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�.� South Athletic Complex Site <br /> City of Lino Lakes, Minnesota <br /> THE APPRAISAL PROCESS , <br /> The estimate of value in the appraisal process is <br /> generally derived through application of three basic <br /> approaches to value: the Cost Approach, the Income Approach, <br /> and the Market Data Approach. <br /> The Cost Approach is an appraisal technique that is based <br /> upon the proposition that an informed purchaser would pay no <br /> more for the subject property than the cost of producing a <br /> substitute property with the same utility as the subject <br /> property. The indication of market value in the cost approach <br /> is obtained by adding the estimated value of the land to the <br /> estimated replacement cost of the improvements less any . <br /> r <br /> depreciation accrued. to the improvements. In this instance, <br /> the Cost Approach has no application as the subject property <br /> is unimproved. <br /> The Income Approach yields an indication of value by <br /> analyzing the subject property in terms of its ability to <br /> produce a net annual income over its economic life. This <br /> method views the subject from the perspective of a potential <br /> investor seeking a return of capital relative to the risks <br /> associated with the investment. In this area, vacant land <br /> does not typically produce any income except in rare cases. <br /> Any income produced from a site such as the subject would not <br /> be commensurate with its highest and best use. Even if the <br /> highest and best use of the site was determined to be for <br /> Page 18 <br />