HomeMy WebLinkAboutA3. ORD 1939Ordinance 1939 – Agreement to Exchange Land with Help Center, Inc.
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Carolyn Poissant – Manager of Trails, Open Space, and Park Development Mitch Overton – Director of Parks and Recreation SUBJECT: Provisional Adoption of Ordinance 1939 – Agreement to Exchange Land
with Help Center, Inc.
MEETING DATE: May 9, 2016
AGENDA ITEM TYPE: Action (Affirmative Vote of 4/5 of Commission Required)
RECOMMENDATION: Staff recommends the Commission hold a public hearing on the
ordinance, consider this staff memorandum, written and spoken public testimony, and
provisionally adopt by a two-third majority (i.e. four affirmative votes) Ordinance 1939
authorizing the City Manager to sign, upon expiration of the 30 day effective period, the Agreement to Exchange Land and subdivision exemption and to take all additional steps necessary
to exchange property with Help Center, Inc.
RECOMMENDED MOTION: Having conducted a public hearing on the ordinance I find the
exchange of 2,450 square feet of real property with the Help Center Inc. meets the requirements of the Bozeman Municipal Code and the Montana Open Lands Act and hereby move to provisionally
adopt Ordinance 1939 authorizing the City Manager to sign, upon expiration of the 30 day
effective period, the Agreement to Exchange Land and subdivision exemption and to take all
additional steps necessary to exchange property with Help Center, Inc.
BACKGROUND: Ordinance 1939 authorizes the exchange of approximately 2,450 square feet of property with Help
Center, Inc. a 501 (c) 3 non-profit entity. The purpose of the exchange is to address an oversight
regarding Help Center Inc.’s playground that occurred when the City purchased the property from
the Gallatin Valley Land Trust. The City will be obtaining land in the exchange that is of equivalent value and usefulness as open-space land.
I. AUTHORITY TO EXCHANGE REAL PROPERTY
The City Commission has authority over the disposition of property owned by the City pursuant to
Chapter 2.06 of the Bozeman Municipal Code (BMC). This chapter was created by Ordinance 1658 (2006) and later amended by Ordinances 1683 (2006) and 1713 (2007). Section 2.06.870.C,
BMC requires properties to be appraised in an exchange of real property and the property received
in exchange must be of equivalent value. In addition, Sect. 2.06.870.A, BMC allows the City to
exchange real property “that is not necessary to the conduct of city business or the preservation of
its property.”
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Ordinance 1939 – Agreement to Exchange Land with Help Center, Inc.
In addition, the Montana Open Lands Act (the Act) applies. The Bozeman Ponds property was
purchased with funds from Trails, Open Space, and Parks program which is funded using proceeds
of bonds sold under the authority of the Act and as such is subject to the restrictions found in the Act (See 76-6-601 et seq., MCA). Pursuant to 76-6-107, MCA, the City may not convert or divert
open space land “unless the conversation of diversion is: (a) necessary to the public interest; (b)
not in conflict with the program of comprehensive planning for the [city]; and permitted by the
conditions imposed at the time […] by governing body resolution.” In addition, the same section of
state law requires that “other real property of at least equal fair market value and of as nearly as feasible equivalent usefulness and location for use as open-space land must be substituted within a
reasonable period not exceeding 3 years for any real property converted or diverted from open-
space land use. Property substituted is subject to the provisions of this chapter.”
As such, the Commission must make findings under the real property exchange provisions of the Bozeman Municipal Code and under the Montana Open Lands Act. Recommended findings are
addressed below.
II. RATIONALE FOR THE EXCHANGE:
In December of 2013 the Commission adopted Resolution 4494 authoring the funding of $1,045,000 for the Bozeman Ponds Expansion Project. Section 1 of Resolution 4494 authorized the purchase of approximately nine acres of real property for the park expansion. In April of 2014
the City entered into an agreement to sell and purchase the nine acres with the Gallatin Valley
Land Trust. After closing on the purchase, the City learned the existing Help Center Inc.
playground was on land the City purchased. We have been working with the Help Center Inc. since then to address this oversight.
The solution agreed to by City staff and the Help Center Inc. is for the City to quitclaim to the
Help Center, Inc. 2,450 square feet that is the area of the playground in exchange for the Help
Center Inc. to quitclaim the same amount of land to the City to expand the northwestern edge of the Bozeman Pond Park along Fowler Avenue. See proposed Amended Plat of Tract B-1 of the Amended Van Horn Subdivision and Lot 4A of Amended Van Horn Subdivision (included in your
packet immediately following Ordinance 1939). This exchange will allow the multi-use path to be
extended north where it will ultimately connect with Babcock Avenue once additional right-of-
way for Fowler Avenue is obtained. Help Center, Inc. is owner of the subject property housing “Hearts and Homes,” which provides
family court assistance services to citizens of Bozeman and Gallatin County, and as such is an
important partner with the City of Bozeman.
1) Exchange Meets the Requirements of the Bozeman Municipal Code a) The exchange is supported by an appraisal demonstrating the property to be
received by the City is of at least equivalent value as the property to be transferred
by the City. See the section below on the appraisal.
b) As explained below, the property to be exchanged is of equivalent usefulness as open-space land; as such, the property to be quitclaimed by the City is no longer necessary for the conduct of City business. In addition, clarifying ownership of the
land upon which the Help Center Inc.’s playground lies is in the public interest as it
alleviates a potential legal dispute between an important community non-profit and
the City. And the land the City will acquire in the exchange has attributes which will enhance connectivity for users of the Park as the trail along the west side of the
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Ordinance 1939 – Agreement to Exchange Land with Help Center, Inc.
Park can be expanded northward to provide better future connectivity to sidewalks
and bike paths on Babcock Avenue.
2) Exchange meets the Requirements of the Montana Open Space Act a) The exchange is in the public interest. As noted above, in addition to alleviating a
concern regarding ownership and encroachment of the playground and supporting
the stability of the Hearts & Homes program, the City will be acquiring additional
land along the trail on the west side of the Park adjacent to Fowler which will allow
the multi-use path extension to be constructed without re-aligning the Davis ditch. b) The exchange is not in conflict with the Bozeman Community Plan nor any zoning
ordinances. The Help Center property is zoned R3 and park property is zoned R4
and both are shown in the Community plan as residential. Parks and recreational
facility are allowable uses in residential zones. The land exchange is in accordance
with the PROST plan in that the boundary re-alignment is in conformance with the approved park master plan and is acceptable for recreational uses.
c) Resolution 4494 authoring the use of TOP funds for the purchase of this property
does not restrict the City from diverting the land proposed to be exchanged; as such,
in executing the exchange the City must comply with the requirements of the Act.
As long as the Commission adopts findings regarding the above two criteria and replaces the land to be exchanged with land of equivalent usefulness as open space
this requirement of the Act will be met.
d) If the Commission adopts this ordinance, replacement of the land of equivalent
value and usefulness will occur with the property to be quitclaimed to the City by
Help Center Inc. As part of this current transaction, the replacement will occur within the three year period required by the Act.
Adoption of Ordinance 1939 designates the land to be acquired by the City as Open Lands for
purposes of the Act. See Section 2(6) of Ordinance 1939. This means the newly acquired land
cannot be converted or diverted from open space uses except as provided for by the Act.
III. APPRAISAL: The proposed exchange is an equal amount of area and is the same in character, immediately
adjacent to the existing park, and does not change any allowed use of land by the City or Help
Center, Inc. No exchange of money will occur with the exchange of property. Full and equal utility in area of the land is being preserved. Appraisals dated March 30, 2016 indicate the value of the
property owned by Help Center, Inc. is equal to or greater than the value of the City park property
(see Attachment C1-Part 2 pp. 44-45 Help Center Appraisal Report and Attachment C2-Part 2,
p.42 – City of Bozeman Appraisal Report). The Help Center Board has approved the Land
Exchange Agreement without any monetary exchange in recognition of the cost incurred and work performed by the City to execute the Agreement.
III. SUBDIVISION EXEMPTION:
The exchange of real property will be conducted through a boundary relocation as shown on the
proposed amended plat. The Recreation and Parks Advisory Board, by virtue of their recommendation and vote to approve the Site Plan for Bozeman Pond Park Expansion supports the
land exchange.
The Bozeman Pond Park Expansion Site Plan (File Z15073), approved by Commission December
7, 2015, includes the following Condition of Approval:
2. The common boundaries between Lot 4A of the park (Van Horn
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Ordinance 1939 – Agreement to Exchange Land with Help Center, Inc.
Subdivision, 511, T02 S, R05 E, Lot 4A, ACRES 3.43, PLAT E-39-C) and the
Help Center lot [Van Horn Subdivision, S11, T02 S, R05 E, ACRES 0.475,
TRACT B-1 PLAT E-39-B OMALLEY COOK ANNEX) shall be reconfigured
through the applicable subdivision review process to accommodate the project prior to final plan approval.
This Land Exchange Agreement and subdivision exemption will satisfy the above stated Condition
of Approval.
IV. EXCHANGE AGREEMENT: An Agreement to Exchange Land specifying the duties and responsibilities of both parties in the
exchange, including copies of the subdivision exemption and the deeds which will execute the
exchange is attached (Attachment A with exhibits). The subdivision exemption has been reviewed by the Director of Community Development and is ready for printing and signatures. The City
Manager may not sign the exemption until the effective date of Ordinance 1939 has passed.
UNRESOLVED ISSUES: None.
ALTERNATIVES: 1) Approve Ordinance 1939 as presented and recommended.
2) Do not approve Ordinance 1939. We would then engage with the Help Center Inc. regarding the
encroachment of the playground onto City land.
UNRESOLVED ISSUES: None.
FISCAL EFFECTS: The City will pay the recording fee for the amended plat (subdivision exemption) and quitclaim deeds. The survey was provided pro bono to Help Center Inc. by Allied
Engineering of Bozeman.
ATTACHMENTS: Ordinance 1939
Attachment A –Agreement to Exchange Land Attachment B1 and B2 – Quit Claim Deeds
Attachment C1 and C2 - Appraisals
Report compiled on May 2, 2016
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ATTACHMENTS
Attachment A – Agreement to Exchange Land
Attachments B 1 and B2 – Quit Claim Deeds
Attachments C 1 and C2 - Appraisals
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ORDINANCE 1939
Page 1 of 4
ORDINANCE NO. 1939
AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, AUTHORIZING THE CITY MANAGER TO ENTER INTO AN EXCHANGE AGREEMENT FOR THE REALIGNMENT OF A PARK BOUNDARY IN THE VAN HORN SUBDIVISION WITH PRIVATELY OWNED TRACTS, PROVIDING
CONTINGENCIES AND AN EFFECTIVE DATE.
WHEREAS, the City of Bozeman purchased three parcels of land utilizing the 2012
Trails, Open Space and Parks Bond funds as part of the Bozeman Pond Park Expansion Project
approved by Commission under Resolution Resolution No. 4494; and
WHEREAS, one of the parcels is identified as Lot 4a of Tract C of the Van Horn
Subdivision as amended by Plat E-39-A, hereinafter referred to as the “Property”; and
WHEREAS, the City is desirous of adjusting the boundary of the Property to accept an
equal amount of new park area for the park area exchanged in order to preserve useable rear yard area and play equipment belonging to a local non-profit organization that provides services in the
public interest for the City of Bozeman and Gallatin County; and
WHEREAS, Section 2.11 of the Bozeman City Charter requires adoption of an ordinance
when the City “convey[s]… or authorize[s] the conveyance… of any lands of the city”; and
WHEREAS, Section 2.06.850 of the Bozeman Municipal Code (BMC), grants the City
Commission the jurisdiction and power to receive property by donation or exchange; and
WHEREAS, Section 2.06.870 of the Bozeman Municipal Code (BMC), grants the City Commission the jurisdiction and power to exchange any real property, however acquired,
belonging to the City that is not necessary to the conduct of city business or the preservation of
city property; and
WHEREAS, Section 2.06.880, BMC, states, “When the City Commission, after a public hearing, has determined by a two-thirds vote of all the members, that any real property owned by
the city is not needed for public use, or that the public interest may be furthered, the City may
sell such property by… exchange…” and
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ORDINANCE 1939
Page 2 of 4
WHEREAS, Section 2.06.880, BMC, also states, “Notice of …exchange… shall be published as provided in MCA 7-1-4127”; and
WHEREAS, as the exchange of the Property is of identical size with the property the City
will receive and is immediately adjacent to the existing park, of equal utility, and no money will
be exchanged; WHEREAS, the appraised value of the property owned by Help Center, Inc. is equal to or
greater than the City park property being exchanged; and
WHEREAS, Help Center, Inc. has executed an agreement for the exchange of the Property subject to City Commission ratification of the City Manager’s signature; and
WHEREAS, the agreement to exchange the Property is attached to this Ordinance as
Attachment A; and
WHERAS, should the Bozeman City Commission provisionally adopt this ordinance by no less than a two-thirds vote of its total membership, notice of provisional adoption of this
ordinance shall be published in compliance with Sect. 7-1-4127, MCA, prior to final adoption.
NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA: Section 1
The Bozeman City Commission finds that: 1. The exchange of the Property as shown on Exhibit A to the Exchange Agreement will have no adverse effect on the public’s use of Bozeman Pond Park and will further the
public interest because the exchange of the Property and related relocation of common
boundaries will aid in the continued provision of support services to City residents.
2. The land exchanged is of identical size, immediately adjacent to the existing park, and of comparable value and utility for all public uses. 3. As the exchange provides an equally functional park space the land to be deeded to Help
Center, Inc. is no longer needed for City purposes.
4. The land exchange is not in conflict with the program of comprehensive planning for the
area. 5. The land exchange is permitted by the conditions imposed when the open-space land was acquired.
Section 2 The property acquired by the City pursuant to the Exchange Agreement is subject to the Open-
Space Land and Voluntary Conservation Easement Act, 76-6-101 et seq., MCA.
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ORDINANCE 1939
Page 3 of 4
Section 3 The Bozeman City Commission hereby authorizes the City Manager to sign the attached
Exchange Agreement. In doing so, the Commission authorizes, subject to fulfillment of the
contingencies as stated in the attached Exchange Agreement and those contingencies listed
below, the conveyance of the Property to the Help Center, Inc.: 1. The exchange must be of the same amount of land area to both parties.
2. The exchange shall be enacted by the approval of an amended plat by the Director of
Community Development in substantially the same form as attached to the Exchange
Agreement and the recording of the amended plat. 3. Help Center, Inc. shall pay the Subdivision Exemption filing fee and all closing costs and recording fees.
4. The City Manager may not sign the Exchange Agreement until 30 days after final
adoption of this ordinance; as such, the Exchange Agreement shall not be binding on the
City until such time and until completion of all included contingencies. 5. The exchange shall close as stated in the agreement.
Section 4
Repealer.
All provisions of the ordinances of the City of Bozeman in conflict with the provisions of
this ordinance are, and the same are hereby, repealed and all other provisions of the ordinances
of the City of Bozeman not in conflict with the provisions of this ordinance shall remain in full force and effect.
Section 5
Savings Provision. This ordinance does not affect the rights and duties that matured, penalties that were
incurred or proceedings that were begun before the effective date of this ordinance. All other
provision of the Bozeman Municipal Code not amended by this Ordinance shall remain in full force and effect.
Section 6
Severability.
That should any sentence, paragraph, subdivision, clause, phrase or section of this
ordinance be adjudged or held to be unconstitutional, illegal, or invalid, the same shall not affect
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ORDINANCE 1939
Page 4 of 4
the validity of this ordinance as a whole, or any part or provision thereof, other than the part so decided to be invalid, illegal or unconstitutional, and shall not affect the validity of the Bozeman Municipal Code as a whole.
Section 7
Codification Instruction.
The provisions of this Ordinance shall not be codified in the Bozeman Municipal Code;
rather, this Ordinance shall be maintained by the City Clerk in an indexed file of all Ordinances
not to be codified.
Section 8
Effective Date.
This ordinance shall be in full force and effect 30 days after final adoption.
PROVISIONALLY PASSED by the City Commission of the City of Bozeman,
Montana, on first reading at a regular session held on the 9th day of May, 2016.
____________________________________
CARSON TAYLOR, Mayor
FINALLY PASSED, ADOPTED AND APPROVED by the City Commission of the
City of Bozeman, Montana on second reading at a regular session thereof held on the ___ day of
______________, 2016. The effective date of this ordinance is _________________ __, 2016.
_________________________________
CARSON TAYLOR, Mayor
ATTEST:
_______________________________
Robin Crough, City Clerk APPROVED AS TO FORM:
_________________________________ GREG SULLIVAN, City Attorney
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339
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AMENDED PLAT OFTRACT B-1 OF AMENDED VAN HORN SUBDIVISION (E-39-B) AND LOT 4A OF AMENDED VAN HORN SUBDIVISION (E-39-C),LOCATED IN THE SOUTHWEST ONE-QUARTER OF SECTION 11,TOWNSHIP 2 SOUTH, RANGE 5 EAST, PRINCIPAL MERIDIAN,CITY OF BOZEMAN, GALLATIN COUNTY, MONTANAOWNERS: TRACT B-1; Help Center Inc. and LOT 4A; City of BozemanPURPOSE: TO REALIGN A COMMON BOUNDARY BETWEEN 2 LOTS IN A PLATTED SUBDIVISIONSHEET1 OF 1Civil EngineeringGeotechnical EngineeringLand Surveying32 DISCOVERY DRIVEBOZEMAN, MT 59718PHONE (406) 582-0221FAX (406) 582-5770www.alliedengineering.comCERTIFICATE OF SURVEYORCONSENT OF MORTGAGEECERTIFICATE OF GOVERNING BODYCERTIFICATE OF DIRECTOR OF PUBLIC WORKSCERTIFICATE OF COUNTY TREASURERCERTIFICATE OF CLERK AND RECORDERAREA TABLETOTAL AREA=3.91 acresLEGAL DESCRIPTIONCERTIFICATE OF EXEMPTION FROM SUBDIVISION REVIEW ANDEXCLUSION FROM D.E.Q. REVIEWRELOCATION OF COMMON BOUNDARY NOTEBASIS OF BEARING, COORDINATESDRAFT341
After recording, please return to:
The City of Bozeman
PO Box 1230
Bozeman, Montana 59771
QUIT CLAIM DEED
FOR ADEQUATE CONSIDERATION, HELP CENTER, lNC. a Montana non-profit
corporation whose address is 421East Peach Street, Bozeman, MT 59715 as Transferor, does
hereby convey, remise, release, and forever quitclaim unto the CITY OF BOZEMAN, a
municipal corporation, whose mailing address is P.O. Box 1230, Bozeman, MT 5977'1, as
Transferee, the following described real property located in Gallatin County, Montana, to wit:
Lot 1 of the Amended Plat of Tract B-1 of the Amended Van Horn Subdivision (E-39-B)
and Lot 44 Amended Van Horn Subdivision (E-39-C) ), located in the city of Bozeman,
Montana according to the official survey thereof on file and of record in the office of the
County Clerk and Recorder, Gallatin County, Montana,
TOGETHER WITH all the tenements, hereditaments, and appurtenances thereto
belonging, and the reversions, remainder and remainders, rents, issues, and profits thereof; and
possession, claim and demand whatsoever as well in law as in equity of the Transferor.
TO HAVE AND TO HOLD, unto the said Transferee, its successors and assigns,
forever.
DATED this A { day of Q#, / ,2016.
HELP CE
Signature
ay:4.HErsTtNrT-
Printed name and title
srArE or NLnd(tl'tw
:SS
county a O,,U\ilatle
on this ?-l*arv ot ,2016 Notary Public
in,and for said State, personally
of HELP CENTER, lNC. a Montana corporation,
known to me to be the person whose name is subscribed to the
acknowledged to me that said corporation executed the same.
seal
n instrument and
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After recording, please return to:
Help Center, Inc. 421 East Peach Street
Bozeman, Montana 59715
QUIT CLAIM DEED
FOR ADEQUATE CONSIDERATION, the CITY OF BOZEMAN, a municipal corporation,
whose mailing address is P.O. Box 1230, Bozeman, MT 59771 as Transferor, does hereby
convey, remise, release, and forever quitclaim unto the HELP CENTER, INC. a Montana non-
profit corporation whose address is 421 East Peach Street, Bozeman, MT 59715, as
Transferee, the following described real property located in Gallatin County, Montana, to wit:
Lot 2 of the Amended Plat of Tract B-1 of the Amended Van Horn Subdivision (E-39-B)
and Lot 4A Amended Van Horn Subdivision (E-39-C) ), located in the city of Bozeman,
Montana according to the official survey thereof on file and of record in the office of the
County Clerk and Recorder, Gallatin County, Montana,
TOGETHER WITH all the tenements, hereditaments, and appurtenances thereto
belonging, and the reversions, remainder and remainders, rents, issues, and profits thereof; and
possession, claim and demand whatsoever as well in law as in equity of the Transferor.
TO HAVE AND TO HOLD, unto the said Transferee, its successors and assigns,
forever.
DATED this _______ day of ___________________, 2016.
CITY OF BOZEMAN, a Montana Municipal Corporation
____________________________________________
Signature
By: _________________________________________
Chris A. Kukulski, City Manager
STATE OF ___________________
:ss
County of ____________________
On this __________day of _____________________, 2016 before me, a Notary Public
in and for said State, personally appeared ________________________,
______________________ of HELP CENTER, INC. a Montana non-profit corporation,
known to me to be the person whose name is subscribed to the within instrument and
acknowledged to me that said corporation executed the same.
seal ________________________________________
Printed Name:_____________________________
Notary Public for the State of _________________
Residing at:_______________________________
My commission expires:_____________________
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AN APPRAISAL OF
THE HELP CENTER SITE
3316 WEST BABCOCK STREET
IN BOZEMAN, MONTANA
DATE OF VALUATION
MARCH 30, 2016
FOR
CAROLYN POISSANT
CITY OF BOZEMAN
BY
J. MICHAEL JOKI, MAI, SRA
HELENA, MONTANA
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J. MICHAEL JOKI, MAI, SRA
P.O. BOX 281
HELENA, MONTANA 59624
Phone (406) 442-2159
April 5, 2016 FAX (406) 442-6196
Carolyn Poissant, MLA, AICP
Manager of Trails, Open Space and Parks Design
City of Bozeman-Department of Parks and Recreation
P.O. Box 1230
Bozeman, Montana 59771-1230
RE: An appraisal of the Help Center site addressed at 3316 West Babcock Street in Bozeman, Montana.
Dear Mrs. Poissant:
Per your request I have made the necessary inspection and analysis to appraise the above referenced
property. The attached report provides the essential data and detailed reasoning employed in my final value
estimate. The report contains45 pages.
I have appraised the property as a whole, owned in fee simple and unencumbered. I assume no
responsibility for matters that are legal in nature nor do I render any opinion as to title.
The site being appraised is a 20,695 SF site improved with the building that houses Help Center,
INC. The City of Bozeman owns the adjoining site to the south and is attempting a land swap with this site.
No building improvements are impacted by this project therefore they are not valued in this appraisal
report. Only the estimated market value of the underlying site is given.
The value reported is qualified by certain definitions, assumptions and limiting conditions, and
certification which are set forth within the attached report. This appraisal report is intended to conform with
the Uniform Standards of Professional Appraisal Practice.
Based on my analysis, the market value of the subject site as set forth, documented and qualified in
the attached report under conditions prevailing on March 30, 2016 was:
One Hundred Thousand Dollars
$100,000
I direct your attention to the data, discussions and conclusions which follow.
Respectfully submitted,
J. Michael Joki, MAI, SRA
Montana State Certified
General Real Estate Appraiser #152
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I CERTIFY THAT...
1. The statements of fact contained in this report are true and correct.
2. The reported analyses, opinions, and conclusions are limited only by the reported Assumptions and
Limiting Conditions, and are my personal, impartial, and unbiased professional analyses, opinions,
and conclusions.
3. I have 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.
4. I have performed no services, as an appraiser or in any other capacity, regarding the property that is
the subject of this report within the three-year period immediately preceding acceptance of this
assignment.
5. 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. This appraisal assignment was not based
on a requested minimum valuation, or a specific valuation.
6. My analysis, opinions and conclusions were developed, and this report has been prepared, in
conformity with The Uniform Standards of Professional Appraisal Practice, and with the
requirements of the Code of Professional Ethics and the Standards of Professional Practice of the
Appraisal Institute.
7. The use of this report is subject to the requirements of the Appraisal Institute relating to the review
by its duly authorized representatives.
8. As of the date of this report, I, J. Michael Joki, have completed the requirements of the continuing
education program of the Appraisal Institute.
9. I have made a personal inspection of the property that is the subject of this report and have afforded
the owner, or their representative, the opportunity to accompany me on the inspection.
10. I have personally inspected and verified the comparable sales relied upon in making this appraisal.
11. No one provides significant real property appraisal assistance to the person signing this certification.
12. I have the necessary level of knowledge and experience to credibly estimate the value of the subject
property, or have taken reasonable steps to achieve such competency and to provide a professional
appraisal of the subject property, in accordance with the Uniform Standards of Professional
Appraisal Practice.
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13. I am currently licensed in the State of Montana (Certificate #152) as a Certified General Real Estate
Appraiser, and hold the MAI and SRA designations conferred by the Appraisal Institute.
DATE: March 30, 2016 SIGNATURE:
Appraised By: J. Michael Joki, MAI, SRA
Certified General #152
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5
J. Michael Joki, MAI, SRA
HELENA, MONTANA
ASSUMPTIONS AND LIMITING CONDITIONS
This is to certify that the appraiser in submitting this statement and opinion of value of subject property
acted in accordance with and was bound by the following principles, limiting conditions and
assumptions. Unauthorized use of this report is set forth below.
1. No responsibility is assumed for matters that are legal in nature nor is any opinion rendered on
title of property appraised.
2. Unless otherwise noted, the property has been appraised as though free and clear of all
encumbrances.
3. All maps, areas, plans, specifications, and other data furnished your appraiser were assumed to
be correct. No survey of the property was made by this firm. Furthermore, all numerical
references to linear measurements, area, volume or angular measurements should be assumed to
be "more or less" (+/-) and are accurate to a degree consistent with their use for valuation
purposes.
4. This appraisal considers only surface rights to the property with consideration of current zoning
and land use controls. The estimate of highest and best use will form the basis for the value
estimate. This appraisal does not consider mineral, gas, oil or other natural resource rights that
may be inherent in the ownership of the property.
5. In this appraisal assignment any potentially hazardous material found on the land which may or
may not be present on the property, has not been considered. The appraiser is not qualified to
detect such substances. Any interested party is urged to retain an expert in this field if there is
any question regarding such potentially hazardous material. If such material or substance is
present it could adversely affect the value reported.
6. The appraiser is not a seismologist. This appraisal should not be relied upon as to whether a
seismic problem exists, or does not actually exist on the property. The property which is the
subject of this appraisal is within a geographic area where earthquakes and other seismic
disturbances have previously occurred and where they may occur again. Except as specifically
indicated in the report, no seismic or geologic studies have been provided to the appraiser
concerning the geologic and/or seismic condition of the property. The appraiser assumes no
responsibility for the possible effect on the subject property on seismic activity and/or
earthquakes. I have not made a specific compliance survey and analysis of this property to
determine whether or not it is in conformity with any seismic requirements by the City or
County. It is possible that a survey of the property could reveal that the property does not meet
the required seismic requirements. If so, this fact could have a negative effect upon the value of
the property. Since I have no direct evidence relating to this issue, I did not consider possible
noncompliance requirements in estimating the value of the property.
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7. All data contained in this report and in the appraiser's files, as obtained from other sources, upon
which to any degree the opinions and conclusions were based, are considered reliable and
believed to be true and correct. However, the appraiser does not assume responsibility for the
accuracy of such items that were obtained from other parties.
8. There shall be no obligation to give testimony or attendance in court by reason of this appraisal
with reference to the property in question unless arrangements have been previously made and at
an additional fee.
9. Disclosure of the contents of this appraisal report is governed by the by-laws and regulations of
the Appraisal Institute.
Neither all nor any part of the contents of this report especially the conclusions as to value, the
identity of the appraiser, or the firm with which he is connected, or to the MAI and SRA
designations, shall be disseminated to the public through advertising media, news media, public
relations media, sales media, or any other public means of communication without the prior
written consent of the appraiser.
10. J. Michael Joki, MAI, SRA, specifically does not authorize the out-of-context quoting from or
partial reprinting of this appraisal report.
11. The liability of J. Michael Joki, MAI, SRA and employees is limited to the client and to the fee
collected. Further, there is no accountability, obligations or liability to any third party. If this
report is placed in the hands of anyone other than client, the client shall make such party aware
of all limiting conditions and assumptions of the assignment and related discussions. The
appraiser assumes no responsibility for any costs incurred to discover or correct any deficiencies
of any type present in the property; physically, financially, or of a legal nature.
12. The fee for this appraisal report is for the service rendered and not for time spent on the physical
report or for the physical report itself.
13. This appraisal report is prepared for the appraisers’ client the City of Bozeman. It is my
understanding the City of Bozeman is working with Help Center, INC to conduct a land swap of
two adjoining parcels. No third parties are authorized to rely upon this report without the
express written consent of the appraiser.
14. This Appraisal Report is intended to comply with the reporting requirements set forth under
Standard Rule 2-2(a) of the Uniform Standards of Professional Appraisal Practice for an
Appraisal Report. As such, it presents discussions of the data, reasoning, and analysis that were
used in the appraisal process to develop the appraiser’s opinion of value. Supporting
documentation concerning the data, reasoning and analysis is contained in the appraiser’s file.
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SUMMARY OF IMPORTANT FACTS AND CONCLUSION
PURPORTED OWNER: Help Center, INC.
LOCATION OF PROPERTY: This site is located on the east side of Fowler
Avenue and just south of West Babcock Street in
Bozeman, Montana. The site is addressed 3316
West Babcock Street.
LAND SIZE: 20,695 SF
IMPROVEMENTS: This site is improved with a single family
residence that was constructed in 1979 but now
houses Help Center, INC., a privately operated
nonprofit corporation.
PROPERTY RIGHTS APPRAISED: Fee Simple
ZONING: R-3 (Residential Medium Density District)
PRESENT USE: Supports the building improvements housed by
Help Center, INC
HIGHEST AND BEST USE IF VACANT: In support of a multi-family building that has 4 to
6 units.
DATE OF VALUATION: March 30, 2016
CONCLUDED ESTIMATE OF
MARKET VALUE $100,000
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SUBJECT PROPERTY PHOTOGRAPH
Looking south at the subject property from the driveway.
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DEFINITION OF MARKET VALUE
Market value, as used in this report is defined as follows:
“The most probable price, as of a specified date, in cash, or in terms equivalent to cash, or in other
precisely revealed terms, for which the specified property rights should sell after reasonable exposure in a
competitive market under all conditions requisite to a fair sale, with the buyer and seller each acting
prudently, knowledgeably, and for self-interest, and assuming that neither is under undue duress.”1
Implicit in this definition is the consummation of a sale as of a specified date and the passing of
title from seller to buyer under conditions whereby:
1. Buyer and seller are typically motivated;
2. Both parties are well informed or well advised, and acting in what they consider
their own best interests;
3. A reasonable time is allowed for exposure in the open market;
4. Payment is made in terms of cash in US dollars or in terms of financial
arrangements comparable thereto; and
5. The price represents the normal consideration of the property sold unaffected by
special or creative financing or sales concessions granted by anyone associated with
this sale.
PURPOSE OF THE APPRAISAL
The purpose of this appraisal report is to arrive at a supportable estimation of the market value.
1 The Appraisal of Real Estate, 12th Edition, (Appraisal Institute, 2006), p. 22.
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INTENDED USE OF THE APPRAISAL AND INTENDED CLIENT
It is understood that the intended use of this appraisal report is to assist the City of Bozeman in
a land swap with the Help Center, INC site which is the adjoining property. The client is the City of
Bozeman, and the intended users of the appraisal report are the City of Bozeman, Montana and Help
Center, INC.
SCOPE OF THE APPRAISAL
The scope of this assignment includes a personal inspection of the subject site, reviewing public
record information concerning the site and other properties in the immediate neighborhood.
Initially I spoke with Carolyn Poissant from the City of Bozeman- Department of Parks and
Recreation. Carolyn Poissant explained the City of Bozeman is attempting to do a land swap with the
Help Center, INC site that is directly north of the land owned by the City of Bozeman. Apparently some
of the fencing and site improvements owned by the Help Center are located on Lot 4-A that is owned
by the City of Bozeman. These two parties are attempting to do a land swap so the site improvements
owned by the Help Center do not have to be relocated and in exchange the land in the northwest corner
of the Help Center site would be given to the City of Bozeman to create better access to their land
which is now known as Bozeman Ponds Park. An illustration depicting the approximate areas to be
swapped was provided to me by Carolyn Poissant and is included in the addenda. Also shown on this
illustration is the location of the well that serves the building improvements on the Help Center site
which is located on the land owned by the City of Bozeman. Reportedly this well was drilled and put in
service many years before the City of Bozeman purchased their land. Is my understanding an easement
will be granted by the City of Bozeman to Help Center, INC so use, access and maintenance can
continue on this well in the future. I have been asked to estimate the market value of both sites so each
party can be appropriately compensated for the land that will be included in the proposed land swap.
I inspected the subject property on March 30, 2016. I was provided the contact information for
Christina Powell who is the Director of Hearts and Homes which is the entity currently operating at the
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subject property. Christina Powell was not available therefore Sylvia Meegard met me on site and was
able to answer a number of questions I had concerning the subject property. March 30, 2016 is the day I
completed my property inspection and is also the day I took all photographs of the subject property.
Real estate agents, local MLS Service, developers and appraisers in Bozeman were interviewed in
an attempt to find relevant market data. Market data has been confirmed with the buyer, seller or broker
involved in the transaction. All of the comparable sales utilized in this appraisal report are described in
the body of the report and in more detail on the sales sheets included in the addenda. All known,
available, relevant market data considered to have an impact on the market value of the subject site has
been considered.
As identified under Assumptions and Limiting Conditions and as explained under Property
Rights Appraised the title is assumed to be free and clear of liens and encumbrances.
The Scope of Work defines an appraiser's conclusions as to what is deemed necessary to provide
a creditable appraisal report. The client is defined as the City of Bozeman. The intended user is the
client, and the intended use will be to assist the City of Bozeman with a land swap involving the Help
Center, INC site. The following sources provided me data that was used in this appraisal report.
• Gallatin County Clerk and Recorder's Office
• City of Bozeman Planning Department
• Andrew Boughn, City of Bozeman Planning Department
• Keith O’Reilly, MAI, Appraiser
• Ed Jackson, Appraiser
• Mike McKenna, Realtor
• Kim Meyer, Realtor
• Donnie Olson, Realtor
• Sue Frye, Realtor
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SUMMARY OF APPRAISAL PROBLEM
It is my understanding the City of Bozeman is attempting to complete a land swap with the Help
Center, INC because some of the site improvements on the Help Center, INC site are currently
encroaching on land owned by the City of Bozeman. Also, the City of Bozeman is trying to gain better
access to their land which now functions as Bozeman Ponds Park. In their opinion better access can be
gained to the park land from the northwest corner of the Help Center, INC site. I have been asked to
estimate the current market value of both sites so the land owners can be appropriately compensated for
their land involved in this proposed swap.
PROPERTY RIGHTS APPRAISED
This appraisal is made with the understanding and assumption that present ownership of the
subject property includes all rights that may be lawfully owned, and is therefore, title in fee simple as of
March 30, 2016. A fee simple estate is subject only to the limitations imposed by the governmental powers
of taxation, eminent domain, police power and escheat.
IDENTIFICATION OF PROPERTY AND LEGAL DESCRIPTION
The site that is the subject matter of this appraisal report consists of 20,695 SF and is addressed
3316 West Babcock Street in Bozeman, Montana. The legal description of the land involved is as
follows:
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“Tract B-1 of the Amended Subdivision Plat of Tracts A and B of the Amended Van Horn
Subdivision, located in the SW ¼ of Section 11, Township 2 South, Range 5 East, PMM, City of
Bozeman, Gallatin County, Montana, as shown on file on the Plat E-39-B.”
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HISTORY OF THE PROPERTY
As shown on the Quit Claim Deed in the addenda the last transfer concerning this
property was on July 25, 2013 wherein Hearts and Homes Family Resource Network, INC transferred
ownership to Help Center, INC. According to Sylvia Meegard this transaction concerned the business
only. Reportedly Hearts and Homes Family Resource Network INC. owned this property for 20+ years.
To the best of my knowledge this property is not currently listed for sale.
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HELENA, MONTANA
REGIONAL MAP
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REGIONAL AND CITY ANALYSIS
Bozeman is the county seat of Gallatin County and is one of 56 counties in the State of
Montana. Gallatin County is located in a mountainous area of Montana north of the
Montana/Wyoming border and Yellowstone National Park. Bozeman primarily lies on the south
side of Interstate 90 and is located approximately 140 miles west of Billings, Montana and 80 miles
east of Butte, Montana.
Gallatin County has grown faster than any other county in the State of Montana over the
past decade according to the Census Bureau. Gallatin County includes almost 2,500 square miles of
mountainous lands that offer a variety of topography and climate. Nearly half of Gallatin County is
under public ownership by the Gallatin National Forest, State of Montana, Bureau of Land
Management or the National Park Service.
Forces Influencing Property Values
The value of real estate is influenced by the interaction of four major forces. Social
considerations, economic considerations, government and environmental considerations. The four
forces are discussed as follows:
Social Considerations
Social forces are exerted largely by population characteristics, including population growth,
density, and age distribution. According to the U. S. Census Bureau the population of the City of
Bozeman increased from 27,509 in 2000 to 37,280 as of April, 2010 and increase of nearly 9,800 people.
This represents an increase in population of approximately 35.5% over this 10-year period, or an average
rate of growth of about 3.55%/year. From April, 2010 to April, 2012 the population increased from
37,280 to 38,695, an increase of nearly 1,415 people which equated to a growth of 3.8% over this time
frame.
Gallatin County’s population increased from 67,831 in 2000 to 89,513 in 2010 or approximately
21,700 people. This represents an increase in population of approximately 32% over a 10-year period or
an average growth rate of 3.2%/year. Between April, 2010 and April, 2012 the population increased from
89,513 to 92,614 people or 3,101people which equates to a growth rate of about 3.5% over this time
period. Comparatively, the State of Montana grew from 989,417 people in April 2010 to 1,005,140
people in 2012 or 15,724 people which equates to a growth rate of 1.6% over that time frame.
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In addition to population growth the City of Bozeman continues to see growth in its geographic
size. In 1990 the City of Bozeman was approximately 6,420 acres (± 10 square miles) and by the end of
2009 it had expanded to 12,300 acres (±19.25 square miles) resulting in an increase of ±92% over this 19-
year period. This growth was to accommodate the increasing population which required new land for
residential, commercial and industrial development. This growth significantly slowed in 2009 and 2010
which was being seen all throughout this region as the national economic recession took effect.
Bozeman has a significantly lower home ownership rate than most other communities in the
county primarily due to the student body of Montana State University. Bozeman also has a smaller
average household size and a smaller portion of families than other areas of Gallatin County. Bozeman
has an average household size of 2.27 people while the average household size for Gallatin County is 2.49
people. Just over half of the Bozeman households are families compared to ±63% countywide. The
population of Bozeman is considerably younger than Gallatin County as a whole, and even more so, in
comparison to the State of Montana. Again this emphasizes the significance of Montana State University
being located in Bozeman. Bozeman and Gallatin County has transformed over the past decade from a
primarily agricultural based community to a tourism related community. Bozeman and Gallatin County
offers a high quality of life due to its low crime rate, offering of many cultural experiences, the presence
of Montana State University and its education offerings. An abundance of outdoor activities that include
excellent downhill snow skiing, world class fly fishing rivers, streams and access to numerous state and
federally owned lands are all nearby.
Economic Considerations
Bozeman, like many communities in Montana experienced significant growth in population and
economy for a number of years. This area was affected by the national recession just like many other areas
in the country however new growth and development has begun again and the outlook for Bozeman and the
vicinity is quite positive based on a number of factors.
• County seat of Gallatin County.
• Wide range of skills in the labor force.
• Home of Montana State University.
• Well located in southwestern Montana
• Numerous recreational opportunities
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Bozeman is somewhat unique when compared to other communities in Montana because there are
few employers who employ a large amount of the population. Missoula, Montana, as an example was very
dependent on the lumber and timber industry and Butte, Montana had always relied heavily on the mining
industry. When those industries slowed those communities were very heavily impacted. The primary
employer in Bozeman is Montana State University. Other major sectors of the economy that provide
employment are construction, local and state government, manufacturing, technology, agricultural and
retail service. Montana State University currently employs about 3,500 people as permanent faculty/staff
and they also employ over 2,000 students in part time work. In the fall of 2,013 the student enrollment at
MSU was slightly over 15,000 people which certainly has a significant effect on the local economy. Other
major employers in Gallatin County include the State of Montana, Gallatin County, the City of Bozeman,
Bozeman Deaconess Hospital, Right Now Technologies. With such a diverse employment base the local
economy tends to be sheltered from a downturn in any of the Country’s key employment industries.
In 2010 Bozeman was declared as the most expensive place to live in Montana based upon a report
by Propera Business Network. This report stated that Bozeman’s 2009 cost of living was 4.4% above the
national average. The other Montana cities that showed an overall cost of living above the national average
were Missoula at 1.8% and Kalispell at 1.5%. Residential rent levels in Gallatin County have remained
stable primarily due to the presence of Montana State University. Rents in this community will periodically
show a slight decline however they tend to stabilize or even increase rather quickly due to the continued
growth of Montana State University.
Overall the economic growth has been much stronger in Bozeman and Gallatin County than what
is being seen statewide. Historically the sectors in Bozeman and Gallatin County that show the most
substantial growth are agricultural services, construction, manufacturing, finance, insurance, real estate and
lodging. Currently the unemployment rate in Montana is 6.4% and Gallatin County recorded a slightly
lower unemployment rate at 5.8%. Gallatin County’s labor force is currently estimated at 52,070
employees, the third largest labor force in Montana’s 56 counties.
Over the past ±10 years residential building permit activity in the City of Bozeman was on the rise
and reached its peak in 2005 and then began to decline over the next 5 years, and most significantly in 2008
and 2009. Residential building permits began to increase again in 2010 and have been on a steady incline.
Bozeman has been experiencing new growth in several areas of town but no area has provided as much
commercial real estate development at the 19th Avenue corridor. Recent stores and restaurants developed
along 19th Avenue include Sportsman’s Warehouse, Lowes, IHOP, Bed Bath and Beyond, Staples, World
Market and REI. Most recently a new Safeway grocery store (±58,000 SF) was completed in December,
2011 and a Kohls department store (±55,300 SF) was completed in October, 2011.
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The City of Bozeman facilities over the past 5 years have seen significant development and/or
renovation which includes the fire stations, police station, waste water treatment facilities, the completion of
a downtown parking garage, City of Bozeman Library, construction of the Gallatin County Detention
Center, an expansion of the landfill building etc. Montana State University has also seen significant
expansion and renovation which include a significant remodel of the football stadium, addition of the
Molecular Biology Center, renovations to the Health and Physical Education Center, addition of the Black
Box Theater, renovation of Gaines Hall etc.
Tourism brings a significant number of visitors to the Bozeman area. Yellowstone National Park,
the first national park in the United States, is located approximately 65 miles south of Bozeman. Big Sky
Ski Resort is located approximately 45 miles south of Bozeman and has recently been listed as the seventh
best ski resort in the United States. This ski area averages over 300" of annual snowfall with skiing available
November through April. The Yellowstone Club lies adjacent to Big Sky Ski Resort and is an exclusive
vacation/residential development that includes both private skiing and golfing. This exclusive, private
development had filed for bankruptcy in 2008 and in 2010 was purchased by Cross Harbor Capital and for
several years saw significant decline in sales and values. However, the private development has begun to
rebound again as sales are starting to climb again. Other ski resorts in Gallatin County include Moonlight
Basin which is also adjacent to Big Sky and Bridger Bowl which lies approximately 15 miles to the north of
Bozeman.
Environmental Considerations
Environmental and physical forces, both natural and man-made, can influence property values.
These forces include climatic conditions, topography and natural barriers, and transportation systems.
Bozeman’s climate clearly reflects its mountain valley location. Bozeman truly has four seasons
with its short summers being pleasant which are typically characterized by warm to hot days and cool
nights. The average high temperature in the summer is in the upper 80°’s and the average low in the
winter is the mid to lower 30°’s. Spring tends to come late in the Gallatin Valley as ⅓ of its annual
precipitation ±19" falls during May and June. The average annual snowfall in Bozeman is ±72" and the
average length of the growing season is about 107 days. The climate of the county varies according to
elevation but is generally characterized by relatively cold winters and warm summers. Snow removal is a
common operating cost that will affect real estate in the winter months. In contrast air conditioning costs
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are less during the fairly temperate summer months however heating bills can be quite high during the cold
winter months.
Bozeman is located on the south side of Interstate 90. Access to the south towards Yellowstone
Park is via U.S. Highway 91. There are numerous other state highways and Gallatin County maintained
roads that provide access throughout this region. Commercial air service, truck and rail transportation are
considered to be adequate. Gallatin Field which is located in the adjacent community of Belgrade is the
second busiest airport in the state and provides air service for this area.
Governmental Considerations
The City of Bozeman is a City Commission/City Manager form of government with an elected
municipal judge. There are five commissioners elected with no party affiliation and are elected to a four-
year term which are overlapping. The City Commissioner elections are held every two years and the terms
of the commissioners are staggered and the candidate who receives the most votes in an election becomes
the mayor the last two years of their term.
The City of Bozeman has approximately 40 police officers and the fire department has
approximately 18 firefighters plus the Fire Chief, Deputy Chief/Marshall, and seven captains. There are
three fire stations in the City of Bozeman and overall the fire and police protection services are considered
to be good.
The Department of Planning and Community Development processes applications for new
development in the city limits. This department enforces the zoning regulations within the city limits of
Bozeman. Gallatin County administers all zoning for properties outside the city limits and within the
“zoning donut”. The Gallatin County Comprehensive Plan encourages development near the existing city
limits and/or services and discourages development in more remote locations. In general, the planning
and zoning regulations in this area are considered stringent.
Conclusion
Bozeman and Gallatin County has population and overall growth trends that are continuing
upward. This area offers a wide variety of outdoor recreational opportunities, cultural resources, tourism,
and coupled with the presence of Montana State University this area is poised for continued growth.
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Bozeman has a young and very well educated work force and coupled with its diverse economy the
general outlook for Bozeman, Belgrade and the surrounding small communities is good.
Overall the real estate market in Bozeman is strong. 2013 was the first year of strong market
conditions after 5+ recession years. Residential and commercial activity has increased significantly.
Residential apartment occupancy is more or less at 100%, and commercial lease rates and commercial
property values have been increasing as well.
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NEIGHBORHOOD DATA & ANALYSIS
The subject site is located near the northwestern edge of the Bozeman city limits essentially at the
intersection of Fowler Avenue and West Babcock Street. Both Fowler Avenue and West Babcock Street
are relatively high traffic streets that provide good north/south and east/west access to and from the
Bozeman city limits. Fowler Avenue extends south past the subject property to where it meets Huffine
Lane which is a lighted intersection. Huffine Lane (Highway 191) is a major east/west thoroughfare
connecting Bozeman, the Four Corners area and Belgrade. This general area is continuing to see more
commercial and multi-family development as the City of Bozeman continues to expand to the northwest.
Between Huffine Lane and Interstate 90 to the north there’s a mix of single family developments,
multi-family housing projects and the remaining farm and ranch properties. Huffine Lane to the east
transitions into West Main Street which leads directly to downtown Bozeman. North 19th Avenue
between West Main Street and Interstate 90 has recently become developed with retail and office
buildings. South of Huffine Lane is a mix of residential developments, rural residential home sites (1- 20
acres) and larger farm and ranch properties. Huffine Lane to the west leads to Jack Rabbit Lane and this
intersection is commonly known as Four Corners. Retail development along Huffine Lane and Jack
Rabbit Lane is becoming more prevalent each year.
Many of the new developments in this area are on agricultural ground so fewer building improvements
had to be razed. Elementary schools, middle schools and Bozeman High School are all located nearby.
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The Gallatin Valley Mall is located just to the south on the north side of Huffine Lane. City water and
sewer services are readily available throughout this neighborhood, and natural gas and electrical service
are provided throughout the area by North Western Energy.
For a number of years’ the new commercial development in Bozeman was most prevalent along
North 19th Avenue. However most of this land has become developed and now more development is
being seen along either side of Huffine Lane as the Bozeman city limits continue to expand north and
west. I expect this neighborhood will continue to see new development because there is a lack a vacant,
developable land to the east. In my opinion market conditions will remain strong in this neighborhood
and most likely market values will appreciate accordingly. This trend is consistent with what other
neighborhoods are experiencing in the Bozeman city limits.
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AERIAL MAP
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PROPERTY DESCRIPTION
Site
Size: As shown on the property record card in the addenda the subject site,
outlined in red on the facing page, is 20,695 SF.
Shape: Slightly irregular.
Topography: Most of this site has level topography. The Davis Irrigation Ditch parallels
Fowler Avenue and flows along the west boundary of the subject site.
Soil Conditions: Soil conditions are unknown and no soils test was provided to your
appraiser.
Easements: To the best of my knowledge there are no easements or encroachments on
the subject property that would adversely affect its market value. However,
a title policy should be used for the final determination of easements and
encroachments.
Access: There is a driveway that crosses in front of the subject site and provides
access from Fowler Avenue to the west or West Babcock Street from the
north. The Fowler Meadows Apartment Complex, which essentially
surrounds the subject property on the east and north, is also accessed from
this same driveway.
Utilities: City sewer service has been extended to the subject site. The building
improvements have been served by a well since they were constructed in
1979 and the well is located on the land owned by the City of Bozeman
directly to the south. It is my understanding once the land swap is completed
an easement will be granted to Help Center, INC so use, access and
maintenance of this well can continue into the future.
As I understand if significant improvement or renovation to the building
improvements on the subject site is completed then city water service will
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have to be extended on this site. Natural gas and electrical service are
provided by North Western Energy.
Functional Adequacy: This site has adequate access, mostly level topography and all utilities are
available. It appears this site is well suited for development to its highest and
best use.
Flood Plain: The subject property is located in Flood Zone X which is an area of minimal
flooding. This information was extracted from FEMA's National Flood
Hazard Layer Website. The Community Panel No. is 30031 C 0812 D. This
map is dated September 2, 2011.
Nuisances or Hazards: To the north and east is the Fowler Meadows Apartment Complex which is
comprised of five buildings that share access with the subject site. To the
south is the Bozeman Ponds Park which is owned by the City of Bozeman.
To the west and across Fowler Avenue are the West Babcock baseball fields
and a mix of single family and multi-family dwellings. These uses are
typically to this neighborhood and do not adversely affect the market value
of the subject site.
Site and Building Improvements: This site is improved with a single family residence that was
constructed in 1979 however it is now occupied by a privately
owned nonprofit business known as Hearts and Homes. It appears
few changes have been made to the building over the years.
Surrounding the building is lawn with underground sprinklers,
sidewalks, a concreate driveway leading to a built in garage, and the
rear yard is enclosed with chain link fencing. None of the site or
building improvements are impacted by the potential land swap and
therefore they are not valued in this appraisal report.
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SUBJECT PROPERTY PHOTOGRAPHS
Front View.
Photograph taken March 30, 2016 by J. Michael Joki, MAI, SRA.
Looking east at the subject property from Fowler Avenue.
Photograph taken March 30, 2016 by J. Michael Joki, MAI, SRA.
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SUBJECT PROPERTY PHOTOGRAPHS
Looking south on Fowler Avenue. Subject property is to the left.
Photograph taken March 30, 2016 by J. Michael Joki, MAI, SRA.
Davis Irrigation Ditch that flows between
Fowler Avenue and the subject site.
Photograph taken March 30, 2016 by J. Michael Joki, MAI, SRA.
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SUBJECT PROPERTY PHOTOGRAPHS
Photograph taken from the driveway and looking southeast
at the very northwest corner of the subject site.
Photograph taken March 30, 2016 by J. Michael Joki, MAI, SRA.
Photograph taken near the southwest corner and looking
northeast at the subject site.
Photograph taken March 30, 2016 by J. Michael Joki, MAI, SRA
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SUBJECT PROPERTY PHOTOGRAPHS
Photograph shows the well on the adjacent site
directly to the south.
Photograph taken March 30, 2016 by J. Michael Joki, MAI, SRA.
Rear view.
Photograph taken March 30, 2016 by J. Michael Joki, MAI, SRA.
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SUBJECT PROPERTY PHOTOGRAPHS
Photograph shows the area that is encroaching on the land to the south.
This area is depicted by the pink flag at the bottom of the photograph.
Photograph taken March 30, 2016 by J. Michael Joki, MAI, SRA.
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ZONING
I confirmed at the City of Bozeman Planning Department that the subject site is zoned
R-3(Residential Medium Density District). The intent of this zoning district is to provide for the
development of 1 to 5 household residential structures near service facilities within the city. It should
provide for a variety of housing types to serve the varied needs of households of different size, age and
character, while reducing the adverse effect of nonresidential uses. A complete copy of the zoning
ordinance is included in the addenda that further explains the allowed uses, conditional uses, building
coverage ratios etc.
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HIGHEST AND BEST USE OF LAND AS VACANT
"The reasonably probable and legal use of vacant land or an improved property that 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. Alternatively, the
probable use of land or improved property - specific with respect to user and timing of the
use - that is adequately supported and results in the highest present value."2
The definition above applies to the highest and best use of vacant land or improved property. It is
to be recognized that in cases where a site has existing improvements on it, the highest and best use may
very well be determined to be different from the existing use. The existing use will continue, however,
unless and until land value in its highest and best use exceeds the total value of the property in its existing
use.
Quite often in estimating the highest and best use of land, the appraiser is controlled by
governmental regulations. These controls are generally zoning ordinance, parking requirements and
building codes. Also, in the estimate of highest and best use, one must recognize the attitude of typical
investors in the marketplace.
Real estate will usually fall into certain definite development patterns, and their uses can be
classified as: residential, agricultural, recreational, industrial, commercial and public use. In valuing the
highest and best use of the land both as if vacant and improved, the following criteria must be met. 1)
legally permissible, 2) physically possible, 3) financially feasible, and 4) maximally productive.
Legally Permissible
The existing R-3(Residential Medium Density District) zoning allows for a number of residential
uses, including multi-family uses. In addition to the permitted uses there are lot area, width and building
height requirements that must be met. There are no known private deed restrictions on the subject site
which would prohibit any of the allowed uses under this zoning ordinance. There are no known public
2 The Dictionary of Real Estate Appraisal, 5th ed., s.v. "highest and best use".
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J. MICHAEL JOKI, MAI, SRA
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reactions, or no known public intent of a re-zoning of the subject site that would potentially affect its
development.
Several of the development classifications previously discussed can be eliminated from
consideration. This zoning does not allow for commercial, industrial, agricultural, or recreational use and
therefore these uses can be eliminated from consideration. The only remaining use that is a reasonable
use and a legally permissible use of this site is for development with a residential use.
Physically Possible
As previously explained there is adequate access to the subject site which is shared with the
surrounding Fowler Meadows Apartment buildings. City sewer service has been extended on site and
water is provided from a well that is on the adjacent site to the south that is owned by the City of
Bozeman. Natural gas and electrical service are readily available throughout this neighborhood. Soil
conditions in the area have proven adequate for development of all property types. Based on the physical
characteristics of the subject site and the existing properties within this neighborhood the legally
permissible uses permitted by the R-3 zoning would be physically possible.
Financially Feasible
Bozeman has been experiencing growth again, particularly in the past three years, and demand
for single family and multi-family housing in this neighborhood out ways the supply. The R-3 zoning
allows for development with a residential use, including multi-family, which has seen a significant
increase in demand in this neighborhood as well as most areas of Bozeman. It will be shown in the
following land valuation section of this appraisal report that the highest and best use of this site as if
vacant is for development with a multi-family use.
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J. MICHAEL JOKI, MAI, SRA
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Maximally Productive
The use that conforms with the requirements of the first three tests and will provide maximum
productivity of the subject site is for development with a residential use, more particularly a multi-family
use. In concluding to the highest and best use of a property the physical use, the timing of the use and
the user’s/most probable buyers needs to be defined. The maximally productive use of the subject site
as if vacant would be for development with a residential use that would be conducive to the surrounding
residential uses in this neighborhood. In terms of the most likely buyer and user of this site there are two
options. An end-user sale is a sale to a buyer who intends to immediately utilize the property to its
highest and best use. A speculative-investor sale is the sale to a buyer who purchases the property with
no intention of immediately utilizing the property to its highest and best use. It is my opinion the subject
site would be purchased by an end user who intends to immediately utilize the property to its highest and
best use.
HIGHEST AND BEST USE AS IMPROVED
The subject property is improved with a single family residence that was constructed in 1979. As
I understand the property was utilized as a single family residence for a number of years however it is
now occupied by a privately owned nonprofit agency. To the best of my knowledge this is a legally
permissible use in the R-3 zoning ordinance. However, the use of this site in support of a single family
residence may no longer be the highest and best use because of the significant demand for land that can
support multi-family units in this neighborhood. The value of this property as improved plus demolition
cost most likely outweighs the value of the site as vacant, however as time goes on these building
improvements will continue to depreciate and most likely a multi-family use on this site will eventually
become feasible.
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J. MICHAEL JOKI, MAI, SRA
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In conclusion, the maximally productive use of this site as improved is for continued use with its
existing improvements however over time it is likely these improvements will be razed and this site will
be developed with a multi-family use.
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PROPERTY VALUATION
In the Sales Comparison Approach an indication of value is derived by comparing the relative
utility and desirability of the subject site with comparable properties that have recently sold or are currently
listed for sale. Basic to this approach is the principle of substitution which states that "when a property is
replaceable in the market, its value tends to be set by the price required to acquire an equally desirable
substitute property."
In this appraisal report vacant land is valued therefore the Cost and Income Approaches to value
are not applicable.
SITE VALUATION
The method employed to value the site as if vacant and available for sale is the Sales Comparison
Approach. An investigation of the market revealed several sales and listings indicative of what a well-
informed buyer or seller would consider in forming an opinion of value. Three sales and two current
listings were chosen as being most appropriate to compare against the subject site. Descriptive data and
photographs of these comparables are contained in the Addenda.
Adjustments
All comparables differ somewhat from each other, and from the subject in various ways. The usual
differences are for cash equivalency, market conditions, location, and a number of physical characteristics.
Many of these factors, in varying degrees, are applicable in the appraisal of the subject property. When
dissimilarities are found in comparable properties, they are adjusted for by adding to the comparable price
when the dissimilar factor is inferior to the same factor found in the subject property. Likewise, a minus
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J. MICHAEL JOKI, MAI, SRA
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adjustment should be made when the comparable sale has a factor which is superior to that found in the
subject property. The sale properties, then, are adjusted to the subject property.
However, in the market it is often difficult and sometimes impossible to accurately isolate a given
factor. In short, one very seldom finds sales which are identical in all respects but one, and thus is able to
prove conclusively the value, or lack of it, for any one factor due to a difference in sale price. Often, there
are plus and minus factors which offset each other. Thus, the use of subjective judgment, to some degree,
may be exercised.
Nevertheless, the differences in values are real and adjustments based on as much fact as can be
found, will be made. Then, the appraiser may call upon his experience to make subjective judgments.
Property Rights
Each of the sales involve fee simple property rights. As a result, no property rights adjustments
were warranted.
Financing:
All Sales were cash to the seller or on terms considered cash equivalent, and no adjustments were
required.
Conditions of Sale:
No non-market conditions motivating the buyer or seller involved in the transactions are known,
therefore no adjustments are required.
Expenditures Immediately After Sale:
None of the sales required expenditures immediately after sale, and therefore no adjustments are
required. If expenditures were verified they were typically associated with annexation into the city limits.
Market Conditions:
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J. MICHAEL JOKI, MAI, SRA
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A market conditions (time adjustment) is required to bring all comparable sale properties up to the
effective date of the appraisal report which is March 30, 2016. Bozeman was experiencing significant
decline in real estate values when the local and national recession was in effect. Since 2011 real estate values
have rebounded in this market and new projects are being developed again. Demand for unimproved land
now outweighs its supply.
Comparable No. 3 and No. 4 are active listings and do not require a market conditions adjustment.
Comparable No. 1, No. 2 and No. 5 sold within 4 months of the effective date of this appraisal report and
in my opinion are indicative of current market value and will not be adjusted for market conditions.
Remaining Adjustments:
The remaining adjustments will be explained in a qualitative analysis which is an effective technique
that recognizes the inefficiencies of a real estate market and the difficulty in expressing the adjustments
with mathematical precision. The adjustments included in the qualitative analysis are location, size, access,
topography, utilities, shape and use. The land sales adjustment grid can be seen on the following page.
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LAND SALE LOCATION MAP
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J. MICHAEL JOKI, MAI, SRA
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LAND SALE ADJUSTMENT GRID
SUBJECT SALE 1 SALE 2 SALE 3 SALE 4 SALE 5
Sale Price $84,072 $82,500 $110,000 $175,000 $70,500
Size (SF) 20,695 13,939 12,000 15,573 25,700 14,375
Price/SF $6.03 $6.88 $7.06 $6.81 $4.90
Date of Sale 12/15/15 1/14/16 Active
Listing
Active Listing 11/20/15
Market
Adjustment -0- -0- -0- -0- -0-
Adjusted Price $84,072 $82,500 $110,000 $175,000 $70,500
Adjusted Price/SF $6.03 $6.88 $7.06 $6.81 $4.09
Location W. Babcock St.
and Fowler
Ave,backs to
City Park
Manzanita Dr.
just south of
Oak St.
SEC of
Sunstone and
N. Ferguson
NEC of
Westgate
and
Durston,
backs open
space
West side of
Fen and backs
to Davis
Just S. of Baxter,
sides open space
Comparability Slightly
Inferior
Slightly
Inferior
Similar Slightly
Inferior
Similar
Size (SF) 20,695 13,939 12,000 15,573 25,700 14,375
Comparability Similar Similar Similar Similar Similar
Access W. Babcock St.
and Fowler Ave.
Manzanita
Ave.
Sunstone
Street
Westgate
Ave.
Fen Way Marias Lane
Comparability Similar Similar Similar Similar Similar
Topography Level Level Level Level Mostly Level Level
Comparability Similar Similar Similar Similar Similar
Shape Slightly Irregular Rectangular Rectangular Slightly
Irregular
Rectangular Slightly Irregular
Comparability Slightly
Superior
Slightly
Superior
Similar Slightly
Superior
Similar
Utilities City Sewer,
Private Well
All City
Services
All City
Services
All City
Services
All City
Services
All City Services
Comparability Slightly
Superior
Slightly
Superior
Similar Slightly
Superior
Slightly Superior
Highest & Best
Use
R-3
Multi-Family
R-4
Multi-Family
R-3
Multi-Family
R-3
Multi-
Family
R-3
Multi-Family
R-3 and
Covenants
Comparability Similar Similar Slightly
Superior
Superior Inferior
Overall
Comparability Similar Similar Slightly
Superior
Superior Inferior
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J. MICHAEL JOKI, MAI, SRA
HELENA, MONTANA
Sales Analysis:
The subject site is located on the east side of Fowler Avenue and just south of West Babcock Street
and backs to city park land. This slightly irregular shaped 20,695 SF site has level topography and has city
sewer service. A private well located on the City of Bozeman land to the south serves the building
improvements. The R-3 zoning ordinance allows this site to be developed with a multi-family building
allowing 4 units (3,000 SF per dwelling). However, because of its size (20,695 SF) potentially 6 units could
be constructed but a site plan would have to be reviewed and approved by the City of Bozeman before
additional units (anything over 4) could be constructed.
Comparable No.1 is the sale of a 13,939 SF site that sold on December 15, 2015 for $84,072
or$6.03/SF. Comparable No. 1 generally has a similar location however this site does not back to a city
park. Comparable No. 1 is similar in access and topography, however this is a rectangular shaped site and it
does have city water service which are both superior aspects when compared to the subject property. Even
though Comparable No. 1 is a smaller site then the subject property it essentially allows for the same use
which is for development with 4 units. Overall Comparable No. 1 is considered to be similar when
compared to the subject property.
Comparable No. 2 is the sale of a 12,000 SF site that sold on January 14, 2016 for $82,500 or
$6.88/SF. Comparable No. 2 also has a similar location however this sale does not back to a city park
either. Comparable No. 2 has similar access and topography, and like Comparable No. 1 is rectangular in
shape and has all city services available. Comparable No. 2 is also zoned R-3 which allows for development
of 4 units, and overall this sale is considered to be similar when compared to the subject property.
Comparable No. 3 is a current listing of a 15,573 SF site at $110,000 or $7.06/SF. Comparable No.
3 has a similar location backing to open space land, is similar in size, access, topography, and shape. A site
plan for this land was submitted to the city and this land can support 5 or 6 units depending on the number
of bedrooms in the units. This is considered to be a superior aspect when compared to the subject property.
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J. MICHAEL JOKI, MAI, SRA
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Comparable No. 4 is a current listing of a 25,700 SF site at $175,000 or $6.81/SF. Comparable No.
4 generally has a similar location when compared to the subject property however it does not back city park
land. Comparable No. 4 has similar size, access, and topography, however this site is rectangular in its shape
and has all city services. A site plan for this land was also submitted to the City of Bozeman and now this
land allows up to 8 units for development, which is superior when compared to the subject property.
Comparable No. 5 is the sale of 14,375 SF site that sold on November 20, 2015 at $70,500 or
$4.90/SF. Comparable No. 5 has a similar location and backs to open space land. Comparable No. 5 has
similar access, topography and shape. This sales only superior aspect is its city water service. Comparable
No. 5 has the same R-3 Zoning that allows 4 multi-family units however covenants within this subdivision
impose additional restrictions and this site is now being developed with a single family residence. Overall
Comparable No. 5 is considered to be inferior when compared to the subject property.
The value indications derived from the comparables are reconciled into a single value indication by
arranging the five comparables in an array relative to the subject.
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J. MICHAEL JOKI, MAI, SRA
HELENA, MONTANA
BRACKETING THE SUBJECT PROPERTY
I will analyze the comparables on a price/SF basis as well as a price/allowable unit. Analyzing the
price/SF information and giving all five comparables consideration a conservative conclusion at $6.00/SF
for the subject property appears reasonable. Multiplying the subject site size of 20,695 SF x $6.00/SF indicates
a value of $124,170. When comparing this value indication to the overall price of the comparables it appears
to overstate the value of the subject property. As shown in the bracketing chart above the price/allowable
unit of Comparables No. 1 through No. 4 indicates a range of $18,333 to $22,000/allowable unit and in my
opinion using this data I can reasonably conclude at a value estimate of $21,000/allowable unit for the subject
property. Knowing 4 units could be developed on the subject site if it were vacant indicates a value of
$21,000/allowable unit x 4 units or $84,000. One coincidence should be discussed when comparing these two
market valuation estimates of the subject property. Using the market value indication derived from the
price/SF analysis indicated a value of $124,170. Dividing this value indication by 6 units, a potential number
of units allowed on the subject property if a site plan were approved, indicates a value of $20,695/unit. This
coincides with my preceding market value estimate of $21,000/allowable unit using the other technique.
Without knowing exactly how many units would be allowed on the subject site, because a site plan
would have to be submitted and approved for any development over 4 units, I cannot give all emphasis to
Comparable Adjusted
Price/SF
Price/ Allowable
Unit
Overall
Comparability
4 $6.81 $21,875 Superior
3 $7.06 $18,333 to $22,000 Slightly Superior
2 $6.08 $20,625 Similar
1 $6.03 $21,018 Similar
Subject
Property
5 $4.90 N/A Inferior
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J. MICHAEL JOKI, MAI, SRA
HELENA, MONTANA
the value indication derived by the price/allowable unit technique. However, I do not see additional units
being unreasonable on this site considering the size is 20,695 SF. Therefore, I have given both the price/SF
and the price/allowable unit techniques equal emphasis and have concluded to a current market value estimate
for the subject property at $100,000.
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J. Michael Joki, MAI, SRA
HELENA, MONTANA
TABLE OF CONTENTS
INTRODUCTION Page
Letter of Transmittal
Certification
Assumptions and Limiting Conditions 5
Summary of Important Facts and Conclusions 7
Subject Property Photograph 8
DESCRIPTION, ANALYSIS AND CONCLUSION:
Definition of Market Value 9
Purpose of Appraisal 9
Intended Use of the Appraisal and Intended Client 10
Scope of Appraisal 10
Summary of the Appraisal Problem 12
Property Rights Appraised 12
Identification of Property and Legal Description 12
History of the Property 14
Regional Map 15
Regional and City Analysis 16
Neighborhood Analysis 22
Aerial Map 24
Property Description 25
Subject Property Photographs 27
Zoning 32
Highest and Best Use Before 33
The Valuation Process 37
Site Valuation 37
Land Sale Location Map 40
Land Sale Adjustment Grid 41
Bracketing the Subject Property 44
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J. Michael Joki, MAI, SRA
HELENA, MONTANA
ADDENDA:
Property Record Card
Quit Claim Deed
Land Swap Illustration
Zoning Ordinance and Map
Comparable Land Sale Sheets with Photographs
Qualifications of the Appraiser
State License
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J. Michael Joki, MAI, SRA
HELENA, MONTANA
ADDENDA
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