HomeMy WebLinkAbout08-13-2018ECONOMIC DEVELOPMENT AUTHORITY OF MOUNDS VIEW, MINNESOTA
MEETING AGENDA
(Open and Closed Meeting)
MOUNDS VIEW CITY HALL
Monday, August 13, 2018 at 5:00 p.m.
[if necessary, such meeting may be continued to immediately following
the conclusion of the 6:30 p.m. City Council Meeting or such other date
and time as determined by the EDA]
1. CALL TO ORDER
2. ROLL CALL: President Mueller, Vice President Gunn, Commissioner Hull,
Commissioner Meehlhause, Commissioner Bergeron
3. EDA BUSINESS
A. CLOSED SESSION -- CROSSROAD POINTE: Pursuant to Minnesota
Statutes Sections 13D.05, subdivision 3(c) and 13.44, subdivision 3, to conduct
a closed EDA meeting concerning real property located at addresses noted
below, to determine the asking price, to consider strategies and to develop or
consider offers or counteroffers for the sale of such real property and to review
confidential appraisal information for such real property.
2400 County Road H2
Mounds View, Minnesota
PIN: 08.30.23.31.0005
2394 Mounds View Boulevard
Mounds View, Minnesota
PIN: 08.30.23.31.0071
2390 Mounds View Boulevard
Mounds View, Minnesota
PIN: 08.30.23.31.0072
B. OPEN SESSION: (to follow immediately after the closed session, if
necessary).
1. Crossroad Pointe
a. General Discussion/Issues
b. Other matters
2. MWF/Boulevard
a. Project and closing matters
4. NEXT EDA MEETING: Monday, August 24, 2018 at 6:00 p.m.
5. ADJOURNMENT
Report Type
Appraisal Report
Effective Date
July 31, 2018
Prepared By:
Ethan Waytas, MAI, Appraiser
William R. Waytas, Appraiser
Nagell Appraisal Incorporated
12805 Highway 55, Suite 300
Plymouth, Minnesota 55441
Tel: 952.544.8966 | Fax: 952.544.8969
Client Subject Property
City of Mounds View Development Land
Attn: Brian Beeman, MPA, Business Development Coordinator 2400 County Road H2
2401 Mounds View Boulevard Mounds View, Ramsey County, MN 55112
Mounds View, MN 55112 Owner: Mounds View Economic Development Authority
File # G1807001
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NAGELL APPRAISAL INCORPORATED
12805 Highway 55, #300 Minneapolis: 952-544-8966
Plymouth, MN 55441 St. Paul: 651-209-6159
Established in 1968 Central Fax: 952-544-8969
City of Mounds View August 9, 2018
Attn: Brian Beeman, MPA, Business Development Coordinator
2401 Mounds View Boulevard
Mounds View, MN 55112
To Brian Beeman:
In accordance with your request, an appraisal report has been made on the following described
property:
Subject Property: Development Land
2400 County Road H2
Mounds View, MN 55112
Described below is a summary of the appraisal report contained herein.
Property Overview
The City of Mounds View owns land along Mounds View Boulevard that is currently zoned for commercial
and is guided for a mixed use planned unit development.
The City has requested an appraisal to help in decision making purposes regarding a potential sale. A
variety of potential development plans were provided to the appraiser. As none of them are approved at
this time, the appraiser valued the scenarios as requested, but also provided price per unit for the
apartments and price per SF for the commercial land so that the City could change the development and
understand how the value might be impacted.
That said, the following scenarios are considered in this appraisal:
• 100% multi-family development with 135 apartment units
• A Kwik Trip gas station with about 1.5 acres and a 63-unit apartment building
• A general commercial development with about 1.5 acres and a 63-unit apartment building
• 100% commercial development on the entire site
As noted, the values provided for the above scenarios assume that they are legally allowed, which is
likely not the case as of the report effective date. Therefore, the values could change, potentially by a
significant amount, if the final development plan differs from the above.
Report Use
Decision making purposes regarding a potential sale
Intended User(s)
City of Mounds View
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Letter of Transmittal – Continued
Extraordinary Assumptions
The appraised values provided in this report are based on various scenarios from the City of
Mounds View. Because none are approved, any user should not rely on them for decision making
purposes. The values are only intended to give the city guidance regarding a potential sale price. If
the city changes any of the assumptions relied upon in this report the values could differ
significantly.
Hypothetical Conditions
None
Property Rights Appraised
− Fee Simple Interest: The property is vacant land. As such the appraised value reflects the Fee
Simple interest.
Property Components Appraised
− Real Estate: The appraised value includes the real estate value opinion.
− Furniture, Fixtures, & Equipment (FF&E): The appraised value does not include any values of
fixtures, furnishings and equipment. The appraised value reflects real estate only.
− Business Value: The appraised value does not include business value.
Highest and Best Use Conclusions
− As Vacant: Develop with a multi-family or commercial use.
− As Improved: Not applicable as the subject is vacant land.
Valuation Methodology
The highest and best use of the subject is for apartment or commercial development.
Given the highest and best use, the following approaches are used:
− Cost Approach: Not applied due to subjective depreciation amounts.
− Sales Comparison Approach: Apartment and commercial land sales.
− Income Approach: Not applied as development land is rarely rented in the market.
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Letter of Transmittal – Continued
The effective date for the below values is July 31, 2018:
Final Value Opinion – 135-Unit Apartment (100%
multifamily) $1,750,000
Final Value Opinion – 63-Unit Apartment with Kwik
Trip
$820,000 Apartments +
$620,000 Kwik Trip =
$1,440,000
Final Value Opinion – 63-Unit Apartment with General
Commercial
$820,000 Apartments +
$750,000 Commercial =
$1,570,000
Final Value Opinion – 100% Commercial
Development $1,550,000
Note: The estimated $110,000 +/- should be deducted from each value above to account for the non-
market cost to relocate the road.
Exposure Time / Marketing Time
Exposure Time:
Final values reflect “market exposure” time of under 1 year before the effective
date of the appraisal. Changes in the market, use, lease and/or building
subsequent to the effective appraisal date could impact value.
Marketing Time: Marketing times for appropriately priced properties is generally 6 to 18 months +/-.
Our company has 10 employees, has been in business since 1968 and has sufficient knowledge,
education, experience, resources and/or contacts to competently complete this assignment. The
accompanying report contains data secured from my personal investigation and from source s considered
to be reliable; however, correctness is not guaranteed. To the best of my knowledge and belief, the
statements contained in this report are true and correct. Neither my employment to make this appraisal,
nor the compensation, is contingent upon the value reported. This report has been prepared in conformity
with the code of professional ethics and standards of professional appraisal practice of the Appraisal
Institute and appraisal standards set forth by Uniform Standards of Professional App raisal Practice.
Please contact us if you have further questions.
Sincerely,
Ethan Waytas, MAI William R. Waytas
Certified General MN 40368613 Certified General MN 4000813
________________________________________________________________________________________________________________________________________
www.nagellmn.com
TABLE OF CONTENTS
SUMMARY OF IMPORTANT FACTS & CONCLUSIONS ....................................................................... 7
VALUE TYPE, CONDITION & STABILITY OF PROPERTY .................................................................... 8
INTENDED USE OF THE APPRAISAL.................................................................................................... 8
DATE OF APPRAISAL ............................................................................................................................. 8
SCOPE OF THE APPRAISAL REPORT .................................................................................................. 9
PROPERTY RIGHTS APPRAISED ........................................................................................................ 10
PROPERTY COMPONENTS APPRAISED ........................................................................................... 10
IDENTIFICATION ................................................................................................................................... 11
REAL ESTATE TAXES .......................................................................................................................... 11
SUBJECT SALES & BUILDING HISTORY ............................................................................................ 12
REGIONAL DATA................................................................................................................................... 13
REGIONAL MAP .................................................................................................................................... 18
CITY & NEIGHBORHOOD DESCRIPTION ........................................................................................... 19
NEIGHBORHOOD MAP ......................................................................................................................... 21
SURROUNDING USES .......................................................................................................................... 22
MARKET CONDITIONS OVERVIEW ..................................................................................................... 23
SITE DESCRIPTION .............................................................................................................................. 25
ZONING .................................................................................................................................................. 26
ZONING MAP ......................................................................................................................................... 28
COMPREHENSIVE PLAN ...................................................................................................................... 29
FLOOD MAP ........................................................................................................................................... 30
PLAT MAP .............................................................................................................................................. 31
SUBJECT PHOTOGRAPHS .................................................................................................................. 32
POTENTIAL DEVELOPMENT ............................................................................................................... 36
HIGHEST AND BEST USE .................................................................................................................... 39
COST APPROACH................................................................................................................................. 43
INCOME APPROACH ............................................................................................................................ 43
SALES COMPARISON APPROACH – APARTMENTS ONLY ............................................................. 44
SALES COMPARISON APPROACH – COMMERCIAL......................................................................... 54
RECONCILIATION ................................................................................................................................. 65
EXPOSURE TIME / MARKETING TIME ................................................................................................ 65
DEFINITIONS ......................................................................................................................................... 66
ENVIRONMENTAL & STRUCTURAL ISSUES ...................................................................................... 67
EXTRAORDINARY ASSUMPTIONS & HYPOTHETICAL CONDITIONS ............................................. 67
ASSUMPTIONS AND LIMITING CONDITIONS .................................................................................... 68
CERTIFICATION .................................................................................................................................... 70
QUALIFICATIONS .................................................................................................................................. 71
ADDENDA TO APPRAISAL REPORT ................................................................................................... 74
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SUMMARY OF IMPORTANT FACTS & CONCLUSIONS
General Description: Vacant development land
Appraisal Report: Appraisal Report
Current Use: Vacant land
Extraordinary Assumptions: Yes, see end of report
Hypothetical Assumptions: None
Site Size: 165,498 SF (3.8 acres), per county and aerial GIS
measurement
Year Built: n/a, the subject is vacant
GBA: n/a, the subject is vacant
NRA: n/a, the subject is vacant
Zoning: B-3, Highway Business
Highest and Best Use: Future development
Property Rights Appraised: Fee Simple
Business Value / FF&E: No business value or FF&E included
Cost Approach: Not Applicable
Sales Comparison Approach: See report
Income Approach: Not Applicable
Final Value Opinion: See report
Page 8 Nagell Appraisal Incorporated | 952.544.8966
VALUE TYPE, CONDITION & STABILITY OF PROPERTY
Type of Value: This report provides an opinion of Market Value.
Condition of Value: This report provides an opinion of the as-is value.
Occupancy: The subject is vacant land.
INTENDED USE OF THE APPRAISAL
Intended Use:
The client intends to use the appraisal for decision making purposes
regarding a potential sale.
No party, other than the named client and listed intended users, may
use or rely upon any part of this report without the prior written
authorization of both the named client and the appraiser. This report is
not valid unless it contains the original signatures in blue ink. Any
unauthorized third party relying upon any portion of this report does so
at its own risk.
Intended User(s): City of Mounds View
Attn: Brian Beeman
DATE OF APPRAISAL
Effective Date: July 31, 2018
Inspection Date: July 31, 2018
Date of Report: August 9, 2018
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SCOPE OF THE APPRAISAL REPORT
USPAP defines Scope of Work as: The type and extent of research and analyses in an
assignment.
For each appraisal, appraisal review and appraisal consulting assignment, an appraiser must:
1) Identify the problem to be solved,
2) Determine and perform the scope of work necessary to develop credible
assignment results; and
3) Disclose the scope of work in the report.
1) Provide a reasonably supported value opinion as it relates to the intended use & scope.
2)
Per assignment request (see addenda for engagement letter), the following degree of research
and analysis has been made. The narrative format used is an Appraisal Report, which is
intended to comply with the reporting requirements set forth under Standards Rule 2 -2a of
USPAP. See individual approaches for further detail.
3)
The scope of work for this appraisal includes:
• a) Property Identification: Public record, plat maps, zoning maps and aerial photographs
were used to identify the subject property.
• b) Property Inspection: A viewing of the subject property and neighborhood by the
appraiser. Physical factors: Based on property viewing and conversations with the client,
city and county officials. Lot size is based on county information. Economic Factors:
Consisted of gathering of information from market experts, city and/or county offices, and
internet about the region, community, neighborhood, zoning, utilities, and any pending
projects in the area that may affect the subject property.
• c) Extent of Data Researched: Sales data of competing properties within the subject
market area were given primary consideration. The most relevant data is used in this
report. Sources include, appraiser data files, assessor, internet, developers, agents, MLS,
periodicals, in-office library, etc. In addition, during the course of appraisal practice and of
this appraisal process, the appraiser has had ongoing discussions with market participants
(buyers, sellers, property managers, real estate agents/brokers, appraisers, etc.) and/or
viewed market data in relation to how the current real estate market may impact the subjec t
value. The appraiser has not researched the title or ownership records.
• d) Type and Extent of Analysis Applied at Opinions or Conclusions : An extensive review of
market data was performed. The most recent, similar and proximate data has been used.
The data used will be adjusted on a grid. Reasonable and appropriate collection,
verification, analysis and viewing has been performed in the valuation approaches, given
the purpose and intended use of the report. A final value opinion will be discussed and
correlated.
The data used was obtained from sources considered credible, yet its accuracy is not guaranteed. If
found otherwise, value could differ.
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PROPERTY RIGHTS APPRAISED
Real property ownership consists of a group of distinct rights. There are two primary property rights, Fee
Simple and Leased Fee (as defined by The Appraisal of Real Estate, 13th Edition, Appraisal Institute).
Fee Simple Interest: Absolute ownership unencumbered by any other interest or estate, subject only to
the limitations imposed by the governmental powers of taxation, eminent domain, police power, and
escheat.
Note: This would typically reflect an owner-occupied property. When the property rights appraised are the
unencumbered fee simple interest of the real estate, the appraised value is subject to normal easements
for drainage, public streets and utilities, if any. The effect of any existing mortgage or delinquent taxes on
the subject property has not been considered in this appraisal.
Leased Fee Interest: The ownership interest held by a lessor (landlord), which includes the right to the
contract rent specified in the lease plus reversionary right when the lease expires. The lessor’s interest in
a property is considered a leased fee interest regardless of the duration of the lease, specified rent, the
parties to the lease, or any of the terms in the lease contract.
A leased property, even one with rent that is consistent with market rent, is appraised as a leased fee
interest, not as a fee simple interest. Even if the rent of the lease terms are not consistent with market
terms, the lease fee interest must be given special consideration and is appraised as a leased fee
interest. (The Appraisal of Real Estate, 13th Edition, Page 114)
The subject is vacant land; therefore, the appraised value will reflect the Fee Simple interest.
PROPERTY COMPONENTS APPRAISED
Real Estate: The appraised value includes the real estate value opinion. The methods utilized for the real
estate valuation include:
• Sales Comparison Approach
FF&E: Furniture, Fixtures, & Equipment (FF&E): The appraised value does not include any values of
fixtures, furnishings and equipment. The appraised value reflects real estate only.
Business Value: There is no business value included in the appraised value.
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IDENTIFICATION
Address: 2400 County Road H2,
Mounds View, MN 55112
County PID: 083023310072, 083023310071, 083023310005
Legal: Lengthy, see addenda.
Fee Owner: Mounds View Economic Development Authority
Census Tract #: 0409.02
REAL ESTATE TAXES
Taxes, per County Records
Payable 2018 Payable 2019
Tax The subject is tax exempt n/a
Tax ratio 0% n/a
Special Assessments / Solid Waste Fee /
Other $0 n/a
Total Tax & Assessments: Tax Exempt n/a
Delinquent taxes: None noted
COUNTY ASSESSOR’S VALUE
Payable 2018 Payable 2019
Land $1,075,400 $1,075,400
Building $0 $0
TOTAL $1,075,400 $1,075,400
$/SF of Site Size $6.50 per SF $6.50 per SF
Typical Tax Ratios by Property Type
Commercial (retail, office, industrial, hotel, other, etc.) 1.5% – 4.0%
Residential (multi-family, apartment, etc.) 0.9% – 1.5%
Single-family dwellings 0.8% – 1.5%
The appraised value given in this report assumes any/all special assessments, and/or liens are paid in full
and that there are no delinquent taxes, fees, payments, association dues, etc. Should it be found that any
of these exist the amount should be deducted from the appraised value. Appraiser did not research these
items; typically, a title search would r eveal any of these.
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SUBJECT SALES & BUILDING HISTORY
Listing History: The subject is listed for sale on CoStar with an asking price of $1,800,000
or $10.88 per SF of site size.
Sales History:
Sale Price: n/a
Sale Date: n/a
Buyer: n/a
Seller: n/a
Terms: n/a
Source: n/a
Comments: There are no known or reported sales of the subject property
within the past 5 years.
Note: The owner reportedly has an interested party in purchasing the
property for development. This appraisal is part of the decision-making
process.
Pending Sale: None apparent at this time.
Building History: The subject is currently vacant. There was reportedly a restaurant and gas
station that were razed by the city.
Lease History: None, the subject is vacant.
Leasehold Interest: None apparent.
Association Dues: None, the subject is not part of a common interest community.
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REGIONAL DATA
Metro Area
Minneapolis-Saint Paul is the most populous urban area in Minnesota, and is composed of 186 cities and
townships. Built around the Mississippi, Minnesota and St. Croix rivers, the area is also nicknamed The
Twin Cities for its two largest cities, Minneapolis and Saint Paul. Saint Paul is the second largest city in
Minnesota, as well as the state capital.
The area is part of a larger U.S. Census division named Minneapolis -St. Paul-Bloomington, MN-WI, the
country’s 16th-largest metropolitan area, composed of eleven counties in Minnesota and two counties in
Wisconsin. This larger area, in turn, is enveloped in the U.S. Census combined statistical area called
Minneapolis-St. Paul-St. Cloud, MN-WI with an estimated population of 3.5 million people in 2006, ranked
the 13th most populous in the U.S.
In both of the fully developed central cities–Minneapolis and St. Paul–the population has declined due to
smaller household sizes, yet growth in other areas of their counties has been more than offsetting. Below
is detailed where this growth has occurred:
POPULATION
County Census
2000
Census
2010
Forecast
2015
Growth
2000 - 2010
Growth
2010 - 2015 Source: US Census Bureau total annual total annual
Hennepin 1,116,200 1,152,425 1,165,830 3.25% 0.32% 1.16% 0.12%
Ramsey 511,035 508,640 491,820 -0.47% -0.05% -3.31% -0.33%
Dakota 355,904 398,552 437,520 11.98% 1.20% 9.78% 0.98%
Anoka 298,084 330,844 374,350 10.99% 1.10% 13.15% 1.32%
Washington 201,130 238,136 257,760 18.4% 1.84% 8.24% 0.82%
Scott 89,498 129,928 186,820 45.17% 4.52% 43.79% 4.38%
Wright 89,986 124,700 159,640 38.58% 3.86% 28.02% 2.80%
Carver 70,205 91,042 114,870 29.68% 2.97% 26.17% 2.62%
Sherburne 64,417 88,499 119,040 37.38% 3.74% 34.51% 3.45%
Chisago 41,101 53,887 67,880 31.11% 3.11% 25.97% 2.60%
Total 2,837,560 3,116,653 3,375,530 9.84% 0.98% 8.31% 0.83%
Overall, the area has experienced moderate to good income growth. Annualized income growth of 2.5%
to 3.5% is consistent with national averages.
MEDIAN HOUSEHOLD INCOME
County Census
2010
Estimate
2014
Growth
2010 - 2014 Source: US Census Bureau total annual
Hennepin 59,236 65,033 10.3% 2.6%
Ramsey 50,136 55,460 10.6% 2.7%
Dakota 69,508 74,995 7.9% 2.0%
Anoka 65,771 70,464 7.1% 1.8%
Washington 77,239 83,182 7.8% 1.9%
Scott 77,314 86,510 11.9% 3.0%
Wright 66,833 73,085 9.4% 2.3%
Carver 80,173 86,391 7.8% 1.9%
Sherburne 69,971 73,621 5.2% 1.3%
Chisago 63,810 70,223 10.1% 2.5%
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Regional Data – continued
Economic Trends
The current residential interest rates for a typical 30-year mortgage are around 4.0% to 5.0%.
Commercial rates are around 4.5% to 6.0%. Rates are expected to be relatively stable for the
foreseeable future.
The state of the macro economy (national, state, etc.) declined from its peak in 2006, but in 2010 began
showing signs of recovery. Many economists are terming 2007 through 2009 as “The Great
Recession”.
New construction labor costs have softened, however, material costs appear to be rising. Overall,
construction costs are very competitive to what they were 5 to 6 years ago. Gener ally, when vacancy is
over 10%, new commercial/industrial construction is slow. Generally vacancy and capitalization rates
were on the rise during the “Great Recession” but are now showing signs of stabilizing and declining.
Listing prices have been declining from the peak of the market in 2006 which was a period of high seller
expectations. Recently seller expectations and value appear to be trending towards equilibrium.
Although well diversified, the TCMA and surrounding Minnesota economy is not im mune to the recent
soft/declining trends of the overall economy.
Source: Minnesota DEED
Minnesota’s index plunged along with the national index during the worst months of the recession but
bottomed out earlier and dropped less than the national index. Minnesota’s economy recovered more
quickly and stronger compared to the national recovery.
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Regional Data – continued
EMPLOYMENT & LABOR
Over the past ten years, unemployment rates have gone from near historical lows in 1999 to at/near
historical highs by year end 2009. Currently, unemployment is below pre-recession values.
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Regional Data – continued
COMMERCIAL REAL ESTATE - Vacancy Rates for Major Building Types
Apartment vacancy declined significantly from 2009 to 2014 and remained relatively stable in 2015 and
2016. New construction is taking place in good quality and built-up markets. Despite the increased
number of units, vacancy has remained at/near historic lows and rental rates are increasing slightly.
The retail market has recovered and is now showing signs of growth.
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Regional Data – continued
Office vacancy is still the highest of the four major building sectors. New construction is typically limited
when vacancy is over 10%. Vacancy trended downward from 2010 to 2015, but new construction in 2016
has increased the vacancy rate.
Vacancy has been trending downward over the past three years. Buildings with high clear height tend to
have stronger demand in the current market.
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REGIONAL MAP
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CITY & NEIGHBORHOOD DESCRIPTION
Type of neighborhood: Northern Suburban
Percent built-up: 95% Developed
Stage of Development: Stable
Neighborhood boundaries: City Limits
Redevelopment Some redevelopment and new development is occurring; property
owners are updating their homes
Major Transportation: I-35W, County Road 10
Predominant type &
conformity:
Single Family Residential 65%
Two- & Multi-Family 15%
Commercial/Industrial 15%
Other/Vacant/Public Land 5%
Total: 100%
Average conformity.
Reputation of the area: Average
Typical property age: New to 75+ years, predominant 25-50+ years
Single-Family Home Sales: $125,000 to $300,000+
Apartment Sales: $50,000 to $125,000+ per Unit
Office Property Sales: $50 to $150+ per SF
Retail Property Sales: $75 to $200+ per SF
Industrial Property Sales: $30 to $85+ per SF
Capitalization Rates: 7-10% Historic
Subject Market: Stable with some growth
Neighborhood Trend: Stable with some growth
Detrimental influences: No major apparent
CITY: The subject is located about 20 minutes north of Downtown Minneapolis in Mounds View, MN. The
subject is located along County Highway 10, which is the primary thoroughfare for Mounds View. Highway
10 has moderate to high traffic levels. Mounds View has a reputation as a stable community, with nearby
shopping and access to Interstate 694, Interstate 35W, US Highway 10 and County Highway 10. Access to
downtown and surrounding communities is convenient. Major shopping and commerce is located nearby.
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City & Neighborhood Description – continued
Subject City:
As of the 2010 census the population was 12,155, in 2000 it was 12,738. This represents a net decrease
of 4.6% from 2000 to 2010. The 2015 population estimate for the city is 12,952, an increase of 6.6%.
The median income for the city is mostly above county levels and below state levels, other than for year
2013 (per Census Bureau). Income has fluctuated throughout the past few years.
Median Home Prices: City of Mounds View
Source: Northstar MLS
The median sale price for a single-family home in Mounds View has steadily increased over the years.
Mounds View is below the Twin Cities Region median sale price.
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NEIGHBORHOOD MAP
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SURROUNDING USES
The subject is located in an area of commercial, apartments, senior living, and residential related uses.
Residential
Residential
Subject
Commercial
Commercial
Park
School
Senior Living
Commercial
Apartments
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MARKET CONDITIONS OVERVIEW
Market Conditions Overview is based on conversations with market participants, articles, publications and
data. Listed below are pertinent conditions of the subject market.
Current Market
Location Site Size (SF) Development
Appeal
List
Date
Current
List Price $/SF
4560 Central Ave NE
Hilltop 104,544 Average Mar-18 $975,000 $9.33
Comments: Current listing of a commercial property with a traffic location. The listing agent is marketing
the site as redevelopment.
6100 University Ave NE
Fridley 21,344 Average Dec-17 $295,000 $13.82
Comments: Commercial property with highway frontage.
Note: No relevant land listings found for apartment development sites. This is not uncommon, as most
apartment development land is privately listed for sale or has a buyer approach a seller.
Commercial Land sales: $8 to $15+ per SF, depending on location, frontage, and visibility
Apartment Land sales: $8 to $20+ per SF or $8,000 to $20,000 per unit, depending on location and allowed
density
Typical Commercial
Rents: Ranges from $10 to $20+ per net, depending on space quality and buildouts
Typical Apartment Unit
Rents:
Typically $900+ for a 1BR (new construction) and $1,200+ for a 2BR (new
construction)
Typical concessions:
0 to 12 months for the buildout period is typical for commercial, none typical for
apartments, however, new construction properties will typically offer incentives to
move in
Expenses:
Tax $2.00 to $4.00+ per SF
Op. Ex. $3.00 to $8.00+ per SF
Total $5.00 to $12.00+ per SF
Vacancy: Historic: 8% - 20%, currently around 10%
Lease up period: Typically 6 to 12 months +/- to find a new tenant
Capitalization Rates:
Tier 1 6.5% - 8.0%, good credit tenants, recent construction, good location
Tier 2 8.0% - 9.5%, average credit tenants, older building, average location
Tier 3 9.5% - 10.5%+, below average credit tenants, older building, fair
location
Page 24 Nagell Appraisal Incorporated | 952.544.8966
Market Conditions Overview – continued
Market Supply
Search Parameters: Source: CoStar
Property Type: Commercial Location: Ramsey County
Search Results: Currently, there are 35 offerings/available properties
Market Absorption
Search Parameters: Source: CoStar
Property Type: Commercial Location: Ramsey County
Search Results: 21 sales within the past year
Supply & Demand:
Considering the above market data/statistics, and based on market
observations, the subject market appears to be in balance (there are
about 20 months of inventory available).
Subject Market: Likely investor purchase for redevelopment
Marketing Time: Market exposure times can vary based on seller motivations;
Typically 6-24 months.
Market participant comments/ observations:
General Comments
Apartments – Cushman & Wakefield Minneapolis Market Report
Minneapolis is in the midst of an economic expansion phase with job
growth rates projected at 1.8% and 1.3% annually through 2019.
Strong In-migration from St. Cloud, Chicago and Duluth will continue to
create demand for apartments throughout the market.
Minneapolis will continue to be a leader in the Midwest due to its diverse
set of economic drivers, including corporate innovation, highly educated
labor force and healthy consumer demand.
Overall Market Condition: Stable with growth
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SITE DESCRIPTION
Dimensions: Somewhat rectangular, see plat
Gross Site Size: 165,498 SF (3.80 acres), per county and aerial GIS measurement
Non-Useable Area: None noted
Net Useable Area: 165,498 SF
Topography / Shape / Low: Mostly level / Somewhat irregular / None noted
Soil conditions / Drainage: Assume Stable / Appears Average
Utilities:
Electricity/Gas Yes / Yes
Water/Sanitary Sewer City water (to site) / City sewer (to site)
Off-Site Improvements:
Street/Curb/Gutter: Bituminous / Concrete / Concrete
Sidewalk/Alley: Asphalt / None
Visual Road Condition: Average
Street Lights / Storm
Sewer: Typical / Yes
Frontage/Access to site (#):
County Road H2 (currently one, likely to be closed), Greenfield Avenue
(currently 2 access points, likely to be closed), Mounds View Boulevard (no
access); Edgewood Drive (no access at this time, likely future access to the
site)
Visibility/Exposure: Average / Average
Flood hazard zone: None apparent, see following flood map
Bus Line: Bus line along Long Lake Road to the west of the subject
Apparent Easements: Typical drainage and utility apparent; no other easement
documentation provided
Encroachments/Conditions: None noted
Surplus/Excess Land: None
Land to Building Ratio: n/a, the subject is vacant land
Use / Functional Adequacy: The subject is vacant land / Average
Surrounding Uses:
N – Restaurant S – Apartments, SF residential
E – Commercial W – SF Residential
Distance to Major Road: Effectively direct access to CR 10, about 1 mi SE to I-35W
Comments: The subject is located along Mounds View Boulevard in an area of office, commercial, and
residential related uses. The site has average visibility and has average development appeal.
Page 26 Nagell Appraisal Incorporated | 952.544.8966
ZONING
The subject is zoned B-3, Highway Business. Value assumes that no known issues are out of
conformance that would restrict the continued use of the subject’s current use. Source: City Zoning Code.
Subject Zoning: B-3, Highway Business
Intent (city code):
The purpose of the B-3, Highway Business District is to provide for and limit
the establishment of motor vehicle oriented or dependent commercial and
service activities.
Permitted Uses:
All permitted uses as allowed in a B-2 Limited Business District;
amusement centers; auto accessory stores; bowling alleys; commercial
recreational uses; grocery stores, supermarkets; motels, motor hotels and
hotels; provided, that the lot area contains not less than 500 SF of lot area
per unit; private clubs or lodges serving food and beverages with use
being restricted to members and their guests; adequate dining room,
kitchen and bar space must be provided according to standards imposed
upon similar unrestricted customer operations. The serving of alcoholic
beverages to members and their guests shall be allowed; provided, tha t
such service is in compliance with applicable Federal, State and Municipal
regulations. Offices of such use shall be limited to no more than 20% of
the gross floor are of the building; public or semi-public recreational
buildings and neighborhood or comm unity centers, public and private
educational institutions limited to elementary, junior high and senior high
schools and religious institutions; rental stores; restaurants, cafes, tea
rooms, taverns, on-and off-sale liquor; taxi terminals, stands and offices;
etc.
Conditional Uses:
Drive-in and convenience food establishments; car washes (drive through,
mechanical and self-service); Motor fuel station, auto repair, minor and tire
battery stores and service; open and outdoor storage as an accessory use;
open or outdoor service, sale and rental as a principal or accessory use and
including sales in or from motorized vehicles, trailers or wagons for a period
greater than 10 days; an accessory use which is a permitted use in a B-2
District; reserved; motor vehicle and recreation equipment sales and
garages accessory thereto; wireless telecommunications towers and
antennae subject to the provisions established in Chapter 1124 of the
Zoning Code; day care center, group nursery;
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Zoning – continued
Major Restriction/
requirements in this
district:
Maximum building height: No building or structure shall have a height
greater than three stories
Minimum front yard: 30 Feet
Minimum side yard: 10 feet, when abuts residential: 20 feet
Minimum rear yard: 20 feet, when abuts residential: 40 feet
Minimum lot size: no minimum; must allow for setback and parking
requirements to be met
Parking:
Motor fuel station: At least 4 off-street parking spaces plus 2 off-street
parking spaces for each service stall. Those facilities designed for sale of
other items than strictly automotive products, parts or service shall be
required to provide additional parking in compliance with other applicable
sections of this title.
Multiple-family dwellings: One and one half uncovered, parking spaces
per unit and at leas one garage space per unit. A parking space and garage
shall be designated and included with each rental unit.
Townhouse and condominium: Three spaces per unit, two of which shall
be garage spaces.
Use:
The subject is vacant land that is guided for mixed-use. The city is
considering multiple uses for the subject, including all apartments, all
commercial, or a mixture of the two.
Source: City zoning map, city code
Page 28 Nagell Appraisal Incorporated | 952.544.8966
ZONING MAP
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COMPREHENSIVE PLAN
The subject is guided for MU-PUD, Mixed Use Planned Unit Development.
The comprehensive plan states:
Land containing a building or buildings with significant amounts of residential uses in combination
with commercial and/or office uses. Sites with this designation should be developed as planned
unit developments to provide flexibility to ensure that integrated efficient and well-planned
development occurs. Examples include projects that could provide for a mix of residential and
commercial uses within single or multiple structures.
Page 30 Nagell Appraisal Incorporated | 952.544.8966
FLOOD MAP
The subject does not appear to be located in a flood plain.
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PLAT MAP
Per county
The red outline reflects the most likely site after it is assembled for development. The vacated road has
an approximate area of 19,454 SF while the new connector street from Edgewood Drive to Greenfield
Avenue has an area 19,920 SF. The remaining platted parcels have a total area of 165,964 SF.
The total net site area is therefore 165,964 SF + 19,454 SF (vacated road) – 19,920 SF (new road) =
165,498 SF.
Page 32 Nagell Appraisal Incorporated | 952.544.8966
SUBJECT PHOTOGRAPHS
Looking north on Edgewood Drive
Looking south on Edgewood Drive
Looking south on Greenfield Avenue
Looking north on Greenfield Avenue
Nagell Appraisal Incorporated | 952.544.8966 Page 33
Subject Photographs – Continued
Looking west on H2
Looking east on H2
Looking southeast on Mounds View Boulevard
Looking northwest on Mounds View Boulevard
Page 34 Nagell Appraisal Incorporated | 952.544.8966
Subject Photographs – Continued
Far west parcel
Far west parcel
Middle west parcel
Middle west parcel
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Subject Photographs – Continued
East parcel
East parcel
Page 36 Nagell Appraisal Incorporated | 952.544.8966
POTENTIAL DEVELOPMENT
The city provided the following site plans for the subject. The first is a 135-unit apartment building that
would occupy the entire site:
A breakdown of units was not available; however, it is likely there is a mixture of 1 -BR, 2-BR, and 3-BR
units. The implied density is about 35.5 units per acre.
This development would allow for a majority of the site to be used for structure and parking. The
apartments would be located along the three adjoining roads (Country Road H 2, Mounds View Boulevard,
and Edgewood Drive).
With this plan there is no potential for a commercial development.
A new public road would be constructed in the southwest corner from Edgewood Drive to Greenfield
Avenue.
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Potential Development – Continued
The second plan is for a Kwik Trip along Edgewood Drive and apartments along Mounds View Boulevard:
In this scenario the apartments are located on Mounds View Boulevard while the gas station is setback
from the traffic road. The gas station user might be concerned about access and visibility, as customers
must turn off from Mounds View Boulevard, travel west on County Road H2, and the n turn south on
Edgewood Drive.
The implied apartment density is about 27.4 units per acre.
Visibility for the commercial site is average for traffic traveling southeast on Mounds View Boulevard;
visibility is blocked by the apartment structure for traffic traveling northwest.
Page 38 Nagell Appraisal Incorporated | 952.544.8966
Potential Development – Continued
The appraiser considered a potential breakdown of areas as follows:
The above is not to scale and is reflected as a concept only. However, the market might try to push the
commercial along Mounds View Boulevard to capture more visibility and to shift the apartments to the
west to reduce traffic noise. Ideally, the apartments would be higher than the commercial and therefore
visible to the roadway (for advertising purposes).
Most commercial sites for retail strip centers or gas stations range from 1 to 2 acres. Assuming a rate at
the mid-range of 1.5 acres, the following allocation of the site is possible:
Apartment Site Area: 100,158 SF
Commercial Site Area: 65,340 SF
Commercial Apartments
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HIGHEST AND BEST USE
Highest and best use as defined in The Appraisal of Real Estate, Thirteenth Edition, by the Appraisal Institute, is:
"The reasonably probable and legal use of vacant land or an improved property, that is physically possible, legally
permissible, appropriately supported, financially feasible, and that results in the highest value.” Highest and best use
is analyzed in two ways, site as vacant and site as improved.
Typically, there are four criteria in highest and best use analysis
Legally permissible uses What uses are allowed by zoning?
Physically possible uses What uses are physically possible on the site?
Financially feasible use Which possible and permissible uses will produce a positive return?
Maximally productive use Of the financially feasible uses, which use produces the highest return warranted by the market
(the ideal improvements)?
Site as Vacant: 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 the parcel of land is vacant or can be
made vacant by demolishing any improvements. The Dictionary of Real Estate Appraisal, Fifth Edition, by the Appraisal Institute.
Legally Permissible Uses: The current B-3, Highway Business zoning allows for a variety of office and
commercial related uses. The site appears to be guided for a Mixed-Use PUD, which allows for
commercial and residential.
The city is considering multiple scenarios for the subject, including 100% multi-family, potentially 100%
commercial, as well as a mixture of both uses.
The below analysis assumes the following. The information is based on documents provided by the city.
100% Apartments: Total of 135 units, density of 35.5 units per acre
Apartment/Commercial Mixture: Total of 63 units, density of 27.4 units per acre
Likely Commercial Pad Area: 1.5 acres or 65,340 SF
The above could change as the city determines final density and commercial areas. This could result in
varying values; for example, more apartment units would likely increase the value while fewer units would
likely decrease the value.
Physically Possible Uses: The physical characteristics of the site appear suitable for development ; the
site has average appeal and average visibility. The site is mostly level and the site shape would allow for
typical building placement. Public utilities are available (gas, electricity, water, sanitary sewer).
Per Brian Beeman, a developer would have to remove the existing Greenfield Avenue on the site and
then reconstruct a connector street from Edgewood Drive to Greenfield Avenue (see prior maps). A
developer would consider this cost when purchasing the subject.
The existing road has an area of about 10,000 SF. Assuming razing costs of $2 per SF (per Marshall &
Swift), the total cost to remove the road is about $20,000.
To construct a new road, concrete curb and gutter, storm sewer, asphalt base, 30’ wide, etc. would be,
per Marshall & Swift, about $300 per linear foot. The distance from Edgewood Drive to Greenfield Avenue
is about 290’, which implies a road cost of $87,000.
The total cost to reconfigure the roads is therefore $87,000 + $20,000 = $110,000 rounded
Note: It is assumed the subject does not have any major soil corrections, if found to be otherwise any
value conclusions could differ.
Page 40 Nagell Appraisal Incorporated | 952.544.8966
Highest and Best Use – continued
Physically Possible Uses:
The subject does have some orientation issues that a buyer might consider. Specifically, that the access
to the site is via Edgewood Drive. This means that if commercial is located on Mounds View Boulevard
traffic must drive past the site and then loop around, it is more circuitous. This can also lead to higher
development costs, including more paved area as well as utility lines running from the street to the
buildings.
If the commercial is placed closer to Edgewood Drive, the visibility of the commercial building or buildings
could be blocked from Mounds View Boulevard if an apartment building is constructed in the eastern
portion of the site.
Any development on the site should be careful to consider the exposure of commercial to the road, as
well as the potential for higher development costs.
Financially Feasible Uses: Typically, surrounding uses, market demand, and availability of financing
drive financially feasible uses.
Surrounding Uses: Uses in the immediate area are a mixture of commercial, residential
(apartments), and senior living. A commercial, office, or apartment use would be supported by the
surrounding uses.
Financing: Over the past 3+ years, financing has loosened up since the “Great Recession”.
However, borrowers typically must be well qualified with 20% to 30% down. For new projects,
lenders commonly require significant pre-leasing activity for multi-tenant commercial properties.
Interest rates for new construction range from 4.75% to 5.75%, depending on tenant quality.
Amortization periods are generally 20 to 25 years with 5-year balloons.
Financing for apartment properties is similarly 4.75% to 5.75%, commonly with amortization
periods of 25 to 30 years (5-year balloons). Lenders will not necessarily look for significant pre-
leasing before extending financing, however, they will strongly consider market demand,
preferably from a feasibility study.
Market Demand: Market demand for commercial land in the subject area is soft to average. The
commercial retail market has been experiencing significant changes in the past few years,
primarily due to online shopping (Amazon). Most new commercial is either service based or food
related. That said, many grocery stores have been expanding in the metro, including HyVee and
Aldi.
CoStar indicates that current asking commercial rates within a 5-mile radius are around $11.38
per SF, net with vacancy of about 3.8%. Any new construction of a commercial building would
likely require rent of $18+ per SF net with a 10-year guaranteed lease.
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Highest and Best Use – continued
Market Demand – Continued: Market demand for apartment land in the subject area is soft to
average as well. CoStar indicates that there has only been one apartment buildi ng constructed in
Mounds View after 2002. There has been newer senior living that has been built.
CoStar indicates the following asking rates for various unit types:
1BR: $864 per month
2BR: $983 per month
3BR: $1,369 per month
The appraiser has observed that new construction units are generally 20% to 40% higher than
the market average. This might imply the following apartment rent ranges for any new
development at the subject site:
1BR: $1,050 to $1,200+ per month
2BR: $1,200 to $1,400+ per month
3BR: $1,650 to $1,900+ per month
The highest observed rents (newer building, 50+ units) in the Mounds View area are at Landmark
Estates (5400 Landmark Circle):
1BR: $945 per month
2BR: $1,025 per month
3BR: Not available
New construction might be supported however, the building would likely have the highest rent
rates in Mounds View. That said, a developer might be a little cautious when building premium
units in Mounds View; this caution might be reflected in a lower land price as opposed to an
established area with history of higher rents.
Note: Per Brian Beeman, one developer conducted a feasibility study that sho wed there is high
demand for senior living, low income housing, and market rate apartments. The study was not
provided to the appraiser however, it does make logical sense given the current hot apartment
market (historically high rents and low vacancy).
Financially Feasible Uses: A feasibility analysis has not been completed as development plans
for the subject are too speculative at this time. That said, an apartment or mixed-use is logical for
the site. Development timing would depend on the land purchase price.
Note: This appraisal does not consider any TIF; if included a developer might be incentivized to
develop the site.
Page 42 Nagell Appraisal Incorporated | 952.544.8966
Highest and Best Use – continued
Maximally Productive Use: The subject is surrounded by commercial, residential, and senior living. The
City of Mounds View is investigating various potential development plans for the subject site. Depending
on city approval of densities, the subject’s value could have a significant range.
That said, here are the proposals the city is considering at this time:
1. Develop entirely with apartments. The proposal provided to the appraiser indicates 135 -units.
2. Develop with a gas station (likely Kwik Trip) and 63 apartment units.
3. Develop with general commercial and 63 apartment units.
4. Develop entirely with general commercial.
Each scenario is considered in the following Sales Comparison Analysis. Because it is unknown at this
time which option is legally allowed, all three will be valued for the client’s consideration. Traditionally, the
highest value is the maximally productive use of the site. Give n this, Option 1 technically has the highest
value based on the above assumptions. That said, the final development option (and effectively value)
rest on the city’s approval of a site development plan.
Note:
Typical apartment construction in the market results in average to good quality units.
Typical commercial construction in the market results in average to good quality and land -to-
building ratios of 4 to 6 to 1. This would imply a commercial building of 10,000 SF to 16,000 SF. A
single- or multi-tenant building would be supported on the site.
Site as Improved: The use that should be made of a property as it exists. An existing improvement should be
renovated or retained as so long as it continues to contribute to the total market value of the property, or until the
return from a new improvement would more than offset the cost of demolishing the existing building and constructing
a new one. The Dictionary of Real Estate Appraisal, Fifth Edition, by the Appraisal Institute.
The site as improved is not a relevant analysis because the subject is vacant.
Most Probable Buyer: The most likely buyer of the subject would be a local or regional investor who
would develop the site.
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COST APPROACH
Due to the subjectivity in physical and external depreciation, the Cost Approach is not considered a
reliable indicator of value and therefore was not applied.
INCOME APPROACH
Redevelopment land and buildings are rarely rented as tenants do not have future certainty of having a
space. Therefore the income approach is considered not reliable and was therefore not applied.
Page 44 Nagell Appraisal Incorporated | 952.544.8966
SALES COMPARISON APPROACH – APARTMENTS ONLY
The Sales Comparison Approach to Value is predicated upon sales of properties with similar
characteristics as the subject. The primary premise of this approach is that the market value of the
subject is directly related to the prices of competing properties after adjustment. Adjustments are
made in an effort to account for significant differences.
Supply and Demand: Sales in the market result from negotiations between buyers, sellers and
lenders. Buyers reflect market demand and sellers supply. If demand is high, prices tend to increase,
if it is low, prices usually decrease.
Substitution: The principle of substitution holds that the value of a property tends to be set by the
price paid to acquire a substitute property of similar utility and desirability within a reasonable amount
of time (The Appraisal of Real Estate, 14th Edition). The Sales Comparison Approach is less reliable
if substitute properties are not available in the market. There are adequate sales to apply the sales
comparison approach and formulate a reliable indication of market value.
Balance: The market tends to force a balance between supply and demand. Balance can change
due to shifts in population, variations in purchasing power, consumer tastes and preference and time.
Externalities: When possible, select comparables with similar location, economic conditions and
support facilities.
Land Value: Land value is estimated as if the land were vacant and available for development to its
highest and best use. There are several different methods to analyze site values: sales comparison,
allocation, extraction, subdivision development, land residual, and ground rent capitalization. One or more
of these methods may be applicable depending on market conditions and the type of land.
The preferred and most reliable approach is the sales comparison; however, when sales data is very
limited, some of the other methods may be employed if appropriate data is available. For purposes of
this appraisal, the sales comparison method has been utilized. A number of sales were reviewed in
the subject marketing area. Of the data analyzed the most relevant sales were selected and used on the
following pages.
The Following Outline Is Used In The Sales Comparison Approach:
- A location map of the comparable sales.
- Comparable sales are listed.
- An adjustment grid using the comparable sales.
- A discussion of adjustment and conclusion of value.
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Comparable Location Map
Primary Comparable Selection/Search Criteria:
• Multi-family land sales
• Sale date of January 1, 2016 +, older sales may be considered if appropriate
• Data from competing communities
• In some instances, older data and/or data from competing communities will be utilized due to
proximity to the subject and other characteristics similar to the subject.
Page 46 Nagell Appraisal Incorporated | 952.544.8966
Sales Comparison Approach -- continued
Land Sale Comparable #1
Property Data
Address: 2665 Victoria Street North, Roseville
PID/Legal Description: 022923340025
Description: Land parcel Zoning/Intended Use: Apartments
Physical Characteristics: Average Utilities: Public
Site Size: 249,163 SF Improvements: None
Comments: Average appeal land that the buyer purchased for apartment development with 105 proposed
units.
Sale Data
Sale Price: $1,525,000 Price/Unit: $14,524 per unit
Sale/Close Date: August 10, 2016 Sale Terms: Financing
Buyer: Applewood Pointe Coop of
Roseville at Central Park Sale Conditions: Typical
Seller: United Properties Residential
LLC Source/Verification: RediComps / CREV
Comments: The buyer and seller privately negotiated the sale price.
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Sales Comparison Approach -- continued
Land Sale Comparable #2
Property Data
Address: 4729 Grand Avenue Northeast, Columbia Heights
PID/Legal Description: 253024320064, 253024320065, 253024320072
Description: Land parcel Zoning/Intended Use: Apartments
Physical Characteristics: Average Utilities: Public
Site Size: 214,751 SF Improvements: None
Comments: Average appeal apartment land with a proposed 83 unit structure.
Sale Data
Sale Price: $1,200,000 Price/Unit: $14,458 per unit
Sale/Close Date: December 1, 2017 Sale Terms: Financing
Buyer: Columbia Heights Leased
Housing Associates III, LLLP Sale Conditions: Typical
Seller: Grand Central Properties,
LLC Source/Verification: RediComps / CREV
Comments: The property was listed on the open market.
Page 48 Nagell Appraisal Incorporated | 952.544.8966
Sales Comparison Approach -- continued
Land Sale Comparable #3
Property Data
Address: XXX 153rd Street, Apple Valley
PID/Legal Description: 017590010010
Description: Land parcel Zoning/Intended Use: Apartments
Physical Characteristics: Average Utilities: Public
Site Size: 57,064 SF Improvements: None
Comments: Average appeal apartment land with a proposed 114 unit building.
Sale Data
Sale Price: $1,425,000 Price/Unit: $12,500 per unit
Sale/Close Date: September 27, 2017 Sale Terms: Cash
Buyer: Bifos-Nuvelo, LLC Sale Conditions: Typical
Seller: IMH special Assest NT 175-
AVN, LLC Source/Verification: RediComps / CREV
Comments: The buyer and seller privately negotiated the purchase price.
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Sales Comparison Approach -- continued
Land Sale Comparable #4
Property Data
Address: 9436 Ulysses Street Northeast, Blaine
PID/Legal Description: 293123340011
Description: Land parcel Zoning/Intended Use: Apartments
Physical Characteristics: Average Utilities: Public
Site Size: 399,010 SF Improvements: None
Comments: Average appeal land with 191-unit building proposed. The buyer plans for market rate
apartment units.
Sale Data
Sale Price: $1,910,000 Price/Unit: $10,000 per unit
Sale/Close Date: March 21, 2016 Sale Terms: Cash
Buyer: Townsend Developers, LLC Sale Conditions: Typical
Seller: Baldwin Partners I, LLC Source/Verification: CoStar / CREV
Comments: The property was listed on the open market.
Page 50 Nagell Appraisal Incorporated | 952.544.8966
Sales Comparison Approach -- continued
Land Sale Comparable #5
Property Data
Address: 8460 Franlo Road, Eden Prairie
PID/Legal Description: 14-116-22-34-0012
Description: Land parcel Zoning/Intended Use: Senior Apartments
Physical Characteristics: Average Utilities: Public
Site Size: 40,075 SF Improvements: None
Comments: Vacant land that was purchased as part of an assemblage scenario for senior living
apartments. There are 41 units allocated to the site.
Sale Data
Sale Price: $765,000 Price/Unit: $18,659 per unit
Sale/Close Date: June 7, 2018 Sale Terms: Cash
Buyer: Eden Prairie Senior Living
LLC Sale Conditions: Typical
Seller: Robert & Condit Bouten Source/Verification: RediComps / CREV
Comments: The property was listed on the open market.
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Sales Comparison Approach – Continued
Listed below is the adjustment grid for the comparables listed on the previous pages. Comparable items
of significant difference are adjusted for:
Description Subject 1 2 3 4 5
2400 2665 4729 XXX 9436 8460
County Road H2 Victoria Street N Grand Avenue NE 153rd Street Ulysses St NE Franlo Road
Mounds View Roseville Columbia Heights Apple Valley Blaine Eden Prairie
Proximity Subject 6.11 mi SE 3.89 mi SW 25.7 mi S 3.31 mi NW 20.5 mi SW
Financing Market Financing Financing Cash Cash Cash
Conditions Typical Typical Typical Typical Typical Typical
Market Conditions --Aug-16 Dec-17 Sep-17 Mar-16 Jun-18
Location Average Average Average Average Average Good
Zoning/Use Apartments Apartments Apartments Apartments Apartments Senior Apartments
Phys Char Average Average Average Average Average Average
Improvements n/a None None None None None
Size n/a ----------
Age n/a ----------
Condition n/a ----------
Utilities Public Public Public Public Public Public
Sale Price --$1,525,000 $1,200,000 $1,425,000 $1,910,000 $765,000
Number of Units 63 - 135 105 83 114 191 41
Units per Acre 27.4 - 35.5 18 17 87 21 45
Site Size (SF)165,498 249,163 214,751 57,064 399,010 40,075
$6.12 $5.59 $24.97 $4.79 $19.09
$14,524 $14,458 $12,500 $10,000 $18,659
Cond. Adj. +/-
Financing Market
Conditions Typical
Market Conditions --
0%0%0%0%0%
$14,524 $14,458 $12,500 $10,000 $18,659
Adjustments +/-
Location Average -20%
Zoning/Use Apartments
Phys Char Average
Improvements n/a
Utilities Public
Number of Units 63 - 135 -5%
Site Size (SF)165,498
0%0%0%0%-25%
$14,524 $14,458 $12,500 $10,000 $13,994
Net Adjustment
Adjusted Price per Unit
Address
Price per Unit
Net Cond. Adj.
Effective $/Unit
Price per SF - Site Size
Page 52 Nagell Appraisal Incorporated | 952.544.8966
Sales Comparison Approach – Continued
Discussion of Adjustments
Property Rights: Refers to the ownership interest conveyed at the time of sale. Properties with leases or
other encumbrances in place can sell for more or less than comparable properties that sell fee simple
interest. The sale prices of the comparable properties were not impacted by existing lease terms (if any).
Financing: The impact financing may have had on the sale price, favorable interest rate or term. All
sales were cash or estimated to be near or at market rates.
Conditions of sale: Reflects non-market conditions, which may or may not have impacted the sale
price, such as differing motivations of buyer or seller (related parties, distressed or liquidation sale,
listings, pending, occupancy, assemblage, etc.), impending eminent domain proceedings, influence du e
to tax ramifications, or lack of market exposure.
Market Conditions: The market did not indicate a time adjustment, therefore no adjustment.
Location: This adjustment is based on the appraiser's judgment. It takes into consideration surrounding
land uses, intended use, neighborhood characteristics, traffic, exposure and access. Comparable 5
adjusted for superior location near the Eden Prairie mall.
Zoning/Use: Comparables had similar uses.
Physical Characteristics: Shape and topography adjustments reflect the market preference for
rectangular and level parcels, which optimize development potential.
Improvements: The comparables were either vacant or had buildings with nominal value.
Utilities: The comparables have competing public utilities, no adjustment.
Number of Units: Comparable 5 adjusted for lower unit counts. Typically, as the number of units
increases, the price paid per unit drops.
Site Size: Accounted for in the price per unit comparison unit.
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Sales Comparison Approach – Continued
Conclusion: The comparables used are rated to be the most indicative of data analyzed and bracket the
subject value. Other sales reviewed were older, further and/or needed more adjustment. Adjustments are
made on a per unit basis. The comparables utilized in this analysis each have several similar
characteristics in common with the subject. While none are totally identical to the subject, each
represents a viable alternative to a prospective buyer of the subject property and, after adjustment, can
be utilized as an indicator of market value for the subject property.
Indicator Un-Adjusted Price per Unit Adjusted Price per Unit
Range $10,000 - $18,659 $10,000 - $14,524
Average $14,028 $13,095
Median $14,458 $13,994
Land Sales 1, 2, and 4 are given more weight due to proximity to the subject (average $12,994). Sales 3
and 5 are given secondary weight. Based on the subject characteristics a rate at the mid-range is
considered appropriate.
Opinion of Value per Unit $13,000
As noted previously, the city provided two potential proposals for development. The values are calculated
by multiplying the number of units by the price per unit:
135-unit development: 135 x $13,000 = $1,750,000 rounded
63-unit development: 63 x $13,000 = $820,000 rounded
Page 54 Nagell Appraisal Incorporated | 952.544.8966
SALES COMPARISON APPROACH – COMMERCIAL
The Sales Comparison Approach to Value is predicated upon sales of properties with similar
characteristics as the subject. The primary premise of this approach is that the market value of the
subject is directly related to the prices of competing properties after adjustment. Adjustments are
made in an effort to account for significant differences.
Supply and Demand: Sales in the market result from negotiations between buyers, sellers and
lenders. Buyers reflect market demand and sellers supply. If demand is high, prices tend to increase,
if it is low, prices usually decrease.
Substitution: The principle of substitution holds that the value of a property tends to be set by the
price paid to acquire a substitute property of similar utility and desirability within a reasonable amount
of time (The Appraisal of Real Estate, 14th Edition). The Sales Comparison Approach is less reliable
if substitute properties are not available in the market. There are adequate s ales to apply the sales
comparison approach and formulate a reliable indication of market value.
Balance: The market tends to force a balance between supply and demand. Balance can change
due to shifts in population, variations in purchasing power, cons umer tastes and preference and time.
Externalities: When possible, select comparables with similar location, economic conditions and
support facilities.
Land Value: Land value is estimated as if the land were vacant and available for development to its
highest and best use. There are several different methods to analyze site values: sales comparison,
allocation, extraction, subdivision development, land residual, an d ground rent capitalization. One or more
of these methods may be applicable depending on market conditions and the type of land.
The preferred and most reliable approach is the sales comparison; however, when sales data is very
limited, some of the other methods may be employed if appropriate data is available. For purposes of
this appraisal, the sales comparison method has been utilized. A number of sales were reviewed in
the subject marketing area. Of the data analyzed the most relevant sales were selected and used on the
following pages.
The Following Outline Is Used In The Sales Comparison Approach:
- A location map of the comparable sales.
- Comparable sales are listed.
- An adjustment grid using the comparable sales.
- A discussion of adjustment and conclusion of value.
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Comparable Location Map
Primary Comparable Selection/Search Criteria:
• Commercial and gas station land sales
• Sale date of January 1, 2016 +, older sales may be considered if appropriate
• Data from competing communities
• In some instances, older data and/or data from competing communities will be utilized due to
proximity to the subject and other characteristics similar to the subject.
Page 56 Nagell Appraisal Incorporated | 952.544.8966
Sales Comparison Approach -- continued
Land Sale Comparable #1
Property Data
Address: 10500 Radisson Road Northeast, Blaine
PID/Legal Description: 213123240019, 233123240001
Description: Land parcel Zoning/Intended Use: Kwik Trip
Physical Characteristics: Average Utilities: Public
Site Size: 136,344 SF Improvements: Fair
Comments:
Commercial land purchased for the construction of a Kwik Trip gas station. There were some
metal buildings on the site with nominal value (offset by razing costs). The site is located on the
east side of the National Sports Center, which is somewhat less appealing.
Sale Data
Sale Price: $1,000,000 Price /SF: $7.33 per SF
Sale/Close Date: February 2, 2018 Sale Terms: Cash
Buyer: Kwik Trip, Inc Sale Conditions: Typical
Seller: Joyce Gabrelcik Source/Verification: RediComps, CoStar / CREV
Comments: The property was listed on the open market.
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Sales Comparison Approach -- continued
Land Sale Comparable #2
Property Data
Address: XXX Hazelwood Street, St. Paul
PID/Legal Description: 032922240016
Description: Land parcel Zoning/Intended Use: Commercial
Physical Characteristics: Average Utilities: Public
Site Size: 406,415 SF Improvements: None
Comments:
Commercial land that was used to bracket the subject site size. The property is similar to the
subject, with some frontage on a busy road (Beam Avenue) and a majority of the site with less
frontage.
Sale Data
Sale Price: $3,757,942 Price /SF: $9.25 per SF
Sale/Close Date: July 29, 2016 Sale Terms: Financing
Buyer: Hazelwood Medical Building,
LLC Sale Conditions: Typical
Seller: VoranDeSoto LLC Source/Verification: RediComps, CoStar / CREV
Comments: The sale was privately negotiated between the buyer and seller.
Page 58 Nagell Appraisal Incorporated | 952.544.8966
Sales Comparison Approach -- continued
Land Sale Comparable #3
Property Data
Address: 2158 Rice Street North, Maplewood
PID/Legal Description: 182922220019
Description: Land parcel Zoning/Intended Use: Commercial
Physical Characteristics: Average Utilities: Public
Site Size: 35,719 SF Improvements: None
Comments: Former gas station site that was sold for a retail strip center development. The site is an outlot
to Cub Foods with a good corner location.
Sale Data
Sale Price: $550,000 Price /SF: $15.40 per SF
Sale/Close Date: December 19, 2016 Sale Terms: Financing
Buyer: Rice Street Retail, LLC Sale Conditions: Typical
Seller: Sinclair Marketing, Inc Source/Verification: RediComps, CoStar / CREV
Comments: The property was listed on the open market.
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Sales Comparison Approach -- continued
Land Sale Comparable #4
Property Data
Address: XXX 70th Street Northeast, Otsego
PID/Legal Description: 118289001010
Description: Land parcel Zoning/Intended Use: Kwik Trip
Physical Characteristics: Average Utilities: Public
Site Size: 259,182 SF Improvements: None
Comments: Larger site with a planned gas station use (Kwik Trip).
Sale Data
Sale Price: $1,839,575 Price /SF: $7.10 per SF
Sale/Close Date: December 17, 2015 Sale Terms: Cash
Buyer: Kwik Trip, Inc. Sale Conditions: Typical
Seller: Darkenwald's Riverbend
Company II, LLP Source/Verification: RediComps, CoStar / CREV
Comments: The property was listed on the open market.
Page 60 Nagell Appraisal Incorporated | 952.544.8966
Sales Comparison Approach -- continued
Land Sale Comparable #5
Property Data
Address: XXX 117th Avenue Northeast, Blaine
PID/Legal Description: 083123340029
Description: Land parcel Zoning/Intended Use: Kwik Trip
Physical Characteristics: Average Utilities: Public
Site Size: 64,904 SF Improvements: None
Comments: Land purchased for a gas station use (Kwik Trip). The site is in a good area, but has reduced
visibility.
Sale Data
Sale Price: $750,000 Price /SF: $11.56 per SF
Sale/Close Date: June 5, 2018 Sale Terms: Cash
Buyer: Kwik Trip, Inc Sale Conditions: Typical
Seller: North Central Properties, Inc. Source/Verification: RediComps, CoStar / CREV
Comments: The property was listed on the open market.
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Sales Comparison Approach -- continued
Land Sale Comparable #6
Property Data
Address: 9751 Xenia Avenue North, Brooklyn Park
PID/Legal Description: 0911921220070
Description: Land parcel Zoning/Intended Use: Commercial
Physical Characteristics: Average Utilities: Public
Site Size: 77,972 SF Improvements: None
Comments: Commercial land purchase for a fast food restaurant. The site has a good corner location in an
overall stronger trade area.
Sale Data
Sale Price: $1,200,000 Price /SF: $15.39 per SF
Sale/Close Date: April 11, 2018 Sale Terms: Cash
Buyer: Chick-fil-A, Inc Sale Conditions: Typical
Seller: Stone Mountain Plaza
Enterprises, LLC Source/Verification: RediComps, CoStar / CREV
Comments: The property was listed on the open market.
Page 62 Nagell Appraisal Incorporated | 952.544.8966
Sales Comparison Approach – Continued
Listed below is the adjustment grid for the comparables listed on the previous pages. Comparable items
of significant difference are adjusted for:
Description Subject 1 2 3 4 5 6
2400 10500 XXX 2158 XXX XXX 9751
County Road H2 Radisson Road NE Hazelwood Street Rice Street North 70th Street NE 117th Ave NE Xenia Ave N
Mounds View Blaine St. Paul Maplewood Otsego Blaine Brooklyn Park
Proximity Subject 4.19 mi N 9.38 mi SE 7.93 mi S 20.1 mi NW 5.8 mi N 7.78 mi NW
Financing Market Cash Financing Financing Cash Cash Cash
Conditions Typical Typical Typical Typical Typical Typical Typical
Market Conditions --Feb-18 Jul-16 Dec-16 Dec-15 Jun-18 Apr-18
Location Average Average Avg/Good Good, Outlot Average Average Good
Zoning/Use Commercial Kwik Trip Commercial Commercial Kwik Trip Kwik Trip Commercial
Phys Char Average Average Average Average Average Average Average
Improvements n/a Fair None None None None None
Size n/a ------------
Age n/a ------------
Condition n/a ------------
Utilities Public Public Public Public Public Public Public
Sale Price --$1,000,000 $3,757,942 $550,000 $1,839,575 $750,000 $1,200,000
Site Size (SF)65,340 136,344 406,415 35,719 259,182 64,904 77,972
$7.33 $9.25 $15.40 $7.10 $11.56 $15.39
Cond. Adj. +/-
Financing Market
Conditions Typical
Market Conditions --6%5%8%
0%6%5%8%0%0%
$7.33 $9.80 $16.17 $7.67 $11.56 $15.39
Adjustments +/-
Location Average -10%-20%-20%
Zoning/Use Commercial
Phys Char Average
Improvements n/a
Utilities Public
Site Size (SF)65,340 5%10%10%
5%0%-20%10%0%-20%
$7.70 $9.80 $12.93 $8.43 $11.56 $12.31
Address
Price per SF - Site Size
Net Cond. Adj.
Effective $/SF - Site Size
Net Adjustment
Adjusted Price per SF - Site Size
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Sales Comparison Approach – Continued
Discussion of Adjustments
Property Rights: Refers to the ownership interest conveyed at the time of sale. Properties with leases or
other encumbrances in place can sell for more or less than comparable properties that sell fee simple
interest. The sale prices of the comparable properties were not impacted by existing lease terms (if any).
Financing: The impact financing may have had on the sale price, favorable interest rate or term. All
sales were cash or estimated to be near or at market rates.
Conditions of sale: Reflects non-market conditions, which may or may not have impacted the sale
price, such as differing motivations of buyer or seller (related parties, distressed or liquidation sale,
listings, pending, occupancy, assemblage, etc.), impending eminent domain proceedings, influence du e
to tax ramifications, or lack of market exposure.
Market Conditions: The market appears to be indicating an upward adjustment of about 3% annually for
commercial land.
Location: This adjustment is based on the appraiser's judgment. It takes into consideration surrounding
land uses, intended use, neighborhood characteristics, traffic, exposure and access. Comparable 2
adjusted for proximity to Maplewood Mall. Comparables 3 and 6 adjusted for good trade areas with traffic.
Zoning/Use: Comparables had similar uses.
Physical Characteristics: Shape and topography adjustments reflect the market preference for
rectangular and level parcels, which optimize development potential.
Improvements: The subject and comparables are rated similar.
Utilities: The comparables have public utilities available, no adjustment.
Site Size: Adjustments recognize larger parcels of land typically sell for less per SF than smaller sites.
Comparables adjusted accordingly.
Page 64 Nagell Appraisal Incorporated | 952.544.8966
Sales Comparison Approach – Continued
Conclusion: The comparables used are rated to be the most indicative of data analyzed and bracket the
subject value. Other sales reviewed were older, further and/or needed more adjustment. Adjustments are
made on a per square foot basis. The comparables utilized in t his analysis each have several similar
characteristics in common with the subject. While none are totally identical to the subject, each
represents a viable alternative to a prospective buyer of the subject property and, after adjustment, can
be utilized as an indicator of market value for the subject property.
Indicator Un-Adjusted Price per SF Adjusted Price per SF
Range $7.10 - $15.40 $7.70 - $12.93
Average $11.00 $10.46
Median $10.40 $10.68
Sales 1, 4, and 5 are Kwik Trip gas stations and have an adjusted average of $9.23 per SF. Sales 2, 3,
and 6 are general commercial and have an adjusted average of $11.68 per SF. About equal weight given
to the sales comparables. Based on the subject characteristics, a rate at the mid-range is considered
appropriate.
Price per SF – General Commercial Land $11.50
Price per SF – Kwik Trip Land $9.50
As noted previously, the city provided one potential proposal for commercial development with a site of
about 1.5 acres. This value was based on either a gas station (Kwik Trip) or general commercial. The
appraiser has added another scenario, which is 100% commercial for the entire site. The values are
calculated by multiplying the site area by the price per SF:
1.5-acre Kwik Trip: 65,340 SF x $9.50 per SF = $620,000 rounded
1.5-acre general commercial: 65,340 SF x $11.50 per SF = $750,000 rounded
100% commercial development: 165,498 SF x $9.50 per SF = $1,550,000 rounded
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RECONCILIATION
Indicated Value by Cost Approach Not Applied
Indicated Value by Sales Comparison Approach See below
Indicated Value by Income Approach Not Applied
The Cost Approach to value was considered less reliable due to subjective depreciation adjustments
and was therefore not applied.
The Direct Sales Comparison Approach to value analyzed recent sales of commercial land as
compared with the characteristics of the subject pr operty. Adjustments were made to the comparables to
make them as similar to the subject as possible. This results in an indication of market value at which a
typical buyer would be willing to pay for the subject property.
The Income Approach is typically preferred for income-producing properties. Vacant development land
is rarely leased in the market; this approach was not considered reliable and was therefore not applied.
Conclusion: The sales comparison approach was considered the most relevant approach to value.
Therefore, the following values are concluded for each of the city’s scenarios:
Note: The estimated $110,000 +/- should be deducted from each value below to account for the non-
market cost to relocate the road.
Final Value Opinion – 135-Unit Apartment (100%
multifamily) $1,750,000
Final Value Opinion – 63-Unit Apartment with Kwik
Trip
$820,000 Apartments +
$620,000 Kwik Trip =
$1,440,000
Final Value Opinion – 63-Unit Apartment with General
Commercial
$820,000 Apartments +
$750,000 Commercial =
$1,570,000
Final Value Opinion – 100% Commercial
Development $1,550,000
NOTE: Typically, unstable, distressed, properties with unusual conditions and/or motivated sellers tend
to sell below market value. Based on market observations and discussions with various market experts,
discounts can range from 10%-50%+.
EXPOSURE TIME / MARKETING TIME
Reasonable Exposure Time: Typically 12 months before
the effective date of the appraisal.
Marketing Time Opinion: 6 to 18 months or less after the
effective date of the appraisal.
Page 66 Nagell Appraisal Incorporated | 952.544.8966
DEFINITIONS
MARKET VALUE - The most probable price which a property should bring in a competitive and open
market under all conditions requisite to a fair sale, the buyer and seller each acting prudently,
knowledgeably, and assuming the price is not affected by undue stimulus. I mplicit in this definition is the
consummation of a sale as of a specified date and the passing of title from seller to buyer under
conditions whereby:
(A) buyer and seller are typically motivated;
(B) both parties are well informed or well advised, and each acting in what they consider their
own best interest;
(C) a reasonable time is allowed for exposure in the open market;
(D) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements
comparable thereto; and
(E) the price represents the normal consideration for the property sold, unaffected by special or
creative financing or sales concessions granted by anyone associated with the sale.
Source: Dictionary of Real Estate Appraisal, Fifth Edition, Appraisal Institute
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ENVIRONMENTAL & STRUCTURAL ISSUES
Regarding any adverse environmental and/or improvement structural conditions (such as, but not limited
to, hazardous wastes, toxic substances, mold, construction defects or inadequacies, etc.) present in the
improvements, on the site, or in the immediate v icinity of the subject property: None are apparent,
however, appraiser is not an expert in this field. Value assumes no hazardous or structural conditions
exist. Value assumes any abandoned wells will be properly sealed. If any of these conditions exis t the
appraised value could differ significantly.
EXTRAORDINARY ASSUMPTIONS & HYPOTHETICAL CONDITIONS
As stated by USPAP;
Extraordinary Assumption: An assumption, directly related to a specific assignment, which, if
found to be false, could alter the appraiser’s opinions of conclusions.
The appraised values provided in this report are based on various scenarios from the City of
Mounds View. Because none are approved, any user should not rely on them for decision making
purposes. The values are only intended to give the city guidance regarding a potential sale price. If
the city changes any of the assumptions relied upon in this report the values could differ
significantly.
Hypothetical Condition: That which is contrary to what exists but is supposed for the purpose of
analysis.
None
Page 68 Nagell Appraisal Incorporated | 952.544.8966
ASSUMPTIONS AND LIMITING CONDITIONS
1. The appraisers assume no responsibility for matters of a legal nature affecting the property appraised
or the title thereto, nor do the appraisers render any opinion as to the title, which is assumed to be good
and marketable. The property is appraised as though under responsible ownership and good
management.
2. The furnished legal description is assumed to be correct.
3. Any sketch in the report may show approximate dimensions and is included to assist the reader in
visualizing the property. The appraisers have made no survey of the property. It is assumed un less
otherwise noted that no survey has been viewed and that all improvements are located within the legally
described property.
4. The appraisers are not required to give testimony or appear in court because of having made the
appraisal with reference to the property in question, unless arrangements have been previously made
therefore.
5. The distribution of the total valuation in this report between land and improvements applies only under
the reported highest and best use of the property. The alloc ations of value for land and improvements
must not be used in conjunction with any other appraisal and are invalid if so used.
6. The appraisers assume that there are no hidden or unapparent conditions of the property, subsoil, or
structures, which would render it more or less valuable. The appraisers assume no responsibility for such
conditions, or for engineering, which might be required to discover such factors.
7. Unless otherwise stated in this report, the existence of hazardous materials, w hich may or may not be
present on the property, was not observed by the appraiser. The appraiser has no knowledge of the
existence of such materials on or in the property. The appraiser, however, is not qualified to detect such
substances. The presence of substances such as asbestos, urea-formaldehyde foam insulation, radon
gas, or other potentially hazardous materials may affect the value of the property. The value estimate is
predicated on the assumption that there is no such material on or in the pro perty that would cause a loss
in value. No responsibility is assumed for any such conditions, or for any expertise or engineering
knowledge required to discover them. The client is urged to retain an expert in this field, if desired.
8. Information, estimates, and opinions furnished to the appraisers, and contained in the report, were
obtained from sources considered reliable and believed to be true and correct. However, the appraisers
can assume no responsibility for accuracy of such items furnished the appraisers.
9. Disclosure of the contents of the appraisal report is governed by the Bylaws and Regulations of the
professional appraisal organizations with which the appraisers are affiliated. No part of the contents of
this report, or copy thereof (including conclusions as to the property value, the identity of the appraiser,
professional designations, reference to any professional appraisal organizations, or the firm with which
the appraiser is connected), shall be disseminated to the public thr ough advertising, public relations,
news, sales, or any other public means of communications without the prior written consent and approval
of the appraisers.
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Assumptions & Limiting Conditions – continued
10. The appraisers have 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. The appraisers have no personal interest or bias with respect to the
parties involved.
11. The appraiser has personally inspected the subject site (unless noted otherwise). The comparable
sales data has been viewed via aerial maps, photographs and/or online street views along with file
pictures, when available. To the best of the appraiser’s knowledge and belief, all statements and
information in this report are true and correct, and the appraisers have not knowingly withheld any
significant information.
12. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and
limiting conditions, and is our personal, unbiased professional analyses, opinions, and conclusions. Our
analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity
with the Uniform Standards of Professional Appraisal Practice. The appraisal is for the sole use of the
named client.
13. The Americans with Disabilities Act ("ADA") became effective January 26, 1992. We have not made
a specific compliance survey and analysis of the property to determine whether or not it is in conformity
with the various detailed requirements of the ADA. It is possible that a compliance survey of the property,
together with a detailed analysis of the requirements of the ADA, could reveal that th e property is not in
compliance with one or more of the requirements of the Act. If so, this fact could have a negative effect
upon the value of the property. Since we have no direct evidence relating to this issue, we did not
consider possible non-compliance with the requirements of ADA in estimating the value of the property.
14. This appraisal assignment was not based on a requested minimum valuation or specific valuation or
approval of a loan.
15. To the best of our knowledge and belief, the reported analysis, opinions, and conclusions were
developed, and this report was prepared in conformity with the requirements of the Code of Professional
Ethics and the Standards of Professional Appraisal Practice of the Appraisal Institute.
16. The appraised value opinion assumes all leases (if any) are current and paid in full as of the effective
date of the appraisal.
17. Excel grids and tables may have slight deviations due to rounding, which may have a nominal impact
on value.
18. The appraised value opinion assumes all formulas used in the Excel grids throughout the report are
accurate.
19. Unless noted, value assumes no apparent adverse site, building or zoning issues or conditions.
20. Site and building sizes are based on public record, data services, client and/or appraiser
measurement at the time of appraisal and are considered reliable, but not guaranteed. Actual sizes herein
could vary if made by an engineer/surveyor/contractor.
21. Because market and property conditions may change rapidly, the named client should exercise
caution in relying on the appraised value subsequent to the appraisal date with the passage of time.
22. If any of the above if found to be different, value could change.
Page 70 Nagell Appraisal Incorporated | 952.544.8966
CERTIFICATION
I certify that, to the best of my knowledge and belief:
1) The statements of fact contained in this report are true and correct.
2) The reported analyses, opinions, and conclusions are limited only by the reported assumptions
and limiting conditions, and are my personal, impartial, and unbiased professional analysis,
opinions, and conclusions.
3) I 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.
4) I have no bias with respect to the property that is the subject of this report or to the parties
involved with this assignment.
5) My engagement in this assignment was not contingent upon developing or reporting
predetermined results.
6) My compensation for completing this assignment is not contingent upon the development or
reporting of predetermined value or direction in value that favors the cause of the client, the
amount of the value opinion, the attainment of a stipulated result, or the occurrence of a
subsequent event directly related to the intended use of this appraisal.
7) My analyses, opinions, and conclusions were developed, and this report has been prepared, in
conformity with the Uniform Standards of Professional Appraisal Practice.
8) The reported analyses, opinions and conclusions were developed, and this report has been
prepared in conformity with the requirements of the Appraisal Institute’s Code of Professional
Ethics and Standards of Professional Appraisal Practice, which includes the Uniform Standards of
Appraisal Practice.
9) William R. Waytas and Ethan Waytas has made a personal inspection of the property that is the
subject of this report.
10) No one provided significant professional assistance to the person signing this report.
11) In accordance with the competency provision USPAP, I have verified that my knowledge,
experience and education are sufficient to allow me to competently complete this appraisal. See
attached qualifications.
12) As of the date of this report, William R. Waytas and Ethan Waytas have completed the
requirements of the continuing education program of the appraisal institute.
13) The use of this report is subject to the requirements of the Appraisal Institute relating to review by
its duly authorized representative.
14) We have not provided services as an appraiser, regarding the subject property within the 3 year
period immediately preceding acceptance to this assignment.
Ethan Waytas, MAI William R. Waytas
Certified General MN 40368613 Certified General MN 4000813
Date: see report Date: see report
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QUALIFICATIONS
Appraisal Experience
Presently and since 2006, Ethan Waytas, MAI has been employed as an employee of Nagell Appraisal
Incorporated, an independent appraisal firm (10 employees) who annually prepare 1,500 +/- appraisal
reports of all types. He is currently a full time licensed certified general real estate appraiser, partner, and
director of the company’s IT department.
Properties appraised:
• Commercial - low and high-density multi-family, retail, office, industrial, restaurant, church, strip-
mall, fast-food, convenience stores, auto-service and repair, cinema, numerous special use
properties, golf courses, and subdivision analysis.
• Residential – single-family residences, hobby farms, lakeshore, condominiums, townhouses,
REO and land.
• Eminent Domain – extensive partial and total acquisition appraisal services provided to
numerous governmental agencies and private owners.
• Special Assessment – numerous street improvement and utilities projects for both governmental
and private owners.
• Clients - served include banks, savings and loan associations, trust companies, corporations,
governmental bodies, relocation companies, attorneys, REO companies , accountants and private
individuals.
• Area of Service - most appraisal experience is in the greater Twin Cities Metro Area (typically an
hour from downtown metro). Numerous assignments throughout Minnesota.
Testimony
-- Court, commission, mediation testimony, etc. has been given
Professional Membership, Associations & Affiliations
License: Certified General Real Property Appraiser, MN License #40368613
Holds the MAI designation from the Appraisal Institute
Education
-- Graduate of the University of Minnesota: College of Science and Engineering, Twin Cities
Campus
Bachelor of Science in Computer Science, with distinction, 3.86 GPA.
-- General & Professional Practice Courses & Seminars
-- Basic Appraisal Procedures
-- Basic Appraisal Principles
-- 2012-2013 15-Hour National Uniform Standards of Professional Appraisal Practice
-- General Appraiser Sales Comparison Approach
-- General Appraiser Income Approach – Part 1
-- General Appraiser Income Approach – Part 2
-- Advanced Income Capitalization
-- General Appraiser Report Writing and Case Studies
-- Real Estate Finance, Statistics and Valuation Modeling
-- 2014-2015 7-hour National USPAP Update Course
-- General Appraiser Site Valuation & Cost Approach
-- Advanced Market Analysis and Highest & Best Use
-- Advanced Concepts & Case Studies
-- Quantitative Analysis
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Curriculum Vitae -- continued
Appraisal Experience
Presently and since 1985, William R. Waytas has been employed as a full time real estate appraiser.
Currently a partner and President of the Nagell Appraisal Incorporated, an independent appraisal firm (10
employees) who annually prepare 1,500 +/- appraisal reports of all types. Mr. Waytas was employed with
Iver C. Johnson & Company, Ltd., Phoenix, AZ from 1985 to 1987.
Properties appraised:
• Commercial - low and high-density multi-family, retail, office, industrial, restaurant, church, strip-
mall, fast-food, convenience stores, auto-service and repair, hotel, hotel water park, bed &
breakfast, cinema, marina, numerous special use properties, and subdivision analysis.
• Residential – single-family residences, hobby farms, lakeshore, condominiums, townhouses,
REO and land.
• Eminent Domain – extensive partial and total acquisition appraisal services provided to
numerous governmental agencies and private owners.
• Special Assessment – numerous street improvement and utilities projects for both governmental
and private owners.
• Review – residential, commercial and land development.
• Clients - served include banks, savings and loan associations, trust companies, corporations,
governmental bodies, relocation companies, attorneys, REO companies, accountants and private
individuals.
• Area of Service - most appraisal experience is in the greater Twin Cities Metro Area (typically an
hour from downtown metro). Numerous assignments throughout Minnesota.
Professional Membership, Associations & Affiliations
License: Certified General Real Property Appraiser, MN License #4000813.
Appraisal Institute: SRA, Senior Residential Appraiser Designation,
General Associate Member
Employee Relocation Council: CRP Certified Relocation Professional Designation.
International Right-Of-Way Association: Member
HUD/FHA: On Lender Selection Roster and Review Appraiser
DNR: Approved appraiser for Department of Natural Resources
Testimony
-- Court, deposition, commission, arbitration & administrative testimony given.
Mediator
-- Court appointed in Wright County.
Committees
-- President of Metro/Minnesota Chapter, 2002, Appraisal Institute.
-- Chairman of Residential Admissions, Metro/MN Chapter, AI.
-- Chairman Residential Candidate Guidance, Metro/Minnesota Chapter, AI.
-- Elm Creek Watershed Commission, Medina representative 3 years.
-- Medina Park Commission, 3 years.
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Curriculum Vitae -- continued
Education
-- Graduate of Bemidji State University, Minnesota. B.S. degree in Bus. Ad.
-- During college, summer employment in building trades (residential and commercial).
-- Graduate of Cecil Lawter Real Estate School. Past Arizona Real Estate License.
-- General & Professional Practice Courses & Seminars
-- Course 101-Introduction to Appraising Real Property.
-- Numerous Standards of Professional Practice Seminar.
-- Fair Lending Seminar.
-- Eminent Domain & Condemnation Appraising.
-- Eminent Domain (An In-Depth Analysis)
-- Property Tax Appeal
-- Eminent Domain
-- Business Practices and Ethics
-- Scope of Work
-- Construction Disturbances and Temporary Loss of Going Concern
-- Uniform Standards for Federal Land Acquisitions (Yellow Book Seminar)
-- Partial Interest Valuation Divided (conservation easements, historic preservation easements, life
estates, subsurface rights, access easements, air rights, water rights, transferable development
rights)
Commercial/Industrial/Subdivision Courses & Seminars
-- Capitalization Theory & Techniques
-- Highest & Best Use Seminar
-- General & Residential State Certification Review Seminar
-- Subdivision Analysis Seminar.
-- Narrative Report Writing Seminar (general)
-- Advanced Income Capitalization Seminar
-- Advanced Industrial Valuation
-- Appraisal of Local Retail Properties
-- Appraising Convenience Stores
-- Analyzing Distressed Real Estate
-- Evaluating Commercial Construction
-- Fundamentals of Separating Real Property, Personal Property and Intangible Business Assets
Residential Courses & Seminars
-- Course 102-Applied Residential Appraising
-- Narrative Report Writing Seminar (residential)
-- HUD Training session local office for FHA appraisals
-- Familiar with HUD Handbook 4150.1 REV-1 & other material from local FHA office.
-- Appraiser/Underwriter FHA Training
-- Residential Property Construction and Inspection
-- Numerous other continuing education seminars for state licensing & AI
Speaking Engagements
-- Bankers
-- Auditors
-- Assessors
-- Relocation (Panel Discussion)
Publications
-- Real Estate Appraisal Practice (book): Acknowledgement
-- Articles for Finance & Commerce and Minnesota Real Estate Journal
Page 74 Nagell Appraisal Incorporated | 952.544.8966
ADDENDA TO APPRAISAL REPORT
Nagell Appraisal Incorporated | 952.544.8966 Page 75
Legal tax descriptions:
083023310072:
Sec/Twp/Rng 08/030/023
SECTION 8 TOWN 30 RANGE 23 & ESMT) OF SEC 8 TN 30 RN 23 PART OF NE 1/4 OF SW 1/4 DESC
AS FOL; BEG ON CENTER LINE OF GREENFIELD AVE AT A POINT 110.46 FT S OF THE N LINE OF
SD 1/4 1/4 , TH E PAR WITH SD N LINE 47.07 FT, TH SELY TO A PT 193.01 FT S OF N LINE & 475 FT
E OF W LINE OF SD 1/4 1/4, THE SALONGA LINE 475 FT E OF & PAR WITH W LINE OF SD 1/4 1/4
TO THE S LINE OF N 365.46 FT, THE E ALONG SD 365.46 FT LINE TO THE SWLY LINE OF HWY 10,
TH NWLY ALONG SWLY LINE OF HWY TO THE S LINE OF CO RD H2, TH W TO THE N EXT OF
CENTERLINE OF GREENFIELD AVE, TH S ALONG CENTERLINE OF SD AVE TO BEG; IN NE 1/4 OF
SW 1/4 (SUBJ TO RD
083023310071:
Sec/Twp/Rng 08/030/023
SECTION 8 TOWN 30 RANGE 23 PART OF NE 1/4 OF SW 1/4 DESC AS FOL; BEG AT A POINT ON
THE CENTERLINE OF GREENFIELD AVE 365.46 FT S OF THE N LINE OF SD 1/4 1/4, TH N ALONG
CENTERLINE OF SD AVE 255 FT, TH E PAR WITH N LINE OF SD 1/4 1/4 FOR 47.07FT TH SELY TO
A PT 193.01FT S OF N LINE & 475 FT E OF W LINE OF SD 1/4 1/4, TH S ALONG A LINE 475 FT E OF
& PAR WITH W LINE OF SD 1/4 1/4 TO THE S LINE OF N 365.46 FT, TH W ALONG SD 365.46 FT
LINE TO BEG; IN NE 1/4 OF SW 1/4 (SUBJ TO RDS HWY & ESMTS) OF SEC 8 TN 30 RN 23
083023310005:
Sec/Twp/Rng 08/030/023
SECTION 8 TOWN 30 RANGE 23 THE N 363 FT OF W 330 FT OF NE 1/4 OF SW 1/4 (SUBJ TO
ROADS) OF SEC 8 TN 30 RN 23
Page 1 of 2
M EMORANDUM
To: Mounds View EDA
From: Brian Beeman, Business Development Coordinator
Jon Sevald, City Planner/Supervisor
Re: August 13, 2018 EDA meeting (Closed); Crossroad Pointe
Date: August 13, 2018
At the July 9, 2018 EDA closed meeting staff informed the Council of the comparable sales research
conducted internally by staff. The EDA directed staff to get an appraisal completed on the Crossroad
Pointe property by two appraisal companies before making a final determination on the acceptable
price range to sell the 4.25 acres to INH Properties.
Lake State Realty Services will provide a presentation on their appraisal findings followed by Nagell
Appraisal Inc. The Council is expected to determine a price range that staff can use to negotiate with
the developers. Below is a brief summary of the history of the current Crossroad Pointe development
with INH Properties.
1. The EDA purchased the three properties for about $1.6 million, and spent about $150,000
on demolition and legal fees (total: $1,808,542.81).
2. The Ramsey County current (2018) assessed property value is:
$ 535,800 2.05 acres 2400 Mounds View Blvd PID: 08-30-23-31-0005
$ 149,300 0.48 acres 2394 Mounds View Blvd PID: 08-30-23-31-0071
$ 390,300 1.28 acres 2390 Mounds View Blvd PID: 08-30-23-31-0072
$1,075,400 3.81 acres
3. During the August 21, 2017 City Council Work Session, the Council considered proposals
from: (1) Dominium, (2) Global/Kraus-Anderson; and (3) INH Properties/Heartland Gun
Club & Range.
The Council’s consensus was INH Properties/Heartland Gun Club & Range (1-1-3 vote).
4. The EDA entered into a Preliminary Development Agreement with INH Property
Management (Resolution 18-EDA-303). The project is to include: (1) 124-unit apartment
building; (2) 15,000 – 20,000 sq. ft. Heartland Gun Club & Range; and (3) 3,000 – 5,000 sq.
ft. retail. The project is to be completed by Dec 31, 2020. This Agreement calls for the EDA
Page 2 of 2
and INH to negotiate a Development Agreement, prior to its expiration (Jan 8, 2019), and for
both parties to complete due diligence.
5. The City Council considered an Ordinance Amendment (Ordinance 939) on Feb 26, 2018,
which would (1) update language to be consistent with MN Statutes; and (2) allow an indoor
shooting range within City Limits. The second part of the amendment was not approved,
hence, the Heartland proposal was removed from the project.
6. During the June 4, 2018 City Council Work Session, the Council considered two options by
INH; (1) 135-unit apartment building; or (2) 63-unit apartment building and Kwik Trip
gas/convenience store. INH’s presentation included a suggested land purchase price of
$225,000 for Option 1, or $750,000 for Option 2, and that no Tax Increment Financing (TIF)
would be requested.
The Council directed Staff and the developer to conduct a Neighborhood meeting, prior the
Council consenting to Option 1 or Option 2. A Neighborhood meeting was held on June 27,
2018.
7. The City Council considered Option 1 and Option 2 at its July 2, 2018 Work Session,
deciding that further discussion of the land sale price would occur at an EDA closed session
on July 9, 2018.
8. At the July 9, EDA closed meeting City Staff informed the Council of the comparable sales
research conducted internally by staff. The City Council directed staff to get an appraisal
completed on the Crossroad Pointe property by two appraisers before making a determination
on the acceptable price range between Option 1 and Option 2.
EDA Action Requested:
Staff requests that the EDA:
Closed
1) Hear a presentation from each of the two appraisal companies.
2) Determine an acceptable land sale price range for each option.
Open
3) Open the EDA meeting and decide which Option to pursue. Option 1 (all apartments) or
Option 2 (apartments & Kwik Trip) and direct staff to negotiate the price within the
Council’s price range and to work with the City Attorney to complete a Development
Agreement and any other necessary documents needed to complete the option chosen for
development.
ATACHMENTS
1) Lake State Realty Services, Inc. Appraisal
2) Nagell Appraisal Incorporated Appraisal
Item No: 03B1a.
Meeting Date: August 13, 2018
Type of Business: EDA Business
City of Mounds View Staff Report
To: Economic Development Authority
From: Brian Beeman, Business Development Coordinator
Item Title/Subject: General Discussion/Issues on Crossroad Pointe
Background:
Any discussion surrounding the Crossroad Pointe development that isn’t in relation to the land price
or negotiation strategy should be conducted in an open meeting format. Therefore, staff allowed for
a general discussion/Issues agenda item on the topic of Crossroad Pointe to allow the EDA to
discuss anything else relating to Crossroad Pointe that is not price and negotiation strategy related.
One item the EDA will need to address in the near future is which option INH should pursue.
The City is cooperating with INH Properties to develop 4.25 acres at Crossroad Pointe. INH
Properties is proposing two options for development at the site. Option 1 is all apartments totaling
approximately 135 units. Option 2 is approximately 63 units of market rate apartments and a Kwik
Trip.
Discussion:
Should the EDA pursue a discussion about Option 1 & 2 a brief historical summary is provided
below.
Information on each option was presented by INH Properties and Kwik Trip at the June 4,
2018 City Council Work Session.
The Council directed staff and the developer to conduct a neighborhood meeting prior to the
Council consenting to Option 1 or Option 2.
A neighborhood meeting was conducted June 27, 2018.
The City Council considered the options at its July 2, 2018 Work Session and decided that
further discussion of the land sale price would need to occur at the EDA closed session.
The Council held an EDA closed meeting July 9, 2018 and decided that an appraisal should
be completed before determining a land sale price.
An appraisal report is planned for the EDA’s August 13, 2018 closed meeting. It is expected
that the Council will have enough information from the appraisals to make a determination of
the land sale price for each option.
Time permitting, discuss the pros and cons of each option and decide whether a decision can be
made at this meeting on choosing an option or if choosing and option should be postponed to a
future meeting.
Recommendation:
Decide whether to take action on Option 1 or Option 2 at this meeting or set a date in the future to
dedicate time and attention to hold a discussion on the options and take any necessary action.
If taking action at this meeting:
Consider approval of either Option 1, all apartments or Option 2, apartments and a Kwik Trip and
direct staff to negotiate the land sale price within the Council’s determined price range and to work
August 13, 2018 EDC Meeting
Item 03B1a – Crossroad Pointe General Discussion/Issues
Page 2 of 2
with the City Attorney to complete a Development Agreement and any other necessary documents
needed to complete the option chosen for development by motion.
If not taking action at this meeting:
Should the City Council choose to decide upon Option 1 or Option 2 at a future meeting, then staff
will not initiate the land sale negotiation until the Council has chosen an option.
Respectfully submitted,
__________________________
Brian Beeman
Attachments:
1) N/A
Item No: 03B2a.
Meeting Date: August 13, 2018
Type of Business: EDA Business
City of Mounds View Staff Report
To: Economic Development Authority
From: Brian Beeman, Business Development Coordinator
Item Title/Subject: MWF/Boulevard Closing Matters
Background:
MWF Properties is exercising their Option Agreement to acquire two tax forfeiture properties for their
60 unit, three story with underground parking, affordable housing project. Pursuant to the Option
Agreement, the Developer is required to also enter into the purchase and development agreement
outlining the terms and conditions of the developer’s acquisition of the property from the EDA and
the platting. The EDA is cooperating with MWF Properties to acquire two tax forfeiture properties for
the proposed 60 unit, three story with underground parking, affordable housing project. The EDA is
establishing certain minimum criteria as conditions required in order to execute the purchase
agreement and development agreement in order to make the development feasible.
Discussion:
MWF Properties DBA “Boulevard Apartments, Limited Partnership” is proposing to construct 60
units of workforce housing. The purchase and development agreement is a requirement outlining
the terms and conditions between the EDA and Boulevard. The City Attorney will be available for
questions if needed.
Recommendation:
Continue the Public Hearing to hear resident comments. Close Public Hearing and consider
approval of Resolution 18-EDA-313 by motion.
Respectfully submitted,
__________________________
Brian Beeman
Attachments:
1) 18-EDA-313 A Resolution Approving Purchase and Development Agreement and
Conveyance of Property Located In Mounds View, Minnesota
2) Purchase and Development Agreement