one countywide school system. In addition to its public school system, Guilford County has 23 private schools.

Transcription

1 one countywide school system. In addition to its public school system, Guilford County has 23 private schools. There are over 500 churches located in Greensboro with several new ones being built each year. The most recent development was a $29 million expansion to the Westover Church located on Muirs Chapel Road. Medical facilities in Greensboro include four hospitals that provide a variety of health care services. The hospitals include: Moses H. Cone Memorial Hospital, Wesley Long Hospital, The Women's Hospital of Greensboro, and Kindred Hospital. Economic Forces Economic trends certainly have an impact on many segments of the real estate market. Key factors providing indicators of the health of the economy include income levels, interest rates, new construction, unemployment rates, retail sales etc. Over the past ten years, Greensboro's economy has experienced modest growth. Since 1970, a fundamental change has been underway in that manufacturing as a percentage of employment has been on the decline, while service jobs have risen. Greensboro is moving from a manufacturing based economy to a service based one. Between 1993 and 2003, employment growth numbers among Triad regional counties have been strongest in Guilford County with a 10.7% growth. The unemployment rate has increased significantly from the 2.9% reported in the year As of November 2008, the unemployment rate was reported to be 7.7% for Guilford County, which is lower than the unemployment rate for the state, which was 7.9%. Employment for the Piedmont Triad is categorized by industry and percentage of the labor force working in that category as shown in the following table: Category Percentage ManufacturinQ 23% Trade 26% Services 25% Government 11% Transportation, Communication & 6.5% Utilities Construction 5% Finance, Insurance and Real Estate 6% Source: Employment Security Commission of NC Employment and Wages In 2004 the median household income for Guilford County was reported to be $42,545 and the figure for the state was $40,863. The 2002 per capita income for Guilford County was $31,225, which was an increase of 36.88% from The average per capita income for the state of North Carolina as of 2002 was $29,785, which is significantly lower than for Guilford County. The percentage increase in per capita income can be compared with the price level increases in the economy to determine how wages are increasing in relation to the cost of living or inflation. The Consumer Price Index (CPI) for all items is a measure of inflation published by the U.S. Government Bureau of Labor Statistics. The CPI for 1990 was and the CPI for 2000 was The percentage increase from 1990 to 2000 is 31.75% or an average of 3.175% per year over the seven years. The income level of persons in Guilford County has increased at a greater rate than the Consumer Price Index, which indicates that the quality of life for persons in this area is good. Governmental Forces The governmental forces 'in the area are adequate and growth of the economy is supported. Significant efforts by the Greensboro Area Chamber of Commerce are also made in recruiting new businesses to the area. Guilford County adopted the county manager form of government in Guilford County has an eleven member Board of Commissioners. The County Manager carries out the day-to-day administration of County government for the Board of Commissioners.

2 The City of Greensboro has a councivcity manager form of government. The City Council sets major policy and the city manager handles day-to-day business. The city manager is hired by and reports to the Council, which is composed of five district representatives, three at-large representatives and a mayor. The government systems of both the county and city work well together and have the reputation as being one of the more progressive in the state. The City of Greensboro offers police and fire protection as well as emergency services. In the county, the Guilford County Sheriff's Department provides police protection with fire protection being provided by paid and volunteer workers. The City of Greensboro offers bus service through the Greensboro Transit Authority. Road maintenance is provided by the city of Greensboro as well as North Carolina State funds. City water and sewer are provided in the city as well as to parts of the county. Private businesses provide telephone, electrical, and natural gas service to the area. Bell South Telecommunications provides telephone service with many long distance services available through various companies. Natural gas is provided by Piedmont Natural Gas Company and Duke Energy supplies the electric power to the area. Environmental Forces Greensboro has a pleasant climate with an average annual temperature of 58 degrees. The annual average rainfall is 42.5 inches, and the average annual snowfall is 9.1 inches. Guilford County is located on a plateau with an elevation ranging from 600 feet to 1,000 feet above sea level with an average of 838 feet. The soil in Guilford County is mostly characterized as sloping, well-drained soils with a sandy clay loam. Summary An important factor in the health of an area is its ability to increase population by drawing residents from other areas. The population of Guilford County has been experiencing growth with each passing decade. Income levels have outpaced the increases for the cost of living. The success of this has been linked to the area's ability to create new jobs by expanding existing operations and attracting new businesses. The central location of the area with convenient transportation by interstates, highways, and roadways as well as airport and train access have made Greensboro and Guilford County a desirable place for businesses to locate. The diversified economic base is a positive factor for the area with many employment opportunities available. Educational opportunities in Guilford County are plentiful. The availability of financing provided by numerous institutions allows for new construction and expansion. The area has experienced progressive economic development and business recruitment in the past and is anticipated to continue to do so. The mild climate, availability of housing, and the amenities available have also helped to make Guilford County a desirable place to live. The area has experienced the repercussions of the recent economic downturn as many areas of the country, however the economic base of Guilford County is considered to be healthy and is anticipated to continue to promote growth in the area.

3 Site Analysis The subject property is the land within a proposed permanent drainage easement containing an area of 7,436 square feet of which 1,762 square feet lie within an existing storm sewer easement, and a temporary construction easement containing an area of 4,320 square feet, of which 107 square feet lie within an existing storm sewer easement, located at 505 W. Sycamore Street in Greensboro, North Carolina. According to the tax card, the property consists of 2.08+/- acres of land. The property is identified in the Guilford County Tax Records as Greensboro Tax Map # The site is improved with a parking lot. Per the instructions of the client, this appraisal report is on the land area within the proposed drainage easement and temporary construction easement area only. The site is rectangular in shape with approximately 360+/- feet of street frontage on both S. Edgeworth Street and S. Spring Street. The lot is street grade at both S. Edgeworth Street and S. Spring Street. The area in the proposed easement area runs through the parking lot from S. Spring Street to S. Edgeworth Street. The appraiser has inspected the area within the proposed drainage easement and temporary construction easement and there are improvements that will be either disturbed or removed as explained later in the report. In the opinion of the appraiser; if the lot were vacant, the lot is large enough so that the site is not restricted as to development. Also it is felt that the continuation of its present use will not be affected by the proposed easements.

4 EXHIBIT The 1nforllletlon on this mal' 1s derived fron.0 City of Gl"'eensDoro survey map nuiipared on file 1n the City of Greensboro's. Engineering Division, Records Section. The street on which the subject has road frontage is paved with asphalt with curb and gutter present. Access to the property is good via both S. Spring Street and S. Edgeworth Street. There were no adverse soil conditions noted at the time of inspection, however a soil report was not available to the appraiser. The utilities and services appear to be adequate for the existing use. The site is located outside a designated flood plain by FEMA (Federal Emergency Management Association) Panel No J dated June 18, 2007.

5 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. 1 Consideration has been given to the four criteria used to determine Highest and Best Use. These criteria are as follows and the use must be: Physically possible Legally permissible Financially feasible. and Maximally productive (returns the highest net land value) The highest and best use assessment is based on the subject property as a whole and not solely on the property located within the proposed easement area. The highest and best use analysis results in the most probable and reasonable highest present value of the property as of the effective date of appraisal. When the land is substantially developed with improvements meeting the above criteria, it is unlikely that redevelopment would occur in the foreseeable future or during the remaining economic life of the improvements. Analysis and Conclusion According to the Greensboro Planning Department, the subject property is zoned PI. The PI, Public and Institutional district is intended to accommodate mid- and large-sized public, quasipublic, and institutional uses which have a substantial land use impact or traffic generation potential. It is not intended for smaller public and institutional uses customarily found within residential areas. Considering the four criteria above, the conclusion of the highest and best use of the site as if vacant is for development of office or institutional which is a permitted use under this zoning classification. The present use is considered to be an interim use until at which time development becomes feasible. The appraisal process is an orderly analytical procedure wherein data is acquired, classified, analyzed and then processed into a value indication by various appraisal techniques. The most common methods utilized are the Cost Approach, the Sales Comparison Approach, and the Income Capitalization Approach. Each approach has its strengths and weaknesses, depending on the type of property being appraised and the quality of data available. In most instances, one or more of these approaches will produce a more reliable value indication than the other approach, or approaches. Therefore, the final step in the appraisal process is the Reconciliation of all the value indications into the formulation of a final opinion of value. This step usually begins with a discussion of the merits of each approach and an analysis of the reliability of the data used in each. It concludes with a statement of the final opinion of value. As for the valuation of the subject, only the Sales Comparison Approach has been developed. With sufficient data to support the sales comparison approach to value, the cost approach and the income approach are not necessary in the valuation of land.

6 Site value is best indicated by comparable sales. Sales comparison is the process of comparing the subject site to similar sites, which have recently sold. Sales comparison is a good indication of value as it reflects the actions of both buyers and sellers. The land sales exhibited in the grid were the best sales that were available after checking with the tax department and local brokers. Market value is defined in terms of the price buyers in general would pay for a property and sellers in general would accept. Therefore, the appraiser has searched the market, not only in the subject area, but also in similar and competing areas, to form an opinion as to what a typical purchaser might pay for a site such as the subject. The grid for the land sales follows. Land Sales Summary The appraiser located three land sales and a listing within a reasonable distance from the subject. All of the sales have city water and sewerage available. The typical unit of comparison for residential land is the price per square foot. The available land sales represent a range from $8.76 to $18.51 per square foot before adjustments. This range can be further narrowed down by comparing each to the subject property. The land sales have been considered for adjustments regarding varying characteristics such as location, corner/access/road frontage, water/sewer, size, shape/topo, and zoning. The primary items of consideration in the order of adjustments are rights of ownership, terms of financing, conditions of sale, and marketing conditions. If applicable, percentage adjustments for these categories are applied individually, in the order listed above. Financing terms were reportedly arm's length and no adjustments are indicated for any of these first three categories. All of the sales and the listing include buildings that have no contributing value, and adjustments were applied to each to cover the expense of razing the existing buildings and clearing the land. Sale #1 and #2 have buildings that are either currently being utilized or may be utilized in the interim

7 future, but the current owners purchased the properties with the intent on razing the buildings and redeveloping. Sale'iumb" Address: 505 DateoISa~: Sales Price: Zoning at time 01Sale: Use: Comer Lot: Approx ReI.Frontage: Shape![ opo 01Usab~ Land: Pubhc Water/Sewer: Tax Map # Grantor Grantee: Deed Relerence: Total Land Area Usable Land Area - SF: Price r Usab~ Acre: Approx Exp. After Sat: Adj. PricelSF: Martet Conditioll Adj. PricelSF: Adjustment!: Location Comer/AccessiRd. Frontage: WaterlSewer: Size: Shape![opo: Zonin2 at time 01Sale Net Ad' ustment Indicated Price Per SF W. Sycamore Street Low S10.50 Mean SI3.27 Median S13.71 High SI5.16 Greensboro, NO N/A N1A PI PiirkingLot/Office No 715+1; Generally Level Yes : N/A N1A N1A ,605 N1A 120 Barnhardt Street 514,600,618 N. Eugene Street Greensboro, NC Greensboro, NC Dec.{J8 Aug 2007/Aug 2006 S\,050,OOO $609,000 L1 GB, GO Similar Similar No No 180 fl ActuaV435+/- Ramp Level Level Yes Yes ID# ,24 C~de M. Marr, Jr. Bellemeade Dev.fl & K LLC FaceoffLLC, Sin.i 10'. LLC and N. Eugene Partners LLC , ,540 44, IIJ.57 5% 5%. S\ % 0' S '10 0'10 10'10 10'10 0'10 0'10 0'10 10'10 5% 0'10 0'10-2'10 25% -2% W. Smith SI. 424 N. Edgeworth SI. GreemlJoro, NC Feb-08 S500,OOO CB Similar Yes Level Yes 21 l-1, Hauser Realty, Inc. Roseland Inyestmen~ LLC , % '10 S1944 Summit Avenue Greensboro, NC Current Listing 1820,000 CB Similar Yes 346 fl ActuaV442 +/- Ramp Level Yes N1A N1A N1A , ' '10 S9.63 0'10 10'10 0'10 0% 0'10 0% 20'10 0'10 0% 0'10-2% -1'10-22'/. 9% S The comparable sales occurred over the past approximate year. All of the sales are considered to be recent sales, and no adjustment was made. Other or secondary adjustments such as location, corner/access/road frontage, water/sewer, size, shape/topo, and zoning are applied to the total adjusted prices per unit as lump sum percentages. A location adjustment has been based upon discussion with market participants, and the appraiser's judgment after viewing each of the comparable sales and considering their exposure

8 to traffic and the general surroundings. The subject property is located in the Greensboro CBD as are all the sales. Sales #1 and the listing are considered to be in inferior locations, and a 10% upward adjustment was made. Sales #1, and #2 are considered to be inferior with respect to corner/access/road frontage, and a 10% upward adjustment was made to each. Sale #3 and the listing are similar to the subject, and no adjustment was made. All of the com parables are similar to the subject property with regard to utilities, and no adjustments were made. Sale #2 and #3 are smaller than the subject site, and downward adjustments were applied to each. Sale #1 and the listing are similar in size, and no adjustment was made. Sale #1 is an irregular shaped lot and considered to be inferior with regard to shape and topography, and a 5% upward adjustment was considered necessary. The remaining sales and the listing are similar to the subject with regard to topography, and no adjustments were applied. Sale #1 is considered to have a zoning designation that is not the same, however considered equally restrictive for the area, therefore it is given no adjustment. The other sales are considered to have a less restrictive zoning designation, and a minor 2% downward adjustment was made. Each of the com parables is considered to be a reasonable substitute for the subject site and received consideration. After comparing the sales to the subject property and adjusting for differences, the range of price per square foot is $10.50 to $ Taking all of the data into consideration, the appraiser is of the opinion that $13.50 is the indicated value per square foot. Analysis of the Proposed Easements Permanent Drainage Easement The property being appraised consists of a permanent drainage easement identified as Tract A containing an area of 7,436 square feet of which 1,762 square feet lie within existing storm sewer easement. (Please see exhibit) The proposed area would then contain 5,674 square feet. With a permanent drainage easement, the current property owner remains the owner of record; however, they are restricted in the use and development of the land in the easement. In the opinion of the appraiser, the property owner loses approximately one-half of the bundle of rights implied with the fee simple estate. Therefore, the estimated market value of the property within the permanent easement is half of the market value of the fee simple per square foot. Therefore, the estimated value of the proposed easement on the subject property is as follows: Permanent Drainage Easement: 5,674 SF x $13.50 per SF x 50% = $38,300 Temporary Construction Easement According to Mr. Tony Cox with the City of Greensboro, the temporary construction easements will be utilized for a period of one year. The property owners will temporarily lose use of the portion of their land within the construction easement. The compensation of the loss of use due to the easement is calculated by determining the estimated market value of the easement area and assuming that money equal to the estimated market value is placed in an interest bearing account for the period of the time the City of Greensboro will be utilizing the easement. For the subject property, there will be a temporary construction easement identified as Tract B containing an area of 4,320 square feet, of which 107 square feet lie within an existing storm sewer easement. The proposed area would then contain 4,213 square feet. Based on $13.50 per square foot, the estimated market value of the land within the temporary construction easement is

9 $ The compensation for loss of use of the land within the temporary construction easement area assumes that the $ is placed in an interest bearing account for one year. The appraiser assumes an interest rate of 5% per year based on corporate bond rates and the prime rate. If the money were placed in an account earning 5% annually over a period of one year, the future value would be $59,785. Therefore the owners of the property would be losing $2,909 by allowing the City of Greensboro to utilize the easement. The appraiser is of the opinion that the compensation for the loss of the use of the land within the temporary construction easement is $2,909 for the subject property. Landscaping and Improvements As discussed in the site analysis, the easement runs across the property in an east to west direction. The appraiser has inspected the area within the easement areas and there are approximately 45 parking spaces that will be affected. Landscaping existing in the easement areas consists of only the grassy areas along each sidewalk fronting each street. The areas of grass that are affected will be reseeded with grass. Existing paving, curbing and gutter, and markings located within the easement areas that will be affected are to be replaced as needed by the City of Greensboro according to the Engineering Department. The construction is to take place in two phases allowing access to the northern portion of the parking lot at all times during construction. Phase I is reported to consist of the area of the easement extending from Point A, which is located at the east side of Edgeworth Street extending onto the subject parcel to Point B, which is roughly 100 feet from the east boundary of the parking lot. Phase II will extend from Point B to Point D which is located at the edge of Spring Street on the westem side of the subject parcel. The engineering Department reports that each construction phase will take one month. It is concluded from the drawings provided by the Engineering Department of the City of Greensboro that 18 parking spaces will be temporarily affected during Phase I of the construction and 27 spaces will be temporarily affected during Phase II. It appears that during the period of construction of each phase that the parking spaces as noted will be temporarily affected, however it was observed that the parking lot appears to be large enough to handle the current capacity of cars as many spaces were observed as being vacant. The parking lot contains approximately 200 spaces and on the two days of observation, roughly 30% of the spaces were vacant. The observation days consisted of a weekday and a weekend day. Compensation for the loss of use of the parking spaces is calculated by assuming a reasonable rent for each parking space based on comparable parking rates in the area. Parking rates for parking spaces in the Greensboro downtown area are typically $50.00 per month. Most of the comparable parking rates used is from lots located in the central business district of Greensboro. The appraiser is of the opinion that $50.00 per month is a reasonable rate for the subject parking spaces. Each of the 45 parking spaces that will be affected will lose utilization for a period of one month. Applying the monthly rate of $50.00 times the total number of parking spaces of 45 for the temporary construction period of one month results in $2,250 compensation for all of the parking spaces affected in the easement areas. Quantit Phase I - 18 s aces Phase II - 27 s aces TOTAL Cost $ 900 $1,350 $2,250 Summary of the Sales Comparison Approach Proposed Drainage Easement $38,300 Temporary Construction Easement - $2,909 Indicated Value of Loss of Use of Improvements - $2,250 Total = $43,459

10 Reconciliation The appraiser was engaged to form an opinion of the market value of the fee simple estate in the subject property as identified in the report. In analyzing the subject, the three traditional approaches to value were considered. The value conclusions based on each approach considered applicable are summarized below, subject to any hypothetical conditions and/or extraordinary assumptions. Three indications of value are typically used in estimating value. These are the cost approach, sales comparison approach, and the income approach. With sufficient data to support the sales comparison approach to value, the cost approach and the income approach are not necessary in the valuation of land. Summary of the Sales Comparison Approach Proposed Drainage Easement - $38,300 Temporary Construction Easement - $2,909 Indicated Value of Loss of Use of Improvements $2,250 Total = $43,459 In the Sales Comparison Approach, the subject site is compared to similar sites, which have recently sold or are listed for sale. This is the method of estimating value much used and most understood by the market. The primary difficulty of this approach is obtaining a sufficient number of bona fide arm's length sales of reasonably similar properties that have sold within a recent time frame. Recent sales of similar properties were used to derive an estimate of value. It is believed that the significant and relevant facts regarding each sale have been given proper consideration and the results of comparison have resulted in a value by the sales comparison approach. These sales are felt to be representative of the typical buyers and sellers in today's market. Based on a reasonable exposure time of one year, the appraiser is of the opinion that the total indicated value of the proposed easements which includes compensation due to the owners for use of the land within the permanent drainage easement, use of the land within the temporary construction easement and any improvements or landscaping affected by the proposed easements on the subject property subject to the certification and limiting conditions set out herein as of February 15, 2009 is: Forty Three Thousand Four Hundred Fifty Nine Dollars $43,459 Certification The Appraiser certifies and agrees that: 1. Appraiser has no present or contemplated future interest in the property appraised; and neither the employment to make the appraisal, nor the compensation for it, is contingent upon the appraised value of the property. 2. The Appraiser has no personal interest in or bias with respect to the subject matter of the appraisal report or the participants to the sale. The "Estimate of Market Value" in the appraisal report is not based in whole or in part upon the race, color, or national origin of the prospective owners or occupants of the property appraised, or upon the race, color or national origin of the present owners or occupants of the properties in the vicinity of the property appraised. 3. The Appraiser has personally inspected the property. To the best of the Appraiser's knowledge and belief, all statements and information in this report are true and correct, and the Appraiser has not knowingly withheld any significant information. 4. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions. 5. This appraisal report has been made in conformity with the Uniform Standards of Professional Appraisal Practice and is subject to the requirements of the Code of Professional Ethics and

11 Standards of Professional Conduct of the appraisal organizations with which the Appraiser is affiliated. 6. All conclusions and opinions concerning the real estate that are set forth in the appraisal report were prepared by the Appraiser whose signature appears on the appraisal report, unless indicated as "Review Appraiser." No change of any item in the appraisal report shall be made by anyone other than the Appraiser, and the Appraiser shall have no responsibility for any such unauthorized change. 7. In this appraisal assignment, the existence of potentially hazardous material used in the construction or maintenance of the building, such as the presence of urea formaldehyde foam insulation, and or existence of toxic waste, which mayor may not be present on the property, was not observed by us; nor do we have any knowledge of the existence of such materials on or in the property. The appraiser, however, is not qualified to detect such substances. The existence of urea formaldehyde insulation or other potentially hazardous waste material may have an effect on the value of the property. The client is urged to retain an expert in this field. 8. I have made a personal inspection of the property that is the subject of this report. No one provided significant real property appraisal assistance to the person signing this certification. 9. This appraisal assignment was not based on a requested minimum valuation, a specific valuation, or approval of a loan. 10. My State Certification has not been revoked, suspended, canceled, or restricted. 11. I certify that the use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. 12. As of the date of this report, I, D. Lynn Cable, MAl have completed the continuing education program of the Appraisal Institute. D. Lynn Cable, MAl State-Certified General Real Estate Appraiser, A4361

12 PROFESSIONAL EXPERIENCE Principal, Real Estate Appraiser and Consultant (2003 to present) LandAmerica - Commercial District Manager - North Carolina, South Carolina ( ) Currently Associated with U.S. Dept. of Housing and Urban Development on a contractual basis (1999 to Present). Currently Associated with the City of Greensboro - Redevelopment Project on a contractual basis (1999 to Present) Partner of Foster Rich & Novak, Inc., Real Estate Appraisers and Consultants, Greensboro, NC (1999 to 2001). Associated with McNairy & Associates, Real Estate Appraisers and Consultants, Greensboro, NC (1995 to 1999). CERTIFICATIONS AND LICENSING Certified General Real Property Appraiser, State of North Carolina, No. A4361 Certified General Real Property Appraiser, State of South Carolina, No Temporary Licensing obtained in other states as necessary PROFESSIONAL ASSOCIATIONS Appraisal Institute - MAl Member Certificate No Appraisal Instit~te - Regional Representative , 2005, 2004 Appraisal Institute - Social Director of the NC Associate Executive Committee ,2000 Appraisal Institute - Guidance Committee Member for the NC Chapter ACADEMIC BACKGROUND B.S. Degree, Pfeiffer University, Business Administration COURSES AND SEMINARS Appraisal Institute Course Work for the MAl Designation Completed course requirements for Continuing Education Numerous courses and seminars relating to real estate, real estate valuation and evaluation TYPES OF PROPERTIES APPRAISED Numerous appraisals involving the following types of properties: Multi-site locations, single and multifamily residential; commercial, and Industrial properties including office/warehouses, manufacturing facilities, office buildings, shopping centers, hotels/motels, multifamily housing developments, residential subdivisions, convenience stores, restaurants, nightclubs, child care centers, churches, marinas, fire stations, schools, mini-warehouses, service garages, car washes, vacant land, utility easements and various other property types. Acquisition Appraisals for Urban Renewal Authorities LOCATIONS OF PROPERTIES APPRAISED North Carolina - statewide South Carolina

13 Photograph(s) Copy of the Deed(s) Tax Abstract

14 The Subject Photograph(s) Were Taken February 15, 2009 By D. Lynn Cable, MAl