value of the ROW parcel to provide a basis for determining
an annual license fee for the use of the property rights, based on current estimated market rates of
return, as of January 22, 2014. This appraisal Report is intended to comply with the reporting
standards as defined by the Uniform standards of Professional Appraisal Practice (USP AP).
Based upon our analysis, it is our opinion that the fair market sales value, the fair market annual
license fee, and the suggested capitalization rate that would be applicable for the fair market values
are shown in the following table.
Fair Market Sale Value $37,400
Fair Market License Fee $3,179 Per Year
Capitalization Rate 8.50%
Anderson & Brabant, Inc.
Ms. Beth Freeman
January 31, 2014
Page 2
The opinions of value expressed herein are subject to certain assumptions and limiting conditions
as set forth in the attached report. A description of the subject and discussions of the data and
analyses that support the value conclusions are also included in the report.
Respectfully submitted,
ANDERSON & BRABANT, lNC.
~~1-Jf~
Brian L. Flannery (/
State Certification No. AGO 17627
/4,~ &/J2.____
William B. Anderson, MAI
State Certification No. AG0023 I 5
869 Square Foot Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
TABLE OF CONTENTS
EXECUTIVE SUMMARY ........................................................................................................ .
ASSUMPTIONS AND LIMITING CONDITIONS ................................................................. 2
APPRAISERS' SIGNED CERTIFICATION........................................................................... 4
INTRODUCTION
Identification of the Property................................................................................................... 5
Purpose of the Assignment...................................................................................................... 5
Estimated Exposure Period...................................................................................................... 5
Effective Date of Value Opinion ............................................................................................. 6
Date of Report......................................................................................................................... 6
Intended Use and User............................................................................................................. 6
Property Rights Appraised ...................................................................................................... 6
Extraordinary Assumptions..................................................................................................... 6
Hypothetical Conditions .......................................................................................................... 6
Scope of Work......................................................................................................................... 7
Report Option .......................................................................................................................... 7
Sales History of the Subject Property ...................................................................................... 7
Location Map ............................................................................................................................. 8
Location Description ................................................................................................................. 9
DESCRIPTION OF REAL EST ATE APPRAISED
Aerial Photograph of APN 203-054-28-00 ............................................................................. 13
Subject Property Photographs ................................................................................................. 15
Site Description ....................................................................................................................... 18
Description of the Improvements ............................................................................................ 20
Tax and Assessment Data ........................................................................................................ 20
VALUATION
Highest and Best Use ............................................................................................................... 21
Valuation Methodology ........................................................................................................... 21
Sales Comparison Approach ................................................................................................... 22
Sales Location Map ................................................................................................................. 23
Summary of Market Data ........................................................................................................ 24
Summary & Conclusion of Value ........................................................................................... 27
Market Lease Value ................................................................................................................. 2 8
ADDENDA
Legal Description
Qualifications of the Appraisers
869 Square Foot Right of Way Parcel, licensed Drainage Facility, Carlsbad, CA
Location:
Assessor's Parcel No.:
Thos. Bros. Map Code:
Owner of Record:
Land Description:
.Size:
Zoning:
General Plan:
Flood Zone:
Seismic Hazard:
Topography:
Access:
Utilities:
Improvements:
Interest Appraised:
Highest and Best Use:
Date of Value:
Date of Report:
Estimated Market Values:
Exposure Time:
Special Assumptions:
Anderson & Brabant, inc.
EXECUTIVE SUMMARY
North of the easterly terminus of Beech A venue, between
the northeasterly boundary of2550 Carlsbad Boulevard and
the southwesterly side of the A.T. & S.F. Railroad tracks,
Carlsbad, California 92054
Portion of APN 203-054-28-00
1106-D5
North County Transit District
869 Square Feet
V-R-Village Review
TC -Transportation Corridor, within V -Village Area
Zone X, per FEMA Community Map No. 06073C0761G,
dated May 16, 2012.
None known
Moderately sloping
(See text)
All to site
None
Fee Simple
Licensed Drainage Facility
January 22, 2014
January 31 , 2014
Fair Market Sale Value
Fair Market License Fee
Caoitalization Rate
12 months
(see page 2)
$37,400
$3, 1 79 Per Year
8.50%
1
869 Square Foot Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
ASSUMPTIONS AND LIMITING CONDITIONS
This appraisal is subject to the following special assumptions and limiting conditions:
1. This is an Appraisal Report which is intended to comply with the reporting requirements set
forth in the Uniform Standards of Professional Appraisal Practice (USPAP). As such, it
includes discussions of the data, reasoning, and analyses that were used in the appraisal
process to develop the appraisers' opinion of value. Supporting documentation concerning
the data, reasoning, and analyses has been retained in our file. The information contained in
this report is specific to the needs of the client and for the intended use stated in this report.
Reliance on this report is limited to the client and it should not be distributed to any party not
identified as an intended user. The appraisers are not responsible for unauthorized use of this
report.
2. No title report or title information was provided to the appraisers. For purposes of this
appraisal, the assumption is made that there are no easements in place that have an adverse
effect on the value or use of the subject Right of Way (ROW) land parcel that is the subject of
this appraisal in accordance with its highest and best use.
3. The opinions and conclusions included in this report are based on information available and/or
discovered as of the date of the report. The appraisers reserve the right to change those
opinions and conclusions if additional information which is in any way pertinent, such as
items specific to the property or additional market data, becomes available and/or is
discovered subsequent to the appraisal report date.
This appraisal is subject to the following general assumptions and limiting conditions:
1. It is assumed that information furnished to us by our client, including maps, cost estimates, and
legal descriptions, is substantially correct.
2. No responsibility is assumed for matters legal in character, nor do we render an opinion as to
title, which interest is assumed to be held as the fee simple estate as of the date of valuation
unless otherwise specified.
3. It is assumed that the property is readily marketable, free of all liens and encumbrances except
any specifically discussed herein, and under responsible ownership and management.
4. Photographs, plats, and maps furnished in this appraisal are to assist the reader in visualizing the
property. No survey of any property has been made and no responsibility has been assumed in
this matter.
5. It is assumed that there are no legitimate environmental or ecological reasons that would prevent
the continued use of the property or orderly development of the land as though vacant to its
highest and best use under economically feasible conditions.
6. We are not qualified to detect hazardous waste and/or toxic materials. Any comment by us that
might suggest the possibility of the presence of such substances should not be taken as
confirmation of the presence of hazardous waste and/or toxic materials. Such determination
would require investigation by a qualified expert in the field of environmental assessment. The
presence of substances such as asbestos, urea-formaldehyde foam insulation, or other potentially
hazardous materials may affect the value of the property.
Anderson & Brabant, inc. 2
869 Square Foot Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
Our value estimate is predicated on the assumption that there is no such material on or in the
property that would cause a loss in value unless otherwise stated in this report. No
responsibility is assumed for any environmental conditions, or for any expertise or
engineering knowledge required to discover them. Our descriptions and resulting comments
are the result of the routine observations made during the appraisal process.
7. Possession of this report, or a copy thereof, does not carry with it the right of publication. rt
may not be used for any purpose by any person other than the party to whom it is addressed and
the identified intended users without the written consent of Anderson & Brabant, Inc., and in
any event, only with proper written qualification and only in its entirety.
8. Disclosure of the contents of this appraisal report is governed by the by-laws and regulations of
the Appraisal Institute. Neither all nor any part of the contents of this report (especially
reference to the Appraisal Institute or the MAI designation) shall be disseminated to the public
through advertising media, public relations media, news media, sales media, or any other public
means of communication without prior written consent and approval of Anderson & Brabant,
Inc.
9. The submission of this report constitutes completion of the services authorized. It is submitted
on the condition that the client will provide the appraiser customary compensation relating to
any subsequent required depositions, conferences, additional preparation or testimony.
10. The valuation estimate is of surface rights only and the mineral rights, if any, have been
disregarded. No warranty is made as to the seismic stability of the subject property.
Anderson & Brabant, inc. 3
869 Square Foot Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
APPRAISERS' SIGNED CERTIFICATION
We do hereby certify that, to the best of our knowledge and belief ...
l. 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, are our personal, unbiased professional analyses,
opinions and conclusions.
3. We have no present or prospective future interest in the property that is the subject of this
report, and we have no personal interest or bias with respect to the parties involved.
4. We have no bias with respect to the property that is the subject of this report or to the parties
involved with this assignment.
5. We have not performed any services regarding the subject property, as appraisers or in any
other capacity, within the three (3) year period immediately preceding acceptance of this
appraisal assignment.
6. Our engagement in this assignment was not contingent upon developing or reporting
predetermined results.
7. Our compensation for completing this assignment is not contingent upon the developing or
reporting of a predetermined value or direction in value that favors the cause of the client,
the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a
subsequent event directly related to the intended use of this appraisal.
8. Our analyses, opinions, and conclusions were developed, and this report has been prepared,
in conformity with the requirements of the Code of Professional Ethics and Standards of
Professional Practice of the Appraisal Institute, which includes the Uniform Standards of
Professional Appraisal Practice.
9. The use of this report is subject to the requirements of the Appraisal Institute relating to
review by its duly authorized representatives.
10. Brian L. Flannery made a personal inspection of the property that is the subject of this
report.
11. No one provided significant real property appraisal assistance to the persons signing this
certification.
~~nn~Je~
State Certification No. AGO 17627
January 31, 2014
Date
12. As of the date of this report, I have completed the continuing education program of the
Appraisal Institute.
Anderson & Brabant, Inc.
Iv~ t>,,(Q____
William B. Anderson, MAI
State Certification No. AG0023 I 5
January 31, 2014
Date
4
869 Square Foot Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
INTRODUCTION
IDENTIFICATION OF THE PROPERTY
The appraised property is an 869 Square Foot right-of-way portion of 7 .14 acre Assessor
Parcel Number (APN) 203-054-28-00. It lies north of the northeasterly terminus of Beech
Avenue, between the northeasterly boundary of a property at 2550 Carlsbad Boulevard, and the
Army and Navy Academy athletic fields just south of that property, and the southwesterly side of
the A.T. & S.F. Railroad tracks, in Carlsbad, California 92054.
Legal Description
We were not provided with a title report for the subject right of way parcel, but were
provided with Engineering Plat Maps and a legal description of the parcel within which the
ROW parcel is located, 203-054-28-00. A copy of the complete legal description, identified as
"Exhibit A," is included in the Addenda to this report.
Ownership
Per the client, title to the subj ect right of way parce.1 is vested as follows: North San
Diego County Transit District.
PURPOSE OF THE ASSIGNMENT
The purpose of this appraisal assignment is to estimate an opinion of a fair market annual
license fee for the subject 869 square foot parcel, currently occupied by the NCTD.
As used in this report, Fair Market Value is defined as follows:
"(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 property 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
ESTIMATED EXPOSURE PERIOD
As a requirement of the Uniform Standards of Professional Appraisal Practice, we have
provided an estimate of the exposure period for the subject property. The exposure period or
time is the estimated length of time the property interest being appraised would have been
offered on the market prior to the hypothetical consummation of a sale at market value on the
effective date of the appraisal; a retrospective opinion based upon an analysis of past events
assuming a competitive and open market. Exposure time is different for various types of real
1 California Code o/Civil Procedure, Title 7, Sec. 1263.320 and 1263.330
Anderson & Brabant, Inc. 5
869 Square Foot Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
estate and under various conditions. It is noted that the overall concept of reasonable exposure
encompasses not only adequate, sufficient, and reasonable time, but also adequate, sufficient and
reasonable effort. The reasonable exposure period is a function of price, time, and property use.
To assist us in determining a reasonable estimate of exposure time for the subject
property, we attempted to extract the marketing periods of the data used in the Sales Comparison
Approach section of this report. We also discussed past marketing periods with local agents and
brokers and relied on information from our office in prior reports. Those interviewed indicated
that marketing periods could fluctuate from several weeks up to one year or longer, depending on
the appeal and characteristics of the property. Based on observed market conditions, it is our
opinion that the exposure time for the subject property described in this report would have been
up to 12 months if marketed for sale at or near market value.
EFFECTIVE DATE OF VALUE OPINION
The effective date of the opinion of values expressed herein is January 22, 2014.
DA TE OF REPORT
The date of this appraisal report is January 31, 2014.
INTENDED USE AND USER
It is understood that the appraisal report will be used by the client, the North County
Transit District (NCTD), for internal purposes and future licensing negotiations. We are not
responsible for any unauthorized use of this report.
PROPERTY RIGHTS APPRAISED
The appraised values pertain to the fee simple interest or estate in the subject property. The
definition of fee simple estate is as follows.
"Absolute ownership unencumbered by any other interest or estate, subject only to the
limitations imposed by the governmental powers of taxation, eminent domain, police
power, and escheat." 2
EXTRAORDINARY ASSUMPTIONS
An extraordinary assumption is something that is assumed to be true, but is not certain. No
extraordinary assumptions were considered in this analysis. However, this appraisal is subject to
certain special and general assumptions as outlined on pages 2 and 3 of this report.
HYPOTHETICAL CONDITIONS
Hypothetical conditions are known to be false, but are presumed to be true for the
purpose of reasonable analysis. No hypothetical conditions were considered in our analysis.
2 The Appraisal of Real Es1a1e, 13th ed. (Chicago: Appraisal Institute, 2008), p. 114
Anderson & Brabant, Inc. 6
869 Square Foot Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
SCOPE OF WORK
The indicated value expressed in this appraisal report reflects the property condition as it
physically, legally, and economically exists on the effective date of value. In preparing this
appraisal, we took the following steps.
• The first step in the analysis was to conduct a preliminary survey of the subject property and
surrounding area in order to more accurately define the appraisal problem and identify the
methods and techniques necessary to accomplish the objective of this appraisal report. Legal
aspects of the subject property were investigated regarding its potential uses within the
context of its surrounding area.
• The general area was inspected for the purpose of identifying those specific boundaries
within which data that could be considered relevant to this analysis would most likely be
located. The intent of this inspection was also to identify physical conditions, neighborhood
development trends, and other factors that affect real property value in the subject area. We
have examined the general economy of the region and community to determine trends in
population, housing, employment, financing, and market conditions.
• A detailed search of the primary market area of the subject was performed in order to collect
relevant and comparable sale data. These data have been considered for direct comparison
to the appraised property when appropriate. The depth of the analysis was intended to be
appropriate in relation to the significance of the appraisal problem. These data have been
analyzed and confirmed with principals, their representatives, or agents leading to the value
conclusion set forth in this report. The valuation process involved the utilization of all
techniques and procedures considered appropriate to the assignment. Sources of data
included the County Recorder's office, various market data services, published reports, and
personal contacts.
• The three traditional approaches to value include the Cost, Sales Comparison, and Income
Approaches. Of these three, the Sales Comparison Approach to estimate the fair market land
value of the right-of-way parcel was considered to have specific applicability in the valuation
of the subject property. Upon determination of highest and best use, reliable market data were
analyzed on the basis of their overall degree of comparability to the appraised property.
• The final step entailed the organization and drafting of the appraisal report.
REPORT OPTION
This is an Appraisal Report as defined by the Uniform Standards of Professional
Appraisal Practice (USPAP). It presents summary discussions of the data, reasoning and
analyses that were used in the appraisal process to develop the appraisers' opinion of value.
SALES HISTORY OF THE SUBJECT PROPERTY
According to public records, the subject right of way parcel has not been involved in a
conventional sale transaction within the three year period that precedes the date of value, and has
been under the ownership of the North County Transit District since at least December 15, 1992.
Anderson & Brabant, inc. 7
869 Square Foot Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
lhll ,t .t••~lm_cr ___ ~
c,,,,,.,
Anderson & Brabant, Inc.
LOCATION MAP
c .. ,
,
,..,
·-
(ll6 ~IFORNIA
AREA MAP
••••• v,,,.
NEIGHBORHOOD MAP
_,
(1''
D I e O 0
-·--·--....
-.. --.. ------
\ ,..# ~
\
8
869 Square Foot Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
LOCATION DESCRIPTION
Region
The subject is located in the city of Carlsbad in the northwestern part of San Diego
County, California. San Diego County is located in the extreme southwesterly comer of the
United States and is bordered by the Pacific Ocean to the west, the California/Mexico border to
the south, Orange and Riverside Counties to the north, and Imperial County to the east. San
Diego County is the second largest county in the State of California based on population which,
as of January l, 2013, was estimated by the California Department of Finance Demographic
Research Unit at 3,150,178 persons. This reflects an increase of less than one percent from the
January 1, 2012 total ofJ,128,734.
The county includes the State's second most populous city and offers such geographic
features as mountainous regions of the Cleveland National Forest, the Anza Borrego Desert, the
International Border with Mexico, and over 50 miles of Pacific Ocean coastline. These features,
and the area's temperate year-round climate, are among the county's major attractions. Most of
the county's population is located along the coastal region, inland valleys, and foothills, within
approximately 25 to 30 miles of the ocean. The mountains and deserts are only sparsely
developed and populated.
On a regional basis, San Diego County is served by three major freeways. These include
Interstate 5, a coastal route connecting San Diego with Baja California to the south and the states
of California, Oregon, and Washington to the north; Interstate 8, a major east-west route
connecting San Diego with Arizona and other southwestern states to the east; and Interstate 15,
an inland route connecting San Diego with Riverside and San Bernardino Counties and other
points to the northeast. There are several important local freeways that provide access within the
region. These include Interstate 805 that runs inl.and from and parallel to Interstate 5; State
Route 94, parallel to Interstate 8; State Route 163, connecting Interstate 15 with Downtown San
Diego; and State Route 78, the major east-west freeway in northern San Diego County.
San Diego International Airport (Lindbergh Field) is located to the west of the subject
and is close to Downtown San Diego. This airport is serviced by 18 commercial airlines and
four scheduled air-freight services. There are an additional eight small public airports located
throughout the county. There is little commercial air activity at these facilities. Rail service is
provided by San Diego and Arizona Eastern Railroad, Santa Fe Railroad, and Amtrak.
Industrial/commercial use of the rail lines for freight carriage has declined in San Diego over the
past 15+ years. However, the Amtrak line between San Diego and Los Angeles is popular with
commuters. The San Diego Trolley (light rail transit system) has opened several commuter
routes in the southern and eastern portions of San Diego County that have proven very popular.
Individual transit districts throughout the county provide local bus service.
The San Diego region has been impacted by the global financial crisis, considered the
worst of its kind since the Great Depression. It became prominently visible in the past decade
with the failure, merger or conservatorship of several large United States-based financial firms.
The underlying causes leading to the crisis had been reported in business journals with
commentary about the financial stability of leading United States and European investment
banks, insurance firms and mortgage banks consequent to the subprime mortgage crisis that
Anderson & Brabant, Inc. 9
869 Square Foot Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
commenced in 2007. The failures of large financial institutions in the United States and Europe
led to dramatic declines in various stock indexes and significant reductions in the market-value
of equities (stock) and commodities worldwide. The crisis has led to a liquidity problem and the
de-leveraging of financial institutions, especially in the United States and Europe, which further
accelerated the liquidity crisis. World political leaders, national ministers of finance, and central
bank directors have coordinated their efforts to reduce fears, but the crisis is ongoing and
continues to change. The economic downturn has been reflected in several other important
economic indicators.
Along with the economic downturn came a marked increase in unemployment. However,
optimism as to a growing economy is seen in improving employment statistics. Based on
statistical data from the California Employment Development department, the unemployment
rate in San Diego County in December 2013 dropped to 6.4 percent from a revised 6.9 percent in
November 2013, and well below the year-ago estimate of 8.2 percent. The San Diego County
unemployment rate in December 2013 was below the state level of 7 .9 percent and the national
rate of 6.5 percent.
The University of San Diego publishes an Index of Leading Economic Indicators for the
San Diego regional economy. The index had posted positive numbers from April 2003 up to
March 2006 when it peaked at 144.2. The Index declined nearly every month thereafter until
March 2009 when it reached 100. 7. Since March 2009 the index has increased slightly every
month, reaching a recovery high of 128.5 in September 2013, before declining slightly to 128.0
in October 2013, the most recent figure available.
The primary source of current economic instability is from Europe. The Greek debt crisis
has created concern in international markets for months. As of the date of value, the Greek crisis
has lessened to some extent and the current focus of concern is Spain, with 25% unemployment
and its banking system in distress. Several major Spanish banks have recently been downgraded
by Moody's as the banks attempt to deal with billions in toxic loans leftover from the 2008 real
estate market collapse. At the same time, austerity measures enacted across the European Union,
led primarily by Germany, have stagnated growth across Europe and several countries in the EU.
How this will affect the US economy remains uncertain.
Economic news in the US and the San Diego region since the summer of 2011 has been
positive and economists are cautiously optimistic about the economy. At the very least, concern
over a double dip recession has lessened. There also appears to be increased activity in the real
estate market. Recently developers have begun new projects in high demand coastal areas such
as Carlsbad and Encinitas, as well as scattered locations throughout the County. How Jong until
this increased demand absorbs the existing residential product on the market, and then extends to
other areas in San Diego County, remains to be seen.
City and Neighborhood
The subject larger parcel is located north of the easterly terminus of Beech A venue,
abutting the northeasterly boundaries of 2550 Carlsbad Boulevard (The Scandia Motel) and 2500
Carlsbad Boulevard (The Army & Navy Academy Athletic Fields), and the southwesterly side of
the A.T. & S.F. Railroad tracks, in Carlsbad. The subject is convenient to coastal beaches, the
Anderson & Brabant, Inc. JO
869 Square Foot Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
central downtown retail/commercial district of Carlsbad, major freeways and other city
thoroughfares, as well as to residential districts of the city.
The population of Carlsbad, as of January 1, 2013, was 108,246. Retail facilities serving
Carlsbad are located at Highway 78 and El Camino Real, (Camino Real Shopping Center) on the
north side of the city; along Paseo Del Norte north of Palomar Airport Road (Carlsbad Car
Country and Carlsbad Company Stores) to the east of the subject along Interstate 5; in the
downtown area toward the northwest corner of the corporate boundaries along Carlsbad Village
Drive west of Interstate 5, and in other neighborhood shopping locations throughout the city.
Major industrial development in Carlsbad is focused along Palomar Airport Road and the
intersection of El Camino Real, in the vicinity of McClellan-Palomar Airport, approximately
three miles east of Interstate 5. Industrial development started in this area in 1975 on land near
the McClellan-Palomar Airport and was originally oriented to general warehousing. The
development of the area was interrupted originally by a Carlsbad sewer moratorium and later by
poor economic conditions. However, by the early to mid-1980's, development in the area was
progressing rapidly, and the area continues to be a focal point for industrial development in the
County today.
Significant development can be found in the area to the west of McClellan-Palomar
Airport, including projects within the 424 acre Carlsbad Ranch, which incorporates the 128 acre
Lego/and California theme park that opened in March 1999. Other projects include the 700
room Pointe Resort, a 280 room hotel, the headquarter facilities for the Gemological Institute of
America, 800,000 square feet of office and industrial space, and a specialty retail center.
Among the most prominent newer development projects in Carlsbad is Bressi Ranch, a
585-acre mixed use project located at the southeast quadrant of Palomar Airport Road and El
Camino Real. As planned, Bressi Ranch will ultimately include approximately 2,160,500 square
feet of industrial space on 150 acres; 623 residential units, including 523 single family units and
100 multi-family units; and over 190 acres of open space.
In addition to the industrial component of Bressi Ranch, other industrial development in
Carlsbad includes Carlsbad Oaks North which will result in development of 23 industrial lots
ranging in size from 2.0 acres to 20.7 acres, totaling 143.7 net usable acres, and the Carlsbad
Raceway and Palomar Concourse projects. Carlsbad Raceway is located along the north side of
Palomar Airport Road.
Another element in the future development of Carlsbad is the proposed realignment of
Carlsbad Boulevard in South Carlsbad and adjacent to South Carlsbad State Beach. Since the
early 1980's the State of California and the city of Carlsbad have envisioned the proposed
realignment which would involve the creation of additional recreational areas; improve parking,
and expand the South Carlsbad State beach campground, along with several other measures. The
City intends to realign Carlsbad Boulevard generally between Cannon Road and Batiquitos
Lagoon by exchanging State of California Park properties for city of Carlsbad properties that are
primarily within the existing alignment of Carlsbad Boulevard. The vacated portions of existing
Carlsbad Boulevard would then be exchanged for State Park lands generally comprised of land
located east and west of Carlsbad Boulevard and north of Palomar Airport Road. The land
acquired by the State would be incorporated into the South Carlsbad State Beach and the City
Anderson & Brabant, Inc. 11
869 Square Foot Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
acquired lands would provide development opportunities for future City projects. The result
would reduce certain portions of Carlsbad Boulevard from two travel lanes in each direction to
one travel lane in each direction. Other significant changes would include reconfiguring the
Carlsbad Boulevard/Palomar Airport Road.
Anderson & Brabant, Inc. 12
869 Square Foot Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
SUBJECT LARGER PARCEL & RIGHT OF WAY AREA
The Subject ROW is located within APN 203-054-28 as shown below & on pages 16 thru 18.
Anderson & Brabant, Inc. 13
869 Square Foot Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
SUBJECT RIGHT OF WAY DRAJNAGE FACILITY
Looking northwesterly at Drainage Facility (fenced area) from NCTD Coaster Parking Lot.
Looking westerly at Drainage Facility (fenced area) from NCTD Coaster Parking Lot.
Anderson & Brabant, Inc. 14
869 Square Foot Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
PLAT MAP LARGER PARCEL
@ ~~~•h\ ~ \
1---+----~~'-n----V.i~ '\
'
€D
•'\ ,.
APN 203-054-28-00
Anderson & Brabant, Inc.
♦
Approximate location of
869 SF subject parcel
15
869 Square Foot Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
LICENSE PLAT SUBJECT DRAINAGE FACILITY
EXHIBIT "B"
SCALE t"•JO'
175
---------7
I
SANTA fE PLACE I
____ _, _ _J
I
I
I
I
I
I
J\JJJ-\P ------,
I
173
I
------i
I
172 I
l
I
~I Z \
~I
tl 1
-----:::-~-~::!'"I-, ► l
Fl
l ~1
171 I I
l l
170
I
I
I
_-I
-----I
I
\
I
I
I
I
I
I
I
I
176
f))A DENOTES AREA OF LICENSE
----869 SQ.FT. MORE OR l.£5S
Right-Of-Way En(ineerinJ Servkea, Inc.
1116 -lb 'J'remo:,I -• -CA llll064 ('NIO) 837-2'100 FAX ('tel) IIS7•2701
O<O•i"',I rle Nlffl« '$co~-Olo NC--11> [.,_Lct.9
Joo No.: 0712-0106-07
Anderson & Brabant, inc.
203 7 SOUTHEAST
CORNER Or
LOT \76
TlilS PLAT WAS PREPARED B\' ME OR UNDER MY OIRECllON IN CONF"ORMANCE 'MTH
TliE PROFESSIONAL LANO SURVEYOR'S ACT
!AICH ,.EL L. S()lLUMPBERGE:R, PLS 7790
CITY OF CARLSBAD
LICENSE PLAT
'IESTJNG; OA111 SAN DIEGO COUNlY fflANSll
DEVELOPMENT BOARD
DATE: NOi/EMBER IJ, 201J SHEET I Of I
16
869 Square Foot Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
STORM DRAIN PLAT-SUBJECT PARCEL
,·-w
Anderson & Brabant, Inc.
EXHIBIT "B"
aTY OF CARLSBAD
ORTH COUNTY TRANSIT DISTRICT
STORMDRAIN PLAT
228.9-XXXX-DR-CARL
OAlE: NO\OIIEt 13,, 2013 SHEET 1 Of 1
17
869 Square Foot Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
DESCRIPTION OF REAL EST A TE APPRAISED
SITE DESCRIPTION
Land Area/Shape
As shown in the Plats on pages 16 and 17, the subject property consists of an 869 Square
Foot portion of land that is contained entirely within Assessor Parcel Number 203-054-28-00.
Topography/Drainage
The subject consists of a moderately sloping parcel that extends along and slightly above
the grade of the NCTD Coaster tracks to the northeast. Based on our inspection we did not
detect any evidence of site drainage concerns.
Toxic/Hazardous Substances
No Phase I Environmental Site Assessment was furnished that would verify the existence
or absence of toxic materials. The final conclusions of value reflect the assumption that there are
no toxic wastes on or in the subject land that would negatively impact its value or use.
Soils
No soils report was provided for this assignment. For purposes of this appraisal, it is
assumed that the soil throughout the subject property possesses the potential bearing capacity
that would allow for the development of the subject property to its highest and best use.
Utilities
All public utilities including electrical power, water, and sewer are located on the
adjacent properties to the southwest, the Scandia Motel and the Army & Navy Academy.
Access
There is no direct vehicular access to the subject parcel. The subject parcel is accessible
on foot via a dirt pathway along the southwesterly side of the A.T. & S.F. Rail Road tracks that
can be accessed from the northeasterly terminus of Beech Street.
Easements & Encumbrances
We were not provided with a copy of a Title Report, but were provided with two Plat
Maps, each identified as Exhibit "B," located on pages 16 and 17, which show that the proposed
subject Drainage Facility parcel lies within an existing A.T. & S.F. Railroad right of way. As
discussed below, the subject right of way is zoned T-C, Transportation Corridor, with the limited
allowable uses already established by the city of Carlsbad. As such, for purposes of this
appraisal, the assumption is made that there are no easements in place that have an adverse effect
on the value or use of the subject parcel in accordance with its highest and best use.
Land Use
The Larger Parcel, Assessor Parcel No. 203-054-28, within which the subject ROW
parcel is located, is designated as T-C, Transportation Corridor by city of Carlsbad zoning and
General Plan. The intent and purpose of the T-C zone is to provide for and ensure the
preservation of certain public transportation rights-of-way which will:
Anderson & Brabant, Inc. 18
869 Square Foot Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
1. Ensure that adequate land area is available for future transportation modes;
2. Insure compatibility of the development with the general plan and the surrounding
developments;
3. Insure that due regard is given to environmental factors;
4. Provide for public improvements and other conditions of approval necessitated by the
development.
Uses permitted by right within the Transportation Corridor zone include:
1. Agriculture, limited to the following uses, and buildings accessory to such
agricultural uses: A) Field and seed crops, B) Truck crops, C) Horticultural crops, D)
Orchards and vineyards, E) Tree farms, F) Fallow fields.
2. Light-rail transit related facilities consisting of: A) Tracks, B) Energy transmission
facilities, including rights-of-way and pressure control or booster stations for
gasoline, electricity, natural gas, synthetic natural gas, oil or other forms of energy
sources, C) Maintenance/repair facilities, D) Stations.
3. Public streets.
4. Railroad tracks and related facilities.
5. Recreational facilities (public) limited to: A) Passive open space, B) Bicycle paths, C)
Pedestrian trails.
6. Signs, except for billboards, subject to the provisions of Chapter 21.41 of the
Municipal Code.
Zoning uses allowed by Conditional Use Permit (CUP) include Parking lots, Railroad
museum, and Recreation use open to the public such as tennis courts, picnic areas and similar
temporary uses, each subject to Planning Commission hearing process. There are no permitted
Accessory uses. There shall be no minimum lot area established for the T-C zone. The size of
the lot shall be dependent upon the existing or proposed use.
The General Plan states that "Land uses that would be compatible with the corridors
would be temporary and low-intensity in nature, such as passive parks, open space, or
agriculture. In this way, corridors would remain available for future transportation needs." This
would preclude any independent development of the subject ROW parcel or assemblage with an
adjacent property for development on the subject parcel.
1n addition to the limitations imposed by City land use designations, the subject property
falls within the purview of multiple agencies that include some or all of the following: the
California Coastal Commission, the Army Corps of Engineers, the California Department offish
& Game, and the Regional Water Quality Control Board.
Flood Zone
According to FEMA Map Community Map Panel No. 06073C0761 G, dated May 16,
2012, the subject is located within Flood Zone X, an area determined to be outside of the 500-
year floodplain.
Anderson & Brabant, Inc. 19
869 Square Foot Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
Earthg uake Zone
The subject property is not within an Alquist-Priolo Earthquake Special Studies Zone.
However, the site is located in an area prone to seismic events, a condition shared with other
properties located in the Southern California area.
DESCRIPTION OF THE IMPROVEMENTS
The subject is improved with concrete drainage vaults as shown in the photos on page 14.
ASSESSMENT DAT A
As the subject site is owned by a public utility it is not assessed by the San Diego County
Assessor. Property taxes are determined pursuant to assessments issued by the State Board of
Equalization. Upon a sale the subject property would be re-assessed and if the buyer were a
private party the subject would be assessed by the County at the applicable tax rate.
Anderson & Brabant, Inc. 20
869 Square Foot Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
VALUATION
HIGHEST AND BEST USE
Highest and Best Use is an important concept in real estate valuation as it represents the
premise upon which value is based. Highest and Best Use is defined as follows.
"Highest and Best Use is the reasonably probable and legal use of vacant land or
an improved property that is physically possible, legally permissible, appropriately
supported, financially feasible, and that results in the highest value." 3
The city of Carlsbad zoning and general plan designations for the subject property are TC,
Transportation Corridor. The allowable land uses have previously been summarized on page 19 of
this report.
The subject ROW parcel is currently not a separate legal parcel that could be
independently sold or transferred. It lies within an existing A. T. & S. F. Railroad Right of Way.
It is bordered on the northeast by the NCTD Sprinter tracks and to the southwest by a motel and
the Army & Navy Academy sports field. Given the subject ROW's location and configuration, its
indirect and undeveloped access, as well as use restrictions based on its zoning and agency
oversight which precludes any independent development or assemblage with an adjacent property
for development, we have valued the subject property utilizing the "across the fence method." This
is "A land valuation method typically used to estimate the value of a real estate corridor, including
railroad or pipeline rights of way, highways, or other corridor real estate. The price or value of
land adjacent to the corridor (i.e., "across the fence'') is considered for the valuation."4 The land
adjacent to the corridor is zoned V-R, Village Review and designated in the General Plan as V -
Village. These designations address land uses in the heart of "old" Carlsbad in the area commonly
referred to as the "downtown." Pennitted land uses may include retail stores, offices, financial
institutions, restaurants and tourist-serving facilities. Residential uses can be intennixed throughout
the area. The Village Area is regulated by the Carlsbad Village Master Plan. The comparable data
selected reflect the predominantly commercial land use emphasis of the V-RN designations.
VALUATION METHODOLOGY
In this appraisal we have sought land value only. The three common valuation approaches
in real estate include the Cost Approach, lncome Approach, and Sales Comparison Approach.
Of these three, the Sales Comparison Approach and an Income Approach utilizing a market rate of
return analysis on the estimated market value of the subject land parcel were considered to have
specific applicability in the valuation of the subject property. The Sales Comparison Approach
relies on the concept that a prudent buyer would pay no more for a property than it would cost to
acquire a comparable substitute. Sales of similar properties are compared directly to the subject
to arrive at an indicated value. The preceding sections of this report provide a description of the
subject property, and the following section includes a description and analysis of the data used in
the valuation process.
3 The Appraisal of Real Es/ale, 13"' ed. (Chicago: Appraisal Institute, 2008), p. 277
• The Dicliona,y of Real Esrare Appraisal, 4"' ed. (Chicago: Appraisal Institute, 2002), p. 5
Anderson & Brabant, Inc. 21
869 Square Foot Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
SALES COMPARISON APPROACH
The reliability of this valuation technique is dependent upon the availability of
comparable sales data, the verification of the data, the overall degree of comparability of the
data, and the absence of non-typical conditions affecting the sales prices. We have investigated
pub)jsbed reports and contacted and interviewed, wherever possible, various local brokers and
agents, including the buyers' and/or sellers' representatives. The highly developed and utilized
nature of the southern California coastal area limits the potential for land sales. In addition,
because of the extremely depressed real estate markets, there have been very few commercial
land transactions in the area over the last three years. As a consequence, even though the data
selected are considered to be the best available for comparison purposes, they still reflect
properties that may vary from the appraised property in many significant ways. In addition, two
are older sales, therefore making quantitative analysis difficult and somewhat subjective at times.
The typical unit of comparison considered in the analysis of parcels of land suitable for
commercial use is the price paid per square foot of land.
The comparable sales are summarized in a grid found on the following page. Discussions
of the data with aerial photographs of the data follow the summary grid. An adjustment grid that
reflects noted diffe~ences between the sales and the subject is found later in this section of the
report.
Anderson & Brabant, Inc. 22
869 Square Foot Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
SALES LOCATION MAP
""'" 5'<.EN0,4 101S N.Coesttiwy.,
Pe C /t I C O C I e ~1..SUIJE_CT ____ _,
Anderson & Brabant, Inc. 23
869 Square Foot Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
SUMMARY OF COMPARABLE LAND DATA
SALE UX:ATION/APN TIIOSBROS SALE OOC.NO. BUYER/SEil.ER PARCEL ZONING/GENERAL COMMEJ-ITS SALE PRICE/SF NO. MAP CODE DATE SIZE(SI') PIAN TOPO PRICE
Nonh of Beech SI. & V,RN All Utililics to si1e; West of AT&SF RR Troclts ---/North County Tnmsit SUBJ. Carlsbad 1106-05 ------District 869 City of Carlsbad Sloping Concrete-Drain11gc ··-·
Vaults on site
Por 203-054-28·00
1044 C,ulsbad Village Dr. Under .. / V-RN Level
I Carlsbad 1106-E5 Contract NA Jane Sonneman 60,112 City of Carlsbad Partially AU Utilities to site $3,250,000 $54.07
203-320-32 & 47 Improved Lot
2865 Jefferson St. V-RN All Utilities on site;
2 Carlsbad 1106-E5 N0\••13 736828 Naber Family Trust/ 9.095 City of Carlsbad Level buyer to eventually $645,000 $70.92 Goll Family Trust Older SFR rcde,•clop for
203-110-32 commercial use.
1430 S. Melrose Or. Edward Olson/ CG-PBD/GC Lc,•cl
3 Oceanside 1107-03 Oec-13 736934 Sieve Matsovas 65,340 City of Oceanside Roosf, Graded All Utilities to site Sl,700,000 $26.02
169-011-44
IOISN.Co11StH")'• Judith Edick Trust 9-21-98/ O/Coastal Com'l Level 4 Oceanside 1106-B2 Oct-II 540295 l0,072 City of Oceanside All Utilities to site $275,000 $27.30
143-040-20 Donhy E. S.tten Improved Lot
314 N. Cleveland St. Ardeshir Babaknia/ 0/HR Level 5 OceM.Sido 1086-A 7 Dec-I I 706031 Chcgni family Trust 15,000 City of Oceanside Improved Lot All Utilities to s.itc $460,000 $30.67
147-088-13 & 14
Anderson & Brabant, Inc. 24
869 Sq. Ft. Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
Land Sale Discussion
SaJe No. 1 is the pending sale of a 60,112 square foot level parcel of land, approximately
two-thirds of which is asphalt paved with the baJance in raw, undeveloped condition, located at
1044 Carlsbad Village Drive in Carlsbad. The parcel is about one-half mile east of the subject,
adjacent to the southbound off ramp of the Interstate 5 freeway. The Listing Agent reported that
the property is under contract at a price above the $3,250,000 Listing price, but couldn't reveal
the actual saJes price because of confidentiality agreements. For purposes of analysis we have
utilized the Listing price which equates to $54.07 per square foot of land. The property has the
same zoning and land use designations as the subject. The potential buyer's tentative plans for
the property are a mixed-use project, with ground floor retail/office and second level residential.
This property was considered superior for location/access/exposure and site condition. It was
adjusted upward for its larger size. After adjustments it indicates a land vaJue for the subject of
$43.25 per square foot.
Sale No. 2 is the November 14, 2013 purchase for $645,000 or $70.92 per square foot of
land, of a 9,095 square foot interior parcel located at 2865 Jefferson Street in Carlsbad. The
level lot is located about one-quarter mile east of the subject and has the same zoning and land
use as the subject. It is currently improved with an older (1957) single-family residence that has
been renovated since then. The buyer had no immediate development plans for the property but
Anderson & Brabant, Inc. 25
869 Sq. Ft. Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
acquired it for future commercial redevelopment of either an office building or a small 4 or 5
unit multi-family residential complex, both of which are allowed in Carlsbad's District 7 where
the property is located. Downward adjustments were made for this property's better site
condition and the contributory value of the single-family residence which can be owner-
occupied or leased out pending future redevelopment. After adjustments it indicates a land
value for the subject of $49.64 per square foot.
Sale No. 3 is the December J 2, 2013 sale of a 65,340 square foot, generally level, land
parcel in raw, undeveloped condition located about five miles east of the subject at 1430 S.
Melrose Drive in Oceanside. The site is within a Planned Business District. The zoning/land
use designation is General Commercial and the proposed use is a future medical office building.
The purchase price was $1 ,700,000 or $26.02 per square foot ofland. All utilities are to the site
and curbs, gutters and sidewalks are installed. It was adjusted upward for its inferior location
and larger size. After adjustments it indicates a land value for the subject of $41.63 per square
foot.
Sale No. 4 is a 10,072 square foot, level, rectangular shaped parcel located at 1015 N.
Coast Highway in Oceanside, about 2.50 miles northwest of the subject property. The property
was acquired October 14, 2011 by the adjacent property owner for $275,000 or $27.45 per
square foot. The listing/selling agent stated that the buyer paid no additional premium for the
Anderson & Brabant, Inc. 26
869 Sq. Ft. Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
site. The buyer's adjacent property is a light industrial building but the immediate
neighborhood is developed with several good hotels and motels, an Oceanside Chamber of
Commerce office building, a Carrow's Restaurant, and a nightclub/restaurant. An upward
adjustment of approximately five percent per year was made for improving market conditions
since the date of sale. An upward adjustment was also made for the subject's better location.
After adjustments it indicates a land value for the subject of $37 .54 per square foot.
Sale No. 5 is a 15,000 square foot interior parcel located at 314 N. Cleveland Street in
Oceanside, about 1.25 miles northwest of the subject. Like the subject it is within easy walking
distance of the Ocean, but is considered inferior overall for location. The parcel is zoned
Downtown, Mixed-Use (retail/office-residential) and the land use is HR -Harbor
Redevelopment, which is considered similar to the subject's Village Review land use. The
immediate neighborhood is comprised of small, mixed use, retail-residential properties, beach
parking lots, and newer detached townhomes. The property transferred between private parties
in December 2011 for $460,000 or $30.67 per square foot. It had previously sold in April 2007
for $675,000 or $39. 70 per square foot. We were unable to contact the principals involved; the
information provided was obtained from CoStar, a commercial data source, and public records.
An upward adjustment of approximately five percent per year was made for improving market
conditions since the date of sale. The site is asphalt paved, very broken and cracked, and was
considered inferior for condition. After adjustments this sale indicates a land value for the
subject of $42.17 per square foot.
Summary and Conclusions of Value:
The sale data described in the preceding paragraphs provide a reasonable basis for
estimating the current market land value of the subject right of way parcel. Prior to adjustments,
the five items of data reported prices between $26.02 and $70.92 per square foot of land area.
As can be seen in the summary of adjustments on the following page, the indicated value for the
subject was narrowed to a range of $37.54 to $49.64 per square foot. The high indicators are
relatively recent Sale No. 2, which reflects the contributory value of an existing single-family
home, and pending Sale No. 1, considered superior to the subject for location/access/exposure
and site condition. The low indicator, Sale 4, which was adjusted upward for improving market
conditions, was considered inferior for location/access/exposure.
Anderson & Brabant, Inc. 27
869 Sq. Ft. Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
.~Criil -L ... SaleDalll
Dr.= Pr-~ !l,t.,> c~ ~~e: :-: .. L,o,.,cc l et li:o i,:., J,d,~ P.u :Md \"ll;t ..\.,:,,:r..1, w,,lt:J.9 c...i.,., L"""°'..,_, !,;.:, 1~q of~ c..~ ."4J~"""' &._.,,,,.,... '• 1b90 ."6J:.>,,,_ \:.bo~
l ~40· 000% 0 00-/4 000% 0 OCl'/4 !.!'4.0-" ·10.00¾ 1000¾ 000¾ -10 00¾ OJX>¾ -1000% ·We.!
: !,70 91 ow.. 000!~ 000'/4 ow., s·o 91 000% !00% OW-~ ·10.00% -.:..!.00% -3000¾ S"964
; !.!S.01 0 00!' 000% 000'~\ O.~} 1~5.01 !O..OCl'/4 10.00',, 000-A 000!', 0.00'/4 6000'!,.'; 'S41.9
4 ;:-· ..lO o~; O.C10% IOcOC/% l0.00'/4 SlO.Gl ~CO%: !00% 0.00'/4 -!00¼ 0.00'/4 z ! 0!'/1/4 t,7!4
! uos 0 00'/4 0.00% 10.00'A 1000% SJ} lj l!.00% !.00% 0.00'/4 !.00% 0.00¾ .:~JXf'~ s,u.1·
According less weight to the lowest and highest indicators for the reasons noted on the
previous page, the remaining sales express values for the subject ROW parcel of between $41.63
and $43.25 per square foot. It is our opinion that the value of the subject is within this range. All of
the data required significant adjustment as each differs from the subject in important
characteristics. However, each item of data adds to the understanding of the subject analysis and
helps shed light on the value of the appraised property.
After consideration of all factors that influence value, it is our opinion that the fair market
value of the subject parcel by the Sales Comparison Approach, as of January 27, 2014, is $43.00
per square foot of land area. When applied to the site area of the subject parcel of 869 square
feet, the estimated fair market value by this technique is $37,400 (869 square feet x $43.00 per
square foot = 37,367, rounded to $37,400).
THIRTY SEVEN THOUSAND FOUR HUNDRED DOLLARS
($37,400)
MARKET LICENSE FEE
Rate of Return
We have also been requested to provide an estimate of the annual "fair market license
fee" for the subject parcel. The result is based on the assumption that the land is subject to a
long-term ground lease. In this analysis, the rental value of the subject site has been estimated
based on the value of the land and an appropriate rate of return on the land value. The terms of
the lease are presumed to be gross. Rates of return vary from property to property and
jurisdiction to jurisdiction based on use and in most instances, negotiations between lessor and
lessee usually results in some middle ground agreement that effectively changes any rates
established by policy. The current rates sought by numerous entities, based on current inquiries
we've made in the course of this appraisal, are summarized below.
Port District of San Diego
Port of Long Beach, CA
City of Los Angeles/Harbor District
Port of San Francisco
San Francisco Int. Airport
California State Lands Commission
Local Interviews
Anderson & Brabant, Inc.
9.5%
10%
10%
10%
8.5%-9%
9%
8.5% to 10%
28
869 Sq. Ft. Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
These rates reflect not only the most recent lease negotiations, but many relate to long-
standing policies without changes for many years, and in the case of the California State Lands
Commission, are mandated by the legislature to never be less than 9%, regardless of current land
values. The higher rates are generally for industrial uses while some of the lower rates at airports
are for commercial uses. The Port of Long Beach utilizes a stabilized (undisclosed) land value
per square foot and uniformly applies a 10% rate of return to the resulting land value, rather than
attempt to '~uggle" rates up or down to keep pace with the often wildly fluctuating land values of
adjacent properties over the past 20 years. None of the remaining rates listed above reflect the
rapidly changing current market and we suspect that any new lease deal would be at or near the
bottom of these rates. Per local market participant Mr. David Sandoval at the City of San Diego,
the optimum sought rate of return for the City is ten percent; however, given current market
conditions they would be willing to negotiate leases in the 9.0 to 9.5 percent range.
Given the subject's small size and configuration, its indirect and undeveloped access, as
well as available information regarding use restrictions and agency oversight affecting the parcel,
we have concluded that a lessor would need to offer a rate of 8.5% in order to attract long term
interest in the appraised property.
Ground Rent -Direct Comparison
Leases of local land in this value range are limited. However, we discovered and verified
several sales of parcels in different parts of the County that are subject to ground leases from
which we could extract effective return rates. A summary of those ground lease sales is shown
below.
SALES OF GROUND LEASED PROPERTIES
Conl) Location Sale Date Parcel Sile SaleA..isting Price/SF Annual Rate/SF/ Rate ol' Conu icnts
No. Size (SF) Conddion Price Land Area NOi Year Retllll
Frontage on 3 comers. In1)rovcd
A 4112 Market St Mar-1 3 23,601 Finisl>M $750,000 $31.78 $70,000 $2.97 9.33% with older billboard siiPt Annual
San Diego Renl/SF/Year represents the aski,g
lease rate at time of sale.
B Rock Sp~ Road Jtu-11 248,292 Fiiishcd $10,650,000 $42.89 $760,000 $3.06 7.14% Leased to auto sales user lor 15 years
F..scondido Pad \>ath I 0% increases cve,y 5 years
Zoning allow.; corrmercial and 1rixcd
C 2045 Pacific Hwy San Mar-09 58,370 Fiiisl>M $7,000,000 SI 19.92 $482,644 $8.27 6.89% lfiCS. Lease sOOjcct to increase within
Diego Pad less tmn 5 years of the sale date ~n
excrc5ing of opti:m
D 1606 Grand Ave. San Sep-09 12,502 Finisred
Diego Pad $2,600,000 $207.97 $236,665 $18.93 9.l0% Leased to lendi,g il'ltitttion ullil 2016
E 246 Town Cc,•cr Pkwy Oct-08 26,136 Finished $1,050,000 $40.17 $67,500 $2.58 6.43% Leased to medical user for 30 years
Sru1.cc Pad \>ath 2, 5-ycar options
The sales of ground leases produced rates of return ranging from 6.43 to 9.33 percent.
Comparable A is the March 2009 sale of a 1.34 acre parcel of leased land located in the Little
Italy neighborhood of Downtown San Diego at 2045 Pacific Highway at a price of $7,000,000 or
$119.92 per square foot. The annual income from ground rents at the time of the sale was
$482,544, thus the return rate to the buyer computed to 6.89 percent. The lease was subject to an
option within five years of the sale date, and all involved parties expected a notable increase in
Anderson & Brabant, Inc. 29
869 Sq. Ft. Right of Way Parcel, licensed Drainage Facility, Carlsbad, CA
the lease rate upon exercising the option. This is justification for a return rate that is below seven
percent. Overall, this property is significantly superior to the subject.
Comparable B is the September 2009 sale of a smaller site in the Pacific Beach area of
San Diego with seven years remaining on a ground lease. The effective return rate for this
investment was 9.10 percent. Sale C is the sale of a commercial site leased on a long term basis
to a medical user, and the reported return rate was 6.43 percent. Comparable D is a more recent
sale of a larger parcel with a newly negotiated lease to CarMax that reflects a return rate of 7.14
percent. All of these properties were significantly superior to the subject.
Comparable E is a current listing of a level, 23,601 square foot parcel of land located at
4112 Market Street in San Diego. The site is improved with an old house (of no value) and a
billboard sign, and the broker stated that the income from the sign was nominal. The site is
currently availabl.e for sale at the asking price of $750,000 or $31. 78 per square foot, or it is offered
for lease at the asking rate of $70,000 per year ($0.247 per square foot per month). The asking lease
rate reflects a return rate of 9.33 percent if the asking lease rate is applied to the asking purchase
price.
Conclusion
Upon review of all known factors, it is our opinion that a market rate of return of 8.5
percent is appropriate for the subject when estimating a market license fee. When this rate is
applied to the estimated market value of the subject of $37,400, the result is an estimate of a fair
market license fee for the land, as of the date of value, of $3,179 per year, or $0.305 per square
foot per month based on the subject's area of 869 square feet.
RECAPITULATION
RENTAL ANALYSIS
ROW Land Area (Sq.Ft.)
Estimated Land Value
Per Square Foot Value
Annual Rate of Return
Annual Rent
Monthly Rent/Square Foot
Monthly Rent
869
$37,400
$43.04
8.5%
$3,179
$0.305
$265
The following is a swnmary of our conclusions of the fair market sale value and fair
market license fee for the subject, as of January 22, 2014.
Fair Market Sale Value $37,400
Fair Market License Fee $3,179 Per Year
Capitalization Rate 8.50%
Anderson & Brabant, Inc. 30
869 Sq. Ft. Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
ADDENDA
Anderson & Brabant, inc.
869 Sq. Ft. Right of Way Parcel, Licensed Drainage Facility, Carlsbad, CA
LEGAL DESCRIPTION
APPRAISAL EXHIB IT
EXHIBIT"A"
LEGAL DC CRIPTION
\\~~S~ORS PARCEL 'LMBER : 203-054-28
VF.S1 l'\G: 'ORnl /\. DIEGO C"Ol. \lTY lRA1'SI I DEVELOPMENT BOARD
,-\LL rHAT PORTION OF ·1 HA I PARCEL I 'THE CITY OF CARL BAD, CO 'TY OF A
Dlt-.GO. STA TE OF CALI FOR NIA. A DESCRIBED 1N TI'IA T QLlTCLAl\1 OF.ED RF.CORDED
Df.n\1BER 15.1992 AS DOCUME T 'O 1992-011,()2209 IN Tim OFFIC"F.OFTHF c o 1 Y
RECORDER or AID('OL,Nl-Y, DESCRIBED AS FOLLOW :
COMMENCll'IG A 1 ntE SOUTI-tEA T COR1'ER OF LOT 176 OF GRANVIU.F. PARK '10. 2 A
SHOW',! 0~ \1AP 2037 RF.CORDED JUNE 18. 1927 A rlLE 1'0. 36270 11, I HI:. Of't'IC-£ 01' rHt: rou,TY RECORDClt Of SAID COUNTY:
THC'l,CE ALO\IG TI~E NORTHEASTERLY LINE Of SAID LOT 176 NORiH 41°58'00"' WE 1 . 57.0J
FEET TO l llE TRl E POINT Of' BEGI '~INC:
Tl IEl\('I: COl\ TINUING AL.ONO AID :-IOR1HF.AS n·.RI. Y L11'E !\ORTH 41 °.S8'00" WEST. 19.30
l'Elr:
Tll[NCl-.1,F.AVI 'G SAID 'IIORT1IL:. 1 ERi Y UNI' NORTli /15"W"56 .. WE T. 25.72 FEET:
TH Lt.CE !'-OR rH 4°20·0,1-\\ EST 13.0 I FEET:
Tl ICNCE fl.OR I H 85°39'~6--EAST 20.00 FEET:
11 JEJI.CF SOU I H 4°10'04" EAST 28.29 rEET;
I l!ENCI:. sou,,~ 85"39'56" WEST 33.94 FEET TO SAID NORTHl:.ASTERL Y LIKE OF LOT 176
A1'D l Hl-TRl'E POl1''T OF 8EGINSI G.
CO TAI l\iG 869 OUARE FEET MORE OR LCS. .
ATTACIIW HERETO Al\D MADE A PART HEREOF IS A PLA I LABl:.Ll:.D EXHIBIT'B'.
flilS REAL PROPERTY DF.SCRIPTIO HAS BEEl PREPARED BY ME. OR DER MY
OIRl:.C,-10:'\. IN co FOR"1A"-CI: wrrn rt-IF. PROF(; SIO AL L,\KD UR VEY ORS ACT.
SIG;~,\TllRE --.,..,11,=.,.,,..~o~,.,..,_"="~.,.=.,~,~~oii----
DATE ------
Anderson & Brabant, Inc.
Expertise:
OUALIFICA TIONS OF THE APPRAISER
Brian L. Flannery
Anderson and Brabant, Inc.
353 West Ninth Avenue
Escondido, CA 92025
(760) 741 -4146 X 309
Real Estate Appraising and Consulting in San Diego and other areas throughout
California. General practice concentrates on commercial property with investment potential.
Areas of specialization include ad valorem property tax valuations of commercial, industrial and
apartment properties. Testified before Assessment Appeals Boards in all Southern California
Counties.
Education:
MBA Real Estate, National University, San Diego, California
BA Economics, San Diego State University, San Diego, California
Successful completion of the following courses sponsored by Appraisal Institute:
Appraisal Principles & Techniques A & B
Standards of Professional Practice A & B
Other Courses and Seminars (Partial List):
Membersltips:
Technical Inspection of Real Estate
Cost Approach
Narrative & Summary Reports
Appraisal of Partial Interests
Highest & Best Use Analysis
OREA Federal and State Law and Regulations
Certified General Real Estate Appraiser, State of California (No. AGO l 7627)
Associate Member Appraisal Institute
Professional:
Anderson & Brabant, Inc., Staff Appraiser
Lipman Stevens & Thene, Inc., Staff Appraiser
Property Tax Representatives, Inc., Senior Appraiser
COMPS, Inc. Data Manager and Sales Representative
Member Firms New York Stock Exchange, Registered Representative
Qualifications of the Appraiser -Brian L. Flannery
Page Two
Financial Institutions
City National Bank
Comerica Bank
California Bank & Trust
Coronado First Bank
First American Trust USB
First Bank & Trust
First Private Bank & Trust
First Republic Bank
First State Bank of California
Hawthorne Savings & Loan
Home Bank of California
ICA Mortgage Capital, LLC
Manufacturers Bank
Michigan National Corporation
Mission Federal Credit Union
Network Small Business Finance, Inc.
Northern Trust of California
Provident Bank
PFF Bank & Trust
San D iego National Bank
Temecula Valley Bank
Torrey Pines Bank
Union Bank of California
U. S. Bancorp
U.S. Bank
Wells Fargo Bank
Attorneys
Steven E. Anderson
Fisch, Spiegler, & Ginsburg
Gray, Cary, Ware & Freidenich
Ginger Larson
Dan Guevera
Hennenhoefer & Heffron
Edwin Johnson
Charles D. Nachand
Wesley Peltzer
Daniel Pearl
Herber D. Sterman
Government Agencies and Municipalities
Cajon Valley Union School District
Center City Development Corporation
City of Carlsbad
City of Chula Vista
City of Del Mar
City of Encinitas
City of Escondido
City of San Diego
City of San Diego Redevelopment Agency
City of Vista
County of Riverside
County of San Diego
North County Transit District
San Diego Unified Port District
The Nature Conservancy
The Trust for Public Lands
Vista Fire Protection District
Vista Unified School District
U S Postal Service
Other Appraisal Clients
Asset Property Management
Aegon Realty Advisors
Air Frame Mfg. & Supply
American Security Products
Burger King
Best Western Inns
NGJ Sparkplug
Coronado Cays Yacht Club
La Jolla Village Towers
Pulse Engineering
SBC Communications
QUALIFICATIONS OF THE APPRAISER
William 8. Anderson, MAJ
Anderson & Brabant, Inc.
353 W. Ninth Avenue
Escondido, CA 92025
(760) 741-4146 Ext. 314
I. Resident of San Diego County since 1970
11. Professional Affiliations:
111.
IV.
A. Member, Appraisal Institute, MAI, RM (Not Active)
B. Member, International Right of Way Association
C. 1988 President, AlREA, San Diego Chapter No. 42
D. Certified General Real Estate Appraiser (AG0023 I 5)
Office of Real Estate Appraisers, State of California
Appraisal Experience:
Co-owner -Anderson & Brabant, Inc., I 979 to present
Co-Owner -Robert M. Dodd & Associates, Inc., 1977 to 1979
Staff Appraiser, Vice President and Appraisal Manager -Financial Appraisals, lnc.,
1968 to 1977
Staff Appraiser -Financial Savings and Loan Association, Culver City, California,
1964 to 1966
Expert Witness:
Superior Court, San Diego County
Municipal Court, San Diego County
Federal Bankruptcy Court, San Diego County, San Bernardino County
Assessment Appeals Board, San Diego County
Various Arbitration Hearings as Witness and Arbitrator
V. Educational Background:
A. Graduated from El Segundo High School -1963
8. Attended El Camino Junior College, Palomar Junior College, and U.C.L.A.
C. Professional Education Completed:
I. Appraisal Institute
2.
3.
Anderson & Brabant, Inc.
a. Real Estate Appraisal I -Principle Methods and Techniques
b.
C.
d.
e.
Real Estate Appraisal JI-Urban Properties
Real Estate Appraisal VI -Investment Analysis
Real Estate Appraisal VJ II
Standards of Professional Practice
f. Litigation Valuation
Society ofReal Estate Appraisers:
a. Course IO I -Real Property Valuation
b. Course 20 I -Income Property Valuation
Partial List of Seminars:
Condemnation Valuation, 11/94
Court Preparation in Litigation Cases, 11/95
California Laws & Regulations, 3/96
Litigation Valuation, 11/96
Qualifications of the Appraiser
William B. Anderson, MAI
Page2
Standards of Professional Appraisal Practice, 12/97
Damages, Diminution and Mitigation, 8/98
31st Annual Litigation Seminar, 11 /98
Land Development, 3/99
Gramm-Leach Privacy Act, I 0/0 I
34th Annual Litigation Seminar, 11/01
Real Estate Disclosure, 1/02
Applying Economic Forecast, 2/02
Partial Interest Valuation -Divided, 3/02
Price Indexing Real Estate Markets, 7/02
Statistical Analysis Using the Database, 7/02
Eminent Domain Case Study Update, I 0/02
35th Annual Litigation Seminar, 11/02
Standards of Professional Practice, Part C, 12/02
National USPAP Update Course, 4/04
Applying Economic Forecast -SD Regional Analysis, 2/05
Uniform Appraisal Standards for Federal Land Acquisitions, 1/07
San Diego Economic Forecast, 2/07
Business Practices and Ethics, 6/07
JRWA 's Eminent Domain Case Update Seminar; I 0/07
40th Annual Litigation Seminar; 9/08
VI. Types of Appraisals:
Residential Property:
Commercial Property:
Industrial Property:
Vacant Land:
Agricultural:
Special Purpose Appraisals:
Special Purpose Properties:
Special Projects:
VIL Partial List of Appraisal Clients:
Lenders
Fallbrook National Bank
Downey Savings
Bank of America
North County Bank
Grossmont Bank
Pomona First Federal
GE Capital
Anderson & Brabant, Inc.
Single-Family Residence, Condominiums, Apartments, Subdivisions,
Mobile Home Parks, Existing and Proposed
Automobile Dealerships, Office Buildings, Shopping Centers, Office
Condominiums, Etc., Existing and proposed
Single/Multi-Tenant, Business Parks, Etc., Existing and proposed
Industrial, Commercial, Residential, and Rural
Ranches, Avocado and Citrus Groves, Nurseries, Etc.
Partial Takings for Road Rights of Way, Easements, Leasehold Estates,
Possessory Interest, Historical Appraisals, Etc.
Hangers, Golf Courses, Churches, Yacht Club & Marina, Etc.
Fire Damaged Property, Encinitas Ranch, Pomerado Business Park,
Parkway Business Park, San Marcos County Landfill and Keller Canyon
Landfill
Great Western Bank
Imperial Bank
Pacific Coast Savings & Loan
Palomar Savings & Loan
Rancho Santa Fe National Bank
Union Bank
Wells Fargo Bank
Qualifications of the Appraiser
William B. Anderson, MAI
Page3
Title Companies
Chicago Title Co.
First American Title Co.
Safeco Title Co.
St. Paul Title Co.
Title Insurance & Trust
Government Agencies and Municipalities
United States Justice Department
CA Department of Transportation -Caltrans
City of Encinitas
City of Chula Vista
City of National City
City ofEscondido
City of Oceanside
City of San Diego
City of San Marcos
City of Vista
County of San Diego
Escondido Union School District
Encina Wastewater Authority
North County Transit District
San Diego Port District
Federal Deposit Insurance Corp.
Olivenhain Municipal Water District
Poway Municipal Water District
Ramona Unified School District
Small Business Administration
Vallecitos Water District
Valley Center Municipal Water District
Law Firms
Daley&Heft
Higgs Fletcher & Mack
Law Offices of Wesley W. Peltzer
Winet, Patrick & Weaver
Endeman, Lincoln, Turek & Heater
Best Best & Krieger
Gray, Cary, Ware & Freidenrich
Jones, Hatfield & Penfield
Nugent & Newnham
Skripek & Miller
Paul, Hastings, Janofsky & Walker
Post, Kirby, Noonan & Sweat
Rutan & Tucker
Jeffrey Scott
Sternberg, Eggers, Kidder & Fox
Sullivan, Delafield, McGrath & McDonald
Anderson & Brabant, Inc.
Wingert, Grebing, Anello & Chapin
White & Bright
Detisch & Christensen
Others
County Counsel
Stone & Youngberg
Trust for Public Land
The Willett Company
Koll Real Estate
Hollandia Dairy
Pardee Construction
Sutro Mortgage Company
Wessell Construction Company
Palomar College
Granite Construction
Homer Heller Ford
The Kissell Company
Los Alamitos Race Course
MCI
Pacific Telephone
AT&T