HomeMy WebLinkAbout09- Bridger Appraisal, Proposal A SUMMARY REPORT
Fire Station One
34 N.Rouse Avenue
Bozeman,MT 59715
PREPARED FOR:
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Mr.Brit Fontenot
City of Bozeman
P.O.Box 1230
Bozeman,MT 59771
PREPARED ON:
I July 9,2009
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EFFECTIVE DATE OF VALUATION:
June 22,2009
PREPARED BY:
Keith O'Reilly,MAI
General Certified Appraiser
Bridger Appraisals,Inc.
PO BOX 11145
Bozeman,Montana 59719
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BRIDCER
PPRAISAL.S
K,..nh CYP-11y.MAi
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July 9,2009
ity of Bozeman
f.O.Box 1230
Pozeman MT,59771
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e: Fire Station One
Bozeman,MT,59715
Dear Mr.Fontenot,
n accordance with your request and authorization,I have viewed the referenced property,also referred to as the
ppraised or subject property in the following report,and have estimated its current Fee Simple value,`As Is"as of
une 22,2009.Both a"Market Value"and a"Value in Use"are being estimated.
y professional opinion is based upon analysis of market data gathered for this purpose and upon the assumptions
nd limiting conditions stated on pages 6-8 of the following report.
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his is a Summary Report as defined by Uniform Standards of Professional Appraisal Practice under+ndards Rule
-2(B).This format provides a summary of the appraisal process,subject and market data and valuatior analyses.
he information contained in this report is specific to the needs of the client and for the intended use as stated in this
eport. The appraiser is not responsible for unauthorized use of this report.
the opinions stated in the accompanying report are based on my viewing of the appraised property,comparable
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roperties,and analysis of all pertinent data.
406 187 77,12
40o.587 2452
f U C3nx 11145
3.ur-,n.ui.M T S0719
s a result of my investigation and analysis,it is my opinion that the Market Value of the Fee Si ple Interest,
As Is",in the subject property,as of June 22,2009,is:
SIX HUNDRED FIFTY THOUSAND DOLLARS
TO ONE MILLION TWENTY THOUSAND DOLLARS
($650,000 to$1,020,000)
s a result of my investigation and analysis,it is my opinion that the"Value in Use"to the currein t owner of
he Fee Simple Interest,"As Is",in the subject property,as of June 22,2009,is:
TWO MILLION THIRTY THOUSAND DOLLARS
($2,030,000)
he following report contains(60)pages plus an addendum that provides the data and analysis to supp rt the stated
value estimates.
espectfully submitted,
Keith O'Reilly,MAI
General Certified Appraiser#400
State of Montana
ABLE OF CONTENTS
TEM: PAGE NO.
HOTOGRAPH OF THE SUBJECT PROPERTY.................................................................................. ...................5
SSUMPTIONS AND LIMITING CONDITIONS................................................................................. ...................6
UMMARY OF IMPORTANT FACTS AND CONCLUSIONS............................................................. ...................9
COPEOF THE APPRAISAL..................................................................................................................................I I
URPOSE AND INTENDED USE AND USER OF THE APPRAISAL.................................................................12
EFINITIONOF MARKET VALUE.......................................................................................................................12
ROPERTYRIGHTS APPRAISED......................................................................................................... .................13
EXPOSURETIME.................................................................................................................................... .. . 14
ALUATIONDATE................................................................................................................................I...........I.....14
DENTIFICATION AND HISTORY OF THE SUBJECT........................................................................................15
EGIONAL,CITY,AND NEIGHBORHOOD ANALYSIS....................................................................................18
AXES,AND ASSESSMENT ANALYSIS.............................................................................................. .................28
ITEDATA AND ANALYSIS.................................................................................................................................29
ONING AND GOVERNMENT RESTRICTIONS................................................................................ .................33
ESCRIPTION OF IMPROVEMENTS....................................................................................................................34
IGHESTAND BEST USE......................................................................................................................................38
EAPPRAISAL PROCESS...................................................................................................................................40
OSTAPPROACH...................................................................................................................................a.................41
ALESCOMPARISON APPROACH...................................................................................................... .................52
OCATION OF COMPARABLE SALES................................................................................................................55
INALRECONCILIATION.....................................................................................................................1.................57
ERTIFICATION..................................................................................................................................... .................59
DDENDUM
eed
esume
Engagement Letter
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PHOTOGRAPH OF THE SUBJECT PROPERTY
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View of the subject property looking from south to north at the rear of improvements.
Photo taken on June 22,2009 by Keith O'Reilly,MAI.
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Street scene looking west along Mendenhall Street.
Photo taken on June 22,2009 by Keith O'Reilly,MAI.
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Rndger Appraisals Inc.,c 5
Keith O Rrille.MAJ
SSUMPTIONS AND LIMITING CONDITIONS
his appraisal report,the letter of transmittal,and certification are subject to the following assumptions and limiting
onditions;and also,any special qualifying conditions that may be contained elsewhere in the report ar
ncorporated by reference.
ssumptions
That the legal description,as furnished,is correct;and that the title to the property is good and mar etable.All
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existing liens and encumbrances,if any,have been disregarded.The property is appraised,as thou h free and
clear of other burdens,under responsible ownership and competent management.
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.
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4. That no adverse water table or soil conditions exist,and no representation regarding such conditionIs is made in
this report unless specifically stated;and,that the value estimated is predicted on the absence of an such
conditions occurring.
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15. It is assumed that the subject property conforms to all applicable zoning and use regulations and re trictions
unless nonconformity has been identified,described and considered in the appraisal report.
6. Those opinions,estimates,data and statistics supplied by others in the course of this study,are cor>ect;the
assumption has been made that the sources are reliable,but no responsibility has been inferred for heir
accuracy.
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7.
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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 age4y.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.
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Leah U RCIII\ M M
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8. Unless otherwise stated in this report,the appraiser did not observe the existence of hazardous mat�rial,which
may or may not be present on the property. I have no knowledge of the existence of such materialslon 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,anl
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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 Meld,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 br may not
affect the value.If future soil tests should reveal the existence of any such soil conditions or hazarc ous waste,I
reserve the right to review and adjust this appraisal accordingly.
uniting Conditions
The appraiser is not responsible for any matter legal in character,nor is any opinion rendered as to itle,which
is assumed to be marketable.
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 who 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 an event,only
the entire report may be used and no part shall be taken or used out of context. i
Included as an integral part of this report are maps and photographs of the appraised properties and!sales.The
maps and photographs were prepared and taken by the appraisers,and although they do not purpopIrty.
to represent
survey accuracy,they are substantially correct and adequately serve as visual reference to the pro
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Disclosure of the contents of this report is governed by the By-Laws and Regulations of the Appra sal Institute.
Neither all nor any part of the contents of this report(especially any conclusions of value,the"den 'ty of the
appraisers or the firm with which they are connected)shall be disseminated to the public through a8vertising
media,public relations,news media,sales media,or any other public means of communication without the prior
written consent and approval of the authors.
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kelth O Reilk MI
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S. The forecasts,projections,or operating estimates contained herein are based on current market con
lIditions,
anticipated short-term supply and demand factors,and a continued stable economy. These forecasts are,
therefore,subject to changes with future conditions. j
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7.
The Americans with Disabilities Act(ADA)became effective January 26, 1992. The appraiser ha�not made a
specific compliance survey or analysis of the property to determine whether or not it is in conformity with the
various detailed requirements of ADA. It is possible that a compliance survey of the property and a detailed
analysis of the requirements of the ADA would reveal that the property is not in compliance with e or more
of the requirements of the act. If so,this fact could have a negative impact upon the value of the p perty.
Since the appraiser has no direct evidence relating to this issue,possible noncompliance with the requirements
of ADA was not considered in estimating the value of the subject property.
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E;cith(�'Rrill� U31
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�UMMARY OF IMPORTANT FACTS AND CONCLUSIONS
lient: Brit Fontenot,City of Bozeman
Owner of Property: City of Bozeman
Date of Valuation: June 22,2009
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ate of Preparation: July 9,2009
tights Appraised: Fee Simple
�egal Description: Lots 15-19 in Block"F"of Rouse's 1 st Addition to Boz man,City of
Bozeman,Gallatin County,Montana.
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ocation of Property: 34 N.Rouse Avenue,Bozeman,MT 59715
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1(mprovements: Currently used as Fire Station One for the City of Bozethan
oning/Governmental: Central Business District(B-3)
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Site Shape and Size: The subject site is rectangular in shape and contains 19,>�75.00sf.
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Environmental: I have viewed the subject site and did not observe a0y suspicious
materials or any situation that would lead me to conclµde that there
were any environmental contamination concerns n�r were any
brought to my attention by the owner of the property or the client.
However, I am not expert in these matters, and rI commend a
professional evaluation if the reader of this report! wants more
reliable information.
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arket Status: The residential real estate market in Bozeman peaked be tween
October of 2005 and February 2006.Like the rest of the Country
residential real estate values have declined.Commercial properties
are starting to feel the effects of tenants not able to affoT d higher
lease prices that were established in late 2004 and 2005.There are
now approximately 13 vacant store fronts in downtown Bozeman
were as in 2005 there were approximately less than 5.
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,Concluded value for each appraisal:
Site Value as Vacant: $650,000 "Market Value"
ales Comparison Approach: $900,000 to$1,250,000"Market Value"
ncome Approach: Not Applicable
1Value in Use: $2,030,000"Value in Use"Current Owner.
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stimated Exposure Time: 6-12 months
Estimated exposure time is based on current sales of
commercial properties within the Bozeman area.The esi imated
exposure time is predicated on the final opinion of value,
Bridge. :\ppidroal,In,:. 10
Leah U Rrdk \f\1
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COPE OF THE APPRAISAL
he scope of work consists of the amount and type of information researched and analyzed in an assi ent.
n preparing the appraisal,I have personally viewed the subject site and improvements and considered ertinent
haracteristics of the site and improvements in comparison to current market standards.I have analyze the subject
eighborhood and competing markets for current sales,cost and lease data.
ocal commercial real estate agents and brokers were consulted with to confirm sales and lease inform tion.The
ftices and brokers include Mike McKenna(McKenna Realty),Dick Stefani(Bozeman Broker Group) Steve Olson
NAl Landmark Reality),Chris Pope(NAI Landmark Reality),Mike Elliot(Grub&Ellis),Kasey Hart(Grub&
llis)and Gene Cook(Gene Cook Real Estate),
viewed the subject property on June 22,2009.
eneral and specific data were obtained through personal and telephone interviews with government ol ficials,
roperty managers,developers,and other market participants.I have considered the highest and best us of the
roperty as if vacant and as improved,and have applied the sales comparison approach and cost appro h valuation
ethods.The results indicated by these methods have been reviewed and reconciled based on the relia ility,
fe levance and reasonableness of the data,and the purpose and intended user of the appraisal.
'f[his is a Summary Report as defined by Uniform Standards of Professional Appraisal Practice under S andards Rule
-2(B).This format provides a summary of the appraisal process,subject and market data and valuatioi analyses.
he information contained in this report is specific to the needs of the client and for the intended use as stated in this
eport.
Bridve, Ahl,i.u�ak Inc. r 11
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DEFINITION OF VALUE IN USE
alue in use is defined as the value a specific property has to a specific person or specific firm as o posed to the
value to persons or the market in general. Special-purpose properties such as churches, school , and public
buildings, which are seldom bought and sold in the open market, can be valued on the basis of valu in use. The
value in use to a specific person may include a sentimental value component.The value in use to a spe ific firm may
be the value of the plant as part of an integrated multiplant operation.Z
PROPERTY RIGHTS APPRAISED
Iroperty rights are ownership interests in real estate and have value. It is important to know what prop rty right(s)
r estate(s)are involved in the appraisal,because the estate identifies the rights being valued.The subj�ct property
fights being appraised are the Fee Simple Interest.
Fee Simple: Absolute ownership unencumbered by any other interest or estate,subject only to the limi ations
imposed by the governmental powers of taxation,eminent domain,police power and escheat.3
eased Fee: An ownership interest held by a landlord with the rights of use and occupancy conveyed b lease to
Ahers.The rights of the lessor(the leased fee owner)and the lessee are specified by contract terms con ained within
he lease.4
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Source. Federal Register,vol.55,August 22,1990,also quoted in the Uniform Standards of Professional Appraisal Practic
The Dictionary of Real Estate Appraisal,4th ed.(Chicago,Appraisal Institute,2002),p.306.
a The Dictionary of Real Estate Appraisal,op.cit.,p. 113.
The Dictionary of Real Estate Appraisal,op.cit.,p. 161.
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Leah l i Reilly M\1
EXPOSURE TIME
Exposure time should not be confused with the marketing period.Exposure time precedes the effective date of the
appraisal.In other words,how long the subject property would be actively marketed prior to the effecti a date of the
appraisal to bring the estimated opinion of market value determined in the appraisal. Marketing time is the period
after the effective date of the appraisal. In other words,how long would it take to sell the subject property,at the
appraised market value,after the effective date of the appraisal?Typically,in a stable market the marketing time and
xposure time should be relatively similar.
ased upon the current market conditions and sales data with the report,I have estimated the exposure ime for the
ubject property to be 6-12 months.
VALUATION DATE
The effective date of the appraisal is June 22,2009.This is the date of valuation and the date that the sL bject
roperty was personally viewed.
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IDENTIFICATION AND HISTORY OF THE SUBJECT
"I he legal description of the subject property is:
Lots 15-19 in Block"F"of Rouse's l st Addition to Bozeman,City of Bozeman,Gallatin County,Mont ina.
Sale History:
he subject property has never been sold or transferred. The property is owned by the City of Bozema .
eference to the ownership is in Deed Book 147,Pg 148.
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he subject property is currently under a purchase agreement with Weston Solutions as stated in the en Tagement
etter of this appraisal.However a purchase price for the subject property has not yet been determined.
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1311d2el .AppialN11,Inr. < 15
Lerth() Red)% XI\1
MONTANA REGIONAL AND CITY MAPS
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SEIG�i:DE _ _
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Subject
BOZEUIIV
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Rndger Appraisals Inc.41C� 17
Keith(YRcilh.MAI
REGIONAL, CITY, AND NEIGHBORHOOD ANALYSIS
The purpose of this section is to identify the pertinent social,economic,governmental and environmental factors
hat affect property value and to analyze their impact on the appraised property's current market value. This
nalysis,begins with regional information and moves to relevant information about the city and the subject's
eighborhood.A neighborhood is defined as a grouping of similar land uses. From an appraisal viewp int,this is
he area where the subject property competes with other properties and where the most comparable in et data is
btained.
Bozeman,Montana is located in Gallatin County,in an area more commonly referred to as the Gallatin Valley.
allatin County is a mountainous area that is located in the southwestern part of the state between Park and Madison
ounties,north of the Montana-Wyoming border and Yellowstone National Park.Gallatin County is the most
pulated and fastest growing county in southwest Montana. In March of 2008 an estimated 87,359 p ple called
Gallatin County home.Gallatin County covers 2,500 square miles of mountainous lands varying in topography and
�limate.Additionally,nearly half of all of the land in Gallatin County is under public ownership by the Gallatin
ational Forest,State of Montana,Bureau of Land Management or the National Park Service.
Bozeman,the county seat for Gallatin County,is located approximately 140 miles to the west of Billings,Montana
d 65 miles to the north of Yellowstone National Park.Bozeman is the fourth largest city in Montana.In 2007,
allatin County's population surpassed that of Flathead County,making it the state's third largest county.
ocial Factors:
ocial influences that affect value include,but are not limited to,population characteristics such as growth,
population density,age distribution,household sizes,employment status,availability of education and 1he quality of
life.
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istoric Population Trends-City of Bozeman,Gallatin County and the State of Montana
kccording to the U.S.Census Bureau,the City of Bozeman's population increased from 22,660 in 199C to 27,509 in
000-an increase of 4,849 people.This represents an increase in population of approximately 21%over a ten-year
eriod,or an average rate of growth of about 2.1%per year. In contrast,the City of Bozeman grew by my 1,015
eople during the 1980s.Between 1980 and 1990,the City's population increased from 21,645 to 22,55 —a 4.7%
Increase over the 10 year period,or an average rate of growth of about 0.47%per year.
Gallatin County's population increased from 50,463 in 1990 to 67,831 in 2000-an increase of 17,368 r eople.This
epresents an increase in population of approximately 34%over a ten-year period,or an average growti rate of 3.4%
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er year.The entire state of Montana grew by 12.9%between 1990 and 2000(799,065 in 1990 and 90 ,195 in
000)with an average growth rate of approximately 1.29%per year.Gallatin County had an estimated 30pulation of
7,359 at the end of 2007 with the State of Montana population estimated at 967,440 at the end of 2008.
City,Cowity and State Historic Population Trends:1900-2000
1900 1910 1 1920 1 1930 11 1940 1950 1 1960 1 1970 1980 1990 1 2000
Bozematt 3,419 5.107 1 6.183 8.855 8,665 11325 13 361 1 S,6-0 21 645 11660 27.509
Gallatin CoxvitV 9,553 14,079 15 864 1 16.124 18'69 21,902 26,045 32 505 4'865 0 463 67,831
State of\iontana 243 329 376,053 545,889 1 537,606 1 559,456 591,024 674,767 694,409 786,,- 99 065 902,195
Population Estimates Census
Geography 2000-2007 I2007 I2006 I2005 ,21004 12003 I2002 12001 April000
Gallatid Count 28.8% 87,359 84,489 80,748 77,472 74733 71,998 70186 67,831
Belgrade 40.5% 8,047 7,642 7,343 7,304 7,050 6,749 6,416 5,728
BozernSn 38.1% 37 981 36 981 35 012 33,576 31824 30,272 29,154 27 50
Manhattan 1 10.4% 1541 1 1557 1 1513 1520 1480 1.438 1428 1396
Three forks 10 9% 1,917 1,925 1,905 1,920 1,854 1,790 1,762 1,728
West Yellowstone 21.9% 1435 1283 1,261 1263 1,241 1.216 1193 1.177
Balancelof Gallatin Cty 20.3% 1 36,438 35101 33,714 31889 31284 30,533 30,233 30,293
Source•U.S Cens:u Brcraiu,PopuGxtion is:in.,x.s Pre�,,rzra
Recent Population Trends-City of Bozeman:
Based upon population estimates from the State of Montana for July 1,2006(35,061 people)and residt ntial
�uilding permit activity in 2006 and 2007,the City's population is estimated to have been approximately 37,530 at
fhe end of 2007. At the end of 2008 the City's population was estimated to be 37,981 which results in i n estimated
�rowth of 451 people or 1.2%during 2008.
urthermore,population projections indicate an average annual compounded growth of 2.4 percent per year in
allatin County between 2006 and 2010.This projection shows that Gallatin County is continuing tooutpace the
ates of state and national growth. The expected strength in population growth in Gallatin County is related to the
onstant influx of residents to the area due to the high quality of life that the county offers.
n addition to population growth,the City of Bozeman continues to grow in geographic size.In order t
accommodate increasing population and business growth,new land for residential,commercial and industrial
Iievelopment continues to be annexed into the City. In 1990,the City was approximately 6,420 acres( 0 square
I iles)in size.By the end of 2007,the City was approximately 12,215 acres(19 square miles)in size. This was a 90
ercent increase in the size of the City in 18 years. However in 2008 the annexation rate has slowed with only 103.5
Gres being annexed into the City.The approximate total size of the City by the end of 2008 was 12,3 1 .5 acres
19.25 square miles). The Bozeman DPCD processed 4 annexation applications in 2008 down from 7 z pplications
n 2007.
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1 90 1991 1992 1993 1994 1995
10.38 0.00 55.92 31.36 11.92 540.14
1 96 1997 1998 1999* 2000 2001
11.50 95S.96 90.04 104.06 632.09 794.06
2 2 2003 2004 2005 2006 2007
222.75 186.58 484.47 444.50 716.80 46S.26
2 O8
103.50
13ozeman is characterized by a smaller portion of families and an average household size somewhat smaller than
allatin County as a whole.Bozeman has an average household size of 2.27 people,while the average iousehold
size for Gallatin County is 2.49 people.Just over half of Bozeman households are families compared to 63%
ountywide.Bozeman also exhibits a significantly lower homeownership rate than the county as a who e,primarily
ue to the student body of Montana State University.
he population of Bozeman is considerably younger than Gallatin County as a whole,and even more so in
omparison to the State of Montana. Again this shows the significant impact of Montana State University on
ozeman and Gallatin County.The estimated median age for Bozeman and Gallatin County residents in 2000 was
A years and 32.9 years respectively.The median age for Montana residents for this time period was 6.4 years.
n general,the City of Bozeman has a significantly higher educational attainment level than Gallatin County or
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Montana.Approximately 47%of Bozeman residents'ages 25 and older have a college degree,compared to 39%for
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Gallatin County and 25%for the State of Montana. Bozeman and Gallatin County have transformed o er the past
decade from a primarily agricultural based community to a tourism related community.The drive to the Bozeman
d Gallatin County area has been due to the high quality of life that this area offers.This quality of lift is due to
ow crime rates,the offering of many cultural experiences and abundant outdoor activities.Having many outdoor
ctivities is due to excellent snow skiing developments,world class fly fishing rivers and streams,miles of hiking
ails and land for almost any other outdoor recreation that comes to mind.
Economic Factors:
Historically,Bozeman has been somewhat different than the rest of the State of Montana and the nation as a whole
conomically speaking.One of the primary reasons of this difference is the fact that there are not a large number of
mployers who employ a significant amount of the population. For example,other areas of Montana,l eke Missoula,
e very dependent on the lumber industry and when the lumber industry slows,Missoula is more I ikely to feel the
,mpact.In contrast,the primary employer in Bozeman is Montana State University.
�he economy of Bozeman and Gallatin County is both broad based and diverse,with 5,194 establishm nts that
employ over 45,000 people.Major sectors of the economy include industries in the areas of constructio i,
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overnment,manufacturing,technology,retail service and agriculture which all play significant roles. The largest
tingle employer in the area is Montana State University(MSU)that employs approximately 3,500 peoy le as
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ermanent faculty/staff and graduate teaching/research assistants.MSU also employs over 2,000 studer is in part-
kime jobs.In the Spring of 2009,the student enrollment at MSU was approximately 11,500.The student body of
MSU has a significant effect on the local economy. Other significant employers in the county include t e State of
wlontana,Gallatin County and the City of Bozeman. As the county's employment base continues to di ersify,the
local economic health will be buffered from a downturn in any of the county's key industries.
verall,economic growth has been much stronger in Bozeman and Gallatin County than statewide;earnings
ncreased 116%over the 1989 to 1998 period but increased only 60%in all of Montana during this per qod. Sectors
n Gallatin County and Bozeman showing the most substantial growth include agricultural services,co struction,
anufacturing,finance,insurance,real estate and lodging.
from March 2008 to March 2009,Montana's non-agricultural employment decreased by 2.2 percent to
pproximately 430,300 employees. The largest decreases were in construction industry,manufacturing industry and
he service/trade industries. During this same time period,the construction industry saw employment decreased by
300 jobs,or 18.9 percent. The largest sectors of employment in Montana for March 2009 was the trade,
ransportation&utilities sector(approx.88,200 employees),government(89,900 employees),education&health
services(63,000 employees),and leisure&hospitality(56,600 employees).Additionally,service proviiiing
industries in Montana contribute 380,600 employees.
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In March 2009,Montana was ranked 10`h in the Nation at a 6.1%unemployment rate.Gallatin County yecorded a
slightly higher unemployment rate of 6.3%in March 2009.Gallatin County's labor force is currently elimated at
50,346 employees. Gallatin County has the third largest labor force in Montana's 57 counties.
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In 2007 the average annual wages in Gallatin County was$32,520,which was above the statewide ave age of
�32,223.Rent levels in Gallatin County have increased significantly over the past ten years,but due to he increase
In inventory rental rates have stabilized and some have slightly declined for residential properties.
�s shown in the table below,residential building permit activity in the City of Bozeman has been stron ever since
991.At the time of the 1990 Census,the City had 9,117 dwelling units in the City limits.By the 2000 Census that
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umber had increased to 11,577 dwelling units. This represents a 27%increase in the City's housing stock in 10
ears. Today,there are approximately 16,942 dwelling units in the City.
Since 1990,single-household units have been the most popular housing type permitted at approximatel 37.15%,
followed by multi-household units at 24.47%.Of the 242 housing units permitted in 2008,38.4%were for single-
household residences, 14.4%for townhomes, 12.4%for duplexes,3,7%for triplexes, 13.2%for fourplc xes, 17.7%
for multi-household units,and 0%for manufactured homes.In 2008 there were no Accessory Dwelling,Units
13rnh�i \pll:,o�ak Inc. ' 21
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ermitted. In 2007 the City issued 764 permits and only 242 in 2008 which results in an approximate 3 %decline.
urthermore,the amount of permits issued in 2008 is similar to the amounts issued in the early 1990s.
1990 1991 199Z I" X994 1995 1996 1997 1'>93 1999 2000 2001 2002 2003120041200512006 200' 20t18 Tocal Pe nt
Single-household 50 101 104 139 130 100 113 98 135 155 158 229 259 215 260 265 257 214 93 3,G'S 37.1 °%o
Townhouse 0 4 4 38 11 53 52 40 35 26 34 0 L
52 70 63 63 71 35 679 8.2
Du lex 2 20 32 50 38 24 46 48 40 56 23 51108 144 141 58 80 30 1,028 13 °'o
Tri lex 3 18 6 0 6 21 21 3 6 3 6 312 45 105 45 33 9 351 4.2Fot lex 12 28 33 24 16 64 24 48 52 136 60 12 44 12032 956 11."Mn1ti-household 0 0 0 30 82 160L376
8 60 116 73 71 146 335 ?81 15� 314 43 2,025 24.
Wnufacturedhome 0 0 0 0 0 E43
7 51 7 0 20 25 36 7 0 0 $ 0 163 1.9
otal 67 171 178 281 283 252 379 499 354 386 503 613 881 955 670 764 242 5,277 100.
Economic Development:
conomic development can also be measured by the amount of new commercial and institutional construction
ctivity within the City. In 2007, a number of major commercial developments were approved and permitted for
onstruction, including: CFT Office Building (71,295sf); City of Bozeman Intermodel Parking Facili (13,578sf);
ostco Gasoline Facility (6,300sf); Social Security Administrative Building (5,399sf); and Ow nhouse Ace
ardware (39,114sf). In total, 321,206sf of new nonresidential buildings were approved and permitted for
onstruction in 2007 including:291,446sf of office;23,593sf of general commercial(including retail)pd hotel;and
,167sf of industrial/warehouse space. The City of Bozeman has seen strong growth in commercial real estate
evelopment in recent years. The following table summarizes the growth in square footage of cominercial, office
nd manufacturing space in the city and suggests an 8.9 percent compound annual growth rate since 2001.
Approved Square Feet of Commercial,Office&Industrial Space
Year Square Feet
2001 412,000
002 490,000 *Note-Figures are rounded to the nearest
003 586,200 hundred square feet.
2.004 362,500
005 649,700
006 630,000
The North 19`h Avenue Corridor has evolved as a significant area of commercial real estate development in
hozeman. In 2007 the following retail stores and restaurants opened along North 19'h Avenue: Sportsman's
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(Warehouse, IHOP, Lowe's, Bed Bath & Beyond, Staples, World Market, and Linen's & Things. Since the
eginning of 2009 Linen's and Things has gone out of business and Sportsman's Warehouse has been organized to
void bankruptcy proceedings.
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t the Montana State University campus a$25 million biology building was completed in 2007 and the new USDA
g Research Building and Teaching Facility ($36.5 million)has began construction and is slated for completion in
010. Other developments to Montana State University in 2006 that had significant development in Bozeman
included a new Molecular Biology Center($458,000), a Health and Physical Education Center($4.9 million), the
lack Box Theater($1.2 million),and the Marsh Laboratory($2.0 million).
iAlso in 2006,several infrastructural projects were completed in the City of Bozeman,including an a dition to Fire
Ptation No. 1 ($3.5 million), police station ($400,000), additions to the water/wastewater treatment plants ($32.2
million) and city hall ($3.0 million). Current projects for 2009 have included the completion of t e Downtown
asking Garage($12 million),the construction of the Fire Station No.3 and Gallatin County 911 Disp tch Center in
ozeman(approximately$7.1 million),a new water reclamation facility($32 million),renovation oft e old City of
Iozeman Library into the new City Hall($2 million),the construction of the Gallatin County Detentio i Center($32
million) and both expansions of the landfill building located at the old landfill ($300,000) and f the vehicle
fmaintenance building/Stream Line bus barn(to be started Summer of 2009).
arket Trends for Single Family Houses in the City Limits of Bozeman
Year Sales Price Range #of Units Sold Avg.List Price Avg.Sales Price
004 $100k to$650k 404 $258,050 $256,092
005 $200k to$650k 468 $299,670 $296,560
006 $200k to$650k 368 $335,655 $330,098
007 $200k to$650k 324 $333,883 $324,913
008 thru Nov 1 $200k to$650k 276 $319,121 $308,434
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he preceding data was supplied by the Southwest Montana MLS.The data shows that the market in B zeman
eaked sometime in late 2005 early 2006.The data also shows increasing values thru 2006 but the mar et values
arted to decline in 2007 and again in 2008.The data suggest the average sales price has declined about 65%but the
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umber of sales dropped about 36%.The data also starts to indicate a larger percentage difference between asking
rice and sales price.
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ourism:
Yellowstone National Park is a significant generator of visitation to Bozeman. Yellowstone visitation ias gradually
ncreased over the years, ranging from 2,752,346 visitors in 2001 to 3,151,342 in 2007. Yellowstone was the first
II__P.S. national park, and with 3,472 square miles of land is larger than Rhode Island and Delaware combined. It
features an active volcano, more than 300 geysers, approximately 290 waterfalls and the 136 square mile
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Yellowstone Lake. Through the National Park Service, the park employs around 380 people year-r and and 800
during its peak summer season. In addition, approximately 3,700 people work for concessionaires o erating such
Services as lodging,foodservice,retail and transportation.
I he Big Sky resort area is located approximately 45 miles south of Bozeman. Skiing Magazine has l sted Big Sky
lis the seventh best skiing resort in the nation and in April 2009 Big Sky was named North America's Favorite
tesort by Onthesnow.com, the internet snow reporting website for the Mountain News Corporation. The area
rages over 300 inches of annual snowfall, with skiing available November through April. In addi ion, Big Sky
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has evolved as more of a year-round destination over the pat several years. Big Sky Resort was conce ved and built
�y the late NBC newscaster,Chet Huntley. It first opened for skiing in 1973. In 1976,Michigan-basei I Boyne USA
Resorts purchased the resort and has owned and managed it since then. Under the management of Boyne USA,Big
Sky Resort continues to grow.
n 1990, the resort invested $18 million in the Shoshone Condominium Hotel and the 46,000-square-foot
ellowstone Conference Center which can accommodate 950 people. In 1995, the Lone Peak Tr�m was built
oisting skiers to 11,150 feet and giving Big Sky one of the nation's largest total vertical drops at 4, 80 feet. Big
ky completed the single largest development since the resort's inception in 2000 when the Summit at Big Sky, a
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uxury hotel condominium complex was constructed. The resort now offers 658 units, including guest ooms,suites,
tudio and condos.
In 2001, Boyne USA announced a 10-year plan which will include$400 million in improvements to t e Village and
Ski terrain at Big Sky. The ski terrain has seen 13 new lifts added since 1988. During the winter se on, the resort
offers winter activities such as snow shoeing and gives skiers/snowboards the opportunity to ski/board over 3,812
Iskiable acres and 150 runs. During the summer season the resort offers many outdoor activities sucl, as mountain
biking and horseback riding. Other activities in the Big Sky area include scenic lift rides, hiking, rock climbing,
ennis, fly fishing and whitewater rafting. In addition, the scenic 18-hole, par 72 Golf Course at Big Sky was
originally designed by Arnold Palmer and has a classic links style, winding along the banks of the Wet Fork of the
ballatin River. The golf course and entire area are populated with beavers,geese, deer, marmot,rainbow trout and
moose. The golf course is also served by the Bunker Bar and Grill and a fully-equipped pro shop. Oi erall the Big
Sky Resort hosts approximately 300,000 skiers per year.
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Another development near Big Sky is the Yellowstone Club, an exclusive vacation/residential development with a
jninimum 7,500 square foot homes, a $250,000 membership fee, and a 5100,000 annual fee. This development
IIncludes private skiing and golfing. In November of 2008,the Yellowstone Club filed for bankruptcy,the effects of
this are not yet known.
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dditional ski areas in Gallatin County include Moonlight Basin near Big Sky with an adjacent condo evelopment,
nd Bridger Bowl, 15 miles to the north of Bozeman. Also, the region's excellent fishing and other outdoor
ctivities generate many visitors to the area. Glacier National Park,located near the northwestern corn r of the state
Iso generates lodging demand in Bozeman due to Bozeman's location between Glacier and Yellows one National
arks. Other attractions in the Bozeman area include the Museum of the Rockies, Emerson Cu tural Center,
merican Computer Museum("Compuseum")and the Pioneer Museum.
The Bozeman Area Convention & Visitors Bureau has organized a Tournament Committee wh ch brings to
f Pozeman ten to twelve amateur sporting events per year. These events are usually held at the fa ilities on the
Montana State University campus or at the Special Events Center in Belgrade, locate seven miles w st Bozeman.
he events typically fill numerous area hotel rooms.
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governmental Factors:
he City of Bozeman is a City Commission/City Manager form of government with an elected Municipal Judge.
Uhese
three entities form the legislative,executive and judicial branches of government.Five commissi Dners,
lected with no party affiliation,make up the City Commission. They are elected to four year,overlap ing terms
nd are part time officials.Terms are staggered,and elections are held every two years.The candidate i iho receives
e most votes in an election becomes the Mayor the last two years of their term.
he Bozeman Police Department consists of 40 sworn officers and six civilian employees.The Bozeman Fire
epartment includes the Fire Chief,Deputy Chief/Training Officer,and Deputy Chief/Marshall,seven Captains and
gighteen firefighters and support staff.There are three fire stations,one located on South 19th Avenue, ne located
n North Rouse Avenue and one being completed on Davis Lane.Both the fire and police protections are considered
ood.
The State of Montana assesses an ad valorem property tax to run public schools and other government E gencies.
There is also a State levied income tax in Montana but there is no sales tax in the State.
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oning Activity:
allatin County administers the zoning code for properties outside the city limits,but within the zoning doughnut.
n general,planning and zoning regulations in the area are considered stringent.The Gallatin County
omprehensive Plan encourages development near existing cities and discourages those in more remote locations.
ozeman's Planning Department enforces zoning regulation within the City Limits.In addition,the City adopted a
`Big Box"ordinance to limit the size and number of big box retailers. Consequently,low supply and h gh demand
ave had a significant impact on real estate values.
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s shown in the table below,the Department of Planning and Community Development processed 20 2oning
pplications in 2008 which is down from 39 zoning applications in 2007.In fact the number of zoning pplications
rocessed in 2008 is a historically low number.Zoning projects include Site Plans,Conditional Use Pei mits;(CUP),
Tanned Unit Development(PUD)Concept Plans and PUD Preliminary Plans.
f Zoning Reviews by Type: 1996-2008
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 200E 2007 2008
Site Plan 24 26 36 24 20 40 40 39 46 53 53 29 14
CUP 6 14 25 12 14 14 12 16 11 14 14 6 5
PLYD Concept Plait 1 4 6 0 1 4 9 5 6 6 6 ? 0
Pfelimimary PUD 1 3 7 3 3 4 6 6 2 7 7 2 1
Total 1 32 1 47 1 74 1 39 1 38 1 62 1 67 1 66 1 65 1 80 1 80 1 39 1 20
In 2008,DPCD also processed 4 Zone Map Amendments(ZMA),2 Master Site Plans, 18 Reuse/Furth r
Development applications,2 Zone Code Amendments(ZCA),3 Variances,3 Appeals, 12 Modifications to
Approved Plans and 22 Informal reviews.
ubdivision Activity:
ubdivision activity has stalled in 2008,In 2008,final plat applications for 61 lots were received(dowy from 861 in
007)and preliminary plat applications for 38 lots were received(1,434 in 2007).Since the beginning f 1996,
pproximately 5,999 new building lots have been created in the City. In 2008,the Department of Plany ing and
ommunity Development processed 15 subdivision applications and 16 subdivision exemption applica ions.Since
he beginning of 1996,616 subdivision applications have been processed.
Subdivision Reviews by Type: 1996 -2008
ff1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 200G 2007 2008
reliniiiiiarylat 219 416 513 333 258 671 700 413 661 1,63 6SS 1,434 38 248 337 278 330 265 1405 343 564 581 495 1,2111 861 11 61
\amber of Loa:1990.200S Final Platinta 'Type:2W8
=005 3 7uw 0'ok
_OOi
•_000
199;
1996
Is9' OF:nalPlat ■Ptel:m:nusPlat
C
0 =00 4DO 600 SW IiAJ 1200 tdOD 160C 159C
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environmental Factors:
environmental factors consist of both natural and man-made features that can influence property values. These
Forces include but are not limited to climate,topography,natural barriers and transportation systems. I
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ozeman's climate reflects its mountain valley location.Bozeman,Gallatin County and the entire State of Montana
ruly have four seasons. Summers are pleasant and characterized by warm to hot days,cool nights and n abundance
f sunshine. Humid conditions are infrequent.The average high temperatures in the summer are in the pper 80s
end the average lows are in the mid 20s to lower 30s.
�he average high and low monthly temperatures for December,January,and February are 34 degrees d 15
d tend degrees,33 degrees and 14 degrees,and 39 degrees and 18 degrees respectively. Springs to come�ate in the
allatin Valley. One third of the annual precipitation of 19.29 inches falls during May and June. The�verage
annual mean snowfall in Bozeman is 72.1 inches and the average length of the growing season is 107 d iys.The
climate of the county varies according to elevation,but it is generally characterized by relatively cold M inters and
warm summers.Typical operation costs that affect real estate are the inclusion of snow removal in the intertime.
Due to the fairly temperate summers,cool air conditioning costs are less;however,heating bills can be high due to
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the cold winter months.
Bozeman is located in Southwest Montana and has access going east and west on U.S. Interstate Highway 90.
Access to the south towards Yellowstone National Park and Salt Lake City is via U.S.Highway 191.Interstate 90,
State of Montana and Gallatin County maintained roads provide access throughout the region and commercial air,
ruck and rail(commercial service only)transportation are adequate. Gallatin Field near Belgrade(seven miles west
of Bozeman)is the second busiest airport in the state and provides adequate service to the region.
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conclusion:
In general,the outlook for Belgrade,Bozeman and the surrounding communities is good.Bozeman's e onomy is
diverse and anchored by Montana State University.As far as the labor market,Bozeman has a young d very well
educated work force.
he quality of life and outdoor activity will continue to be one of the driving factors for population gro h in the
iallatin Valley.Gallatin County has a wide variety of excellent outdoor recreational opportunities. Th re are
ultural and additional recreational resources in Bozeman due to the presence of MSU,and the tourism industry in
outhwestern Montana is poised for continued growth. Current population trends continue in an upwar direction
nd growth has been sustained over the past decade.
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TAXES AND ASSESSMENT ANALYSIS
The State of Montana,through the Department of Revenue,is responsible for valuing all taxable real at d personal
property.Department of Revenue field offices accomplish this property valuation. State guidelines are ollowed to
�nsure property is appraised in a fair and equitable manner.According to the Department of Revenue all three
pproaches to value are considered in the appraisal process.
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The amount of property tax paid is not determined solely by a property's value.The property's value ismultiplied
y a tax rate,set by the Montana Legislature,to determine its taxable value.The taxable value is then multiplied by
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he mill levy established by various taxing jurisdictions—city and county government,school districts 4nd others-to
provide services in the property's area.
The following calculations are used to determine general property tax:
Value x Tax Rate=Taxable Value
Taxable Value x Mill Levy=General Property Tax
he property tax process begins with an appraisal of the property.State law requires the Department of Revenueto
reappraise property periodically.The most recent reappraisal was completed on December 31,2002.
�ach year,the Department of Revenue field offices must certify the taxable value of all properties incoi porated
within the boundaries of each existing tax jurisdiction or school district.This valuation is then submitte J to the
axing jurisdictions and the county commissioners.
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The taxing jurisdictions then set mill levies based on these values and the budget required to provide the necessary
ervices.The levy is calculated by dividing the necessary budget by the taxable value.In addition to local levies,
here are statewide mills mandated by the Montana Legislature to provide school equalization and funding for the
university system.
No taxes are assessed on the subject property due to the owner being a government agency.However the taxes are
listed under Tax No.RGH33774 and are subject to assessment if sold to a non-government agency.
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5ITE DATA AND ANALYSIS
Location: 34 N.Rouse Avenue,Bozeman,MT 59715
Dimensions: See Attached Plat Map
Land Area: 19,875.00sf
Shape: Rectangular
Drainage: Adequate
Flood Zone: Census Tract: 7. The Subject Is Not located in a flood hazard zone.
FEMA Map Number: 300028 0012C. FEMA Map Date: 07/15/88
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Topography: Level
Frontage: Approximately 150' along Rouse Avenue and 130' along Mendenhal Street
Visibility: Good—located on corner of Rouse and Mendenhall
Landscaping: Typical for neighborhood
Site Utility: Good
Off-Site Improvements: Concrete Sidewalks
Street Access: Good
Maintenance: Public
I$urface: Asphalt
(Sewer and Water: Sewer: City Sewer
Water:City Water
tilities: NorthWestern Energy
urb/Gutter: Concrete
Sidewalk: Concrete
Streetlights: Gas
2008 Real Estate Taxes: N/A
Adverse Easements or None noted
Encroachments:
Adjacent Uses: Commercial
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Korth O Rcill� \1\I
SUBJECT PLAT MAP
Subject=
Lots15-19 MENJ DEN HALL STREE ,
' 28, 281 28' =r 286 s ' A' /41 4, 28r
�•' H �T RSSocI E
15 16 17 18J 19 20 21 22 23` 24 25
.'.i9ri 7 FA£a
FlA i J`5 J_pl lg1
`W fkn.
f Y l
F
�31
R
W 14 13 12 11 10 9 I 8 7 6�'r 5 :w 4
I-1
.ten �y3 .. �•• '.
arm
/A2 M9 yg?3c K '
s
A. FM S 3 -
I'% -
99-oB
28, 26, 26, 28' 28' 28 28' i 28' jil • 1 ' !r u
MAIN STREET
F1 F
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�LOOD MAP
IN _ 8cn d St
Icr Lr;
ECG k.ram.1
W _
p
ck
w,1u,n i ,per
6
�pS n E Tama10
'ia�
Q -.
� L " �QG "�tonwoo�du YLa„onwootl S, o
QQfl�aQ�00���� >_-} hamLn
Q �LOSt EE t0'Dr�n�
K.illa� �I jji w
.� anflnonPOaPP� r
QI�DCW Bea �1=1L:zl �1Q ��II,I
_�])]�Q��C=[�x] L1Lstamme5I
C? � ��� D C�'L�I�� M9nae�rthfflllS,�
0
g np p'j)•Ir'It�rl�--+ ��d Bozeman t---�-ti�'(-�4�
ro r!�CaolCuS.HWY�191 �D--�OC7C�fr��C�C7 g¢ g�
�1f�J5Q�r1-9 MCI—l�a❑Q��L
'JOC7t7C]0�❑{iC1�� r�V`E m 4
L.ILIL�J�JI—J�1J1�_'L1LJuSu�'iJa B°'�an PI m ��
00,
00 <z
aIl[7�Q�ODOC ��Q�a
1L�L� u 00 0 0 o� E
uiju �=�0a�� E�Ham on St
11 E Clevela'rid=St 8
Larr�s,
00 C .l1J l..l l..l 11
GWLt aro�aa 1 �A c
U E Lincolln
11 J1 ��11 --U
��
E h�so..- --yy..
Flood2ones SFHA (Flood Zone): Out
AI'eas inundated by000ywr flooding Within 250 ft. of multiple Flood zone? No
Areas outeideofthe 100 and soo year flood Community! 300028
plaine Community Name: BOZEMAN,CITY OF
Areas inundaW by 10oyear flooding Zone:X50 Panel:300028 0012C Panel Date: 07 15/1988
Atom inundabed by looyear flooding wIn FIPS Code: 30031 Census Tract: 0007.00
veloc iy hazard This Flood Report is for the sole benifit of the Customer that ord red nd paid
Fbodwayareas For the Report and is bas¢d on the brooerty information Drovide by t�e
customer.That customers use of this reoort is s biect to the to s agreed by
■ Fbodwayareas wIn Melody hazard that customer when accessing this Droduct.No t:trd party is autt orized to use
or rely on this reoort for anv Duroose.NEITHER FIRST AMERI AN FLOOD
Areas ofundetermined but pose ibieflood DATA SERVICES NOR THE SELLER OF THIS REPORT MA ES ANY
hazard REPRESENTATIONS OR WARRANTIES TO ANY PARTY C NCERNING
Areas not mapped o n any pu ble hod FIRM THE CONTENT ACCURACY OR COMPLETENESS OF THIS REPORT
INCLUDING ANY WARRANTY OR MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE,Neither FAFDS nor the sells of this Reoo
shall have any liability to any third party for any use or misuse of this Report.
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Conclusion:
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The subject site has many attributes that make it ideal to develop to its Highest and Best Use.The topc graphy of the
Fite is level to slightly sloping for adequate drainage. All utilities are in place, NorthWestern Energy supplies
lectricity and natural gas. There is good access via Rouse Avenue and Mendenhall Street. The site also has good
isibility from Rouse Avenue and Mendenhall Street. The site size is typical of sites developed into commercial
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etail or office space.
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ZONING AND GOVERNMENT RESTRICTIONS
- R.2 -
—Z'ftH
' �, �� DAVISjST Oa
E:BEAL
E'L MEE S L7ST"
S 3
T E LAMPAE•ST
E MENDE O
-C> Ulilldl.Ll� T
97
B 3 Zw ST B-2
Subject
-`E BABCOCK ST" 1 i _l Q i' E B'
-- E'CUR ISS•ST.
CUR i53'Sf' 1'�-T
c..� NL
AE KOCH ST_.
�lt ' I IIII �J�II
---BOGERT-PLC
he subject site is zoned by the City of Bozeman as Central Business District(B-3).
IThe intent of the B-3 central business district is to provide a central area for the community's business,government
�ervice and cultural activities.Uses within this district should be appropriate to such a focal center with
appropriate uses being excluded.Room should be provided in appropriate areas for logical and plann d expansion
f the present district.
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�.It is the intent of this district to encourage high volume,pedestrian-oriented uses in ground floor space in the
;`core area"of Bozeman's central business district, i.e.,along main Street from Grand to Rouse and to t�:a alleys one-
half block north and south from Main Street.
Lower volume pedestrian uses such as professional offices may locate on ground floor space in the B-3 area outside
the above defined core.
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�ESCRIPTION OF IMPROVEMENTS
(Since the intended user occupies the subject building and is more familiar with the improvements than�he appraiser,
{he report is not going to detail the improvements.The following are photos taken at the time of viewin�.
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Sample photo of the subject property looking west.
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View of the rear of the Subject looking west.
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View of the front of the subject improvements.
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i Street scene looking south towards Main Street.
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View of the subject mechanical room.
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Sample interior photo of subject building.
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Sample view of the+upper level living quarters.
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Sample view of the upper level livingquarters.
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HIGHEST AND BEST USE
�Iighest and best use is defined in the fourth edition of The Dictionary of Real Estate Appraisal(Appr�isal Institute,
Chicago,2002),as follows:
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The reasonably probable and legal use of vacant land or an improved property, which
is physically possible, appropriately supported, financially feasible, and that results in
the highest value. The four criteria the Highest and Best Use must meet are legal
permissibility,physical possibility,financial feasibility,and maximum productivity.
Highest and best use analysis is a three-step process. The first step involves the highest and best u le of a site as
hough vacant. The determination must be made to leave the site vacant or improve it. If the co elusion is to
improve the site,the second step is to detennine the ideal improvement. The final step is a comparisoi between the
ideal improvement and the existing improvement. At this point, the determination must be made t maintain the
property in its present form or to modify the improvements to more closely conform to the ideal use.
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Highest and best use may be defined as the reasonably probable and legal use of vacant land or improvr d property,
which is physically possible,appropriately supported,financially feasible,and that results in the highes�value.5
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1. Permissible Use.What uses are permitted by zoning and other legal restrictions?
2. Possible Use.To what use is the site physically adaptable?
3. Feasible Use.Which possible and permissible use will produce any net return to the owner of he site?
4. Maximally Productive. Among the feasible uses which use will produce the highest net retutl,(i.e.,the
highest present worth)? I
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'Boyce,op.cit..p 135
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onclusion
ighest and Best Use As Improved:
he highest and best use as improved is to cure the curable depreciation and continue the current use asl afire
tation.The existing improvements are in good condition and still contribute a significant amount of ec�nomic value
o the current owner.
ighest and Best Use As Vacant:
jfhe highest and best use of the Subject as vacant is not consistent with the current use as a fire station. e highest
aI j
nd best use as vacant is for more productive income producing use such as retail and office space.
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Hrid�er \ppi,wais Inw.
Keith r 1 krill\.\1\1
�HE APPRAISAL PROCESS
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Typically,real estate can be valued by applying three approaches.
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Cost Approach: That approach in appraisal analysis that is based on the proposition
that the informed purchaser would pay no more thaq the cost of
producing a substitute property with the same utility as the Subject
i property. It is particularly applicable when the property being
appraised involves relatively new improvements that represent the
Highest and Best Use of the land or when relatively unique or
specialized improvements are located on the site and for which there
exist no comparable properties on the market.6
Sales Comparison Approach: Traditionally, an appraisal procedure at which the narket value
estimate is predicated upon prices paid in actual mark transactions
and current listings; the former fixing the lower limit of value in a
static or advancing market(price wise),and fixing the higher limit of
value in a declining market; and the latter fixing the higher limit in
any market. It is a process of analyzing sales of similar recently sold
properties in order to derive an indication of the most probably sales
price of the property being appraised.The reliability of 1his technique
is dependent upon (a) the availability of comparable sales data, (b)
the verification of the sales data, (c) the degree of comparability or
extent of adjustment necessary for time differences and (d) the
absence of non-typical conditions affecting the sale pric
ncome Approach: That procedure in appraisal analysis that converts anticipated benefits
(dollar income or amenities) to be derived from the wnership of
property into a value estimate. The Income Appro ch is widely
applied in appraising income-producing properties. Anticipated
future income and/or reversions are discounted to a resent worth
figure through the capitalization process.'
In essence,all approaches to value(particularly when th purpose of
the appraisal is to establish market value)are market dat i approaches
since the data inputs are presumably market derived.
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°Boyce,op,cit.,p.67.
6Boyce,op.cir.p.245,255.
'Boyce,op.cit..p. 143
40
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� Iindgtt 1P1�iu�nl>In.. �_ �
Keith t Reuh \1 11
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COST APPROACH
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The Cost Approach is one of the three traditional approaches in valuing real property. This approach i3 based on the
proposition that an informed purchaser would pay no more than the cost of producing a substitute pro erty with the
same utility. The approach represents an alternative course of action available to a purchaser considering the
acquisition of the subject property, i.e., instead of buying the subject property, what would it co srt to build an
improvement offering the same utility?
estimating Market Value for the subject property by use of the Cost Approach involves the following pkocedures:
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a. Estimating value of the site as if vacant and available to be put to its Highest and est
Use.
b. Estimating Reproduction Cost New of the Improvements.
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C. Subtracting the total depreciation, if any, from the reproduction cost new of the
improvements,resulting in an estimate of the depreciated value of the improvements.)
d. Adding site value to the depreciated value cost of the improvements. The sum of these
estimates represents a value indication of the Subject property via the Cost Approach.
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the following pages present data and analysis utilized in estimating the value of the subject prope by the Cost
Approach. 11
$ite Valuation:
The procedure used in estimating site value is direct market comparison, which involves compiling cata on recent
ales of similar sites that are competitive with the subject property. After the sales are gathered,they�re compared
to the Subject as to time,conditions of sale,location and physical characteristics and adjusted for dissimilarities.The
adjusted sale price of the comparables is used to form an indication of the site value for the Subject.
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41
hc11110 Kelly. MAI
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LAND SALE NO. 1
PROPERTY DATA
Grantor: Glenn Badgley Date of Sale:
Grantee: Recording Date:
Location: 716 East Main Recording Doc#:
County: Gallatin Terms: Cash to s ler
Marketing Time: Auctioned Off Property Rights: Fee Simpl
Confirmed By: Keith O'Reilly Price: $1,450,00
i Confirmed With: Phone Number:
i Legal Description: TRACT 4 100X311Y IN SE4NE4 SEC 7 2S 6E IND.SITE
I Tax ID: RGH1330
SITE DATA
Site Size(Acres): 1.008 Dimensions: Irregular
Site Size(SF): 43,900sf Site Topography: Level
Front Ft: About 100' Water: Public
Corner: No Utilities: NorthWest rn Energy
Zoning: B-2 Landscaping: Minimial
Access: Main Street
Price psf: $33.03
NOTES
This property is located on East Main Street adjacent to Lindley Park.The property was put up for a silent auctic n.Bidders
submitted bids and the top three bids then met to discuss the sale.It is my understanding the winning bid was$11450,000 payable in
Icash within 14 days.The subject site contains some land in a wetland area that is probably unusable.
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fin dgel 1p pwl,a>Inc. _
Ken)O Rrilk \]AI
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LAND SALE NO. 2
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PROPERTY DATA
Grantor: Stoneridge Partners LLC Date of Sale: 04/21/200
Grantee: Jayhawk Properties LLC Recording Date: "30/200
Location: N 19th and Oak Bozeman Recording Doc#: 2301303
County: Gallatin Terms: Cash to s ler
Marketing Time: Less than 10 months Property Rights: Fee Simpl�
Confirmed By: Keith O'Reilly Price: $900,000
Confirmed With: Bob Hayes Phone Number: 406-586- 000
Legal Description: Lot 7 of the Final Plat of Stoneridge Square Subdivision,City of Bozeman,Gallatin County,
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Montana.
Tax ID: RGG56125
SITE DATA
Site Size(Acres): .934acres Dimensions: Irregular
Site Size(SF): 40,685sf Site Topography: Level
Front Ft: About 160'along Oak Water: Public
Corner: Yes Utilities: NorthWest rn Energy
Zoning: B-1 Landscaping: Pad Site
Access: N 19th and Oak/Paved
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Price psf: $22.12 Price per acre: S900,000
NOTES
This site is located in Stoneridge Square Subdivision just behind the site purchased by Stockman Bank.Originally the site was
under contract for$975,000 but reduced to$900,000.The site only allows for a 5,000sf retail building.
43
13rndgcr Appraisals Inc.C r
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Keith O'Reilly.MAI
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LAND SALE NO. 3
1
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PROPERTY DATA
Grantor: IQ Development,LLC
Grantee: Snowload,LLC Recording Date: 05/02/200
Location: 801 W Main St.Bozeman Recording Doc#: 2264742
County: Gallatin Terms: Cash to s ler
Marketing Time: Unknown Property Rights: Fee Simpl
Confirmed By: Keith O'Reilly Price: $1,158,00
Confirmed With: Shawn Shahan Phone Number: 406-580- 181
Legal Description: Lots 1-6&Lots 7-12,all of Lot 16 and 20' off of the E side of Lot 17,
all in Blk 2 of Springbrook Addition.
Tax ID: RGG2921
SITE DATA
Site Size(Acres): 1.064 acres Dimensions: Rectangular
Site Size(SF): 46,351 sf Site Topography: Level
Front Ft: Along W.Main St. Water: City
Corner: Yes Utilities: NorthWest rn Enerby
Zoning: B-2 Access: Paved/Go
Price psf: $24.98 Price per acre: $1,088,272
NOTES
The old improvements shown in this photo have recently been razed.
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44
Bridgtr Appraisals Inc.r)
i Frith O'Krilh,MAl
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LOCATION OF COMPARABLE SALES
• .lrlr i'' _vie* ,'I ��' (�'"� _ `
36
WOO
Land Sale 2
I iii►' y � ..
Subject
� ' � •
II "' Land Sale 3 '�
,e tiLQ.Lt9 WUi. I B OZEMA
Pendi g Land
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I I Sale 1
'WE , •J
6% :L J
• � I 1 rT '� r; Gtf fit. G
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l3ndger Appraisals Inc. t
berth O'Rellk,MAI
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.and sales in the CBD are almost non-existent.Land Sale l has not closed and is the most recent pending sale in the
CBD.It is highly unlikely this sale will close;the property is currently being offered for sale.The indicated value
from this sale is$33.03psf;quite frankly I do not believe this sale will close.The indicated value from 1his sale is
$33.03psf x 19,875sf=$656,471.
ale 2 closed and is an odd sale because the site is limited to a 5,000sf building.The overall sales price,ofthis site at
900,000 would bracket the absolute upper end of value for the subject site as vacant.
Land Value Conclusion
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Based on the above analysis,I have reconciled to a site value of$650,000,as of April 22,2009,and subject to the
�imiting Conditions and Assumptions of this appraisal.
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hcnh t 1 R(e111% \LAf
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Reproduction Cost New:
�e next stepin the Cost Approach to Value is estimating the Reproduction Cost New of the Improvements, as of
PP g P
the date of valuation. Reproduction Cost New of the improvements is defined as:
1
P �
The cost of construction at current prices of an exact duplicate or replica using
the same materials, construction standards, design, layout, and quality of
workmanship, embodying all the deficiencies, superadequacies, and
obsolescence of the subject building.b
�eproduction Cost New,then,involves the cost associated in reproducing the exact physical structure ith all items
�f functional and locational obsolescence built-in. The structure and the cost thereof together with accr aed
ilepreciation(functional,locational,and physical)are analyzed,estimated and deducted in the next step of the Cost
pproach.
eproduction Cost New is contrasted to replacement cost which involves the cost associated with repla ing utility,
of the physical structure;therefore,the cost of functionally obsolete components would not be include 1.
keproduction Cost New reflects all ingredients of cost to the most probable,typical purchaser. Specifically,they
include direct,or hard,costs and indirect or soft costs. Direct costs include labor,materials,equipmentiand
pubcontractor's fees and charges. Indirect costs involve such items as contractor's overhead and profit;architectural,
Ongineering and legal fees;taxes and insurance during construction;construction financing cost,etc.
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reproduction Cost New of the Subject is estimated using the Calculator Cost Method in the Marshall and Swift
1 aluation Service.
hosts are classified by class and quality of construction. Buildings typical of a certain quality have many
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pharacteristics in common. For example,a"Good Quality"building will usually have good quality roo ring so
modifications for roof differences on a quality-classified building are seldom necessary.
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Marshall Valuation Service,compiled and published by Marshall and Swift Publication Company of Los Angeles,
California,was used as a source of cost data. Marshall Valuation Service is a cost data manual based or analysis of
the cost of new buildings on a national basis. The costs are updated quarterly via a current cost multipl er compiled
on a regional basis. The costs are further refined to a metropolitan area by use of a local multiplier. Therefore,
urrent cost for the Western United States are modified by a Bozeman,Montana Area multiplier and reported on a
nit or component basis.
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Hrlduel Arpl,11 .ak fnr.
hcitl�t l Rrill� �I�I
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�Ie Marshall Valuation Service has long been recognized as an authoritative source of cost data and h been used
xtensively by the appraisal profession.
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fhe RCN has been estimated using(1)the Marshall Swift Cost Manual,(2)analysis of other constructi n projects.
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The following page contains the cost calculations by Marshall Swift Commercial Estimator.
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hclth )'Rc.lI\ \I\I
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Cost Analysis
Marshall&Swift Multipliers
Marshall&Swift Section: Please Select
No.of Stories Multiplier: 1.000 Local Multiplier. 1.000
Height/Story Multiplier: 1.000 Current Cost Multiplier. 1.000
Perim iter Multiplier: 1.000 Combined Multipliers: 1.000
Building Improvements Cost Section 1 of
Item Unit Type Cost Quantity M&s x To I
Fire station Sq.Ft. $217.90 11,592 1.000 $2,525,897
1.000 $0
1.000 $0
Total Building improvement Costs $2,525,89 r.
Per SF GBA $217.90
Site Improvements
Item U nit Type Cost Quantity Tot I
Hardscape-Lands cape Sq.Ft. $5 10,283 $51,41 5
$0
$0
S
Total Site Improvement Costs $51,41
Subtotal:Building&Site Costs $2,577,31
Per SF GBA $222.33
Soft Costs
Item Percent Type Tot I
Engineering ................................. 0.0% %Building Cost $
Architectural ................................. 0.0% %Building Cost $t)
Permits&Legal ............................................................................................. $75,000
Leasing .........................................................
Total Soft Costs $75,000
Contingency @ 2.0% $51,546
Entrepreneurial Profit 0.0% $0
Total Cast $2,703,858
Per SF GBA $233.26
Cost Allocation
TotalBuilding Costs ............................................................................................. $2,652,
TotalSite Costs ............................................................................................ $51,41
Depreciation
Component Effective Age Life Percent Amou t
Physical Depreciation:Building 30 60 50% $1,326,22
Physical Depreciation:Site 0 1 0% $
Functional Obsolescence Building ................................................... 0% $�0
External Obsolescence Building ................................................... 0% $0
Total Depreciation $1,326,2
Depreciated Value of Improvements $1,377,63.
Per SF GBA $202.
Land Value
LandValue ............................................................................................. $650,0
Other ............................................................................................. $0
CostApproach Value Indication $2,027,63
Rounded $2,030,0
Per SF GBA $175.12
LIDWa SOw m-atmluelnm
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linLl_a Apr,r,usals Ins, t
hrnh(1 kcilh \111
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n addition to using Marshall and Swift,I consulted with Martel Construction on two fire station projec s,one in
ozeman and one in Kalispell.The reported cost including site work was between approximately$220 00psf and
$232.00psf.These costs are very similar to what Marshall and Swift reported.
eveloper's Profit
his factor reflects the profit necessary for the developer to undertake the management, responsibility d risks of
onstruction associated with the subject property. Current valuation theory states that the four components that
reate value are land,labor,capital and coordination. Developer's profit as used in the Cost Approach reflects the
oordination component of value. Typically,developer's profit runs 10%to 20%:I have computed developer's
rofit at 0%of construction costs since fire stations are not typically constructed for speculation.
epreciation Analysis
Depreciation may be defined as any loss of value from any cause.There are three general areas of depreciation:
�hysical deterioration,functional obsolescence and external obsolescence.Depreciation may be curable or incurable,
e test being that money spent to cure the depreciation be gained in value. If the depreciation costs more to fix than
he
be gained in value,then the depreciation is considered incurable.
Physical Deterioration
This results from deterioration from aging and use.This type of depreciation may be curable or incurable.
Functional Obsolescence
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This results from a lack of utility or desirability due to design or market perception of the improvements.This type
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of depreciation may be curable or incurable.
External Obsolescence
This is due to circumstances outside the property itself,such as industry,demographic and economic conditions or
an undesirable proximate use.This type of depreciation is rarely curable.
Obviously all three types of obsolescence are present in the subject improvements for several reasons.Fire stations
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designs and materials have changed since the improvements were constructed,this account for some functional
obsolescence.
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The location of the subject property is more valuable as a retail-office type development,this accounts for some
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external obsolescence.
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Bridger Appiaitiak Inc. _
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The improvements have an effective age of approximately 30 years;however,the improvements are vey well
maintained.
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have thus estimated total depreciation at 50%.For the sake of discussion it is highly likely that the de reciation is
more than 60%and less than 40%.
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�ost Approach Conclusion
based on the analysis detailed on the preceding pages,I have reconciled to a cost approach value of$2,030,000,as
f April 22,2009,subject to the Limiting Conditions and Assumptions of this appraisal. I�
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I �t needs to be clearly noted that the cost approach is not consistent with"Market Value". The cost approach is
Fonsistent with a"Value in Use"to the current owner.
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Bridge, \ppiamdls Inc.
kelth t I Rc,lh M NI
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SALES COMPARISON APPROACH
The Sales Comparison Approach is one of the three traditional approaches to value. It is also referred to as the
Market Data or Market Comparison Approach. It is defined as follows:
That approach in appraisal analysis which is based on the proposition that an informed purchaser
would pay no more for a property than the cost to him acquiring an existing property with the
same utility.
Basic real estate appraisal principles involved in this approach are the principles of substitution, anticipation and
contribution. The 'principle of substitution"is the underlying premise from the Sales Comparison Approach and its
definition is very similar to that of the approach itself. This principle fundamentally states that the value of a
property is influenced to a large extent by the prices being paid in the open market for similar properties offering the
same utility. It is irrational for somebody to pay an amount of money for a property that is greater than the price at
which an equally desirable substitute may be acquired. The market,which is made up of substitute properties,thus
represents alternatives for a prospective buyer and tends to set the range of values.
The "principle of anticipation"states that prices paid for property is a reflection of the market's expectation of future
benefits that accrue from ownership. It follows,then,that if the property is old and nearing the end of its economic
life, or for another reason has a dismal future, the present worth of all future benefits would be considerably lower
than if the property was new and could generate benefits for a longer period of time. The value of real property,
therefore,can be considered the present worth of all future benefits that can be derived from its ownership.
The "principle of contribution"is the underlying rationale for the adjustment process in the Direct Sales Comparison
Approach. This principle views the sale price of real property as the sum of all value contributing characteristics.
The individual characteristics are measured by the effect their presence or absence has on the total sale price. Not
only are their mere presence important,but also the quantity and quality in which they exist.
There are other appraisal principles involved in Direct Sales Comparison, but the three mentioned are considered
most pertinent.
'Boyce,op.cit..p.255.
52
lindger \rq.;<u .ih Inc.
Heidi O R„Ih \1\I
IMPROVED SALE NO. 1
Property Type: Retail-Commercial Date of Sale: Unknown i
Location: 34 North Bozeman Avenue Sale Price: $1,300,000
County: Gallatin Overall Price PSF GSA: $133.44
Y
Grantor: David W.Vaughan
' Grantee: Montana Investment Strategies, Financing: Cash to seller
LLC
Recording Date: 02/26/2007 Marketing Time: Unknown
Recording Doc#: 2257916 Property Rights: Fee Simple
Confirmed With: Mike Basile Phone Number: 406-586-7676
Confirmed By: Keith O'Reilly
Legal Description:So.60ft of Lots 32,33 and So.100ft of Lots 34-38 Block D Original Plat of Bozeman.
SITE DATA
Site Size: 14,000sf Site Topography: Level
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Dimensions: Nearly Square Zoning: B-3
Frontage: North Bozeman Avenue Landscaping: Average
Access: Paved Water: Municipal
Corner: No Utilities: NorthWestern nergy
Parking: Surface Parking
IMPROVEMENT DATA
GBA(SF): 9,742sf Condition: Good
Year Built: 1957 Year Renovated: 1990
Approximately 5,176sf of this building was used as retail space and 4,566sf was used as warehouse s orage space.
Bozeman TV and Appliance was a tenant in the building for years.
I i 53
Bridger Appraisids Ines'
Keith O'Iteil]N MAI
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IMPROVED SALE NO. 2
Property Type: Commercial Land wBuilding Date of Sale: 03/11/2006
Location: 2275 West Koch Street Sale Price: $1,200,000
County: Gallatin Overall Price PSF GBA: $125.55
Grantor: DAK LLC-Kennedy Asking Price: $1,200,000
Grantee: Three Doodaas Inc. Financing: Cash
Recording Date: 03/02/2007 Marketing Time: Less than 12 m
Recording Doc#: 2258382 Property Rights: Fee Simple
Confirmed With: Mike McKenna Phone Number: 406-587-0792
Confirmed By: Keith O'Reilly
Legal Description:Lot 1 of Amended Sub Plat G-22-E of Lot 3A-3 of the Amended Sub Plat G-22- ,bein-a portion
of Block 3,Kirk Sub No.4,City of Bozeman,Gallatin County,Montana. [Plat J-90]
SITE DATA
Site Size: 24,475sf Site Topography: Level
Dimensions: Rectangular Zoning: B-2
Frontage: 23`d Ave Landscaping: Average
Access: Paved Water: Municipal
Corner: Yes Utilities: NorthWestern 1 nergy
Parking: Surface Parking
IMPROVEMENT DATA
GBA(SF): 9,558sf Condition: Fair to Averae
Year Built: 1990 Year Renovated: Not Applicab
This property was used by Vann's TV and appliance since 1990.The building was more or less shell quality after they
moved to the new building.The purchasers renovated about 50%of the building to new office and le the remainder as
warehouse space.
54
Bridger Appraisals Inc.K)
Keith CYReilh,MAI
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LOCATION OF COMPARABLE SALES
(JAV— - �
36
ua-
Ali 2 6Ea
Improved
I ' ' Improved
Compl
Comp 2 n
_'�, _ t;,• Ell
Subject
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- 8 MI-T
B OZEMA�
C.
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Br,dger.Appraisals Inc.r'•
Keith O'Keilk.MAI
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Units of Comparison-Property Valuation:
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1 here are no truly comparable sales to com pare to the subject property.For the purpose of this apprais I I have
identified and analyzed two of properties that are considered the most similar to the Subject.I have con idered
adjustments in the areas of
• Property Rights Sold • Economic Trends(time)
• Financing • Location
• Conditions of Sale • Physical Characteristics
II
Comparable Sale Adjustments
ale 1 is closest in proximity to the Subject,the site is inferior in size and location compared to the Sub ec"s corner
ocation.The size of the improvements are similar when compared to Subject.This property was purch ed close to
he height of the Bozeman real estate market.A negative market condition between 20%and 25%is su ported with
arket data.The indicated value from this sale is$99.75psf to$106.40psf.
ale 2 is located further from the CBD.The property went through a change in use after the sale.Over�111 the site
ize and location size are relatively similar to the Subject.A negative market condition adjustment of approximately
0%to 15%is warranted and equates to$112.50psf to l 06.25psf.
pplied to the Subject this equates to$100.00psf x l 1,685sf=$1,168,500.Rounded to$1,170,000.Du�to some
ecessary retrofitting of HVAC and possible mechanical issues such as separating the electrical from City Hall I
ave made a rough estimate of at least$150,000 and deducted it from the$1,170,000 equals$1,020,00 .
Sales Comparison Approach Conclusion
Based on the above analysis,I have reconciled to a value of$650,000 to$1,020,000,as of June 22,20099 and
subject to the Limiting Conditions and Assumptions of this appraisal.
56
13niecr \pptaiSal�Ini.
FINAL RECONCILIATION
The process of reconciliation involves the analysis of each approach to value.The quality of data appli d and the
significance of each approach related to market behavior and defensibility of each approach are consid Fred and
weighed.Finally,each is considered separately and comparatively with each other.
Value Indications
Cost Approach: $2,030,000"Value in Use"
Land Value: $650,000
Sales Comparison Approach: $650,000 to$1,020,000"Market Value"
Income Approach: Not Applicable
Income Approach
The income approach to value is not applicable due to the fact that no potential purchaser would presenly buy the
subject property based upon a projected income stream.
1
Sales Comparison Approach i
The data from the sales comparison approach for the subject land as vacant and for the property as imp oved is
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average to good.The most difficult part is comparing the Subject to other improved properties.The tw sales that
were analyzed have current or past uses that potentially would work with the subject property. The indicated value
from these two sales was$1,020,000;the site value was estimated at$650,000 indicating an improvement value of
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{only$31.66psf.
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Value Conclusions
have reconciled a range of values between$650,000 if the improvements were razed to$1,020,000 far the subject
roperty if it were to undergo a change in use. The upper end of the range is a best case scenario and assumes that no
xtra costs will be incurred to cure the obsolescence of the subject property.The"Value in Use"of the�ubject
broperty to the current owner is at least$2,030,000,The subject property still contributes a significant amount of
�alue to the current owners.
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57
lin�i�cr \rq,.rs.il,Irn. �
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ased on the data and analyses developed in this appraisal,I have reconciled to the following value cot clusions,as
f June 22,2009,subject to the Limiting Conditions and Assumptions of this appraisal.
Reconciled Value Conclusion: Premise:"As Is"
Estate:Fee Simple
Value Conclusion:$650,000 to$1,020,000"Market Value"
Value Conclusion:$2,030,000"Value in Use"—Current Owt er
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As a result of my investigation and analysis,it is my opinion that the Market Value of the Fee Sin ple Interest,
`As Is",in the subject property,as of June 22,2009,is:
I SIX HUNDRED FIFTY THOUSAND DOLLARS
TO ONE MILLION TWENTY THOUSAND DOLLARS
($650,000 to$1,020,000)
s a result of my investigation and analysis,it is my opinion that the"Value in Use"to the curre t owner of
he Fee Simple Interest,"As Is",in the subject property,as of June 22,2009,is:
TWO MILLION THIRTY THOUSAND DOLLARS
($2,030,000)
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Bridgcr \ppwisal,Ins.
hcrth f� Keili� \Ill
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CERTIFICATION
�s a result of a request for an appraisal assignment of the property,identified as:
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Fire Station One
34 N.Rouse Avenue
Bozeman MT 59715
We certify:
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li o the best of my knowledge and belief,the statements of fact contained in this report are true and corn ct.
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he reported analyses,opinions,and conclusions are limited only by the reported assumptions and limi ing
Fonditions,and is my personal,unbiased professional analyses,opinions,and conclusions.
The appraisal assignment was not based on a requested minimum valuation,a specific valuation,or the approval of a
Joan.
I
h ave no present or prospective interest in the property that is the subject of this report,and I have no personal
interest or bias with respect to the parties involved.
i P
My compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the
cause of the client,the amount of the value estimate,the attainment of a stipulated result,or the occurrence of a
subsequent event.
My analyses,opinions,and conclusions were developed,and this report has been prepared, in accordan'e with the
standards and reporting requirements of and in conformity with the requirements of the Code of Professional Ethics
and the Standards of Professional Practice of the Appraisal Institute,and the Uniform Standards of Professional
Appraisal Practice(USPAP)published and copyrighted by the Appraisal Foundation.
Keith O'Reilly, MAI,has made a personal viewing of the property that is the subject of this report.
No person,other that the appraiser signing this report,provided significant professional assistance to th person
signing this report.
Further,the value reported is based upon cash in U.S.dollars or in terms of similar financial arrangements.
59
lind'ei Inc.
Lrnh�� Kc�lh V\I
P he reported analyses,opinions and conclusions were developed,and this report has been prepared in cionformity
�ith the requirements of the Code of Professional Ethics and the Standards of Professional Appraisal P actice of the
ppraisal Institute.
I
jThe use of this report is subject to the requirements of the Appraisal Institute relating to review by its d ly
futhorized representatives.
I
f s of the date of this report,I,Keith O'Reilly,MAI,have completed the continuing education program of the
1Appraisal Institute.
s a result of my investigation and analysis,it is my opinion that the Market Value of the Fee Sin pie Interest,
As Is",in the subject property,as of June 22,2009,is:
SIX HUNDRED FIFTY THOUSAND DOLLARS
TO ONE MILLION TWENTY THOUSAND DOLLARS
($650,000 to$1,020,000)
s a result of my investigation and analysis,it is my opinion that the"Value in Use"to the curre t owner of
he Fee Simple Interest,"As Is",in the subject property,as of June 22,2009,is:
TWO MILLION THIRTY THOUSAND DOLLARS
j ($2,030,000)
I
espectfully Submitted,
� I
Keith O'Reilly,MAI
General Certified Appraiser#400
State of Montana
60
Bnd,er Appraisals Inc.S!
Keith O'Reilly.MAI
I
ADDENDUM
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th,Art)r,.....of th,,M,,-r d part,iirt7N1°=TH:Thd 61 aid t>!DLU&of IM fw 'wit
catddmalierr of a,c.-,of_O>yR_DOfLIa�.l�r..00hsrc...vtait�aala.,CQRitttd+sz�trlq
fi=md pcia!.ay&add
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m+d camsed.a,d by thp.as+v+h do.__ bortatn.,ell. atlo'J4 r:T[/ 16e
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TOCETHER sith ap arid.rn6vlor the hnaa aid a�MrtieAnoeo i rds ^«
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in equity.of the wd JwL1Atrr4h.brit irwt,of:i.'e io the idd txsn+i,ae.aati si ssyi jwf,Wtf
patul theaea/,uu! the •
TO'HAVE AND TOW61:0 aQ ow-vutw iogrow jA lbr'o m[cf-OKI"
vnla the&aid petty._ of thr wcw.d W and t&U s,.;f"c em so r.a.-*'mwawr'*VU'/o"!w,-
IN WITNESS WHEREOF.The said Pallas of the twit Pert hdiwit Mm*wl: CAQU-..:
hard mid,sat-s the day,mid bier fv,r aio!s,eariifrn. _ -
Signed.Seol.id mid be(roored in the firan,ce of
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STATtt OF NG .INA �•
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beware me_...... >k�R.tlt3tIltilg> t 11�oiMiry;P.a�e ys tna fur iaod
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_ 62
Badger Appraisals Inc.
Keith O'Reilly,MAI
i
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• � - � _ •� _y ._ � � `',may -
D+ �• �, �-; 1Q It r �� ..�}
63
Bridger Appraisals Inc.
Keith('Reilly,MAI
i
Keith O'Reilly, MAI
State of Montana General Certificate#400 Expires 3-31-2010
Qualifications
EDUCATION
• Educated in the Bozeman and Billings Public Schools Systems, Bozeman and
Billings, MT.
• Obtained a B.S. degree in Business Marketing from Montana State University in 1992
APPRAISAL EDUCATION COURSES:
• Successfully completed the following courses and seminars from Appraisal Institute:
Courses from Appraisal Institute Seminars from Appraisal Institute
1 110 Appraisal Principles "The New URAR"
1 120 Appraisal Principles "High Tech Appraisal Office"
1 210 Appraisal Principles "Fundamental of Relocation"
1 410 Appraisal Principles "Understanding Limited Appraisals Residential"
1 420 Appraisal Principles "Understanding Limited Appraisals Gen ral"
310 Basic Income Capitalization "660-Small Hotel/Motel Valuation" j
430 Standards of Professional Standards Part C "620-Mixed Use Valuation Analysis"!
i 510 Advanced Income Capitalization "Appraising Manufactured Housing"
520 Highest&Best Use and Market Analysis "Data Confirmation and Verification Meth ds"
530 Advanced Sales Comparison and Cost Approaches "Partial Interest Valuation-Undivided'
540 Report Writing and Valuation Analysis "Appraisal Review General"
550 Advanced Application "2004 7hr USPAP Update"
• Completed Ted Whitmer's Comprehensive Appraisal Work Shop,Dallas Texas
APPRAISAL EXPERIENCE:
1 have specialized in the appraisals of residential and commercial properties located in Gallatin County,
Montana since May of 1992. My experience includes an apprenticeship with Henry Neils, MAI&Patrick Nolan,
MAI, SRA.. Appraising residential properties including single family, 2-4 family,and condominiums, industrial
sites and buildings, commercial sites and buildings, and insurable value appraisals.
I am a native of Bozeman and have resided in the area for approximately 38 years. I served as a board
member for the Montana Board of Real Estate Appraisers from 2001 -2007 and was the Chairman o the
Screening Panel Committee for the Board of Appraisers.
I have completed work for the following:
American Bank,Wells Fargo Home Mortgage, Country Wide Mortgage, Prudential Relocation, iterstate
Bank,Valley Bank of Belgrade,United States Government General Services Administration,Big Sky
Western Bank,Sterling Savings and Loan, First Security Bank of Bozeman,U.S.Bank,American Federal Savings Bank,
Wells Fargo Bank,Bozeman Deaconess Hospital,Burlington Northern Santa Fe Railroad.
64
Itndger \Ppr,uti.ils InC.
Keith() Redd \1:AI
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From:Brit Fontenot[mailto:bfontenot@13OZEMAMNETI
Sent:Wednesday,May 27,2009 9:07 AM
To:keitho@montanadsl.net
Cc:mike.elliott@grubb-ellis.com;Jason Shrauger
Subject:Fire Station one Appraisal
Keith,
As I mentioned in our phone conversation we would like to contract with Bridger Appraisals fot an appraisal of the
City of Bozeman's Fire Station One. Below is a copy of the letter I am putting in the mail today. Please c ntact me
with any questions.
Regards,
Brit
p CITY OF BOZEMAN
BOZEMAN CITY HALL
121 NORTH ROUSE AVENUE
P.O.BOX 1230
BOZEM,\N,MONTANA 5977t-1230
PHONE(406)582-2258•FAX(406)582-2339
EMAIL bfontenot@bozeman.net `
May 27,2009
Keith O'Reilly,MAI
Bridger Appraisals
PO Box 11115
Bozeman,MT 59719
RE:Appraisal of Fire Station One located at 34 North Rouse Avenue for City of Bozeman
Dear Keith;
Recently the City of Bozeman(City)entered into a Letter of Intent(Lol)agreement with Westo Solutio s for the sale
of both the former City Hall building and the Fire Station One facility and property. As requiredby the LpI and City
ordinance(Ch.2.05.040,BMC),we request that you complete an appraisal on Fire Station One located at 34 North
6/17/2009
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Bridaer.Appraisals Inc.It)
Keith U'Reilh.MAI
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1 Rouse Avenue.
The scope ofrthe appraisal is as follows:
I. A Summary Report as defined by Uniform Standards of Professional Appraisal Practice hinder Stan lards Rule
2-2(B);and
2. To sell the property underlying Fire Station One,the City Commission must,at a public}hearing,co dude the
Fire Station One property is no longer needed.The Commission may base its decision oo the fact thb City will
require complete replacement of Fire Station One prior to final consummation of a sale df that proprty.As
such,,the subject property should be appraised as vacant land less demolition costs.
I
In addition to your normal scope of conducting a commercial appraisal,we would request that You research and
1 analyze the property to include the following provisions:
I
3. Factor a redevelopment effort aggregating the former City Hall facility and Fire Station One as a combined lot;
4. Consider the public right-of-way directed east and west located to the north of the former City Hall facility and
south pf Fire Station One;and
5. Consider shared parking arrangements in conjunction with the former City Hall facility
Prior to begitiing the appraisal process on Fire Station One please contact me to discuss the details of the ost,contract
and timeline.I My cell phone number is 406-579-1302. Finally,please do not hesitate to call Mil a Elliott ith Grubb
&Ellis at 406-599-0466 for further information or clarification on the scope of the requested ap�raisal. Th mk you for
your assistance with this project.
Sincerely,
Brit Fontenot
Assistant to the City Manager
cc: Chris;Kukulski,City Manager
Chuck Winn,Assistant City Manager
JasonjShrauger,Fire Chief
Jame]Goehrung,Facilities Superintendent
Greg Sullivan,City Attorney
Mike Elliott,Grubb&Ellis
I
Brit Fontenot
City of Bozeman
Phone:406-582-2258
6/17/2009
Far:406-582-2�39
I
www man.
Please con ider the environment before printing this email.
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Bridger Appraisals Inc.
Keali U'Reilh_NIA1