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HomeMy WebLinkAboutResolution 5313 Setting the Fair Market Value of Land for Calculating CILP RESOLUTION 5313 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, SETTING THE FAIR MARKET VALUE OF LAND PER SQUARE FOOT FOR CALCULATING CASH-IN-LIEU OF PARKLAND DEDICATION WHEREAS, Section 38.420.030 of the Bozeman Municipal Code, (“Cash Donation in lieu of Land Dedication”) states that the city commission may adopt procedures to be used by the director of parks and recreation to determine the fair market value for cash in lieu of parkland dedication donations; and WHEREAS, Section 38.420.030 of the Bozeman Municipal Code states that the city must periodically update the market value as deemed necessary to reflect changes in the price of land; and WHEREAS, most recently Resolution 5243 was adopted on December 15, 2020, establishing the fair market value of land for purposes of cash donation in lieu of park dedication; and WHEREAS, an updated appraisal report has been obtained from a qualified, licensed appraiser to determine the fair market value of unsubdivided, unimproved land after it has been annexed and given a municipal zoning designation in accordance with Montana Code Annotated Section 76-3-621; and WHEREAS, the appraisal report indicates the fair market value of residential property for the purposes of cash donation in lieu of park land dedication is now $90,000 per acre (Exhibit A); DocuSign Envelope ID: 95E28DF7-CE19-488A-A4F9-53625F3505AD NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of Bozeman, Montana, that the fair market value of residential property for the purposes of cash donation in lieu of park land dedication is $2.07 per square foot, subject to changes in market conditions that warrant an updated appraisal. PASSED, ADOPTED, AND APPROVED by the City Commission of the City of Bozeman, Montana, at a regular session thereof held on the 22nd day of June, 2021. ___________________________________ CYNTHIA L. ANDRUS Mayor ATTEST: ____________________________________ MIKE MAAS City Clerk APPROVED AS TO FORM: ___________________________________ GREG SULLIVAN City Attorney DocuSign Envelope ID: 95E28DF7-CE19-488A-A4F9-53625F3505AD AN APPRAISAL REPORT OF: Standard Property Valuation for the City of Bozeman's Cash in Lieu of Parkland Dedication Process FILE NO.: C051321295 PREPARED FOR: Mr. Mitchell Overton City of Bozeman - Department of Parks and Recreation 415 North Bozeman Avenue Bozeman, MT 59715 PREPARED ON: May 28, 2021 EFFECTIVE DATE OF VALUATION: May 15, 2021 PREPARED BY: Keith O'Reilly, MAI, MT-400 Bridger Appraisals, Inc. P.O. Box 11145 Bozeman, MT 59719 DocuSign Envelope ID: 95E28DF7-CE19-488A-A4F9-53625F3505AD May 28, 2021 City of Bozeman - Department of Parks and Recreation 415 North Bozeman Avenue Bozeman, MT 59715 Re: Standard Property Valuation for the City of Bozeman's Cash in Lieu of Parkland Dedication Process Dear Mr. Mitchell Overton, Per your request, I have gathered information and completed the following report to establish a standard property valuation on a per square foot basis for Residential Single-Household Low Density (R1), Residential Two-Household Medium Density (R2), Residential Medium Density (R3), Residential High Density (R4), and Residential Office (RO) districts within the City of Bozeman. This report is to be used for the City of Bozeman’s Cash in Lieu of Parkland dedication process. This appraisal is not of one subject property but is rather a compilation of sales of large tracts of land within the City as well as Gallatin County purchased for development purposes. Per city code and state law: Cash donation in-lieu of land dedication shall be equal to the fair market value of the amount of land that would have been dedicated. For the purpose of these regulations, the fair market value is the value of the unsubdivided, unimproved land after it has been annexed and given an urban zoning designation. The city intends to obtain the highest value for cash-in-lieu of park land that is allowable under state law. DocuSign Envelope ID: 95E28DF7-CE19-488A-A4F9-53625F3505AD 3 ASSUMPTIONS AND LIMITING CONDITIONS This appraisal report, the letter of transmittal, and certification are subject to the following assumptions and limiting conditions; and also, any special qualifying conditions that may be contained elsewhere in the report are incorporated by reference. Assumptions 1. That the legal descriptions, as furnished, are correct; and that the titles to the properties are good and marketable. All existing liens and encumbrances, if any, have been disregarded. The properties are appraised as though free and clear of other burdens, under responsible ownership and competent management. 2. That the land dimensions taken from available maps, plats, and/or surveys are correct. It has been assumed that those boundaries that are apparent are correct. 3. It is assumed that the use of the land and improvements is confined within the boundaries or property lines of the property described and that there is no encroachment or trespass unless noted in the report. 4. That no adverse water table or soil conditions exist, and no representation regarding such conditions is made in this report unless specifically stated; and, that the value estimated is predicated on the absence of any such conditions occurring. 5. Those opinions, estimates, data and statistics supplied by others in the course of this study, are correct; the assumption has been made that the sources are reliable, but no responsibility has been inferred for their accuracy. 6. This report does not contemplate any court action, nor does it obligate the appraiser to give any testimony or make any appearance in court, before commission, arbitrator or any other individual, body, or agency. If court action or appearance later becomes necessary in the interest of the client, the terms of the additional service shall be negotiated at that time. DocuSign Envelope ID: 95E28DF7-CE19-488A-A4F9-53625F3505AD 4 7. Unless otherwise stated in this report, the appraiser has no knowledge of the existence of hazardous material, which may or may not be present on the properties. I am not qualified to detect such substances. The presence of potentially hazardous materials may affect the value of the property. This extends to any leaks from underground fuel storage tanks, and identification of Asbestos containing materials. The value estimate is predicated on the assumption that there is no such material on or in the property. No responsibility is assumed for any such conditions or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in this field, if desired. Any such environmental risk discovered at a later date may require a revised estimate of value that may or may not be simply a reduction of the value by the estimated cost to cure the environmental condition. Properties known to have environmental risk may also carry a stigma in the market place that may or may not affect the value. If future soil tests should reveal the existence of any such soil conditions or hazardous waste, I reserve the right to review and adjust this appraisal accordingly. Limiting Conditions: 1. The appraiser is not responsible for any matter legal in character, nor is any opinion rendered as to title, which is assumed to be marketable. 2. The value reflected in the analysis applies only to the program of utilization considered in this report. The use of the value in conjunction with any other appraisal or under other influences invalidates the conclusions developed. 3. This analysis and estimate of value is made for the exclusive use and benefit of the clients to whom it is addressed; and, possession of this report or a copy, does not carry with it the right of publication, nor may it be used for any purpose other than that intended without the previous consent of the appraisers. In any event, only the entire report may be used and no part shall be taken or used out of context. 4. Included as an integral part of this report are maps and photographs of the comparable properties and sales. The maps and photographs were prepared and taken by the appraisers, and although they do not purport to represent survey accuracy, they are substantially correct and adequately serve as visual reference to the properties. DocuSign Envelope ID: 95E28DF7-CE19-488A-A4F9-53625F3505AD 5 5. Disclosure of the contents of this 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 any conclusions of value, the identity of the appraisers or the firm with which they are connected) shall be disseminated to the public through advertising media, public relations, news media, sales media, or any other public means of communication without the prior written consent and approval of the authors. 6. The forecasts, projections, or operating estimates contained herein are based on current market conditions, anticipated short-term supply and demand factors, and a continued stable economy. These forecasts are, therefore, subject to changes with future conditions. DocuSign Envelope ID: 95E28DF7-CE19-488A-A4F9-53625F3505AD 6 SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS Client: Mitchell Overton, City of Bozeman - Department of Parks and Recreation Intended User: City of Bozeman - Department of Parks and Recreation Date of Valuation: May 15, 2021 Date of Preparation: May 28, 2021 Rights Appraised: Fee Simple Highest and Best Use: The highest and best use is not applicable to this appraisal report as the valuation is not of a subject property, but rather a compilation of sales to establish a standard property valuation. DocuSign Envelope ID: 95E28DF7-CE19-488A-A4F9-53625F3505AD 7 SCOPE OF THE APPRAISAL The scope of work consists of the amount and type of information researched and analyzed in an assignment. In preparing the appraisal, I have considered pertinent characteristics of the comparable sales in comparison to current market standards. I have gathered information and completed the following report to establish a standard property valuation on a per square foot basis for Residential Single-Household Low Density (R1), Residential Two-Household Medium Density (R2), Residential Medium Density (R3), Residential High Density (R4), and Residential Office (RO) districts within the City of Bozeman. General and specific data was obtained through personal and telephone interviews with government officials, property managers, developers, and other market participants. I have not considered the highest and best use as it is not applicable to the standard property valuation on a per square foot basis of R1, R2, R3, R4, and RO districts within the City of Bozeman. I have applied the sales comparison approach valuation method to determine a standard property valuation method on a per square foot basis. This is the only applicable approach to valuing vacant land. The results indicated by this method have been reviewed and reconciled based on the reliability, relevance and reasonableness of the data, and the purpose and intended user of the appraisal. This is an Appraisal Report as defined by Uniform Standards of Professional Appraisal Practice under Standards Rule 2-2. This format provides a summary of the appraisal process, subject and market data and valuation analyses. The information contained in this report is specific to the needs of the client and for the intended use as stated in this report. DocuSign Envelope ID: 95E28DF7-CE19-488A-A4F9-53625F3505AD 8 PURPOSE AND INTENDED USE AND USER OF THE APPRAISAL The purpose of this appraisal is to estimate a credible opinion of the Current Market Value on a per square foot basis of the Fee Simple Interest for Residential Single-Household Low Density (R1), Residential Two-Household Medium Density (R2), Residential Medium Density (R3), Residential High Density (R4), and Residential Office (RO) districts within the City of Bozeman, in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP) and supplemented by the Appraisal Institute. The intended use of the appraisal is to assist the Client and Intended User, City of Bozeman - Department of Parks and Recreation, in establishing a standard property valuation for vacant land on a square foot basis to be used for the City of Bozeman’s Cash in Lieu of Parkland dedication process. There are no other intended users. DEFINITION OF MARKET VALUE Market value is defined as the most probable price, which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is consummation of a sale as of a specified date and passing of title from seller to buyer under conditions whereby: 1. Buyer and seller are typically motivated; 2. Both parties are well informed or well advised, and each acting in what they consider their own best interest; 3. A reasonable time is allowed for exposure in the open market; 4. Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; 5. The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. 1 1[Source: Section 323.2 amended at 57 Fed. Reg. 9049, March 16, 1992; 59 Fed. Reg. 29501, June 7, 1994] DocuSign Envelope ID: 95E28DF7-CE19-488A-A4F9-53625F3505AD 9 PROPERTY RIGHTS APPRAISED Property rights are ownership interests in real estate and have value. It is important to know what property right(s) or estate(s) are involved in the appraisal, because the estate identifies the rights being valued. The subject property rights being appraised is the Fee Simple Interest. Fee Simple: Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power and escheat.2 Leased Fee: A freehold (ownership interest) where the possessory interest has been granted to another party by creation of a contractual landlord-tenant relationship (i.e. a lease). 3 VALUATION DATE The effective date of the appraisal is May 15, 2021. This is the date of valuation. The comparable sales reflected in this report are the most current identifiable sales as of the effective date. 2 The Dictionary of Real Estate Appraisal, 5th ed. (Chicago; Appraisal Institute, 2010), p. 78. 3 The Dictionary of Real Estate Appraisal, 5th ed. (Chicago; Appraisal Institute, 2010), p. 111. DocuSign Envelope ID: 95E28DF7-CE19-488A-A4F9-53625F3505AD 10 MONTANA REGIONAL AND CITY MAPS Subject Area DocuSign Envelope ID: 95E28DF7-CE19-488A-A4F9-53625F3505AD 11 REGIONAL, CITY, AND NEIGHBORHOOD ANALYSIS Bozeman, Montana is located in Gallatin County, in an area more commonly referred to as the Gallatin Valley. This report is for the Client and Intended User, the City of Bozeman – Department of Parks and Recreation. Information regarding the City of Bozeman has not been included as this information is provided from the City of Bozeman and the client and intended user has access to this information. DocuSign Envelope ID: 95E28DF7-CE19-488A-A4F9-53625F3505AD 12 THE APPRAISAL PROCESS Typically, real estate can be valued by applying three approaches. All of these approaches to value, (particularly when the purpose of the appraisal is to establish market value) are market data approaches since the data inputs are presumably market derived. Cost Approach: One of the approaches to value commonly applied in Market Value estimates and many other valuation situations. A comparative approach to the value of property or another asset that considers, as a substitute for the purchase of a given property, the possibility of constructing another property that is an equivalent to the original or one that could furnish equal utility with no undue cost resulting from delay. The Valuer's estimate is based on the reproduction or replacement cost of the subject property or asset, less total (accrued) depreciation. The cost approach establishes the value of a real property by estimating the cost of acquiring land and building a new property with equal utility or adapting an old property to the same use with no undue cost due to delay. An estimate of entrepreneurial incentive or developer's profit/loss is commonly added to land and construction costs. For older properties, the cost approach develops an estimate of depreciation including items of physical deterioration and functional obsolescence.4 Sales Comparison Approach: A comparative approach to value that considers the sales of similar or substitute properties and related market data and establishes a value estimate by processes involving comparison. In general, a property being valued (a subject property) is compared with sales of similar properties that have been transacted in the open market. Listings and offerings may also be considered. A general way of estimating a value indication for personal property or an ownership interest in personal property, using one or more methods that compare the subject to similar properties or to ownership interests in similar properties. This approach to the valuation of personal property is dependent upon the Valuer's market knowledge and experience as well as recorded data on comparable items. 5 Income Approach: A comparative approach to value that considers income and expense data relating to the property being valued and estimates value through a capitalization process. Capitalization relates income (usually net income) and a defined value type by converting an income amount into a value estimate. This process may consider direct relationships (whereby an overall capitalization rate or all risks yield is applied to a single year's income), yield or discount rates (reflecting measures or return on investment) applied to a series of incomes over a projected period, or both. The income approach reflects the principles of substitution and anticipation. 6 5 The Dictionary of Real Estate Appraisal, 5th ed. (Chicago; Appraisal Institute, 2010), p. 250. 5 The Dictionary of Real Estate Appraisal, 5th ed. (Chicago; Appraisal Institute, 2010), p. 244. 7 The Dictionary of Real Estate Appraisal, 5th ed. (Chicago; Appraisal Institute, 2010), p. 256 DocuSign Envelope ID: 95E28DF7-CE19-488A-A4F9-53625F3505AD 13 Comparable Sales The following sales have been used to estimate a value on a per square footage basis. The compiled data represents the most recent known sales of speculative development land within the City of Bozeman and Gallatin County. DocuSign Envelope ID: 95E28DF7-CE19-488A-A4F9-53625F3505AD 14 ID 1259 Verification Source Purchaser Address 5250 Baxter Lane Price $8,080,000 City Bozeman Price per Acre $50,374 State MT Financing Cash to Seller Tax ID RGG6855 Property Rights Fee Simple County Gallatin Days on Market None Grantor Fern Vesta Anderson Recording Date 6/7/2019 Grantee NWX, LLC Recording Number 2646897 Legal Description Acres 160.4 Topography Level Land SF 6,985,282 Zoning A-S, Agricultural Road Frontage Baxter Lane & Cottonwood Flood Zone None Dimensions Rectangular Encumbrance or Easement None Utilities NorthWestern Energy Environmental Issues None Access Baxter Lane & Cottonwood Price Per Land SF $1.16 Tract 5 of COS 2552, NE 1/4 of Section 4, Township 2 South, Range 5 East, Gallatin County, Montana. This property sold on 06/07/2019 for $8,080,000 or $50,374per acre for 160.360 acres. The property went under contract in the early fall of 2018. The property is in the county, but adjacent to the City of Bozeman. The property is bordered to the east by the new Bozeman Sport Complex and to the south by Laurel Glen, a residential subdivsion. This property is also in very close proximity to the new Bozeman High School. The purchaser has applied for annexation into the City of Bozeman and will pursue a high-density REMU and B-2M zoning designation for the site following annexation. According to the buyer's proforma, off-site improvement costs are estimated to be approximately $4,300,000 or $26,815 per acre. Therefore, the effective acquisition cost for the property inclusive of estimated off-site improvement costs is $12,380,000 or $77,375per acre. This property was not openly marketed and the transaction was privately negotiated between the buyer and the seller. Transaction Site Comments Land Comparable 1 DocuSign Envelope ID: 95E28DF7-CE19-488A-A4F9-53625F3505AD 15 ID 1400 Verification Source Buy-Sell Agreement Address TBD South 19th Avenue Price $10,000,000 City Bozeman Price per Acre $83,600 State MT Financing Conventional Tax ID RGG9600 Property Rights Fee Simple County Gallatin Days on Market None Grantor Bozeman Ranch Land, LLC Recording Date 10/30/2019 Grantee Blackwood Land Fund. LC Recording Number 2662993 Legal Description Acres 119.6 Topography Level Land SF 5,210,522 Zoning See Comments Road Frontage South 19th Avenue Flood Zone None Dimensions Rectangular Encumbrance or Easement None Utilities NorthWestern Energy Environmental Issues None Access South 19th Avenue Price Per Land SF $1.92 The South 1/2 of the Southwest 1/4 of Section 24 and the North 1/2 of the North 1/2 of the Northwest 1/4 of Section 25 in Township 2 South, Range 5 East, Gallatin County, Montana. This is the sale of a large tract of speculative development land that is located along the eastern side of South 19th Avenue in the southern part of Bozeman. The property is not yet annexed into the City of Bozeman but is bordered on three sides by properties that are annexed. The City of Bozeman is very likely to grant annexation for the property shortly following the sale. The property is currently zoned by the Gallatin County Planning Department as AS, Agricultural Suburban District but the buyer is attempting to achieve an REMU, Residential Emphasis Mixed-Use zoning designation for a majority of the site from the City of Bozeman when it is annexed. Lower density zoning designations will be utilized for areas bordering existing communities. The buyer intends to develop the property into a multi-phase, large-scale mixed-use residential and commercial development. The property is already bisected by a water main for the City of Bozeman water system but the City's preferred sewer main connection is approximately 1,300 feet north of the property at the intersection of South 19th Avenue and Graf Street. However, it is expected that early phases of the development can be connected to smaller sewer lines stubbed at the adjacent Alder Creek Subdivision. There are estimated to be approximately $1,181,000 in off-site improvement costs for the widening of South 19th Avenue and the development of a traffic control light at 19th Avenue and Blackwood Road. The property is located in a Qualified Opportunity Zone which provides for additional potential tax benefits. The property was not openly marketed and the transaction was privately negotiated between the buyer and the seller. Comments Site Transaction Land Comparable 2 DocuSign Envelope ID: 95E28DF7-CE19-488A-A4F9-53625F3505AD 16 ID 1014 Verification Source Confidential Address 5528 Stucky Rd Price $2,900,000 City Bozeman Price per Acre $59,434 State MT Financing Cash to Seller Tax ID RGG6891 Property Rights Fee Simple County Gallatin Days on Market -- Grantor Big Sky Western Bank, a Division of Glacier Bank Recording Date 7/18/2017 Grantee R Haus, LLC Recording Number 2585905 Legal Description Acres 48.8 Topography Mostly Level Land SF 2,125,467 Zoning Residential High Density (R4), Residential Medium Density (R3) Road Frontage --Flood Zone No Dimensions Irregular Encumbrance or Easement None Utilities NorthWestern Energy Environmental Issues None Access Stucky Rd, Graf St Price Per Land SF $1.36 Tracts 1, 3 and 4 of C.O.S. No. 2725, being a relocation of common boundaries between Tracts 1 & 2 of C.O.S. No. 2122 and Tract 1A-1 of C.O.S. No. 2029 and Parcel II, loc. in N1/2 of Sec. 23, T2S, R5E, P.M.M., City of Bozeman, Gallatin Co., MT. Comments Transaction Land Comparable 3 The subject is located in southwest Bozeman, near Montana State University. The site is annexed into the city. The surrounding area has seen recent growth with a mix of commercial and residential development. This sale was a bank owned property that went to auction. Site DocuSign Envelope ID: 95E28DF7-CE19-488A-A4F9-53625F3505AD 17 ID 1548 Verification Source Sue Fry- Listing Agent Address 1280 Baxter Lane Price $3,800,000 City Bozeman Price per Acre $51,757 State MT Financing Cash to Seller Tax ID RGG11913 Property Rights Fee Simple County Gallatin Days on Market 222 Grantor Estate of Wayne E. Brewer Recording Date 12/22/2020 Grantee MVGR Land LLC Recording Number 2713654 Legal Description Acres 73.4 Topography Generally Level Land SF 3,198,175 Zoning RR/A, Rural Residential & Road Frontage Baxter Lane Flood Zone None Dimensions Irregular Encumbrance or Easement None Utilities NorthWestern Energy Environmental Issues None Access Baxter Lane Price Per Land SF $1.18 Tract 1 of Certificate of Survey No. 640, located in the NW 1/4 of Section 6, Township 2 South, Range 5 East, Gallatin County, Montana. Site Transaction Land Comparable 4 Comments This is a tract of speculative development land in the Four Corners area that is improved with a small single-family residence that is thought to have no contributory value. The property is bordered to the south and east by Black Bull Subdivision and to the west by a tract of land that was recently approved for development of a 96-lot residential subdivision that will be known as Creekside Meadows. The property is located in the service area for the Four Corners Water and Sewer District and is borderd to the east and south by the Four Corners Water and Sewer District. Furthermore, a water main, a sewer main, and a sewer lift station are located along the southern boundary of the property. This combined with the fact that the adjacent property to the west will be improved with utility services for the Creekside Meadows Subdivision makes this property a prime residential subdivision development site. The property was marketed as being able to situate 128 residential lots according to the local zoning ordinance. According to the seller, she received three offers for the full $3,600,000 asking price; however, the buyer that she had it under contract to terminated the agreement as a result of market uncertainty regarding COVID-19. The price was then raised to $3,999,000 before consumating at a price of $3,800,000 cash. DocuSign Envelope ID: 95E28DF7-CE19-488A-A4F9-53625F3505AD 18 ID 1804 Verification Source Confidential Address 5700 Fowler Ln Price $8,480,000 City Bozeman Price per Acre $53,000 State MT Financing Cash to Seller Tax ID RGG6752 Property Rights Fee Simple County Gallatin Days on Market Unknown Grantor Spencer N. Anderson, Trustee of the Grandchildren's Trust Recording Date 6/28/2019 Grantee Real Red, LLC Recording Number 2649002 Legal Description Acres 160.0 Topography Mostly Level Land SF 6,969,600 Zoning Agriculture Suburban Road Frontage Fowler Ln Flood Zone None Dimensions Rectangular Encumbrance or Easement None known Utilities NorthWestern Energy Environmental Issues None known Access Average Price Per Land SF $1.22 The NW1/4 of Section 26, T2S, R5E, P.M.M., Gallatin County, MT. Transaction This is the sale of 160 acres of land located southwest of Bozeman. The site was not annexed into the City, but was adjacent to City limits. The property was not openly marketed and the purchase price was privately negotiated between the buyer and seller. Comments Site Land Comparable 5 DocuSign Envelope ID: 95E28DF7-CE19-488A-A4F9-53625F3505AD 19 Sale 1 Sale 2 Sale 3 Sale 4 Sale 5 DocuSign Envelope ID: 95E28DF7-CE19-488A-A4F9-53625F3505AD 20 Address City State Date Price Acres Acre Unit Price Property Rights Fee Simple 0.0%Fee Simple 0.0%Fee Simple 0.0%Fee Simple 0.0%Fee Simple 0.0% Financing Cash to Seller 0.0%Conventional 0.0%Cash to Seller 0.0%Cash to Seller 0.0%Cash to Seller 0.0% Conditions of Sale Arm's Length 0.0%Arm's Length 0.0%Arm's length 0.0%Arm's Length 0.0%Arm's length 0.0% Expend. After Sale Market Trends Through 5/15/2021 12.0% Location % Adjustment $ Adjustment Acres % Adjustment $ Adjustment Topography % Adjustment $ Adjustment Shape % Adjustment $ Adjustment Utilities % Adjustment $ Adjustment Zoning % Adjustment $ Adjustment Net Adjustments Gross Adjustments $65,601.48 4.6% $99,569.01 54.3%19.1% 19.1%54.3% 4.6%24.6% $62,774.72 $54,123.61Adjusted Acre Unit Price $91,708.27 24.6% Adjusted Acre Unit Price $62,774.72 Good $83,600.16Adjusted Acre Unit Price $50,386.63 24.6% Good 0% $65,601.48 0%0% 4.6%54.3% MT $59,433.54 Bozeman MT $59,434 48.79 Transaction Adjustments 160.36 Bozeman $8,080,000 Bozeman 5528 Stucky Rd 1280 Baxter Lane NorthWestern Energy 0% $0 NorthWestern Energy 0% 0% Agriculture Suburban (AS) $0$0 $0 0% Residential High Density (R4), Residential Medium Density (R3) $0 RR/A, Rural Residential & Agricultural $0 0%0% See CommentsA-S, Agricultural Suburban $0 0% $0 160.36 0% Rectangular Land Analysis Grid Comp 1 $50,387 MT 5250 Baxter Lane TBD South 19th AvenueBozeman 119.62 Comp 2 $83,600 Comp 4 Comp 5Comp 3 $0 0% $0 Rectangular 0% 0% 0% $0 Irregular 0% 7/18/2017 $0 Level $0 0% $91,708.27 0% $2,900,000 MT $0 Good 0% Level $0 $0 NorthWestern Energy 0% NorthWestern Energy 0% 19.1% $99,569.01 $0 12/22/2020 0% 6/28/2019 $8,480,000 5700 Fowler Ln Bozeman $53,000 $0 MT 23.8% Mostly Level $0 $0 Irregular Rectangular $0 NorthWestern Energy $53,000.00$51,757.01 0% $0 0% 23.8% 23.8% 0% 160.00 $0 Generally Level 48.79 $0 Mostly Level $0 $0 0% 119.62 $0 0% $0 0% $51,757 73.42 $0 $3,800,000 $0 10/30/20195/15/2021 6/7/2019 $10,000,000 $0 0% $54,123.61 Good 0% $0$0 73.42 Good $0 160.00 $0 The provided sales give a good indication of the per square foot valuation for vacant land in the City of Bozeman. This valuation is for Residential Single-Household Low Density (R1), Residential Two-Household Medium Density (R2), Residential Medium Density (R3), Residential High Density (R4), and Residential Office (RO) districts. With the exception of Sale 4, there have been no new applicable land sales in the past six months to include in the report. Sales 1, 2, and 5 are fairly current, while Sale 3 is a bit older. However, all fit the criteria and definition for the Cash in Lieu program. Sale 1 had approval to be annexed into the City at the time of sale and Sale 2 was annexed in after purchase. Sales 1 and 2 will be developed with a mix of commercial and residential while Sale 3 is currently being developed mixed-use residential. Sale 5 does not currently have any development plans in place, but is located adjacent to the City limits. A site just to the north of this was recently annexed into the City and is planned for high density residential development. Sales 1 and 5 are the largest available sales at 160 acres, with Sale 2 at 120 acres. Sale 3 is a more moderately sized 49 acres. DocuSign Envelope ID: 95E28DF7-CE19-488A-A4F9-53625F3505AD 21 Typically, the larger the site, the lower the value per acre, and the smaller the site, the higher the value per acre; however, Sale 2 is one of the larger sites and has one of the highest indicated prices per acre. All four sales are typical sites where the developers will literally have to give up the physical land for park. These sales indicate an adjusted range of $62,774 to $99,569 per acre, or $1.44 to $2.29 per square foot. Sale 4 was included as it is a recent sale of a large tract of land not annexed into the City, but was purchased for speculative development purposes. The per square foot value for this sale was $1.18 ($1.24 adjusted). This comparable helps to establish to the lower limit of value on a per square foot basis. The per square foot value of this comparable is lower than those sites annexed into the City, which is expected, as the purchasers of this site would have additional costs for annexation and accessing utilities. In addition to these sales, there are two pending sales of large tracts of development land which have been disclosed to the appraiser. These sales are pending and confidential, so they have not been included within the report. However, the first is of approximately 100 acres and would be considered an infill site as it is not annexed, but is surrounded by properties which have been annexed into the City. The property is under contract for approximately $105,000 per acre. The second is adjacent to the City limits. This property contains approximately 185 acres and is under contract for approximately $70,000 per acre. There have been a limited number of sales in the past year. This can be attributed to the cost of development and the limited number of available properties. From approximately July 2020 to present, the inventory of single family homesites in the Bozeman market decreased significantly. As stated in the previous report for the client, the Flanders Mill subdivision is really the only new subdivision with homesites being sold off in the city limits. The Flanders Mill inventory saw 36 sites go under contract in 3 months in June-August 2020, while the three months prior to that saw only 10 sites go under contract. The Bozeman market has seen unprecedented values and demand in the past 10 months. In the past 3 months, 8 single family homesites have sold, with an average sale price of approximately $300,000. The average single family homesite price a year ago was $135,000. Based upon the preceding sales and pending sales, and analysis of homesite appreciation, I would estimate the per square foot value for vacant land in the Residential Single- Household Low Density (R1), Residential Two-Household Medium Density (R2), Residential Medium Density (R3), Residential High Density (R4), and Residential Office (RO) districts within the City of Bozeman between $2.05psf and $2.10psf or $90,000 per acre as of May 15, 2021. If I can be of further assistance, please do not hesitate to contact me. Sincerely, Keith O’Reilly, MAI General Certified Appraiser State of Montana #400 DocuSign Envelope ID: 95E28DF7-CE19-488A-A4F9-53625F3505AD 22 CERTIFICATION As a result of a request for an appraisal assignment of the property, identified as: Standard Property Valuation for the City of Bozeman's Cash in Lieu of Parkland Dedication Process I certify: To the best of my knowledge and belief the statements of fact contained in this report are true and correct. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions. I have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved. I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. My engagement in this assignment was not contingent upon developing or reporting predetermined results. My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice and the requirements of the Code of Professional Ethics and Standard of the Professional Appraisal Practice of the Appraisal Institute. The use of this report is subject to the requirements of the Appraisal Institute relating to its duly authorized representatives. As of the date of this report, I, Keith O’Reilly, MAI, have completed the continuing education program of the Appraisal Institute. Heidi Switzer provided significant real property appraisal assistance to the person signing this certification, including market research and input as to the final reconciled value. Respectfully Submitted, Keith O’Reilly, MAI General Certified Appraiser #400 State of Montana DocuSign Envelope ID: 95E28DF7-CE19-488A-A4F9-53625F3505AD Bridger Appraisals Inc. © Keith O’Reilly, MAI ADDENDUM DocuSign Envelope ID: 95E28DF7-CE19-488A-A4F9-53625F3505AD Bridger Appraisals Inc. © Keith O’Reilly, MAI DocuSign Envelope ID: 95E28DF7-CE19-488A-A4F9-53625F3505AD Bridger Appraisals Inc. © Keith O’Reilly, MAI DocuSign Envelope ID: 95E28DF7-CE19-488A-A4F9-53625F3505AD