5 WHEREAS, in accordance with NRS (purchase, sale or exchange of property with

Transcription

1 I NYL COUNTY RESOLUTION NO A RESOLUTION AMENDING NYE COUNTY RESOLUTION NO AUTHORIZING THE 3 EXCHANGE OF NYF COUNTY PROPERTY FOR PRIVATE PROPERTY IN ORDER TO ACQUIRE PUBLIC ROAD AND UTILITY EASEMENTS IN THE lown OF MANHATTAN. 4 5 WHEREAS, in accordance with NRS (purchase, sale or exchange of property with 6 owners abutting road or flood control facility to adjust road or flood facility...), the Nyc County Board 7 of County Commissioners at its May 3, 2011 meeting reviewed a proposal made by Nyc County Public 8 Works, whereas Mr. Robert M. Bottom. owner of lands impacted by the Manhattan Water Project, Phase 9 2, located within the Town of Manhattan, Nyc County, Nevada, would convey Public Road and Utility 10 Easements to Nyc County, in exchange for Nyc County owned properties in the Town of Manhattan, the 11 parcels described as: Lots 8 through 10, Block D, also known as Assessor s Parcel No , being acres more or less, Lot 6, Block 27, also known as Assessor s Parcel No , being acres more or less, Lot 4, Block 27, also known as Assessor s Parcel No , being acres 14 more or less, Lot 11, Block 27, also known as Assessor s Parcel No , being 0058 acres more 15 or less, Lot 1, Block 17, also known as Assessor s Parcel No , being acres more or less, 16 Lot 9, Block 15, also known as Assessor s Parcel No , being acres more or less, Lot 3, 17 Block 18, also known as Assessor s Parcel No , being acres of land more or less, Lots I 18 through 6, Block 16, also known as Assessor s Parcel No , being acres of land more or 19 less, Lot 10, Block 20, also known as Assessor s Parcel No ,, being acres of land more 20 or less, all as shown on the Record of Survey of the Town of Manhattan, recorded in the Office of the 21 Nyc County Recorder as File Map No , Nyc County, Nevada, and Lot 7 and 8, Block 4, also 22 known as Assessor s Parcel No bcing acres of land more or less, as shown on The 23 Jackson Addition, recorded in the Office of the Nyc County Recorder as File Map No. 1385, Nyc 24 County, Nevada. In the Town of Belmont, the parcel being described as the Southwest feet of Lot 25 24, All of Lots 25 and 26 and the Northeast feet of Lot 27, Block 1, also known as Assessor s Resolution Amending Resolution 201 l-30.docx - I

2 I Parcel No , being acres as shown on the Record of Survey of the Revised Town of 2 Belmont recorded in the Office of the Nyc County Recorder as File Map No , Nyc County, 3 Nevada. In Shoshone Estates Subdivision, the parcel being described as Lot 23, also known as 4 Assessor s Parcel No , being 0.71 acres of land more or less, as shown on Shoshone Estates 5 Subdivision, recorded in the Office of the Nyc County Recorder as File Map No ,Nyc County, 6 Nevada. In the Town of lonopah, a parcel described as Parcel 1, as shown on the Lot Line Adjustment, 7 recordcd as File Map No and SAVE AND EXCEPT that portion as described in Deed recorded 8 as Document No , both being recorded in the Office of the Nyc County Recorder, Nyc County, 9 Nevada, also known as Assessor s Parcel No , being 1.92 acres of land more or less; and; 10 WHEREAS, the Board finds pursuant to NRS that this proposed exchange would be in 11 the best public interest in the future development in the [own of Manhattan and will require Public 12 Road and Utility Easements in order to provide access and water utilities necessary for the creation or 13 retention of redevelopment and economic development for residents of the county; and 14 WI IEREAS, the Board finds that the value of the property to be received by each party is 15 equitable; and 16 WHEREAS, the property obtained by the County will be used for a public purpose. 17 NOW THEREFORE, BE IT RESOLVED, by the Board of County Commissioners of the County ol 18 Nyc, State of Nevada, that exchange conveyances be recorded effecting the above described exchange ol 19 properties whose legal descriptions areas follows: Nye County to Robert M. Bottom, Trustee, Bottom Family Trust and Bottom Family Trust: In the Town of Manhattan -Lots 8 through 10, Block 0, also known as Assessor s Parcel No , being acres more or less, Lot 6, Block 27, also known as Assessor s Parcel No , being acres more or less, Lot 4, Block 27, also known as Assessor s Parcel No , being acres more or less, 24 Lot 11, Block 27, also known as Assessor s Parcel No , being acres more or less, Lot 1, Block 17, also known as Assessor s Parcel No , being acres more or less, Lot 9, Block 25 15, also known as Assessor s Parcel No , being acres more or less, Lot 3, Block 18. also known as Assessor s Parcel No , being acres of land more or less, Lots I through Resolution Ameuding Resolution docx -2-

3 1 6, Block 16, also known as Assessor s Parcel No , being acres of land more or less, Lot 10, Block 20, also known as Assessor s Parcel No , being acres of land more or 2 less, all as shown on the Record of Survey of the Town of Manhattan, recorded in the Office of the Nyc County Recorder as File Map No , Nyc County, Nevada, and Lot 7 and 8, Block 4, a]so known as Assessor s Parcei No , being acres of land more or less, as shown on The Jackson Addition, recorded in the Office of the Nyc County Recorder as File Map No. 1385, Nyc County, Nevada. 5 In the Town of Belmont 6 Part of Lot 24, All of Lots 25 and 26 and Part of Lot 27, Block I. also known as Assessor s Parcel No , being acres as shown on the Record of Survey recorded in the Office of the Nyc 7 County Recorder as File Map No , Nyc County, Nevada. In Shoshone Estates Subdivision Lot 23, also known as Assessor s Parcel No , being 0.71 acres of land more or less, as shown on Shoshone Estates Subdivision, recorded in the Office of the Nye County Recorder as File Map No , Nyc County, Nevada. In the Town of Tonopah Parcel 1, also known as Assessors Parcel No , being 1.92 acres of land more or less, as 12 shown on the Lot Line Adjustment, recorded in the Office of the Nyc County Recorder as File Map No , SAVE AND EXCEPT that portion of Parcel 1 being described in deed recorded in the Office of 13 the Nye County Recorder as Document , Nyc County, Nevada. 14 Robert M. Bottom, Trustee, Bottom Family Trust and Bottom Family Trust to Nye County: 15 The Real Property located in the Town of Manhattan, described by metes and bounds as follows: 16 PUBLIC ROAD AND UTILITY EASEMENT No. I 17 BEING situated in Section 20, Township 8 North, Range 44 East, MDB&M, and as shown on the g Record of Survey recorded as File Map No , of the Official Records in the Office of the Nye County Recorder, Nye County, Nevada, the centerline of a foot Public Road Right-of-Way and 19 Utility Easement being described by Metes and Bounds as follows: 20 COMMENCING at the West ¼ corner of said Section 20, Township 8 North, Range 44 East; 21 THENCE North 44 degrees 53 minutes 23 seconds East, a distance of feet to the POINT OF BEGINNING; THENCE South 30 degrees 00 minutes 50 seconds West, a distance of feet; 24 THENCE South 09 degrees 58 minutes 51 seconds West, a distance of feet to the terminus of the Public Road and Utility Easement, said terminus being North 48 degrees 14 minutes 33 seconds East, feet from the above mentioned West ¼ corner ol Section 20, and containing 1,521 square feet or acres of land more or less. Resolution Amending Resolution docx 3 -

4 BASIS OF BEARiNG: North 72 degrees 32 minutes 40 seconds West 2 Being the centerline of Main Street per the above mentioned Record of Survey. PUBLIC ROAD AND UTILITY EASEMENT No.2 BEING situated in Section 20, Township 8 North, Range 44 East, MDB&M, and being a portion of the Town of Maithattan, as shown on the Record of Survey recorded as File Map No , of the Official Records in the Office of the Nye County Recorder, Nyc County, Nevada, the centerline of a foot Public Road and Utility Easement being described by Metes and Bounds as follows: 7 COMMENCING at the West ¼ corner of said Section 20, Township 8 North, Range 44 East; 9 10 [HENCE North 48 degrees 51 minutes 14 seconds East, a distance of feet to the POINT OF BEGINNING; THENCE South 17 degrees 03 minutes 26 seconds West, a distance of feet; II IENCE South 09 degrees 45 minutes 34 seconds West, a distance of feet to the terminus of the Public Road and Utility Easement, said terminus being North 53 degrees 11 minutes 08 seconds East, feet from the above mentioned West ¼ corner of Section 20, and containing 1,502 square feet or acres of land more or less. 13 BASIS OF BEARING: North 72 degrees 32 minutes 40 seconds West 14 Being the centerline of Main Street per the above mentioned Record of Survey is PUBLIC ROAD AND UTILITY EASEMENT No.3 BEING situated in Section 20, Township 8 North, Range 44 East, MD[3&M, and as shown on the Record of Survey recorded as File Map No , of the Official Records in the Office of the Nyc County Recorder, Nyc County, Nevada, the foot Public Road and Utility Easement being described by Metes and Bounds as follows: 19 COMMENCING at the West ¼ corner of said Section 20, Township 8 North, Range 44 East; 20 THENCE North 57 degrees 01 minutes 19 seconds East, a distance of feet to the POINT OF 21 BEGINNING; 22 THENCE South 04 degrees 55 minutes 16 seconds East. a distance of feet; 23 THENCE South 04 degrees 24 minutes 43 seconds West, a distance of feet to the North Right-of- Way line of Euclid Avenue, (a 50.0 foot Right-of-Way) as shown on the above mentioned Record of 24 Survey; 25 THENCE South 85 degrees 04 minutes 44 seconds West, along the North line of said Euclid Avenue, a distance of feet; Resolution Amending Resolution 201 I-3OAocx -4

5 THENCE North 04 degrees 24 minutes 43 seconds East, departing the North line of said Euclid Avenue, 2 a distance of feet; 4 THENCE North 09 degrees 45 minutes 34 seconds East, a distance of 4.28 feet to the POINT OF BEGINNING, and containing 1,032 square feet or acres of land, more or less. BASIS OF BEARING: North 72 degrees 32 minutes 40 seconds West Being the centerline of Main Street per the above mentioned Record of Survey. 6 PUBLIC ROAD AND UTILITY EASEMENT No. 4 7 BEING situated in Section 20, lownship 8 North, Range 44 East, being a portion of the Carson Patented 8 Mining Claim, Mineral Survey No. 2613, the Jackson Patented Mining Claim, Mineral Survey No and the Pine Nut Patented Mining Claim, Mineral Survey No. 2915, and a portion of the real property shown on the Record of Survey recorded as File Map No , of the Official Records in the Office of the Nyc County Recorder, Nyc County, Nevada, the centerline of a foot Public Road and 10 Utility Easement being described by Metes and Bounds as follows: COMMENCING at the West ½ corner of said Section 20, Township 8 North, Range 44 East; THENCE North 60 degrees 32 minutes 22 seconds East, feet to the POrN] OF BEGINNING; THENCE South 29 degrees 59 minutes 07 seconds East, a distance of feet; THENCE South 65 degrees 52 minutes 31 seconds East, a distance of feet; THENCE South 52 degrees 04 minutes 56 seconds East, a distance of feet; 17 [hence South 17 degrees 25 minutes 34 seconds East, a distance of feet; 18 THENCE South 26 degrees 03 minutes 33 seconds East, a distance of feet; 19 THENCE South 41 degrees 25 minutes 28 seconds East, a distance of feet; 20 THENCE South 48 degrees 05 minutes 09 seconds East, a distance of feet; 21 THENCE South 63 degrees 01 minutes 10 seconds East, a distance of feet to the beginning of a 22 curve to the left, whose center hears North 26 degrees 58 minutes 50 seconds East, having a radius of feet, and a delta of 114 degrees 01 minutes 31 seconds; 23 TI IENCE along said curve to the lefi, an arc length of feet, a chord bearing of North 59 degrees minutes 05 seconds East and a chord length of feet; 25 THENCE North 02 degrees 57 minutes 20 seconds East, a distance of feet; Resolution Amending Resolution 201 l-30.docx -5 -

6 1 l l-ience North 05 degrees 56 minutes 19 seconds West, a distance of feet; 10 2 THENCE North 04 degrees 55 minutes 10 seconds West, a distance of feet to the beginning of a curve to the right, whose center bears North 85 degrees 04 minutes 50 seconds East, having a radius of feet and a delta of 90 degrees 54 minutes 23 seconds: THENCE along said curve to the right having an arc length of feet, a chord bearing of North 40 degrees 32 minutes 02 seconds East and a chord length of feet; 6 THENCE North 85 degrees 59 minutes 13 seconds East, a distance of feet; 7 THENCE North 17 degrees 27 minutes 20 seconds East, a distance of feet to the terminus of the foot Public Road and Utility Easement and said point being North 67 degrees 47 minutes 28 seconds East, a distance of 1, feet from the above mentioned West ¼ corner of Section 20, and containing 18,956 square feet or acres of land more or less. BASIS OF BEARING: North 72 degrees 32 minutes 40 seconds West Being the centerline of Main Street per the above mentioned Record of Survey. 11 PUBLIC ROAD AND UTILIT EASEMENT No.5 12 BEING situated in Section 20, Township 8 North, Range 44 East, being a portion of the Dexter No Patented Mining Claim, Mineral Survey No. 2602, the Carson Patented Mining Claim, Mineral Survey No. 2613, the Jackson Patented Mining Claim, Mineral Survey No and the Pinenut Patented 14 Mining Claim, Mineral Survey No. 2915, and being part of the real property shown on the Record of 15 Survey recorded as File Map No , of the Official Records in the Office of the Nyc County Recorder, Nyc County, Nevada, the centerline of a foot Public Road and Utility Easement being 16 described by Metes and Bounds as follows: 17 COMMENCING at the West ¼ corner of said Section 20, Township 8 North, Range 44 East: 18 THENCE North 87 degrees 25 minutes 16 seconds East, a distance of 1, feet to the POINT OF BEGINNING; 19 TIIENCE South 00 degrees 57 minutes 29 seconds East, a distance of feet; 20 THENCE South 13 degrees 13 minutes 45 seconds East, a distance of feet; THENCE South 23 degrees 26 minutes 05 seconds East, a distance of feet; II IENCE South 30 degrees 00 minutes 41 seconds East, a distance of feet; 24 THENCE South 35 degrees 54 minutes 25 seconds East, a distance of feet; 25 THENCE South 56 degrees 20 minutes 30 seconds East, a distance of feet; Resolution Amending Resolution 201 I-30.docx -6-

7 I THENCE North 82 degrees 07 minutes 45 seconds East, a distance of feet, to the beginning of a curve to the left, whose center bears North 07 degrees 52 minutes 15 seconds West, having a radius of feet and a delta of 77 degrees 52 minutes 50 seconds; TINCE along said curve to the left, an arc length of feet, a chord bearing of North 43 degrees 11 minutes 21 seconds East and a chord length of feet; THENCE North 04 degrees 14 minutes 56 seconds East, a distance of feet; 6 THENCE North 32 degrees 02 minutes 03 seconds East, a distance of feet; 7 THENCE North 44 degrees 21 minutes 20 seconds East, a distance of feet to the beginning of a curve to the right, whose center bears South 45 degrees 38 minutes 40 seconds East, having a radius of feet and a delta of 90 degrees 42 minutes 00 seconds; Il IENCE along said curve to the right, an arc length of feet, a chord bearing of North 89 degrees 42 minutes 20 seconds East and a chord length of feet; ThENCE South 44 degrees 56 minutes 40 seconds East, a distance of feet; 12 THENCE South 39 degrees 33 minutes 34 seconds East, a distance of feet to the terminus of the 15 foot Public Road and Utility Easement, said terminus being in the North line of the following 13 described Public Road and TJtility Easement No. 6, and said terminus being South 87 degrees 53 minute 22 seconds East, 1, feet from the above mentioned West 1/4 corner of the above mentioned 14 Section 20 and containing 14,251 square feet or acres of land more or less BASIS OF REARING: North 72 degrees 32 minutes 40 seconds West, Being the centerline of Main Street per the above mentioned Rccord of Survey. PUBLIC ROAD AND UTILITY EASEMENT No.6 18 BEING situated in Section 20, Township 8 North, Range 44 East, being a portion of the Dexter No.8 Patented Mining Claim, Mineral Survey No. 2602, the Jackson Patented Mining Claim, Mineral Survey 19 No. 2914, Town of Manhattan, Nyc County, Nevada, being a Public Road and Utility Easement and said Public Road and Utility Easement being described by Metes and Bounds as follows: 20 COMMENCING at the West ¼ corner of Section 20, Township 8 N, Range 44 E; THENCE South 87 degrees 44 minutes 46 seconds East, adistance of 1, feet to the POINT OF BEGINNING; TIIENCE North 90 degrces 00 minutes 00 seconds East, a distance of feet; THENCE South 00 degrees 00 minutes 00 seconds East, a distance of feet; THENCE South 90 degrees 00 minutes 00 seconds West, a distance of feet; Resolution Amending Resolution 201 I-30docx -7-

8 THENCE North 00 degrees 00 minutes 00 seconds West, a distance of feet to the PONT OF 2 BEGINNrNG and containing 39,222 square feet or 0.90 acres of land more or less. BASIS OF BEARING: North 72 degrees 32 minutes 40 seconds West Being the centerline of Main Street per the Record of Survey recorded as File Map No Said Public Road and Utility Easements are shown in the attached Exhibit A attached hereto. 6 IT IS FURTHER RESOLVED that the parcel located in the Town of Belmont, Assessor s Parcel No, shall not be transferred unless and until Nyc County shall obtain good and legal title free ol 7 any legal restrictions on the transfer of said property; and IT IS FURTHER RESOLVED that a copy of this resolution be attached to each conveyance docunieni upon recordation of each exchange conveyance. II IS APPROVED this day of August, NYE COL]ETY BOARD OF COUNTY COMMISSIONERS: Gary I lollis, Chairman ATTESI: Sandra Sam L. Merlino, Nyc County Clerk And Ex-Offiejo Clerk of the Board Resolution Amending Resolution 201 I-30.docx -8-

9 A SUMMARY APPRAISAL REPORT OF The Market Value of A Water Line Easement To Be Acquired From Patented Mining Claim Land-CaNon, Pinenut, Jackson, Dexter #8 ILSMS 2613, 2915, 2924, and 2602 respectively); Aka Land and Subdivided Lots in Blks 15, 16,19,26, and 29 of Record of Survey 2147; and Lots in Blocks 20, 21, 22, and 23 of the Jackson Addition OWNED BY Robert Bottom LOCATED In Pylarihaftan, Nevada, 49 Miles Northeast of Tonopah, Nevada In the Toquima Mountains in the flu mbolt Toiyabe National Forest FOR THE PURPOSE OF Forming an Opinion of the Market Value of the Water Line Easement Needed from the Subject Property Job Name Manhattan Water Project Phase II DATE OF VALUE May 31, 2011 PREPARED FOR County of Nye Mr. Andrew Borasky, Nve County Commissioner P.O. Box 887 Tonopah, Nevada APPRAISAL COMPLETED BY LU]BAWY Gi ASSOCIATES, INC South Durango Drive, Suite 100 Las Vegas, Nevada Phone: (702) Fax: (702) File #11-160A

10 June 10, 2011 File #2 I-160A County of Nye Mr. Andrew Borasky, \ve County Commissioner P.O. Box 887 Tonopab, Nevada Re: A Summary Appraisal Report of the Current Market Value and of a Water Line Easement Needed From Patented Mining Claim Land Carson, Pinenut, Jackson, Dexter #8 (USMS 2613, 2915, 2914, and 2602 respectively); aka Land and Subdivided Lots in Blocks 15, 16, 19,26, and 29 of Record of Survey ; and Lots in Blocks 20, 21, 22, and 23 of the Jackson Addition Project: Manhattan Water Project Phase II Dear Mr. Borasky: As requested, we have prepared a Summary Appraisal Report of the market value of a water line easement, with a public road on top of the easement, and a site for a water storage tank. The town of Manhattan, where the easement is planned, is in the loquima Mountains in the }{umbo]t Toiyabe Nahonal Forest, 49 miles northeast of Tonopah in Nve County, Nevada. and the town has an existing public water system with the water containing an arsenic level that exceeds the federal standard. There are no private water wells in Manhattan, and the federal government will lgin finirg Nyc County at reportedly 53,000 per day if the arsenic level is not reduced. Mr. Robert Bottom, who owns the mining claims underlying Manhattan, found a well location that reportedly provides water meeting the federal arsenic standard, and a water tank along with a water line can be placed on his property that will provide water to the town s existing water distribution system. The water line routing has a winding configuration that extends down a low mountainside, past existing homesites, and staving on a steady downward slope. Manhattan has 50 permanent residents, and 25 part time residents, along with a snia]] mote], a historic wood consituction church, a fire station, a post office, two bars, and homes. The town started in 1867 with silver mining, and gold was discovered in The town s population reached about 1,000 people and reportedly, there were three banks, 75 frame buildings, and a Wells Fargo Office. The precious metals mining ended by the 1940s. Kendal Stewart has inspected the property and we have investigated and analyzed the relevant data for the purpose of arriving at a supportable opinion of the market value of the easement to be acquired to construct a water tank and a water line on the subject property. The supporting data,

11 Mr. Andrew Borasky Page 2 analyses and concjusions used to form the opinion of the market value are contained in the accompam ing report and addenda. This letter by itself should not be construed as a complete report. Attached is a Summary Appraisal Report which is intended to comply with the reporting requirements set forth under Standards Rule 2-2(b) of the Uniform Standards of Professional Appraisal Practice for a Summai-v Appraisal Report. It presents only summary discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraisers opinions of value. Supporting documentation concerning the data, reasoning, and analyses is retained in thc appraisers files. The depth of discussion contained in this report is specific to the needs of tim client and for the intended use stated bejow. The appraiser is not responsib]e for unauthorized use of this report. The effective date of value is May 31, 2011, and we have formed an opinion of the market va]ue of the land in fee simple ownership. The client for the appraisal is Nye County, and the intended users of the report axe Nyc County and Mr. Robert Bottom. The intended use of the report is to establish the current market value of the subject easement to assist Nyc County and Robert Bottom in a property exchange. Based upon an analysis ol the market data and subject to the assumptions and limiting conditions contained within this report, we have formed an opinion of the market value of the water line easement as follows:

12 Mr. Andrew Borasky Page 3 MARKET VAIAJF OF THE ACQUISITION OPINION OF! VALUEIDENTIHCATTON MARKETVAT.UE A) Value Of The Unused Land Before The Acqu&tion: S 1,125,000 B) Value Of The Part Acq As Part Of The Whole Property: Value Of The Easement Acquisition: Water Tank and Water Line Easement: $ 131,700 C) Value Of Remainder Property As Part Of The Whole (A-B) S 993,300 D) Value Of Remaindcr Property After The Aquisitiori Disregarding Special Benefits S 952,817 E Severance Damages (C-D) S 40,483 F) Value Of The Remaij,der Property After The Acquisition Considering Special Benefits $ 952,817 G) Special Benefits (F-D) $ 0 H) Net Damages Or Net Special Benefits (E-G) S 40,483 I) Summary of the Market Value of the Easement Value Of The Easement To Be Acquired (B) $ 131,700 Net Damages To The Remainder Prop. (H) $ 40,483 Total Market Value of the Easement $ 172,183 Rounded To: $ 172,200 The opinion of the current market value of the proposed water Line casement, as of May 31, 2011 suect to the assuniptions and Iimting conditions contained herein ale as foiows: Water Line Easement Opinion of Value Easement Market Value 5172,200

13 Mr. Andrew Borasky Page 4 It is emphasized that any increase or decrease in the market value of the property prior to the date of value caused by the water line use for which the easement is being acquired has been disregarded in estimating the market value of the property, to the greatest extent practicable. (Source: 42 U.s.c (3) of the Uniform Relocation Assistance and Real property Acquisition Policies Act of 797O,. The opinion of market value has been predicated upon an exposure time of 6 to 12 months. The exposure time is based on the comparable sales within this report and on discussions with real estate professionals who are active in the area. Like the exposure time, the marketing period has also been estimated at 6 to 12 months. The acceptance of this appraisal assignment and the completion of the appraisal report submitted herewith are not contingent upon any extraordinary assumptions or hypothetical conditions. Thank you for giving us the opportunity of appraising this property. assistance, please do not hesitate to contact us. If we may be of further Sincerely, Matthew Lubawy, MAT Kendal Stewart Nevada License Number A cc Nevada License Number A CG License expires April30, 2013 License Expires April 30, 2013

14 Table of Contents TABLE OF CONTENTS I ASSUMPTJONS&LIMITINO CONDITIONS GENERAL ASSUMPTIONS AND LIMITING CONDITIONS I EXTRAORDINARY ASSUMPTIONS 2 CERTIFICATIONOF VALUE 3 SUMMARYOFIMPORTANTFACTSAND CONCLUSIONS INTRODUCTION 8 IDENTIFICATION OF THE PROPERTY 8 LEGAL DESCRIPTION 8 PURPOSE OF APPRAISAL 8 CLIENT FOR THE APPRAISAL 9 INTENDED USERS OF THE APPRAISAL REPORT 9 INTENDED USE OF THE APPRAISAL 9 EFFECTIVE DATEOF VALUE 9 DATE OF INSPECTION 9 DATE OF APPRAISAL REPORT 9 COMPETENCY PROVISION 9 DEFINITIONOFMARKETVALUE 9 NRS ASCERTAINMENT AND ASSESSMENT OF DAMAGES ID NRS , VALUATION OF PROPERTY SUBJECT TO CONDEMNATION AS RESULT OF PUBLIC WORK OR PROJECT NRS ASSESSMENT OF COMPENSATION AND DAMAGES: DATE OF I VALUATION; EXCEPTIONS II DEFINITION OF JUST COMPENSATION 12 PROPERTY RIGHTS APPRAISED 12 DEFINITION OF AN EASEMENT 12 EXPOSURE TIME 13 MARKETING TIME 14 CURRENT OVftJERSHIP/OV,ERSHIP HISTORY 14 SCOPE OF APPRAISAL 15 AREA/CITY DESCRIPTIONANDANALYSIS 17 SUMMARYOFAREADATA is MARKETAREA/NEIGHBORHOOD DESCRIPTION AND ANAL YSJS 20 MARKET AREA/NEIGHBORHOOD BOUNDARIES 21 MARKET AREM EIGHBORIIOOD DESCRIPTION 21 IONOPAH PROFILE 22 location AND ACCESSIBILI I Y 23 ASSESSED VALUE AND PROPERTY TAXES 24 UTILITIES/SERVICES 24 MARKET AREAJNEIGHBORHOOD CONCLUSION 24 SJTEDESCRJPTIONANDANALYSIS 26 LOCATION 26 DIMENSIONS, SHAPE, AND AREA 26 TOPOGRAPHY AND DRAINAGE 26 SOILS CONDITION/ENVIRONMENTAL HAZARDS 27 MANHATTAN MINING CLAIM AND LOTSLIRVEY MAP 28 AERIAL PHOTOGRAPH 29 MANHATTAN WATER LINE EASEMENT PLAN 30 SThEET IMPROVEMENTS AND ACCFSSIDILITY 31 UTILITIES 31 NUISANCES/hAZARDS 32 SURROUNDING LAND USES/LOCATION ADVANTAGES AND DISADVANTAGES 32 EASEMENTS AND ENCROACHMENTS 33 ZONING/MASTER PLAN 33 CONCLUSION 34 ASSESSED VALUEAND PROPERTYTAXES 35 CALCULATIONOFTAXES 35 TAXRATES 35 HIGHESTANDRESTUSE 37 File #11-160A UJ[BAWY ASSOCIATES, INC.

15 AFTER Table of Contents HIGHEST AND BEST USE - BEFORE EASE.(FNT kcquisition..37 HIGHEST AND EIESI USE THE ACQUISITION AND BEFORE CONSIDERATION OF SPECIAL BrtEflTs.. 40 highest AND BEST USC -AFTER THE ACQUISIT[ON AND AFTER CONSIDERATION OF SPECIAL BENEFITS 40 METHODOFVALUAT[O/V 43 APPRAISAL PROCEDuRES FOR PARTIAL ACQUISTTIONS 42 L4VD VALUA lion 1W THE BEEOgEcaVDhT1O,V 44 1A D5ALESLQC4TiONt4P -$6 41 UI TIUVOF THE ] ARTACOUJRED AS PIRTOF THE WHOLE 56 DESCRII TIONOFTHEWATERUNEEkSEMEST PROPOSED WATER LIVE EASEMENTACQUISInON 57 DETERMI\Az]O\: OF THE PFht1ANEST WAEER UNE EASnWNTCOMPENSA:IO\ V4LUE OF THE REMAJ.VDER 45 PlATO! THE WHOLE 60 VILLEOF THEREM4JADER AFTER THE.4CQUISITIO. c 61 DISREGAFDLVG SEE(L4L BENEFITS 61 DESCRIPT:ON OF THE REMAINDER QALCUL4TJONOFSEiEK4.VCED4M,;GES 65 SEVERANCEDAMAGES UK OF THE REM4L\DER AFTER THE.ICQUISJTJUVQO.VSJDERJVGSpECL4L BEXEFITS 66 CALCUL1T[ONOFSPEC1ALBEVEF17 67 SUMJ4RYOFJLSTCOMPE.V&ITION 69 KYPOSUREJLWEAVD.WARKETLVGPEPJO[) 7 ) ADDENDA SUWECT PHOTOGRAPHS ENGAGEMENT LEYFER QIJA:FbCATIoNS OF APPRAISERS File #ii-160a LUBAWY.fl ASSOCIATES, INC.

16 Assumptions and Limiting Conditions ASSUMPTIONS & LIMITING CONDITIONS I GENERAL ASS UMPTIONS AND LIMITING CONDITIONS The acceptance of this appraisal assignment and the completion of the appraisal report submitted herewith are contingent upon the following general assumptions and limiting conditions: 1. This is a Summary Appraisal Report which is intended to comply with reporting requirements set forth under Standard Rule 2-2(b) of the Uniform Standards of Professional Appraisal Practice for a Summary Appraisal Report. As such, it might not include full discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraiser s opinion of value. Supporting documentation concerning the data, reasoning, and analyses is retained in the appraiser s file. The information contained in this report is specific to the needs of the client and for the intended use stated in the report. The appraiser is not responsible for unauthorized use of this report. 2. No responsibility is assumed for legal or title considerations. Title to the property is assumed to be good and marketable unless otherwise stated. 3. The property is appraised free and clear of any or all liens or encumbrances unless otherwise stated in this report. 4. Responsible ownership and competent property management are assumed, unless otherwise stated. 5. The information furnished by others is believed to be reliable; however, no warranty is given for its accuracy. 6. All engineering is assumed to be correct. Any plot plans and illustrative material in this report are included only to assist the reader in visualizing the property. 7. It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or structures that render it more or less valuable. No responsibility is assumed for such conditions or for arranging for engineering studies that may be required to discover them. 8. It is assumed that there is full compliance with all applicable federal, state, and local environmental regulations and laws unless othenvise stated. 9. It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless a nonconformity has been stated, defined, and considered. 10. It is assumed that all required licenses, certificates of occupancy or legislative or administrative authority from any local, state, or national governmental or private entity organization have been or can be obtained or renewed for any use on which the value opinions contained in this report are based. 11. Any sketch may show approximate dimensions and is included to assist the reader in visualizing the property. Maps and exhibits found are provided for reader reference purposes File #11-160A LUBAWY ASSOCIAT]ES, INC.

17 Assumptions and Limiting Cc nditions 2 only. No guarantee as to accuracy is expressed or implied unless otherwise stated. No survey has been made for the purpose of this report 12. It is assumed that the utilization of the land and improvements is within the boundaries or property lines of the property described and that there is no encroachment or trespasses unless otherwise stated. 13. The appraisers are not qualified to detrct hazardous vaste and/or toxic materials. Any comment by the appraisers that might suggest the possibility or presence of such substances should not 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 potential]y hazardous materials may affect the value of the property. The appraisers va]ue opinions are 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. The appraisers descriptions and resulting comments are the result of the routine observations made during the appraisal process. 14. Any proposed improvements are assumed to be completed in a good workmanlike manner in accordance with the submitted plans and specifications 15. The distribution of any or the total valuation of this report between land and improvements applies under the stated program of utilization. The separate allocations for land and buildings must not be used in conjunction with any other appraisal and are invalid if so used, 16. Possession of this report or a copy thereof, does not carry with it the right of publication. It may not be used for any purpose by any person other than the party to whom it is addressed without the written consent of the appraisers, and in any event, only with the propcr]v wriften qualification and only in its entirety. 17.either all nor am part of the contents of this report (especially any conclusions as to value, the identity of the appraisers, or the firm with which the appraisers are connected) shall be disseminated to the public through advertising, public relations, news sales, or other media without prior written consent and approval of the appraisers. 15. Prospective values are predicated upon stab[e market conditions unless otherwise stated. The appraisers cannot he held responsible for unforeseeane events that may alter market conditions prior to the prospective dates of value. EXTRA ORDINARY ASSUMPTIONS The acceptance of this appraisal assignment and the comp]etion of the appraisal report submitted herewith are not contingent upon any extraordinary assumptions or hypothetical conditions. File #11-160A LUBAWY G5 ASSOCIATES, INC.

18 Certification of Value 3 CERTIFICATION OF VALUE I We certify that to the best of our knowledge and belief: 1. The appraisal assignment was not based on a requested minimum valuation, a specific valuation or the approval of a loan. 2. The statements of fact contained in this appraisal report are true and correct 3. The reported analyses, opinions, and conclusions are limited oniy by the reported assumptions and limiting conditions, and are our personal, impartial, and unbiased professional analyses. opinions, and conclusions. 4. We have no present or prospective interest in the property that is the subject of this report, and no personal interest with respect to the parties involved. 5. We have no bias with respect to the property that is the suect of this report or to the parties involved with this 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 development 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 resujt, or the occurrence of a subsequent event directly related to the intended use of this appraisa]. 8. Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. 9. Kendal Stewart has made a personal inspection of the property that is the subject of this report. 10. No one provided significant real property appraisal assistance to the persons signing this certification. 11. The reported 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 Profcssiona[ Appraisal Practice of the Appraisal Institute, which include the Uniform Standards of ProfessionaL Appraisal Practice. 12. The use of this report is subject to the requirements of the AppraisaL Institute relating to review by its duly authorized representatives. 13. As of the date of this report, Matthew Lubawy, MAI has completed the continuing education program of the Appraisal hstitute. File #ii-16oa LUBAWY ASSOCIATES INC.

19 Certflcation of Value 4 14, The appraisers state registration/certification has not been revoked, suspended, canceled or restricted. 15. The Appraiser did not base, either partially or completely, his or her analysis and/or the estimate of value on the race, color, religion, sex, handicap, familial status, health or national origin of the present or prospective owners, occupants or users of the subject property or of the present or prospective owners, occupants or users of the properties in the vicinity of the subject property. 16, We have not previously performed an appraisal service on the subject property within the past 3 years. Matthew Lubawy, MAI Kendal Stewart Nevada License Number A CG Nevada License Number A CG License expires April 30, 2013 License expires April 30, 2013 File # A UJ[BAWY ASSOCIATIRS, INC.

20 Summary of Important Facts and Conclusion5 5 SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS PROPERTY LOCATION: The suhiect property is located in the small town of Manhattan, 49 miles northeast of Tonopah in Nve County, Xe ada. Manhattan is in a canyon in the Toquima Mountains in the Huinbolt Toiyabe National Forest, and the town traces its origin to Silver and Cold mining created and supported the community until the 1940s when the mining ended. Manhattan today has only 50 permanent residents, and 25 part time residents, but the town s location in a mountain canyon with pine trees, paved road access, a community atmosphere, and historic mining relics make it a pleasant place to live and to visit. f-{omesites in the town are being sold, and Manhattan could easily attract more permanent and part time residents if it were c]osor to a major population center. Las Vegas is 259 miles away to the southeast, and Reno is 255 miles away to the northwest. Tonopah (49 miles away) has only 2,488 residents. ASSESSOR S PARCEL NUMBER: There are no Nye County Assessor s parcel numbers for the subject [and. The reason is because Manhattan, Nevada was established as mining claim laid, and the town s unjerlying claims are today owned by Robert Bottom. A subdivision map of streets m,d lots was created by the mining companies, and the lots are not recorded untii they are sold. The shapes, dimensions, and sizes of the underlying mining claims axe not helpful in describing the land affected by the water line easement. The easement boundaries and the acreage areas on the lots and land that are affected were provided by Nyc County Public Works, and are shown on Nyc County created maps that are presented in the appraisal report. The appraisal relies on the maps and the information provided by Nyc County (as presented in the as the,neans of legally describing the land involved. The appraisers do not warrant that the maps and acreage calculations are accurate. However, Ave County Public Works and Robert Bottom are in agreement with the maps and acreages as presented in this report. rert) PURPOSE OF APPRAISAL: The purpose of this appraisal report is to form opinions of 1) the market value of the pi-operty appraised before the acquisition; 2) the contributory value of the acquisition (part taken) as past of the whole; 3) the market value of the File #11-160A LUJAWY ASSOCIATES INC.

21 Summary of Important Facts and CotcIusiui,s 6 remainder as part of the whole (before the take); and 4) the market value of the remaindcr after the acquisition (after the takc). The opinions of value are used to form an opinion of the market value of the easement needed (rom the subiect land. CLIEN1 FOR THE APPRAISAL The client for the appraisal is Nve County. INTENDED USERS OF THE REPORT: INTENDED USE OF APPRAISAL: PROJECT: The intended users of the report are \ve County Public Works and Robert Bottom. The intended use of the appraisal is to establish the current market value of the subject easement to assist Nyc County and Robert Bottom in a property echangc. Manhattan Water Project Phase II EFFECTIVE DATE OF VALUE: Ma 31,2011 PROPERTY INSPECTION DATE: The property was inspected and photographs were taken on May 32, 2011 DATE OF REPORT: This report was prepared on June 10, The comparable sales and market data were collected and verified prior to this date. PROPERTY RIGHTS APPRAISED: EASEMENT AFFECTED LANDS: Fee Simple Estate See maps and drawings in the appraisal report PROPOSED ACQUISITIONS: Permanent Water Line Easement: The subject easement totals acres and will be approximately 2,500 feet long by 15 feet wide. lucre is also a water tank site in the easement acreage that totals.90 acre. ZONING: The parcels are unzoned in Nye County DESCRIPTION OF PROPERTY: Before the Acquisition: After the Acquisition: Homesites Homesites File #11-160A LUBAWY & ASSOCIATES. INC.

22 j Summary of Important Facts and Conclusions 7 HIGHEST AND BEST USE: Before the Acquisition: After the Acquisition: Residential Residential PROJECT INFLUENCE: EXPOSURE TIME: It is emphasized that any increase or decrease in the market value of the property prior to the date of value caused by the water line use for which the easement is being acquired has been disregarded in estimating the market value of the property, to the greatest extent practicable. (Source: 42 U.S.C. fi651 (3) of the UnUbrnz Relocation Assistance and Real property Acquisition Policies Act of 1970). The opinion of market value has been predicated upon an exposure time of 6 to 12 months. MARKETING PERIOD: If the subject were marketed for sale as of the date of the opinion of value, the marketing period woujd be 6 to 12 months assuming competent marketing with pricing commensurate with the opinion of market value. The opinion of market value shown below is not contingent upon any extraordinary assumptions or hypothetical conditions. SUMMARY OF VALUE CONCLUSIONS: The opinion of the current market value of the water line easement, as of May 31, 2011 subject to the assumptions and limiting conditions contained herein are as follows: Water Line Easement Opinion of Value I Easement Market Value Si 72,200 File #11-160A ]LU3AWY & ASSOCIATES, INC.

23 Introduction S INTRODUCTION I IDENTIFICATION OF THE PROPERTY The subject property is located in Manhattan, Nyc County, Nevada, 49 miles northeast of Tonopab, Nevada in the Toquima Mountains in the Humbolt Toiyabe National Forest. Manhattan was originally a gold and silver mining town, but the precious metals mining ended in the 1940s. Today, Manhattan has 50 full time residents and 25 part time residents, and the town has appeal because of its mountain canyon location with pine frees, old mining relics, and paved road access. Manhattan home lots would be in sfronger demand if there were a major population center nearby, but Las Vegas is 259 miles away, and Reno is 255 miles away. The subject land is part of mining claim land overlaid with a lot and block subdivision map, and the land is identified by the maps presented in the report. The underlying mining claims are owned by Mr. Robert Bottom, and the subdivision lots are given Nyc County Assessor s Parcel Numbers when they are sold by Mr. Bottom. They do not yet have parcel numbers. The subject property is more thoroughly described in the Site Description and Analysis section presented later in this report. LEGAL DES CRIPTION The subject parcel is legally described as follows: Being portions of patented mining claims Carson (USMS 2613), Pinenut (USMS 2915), Jackson (USMS 2914), and Dexter #8 (USMS 2602) n Sections 19 and 20, Township 8 North, Range 44 East, M.D.M., Nevada; aka Record of Survey Manhattan lots affected are: Lot 6, Block 15 Lots 7 and 8, Block 16 Lots 3,4, and 5, Block 19 Lots 7, 8, 9, and 10, Block 29 Lots 6 and 13, Block 26 And Jackson Addition (Book C of Surveys, pages 154 and 155): Lots 1,2,3, and 4, Flock 23 Lots 2, 3, 4, and 5, Block 20 Lot 6, Block 21 Lots 6 and 7, Block 22 The water tank site is on the Dexter #8 mining claim. PURPOSE OF APPRAISAL The purpose of this appraisal is to form opinions of 1) the value of the property appraised before the acquisition; 2) the contributory value of the acquisition (part taken) as part of the whole; 3) the market value of the remainder as part of the whole (before the take); and 4) the market value of the File #11-160A LU8AWY ASSOCIATES, INC.

24 Introduction 9 remainder after the acquisition (after the take). Fhe opthions of value are used to form an opinion of the market vaiue of the subject water line casement needed from the subject land. CLIENT FOR THE 4 PPRAISAL The client for the appraisal is County of Nye. INTENDED USERS OF THE APPRAISAL REPORT The intended users of the report are Nyc County Public Works and Robert Bottom. INTENDED USE OF THE APPRAISAL The intended use of the appraisal is to establish the current market value of the subject easement to assist Nye County and Robert Bottom in a property exchange needed to construct a new water system in Manhattan, Nevada. EFFECTIVE DATE OF VALUE The effective date of value for the appraisal is May 31, DATE OF INSPECTION The subject property was inspected on May 31, 2011, and photographs of the property were taken on that date. DATE OF APPRAISAL REPORT The date of preparation of this report is June 10, verified prior to the date of this report. The comparable sales and market data were COMPETENCY PRO VISION This appraisal report is being prepared with the intention of complying with the most recent version of the Uniform Appraisal Standards of Prfrfr-sio zai Appraisal Practice (USPAP) as adopted by the Appraisal Foundation Matthew Luhawv, MAt and Kcndal Stewart have appraised several similar properties in Nevada and are qualified to appraise the subject property. Please see our qualifications contained in the addenda of this report for additional information. DEFINITION OF MARKET VALUE Nevada State Assemh]v Bill 102, adopted May 23, 2007, defines market value as follows: Value means the highest price, on the date of valuation, that would be agreed to by a seller, who is willing to sell on the open market and has reasonable time to find a purchaser, and a buyer, who is ready, willing and able to buy, if both the seller and the buyer had fu[l knowledge of all the uses and purposes for which the property is File #11-160A JLLJ[BAWY cw ASSOCIAT]ES. INC.

25 Introduction 10 reasonably adaptable and available. In determining value, except as otherwise provided in this subsection, the property sought to be condenmed must be valued at its highest and best use without considering any future dedication requirements imposed by the entity that is taking the property. If the propcrty is condemned primarily for a profitmaking purpose, the property sought to be condenmed must be valued at the use to which the entity that is condemning the property intends to put the property. ii such use results in a higher value for the property. &urrc: \½a Ia Rtist d Stat des NRS AScERTAINMENT AND ASSESSMENT OFDAMAGES The court, jun. commissioners or master must hear such legal testimony as may be offered by any of the parties to the proceedings, and thereupon must ascertain and assess: 1. The value of the property sought to be condemned and all improvements thereon pertaining to the realty, and of each and every separate estate or interest therein; if it consists of different parcels, the value of each parcel and of each estate or interest therein shall he separately assessed. 2. If the property sought to be condenmed consiltut only a part of a large parcel, the damages which will accrue to the portion not sought to be condemned, by reason of its severance from the portion sought to he condemned, and the construction of the improvement th the manner proposed by the piaintiff. 3. if the property, though no part thereof is taken, will he damaged by the construction of the proposed improvement the amount of such damages. 4. Separately, how much the portion not sought to be condemned, and each estate or interest therein, will be benefited, if at all, by the construction of the improvement proposed by the plaintiff; and if the benefit shall be equal to the damages assessed, under subsection 2 of this section, the owner of the parcel shal] be allowed no compensation except the value of the portion taken; but if the benefit shall be less than the damages so assessed, the former shall be deducted from the latter, and the remainder shall be the only damages allowed in addition to the value of the portion taken. 5. If the property sought to be condemned be for a railroad, the cost of good and sufficient fences along the line of such railroad between such railroad and other adjoining lands of the defendant; and the costs of cattle guards where fences may cross the line of such railroads. As far as practicable, compensation must be assessed for each source of damages separately. [1911 CPA 674; Rt. 5616, ND. 9163] NRS VAL U.4 TION OF PROPERTY SUBJECT TO CONDEMNATION AS RESULT OF PUBLIC WORK OR PROJECT 1. Except as othenvise provided in subsection 2. if the prortv is subject to condemnation as a result of a public work or public improvement, an decrease File #11-160/i ASSOCIATES, INC.

26 Introduction 11 or increase in the fair market value of the property before the date of valuation which is caused by: (a) The public work or public improvement for which the property is acquired; or (b) The likeithood that the property would be acquired for such a purpose, Must be disregarded when assessing the value of the property pursuant to NRS 37, Any decrease or increase in the fair market value of the property before the date of valuation resulting from physical deterioration within the reasonable control of the owner is not required to be disregarded pursuant to subsection 1. (Added to NRS by 1993, 525) NRS ASSESSMENT OF COMPENSATION AND DAMAGES: DATE OF VALUATION; EXCEPTIONS. 1. To assess compensation and damages as provided in NRS 37.1 I Q the date of the first service of the summons is the date of valuation, except that, if the action is not trued within 2 years after the date of the first service of the summons, and the court makes a written finding that the delay is caused primarily by the plaintiff or is caused by congestion or backlog in the calendar of the court, the date of valuation is the date of the actual commencement of the trial. If a new trial is ordered by a court, the date of valuation used in the new trial must be the date of valuation used in the original trial. 2. No improvements put upon the property after the date of the service of the summons may be included in the assessment of compensation or damages, regardless of the date of valuation. 3. In all actions in eminent domain, the court shall award just compensation to the owner of the property that is being taken. Just compensation is that sum of money necessary to place the property owner in the same position monetarily as if the property had never been taken, excluding any governmental offsets except special benefits. Special benefits may only offset severance damages and may not offset the value of the property. Just compensation for the property taken by the exercise of eminent domain must include, without limitation, interest computed pursuant to NRS and reasonable costs and expenses, except attorney s fees, incurred by the owner of the property that is the subject of the action. 4. As used in this section, primarily means the greater amount, quantity or quality of acts of the plaintiff or the defendant or, if there is more than one defendant, the total delay caused by all the defendants, that would cause the date of the trial to be continued past 2 years after the date of the first service of the summons. [1911 CFA 675; RL 5617; NCL 9164] (NRS A 1965, 686; 1991, 1641; 1993, 526; ; 2007, 336) File #11-16O4 ILUBAWY & ASSOCIATES, INC.

27 introduction 12 DEFINITION OF IL/ST COMPENSATION Just compensation is defined as... That sum of money necessary to place the property owner in the same position monetarily as if the property had never been taken, excluding any governmental offsets except special benefits. Special benefits may only offset severance damages and may not offset the value for the property- Just compensation for the property taken by the exercise of eminent domain must include, without limitation, interest computed pursuant to NRS and reasonable costs and expenses. except attorneys fccs, incurred by the owner of the property that is the subject of the action Source: NRS The 2000 Edition of the Uniform Appraisal Standards for Federal Land Acquisitions (Section 8-2) states that under established ]aw, the criterion for just compensation is the market value of the property taken. As stated by the U.S. Supreme Court: The United States has the authority to take private property for public use by eminent domain, but is obliged by the Fifth Amendment to provide just compensation to the owner thereof. Just Compensation, we have held, means in most cases the fair market value of the property on the date it is appropriated. Under this standard, the owner is entitled to receive what a willing buyer would pay in cash to a willing seller at the time of the taking. Source: Kirby Forest Industries, Inc. v. United States, 467 U.S (1984) (citations omitted). PROPERTY RIGHTS APPRAISED We have formed an orirlion of the market value of the subject property in fee smp[c estate- Fee simple ownership is defined as: Absolute ownership unencumbered by any other interest or estate, subject oniy to the limitations imposed by the governmental powers of taxation, eminent-domain, police power. and escheat. Source: The Dictionary of Real Estate Appgjal Fifth Edition. (chicago: Appraisal Institute, 2010) Page 78. DEFLVmON0FANEASE.iIENT This report addresses an easement. An easement is defined as follows: An easement is an interest in real property that transfers use, but not ownership, of a portion of an owner s property. Easements usual]y permit a specific portion of a property to he used for identified purposes, such as access to an adjoining property or as the location of a certain underground utility. Although surface easements are the most common, subterranean and overhead easements are used for public utilities, subways, and bridges. Other easements, e.g., scenic easements and façade easements, may prohthit the owner of the underlying fee simple interest from certain uses of the property without giving the owner of the easement any possessory interest in the real estate. File #11-160A ILU]BAWY f ASSOCIATES, INC

28 Introduction 13 Easement rights can be transferred in perpetuity or for a limited time period. An easement can be created in several ways: By a confract between private parties By adverse possession in accordance with state law By prescription B governmental entities or public utilities through the exercise of eminent domain. Source: The Appraisal of Real Estate 13h Edition. (Chicago: Appraisal Institute, 2308 Pages 117 and 118). The Uniform Appraisal Standards or Federal Lands Acquisitions further describes an easement as: An easement can generally be described as an interest in land of another entitling the owner of that interest to a limited use of the land in which it exists, or a right to preclude specified uses in the easement area by others. An easement is an interest less than the fee estate, with the landowner retaining full dominion over the realty subject only to the easement; the landowner may make any use of the realty that does not interfere with the easement holder s reasonable use of the easement and is not specifically excluded h the terms of the easement. Source: 2V0() Edition cf the Uniform Appraisal StaiidardsfrrFedeil LundArquisilions; Section 4-9. Finally, the State of Nevada Department of Transportation uses the foiiowing definition of an easement: The right to perform a specific action on a particular land parcel, or portion of a parcel of land, without owning the underlying fee. A continuous easement across multiple tracts of land is often referred to as a right-of-way. Source: Real Estate Valuation in Litigation, 2 Ed. (Chicago; Appraisal Institute, 1995), p Courts have made a distinction between easements which Jeave the owner with some beneficial use of the land and those which deprive the owner of any beneficial use thereof, at least to the surface thereof. Where some beneficial use remains, the value of the easement will be only part of the basic value of the site. Where no beneficial use remains, the value of the easement taken is that of fee even though a fee is not taken. Source. Eminent Domain Valuahon, American Institute of Real Estate Appraiser, Chicago, illinois, 1978, pages 152 and 156. EXPOSURE TIME One of the implicit conditions of market value is that a reasonable time is allowed for exposure in the open market. This is always assumed to precede the effective date of the appraisal. Specifically. exposure time is defined as: The estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a s]e at market File #11-169A LLXBAWY T ASSOCIATES, INC.

29 Introduction 14 value on the effective date of the appraisal; a retrospective Opinion based upon an analysis of past events assuming a competitive and open market. Source: Stale,,,eni 6, Uniform Standards ci Profrs,ionul Appraisal Practice 2Oi02O11 Editic.n, Appraisal Standards Board. MARKETING TIME Marketing time is defined as follows: The reasonable markethig time is an opinion of the amount of time it might take to sell a real or perconal property interest at the concluded market value levct during the period immediately alter the effective date of an appraisal. Source: The U,,,nn Standards of Professional Appraisal Practice, 2010/2011, Advisory Opinivii 7. CURRENT 0 WIVERSIJIP/OWNERSHIP HIS WRY According to information provided by Nye County to the appraiser, the current owner of the subject land is Robert Bottom. Mr. Bottom has owned all of the property, except the land where the new water tank will be installed, since at least He acquired the water tank land in a 2009 land trade with a mining company in anticipation of needing the land for the new water tank. He didn t want Nyc County to have to go through the headache of dealing with the mining company. Mr. Bottom was born in Tonopah and was a miner until he retired. After he acquired the patented mining claims underlying Manhattan, he began selling and finishing homesites with water hookups and septic tanks. To install a septic tank, the State of Nevada requires one-quarter of an acre of land which equates to three adjacent Manhattan lots (A typical lot measures 32 feet wide by 100 Feet in depth. The one-quarter of an acre hon,esites cost $10,000 to finish with water hookup and septic tanks, and Mr. Bottom sells the finished homesites for S2S,5 each. Nuisance Lots that are too small for septic and caimot be assembled with adjacent lots to qualify for a septic tank sell for S1,2 to 515(X) each. The current water supply for Manhattan residents has an arsenic level that exceeds the federal standard, and the federal government is poised to fine Nyc Counh- reportedly S3,000 per day if the arsenic level is not brought within guidelines. The Manhattan water system is orated by Nyc County, and there are no private water wells in the community. ft is Nyc County s responsibility to solve the arsenic problem, hut Ms. Bottom and the other residents need c]eaner water. The arsenic occurs naturally in Manhattan soils, but Mr. Bottom located a new well site where the water meets the federal stai,dard, A new water tank and new water line are needed to get the water from the new weli to the community s existing water math, and the tank site and the routing of the new line is on Mr. Bottom s land. The new water well was also on Mr. Boftom s land, but he already deeded the well hole to the county, and he is agreeable to exchange the needed easement land for Nye County property of equal value, consisting primarily of Manhattan lots forfeited to the county because of nonpayment of property taxes. Nyc County and Mr. Bottom have been working on the new water system and the proposed land exchange for four years. The water system development is requiring bonding, with resident water meter charges of $55 per month. There are 85 meters in Manhattan, and 40 are year round meters. File #1I-160A LUIBAWY & ASSOCIATIE5, rnc.

30 Introduction 25 There have not been any sales, listings, or offers for the subject land in the past three years. SCOPE OFAPPRAISAL This is a Summary Appraisal Report which is intended to comply with the reporting requirements set forth under Standards Rule 2-2 (b) of the Uniform Standards of Professional Appraisal Practice (USPAP). It presents only summary discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraisers opinions of value. Supporting documentation concerning the data, reasoning, and analyses is retained in the appraisers files. The depth of discussion contained in this report is specific to the needs of the client and for the intended use stated. As part of this appraisal, the appraisers have made a number of independent investigations and analyses. The investigations undertaken and the major data sources used are discussed as follows: Area/City and Neighborhood Analysis Data pertaining to Nye County, Manhattan, and Tonopah was provided by internet publications, Nyc County government departments, and Nevada newspapers. Data pertaining to the labor force and employment was supplied by the State of Nevada Employment Security Department; information pertaining to taxable sales was provided by the Nevada Department of Taxation; and data pertaining to Manhattan and Tonopah development was provided by Nyc County and Mr. Robert Bottom. Additional data was based upon a physical inspection of the area. Site Description and Analysis On May 31, 2011, Kendal Stewart physically inspected the subject land and surrounding area, and photographs of the property were also taken as of that date. Information concerning utilities was collected by a physical inspection as well as by contacting the individual utility companies. The Nyc County Planning Department was contacted to obtain zoning information on the property. Information pertaining to dimensions, shape, and area was taken from data provided by Nye County Public Works. The description and analysis of topography, drainage, soils conditions, and surrounding land uses was based upon a physical inspection. Environmental information was also based on a physical inspection. Although we found no evidence of detrimental conditions (other than an arsenic level in Manhattan water that exceeds federal standards) including hazardous wastes during our inspection, It is imperative to note that the appraisers are not experts in the analysis of soils conditions or environmental hazards; therefore, any comment by the appraisers regarding such conditions should not be taken as confirmation of the presence or absence of hazardous waste or detrimental soils conditions. Such determination would require investigation by qualified professionals in the field of environmental assessment or soils testing. No responsibility is assumed for any environmental conditions or for any expertise or engineering knowledge required to discover them. The appraisers descriptions and resulting comments are the result of the routine observations made during the appraisal process. Applied Methods of Valuation To form an opinion of the market value of the subject property as vacant, unimproved land, we have utilized the sales comparison approach. In this approach we have compared sales of competitive File #11-160A LUBAWY ASSOCIATES, INC.

31 Introduction 16 parcels in the subject market area. Please see the section entitled Method of Valuation contained later in the report for a full description of the complete process for the Sales Comparison Approach. Market Data Collection and Ver(flcation Data pertaining to land sales was collected from sources including Nye County Public Records, the Realtor s Multiple Listing Service, and discussions with brokers, and Manhattan landowner, Robert Bottom. Tnformation on land sales, listings or offers was verified with the parties involved in the transaction including the grantor, grantee, broker or other knowledgeable parties, when possible. Verification of each sale is listed separately on each land sale abstract. File #11-16O4 LU3AWY t1 ASSOCIAI]ES, INC.

32 H I U z C z 7 I U Ui U 0

33 Area/City Description and Analysis 18 SUMMARY OF AREA DATA Manhattan is in Nye County, Nevada which, as of July 2010, had a population of 45,459 and a county land size of 18,159 square miles. The government seat for Nyc County is in Tonopah, and Nyc County is the third largest county (in [and area) in the United States. The county s earliest growth was associated with mining which pushed the population of Tonopah and Rhvo)ite to around 10,000 in each comniunitv tonopab now has a population of 2,188 and Rhvolite is a ghost town. Manhattan is 49 miles northeast of Tnnopah In a mountain canyon in the Toquima Mountains in the Humbolt Toivabe National Forest. The town traces its origin to 1867 when silver was discovered in the area, and it was officially founded in 1905 when gold mining began. The community grew to about 500 people. but the precious metal mining ended in the 1940s. Today, Manhattan has 50 permanent residents and 25 part time residents along with a small motel, a historic wood construction church, a fire station, a post office, two bars, and homes. In its heyday, Manhattan had three banks, 75 frame buildings, and a Wells Fargo Office. The total value of ore mined in the Manhattan district was well over $12 million. Manhattan s current appeal for its residents is its mountain canyon location at an elevation of 7,000 feet with pine trees covering the mountain slopes. Relics of mining operations are extensive and interesting in Manhattan, and the town has paved road access. Tonopah, 49 miles southwest of Manhattan, is the county seat of Nve County, and it is located at the US 95/US 6 junction. Tonopah had, as indicated, 2,488 residents as of July 2010, and the town covers 16.2 square miles. The community began as a silver and gold mining town, and was the location of the second-richest si]ver strike in Nevada history, but the mining ceased at the start of World War 11. Tonopah today is supported by Nyc County government operations, and by Tonopah Test Range employment, which is a Department of Defense/Department of Energy secretive site. The Test Range is known as Area 52 and is 70 miles northwest of Area 51. Both areas have tested experimental and classified aircraft (such as stealth bombers), and the Tonopah Test Range is currently used for reliability testing of the nuclear weapons stockpile, and for testing nuclear weapon delivery systems. The Test Range airspace is used for military training, and it was the base of operations for development of the F-117 Nighthawk. Tonopah has hillside housing development, with businesses mainly alongside US 95. The historic Mizpah Hotel, built in 1908, is along US 95, and new owners are renovating the hotel for reopening in coming months. The town [las many other historic buildings and is surrounded by low rock mountains that have little vegetation. Tonopah is 210 miles northwest of Las Vegas, and 238 miles southeast of Reno. Pahrump, Nevada is 160 miles southeast of Tonopah, and Pahrump is the largest community in Nye County. A description of Pahrurnp gives an idea of just how limited Nye County is in population, and how little control thcrc has been over development in the county. Historically, the Pahnirnp Valley was an oasis in the desert for aboriginal Paiute Indians because of its abundant water, The Indians ew con], squash, and melons, and in 1876 an early white settler established the Manse Ranch, which was followed in the 1930s by cotton growers. The road from Las Vegas to Pahrump was paved in 1954 (Las Vegas is 63 miles east of Pahrump). ErIe #11-160A LUBAWY ASSOCIATES, INC.

34 Area/City Description and Anal ysis 19 The Pahrump area was primarily utilized for farming and ranching prior to the late 1960s, with some peripheral mining activity. In the 1970s, Las Vegasbased Preferred Equities Corporation purchased the 10,000 acre Pahrump Ranch. The corporation subsequently began subdividing the land and selling off parcels in the Calvada community. Originally lots were purchased for investment or speculation; however, an increasing number of people began moving to those lots as they reached retirement age. More recently, the high cost of property in the Las Vegas Valley combined with the low cost of Pahrump land and relatively unrestricted building environment resulted in an influx of people who are either retired or work in the Las Vegas Valley but live in Pahrump. Pahrump is not incorporated, and until recently, the primary control and limitations to growth were subdivision CC&Rs, and limited utility line infrastructure. In 2005, newly enacted zoning requirements were adopted that coincide with the Pahrump Regional Planning District Master Plan. As indicated, Pahrump grew with minimal zoning except for restrictive CC&Rs within planned developments. This allowed many commercial businesses to be placed on residential land throughout the valley. Additionally, until 2005, the Nyc County Commission master-zoning plan had only three zoning designations for Pahrump, Open Use (OU), Residential Districts, and a Highway Frontage District (HF). The majority of land within the Pahrump Valley was classified as OIJ property. This allowed for use permits to be submitted and approved for non-residential uses throughout the valley, but it also provided for some regulation of land uses. As mentioned, a new master plan has been adopted for Pahsump. According to the Nevada State Demographer s Office, the most recent populahon statistics, prepared for the Nevada Department of Taxation, revealed that the Pahrurnp population as of July 1, 2010 reached 37,796 versus 7,425th Statistics show that as of July 1, 1996, Pahrump had 68% of the entire Nyc County population, arid as of July 1,2000, this figure approached 73%. As of the Second Quarter 2010 approximately 83% of Nye County residents were located in Pahrump. The statistics also reveal that during the 2000/2009 timeframe, Nye County experienced a total growth of 41%, averaging 4.1% annually while Pahrump had a total growth of 57.8% in this timeframe, or an average of 5.8% annually. The statistics show that Pahrump is not only outpacing Nye County in terms of growth, but it has been the driving force behind Nyc County s growth as a whole. The economic base of the Pahrump Valley consists of agriculture, government installations such as the Nevada Test Site and the Yucca Mountain project, tourism, gaming, mining, and manufacturing. Much of the population base is retired and on fixed income, while other residents live in Pahrump but commute to Las Vegas to work. The fastest growing categories of employment in Pahrump have been the service industry and retail trade. Pahrurnp is, as indicated, the largest community in Nye County, but it isn t a big population center. Its history of uncontrolled development with little public utility infrastructure has created a community with challenges as it moves into the future, It is also a town that had hopes that development of the Yucca Mountain Nuclear Waste Repository to the north of Pahrunip would provide jobs and an enhanced economic base, but the repository may never be built. That said, Pahrump will continue to have the best prospects for future growth in ail of Nyc County. File #71-160A LUBAWY 1 ASSOCIATES, INC.

35 t flfa 1I4LI1 T7! tr N 1 rrt.-- ani SSIIVIDOSSV $ AMYafliL V091-tt# 21!J SW.man 1, Fj I d S,_. L 1. rt -,.7 I SISA1YNY (NV NOIJALNDS4U 000H110aH913N1V3NV L3NNVI& I I *,1s I.,,, s 1. / I (I C _l. es s E,j 1,- S I! V S C 4:. 0 C 4. srnfijvuv prn uoirhcs7a pool11oqtisuijjvav zyvw 4 WJ 4ri

36 Market Area/Neighborhood Description and Analysis 21 MARKET AREA/NEIGHBORHOOD BOUNDARIES As defined by the Appraisal Institute in the 13th Edition of The Appraisal of Real Estate, a neighborhood is A group of complimentary land uses; a congruous grouping of inhabitants, buildings, or business enterprises In a neighborhood, the operation of social, economic, government, and environmental forces generally influence property values in the same way. The neighborhood may consist of a mixture of uses (termed a neighborhood), or one of similar uses (termed a district). A market area is the area in which the subject property competes for the attentions of buyers and sellers in the real estate market. A market area can encompass one or more neighborhoods and/or districts. For this appraisal report the market area/neighborhood is defined as that area which lies south of US Highway 95, north of Goldfield, Nevada, east of the Shoshone Mountains, and west of State Route 379. A map delineating the neighborhood is shown on the preceding page. MARKET AREA/NEIGHBORHOOD DESCRIPTION The defined market area is in central Nevada, to the north of the Nevada Test Site and the Nellis Air Force Training Range. The Test Site and training range occupy a huge area (3 million acres) that is off-limits to the public. Public roads extend around, not through, the Test Site/Nellis Air Force Range, which makes accessing central Nevada circuitous. US 95 is west of the Test Site/Air Force range, and the region alongside US 95 is dry desert in character with few towns and a limited population. That tends to discourage travel to central Nevada just to visit, and US 95 travelers are usually driving between Las Vegas and Reno. However, away from US 95 in central Nevada, there are picturesque mountain ranges with abundant wildlife, and the region has a long gold and silver mining history with ghost towns, mining relics and communities like Goldfield and Tonopah with historic hotels and old mining structures. Other towns like Manhattan and Belmont are very small but in attractive mountain canyons. Tonopah is the largest community in the defined neighborhood/market area, and it is the county seat of 18,159 square mile Nye County. Tonopah has 2,488 residents as of July 2010, and the town relies on county jobs and on federal or federally-related jobs and activities associated with the Tonopah Test Range and the Nellis Air Force Training Range. Tonopah began in 1900 with the discovery of rich gold and silver ore, but the mining ended when World War H started. A proposed Tonopab solar energy generation and storage plant has received a conditional promise from the Department of Energy for $737 million to build the project, which will create 600 jobs (50 permanent) in Nyc County (Las Vegas Sun Newspaper, 05/20/2011). That project is tied to SolarReserve Company s 110-megawatt Crescent Dunes solar energy project near Tonopah which will break ground this summer. The solar plant should benefit Tonopah over the years to come, and solar power projects are expected to be a significant part of rural Nevada s future. File # A ]LU]BAWY ASSOCIATES, INC.

37 Market Area/Neighborhood Description and Analysis 22 Tonopah is like other communities in the defined market area in having a mining boom-and-bust history, with periods of barely hanging on. With that in mind, Tonopah s main street (US 95) has turn-of-the-century buildings on either side of the street including the historic 5-story Mizpah Hotel built in There is also a library built in 1905, and 300 miles of mining tunnels underground. Tonopah is a basics kind of town with just a few dentists, a medical clinic, a grocery store, and some clothing stores. There is a McDonalds restaurant, a Burger King, convenience store/gas stations, and the Station House hotel-casino, but there are no Kmart-type stores, and travel to Las Vegas or Reno (a minimum of 211 miles away) is needed for specialty shopping. Tonopah grew to about 6,500 when the Stealth bomber was being created and tested at the Nellis Air Force Range and the Nevada Test site from 1980 to 1991, and the town also had non-miningrelated booms in the 60s and 70s when Sandia Corp., a weapons contractor, had its headquarters in Tonopah, and during World War II when the W24 bomber training center was in the area. Today, in addition to government jobs, US 95 traffic between Las Vegas and Reno has helped Tonopah survive. Tonopah and other towns in the defined market area are sometimes referred to as museums, with buildings remaining in existence because they are historical relics, Better economic periods will occut in the future with projects like the solar energy plants, but the population of the defined market area is not expected increase significantly or keep increasing steadily into the future, It s too far from large population centers and major private industries to expect significant ongoing growth. TONOPAI-I PROFILE A proffle of Tonopah reflects the limited services and the outlying rural character of the defined market area: Industry Lodging Mining Best Western Economy Inn Retail Trade Clown Motel National 9 Inn Government Jim Butler Inn Silver Queen Tourism Tonopah Station/Ramada Tonopah Motel Dining McDonalds Burger King Cisco s El Marques Stage Stop Café Subway Riccardo s Shopping A-Bar-L Western Store Scolari s Food and Drug Kraft and Gift Stores Hardware and Tool Stores High Desert Furniture Super 7 Food Store Antique and Miscellaneous Stores File #11-bOA LU]AWY i ASSOCIATES INC.

38 Market Area/Neighborhood Description and Analysis 23 Schools Tonopah Elementary Tonopah High School Casinos Tonopah Station / Ramada Banc Club Casino Combination Seven LLC - Mizpah Recreation Tonopah Mining Park Central Nevada Museum Peavine Campground Wilderness Areas Churches First Baptist New Hope Assembly of Gold Seventh Day Adventists St. Marks Episcopal St. Patrick Catholic Presbyterian Church LOS Church There are also some auto parts stores, towing companies, and mechanics, along with construction contractors, and gas stations/convenience stores. The lodging, restaurants, and convenience stores rely heavily on US 95 traffic, and on visitors for county and federal business. Tonopah at 2,488 residents is the key population center in the defined market area/neighborhood, and Tonopah is a small town with limited services. Although it is expected to grow by up to 600 people (50 permanent) when the solar power generation and storage facilities are built, that won t change Tonopah significantly. LOCATION AND ACCESSIBILITY The subject market area/neighborhood is in central Nevada, and primary access to the area is via US 95. US 95 extends along the west side of Nevada from California, through Las Vegas, then on to Fallon (near Reno), and finally on in to Oregon. US 95 is 705 miles long in Nevada, and is important highway for business and personal travel between Las Vegas and Reno. In the subject market area, US 95 is a paved highway with one travel lane in each direction, and the road is in good condition. East/west travel through the market area is via US 6 extending east from Bishop, California, through Tonopah, and on to Massachusetts. US 6 is the second longest highway in the United States. East/west access is also available via US 50, called the Loneliest Road in America for the section in Nevada. US 50 extends from San Francisco to Washington D.C., and from there to Maryland. Other than the three US Highways, which skirt the outside edges of the defined market area, the only paved road all the way through the market area is State Route 376. Other maintained gravel roads are available, but they are long, and extend through virtually unpopulated valleys and remote mountain passes. File #21-160A LUBAWY ASSOCIATES, INC.

39 Market Area/Neighborhood Description and Analysis 24 ASSESSED VALUE AND PROPERTY TAXES Taxes for Nye County (Tonopah and Manhattan) are at the higher end when compared to Clark County to the south. The tax rates for the 2010/Il tax year are $36399 (Tonopah) and $34368 (Manhattan) per $100 of assessed value, whije tax rates in Clark County range from a low of $24730 to a high of $ The 2010/11 tax year runs from July 1 to June 30 and includes four installment due dates which are August 151I, October 3rd, January 2nd and March 6th. UTILITIES/SER VICES Outside of Tonopah in the defined market area/neighborhood, only Manhattan has a public water system. Manhattan does not have a public sewer system. For areas without public water and sewer service, private water welis and septic sewer systems are used. The utility services in Tonopah are provided by the fojlowing entities: TONOPAH UTILITY AGENCIES UTILITY E]ectricity Water Sanitation Telephone Natural Gas Solid Waste Disposal AGENCY Sierra Pacific Power Tonopah Public Utilities Tonopah Public Utilities Frontier Liquid Petroleum Gas (LPG) Hoss Disposal (from Winnemucca) Please note that the State of Nevada requires a minimum Jot size of one-quarter of an acre, where public water service is available, to qualify for a septic tank sewer system. Individual lots in Manhattan are not large enough on their own to qualify for a septic tank. Three contiguous lots are needed for one-quarter acre, so individual lots that are between ownerships, or are isolated for some other reason, cannot be used as homesites. MARKET AREA/NEIGHBORHOOD CONCLUSION The defined subject market area/neighborhood is in central Nevada, north of the Nevada Test Site and the Nellis Air Force training range, and the area is small town and rural in character. Tonopah is the largest community at 2,488 residents, and Tonopab like the few other small towns in the region has a mining history that mostly ended in the early 1940s. Recent periods of boom and bust have primarily been associated with U.S. weapons and secretive aircraft testing at the Nellis Air Force Range and the Tonopah Test Range on the Nevada Test Site. Access to the market area/neighborhood is via perimeter U.S. highways, including US 95, US 6, and US 50. The highways are Jong distance highways, and motorists are typicajly interested in getting from Las Vegas to Reno, or from California to Midwestern and eastern states. The US highways are not heavily trafficked as they pass by the subject market area, and while maintained, they consist of a single travel lane in each direction in the subject area. File #11-160A LUIBAWY t$ ASSOCIATES, INC.

40 Market Area/Neighborhood Description and Analysis 25 Plans for solar energy generation and storage near tonopah vill bring in jobs, but not enough to significantly thcrease the population or the business base There is also expected to be continuing employment at the Tonopah Test Range and the Xe]Iis Air Force Range, and US 95 travelers will continue to support businesses in Tonopah. However, prospects for growth will ]ikclv remain limited. The market area/neighfrhood has desert alleys with desert rock mountains around places like Tonopah and GoldIield. It also has high pine covered mountain ranges such as the Shoshone, Toivabe, Toquima. Monitor, and Hot Creek ranges that have high alpine environs, springs, creeks, the Reese River, and abundant wildlife. The mountain ranges are mostly part of the Humbolt Tolyabe National Forest where lands are public and not being sold by the US government. Even so, there are smaji mounlain communities such as Manhattaj, and Belmont where retirees, workers in Tonopah, and part time summer residents enjoy the mountain atmosphere, recreation, and mining relics that are still standing. File #l1-160a ILT1IBAWY ASSOCIATES, rnc.

41 Site Description and Analysis 26 SITE DESCRIPTION AND ANALYSIS I LOCA HON The suject property is located in Maihattan, Nevada and consists of patented nhinhlg claim lands overlaid with subdivision lots and a roadway system. \-Ianhattan is in a mountain canyon at an elevation of 7,000 feet, with pine frees covering the mountain slopes, and with paved Nevada State Route 377 providing the coninninitvs main street. There ale 50 permanent residents and 25 part time residents along with a small 4-room motel, a historic wood construction church high on a hill, a volunteer fire station, two bars, a post office, and homes. Manhattan has a gold and silver mining history dating hack to 1867, and relics of the past, including old commercial buildings and homes, along with old mining structures are locatcd throughout the town. There are also old cars and trucks that are so old they add visual interest to the community. The town subdivision map and other maps presented on the following pages more completely illusate the location of the subject property. A drawing of the needed water line easement is presented on a following page and again Later in this report under the section tilled Valuation of the Part Acquired as Fart of the WhoLe. The subject properh- is located in Census Tract Number DIMENSIONS. SHAPE, AND AREA The subject property consists of four patented mining claims totaling a combined acres. The mining claims have irregular but functional shapes, and they are overlaid by a subdivision map showing lots and streets that constitute the Maithattan townsite. The underlying mining claims are owned by Mr. Robert Bottom, hut many of the lots have been sold over the years mid are owned by permanent and part time residents, as well as vacant lot owners, including Nyc County which has acquired title to lots when unpaid property taxes are involved. The configuration of the mining claims, subdivision lots, and Manhattan roads is referenced by the maps and drawings presented on following pages. TOPOGRAPHY AND DRMNAGE The Flood Disaster Protection Act of 1973 and the National Flood Insurance Reform Act of 1994 have made the purchase of flood insurance mandatory for Federally-backed mortgages on structures located in special flood hazard areas. Federal Emergency Management Agency (FEMA) flood insurancc rate map, Community Panel Numbers 32023C 2950E, with an effective date of February 17, 2010 is not printed by FEMA. However, although Manhattan is indicated by Nyc County to not be in a flood zone, the town is iii a mouritath canyon where draws and ravines on the mountain slopes hkelv do experience drainage when snows melt, and during heavy rain storms. However, homesites and other buildings are typically above the potential flow areas, and grading pads to avoid drainage problems does not appear to be difficult. Manhattan has been in existence for many decades, and buildings of significant age show wear and tear, but no visible signs of flood damage. File Uii-160A LUBAWY Cd AssOc1,vrrs, INC.

42 Site Description and Analysis 27 SOILS CONDITION/ENVIRONMENTAL HAZARDS Neither a geotechnical report nor an environmental assessment report were made available to the appraisers, and no definitive opinion as to soils or subsoils conditions is given in this report. That said, the purpose of this appraisal is to provide the current market value of the proposed water line easement to assist in the exchange of properties so that a new water source can be provided to residents of Manhattan. The current water supply has an arsenic level, from naturally occurring arsenic in the soil, that exceeds the federal standard. The federal govnerment will begin fining Nye County, reportedly $3,000 per day, if the arsenic level is not reduced to the federal standard. The solution is a new water well that provides water that complies with the federal arsenic standard. The well water will be delivered to the existing Manhattan water system via an underground pipeline installed in the subject easement. During the appraiser s inspection and investigations, we found no other evidence of any hazardous waste and/or toxic materials on the site. However, the appraisers are not qualified to detect such materials, and any conclusive determination as to the presence of such substances would require investigation by a qualified expert in the field of environmental assessment. It is emphasized that Manhattan, Nevada has a mining history, and mining can involve toxic waste and hazardous materials. The presence of toxic waste or potentially hazardous materials could affect the value of the property. The appraisers value opinion is predicated on the assumption that, aside from resolution of the water arsenic problem, there is no such material on or in the property that would cause a loss in value. No responsibility is assumed for any environmental conditions, or for any expertise or engineering knowledge required to discover them. The appraisers descriptions and resulting comments are the result of routine observations made during the appraisal process. Pile # A ELIEBAWY L1 ASSOCIATES, INC.

43 Site Description and Analysis 28 MANHATTAN MINING CLAIM AND LOT SURVEY MAP File #11-160A LIJ[BAWY ASSOCIATES, INC.

44 Site Description and Analysis 29 AERIAL PHOTOGRAPH File #11-160A IU8AWY 1 ASSOCIATES. INC.

45 Site Description and Analysis 30 MANHATTAN WATER LINE EASEMENT PLAN File #11-160A ILIJIflAWY (2 ASSOCIATES INC.

46 Site Description and Analysis 31 STREET IMPROVEMENTS AND ACCESSIBILITY Access to the subject property begins at the US 95/US 6 junction in Tonopah, heading east 5 miles on US 6 to the US 6/Nevada State Route 376 (SR 376) junction, then north on SR 376 thirteen miles to Nevada State Route 377 (SR 377). SR 377 is taken east 7 miles to Manhattan. US 95 and US 6 are major US highways, hut are two lane highways (one lane rn each direction) in the subject area. Both highways are fully paved and maintained, and US 93 connec Las Vegas with the Reno/Lake Tahoe re on. SR 376 is paved and extends from US 6 one hundred miles through Big Smoky Valley to CS 30 near Austin, Nevada. SR 376 has been in place as far back as 1919, and besides linking Tonopah to Austin, SR 376 provides access to Manhattan, Hadley, Kingston, and Rouid Mountain, Nevada. Manhattan has 50 permit residents while Kingston has around 100 residents. Round Mountain Gold Corporation mines gold at Round Mountain, and there is a planned community of roughly 800 residents in Hadley across SR 376 from Round Mountain. SR 377 is 7 miles long and connects the town of Manhattan to SR 376. SR 377 ends as paved Main Street in Manhattan, and has existed since A National Forest developed dirt road (014 Road) extends from Manhattan s main street eastward through low mountain passes to BeLnont, Nevada. UTILITIES There is no public sewer service available to the subject area, hut Manhattan has a public water system. There are no private water wells in Manhattan, so good, potable water in the public system is critical. The probiern is that naturally occurring arsenic in the soi]s has caused Manhattan s existing water to exceed the federal standard, and the federal government is poised to fine Nyc County reportedly $3,000 per day if Manhattan s water is not brought into the federal standard. Mr. Robert Bottom, who owns the mining claims underlying Manhattan, found a site for a new community water well where the water complies with the federal guideline, and he deeded the well site and mineral rights at the site to Nyc County. The water system is Nye County s responsibility, and the county must install a new water tank and a new water pipe line to deliver the water to Manhattan s existing main line. The routing of the new line must cross land owned by Mr. Bottom, and Nye County plans a land exchange with Mr. Bottom in order to acquire the needed easement to install the new water line. Manhattan has electrical power and telephone service. Utilities in Manhattan are provided as follows: UTILITY Electricity Water Sanitation Telephone Solid Waste Disposal AGENCY çr Energy Nve County Septic Tanks Frontier Smoky Valley Disposal File #11-i5L4 LUBAWY fi ASSOCIATES. INC.

47 Site Description and Analysis 32 NUISANCES! HAZARDS The subject land is not known to be located in an area prone to earthquake activity or accumulations of toxic waste or large-scale storage. There are no known underground storage tanks in place on the land, and there are no known underground tanks on surrounding properties. That said, the land is in an area where naturally occurring arsenic levels in the soils cause the existing Manhattan public water supply to exceed the federal arsenic standard for potable water. Consequently, a new water supply is needed which requires a new water well, along with a new water tank and a new water line in the proposed subject easement. It is also noted that the subject land is in an area with a mining history dating back to the 1860s. Mining can involve toxic materials detrimental to public health. However, there was no evidence determined by the appraiser of hazardous materials contamination on the subject land. Even so, it is emphasized that the appraisers are not qualified to detect hazardous waste and/or toxic materials, and it should be re-emphasized that the appraisers were not provided with an environmental site assessment or a geotechiiical report for the subject property. We have assumed adequate soils conditions, and we have assumed that there are no adverse environmental conditions affecting the subject land other than a naturally occurring arsenic level that affects the existing water supply. SURROUNDING LAND USES/LOCATION ADVANTAGES AND DISADVANTAGES The subject property is in Manhattan, Nevada which is in the Toquima Mountains in central Nevada. There are five large mountain ranges in the subject region that extend north/south and include the Toiyabe, Toquirna, Shoshone, Monitor, and Hot Creek ranges. Although the mountains rise from desert valleys, they are Alpine in character with nine peaks higher than 10,000 feet in elevation, including Mt. Jefferson at 11,941 feet. The mountains ale covered in snow in the winter, and have springs, creeks, ponds, and the Reese River (Shoshone Range) that support abundant wildlife including, deer, elk, bighom sheep, and pronghorn antelope. Between the mountain ranges are valleys including Hot Creek Valley to the east of the Hot Creek Mountain Range. The valley is 183 miles long by 13 to 50 miles in width. The primary vegetation in the valley is sagebrush and grasses, and there are no perennial sfreams in Hot Creek Valley. Monitor Valley is west of the Monitor Mountain Range, and a point in the valley is at the geographic center of Nevada. Monitor Valley is 70 miles long by up to 10 miles wide, and is accessed via Monitor Valley Road, a maintained dirt road extending north from the old mining town of Belmont through the center of the valley to US 50. The valley is a sagebrush covered empty expanse with only remains of the Potts Ranch buildings which are no longer used, but where cattle grazing continues, and occasional wild horses can be seen. The valley has hot springs in a few locations, along with Indian pictographs at Toquima Cave, but no permanent residents. Big Smoky Valley is west of the Monitor Valley between the Toiyabe and Toquima mountains. The valley is 100 miles long and has seven small communities including the largest, Hadley, which is a planned community built across SR 376 from the Round Mountain Gold Mine. Hadley has around 800 residents, an elementary school, a high school, a library, a swimming pool, a 9-hole golf course, and a football field. File #11-IÔOA L1J[BAWY e ASSOCIATIRS, INC.

48 Site Description and Analysis 33 The Round Mountain Gold Mine is an open pit mine which dates back to By 2006, the mine had produced 39.5 million worth of gold ore at 2009 prices, and the mine continues to operate, with an estimated 1.8 million ounces of gold ore reserves and resources at the end of Big Smoky Valley was used as a pony express route in the 1860s, and it remains a valley with active farming, ranching, and mining. The valley has paved SR 376 extending from US 6 north to US 50, and travelling SR 376 is a scenic drive. The Reese River flows between the Toiyabe and Shoshone Mountains, and begins on the slopes of Arc Dome. The river is fast-flowing at its origin, and flows north 181 miles to merge with the Humbolt River. Lush growth including aspen groves and cottonwood trees are alongside the river, and it is used for irrigation by scattered farms. Not much remains of the river by the time it reaches the Humbolt River. While the valleys and mountain ranges near Manhattan offer impressive landscapes, and great areas to explore, major population bases are hundreds of miles away, and not many tourists visit the mountains and valleys. There are some hundreds of big game hunters in the area in the fall, and residents of the small towns, along with travelers between Tonopah and Austin cross the area, but there isn t an expectation of significant growth in either population or travel in the region near Manhattan in coming yeats. EASEMENTS AND ENCROACHMENTS A Preliminary Title Report was not provided to the appraisers. Consequently, any easements or encroachments that might affect the property could not be determined with certainty. However, based upon our review, it does not appear that there are either easements or encroachments that would adversely affect the highest and best use of the land. ZONING/MASTER PLAN The subject property does not have any zoning, which is characteristic of most of Nyc County. Outside of Pahrump, Nyc County land use planning is virtually nonexistent and because of the County s very limited resources, there are no mechanisms in place to regulate land uses. The Nyc County Comprehensive Plan states that there is no inventory of the amount of land for each land use category, and much of the land within Nyc County communities is subject to mixed use. In other words, mobile homes, trailer homes, site-built homes, commercial and industrial facilities, businesses, and even agricultural uses are often mixed together with seemingly incompatible uses adjacent to each other. Pahrump, in recent years, has instituted a land use plan, but driving along neighborhood streets in Pahrump and passing car repair shops, feed and tack stores, industrial storage yards, and mom and pop restaurants and businesses sandwiched between homes in common. Although Nyc County now has ordinances in place to regulate the subdivision of land as mandated by the State in NRS , and has adopted the Uniform Building Code, the County has no mechanisms to enforce the code, and has no zoning ordinance. The Comprehensive Plan says these circumstances (i.e. no enforcement of code mechanisms and no zoning) allow people to build with File #11-160A ILIIBAWY ASSOCIATES, INC.

49 Site Description Qnd Anal ysis 34 very few impediments from local government, and the County s position is that it is important from an economic development standpoint to keep development requirements for new business and industry at a minimum. Mr. Robert Bottom indicated that the Manhattan land subdivision occurred in the early 1900s, and was initiated by the mining companies. Use of the subdivided lots is subject to state requirements for size at a quarter of an acre to qualify for a septic system. Tn summary, the subject property has no zoning, but the property would be allowed at a minimum, a residential use, and likely most other uses as well, assuming there were demand. Other uses likely would be viewed favorably by Nyc County as well. CONCLUSION The physical characteristics of the subject property include its present use (if any), accessibility and road frontage, land contours and elevations, soils, views, land area, shape, availability of utilities, mineral deposits, water rights associated with the property, easements, etc. The subject property is located in the small conmiunity of Manhattan in the Toquima Mountains, 49 miles northeast of Tonopah in Nyc County, Nevada. The subject land is mining claim land overlaid with a subdivision map creating home and business lots and streets in Manhattan. The land has no zoning, but Manhattan has a main street along with community roads, homes, a small motel, a post office, two bars, and a historic wood constructed church on a hillside. The community has a public water system administered by Nye County, and there are no private water wells in the town. Manhattan has telephone and electrical power service, but there is no public sewer system, so septic tanks are use. The State of Nevada requires home and business sites to total a minimum of one quarter of an acre to qualify for a septic tank, which equates to three contiguous residential lots in Manhattan. Manhattan is in a mountain canyon that has pine covered mountain slopes, and it is a pleasant location with cool spring, summer, and fall seasons, and snow in the winter. Access to Manhattan is via paved Nevada State Route 327 extending off paved SR 376, and Manhattan residents can access commercial and retail services 49 miles away in Tonopah. The town of Hadley is closer to 20 miles from Manhattan, and Hadley has a grocery store, several churches, schools, and recreational facilities. Manhattan would likely attract more residents and property buyers if it were close to a major population center, but at its rather remote location in central Nevada, it isn t expected to grow rapidly in coming years. For government workers in Tonopah, miners at Round Mountain, as well as summer vacationers, and retirees, Manhattan is a viable option because of its pleasant environment. File #11-16O4 LUBAWY ASSOCIATIES, INC.

50 Assessed Value and Property Taxes 35 ASSESSED VALUE AND PROPERTY TAXES I CALCULATION OF TAXES Property taxes are based upon an appraisal of the property performed by the Nyc County Assessor s Office. An appraisal is conducted every five years on properties located within Nyc County and the values are updated each year by an index computed by the State of Nevada Department of Taxation. According to personnel at the Assessor s Office, improved properties are appraised for taxable value based upon the cost approach. This approach to value is performed by estimating the replacement cost new of a property, less depreciation of 1.5% per year of effective age, up to a maximum of 75%. State Statute indicates that the taxable value of the property must not exceed the current market value. Since the cost approach in some instances may provide an indication higher than current market value, the sales comparison approach and/or income capitalization approach may be used to establish the taxable value of the property. Property taxes are calculated by multiplying 35% of the taxable value by the tax rate. TAX RATES The subject is located within Tax Disifict Number 3.0 which has a tax rate of $34368 per $ of assessed value for the 2010/11 tax year. The fiscal year starts July 1st and ends on June 30th of every year. The following is a summary of tax rates for the previous years. HISTORIC TAX RATES TAX YEAR TAX RATE 2010/11 $ /10 $ /09 $ / The 2010/ 11 tax rate is higher than for the previous year, and the tax rate is expected to increase at a moderate pace in coming years. Please note that property tax increases were capped by Nevada Legislature Assembly Bill 489, which was passed on April 6, The tax increase caps are 3% per year for a primary residence and 8% per year on all other properties, based on taxes in effect as of the 2004/05 tax year. New construction has the tax cap applied starting in the 2006/07 tax year. Consequently, higher assessed values each year will not affect the property taxes nearly as much as the new assessed values might infer. Vacant land in Manhattan, such as the subject easement land, typically has an assessed value ranging from $4,333 to $4,822 per acre. Correlating to $4,800 per acre, the subject acres of water tank and pipeline easement land would have property taxes as follows: File # A ]LUSAWY ASSOCJAT]ES, INC.

51 Assessed Value nd Property Tan s 36 SUBJECT ANNUAL PROPERTY TAXES :, - Acres of Easement Land Assessed Valuation Land S8,424 Improvements + SO Total Assessed Value SS,424 Tax Rate x Total 5290 Less Cap Reduction SO Total Annual Taxes $290 File #11-160A ]LTJBAWY ASSOCLATiES, [NC.

52 r Highest and Best Use 37 HIGHEST AND BEST USE Highest and best use is detined as: 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 highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum productivitv Alternatively, the probable use of land or improved property-specific with respat to the user and timing of the use-that is adequately supported and results in the highest present value. Sourcc: The Dirhonan, of Real Estate Appraisal. Fifth Edition, (Chicago: Appraisal Instilutr. 2010) Page 93. The highest and best use of a property is an economic study focusing on the four criteria mentioned above. The determination of a property s highest and best use is the basis that provides the valuation framework upon which comparable market djta is selected. Such data for improved properties may include cost, income and expense data, and improved sales pertaining to the property s concluded best use. Highest and best use of the property as though vacant is considered separately from the highest and best use of the property as improved. The site is valued as though vacant and available for development to its highest and best use even if the property s existing improvements do not represent the highest and best use of the site. Highest and best use of the land as though vacant indicates only how the [and should be used if it were vacant. The following is an analysis of highest and best use of Ihe Jand as though vacant. Each of the four criteria, legally permissible, phvsica]lv possible, financia]lv feasible, and maximally productive, have been considered separately as they relate to the subject property both before and after the easement acquisitions. Highest and best use of land or a site before acquisition is defined as: Among all reasonable, alternative uses, the use that yields the highest present land value, after payments are made for labor, capital. and coordination. The use of a property based on the assumption that thc parcel of Land is vacant or can be made vacant by demolishing any improvements. Soir: The Dichonarw of Real Eshfle Aprrsai, Fifth Editron, (Ciucg: Apprths frstih1te. 2OWj Page 95. HIGHEST AND BEST USE - BEFORE EASEMENT ACQUISITION Legally Permissible The subject property does not have any zoning, and according to the Nyc County Planning Department, any land use could be considered for the property. Pahrump is the only area of Nyc County that has a land use master plan and a zoning ordinance, while all other areas outside of Pahrump have no zoning code and no land use master plans. File #11-160A IU3AWY ASSOCATIES, INC.

53 Highest and Best Usc 38 The Nyc County Comprehensive man for areas outside Pahrump indicates There is no inventory of the amount of land in each land use category, because in the absence of mechanisms to regulate land use, much of the land within communities is subject to mixed use. It is common to find residential, commercial, industrial, and even agricultural uses on adjacent properties and, at times, on the same parcel of property (page 14). In other words, outside of Pahrump, land use options are open and are only controlled by stipulated uses that require a special or conditional use permit such as brothels, bars, many heavy industry uses, auto wrecking, cemeteries, dairies, gaming establishments, landfills, massage parlors, mining, rifle ranges, and similar uses (pages 1.6 and 17). However, special or conditional uses are not ruled out as potential uses, and site-built homes, churches, RV get-away sites, mobile homes, cabins, waterfowl/upland game bird hunting quarters, campgrounds, and recreational parks are not on the list of special or conditional uses. An objective of the Nye County Comprehensive Plan is to establish an open use zone outside the Pahrump planning area to permit any use allowed by the State Health Department (page 18). Regulation of land uses is left to town boards, mid Nye County will help unincorporated towns or other areas create a land use plan, zoning maps, and/or other growth management mechanisms if requested. The Nyc County Planning Staff indicated that as long as fire codes are adhered to and flood plain issues (if any) axe handled properly, the subject property has open use potential with homes, commercial use, or any other use being possible. In summary, the subject land is not restricted in legally permissible use potential, but because of several uses requiring conditional or special use permits in Nyc County, the legally permissible uses that are not speculative would realistically be homes, commercial or industrial business, or a recreational use. Physically Possible Physical characteristics of the parcel that affect its possible use include but are not limited to its location, street frontage, size, shape, street access, availability of utilities, easements and encroachments, soils and subsoils conditions, and topography. The proposed subject easement land totals acres, and the land is part of a mapped subdivision of land designed to create the town of Manhattan. The subdivision map overlays patented mining claims, and lots for homes and other uses have been, and are being, recorded as individual lots when they are sold by the owner of the underlying mining claims for development of homes or for other uses. In the early 1900s, the mining claims were owned by mining companies, but today, the underlying mining claim land not yet sold for home or other use is owned by Robert Bottom. The acres of proposed easement land is an undivided part of lot and other use land, and as such, it is part of larger mining claim parcels totaling a combined acres that have irregular but functional shapes and adequate size to accommodate highest and best use development. The subject land is not in a FEMA-designated flood zone, and the property is closely accessible from paved Nevada State Route 377 which serves as Manhattan s main street. A public water system under Nyc County administration serves the Manhattan lots, but a public sewer system is not available. Instead, septic sewer tanks are used. File #11-160A ]LIJBAWY & ASSOCIAT]ES, INC.

54 Highest and Best Use 39 The subject land has level to sloping topography that can be graded and provided with a water line hookup, a septic tank and a frontage road at a cost of approximately $10,000 per lot. The lot finishing is done by Mr. Bottom, and he has finished a number of lots over the past few years. The subject easement land, like all land in Manhattan, has no zoning and is allowed a range of development/use options. However, given the location of the subject land in a mountain canyon with 50 permanent and 25 part time residents, residential use is probable. Residential uses could include a site built home, a manufactured home, a cabin, or seasonal motor home/rv use. No easements or reservations of negative effect were determined to exist, and the physical attributes of the subject property are adequate to allow for legally permissible use of the land. Financially Feasible All uses that are expected to produce a positive return are regarded as financially feasible. However, when analyzing the most economically feasible uses of a site, emphasis is placed on existing land use patterns within the neighborhood, with particular emphasis on land uses in the immediate area of the site. The most feasible uses would both complement and be compatible with existing and proposed development in the area. Financial feasibility of a residential or other use of the subject land is directly affected by supply and demand factors. The subject property is in the small Manhattan community, in a mountain canyon in central Nevada, and in Nyc County in an area of boom and bust growth, where there never has been a large population base. Nye County, like everywhere else, has weathered the recent economic and real estate market downturn, but in the subject region, jobs are federal, federally-related, and Nyc County government jobs, along with gold mining jobs, US 95 service business jobs, and agricultural jobs that have been more stable than other types of jobs. Additionally, the subject area is rural in character and didn t experience nearly as much real estate market volatility, either on the upside or the downside, when compared to larger population areas. Manhattan is a unique living area where buyers of land have been coming forward at a slow but steady pace, and that is expected to continue. Consequently, residential use of the subject land is concluded to be financially feasible. Maximally Productive The final step in the Highest and Best Use Analysis is to choose the use or uses among the appropriate or feasible uses which would produce the highest present value of the land, We have concluded that the highest and best use of the subject land would be residential use in accordance with the property s location in small Manhattan, Nevada where there is very little traffic and only 75 full and part time residents. Conclusion to the Highest and Best Use In conclusion, we estimate the highest and best use of the subject property to be residential. No other alternative use would be expected to provide a higher return to the land. File #11-160A UJ[BAWY & ASSOCIATES, INC.

55 Highest and Best Use 40 HIGHEST AND BEST USE - AFTER THE ACQUISITION AND BEFORE CONSIDERATION OF SPECIAL BENEFITS This analysis of highest and best use considers the remainder parcel after the acquisition and before consideration of special benefits. Legally Permissible There are no expected changes from the prior Highest and Best Use section before the acquisition of the easements. Physically Possible Twelve lots crossed by the proposed easement will no longer be usable, or at least fully usable, for residential development because of shape and size limitations. Financially Feasible There is no change from the prior highest and best use section before the acquisition. Maximally Productive The twelve lots crossed by the easement will have partial to virtually no remaining use potential or market value. Conclusion In conclusion, the highest and best use of twelve lots crossed by the proposed easement will be partially to fully damaged, and they likely will have little to only partial remaining market value. HIGHEST AND BEST USE -AFTER TILE ACQUISITION AND AFTER CONSIDERATION OF SPECIAL BENEFITS This analysis of highest and best use considers the remainder parcel after the acquisition and after consideration of special benefits. Legally Permissible There is no change from the prior highest and best use sections of the report. Physically Possible Twelve lots crossed by the proposed easement will no longer be usable, or at least full usable, for residential development because of shape and size limitations. Financially Feasible There is no change from the prior highest and best use sections of this report. File #fl-160a LLXBAWY 1 ASSOCIATES, INC.

56 Highest and Best Use 41 Maximally Productire The twelve lots crossed by the easement will have partial to virtually no remaining use potential or market value. Conclusion In conclusion, the highest and best use of twelve lots crossed by the proposed easement will be partially to fully damaged, and they likely will have little to only partial remaining market value. File #11-160A LUBAWY 1 ASSOCIATES, INC.

57 Method of Valuation 42 METHOD OF VALUATION I The valuation process is the method of acquiring, analyzing, and presenting the data used to form an opinion of the market value of the subject property. This data is typically applied within the three traditional approaches to value, which are the cost approach, the income capitalization approach, and the sales comparison approach. In appraisal practice, one or more approaches may not be appropriate to the property being appraised depending upon the quality, quantity, and reliability of the data. APPRAISAL PROCEDURES FOR PARTIAL ACQUISITIONS This appraisal report deals with a partial acquisition for a utility line. The appraisers have relied on the 2000 Edition of the Uniform Appraisal Standards for Federal Land Acquisitions, adopted by the Interagency Land Acquisition Conference as well as the State Rule from the Nevada Revised Statutes (Chapter 37). Since the State Rule would take precedence over the Federal Land Acquisitions Guidelines in any local district court proceedings, the appropriate method for valuing a partial acquisition is as follows: A) Form an opinion of the market value of the whole property before the acquisition; B) Fonn an opinion of the market value of the part acquired as a part of the whole; C) Form an opinion of the value of the remainder as part of the whole; D) Form an opinion of the value of the remainder after the acquisition and before consideration of special benefits; F) Determine severance damages (Line C less Line D); F) Form an opinion of the value of the remainder after the acquisition and after consideration of special benefits; C) Determine special benefits (Line F Less Line 0); H) Determine net damages or net benefits (difference between Lines F and C); and I) Determine the recommended compensation (Line B plus Line H). The compensation for the easement acquisition is determined by adding the value of the part acquired to any net damages. It should be noted that if there are special benefits to the property resulting from the water line project, the value of these benefits cannot be used to offset the File #11-160A LU8AWY 4I ASSOCIATES, INC.

58 Method of Valuation 43 compensation for the part acquired (State Rule). Benefits can only be used to offset any damages to the remainder properlv Furthermore, the procct influence cannot be considered when vajuing the property in the before condition (i.e. the land valuation assumes there were no utility line project). The Cost Approach to Value begins with an opinion of the market value of the site, usually derived by direct comparison with sales of similar, competing parcels. Next, the replacement costs (substitute) are estimated using published cost data. From this is deducted depreciation, which accrues from wear and tear, changing standards of desii and plan, and neighborhood dcfects. This depreciated value of the irnprovemen is added to the opinions of value of the site and site improvements, to conclude the market value opinion of the entire property. The prhnarv justificatio]1 for this approach is that a typical investor would not generally he willing to pay more for the subject property than it would cost to produce a suitable substitute. The Sales Comparison Approach to Value forms an opinion of the market value of the subject property by comparing prices paid in the market for similar realty. The comparable sales are chosen from those recently sold properties that would generally compete for the same buyers in the market. Comparison may be made of the whole comparable property to the subject or of some element, such as the ratio of gross income to sales price or the sale price per square foot, per room, or per some other unit of comparison. Appropriate adjustments are made for any differences. Based on the actual or the adjusted sales price of the comparable sales, an opinion of the most probable selling price of the subject is formed. Primary justification for the validity of this approach is that the buyer would not typically be willing to pay more for the subject property than it would cost him/her to purchase a suitable, existing substitute available in the market. The Income Capitalization Approach to Value commences with an opinion of market rent and the appropriate expense ratio for the subject property. The expenses are deducted from the effective gross income to form an opinion of the net operating income, which is capitalized into an opinion of market value by the use of appropriate rates developed in the market. These rates are based upon returns on and of capital investment typically required by investors in the market; sometimes discounted cash flow studies and other present worth techniques are used Absorption and rent-up periods are considered, where applicable. One ushfication for this approach is that an investor would not typically pay more for the income stream produced by the subject property than he/she would pay for a suitable subsutute in the market. Further justification is that the market value is the present worth to the investor of all the future benefits (returns on and of equity investment) to be derived from holding title to the subject property. For purposes of this analysis, since the subject is vacant land, only the Sales Comparison Approach is considered appropriate for forming an opinion of the market value of the site. The Cosi and Income approaches are not applicable since it is not necessary to value any improvements. File #11-160A LUJBAWY & ASSOCIATES, INC