HomeMy WebLinkAboutResolutions 5477 - Resolution Title Unknown DocuSign Envelope ID: B573184A-3D66-4152-97AA-92F87D9818B6
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RESOLUTION 5477
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN,
MONTANA,
WHEREAS, Section 38.420.030 of the Bozeman Municipal Code, ("Cash Donation in
lieu of Land Dedication") states that the city commission may adopt procedures to be used by the
director of parks and recreation to determine the fair market value for cash in lieu of parkland
dedication donations; and
WHEREAS, Section 38.420.030 of the Bozeman Municipal Code states that the city must
periodically update the market value as deemed necessary to reflect changes in the price of land;
and
WHEREAS, an updated appraisal report has been obtained from a qualified, licensed
appraiser to determine the fair market value of unsubdivided, unimproved land after it has been
annexed and given a municipal zoning designation in accordance with Montana Code Annotated
Section 76-3-621; and
WHEREAS,the appraisal report indicates the fair market value of residential property for
the purposes of cash donation in lieu of park land dedication has increased considerably since the
last appraisal (Exhibit A);
NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of
Bozeman, Montana, to wit: that the fair market value of residential property for the purposes of
cash donation in lieu of park land dedication is $2.60 per square foot, subject to changes in market
conditions that warrant an updated appraisal.
PASSED, ADOPTED, AND APPROVED by the City Commission of the City of
Bozeman, Montana, at a regular session thereof held on the 71h day of February, 2023.
DocuSign Envelope ID:B573184A-3D66-4152-97AA-92F87D9818B6
DocuSigned by:
kr6ANDRUS
Mayor
ATTEST:
DocuSigned by:
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DocuSigned by:
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M 'mxxs5.
City Clerk
APPROVED AS TO FORM:
DocuSigned by:
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City Attorney
DocuSign Envelope ID: B573184A-3D66-4152-97AA-92F87D9818B6 Resolution 5472 Exhibit A
AN APPRAISAL REPORT OF:
Standard Property Valuation for the City of Bozeman's Cash in Lieu of Parkland Dedication
Process
FILE NO.:
C113022457
PREPARED FOR:
Mr. Mitchell Overton
City of Bozeman- Department of Parks and Recreation
415 North Bozeman Avenue
Bozeman, MT 59715
PREPARED ON:
November 30, 2022
EFFECTIVE DATE OF VALUATION:
November 1, 2022
PREPARED BY:
Keith O'Reilly, MAI, MT-400
Bridger Appraisals, Inc.
P.O. Box 11145
Bozeman, MT 59719
DocuSign Envelope ID: B573184A-3D66-4152-97AA-92F87D9818B6
r
BRIDGER
APPRAISALS!
November 30, 2022
City of Bozeman-Department of Parks and Recreation
415 North Bozeman Avenue
Bozeman, MT 59715
Re: Standard Property Valuation for the City of Bozeman's Cash in Lieu of
Parkland Dedication Process
Dear Mr. Mitchell Overton,
Per your request, I have gathered information and completed the following report to establish a
standard property valuation on a per square foot basis for all zoning districts within the City of
Bozeman. The zoning districts are as follows: Residential Suburban District (R-S), Residential
Low Density District(R-1), Residential Moderate Density District(R-2), Residential Medium
Density District(R-3), Residential High Density District(R-4), Residential Mixed-Use High
Density District(R-5), Residential Office District(R-O), Residential Manufactured Home
Community District (RMH),Neighborhood Business District(13-1), Community Business
District (B-2), Community Business District-Mixed(B-2M), Downtown Business District(B-3),
Urban Mixed-Use District(UMU), Light Manufacturing District(M-1), Manufacturing and
Industrial District (M-2), Business Park District(B-P),Northeast Historical Mixed-Use District
(NEHMU),Neighborhood Conservation Overlay District(NC), and Residential Emphasis
Mixed-Use District(REMU). This report is to be used for the City of Bozeman's Cash in Lieu of
Parkland dedication process. This appraisal is not of one subject property but is rather a
compilation of sales of large tracts of land within the City as well as Gallatin County purchased
for development purposes.
Per city code and state law:
Cash donation in-lieu of land dedication shall be equal to the fair market value of the amount of
land that would have been dedicated. For the purpose of these regulations, the fair market value
is the value of the unsubdivided, unimproved land after it has been annexed and given an urban
zoning designation. The city intends to obtain the highest value for cash-in-lieu of park land that
is allowable under state law.
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ASSUMPTIONS AND LIMITING CONDITIONS
This appraisal report,the letter of transmittal, and certification are subject to the following assumptions
and limiting conditions; and also, any special qualifying conditions that may be contained elsewhere in
the report are incorporated by reference.
Assumptions
1. That the legal description, as furnished, is correct; and that the title to the property is good and
marketable. All existing liens and encumbrances, if any,have been disregarded. The property is
appraised as though free and clear of other burdens,under responsible ownership and competent
management.
2. That the land dimensions taken from available maps,plats,and/or surveys are correct. It has been
assumed that those boundaries that are apparent are correct.
3. It is assumed that the use of the land and improvements is confined within the boundaries or property
lines of the property described and that there is no encroachment or trespass unless noted in the
report.
4. That no adverse water table or soil conditions exist,and no representation regarding such conditions
is made in this report unless specifically stated; and,that the value estimated is predicated on the
absence of any such conditions occurring.
5. Those opinions, estimates, data and statistics supplied by others in the course of this study,are
correct;the assumption has been made that the sources are reliable,but no responsibility has been
inferred for their accuracy.
6. This report does not contemplate any court action,nor does it obligate the appraiser to give any
testimony or make any appearance in court,before commission, arbitrator or any other individual,
body or agency. If court action or appearance later becomes necessary in the interest of the client,the
terms of the additional service shall be negotiated at that time.
7. Unless otherwise stated in this report,the appraiser did not observe the existence of hazardous
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material,which may or may not be present on the property. I have no knowledge of the existence of
such materials on or in the property. I am not qualified to detect such substances. The presence of
potentially hazardous materials may affect the value of the property. This extends to any leaks from
underground fuel storage tanks, and identification of Asbestos containing materials. The value
estimate is predicated on the assumption that there is no such material on or in the property.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.Any such
environmental risk discovered at a later date may require a revised estimate of value that may or may
not be simply a reduction of the value by the estimated cost to cure the environmental condition.
Properties known to have environmental risk may also carry a stigma in the market place that may or
may not affect the value. If future soil tests should reveal the existence of any such soil conditions or
hazardous waste, I reserve the right to review and adjust this appraisal accordingly.
Limiting Conditions:
1. The appraiser is not responsible for any matter legal in character,nor is any opinion rendered as to
title,which is assumed to be marketable.
2. The value reflected in the analysis applies only to the program of utilization considered in this report.
The use of the value in conjunction with any other appraisal or under other influences invalidates the
conclusions developed.
3. This analysis and estimate of value is made for the exclusive use and benefit of the clients to whom it
is addressed; and,possession of this report or a copy, does not carry with it the right of publication,
nor may it be used for any purpose other than that intended without the previous consent of the
appraisers.In any event, only the entire report may be used and no part shall be taken or used out of
context.
4. Included as an integral part of this report are maps and photographs of the appraised property and
sales. The maps and photographs were prepared and taken by the appraisers, and although they do not
purport to represent survey accuracy,they are substantially correct and adequately serve as visual
reference to the property.
5. Disclosure of the contents of this report is governed by the By-Laws and Regulations of the Appraisal
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Institute.Neither all nor any part of the contents of this report(especially any conclusions of value,
the identity of the appraisers or the firm with which they are connected) shall be disseminated to the
public through advertising media,public relations,news media, sales media,or any other public
means of communication without the prior written consent and approval of the authors.
6. The forecasts,projections, or operating estimates contained herein are based on current market
conditions, anticipated short-term supply and demand factors,and a continued stable economy.
These forecasts are,therefore, subject to changes with future conditions.
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SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS
Client: Mitchell Overton, City of Bozeman - Department of
Parks and Recreation
Intended User: City of Bozeman - Department of Parks and Recreation
Date of Valuation: November 1, 2022
Date of Preparation: November 30, 2022
Rights Appraised: Fee Simple
Highest and Best Use: The highest and best use is not applicable to this appraisal
report as the valuation is not of a subject property, but
rather a compilation of sales to establish a standard
property valuation.
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SCOPE OF THE APPRAISAL
The scope of work consists of the amount and type of information researched and analyzed in an
assignment.
In preparing the appraisal, I have considered pertinent characteristics of the comparable sales in
comparison to current market standards. I have gathered information and completed the
following report to establish a standard property valuation on a per square foot basis for all
zoning districts within the City of Bozeman as previously listed.
General and specific data was obtained through personal and telephone interviews with
government officials,property managers, developers, and other market participants. I have not
considered the highest and best use as it is not applicable to the standard property valuation on a
per square foot basis for all zoning districts within the City of Bozeman. I have applied the sales
comparison approach valuation method to determine a standard property valuation method on a
per square foot basis. This is the only applicable approach to valuing vacant land. The results
indicated by this method have been reviewed and reconciled based on the reliability, relevance
and reasonableness of the data, and the purpose and intended user of the appraisal.
This is an Appraisal Report as defined by Uniform Standards of Professional Appraisal Practice
under Standards Rule 2-2. This format provides a summary or description of the appraisal
process, subject and market data and valuation analyses. The information contained in this
report is specific to the needs of the client and for the intended use as stated in this report.
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PURPOSE AND INTENDED USE AND USER OF THE APPRAISAL
The purpose of this appraisal is to estimate a credible opinion of the Current Market Value on a
per square foot basis of the Fee Simple Interest for the Residential Suburban District(R-S),
Residential Low Density District (R-1), Residential Moderate Density District(R-2), Residential
Medium Density District (R-3), Residential High Density District (R-4), Residential Mixed-Use
High Density District(R-5), Residential Office District(R-O), Residential Manufactured Home
Community District (RMH),Neighborhood Business District(B-1), Community Business
District(B-2), Community Business District-Mixed(B-2M), Downtown Business District(B-3),
Urban Mixed-Use District(UMU), Light Manufacturing District(M-1), Manufacturing and
Industrial District(M-2), Business Park District(B-P),Northeast Historical Mixed-Use District
(NEHMU),Neighborhood Conservation Overlay District(NC), and Residential Emphasis
Mixed-Use District(REMU)within the City of Bozeman, in accordance with the Uniform
Standards of Professional Appraisal Practice (USPAP) and supplemented by the Appraisal
Institute. The intended use of the appraisal is to assist the Client and Intended User, City of
Bozeman-Department of Parks and Recreation, in establishing a standard property valuation for
vacant land on a square foot basis to be used for the City of Bozeman's Cash in Lieu of Parkland
dedication process. There are no other intended users.
DEFINITION OF MARKET VALUE
Market value is defined as the most probable price, which a property should bring in a
competitive and open market under all conditions requisite to a fair sale, the buyer and seller,
each acting prudently and knowledgeably, and assuming the price is not affected by undue
stimulus. Implicit in this definition is consummation of a sale as of a specified date and passing
of title from seller to buyer under conditions whereby:
1. Buyer and seller are typically motivated;
2. Both parties are well informed or well advised, and each acting in what they consider their
own best interest;
3. A reasonable time is allowed for exposure in the open market;
4. Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements
comparable thereto;
5. 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: Section 323.2 amended at 57 Fed.Reg.9049,March 16,1992;59 Fed.Reg.29501,June 7,1994]
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PROPERTY RIGHTS APPRAISED
Property rights are ownership interests in real estate and have value. It is important to know
what property right(s) or estate(s) are involved in the appraisal, because the estate identifies the
rights being valued. The subject property rights being appraised is the Fee Simple Interest.
Fee Simple: 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.2
Leased Fee: A freehold(ownership interest) where the possessory interest has been granted to
another party by creation of a contractual landlord-tenant relationship (i.e. a lease). 3
VALUATION DATE
The effective date of the appraisal is November 1, 2022. This is the date of valuation. The
comparable sales reflected in this report are the most current identifiable sales as of the effective
date.
2 The Dictionary of Real Estate Appraisal,5th ed.(Chicago;Appraisal Institute,2010),p.78.
s The Dictionary of Real Estate Appraisal,5th ed.(Chicago;Appraisal Institute,2010),p.111.
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MONTANA REGIONAL AND CITY MAPS
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REGIONAL, CITY, AND NEIGHBORHOOD ANALYSIS
Bozeman, Montana is located in Gallatin County, in an area more commonly referred to as the
Gallatin Valley. This report is for the Client and Intended User, the City of Bozeman—
Department of Parks and Recreation. Information regarding the City of Bozeman has not been
included as this information is provided from the City of Bozeman and the client and intended
user has access to this information.
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DocuSign Envelope ID: B573184A-3D66-4152-97AA-92F87D9818B6
THE APPRAISAL PROCESS
Typically,real estate can be valued by applying three approaches. All of these approaches to value,(particularly
when the purpose of the appraisal is to establish market value)are market data approaches since the data inputs are
presumably market derived.
Cost Approach: One of the approaches to value commonly applied in Market Value
estimates and many other valuation situations. A comparative
approach to the value of property or another asset that considers, as a
substitute for the purchase of a given property, the possibility of
constructing another property that is an equivalent to the original or
one that could furnish equal utility with no undue cost resulting from
delay. The Valuer's estimate is based on the reproduction or
replacement cost of the subject property or asset, less total (accrued)
depreciation. The cost approach establishes the value of a real
property by estimating the cost of acquiring land and building a new
property with equal utility or adapting an old property to the same use
with no undue cost due to delay. An estimate of entrepreneurial
incentive or developer's profit/loss is commonly added to land and
construction costs. For older properties, the cost approach develops
an estimate of depreciation including items of physical deterioration
and functional obsolescence.4
Sales Comparison Approach: A comparative approach to value that considers the sales of similar or
substitute properties and related market data and establishes a value
estimate by processes involving comparison. In general, a property
being valued (a subject property) is compared with sales of similar
properties that have been transacted in the open market. Listings and
offerings may also be considered. A general way of estimating a
value indication for personal property or an ownership interest in
personal property, using one or more methods that compare the
subject to similar properties or to ownership interests in similar
properties. This approach to the valuation of personal property is
dependent upon the Valuer's market knowledge and experience as
well as recorded data on comparable items.5
Income Approach: A comparative approach to value that considers income and expense
data relating to the property being valued and estimates value through
a capitalization process. Capitalization relates income (usually net
income) and a defined value type by converting an income amount
into a value estimate. This process may consider direct relationships
(whereby an overall capitalization rate or all risks yield is applied to a
single year's income), yield or discount rates (reflecting measures or
return on investment)applied to a series of incomes over a projected
period, or both. The income approach reflects the principles of
substitution and anticipation.6
5 The Dictionary of Real Estate Appraisal,5th ed.(Chicago;Appraisal Institute,2010),p.250.
s The Dictionary of Real Estate Appraisal,5th ed.(Chicago;Appraisal Institute,2010),p.244.
The Dictionary of Real Estate Appraisal,5th ed.(Chicago;Appraisal Institute,2010),p.256
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Comparable Sales
The following sales have been used to estimate a value on a per square footage basis. The
compiled data represents the most recent known sales of speculative development land within the
City of Bozeman and Gallatin County.
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DocuSign Envelope ID: B573184A-3D66-4152-97AA-92F87D9818B6
Land Comparable 1
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Transaction
ID 1850 Sale Verification Source Broker Cory Vellinga
Address SE Comer Gooch Hill Rd Price $4,000,000
City Bozeman Price per Acre $97,454.00
State MT Financing Cash to Seller
Tax ID RGG10212 Property Rights Fee Simple
County Gallatin Days on Market 0
Grantor Alan D.Fulton Recording Date 7/2/2021
Grantee Ryan Roller Book/Page or Reference 2739945
Legal Description Tracts 1 and 2 of COS No. 158 located in the NW 1/4 of Section 9 Township 2
South,Range 5 East,P.M.M.Gallatin County,MT
Site
Acres 41.05 Topography Level
Land SF 1,787,920 Zoning Agricultural Suburban
Road Frontage -- Flood Zone None
Dimensions Rectangular Encumbrance or Easement None
Utilities NorthWestem Fhergy En-ironmental Issues None
Access Durston Rd and Gooch Price Per Land SF $2.23
Hill Rd
Sale Comments
There are two approximatle 20 acre parcels totaling 41.045 acres that sold for$4,000,000 cash.The property
was not actively listed for sale.The property is at the SE corner of the intersection of Gooch Hill Rd and
Durston Rd.The property is not annexed into the City of Bozeman,but is adjacent to the City Limits.This is a
prime piece of speculative residential land.The land to the east is already developed residentially.
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DocuSign Envelope ID: B573184A-3D66-4152-97AA-92F87D9818B6
Land Comparable 2
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Transaction
ID 1777 Sale Verification Source Buyer
Address TBD West Graf Street Price $7,743,260
City Bozeman Price per Acre $95,000.00
State MT Financing Cash to Seller
Tax ID RGG8316&RGG8318 Property Rights Fee Simple
County Gallatin Days on Market None
Grantor Diane L.Brawner Recording Date 9/24/2021
Revocable Trust
Grantee Bozeman Hans Two LLC Book/Page or Reference 2751910
Doc
Legal Description Tract 1 of Certificate of Survey No.2074 and Tract A of Certificate of Survey No.
1861,tracts of land being the NW 1/4 SW 1/4 and the NE 1/4 SW 1/4,Section 23,
Township 2 South,Range 5 East,Gallatin County,Montana.
Site
Acres 81.51 Topography Level
Land SF 3,550,488 Zoning AS,Agricultural
Road Frontage W.Graf St.&S.27th Ave. Flood Zone None
Dimensions Rectangular Encumbrance or Easement None
Utilities NorthWestern Energy Emironmental Issues None
Access W.Graf St.&S.27th Ave. Price Per Land SF $2.18
Sale Comments
This is a closed sale of two adjacent 40+/-acre parcels of vacant land in the southern part of Bozeman from
single seller to a single buyer.The eastern parcel is bordered to the north,west,and south by the Bozeman
city limits and it is expected that the buyer will pursue annexation and connection to the City of Bozeman
water and sewer system The buyer reportedly plans to develop the sites with multifamily residential
improvements.This is considered to be a very attractive speculative development site given its location in the
southern part of Bozeman and its adjacency to the Bozeman city limits.This property was not openly
marketed and the transaction was privately negotiated between the buyer and the seller.
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Land Comparable 3
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Transaction
ID 1749 Sale Verification Source Buyer
Address NWC S. 19th Ave& Price $10,250,000
Stucky Rd.
City Bozeman Price per Acre $105,249.11
State MT Financing Cash to Seller
Tax ID RGG40140 Property Rights Fee Simple
County Gallatin Days on Market None
Grantor Steven R.Aaker Recording Date 12/14/2021
Grantee West University,LLC Book/Page or Reference 2761479
Legal Description Lot 2 of Minor Subdivsion Number 191,located in the SE 1/4 of Section 14,T2S,
R5E,P.M.M.Gallatin County,MT.
Site
Acres 97.39 Topography Level
Land SF 4,242,221 Zoning AS,Agricultural
Road Frontage Stucky Rd.,S. 19th Ave., Flood Zone None
W.Kagy Blvd.
Dimensions Irregular Encumbrance or Easement None
Utilities NorthWestern Energy En-ironmental Issues None
Access Stucky Rd.,S. 19th Ave., Price Per Land SF $2.42
W.Kagy Blvd.
Sale Comments
This is a prime speculative development site located at the intersections of Stucky Road and South 19th
Avenue and West Kagy Boulevard and South 19th Avenue.The site is adjacent to the Bozeman city limits
making it a likely candidate for annexation into the City of Bozeman and connection to the City of Bozeman
water and sewer system.The properties to the north,east,and south of the site have already been annexed
into the City of Bozeman.The site will likely be developed into a mixed-use project incorporating commercial
development that takes advantage of South 19th Avenue with residential development to the west.The
property was not openly marketed.
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Land Comparable 4
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Transaction
ID 1751 Sale Verification Source Buyer
Address TBD Davis Lane Price $8,100,000
City Bozeman Price per Acre $70,009.00
State MT Financing Cash to Seller
Tax ID -- Property Rights Fee Simple
County Gallatin Days on Market --
Grantor The Peter Family Trust Recording Date 6/4/2021
Grantee Virga Venture II LLC Book/Page or Reference 2736653
Legal Description Lengthy Retained in File
Site
Acres 115.70 Topography Level
Land SF 5,039,892 Zoning Ag
Road Frontage -- Flood Zone None
Dimensions Irregular Encumbrance or Easement None
Utilities NorthWestern Energy Environmental Issues None
Access Davis Lane/Frontage Rd Price Per Land SF $1.61
Sale Comments
This is the sale of a speculative development site located in the northwest quadrant of Bozeman.The sale
price is $70,009 per acre for non-annexed land adjacent to City services.The purchaser plans on developing
the site with high density residential improvements.The purchaser is a very seasoned developer in the
Bozeman market.
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Land Comparable 5
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Transaction
ID 1371 Sale Verification Source Buy-Sell Agreement
Address TBD South 19th Avenue Price $10,000,000
City Bozeman Price per Acre $83,600.00
State MT Financing Conventional
Tax ID RGG9600 Property Rights Fee Simple
County Gallatin Days on Market None
Grantor Bozeman Ranch Land, Recording Date 10/30/2019
LLC
Grantee Blackwood Land Fund. Book/Page or Reference 2662993
LC Doc
Legal Description The South 1/2 of the Southwest 1/4 of Section 24 and the North 1/2 of the North
1/2 of the Northwest 1/4 of Section 25 in Township 2 South,Range 5 East,Gallatin
County,Montana.
Site
Acres 119.62 Topography Level
Land SF 5,210,522 Zoning See Comments
Road Frontage South 19th Avenue Flood Zone None
Dimensions Rectangular Encumbrance or Easement None
Utilities NorthWestern Energy En-dronmental Issues None
Access South 19th Avenue Price Per Land SF $1.92
Sale Comments
This is the sale of a large tract of speculative development land that is located along the eastern side of South
19th Avenue in the southern part of Bozeman.The property is not yet annexed into the City of Bozeman but is
bordered on three sides by properties that are annexed.The City of Bozeman is very likely to grant annexation
for the property shortly following the sale.The property is currently zoned by the Gallatin County Planning
Department as AS,Agricultural Suburban District but the buyer is attempting to achieve an REMU,
Residential Emphasis Mixed-Use zoning designation for a majority of the site fromthe City of Bozeman when
it is annexed.Lower density zoning designations will be utilized for areas bordering existing communities.The
buyer intends to develop the property into a multi-phase,large-scale mixed-use residential and commercial
development.The property is already bisected by a water main for the City of Bozeman water systembut the
City's preferred sewer main connection is approximately 1,300 feet north of the property at the intersection of
South 19th Avenue and Graf Street.However,it is expected that early phases of the development can be
connected to smaller sewer lines stubbed at the adjacent Alder Creek Subdivision.There are estimated to be
approximately$1,181,000 in off-site improvement costs for the widening of South 19th Avenue and the
development of a traffic control light at 19th Avenue and Blackwood Road.The property is located in a
Qualified Opportunity Zone which provides for additional potential taxbenefits.The property was not openly
marketed and the transaction was privately negotiated between the buyer and the seller.
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DocuSign Envelope ID: B573184A-3D66-4152-97AA-92F87D9818B6
Land Comparable 6
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ID 1230 Sale Verification Source Purchaser
Address 5250 Baxter Lane Price $8,080,000
City Bozeman Price per Acre $50,374.00
State MT Financing Cash to Seller
Tax ID RGG6855 Property Rights Fee Simple
County Gallatin Days on Market None
Grantor Fern Vesta Anderson Recording Date 6/7/2019
Grantee NWX,LLC Book/Page or Reference 2646897
Legal Description Tract 5 of COS 2552,NE 1/4 of Section 4,Township 2 South,Range 5 East,Gallatin
County,Montana.
Site
Acres 160.36 Topography Level
Land S F 6,985,282 Zoning A-S,Agricultural
Road Frontage Baxter Lane& Flood Zone None
Cottonwood Road
Dimensions Rectangular Encumbrance or Easement None
Utilities NorthWestern Energy Environmental Issues None
Access Baxter Lane& Price Per Land SF $1.16
Cottonwood Road
Sale Comments
This property sold on 06/07/2019 for$8,080,000 or$50,374per acre for 160.360 acres.The property went under
contract in the early fall of 2018.The property is in the county,but adjacent to the City of Bozeman.The
property is bordered to the east by the new Bozeman Sport Complexand to the south by Laurel Glen,a
residential subdivsion.This property is also in very close proximity to the new Bozeman High School.The
purchaser has applied for annexation into the City of Bozeman and will pursue a high-density REMU and B-
2M zoning designation for the site following annexation.According to the buyer's proforma,off-site
improvement costs are estimated to be approximately$4,300,000 or$26,815 per acre.Therefore,the effective
acquisition cost for the property inclusive of estimated off-site improvement costs is $12,380,000 or$77,375per
acre.This property was not openly marketed and the transaction was privately negotiated between the buyer
and the seller.
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DocuSign Envelope ID:B573184A-3D66-4152-97AA-92F87D9818B6
19
se
Gallatin
County
ORegional Park
R5, Bozeman
191
Four Corners
191 Montana State
Universit
Museum of the ckies19
4
• • • Map data 02022 Google
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DocuSign Envelope ID: B573184A-3D66-4152-97AA-92F87D9818B6
Land Analysis Grid Comp 1 Comp 2 Comp 3 Comp 4 Comp 5 Comp 6
Address SE Comer Gooch Hill TBD W est Graf Street NWC S.19th Ave& TBD Davis Lane TBD South 19th 5250 Baxter Lane
Rd and Durston Rd Stucky Rd. Avenue
City Bozeman Bozeman Bozeman Bowman Bozeman Bozeman
State MT MT MT MT MT MT
Date 11/1/2022 7/2/2021 9/24/2021 12/14/2021 6/4/2021 10/30/2019 6/7/2019
Price - $4,000,000 $7,743,260 $10,250,000 $8,100,000 $10,000,000 $8,080,000
Land SF 1,787,920.00 3,550,488.00 4,242,221.00 5,039,892.00 5,210,522.00 6,985,282.00
Land SF Unit Price $2.24 $2.18 $2.42 $1.61 $1.92 $1.16
Transaction Adjustments
Property Rights Fee Simple 0.0% Fee Simple 0.0% Fee Simple 0.0% Fee Simple 0.0% Fee Simple 0.0% Fee Simple 0.0%
Financing Cash to seas 0.0% Cash uo su10r 0.0"/ Cash t0 s0110r 0.00/ Cash to sous 0.00/0 Co tioael 0.0% Cwh to saner 0.00%
Conditions of Sale Am's Lmgth 0.0% Am's Lmgth 0.0% Am's Lmgth 0.0% Am's Lmgth 0.0% Am's Lmgth 0.0% A='s Lmgth 0.00/
Expend.After Sale $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Adjusted Land SF Unit Price $2.24 $2.18 $2.42 $1.61 $1.92 $1.16
Market Trends Through ll/l/2022 10.00/0 13.6% 11.1% 8.8% 14.4% 33.2% 38.3%
Adjusted Land SF Unit Price $2.54 $2.42 $2.63 $1.84 $2.56 $1.60
Location Good Good Good Good Good Good
%Adjustment 00/ 0% 0% 00/a 0% 0%
$Adjustment $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Acres 41.05 81.51 97.39 115.70 119.62 160.36
%Adjustment 00/ 0% 0% 00/0 0% 0%
$Adjustment $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Topography Level Level Level Level Level Level
%Adjustment 00/ 0% 00/ 00/ 0% 00/
$Adjustmentl $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Shape Rectangular Rectangular Irregular Irregular Rectangular Rectangular
%Adjustment 0% 0% 01% 00/ 0% 01/6
$Adjustment $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Utilities NorthWestem NorthWestem NorthWestem NorthWestem NorthWestem NorthWestem
%Adjustment 00/ 0% 00/ 00/ 0% 00/
$Adjustment $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Zoning Agricultural AS,Agricultural AS,Agricultural Ag See Comments A-S,Agricultural
Suburban Suburban Suburban Suburban
%Adjustment 00/ 0% 0% 00/a 0% 00/0
$Adjustment $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Adjusted Land SF Unit Price $2.54 $2.42 $2.63 $1.84 $2.56 $1.60
NetAcjjustments 13.60% 11.1% 8.8% 14.40/. 33.2% 38.3%
Gross Adjustments 13.6% 11.1% 8.8% 14.40/. 33.2% 38.3%
The provided sales give a good indication of the per square foot valuation for vacant land in the
City of Bozeman. This valuation is for all zoning districts within the City of Bozeman.
Sales 1 through 4 are the most current, while Sales 5 and 6 are older. However, all fit the criteria
and definition for the Cash in Lieu program. Sale 1 is located adjacent to the city limits. This
property was not annexed and has not applied for annexation yet, but likely will be annexed
before being developed. Sales 2, 3, and 4 were not annexed at the time of sale, but all have since
applied for and are in the process of annexation. Sale 5 was annexed in after purchase and Sale 6
had approval to be annexed into the City at the time of sale. Sales 5 and 6 are currently being
developed with a mix of commercial and residential development. Sale 2 is expected to be
primarily residential, and Sales 3 and 4 will likely be a mix of commercial and residential. Sale 6
is the largest available sale at 160 acres,with Sales 2, 3, 4, and 5 between 80 acres and 120 acres.
Sale 1 is the smallest at approximately 41 acres. Typically, the larger the site, the lower the value
per acre/square foot, and the smaller the site, the higher the value per acre/square foot; however,
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DocuSign Envelope ID: B573184A-3D66-4152-97AA-92F87D9818B6
the adjusted values from Sales 1, 2, 3, and 5 are all very consistent between $2.42 per square foot
and$2.63 per square foot. Sales 1, 2, and 3 are recent sales.
There have been very limited sales of larger sales of development sites located within the city
limits in recent years, but four recent sales of development sites located adjacent or near the edge
of the city limits were included. Three of these are in the annexation process. In addition, I have
confirmed two confidential sales, one of a moderately sized development piece annexed into the
City of Bozeman, and one of a larger development piece annexed into the City of Belgrade.
While the Belgrade piece would obviously not be a candidate for cash in lieu through the City of
Bozeman, it fits the cash in lieu criteria and has been given consideration as additional support to
the overall reconciled value.
The pending sale from Bozeman is annexed into the City and zoned R-1 and R-2. The site
contains approximately 35 acres and the buyer confirmed the purchase price is approximately
$115,000 per acre or$2.64 per square foot. The confidential sale from Belgrade was
approximately 239 acres of annexed land with a commercial zoning. The buyer reported this sale
sold for approximately$117,000 per acre or$2.69 per square foot. At the time of this purchase,
this was the highest price paid on a per acre basis for a larger speculative development site
located in or near Belgrade or Bozeman.
Market conditions are currently changing due to a significant increase in interest rates. The
market peaked in the early spring of 2022, and market conditions began to change in the summer
to early fall of 2022. Currently, days on the market have been extended and there is much less
competition to purchase speculative development land. There are simply not enough sales of this
type of property to graph or show the increase and then likely decline in values.
Based upon the preceding sales and analysis of current market conditions, I would estimate the
per square foot value for vacant land in the Residential Suburban District (R-S), Residential Low
Density District(R-1), Residential Moderate Density District(R-2), Residential Medium Density
District(R-3), Residential High Density District (R-4), Residential Mixed-Use High Density
District(R-5), Residential Office District(RO), Residential Manufactured Home Community
District (RMH),Neighborhood Business District(B-1), Community Business District(B-2),
Community Business District-Mixed (B-2M), Downtown Business District(B-3), Urban Mixed-
Use District(UMU), Light Manufacturing District (M-1), Manufacturing and Industrial District
(M-2), Business Park District(B-P),Northeast Historical Mixed-Use District (NEHMU),
Neighborhood Conservation Overlay District(NC), and Residential Emphasis Mixed-Use
District(REMU)within the City of Bozeman to be $2.60psf or between $110,000 and $115,000
per acre as of November 1, 2022. While there is a broad range of zoning districts, there is not
enough data available to support a different reconciled land value for a low density zoning versus
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DocuSign Envelope ID: B573184A-3D66-4152-97AA-92F87D9818B6
a high density or commercial zoning. The overall reconciled value per square foot is supportable
across all larger speculative development parcels.
If I can be of further assistance, please do not hesitate to contact me.
Sincerely,
Keith O'Reilly, MAI
General Certified Appraiser
State of Montana#400
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DocuSign Envelope ID: B573184A-3D66-4152-97AA-92F87D9818B6
CERTIFICATION
As a result of a request for an appraisal assignment of the property,identified as:
Standard Property Valuation for the City of Bozeman's Cash in Lieu of Parkland Dedication Process
I certify:
To the best of my knowledge and belief the statements of fact contained in this report are true and correct.
The reported analyses,opinions,and conclusions are limited only by the reported assumptions and
limiting conditions and are my personal,impartial, and unbiased professional analyses, opinions, and
conclusions.
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.
I have no bias with respect to the property that is the subject of this report or to the parties involved with
this assignment.My engagement in this assignment was not contingent upon developing or reporting
predetermined results. My compensation for completing this assignment is not contingent upon the
development or reporting of a predetermined value or direction in value that favors the cause of the client,
the amount of the value opinion,the attainment of a stipulated result, or the occurrence of a subsequent
event directly related to the intended use of this appraisal.
My analyses, opinions, and conclusions were developed, and this report has been prepared,in conformity
with the Uniform Standards of Professional Appraisal Practice and the requirements of the Code of
Professional Ethics and Standard of the Professional Appraisal Practice of the Appraisal Institute.
The use of this report is subject to the requirements of the Appraisal Institute relating to its duly
authorized representatives.
As of the date of this report, I,Keith O'Reilly,MAI,have completed the continuing education program of
the Appraisal Institute.
Heidi Switzer provided significant real property appraisal assistance to the person signing this
certification,including market research and input as to the final reconciled value.
Respectfully Submitted,
Keith O'Reilly,MAI
General Certified Appraiser#400
State of Montana
24
DocuSign Envelope ID:B573184A-3D66-4152-97AA-92F87D9818B6
ADDENDUM
Bridger Appraisals Inc.
Keith O'Reilly,MAI
DocuSign Envelope ID:B573184A-3D66-4152-97AA-92F87D9818B6
Keith O'Reilly-, ALAI
State of N4onti a General Certificate#400 Expires 3-31-2023
QUALIFICATIONS
EDUCATIONAPPRAIS-U EDUCATION COURSES
• Educated in the Bozeman and Billmgs Public Schools Systems.Bozeman and Bi mi!,.Nff.
• Obtained a B.S.degree in Business Marketing from Montana State University in 1992.
• Successfully completed the following courses and seminar from Appraisal Institute:
Coarses from Appraisal Institute Seoiaars from Appraisal Institute
I 110&120 Appraisal Principles "The New MkR'
1210.410 dr 420 Appraisal Principles "High Tech Appraisal Office'
310 Basic Income Capitalization "Fundamental of Relocation"
430 Standards of Professional Standards Part C "Understanding Limited Appraisals Residential"
510 Advanced Income Capitalization "Understanding Limited Appraisals General"
520 Highest do Best Use and Market Analysis "660-Small Hotel Morel Valuation"
530 Advanced Sales Comparison and Cost Approaches "620-Mixed Use Valuation Analysis"
540 Report Writing and Valuation Analysis "Appraising Nfanufactured Housing"
550 Advanced Application "Data Confamanon and Venficanon Methods"
Business Ethics C Standards "Partial Interest Valuation-Undivided'
Analyzing Operating Expenses Appranil Review General"
Forecasting Revenue "2020-202 1--7hr USPAP Update`
APPRAISAL EXPERIENCE:
I have specialized in the appraisals of residential and commercial properties located in Gallatin County,MT since May of
1992. My experience includes an apprentice-,hip with Henry Neils.MAI&Patrick Nolan.MAI.SRA.appraising residential
properties including single family, 24 family, and condominiums. industrial site, and buildings, commercial sites and
buildings,and insurable value appraisah. I have completed appraisal work for a variety of purposes including acquisition,
financing.consulting and litigation.
I am a native of Bozeman and have resided in the area for approximately 45 year.I served as a board member for the
Montana Board of Real Estate Appraisers from 2001 2007 and was the Chairman of the Screening Panel Committee for the
Board of Appraisers.
I have completed work for the following:
Opportunity Bank.Welh Fargo Bank,Rocky Mountam Bank,First Interstate Bank,American Bank,Manhattan Bank.
Valley Bank of Belgrade.Big Sky Western Bank.Stockman Bank,Sterling Savings and Loan-First Security Bank of
Bozeman,U.S.Bank.Yellowstone Bank,Bozeman Deaconess Hospital.Burlington Northern Santa Fe Railroad.Washington
Mutual Bank.State of Montana and United States Government General Services Admini tiation,and a variety of law offices.
both locally and nationally.
Bridger Appraisals Inc.
Keith O'Reilly,MAI
DocuSign Envelope ID: B573184A-3D66-4152-97AA-92F87D9818B6
•r F
State of Montana
V !1 This certificate verifies hceusure as:
Business Standards Division
W Board of Real Estate Appraisers CERTIFIED GENERAL APPRAISER
Supervises:HEIDI SWITZER
y Supervises:CONNER LINEBARGER
REA-RAG-LIC-400 With endorsements of:
Status: Active
`REAL ESTATE APPRAISER MENTOR
Expires: 03/31/2023
KEITH PATRICK O REILLY
85 MILL TOWN LOOP 2D
BOZEMAN, MT 59718
� •' I'❑
aMvnlana Dcpat tmcnt of
Sw:�LABOR&INDUSTRY
RENEIV OR VERIFY YOUR LICENSE AT:
httP's:/)etwz.ml,gov/pN
Bridger Appraisals Inc.
Keith O'Reilly,MAI