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00-3249
ORDINANCE NO. 00-3249 AN ORDINANCE OF THE CITY OF PLAIN-VIEW AUTHORIZING THE CONDEMNATION OF PRIVATE PROPERTY TO BE USED FOR THE PURPOSE OF A PERMANENT UTILITY EASEMENT; SEVERABILITY cLAUSE; CUMULATIVENESS CLAUSE; CONFLICTS CLAUSE; AND EFFECTIVE DATE. WHEREAS, the City of Plainview, in the best interest of its citizens, has formulated a plan for extending a portion of a permanent utility easement which extends from Highway 70 within the municipal limits of the City of Plainview; and WHEREAS, the City of Plainview has been unable to come to an agreement upon the price of the property which must be acquired to develop said easement; and WHEREAS, the City Council of the City of Plainview now finds it necessary to condemn the property that must be acquired to develop said easement; NOW, THEREFORE, THE CITY OF PLAINVIEW HEREBY ORDAINS: SECTION I. That a permanent easement over, along, under, across, and through the following described parcel of real estate be, and the same hereby is appropriated for the public purpose of a permanent utility easement, pursuant to and in accordance with Chapter 21 of the Texas Property Code, to wit~ Parcel #1 (Cecil Woods): A parcel of land situated in the City of Plainview, Hale County, Texas and being particularly described as follows: 10.22 acres out of the E/2 of Section 15, Block D6, and 309.978 acres out of the E/2 of Block D6, Hale County, Texas (2208 E. 5th Street, Plainview, Texas) Parcel #2 (Craig Silverthorne): A parcel of land situated in the City of Plainview, Hale County, Texas and being particularly described as follows: 10.24 acre tract out of Section 16, Block D6, Hale County, Texas (North side of US Highway 70 and east of County Road Y, Plainview, Texas) SECTION II. Ordinance No. 00-3249 Page 1 of 3 That the City Council of the City of Plainview hereby fixes the value of said permanent easement over, along, under, across, and through said parcel, pursuant to the appraisal attached hereto as Exhibit "A", as follows: Parcel # 1 $3,068.00 Parcel #2 $ lq 233.00 Total $4,301.00 SECTION III. Thai the amount of $4,301.00 being the amount set forth in Section II herein, be deposited with a District Court of Hale County, Texas for the use and benefit of the owners of the property appropriated in accordance with Chapter 21 of the Texas Property Code. SECTION IV. That the City Council of the City of Plainview, Texas finds that the appropriation of property made herein is necessary for said public purposes; that the City has been unable to agree with the owners of the property appropriated herein. SECTION V. That the City Attorney be, and he hereby authorized and directed to file a compliant in a court of competent jurisdiction to have a jury impaneled to make inquiry into the assess the compensation to be paid for each of the aforesaid fee simple titles. SECTION VI. That the expenditure of $4,301.00, or so much thereof as may be necessary, from the Highway 70 Fund (36-31-6841) aforesaid purposes is hereby authorized. SECTION VII. If any section, subsection, sentence, clause, phrase, or portion of this ordinance is for any reason held invalid or unconstitutional by any court of competent jurisdiction, such portion shall be deemed a separate, distinct, and independent provision and such holding shall not affect the validity of the remaining portions hereof. SECTION VIII. Provisions of this ordinance are cumulative and nothing herein shall prevent, alter or diminish the applicability or enforcement of other ordinances restricting, regulating or governing the subject matter herein. Ordinance No. 00-3249 Page 2 of 3 SECTION IX. All ordinances or portions of any ordinance of the City of Plainview, Texas in conflict herewith, are hereby amended to conform with the provisions hereof. SECTION X. That for the reasons stated in the preamble hereto, which is hereby made a part hereof, this ordinance shall take effect and be in force from and after its passage and approval by the mayor. PASSED AND APPROVED the 23rd day of May, 2000. Karen McBeth, City Secretary APPROVED AS TO CONTENT: J~m-'~es P J~er~, ~ M/~ger / APPROVED AS TO FORM: Wa~l~ H ,al/ch, City Attorney Ordinance No. 00-3249 Page 3 of 3 PROPOSED RIGHT~OF-WAY TAKING CECIL WOODS, OWNER PLAINVIEW, TEXAS 1827 S. Virginia Amarillo, Texas 79102 (806) 358-7611 FAX: (806) 353-6903 February 9, 2000 Mr. Wally Hatch - City Attorney city of Plainview 901 Broadway Plainview, Texas 79027 RE: Proposed Right-of-Way Taking Cecil Woods, Owner Plainview, Texas Dear Mr. Hatch: As requested, I have completed the summary appraisal of the above referenced property. The value indicated is based on the market value of the subject property in its "as is" condition. Inherent in the definition of market" value is that a reasonable time is allowed for exposure in the open market. The property rights appraised are the fee simple estate. Based upon the investigation undertaken, the analyses made, and subject to the enclosed assumptions and limiting conditions, it is my opinion that as of December 2, 1999, the "as is', market value of the whole property with a marketing time of twelve to twenty-four months is: $475~000 Four Hundred Seventy Five Thousand Dollars As requested, compensation for .part taken was also estimated. The total compensation is: $3,068 Three Thousand Sixty Eight Dollars 1827 S. Virginia Amarillo, Texas 79102 (806) 358-7611 Fax: (806) 353-6903 Page 2 February 9, 2000 Mr. Wally Hatch This appraisal is a Summary Appraisal Report' which conforms with the reporting requirements set forth under Standards Rule 2-2 (b) of the Uniform Standards of Appraisal Practice for a summary appraisal report. As such, it presents only summary discussions of the data, reasoning, and analysis that were used in the appraisal process to develop the opinion of value. Supporting documentation concerning data, reasoning, and analysis is retained in the appraiser's files. The summary report that follows sets forth the data and analyses upon which my opinion of value is predicated. Respectfully submitted, sR/sg TABLE OF CONTENTS SUMMARY OF SALIENT FACTS ............... INTRODUCTION LOCATION MAP DESCRIPTION OF REAL ESTATE APPRAISED PROPERTY DESCRIPTION HIGHEST AND BEST USE APPRAISAL PROCEDURE LAND VALUE ESTIMATE VALUE INDICATED BY COST APPROACH CORRELATION AND CONCLUSIONS DESCRIPTION OF RIGHT-OF-WAY TAKING CERTIFICATE CERTIFICATION AND STATEMENT OF LIMITING CONDITIONS QUALIFICATIONS 1 3 7 8 13 22 26 28 39 46 48 54 56 59 SUMMARY OF SALIENT FACTS Property Location: Owner. - Land Area: Land Shape: Road Frontage: Topography: Zoning: Flood Zone: Improvements: Highest and Best Use (Whole Property): Highest and Best Use (Remainder): Interest Appraised: Date of Value: 2208 E. 5th Street Plainview, Texas Cecil Woods 320 Acres Roughly rectangular Approximately one-half mile along south Side of U.S. Hwy 70 At street level None - outside city limits The subject is not in the 100 Year Flood Zone. The subject site is improved with a brick residence, two shops, frame residence and shed. Continued agricultural residential use and Continued agricultural residential use Fee Simple Estate December 2, 1999 and Summary of Salient Facts, continued Final Estimates of Market Value: Whole Property: Compensation for Part Taken: Remainder Before: Remainder After: Net Damages: Total Compensation: Marketing Time: $475,000 $ 2,818 $472,182 $471,932 $ 25o $ 3,068 12 to 24 Months INTRODUCTION Identification of the Property The subject property is an improved property located at 2208 E. 5th Street, Plainview, Texas 79072. PurDose of the Appraisal Report The purpose of this report is to set forth the data, analyses, and conclusions relative to my opinion ofthe subject's market value as of December 2, 1999. Use of the Appraisal Report The use of this appraisal is for use by the City of Plainview for acquiring a 25 foot wide sewer line easement across the subject property. Date of Valuation ~ The effective date of the value estimate is December 2, 1999. date of the report is February 9, 2000. The Interest Appraised Fee simple interest in the real property. 3 Introduction, continued Area and Neiqhborhood Analysis For demographic data, area growth, trends, and forecasts, the appraiser examined Federal Census information and information provided by the city of Plainview Chamber of Commerce. Site/Improvement Description and Analysis The appraiser reviewed public records, plat map, and physically inspected and photographed the subject property and improvements. Market Data Proqram The appraiser obtained data. on vacant property transactions by researching transfers, and verified these transactions with either buyers, sellers or brokers. Definitions Market Value The term market value is defined by Title 12 of the Code of Federal Regulations 34.42(f) as follows: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently 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: 4 introduction - Definitions, continued de Se buyer and seller are typically motivated; both parties are well informed or well advised, and each acting in what they consider their own best interest; a reasonable time is allowed for exposure in the open market; payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. Hiqhest and Best Use Highest and Best Use is defined by The Dictionary of Real Estate Appraisal, 3rd Edition, 1993, as follows: The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum profitability. Fee Simple Estate The real estate interest appraised is the fee simple interest. The Dictionary of Real Estate Appraisal, 3rd Edition, 1993, defines fee simple estate as follows: Absolute ownership unencumbered by any other interest or estate subject only to the limitations imposed by governmental powers of taxation, eminent domain, police power, and escheat. IntroduCtion - Definitions~ continued Legal'Description The subject is legally described in two tracts: 10.022 acres out of E/2 Section 15, Block D-6, and 309.978 acres out of'E/2 SeCtion 15, Block D-6, Hale County, Texas. (Please see attached survey.) Ownership History, Owner is. Cecil Woods Subject History The subject property has been owned by the current owner in excess of five years. The subject is not currently offered for sale. 6 2?th FJ~. ROAD l~e, 400 ~4~ St. PL~m~' / '7 I Location DESCRIPTION OF REAL ESTATE APPRAISED ~E~ DAT~ - PL~INVIEW~ TEX~S General Information Plainview, Texas, is the seat of Hale County. The county is located in the High Plains - Panhandle area of Texas and is generally regarded as a major agricultural area of the state. Agriculture remains the basic industry in the county, but there has been some diversification in recent years. Population Census figures have been made available from the Plainview Chamber of Commerce for 1970-1998. The City of Plainview has shown a population increase of 31% during that 28 year time period. The following are population figures for each available year: Year City County 1970 19,096 34,137 1980 22,187 37,592 1990 21,700 34,671 1997 25,000 37,200 199.8 25,000 37,300 More recent statistics show a population increase from 1990 to 1998 of 15% in the City of Plainview and 8% in Hale County. This population increase is contrary to the trend in small, agricultural based counties in the area. Both Plainview and Hale County have General Data - Plainview, Texas, continued shown population~growth over the past nine years when the other area counties have lost population. This is a product of industrial development and the creation of non-farm jobs in the Plainview market. Labor Analysis - Plainview Chamber of Commerce Date of Report Work Force Unemployment Rate January, 1999 County- 17,293 County - 4.9% City - 11,030 City - 4.7% Aqriculture Ma~or Products Grown Grain Sorghum Wheat Corn Cotton Soy Beans Estimated Area of Production 6,000 lbs per acre 30 bushels per acre 10,000 lbs per acre 700 lbs per acre 40 bushels per acre Other food produced in area: Total Number of Irrigated Acres in the Area: Vegetables: onions, peppers, potatoes, cucumbers, carrots, cantaloupe, watermelon 310,000 Livestock Cattle Hogs Sheep Cattle Estimated Units Raised/ Fed/Slauqhtered Annually 1,000,000 Slaughtered 8,000 On Feed 500 On Feed 123,000 On Feed 9 General Data - Plainview, Texa~, continued Government. Plainview is served by a council/manager type government with seven councilmen and a mayor. There are 36 full-time firemen and 43 full-time policemen. The city has a Planning Commission and zoning regulations. The total 1998-99 operating budget was $12,601,080 and total tax collections were $2,325,536. General Information The City of Plainview is served by a major interstate highway and three state highways. The Burlington Northern Santa Fe Railroad provides service. TNM and 0 bus service is available. Intrastate freight service is provided by UPS, TexPack and Central Freight Lines, while interstate service is provided by Central, Merchants, Yellow, Roadway, Consolidated, UPS, Federal Express and TexPack. Hale County Airport is adequate for most private and corporate air traffic, and three charter services are available. The runway has been extended to 6,000 feet. A regional airport serviced by Delta, Southwest, American and America West is located 35 miles south in Lubbock, Texas. Medical facilities are considered adequate with 100 hospital beds available. There are five nursing homes with a total capacity of 300 beds and two retirement centers with 72 rooms available. These 10 General Data - Plainview, Texas,. continued facilities are staffed by 30 doctors~.and 8 dentists. Schools, churches, and recreational facilities are considered adequate and typical for a city this size. The Plainview school system serves approximately 6,244 students with seven elementary schools, three junior high schools and one high school. Wayland Baptist University is located in Plainview and has an enrollment of approximately 1,129. Other colleges within commuting distance include: Texas Tech University in Lubbock, West Texas A&M University in Canyon, Texas, South Plains College in Levelland and Amarillo College in Amarillo. Conclusions The city of Plainview has Shown population growth since 1990 of about 3,300 persons, while the county has shown an increase of about 2,629 persons. This would indicate a strengthening of the city of Plainview population while the rural population has declined slightly. Recent industrial development to add local non- farm jobs has added to the population growth. The stable nature of the four major employers; Excel Beef Packers, Wal-Mart Distribution, Plainview ISD, and the Texas Criminal Justice System, has created a strong job base in the City of Plainview. The rental housing market remains tight, with a small percentage of units available for lease. The office and retail segments of the market, 11 General Data - Plainview, Texas, continued however, do not show the same strength, and there is ample- available space in each of these markets. New construction in all elements of the real' estate markets remain slow. Except for the tight housing market, there does not appear to be sufficient demand for new commercial real estate development. Almost all new commercial construction has been for owner-occupants and in high traffic areas. 12 PROPERTY DESCRIPTION The subject site is a 320 acre tract located on the south side of U.S. Hwy 70 east of Plainview, Texas. The site is located outside the corporate limits of Plainview. The site is roughly rectangular in shape with about one-half mile of frontage along U.S. Hwy 70. The site has about one mile of depth. U.S. Hwy 70 is an asphalt surfaced public road. The subject property has multiple uses. The 10.022 acre. tract on U.S. Hwy 70 has two residences, an auto sales/repair shop, and outbuilding. The remaining 309.978 acres is an irrigated farm in wheat and alfalfa production. The 10.022 acre tract has the following improvements: 5,124 SF - Brick Residence 928 SF - Frame Residence 4,040 SF - Office/Shop 3,200 SF - Shop 420 SF - Trailer Shed Overall condition of these improvements is considered to be average. The brick residence is occupied by Mr. Woods and the shop 13 Property Description, continued and shed buildingsare used for Mr. Woods automobile business. The frame residence has been a rental unit. The 309.978 acre farm tract is level and irrigated from three wells. The wells are connected into concrete underground irrigation pipe. This pipe is located along the western property line, outside the proposed easement. The farm is currently leased to Bill Langston for agricultural production. The original five year lease has one year remaining. Annual lease payments are $90.00 per acre. The farm is level, has adequate water, and good access. Wheat and alfalfa production are typical for the property. The property is located outside the city limits and therefore has no zoning. The property is, however, located in the extra territorial jurisdiction of the City of Plainview. Any additional development of the site would be subject to City of Plainview code for platting, utility service, street access, and parking requirements. 14 City of Plntnvlew Landfill Site V~lvc 19. E. 18.9' Valve 19.&' F. ?11 City of Plnlnvlew Sewer ~entment Site Woods Tract City of l)]alnview Sewer Easement Being a 3 acre Sewer Easement out of thc west side of a 10.022 acre tract (deed to Cecil Woods recorded Volume 813, page 181 HCDR) and thc remainder of thc 'East half of Section No. 15, Block D-6, Hale County, Texas (deed to Cecil Woods recorded in Volume 823, page 571 HCDR) and being further described as follows: Beginning at a set 1/2 inch rod found for the northwest comer of said 10.022 acre tract and also being thc intersection of thc West linc of said East half and thc south right of way line of U.S. Highway 70; Tbencc $0°10'30"E 5235 feet along the west linc of said 10.022 acre tract and said East half to thc southwest comer of said East half to a point; Thence N89°56'25"E 25 feet along the south linc of said section to a point; Thence N0°I0'30"W 5234.97 feet 25 feet from and parallel to said West linc of said East half lo a point in the south right of way line of said highway; Thence West 25 feet to thc Point of Beginning. I. Carl Joe Williams. do hereby cefliry that I have surveyed Ihe above described properly on fl:c ground. P,o,e P.O. Box 1418 Plalnvicw, Texas (806) 29~$217 (Fax/Volcc) © May 18. 1999 15 80' 22D8 E. 5th Cecil ?~Dods, Owner Plainview, Texas 31' 40' 25' 4 , 040 SF 40' 20' 40' 3,200 SF Shop 80' 40' Shop 40' 76' 40' 16 36' 2208 E. 5th Cecil Woods, Owner Plainview, Texas 10' 24' 24' 24' 67' 18' 43' 5,124 SF Masonry Residence 22' 26' 17 30' 2208 E. 5th Cecil Woods, Owner Pl~inview, Texas 32' 16' f! 16' 928 SF Frame Residence 14' 32' 420 SF Trailer Shed 30' 14' 18 26' FRONT ¥~;W' OF COMMF~RCIAL IMPROViq~IENTS SOUTH VIF~W ~.,ONG RIGHT-OF-WAY NORTH ¥1~:W ALONG RIGHT-OF-WAY NORTH VIEW AI,ONG.RIGHT-OF-WAY 2O CROPLAND AND IRRIGATION WELL EAST VIF~W ALONG U.S. HWY 70 21 HIGHEST BEST USE A fundamental principle in the valuation of real property highest and best use. Highest and Best Use can be defined as: is the reasonably probable and legal use of vacant land or improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value. This basic principle will be utilized throughout the appraisal as the property is analyzed in light of its highest and best use. The highest and best use of a specific parcel of land is not determined through subjective analysis by the property owner, the developer, or the appraiser; rather, highest and best use is shaped by the competitive forces within the market where the property is located. Therefore, the analysis and interpretation of highest and best use is an economic study of economic forces focused on the subject property,l ! The Appraisal of Real Estate, Tenth Edition, Appraisal Institute 22 Analysis of Hiqhest and Best Use, continued From the data gathered in the site and neighborhood descriptions, we may determine the highest and best potential use for the land under the theoretical assumption of the site as a vacant tract. This logic will provide the reasoning for the land valuation. The four tests of highest and best use -consist of legal permissibility, physical possibility, financial feasibility, and maximum profitability. The subject property is legally permissible. The property is located outside the city of Plainview and not zoned. The existing residential, commercial, and agricultural uses are allowed by county ordinances. The subject is physically possible as the improvements are in place on the site to allow the existing uses. The property is financially feasible as a commercial, residential, and agricultural property. Conclusions In order to be considered as a property's highest and best use, the following criteria must be met. The subject site is legally suited to its present use, feasible for its present use and obviously 23 Analysis of Hiqhest and Best Use, continued possible as currently improved. These criteria, in the appraiser's opinion, have been met. Then it is reasonably concluded that the Highest and Best Use of the subject site, if vacant, is for long term commercial development. The subject property is located east of the city limits of Plainview in an area which is considered to be static. If the subject site were vacant and available, it is not likely that immediate development would take place. The occupancies in the neighborhood and the current economic conditions would not encourage the site to be developed at this time. The highest and best use of a property, as improved, may not always be the same as the highest and best use of the tract, as if vacant. However, the improvements typically continued to exist until the vacant site's value exceeds its improved value. The subject property is improved with an existing residence, commercial buildings, and agricultural uses. Therefore, the highest and best use, as if vacant, is secondary due to the fact that the existing improvements obviously contribute significantly to the value of the overall property. A comparison 2.4 Analysis of Hiqhest and Best Use, continued of the val~ of the site (as vacant) with the value of the property (as improved) clearly indicated that the property with the existing improvements is significantly more valuable than the vacant site. In conclusion, the highest and best use of the subject site, as improved, is for continued use for residential, commercial, and agricultural uses. 25 APPRAISAL PROCEDURE The procedure followed in making this appraisal revolved around an analysis of various factors which impinge on the value of the subject property. Included in this analysis was an investigation into such matters as physical attributes of the property, area and neighborhood trends, and general economic, social, and political influences which bear upon the value of the property being appraised. The actual valuation process which serves as a basis for estimating the stabilized market value of a property being appraised employs as many separate techniques as are appropriate. Value estimates are typically made in the following categories: COST APPROACH - An estimate of the present reproduction cost of the improvements, less accrued depreciation, plus the land value. Depreciation includes a deduction from reproduction cost of the improvements due to physical, functional, and economic causes. INCOME APPROACH - Capitalization of the net income that the property is capable of producing. This approach, of course, is applicable only in income-producing properties. 26 Appraisal Procedure, continued MARKET APPROACH - Comparison with similar properties that have sold in the market. This approach can be applied to land alone or to improved properties. SCOPE OF THE APPRAISAL - Each of the above described approaches to value will be applied to the subject as they are worthy of consideration. Omission of any of these approaches will be explained in the report. 27 LAND VALUE ESTIMATE The estimate of Land Value can be derived by use of one of six different procedures. They are: 1. Sales Comparison 2. Allocation 3. Extraction 4. Subdivision Development 5. Land Residual 6. Ground Rent Capitalization The Sales Comparison Approach may be used to value land that is actually vacant or land that is considered as though vacant for appraisal purposes. Sales comparison is the most common technique for valuing land, and it is the preferred method when comparable sales ar~ available. The greatest weight is placed on actual sales of similar land made at times relatively concurrent with the date of the appraisal and subject to similar conditions. The estimate of value for the subject site can be obtained by applying the Direct Sales Comparison Approach. In this Approach, sales and asking prices of comparable area tracts were investi- gated as a basis for estimating the value of the subject site. 28 Land Value Estimate, continued Comparable tracts must be located in similar market environments when compared to the subject. Investor attitudes toward the comparable sales must be reasonably compatible with probabl'e investor attitudes toward the subject site. Adjustments are made to the selected tracts to compensate for the differences between the sales and the subject property. Generally, adjustments are made to the sales to compensate for dissimilarities for the factors of time, location, condition of the sales and physical characteristics (utility). Physical characteristics can include topography, size, shape, utility availability, etc. Required adjustments can be determined after a thorough analysis of available comparable market data which is detailed on the following pages. The appraiser has attempted to utilize the "paired sales" technique, where aVailable data makes it possible, coupled with judgement to extract the amount of each adjustment for dissimilar characteristics. 29 Property Grantor: Grantee: Date of Sale: Sales Price: Recording: COMPARABLE LAND SALE NO. 1 Farmland Hale County, TX R. Wilson City of Plainview 03/11/92 $ 368,247.00 Volume 813, Page 17 Hale County Property Description Land Area: Improvements: Legal Description: Terms: Sales Price / Unit: 292.26 Acres None at sale 292.26 acres, out of the West half of Section 15, Block D-6 Cash to Seller $ 1,260.00 ACRE Comments: Western half of Section 15 purchased for development of sanitary land fill. Frontage on U.S. Hwy 70. Confirmed by CAD. 291.26 acres considered irrigated cropland. 62100100170 30 COMPARABLE LAND SALE NO. 2 Property Grantor: Grantee: Date of Sale: Sales Price: Recording: Property Description Land Area: Improvements: Legal Description: Sales Price / Unit: Farmland Hale County, Tx R.C. Palmer Kevin Sanmann 04/24/95 $ 44,458.00 Volume 862, Page 645 Hale County 58 acres None S 3/4 N/2 NW/4 Section 5, Block D-4 $ 767.00 PER ACRE 'Comments: This irrigated tract is located about 2 miles north of Plainview on a county road. Soils are Pullman clay loams, Lofton and Randall clays. Topography is nearly level to sloping into a 5 acre playa lake on the north side. Confirmed by grantee via CAD. 62100100149 31 COMPARABLE LAND SALE NO. 3 Property Grantor: Grantee: Date of Sale: Sales Price: Recording: Property Description Land Area: Improvements: Legal Description: Sales Price / Unit: Farmland Hale County, Tx N/A Kathryn Raymond 04/15/96 $ 175,700.00 Volume 879, Page 249 Hale County 251.3 acres None W/2 Section 28, Block A-i, north of RR, except 9.17 acres to highway $ 699.00 PER ACRE Comments: This irrigated/dry crop farm is located about 3 miles NE of Hale Center on 1-27. Soils are Pullman and Olton clay loams. Topography is nearly level with a playa lake in the southeast part. The ApPraisal District reports 120 acres irrigated and 131.3 acres dry crop. Confirmed by Grantee via CAD. 62100100155 32 Property COMPARABLE LAND SALE NO. 4 Grantor: Grantee: Date of Sale: Sales Price: Recording: Property Description' Land Area: Improvements: Legal Description: Terms: Sales Price / Unit: Farmland Hale County, TX E. Stephens Ann Thomas 04/98 $ 100,800.00 Volume 914, Page 336 Hale County 160 Acres None with contributory value NE/4 Section 32, Block D-6 Cash to Seller $ 630.OO ACRE Comments: Irrigated farm with one 8-inch well. Estimated 300 gpm well production. Located about five miles southeast of Plainview. Verified by CAD. 62100100171 33 iNCORPORATED 512 ASH ST. PLAINVIEW, TEXAS SleigHER' Comparable Land Sales } 34 Land Value Estimate, continued LAND SALES SU~Y s,,t~. ~s. s,~. s. s,,~. 28. s,,t~. 32. 3/92 4/95 4/96 4/98 292.26 58.0 251.3 160.0 $1,2~ $ 767 $ 699 $ 630 U.S. Hwy 70 No~h of 1-27 So~hea~ of P~n~ew P~n~ew LAND SALES ADIUSTM~NT GRID 35 Land Value Estimate, continued With this limited data, in depth analysis via paired sales or resales was not available. All of the adjustments are estimations based on the expertise of the appraiser after careful inspection and consideration of all the properties involved. These adjustments are not intended as exact measurements, but are used to more accurately define the range of values indicated bythe market. The Adjus~nent Process: Sales of vacant land have been presented which reflect a range of unit prices. The range may be narrowed somewhat by adjusting the unit sale prices to the subject site for the various differences. Usually, there must be discussion con- cerning the cash eqUivalency of the sale transactions as financing terms can make a large difference in the effective sale price. In this case, however, all sales were on a cash basis or had financing terms which we consider to represent the market for the time frame in which the sales took place. Therefore, no cash equivalency adjustments were necessary. The following is a discussion of the remaining adjustments. Time: The time adjustment reflects fluctuations in economic factors such as inflation, supply and demand, and general economic conditions. The comparable sales found in our market study occurred since 1992. No time adjustment is indicated for these sales. 36 Land Value Estimate, continued Size: Generally, when two s~ilar properties sell with the only significant difference being size, the larger property will sell at a lower unit price than the smaller site, in much the same manner as buying in bulk with any commodity. While the specific measure- ments may vary from region to region, many years of studies suggest that the land market in Plainview is only marginally sensitive to size. Sale 2 is much smaller than the subject property. A downward size adjustment is made for Sale 2. Location: Location involves a number of factors, many of which are subjective to the purchaser and are thus difficult to quantify. With the available comparable sales, these subjective elements can be observed only. As each of the comparable sales and the subject are located in areas with similar locational characteristics, loca- tional adjustments are sometimes necessary for some of the com- parable sales. Adjustments are made depending upon the importance of the intersection, ingress and egress, traffic volume, exposure and other factors. In each case, the comparable sales are compared to the subject in terms of location. Sale 1 is located adjacent to the subject. No location adjustment is indicated for Sale 1. Sales 2, 3 and 4 are all located away from the city of Plainview in areas with very limited development potential. Upward location adjustments are indicated for these sales. 37 Land Value Estimate, continued The available sales produce an adjusted market value ~ange of $1,071/Acre to $1,260/Acre. Given the limited activity in the local market, particularly for a tract the size of the subject, this is considered to be a reasonable value guide. This is a reasonable value range and will be applied to the subject site. These represent the most recent, comparable land sales in the area. Adjustments have been made for differences in size, location, utility and date of sale. After making the indicated adjustments, the following is considered to be a reasonable market value guide for the whole property subject site: 320.0 Acres x $1,200/Acre = $384,000 320.0 Acres x $1,250/Acre = $400,000 Indicated Site Value - Whole Property Say, $400,000 38 VALUE INDICATED BY COST APPROACH A measure of the value of a property is indicated by considering the cost of constructing the improvements, plus the Market Value of the land. Current construction costs, including material costs, labor costs, equipment costs and various miscellaneous expenses (such as insurance, fees, permits and other interim items), for commercial, industrial, residential and special purpose buildings are main- tained by your appraiser. The indicated amounts found by the above techniques, are further cross-checked against actual construction costs of known buildings and against reported construction costs in Dodge Reports, Marshall Valuation Service, and other similar services. Replacement Cost Replacement cost may be defined as the total cost of constructing new improvements of equivalent utility to the property being appraised. It may or may not be an exact replica, but the design, materials and building techniques are based on modern construction practices to replace this equal utility aspect of the improvements. The replacement cost estimate will include all costs associated 39 Value Indicated by Cost Approach, continued with a new project such as materials, labor, builder's profit and overhead, plus soft costs like interim construction interest, various professional fees and services, etc. We will discuss appropriate sources of cost information and draw comparisons toward the subject improvements. We have interviewed general building contractors, derived actual cost breakdowns from various new projects and refer to a national cost publication for pertinent information. Marshall Valuation Service reports the following costs per square foot of area, locally adjusted to the West Texas market for pre- engineered steel buildings. This information is found on Page 25, Section 14, Marshall Valuation GUide. Indicated Cost Local Multiplier Adjusted Cost Low Cost Average $14.90 $21.33 x .8.9 x .89 $13.26 $18.98 4O Value Indicated by Cost Approach, continued Marshall Valuation Service reports '~he following costs per square foot of area, locally adjusted to the West Texas market for General Purpose Barns. This cost will be applied to the trailer shed. This information, is found on Page 21, Section 17, Marshall Valuation Guide. Indicated Cost Local Multiplier Adjusted Cost Low Cost Averaqe $ 9.45 $13.00 x .89 x .89 $ 8.41 $11.57 Marshall and Swift, Residential CoSt Handbook reports the following costs per square foot of area, locally adjusted to the West Texas market for average quality residences. This information is found on Page Avg-19. Indicated Cost Local Multiplier Adjusted Cost Stud Framed Masonry $51.30 $48.19 x .89 x .89 $45.66 $42.89 41 Value Indicated by Cost Approach, continued Cost Discussion ~< The pre-engineered steel building cost comparables indicate a range of costs from $13.26/SF to $18.98/SF. The subject property is of low cost construction that can be considered in the lower range of costs. An appropriate estimate for the replacement cost of the pre-engineered building is considered to be $13.50/SF. The barn costs range from $8.41/SF to $11.57/SF. The lower cost is most comparable. Therefore, the replacement cost of $8.50/SF is applied to the trailer shed. The frame residence cost is estimated at $45.66/SF. The masonry residence cost is estimated at $42.89/SF. Depreciation If a propertY experiences any form of deterioration or obsoles- cence, then depreciation exists and must be deducted from the total replacement cost. Depreciation is loss from the upper limit to value and may occur in one or more of the following forms: Physical Deterioration Functional Obsolescence Economic Obsolescence General wear and tear, maintenance, age related maining economic life deferred to re- Problem within the improvements caused by design, adequacy, style or capacity External problem usually beyond ownership control, due to market changes, legislation, neighborhood development cycle 42 Value Indicated by Cost Approach, continued Physical Deterioration a) Curable Physical Depreciation Curable physical depreciation considers items which a prudent purchaser would anticipate correcting immediately upon acquisition of the property. It is assumed that the cost of affecting the cor- rection would not be any greater than the anticipated gain in value accrued by virtue of correcting the problem. The estimate of this amount is usually computed.as a dollar amount to the cost to cure. No curable depreciation is present in the subject property. b) Incurable Physical Depreciation Incurable physical depreciation refers to those items of physical deterioration which cannot be physically and/or economically cor- rected. The estimate of incurable physical depreciation has been based on the Age/Life Method of depreciation. The Age/Life Method is generally considered to be an acceptable measure of physical deterioration due to the effective age of the property. The subject is existing construction and will have some physical deterioration. The effective age of the subject overall is considered to be 32 years. Marshall Valuation Service estimates the economic life for buildings similar to the subject at 40 years. 43 Value Indicated by Cost Approach, continued Their figures Are based on studies of actual building mortality, condition of surviving buildings and ages at which major recon- struction or change of occupancy takes place. Therefore: Effective Age + Economic Life = % Depreciation 32 years + 40 years = 80% Functional Obsolescence Functional obsolescence is an impairment of functional capacity or efficiency and reflects the loss in value caused by super- adequacies or inadequacies. Super-adequacies are changes in con- struction methods which hamper the ability of the-structure to adequately fulfill its current function. Inadequacies are deficiencies in construction methods that have the same effect. Functional obsolescence, like physical deterioration, can be divided into curable and incurable~components. Functional curable obsolescence would be represented by an item whose cost to correct would be equal to or less than the increase in value which would result by doing so. Functional incurable obsolescence would be represented by a major structural deficiency or super-adequacy that would not be justified in replacing the repairing because the sub- stantial cost to do so would be greater than the value advantage gained from the correction. The subject does not appear to suffer from any form of functional depreciation. 44 Value Indicated by Cost Approach, continued Economic Obsolescence Economic obsolescence is a form of depreciation which is caused by factors external to the property, such as environmental or economic forces which affect supply/demand relationships or otherwise impair the desirability or useful life of the subject property. The subject does not appear to be suffering from economic obsolescence. Replacement Cost New Replacement Cost of Improvements Shop - Shop - Masonry Residence Frame Residence - Trailer Shed - 3,200 SF x $13.50/SF = 4,040 SF x $13.50/SF = 5,124 SF x $42.89/SF = 928 SF x $45.66/SF = 420 SF x $ 8.50/SF = Site Improvements - minimal Total Replacement Cost of Improvements Less Physical Depreciation @ 80% Depreciated Value of Improvements Plus Land Value Total Indicated Value by Cost Approach Say, $ 43,200 $ 54,540 $219,768 $ 42,372 $ 3,570 $ 8,000 $371,450 ($297,160) $ 74,290 $400,000 $474,290 $475,000 45 CORRELATION AND CONCLUSIONS A correlation of the three approaches to value of an appraisal places their indicated values in a mutual relationship. Then, an analysis of their relative merit is made in an overall view of the property and a final value is produced. Thus, we have completed the appraisal process having analyzed the property from several aspects and a review of the value indications is as follows: Land Value Estimate Cost Approach Income Approach Market Approach $400,000 $47'5,000 $ N/A $ N/A The Cost Approach has been used in determining the value of the subject property. The Cost Approach takes into consideration the estimated construction cost of the building and site improvements plus the land value. The Cost Approach is considered to be a reliable guide in estimating the value of a multi-use facility such as the subject. No comparable improved properties were located in the Plainview market. The subject is a special use property. Therefore, the Market Approach was not applied in this report. 46 Correlation and conclusions, continued The Income Approach attempts to reflect the demands of investors in the current market. As the subject is a special use property and comparable rental data is unavailable, the Income Approach is not considered to be a reliable guide in estimating value of this property. Hazardous Substance Comment The physical inspection of the subject revealed the presence of no hazardous substances; however, the examination for such substance is not within the realm of the appraiser's expertise, and no warranty is made that such a presence does not exist. The value estimate produced assumes the subject property to be environ- mentally clean. After examination of the available data and application of the appraisal process, a reasonable and supportable Market Value estimate for the subject whole property, as of December 2, 1999, is: $475,000 FOU~ Hundred Seventy Five Thousand Dollars 47 DESCRIP .TION OF RIGHT-OF-WAY TAKING The proposed right-of-way taking, as described in the attached field note description, is a total 3.004 acre tract located along the west property line of the subject site. will be 25 feet wide by 5,235 feet long. entire length of the subject site. The proposed taking This represents the The proposed taking is located down the west property line of the subject. At the northern portion of the right-of-way the taking passes alongside the frame house and includes three Elm trees. The southern portion of the take crosses the irrigated cropland. The underground irrigation pipe is located just to the east of the proposed take. This pipe is located outside the taking. Any damage or -leaking in this line caused by the right-of-way construction will be repaired by the condemnor. The highest and best use of the proposed taking is for continued use in conjunction with the adjacent property. The purpose of the proposed right-of-way taking is to allow construction of an underground sewer line. After installation of the sewer line the surface of the right-of-way will be returned to its present use. The right-of-way will restrict future development 48 Description of Riqht-of-Wa¥ Takinq, continued of permanent structures within the designated right-of-way property. The surface, however, can be used for any other surface uses. The right-of-way will not be fenced or otherwise have access restricted to the property owner. Valuation of the Part Taken The land value of the part taken for easement purposes, as severed land, is based on the highest and best use in conjunction with the adjacent property. The location of the proposed easement along the southern property line should allow future development of the remainder site without damage. The easement taking is less restrictive than a taking in fee simple in that the landowner retains some of the use rights in the land. Only the right to erect permanent structures in the right-of-way will be restricted. Research into the market place could not verify market sales of such easement takings. The location of the proposed easement should minimize the value loss to the property. Despite these factors, the loss of some of the use rights by the property owner indicates a need for compensation to the property owner for the right-of-way taking. This compensation, however, is considered to be less than the full fee value of the proposed taking. 49 Description of Riqht-of-Wa¥ Takinq, continued The use of the surface of the proposed taking remains largely intact. This would preclude payment of 100% of fee simple value. The restriction against permanent construction in the easement would call for additional planning before any future development could occur. Compensation is due for this additional planning. Additionally, the presence of the easement could extend the marketing time somewhat. Compensation is due for any extended marketing time. No empirical data was available to produce this value loss. Observations of the market indicate that this reduction in development control of the'right-of-way taking should produce a permanent easement value of 75% of the fee~simple value. The land value estimate produced a market value estimate of $1,250/Acre for the whole property. An easement compensation Of 75% of the fee simple value calculates to $938/Acre. This can be applied to proposed right-of-way taking as follows: Proposed Takinq x Price = 3.004 Acres x $938/Acre = Just Compensation $2,818 50 Description of Riqht-of-Wa¥ Takinq, continued ~ascription - Remainder Before the Taking The remainder before the taking totals 316.996 acres. The remainder is of adequate size and access to continue its current use. The highest and best use of the remainder, before the taking, is for mixed commercial, residential, and agricultural uses. Valuation - Remainder Before the Taking The valuation of the remainder before the taking is equal to the value of the whole property less the estimated just compensation for the proposed right-of-way taking. Thus: Market Value -Whole Property Less: Just Compensation for Taking Remainder Value - Before Taking $475,000 ($ 2,8 8) $472,182 Description - Remainder After Taking The remainder site remains 320.0 acres of fee simple ownership with 3.004 acres along the west property line encumbered by a permanent sewer line easement. The entire surface site will continue to be available for development, with the 3.004 acre tract restricted against permanent building construction. It is the appraiser,s judgment that future development of the site would not be 51 Description of Riqht-of-Wa¥ Taking, continued restricted by the presence qf the proposed easement. Therefore, the highest and best use of the remainder, after the taking, remains for mixed commercial, residential, and agricultural uses. Valuation - Remainder After Taking The remainder property is considered to be damaged bythe presence of the proposed permanent easement. The presence of the easement does not affect the highest and best use of the development tract, but the damage to the trees located in the right-of-way is expected. Future development can occur on the remainder tract. These factors would indicate that the value of the remainder tract would equal the value of the whole property, less the just compensation for the part taken and the damage to the trees. It is the appraiser's judgment that a contributory value of $250 is assigned to the trees located in the proposed right-of-way. Thus: Market Value -Whole Property Less: Just Compensation for Easement Tree Damage Market Value - Remainder Property $475,000 ($ 2,818) $. 250 $471,932 52 Description of Riqht-of-Way Takinq, continued Total Compensation Due Based on the preceding valuations and conclusions, the following is a summary of the Total Compensation Due: Market Value of Whole Property Estimate of Compensation for Right-of-Way Taking Remaining Property: Remainder Before Taking Less: Remainder After Taking Net Damages Total Compensation $475,000 $472,182 ($471,932') $ 2,818 $ 25O $ 3,068 Conclusion of Estimate of Compensation Due Based on investigations and analyses undertaken, the appraiser is of the opinion that, as of December 2, 1999, subject to the Assumptions and Limiting Conditions set forth in this report, the total estimate of compensation for the proposed right-of-way taking is: $3,068 Three Thousand sixty Eight Dollars 53 CERTIFICATE I certify that, to the best of my knowledge and belief, ... the statements of fact contained in this report are true and correct the reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, unbiased professional analyses, opinions, and conclusions. I have no (or the specified) present or prospective interest in the property that is the subject of this report, and I have no (or the specified) personal interest or bias with respect to the parties involved. The appraisal is not based on a requested minimum value, specific value or loan approval. my compensation is not contingent on an action or event resulting from the analyses, opinions, or conclusions in, or the use, of this report. my analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and the Standards of Professional Practice of the American Institute of Real Estate Appraisers. The use of this report is subject to the requirements of the American Institute of Real Estate Appraisers relating to review by its duly authorized representatives. As of the date of this report, I have completed the requirements under the continuing education program of the American Institute of Real Estate Appraisers. I have made a personal inspection of the property that the subject of this report. 54 Certificate, continued Based upon my investigation and my experience, I conclude that the Market ~a:lue of the said property, as of December 2, 1999, under the assumptions and limiting conditions as stated, is: Market Value - Whole Property Easement compensation $475,000 $ 3,068 General Appraiser TX-1320765-G 55 CERTIFICATION AND STATEMENT OF LIMITING CONDITIONS CERTIFICATION The appraiser certifies and agrees that: 1. The Appraiser has no present or contemplated future interest in the property appraised; and neither the employment to make the appraisal, nor the compensation for it, is contingent upon the appraised value of the property. 2. The Appraiser has no personal interest in or bias with respect to the subject matter of the appraisal report or the participants to the sale. The "Estimate of Market Value" in the appraisal report is not based in whole or in part upon the race, color, or national origin of the prospective owners or occupants of the property appraised, or upon the race, cOlor or national origin of the present owners or occupants of the properties in the vicinity of the property appraised. 3. The Appraiser has personally inspected the property, both inside and out, and has made an exterior inspection of all comparable sales listed in the report. To the best of the Appraiser's knowledge and belief, all statements and information in this report a~e true and correct, and the Appraiser has not knowingly withheld any significant information. 4. Ail contingent and limiting conditions are contained herein (imposed by the terms of the assignment or by the undersigned affecting the analyses, opinions, and conclusions contained in the report). 5. This appraisal report has been made in conformity with and is subject to the requirements of the Code of Professional Ethics and Standards of Professional Conduct of the appraisal organizations with which the Appraiser is affiliated. 6. Ail conclusions and opinions concerning the real estate that are set forth in the appraisal report were prepared by the Appraiser whose signature appears on the appraisal report, unless indicated as "Review Appraiser." No change of any item in the appraisal report shall be made by anyone other that the Appraiser, and the Appraiser shall have no responsibility for any such unauthorized change. 7. The Appraisal Institute conducts a voluntary program of continuing education for its designated members. MAIsand SRAs who meet the minimum standards of this program are awarded periodic educational certification. I am currently certified under this program. 56 CONTINGENT AND LIMITING CONDITIONS The certification of the Appraiser appearing in the appraisal report is subject to the following conditions and to such other specific & limiting conditions as are set forth bythe Appraiser in the report. 1. The Appraiser assumes no responsibility for matters of legal nature affecting the property appraised or the title thereto, nor does the Appraiser render any opinion as to the title, which is assumed to be good and marketable. The property is appraised as though under responsible ownership. 2. Any sketch in the report may show approximate dimensions and is included to assist the reader in visualizing the property. The Appraiser has made no survey of the property. 3. The Appraiser is not required to give testimony or appear in court because of having made the appraisal with reference to the property in question, unless arrangements have been previously made therefor. 4. Any distribution of the valuation in the report between land and improvements applies only under the existing program of utilization. The separate valuations for land and building must not be used in conjunction with any other appraisal and are invalid if so used. 5. The Appraiser assumes that there are no hidden or unapparent conditions of the property, subsoil, or structures, which would render it more or less valuable. The appraiser assumes no responsibility for such conditions, or for engineering which might be required to discover such factors. 6. Information, estimates, and opinions furnished to the Appraiser, and contained in the report, were obtained from sources considered reliable and believed to be true and correct. However, no responsibility for accuracy of such items furnished the Appraiser can be assumed by the Appraiser. 7. Disclosure of the contents of the appraisal report is governed by the Bylaws and Regulations of the professional appraisal organizations with which the Appraiser is affiliated. 57 Continqent and limitinq conditions, continued 8. Neither all, nor any .part of the content of the report, or copy thereof (including conclusions as to the property value, the identity of the Appraiser, professional designations, reference to any professional appraisal organization, or the firm with which the Appraiser is connected), shall be used for any purposes by anyone but the client specified in the report, the borrower if appraisal fee paid by same, the mortgagee or its successors and assigns, mortgage insurers, consultants, professional appraisal organizations, any state of federally approved financial institu- tion, any department, agency, or instrumentality of the United States or any state or the District of Columbia, without the previous written consent of theAppraiser; nor shall it be conveyed by anyone to the public through advertising, public relations, news, sales, or other media, without the written consent and approval of the Appraiser. 9. On all appraisals, subject to satisfactory comPletion, repairs, or alterations, the appraisal report and value conclusions are contingent upon completion of the improvements in a workmanlike manner. 58 QUALIFICATIONS STEVEN ROGERS, MAI GENERAL President of The Steve Rogers Company, Appraisal and Counseling in Real Estate, located at: 1827 S. Virginia Amarillo, Texas PROFESSIONAL EXPERIENCE Over three years appraisal experience with smith Real Estate Associates, Inc., in Waco, Texas. Duties include real property appraising of residential, commercial, industrial, and development properties. Have also testified as an expert witness in McLennan County Court, Waco, Texas. Over two years appraisal experience with Toland, McClellan, Massey, Inc. and McClellan, Massey, Mashburn, Inc., in Dallas, Texas. Duties include real property appraising of commercial and industrial properties as well as appraising for eminent domain proceedings. Over sixteen years of appraisal experience with Steve Rogers Company in Amarillo, Texas. Experience includes real property appraising of residential, commercial, and industrial properties. Have also testified as expert witness in Potter and Randall County Courts. PROFESSIONAL AFFILIATIONS American Institute of Real Estate Appraisers, Texas Plains Chapter MAI Designation, certificate $6342, currently certified Texas State Certified - TX-1320765-G New Mexico State Certified - ~000821-G Oklahoma State Certified - #11078 59 Qualifications, continued Kansas State Certified - ~G-1015 Colorado State Certified - CG01325304' Member, Society of Real Estate Appraisers, Young Advisory Council 1979, New Orleans, and 1980, Denver ' Member, Amarillo Board of Realtors Real Estate Broker-Texas Real Estate Commission EDUCATIONAL BACKGROUND General: Bachelor of Science (B.S.), Texas Tech University, Lubbock, 1971 Specific: Several courses of the American Institute of Real Estate Appraisers, and cost estimating seminars in Dallas (1976 and 1977), presented by the Marshall and Stevens Publications Company, and Boeckh Valuation Service. Baylor University - Post Graduate Study in Real Estate.. 60