HomeMy WebLinkAbout Parking Lot Appraisal at Black and Mendenhall, Carnegie LotS UMMARY R EPORT
R EAL E STATE A PPRAISAL
Of
Bozeman City Public Parking Lot
At the Southeast Inters ection of Black Avenue and Mendenhall Street
Bozeman,
Gallatin County, MT, 59718
As of
September 14, 2011
Prepared For
Mr. Paul Burns
Parking Manager
City of Bozeman
121 North Rouse Ave.
Bozeman, MT
59715
Prepared by
A PPRAISAL S ERVICES OF B OZEMAN , I NC .
PO Box 1076
Bozeman, MT 59771
Jerry R. Gossel, Certified General, MT-106
File Number: 11-361
A PPRAISAL S ERVICES OF B OZEMAN , I NC .
PO Box 1076
Bozeman, MT 59771
www.AppraisalServicesBozeman.com
406-587-5044
Fax:406-5897-5481
asjgoss@gmail.com
October 5, 2011
Mr. Paul Burns
Parking Manager
City of Bozeman
121 N. Rouse Ave.
Bozeman, MT 59715
Re: Summary Report, Re al Estate Appraisal
City of Bozeman Public Parking Lot
At the Southeast Intersection of
Black Avenue and Mendenhall Street
Bozeman, Gallatin County, MT, 59718
Dear Mr. Burns:
At your request, I have prepared an apprai sal for the above referenced property, which
may be briefly described as follows:
A 26,500 square foot vacant lot used by the City of Bozeman for public parking.
Please reference page 10 of this report for important information re garding the scope of
research and analysis for this appraisal, including property id entification, inspection,
highest and best use analys is and valuation methodology.
I certify that I have no present or contemplated future intere st in the property beyond this
estimate of value. The appraiser has not pe rformed any prior services regarding the
subject within the previous three years of the appraisal date.
Your attention is directed to the Limiting Conditions and Assumptions section of this
report (page 8). Acceptance of this report constitutes an ag reement with these conditions
and assumptions. In particular, I note the following:
October 5, 2011
Page 2
Hypothetical Conditions:
There are no hypothetical conditi ons for this appraisal.
None.
None.
Extraordinary Assumptions:
There are no Extraordinary Assumptions for this appraisal.
None.
None.
Based on the appraisal described in the accompanying report, subject to the Limiting
Conditions and Assumptions, Extraordinary Assumptions and Hypothetical Conditions
(if any), I have made the following value conclusion(s):
Current As Is Market Value:
The “As Is” market value of the Fee Simple estate of the property, as of September 14,
2011 is:
$1,500,000
One Million Five Hundred Thousand Dollars
The market exposure time 1 preceding September 14, 2011 would have been 12-24
months and the estimated marketing period 2 as of September 14, 2011 is 12-24 months.
Respectfully submitted,
Appraisal Co. Valuation & Consulting
Jerry R. Gossel, Certified General
MT-106
1 Exposure Time: see definition on page 10.
2 Marketing Time: see definition on page 9.
T ABLE OF C ONTENTS
Summary of Important F acts and Conclusions ................................................................... 5
Definitions....................................................................................................................... 6
Limiting Conditions and Assumptions ............................................................................... 8
Scope of Work .................................................................................................................. 10
Market Area Summary ...................................................................................................... 12
Property Description ......................................................................................................... 20
Site Plan ........................................................................................................................ 21
Assessment and Taxes ...................................................................................................... 29
Zoning ............................................................................................................................... 30
Highest and Best Use ........................................................................................................ 3 1
Valuation Methodology .................................................................................................... 32
Analyses Applied .......................................................................................................... 32
Land Value ........................................................................................................................ 33
Sales Comparison Approach – Land Valuation ................................................................ 33
Land Comparables ........................................................................................................ 33
Analysis Grid ................................................................................................................ 38
Lot Value Calculations: .................................................................................................... 40
Final Reconciliation .......................................................................................................... 40
Value Indications .......................................................................................................... 40
Value Conclusion .......................................................................................................... 40
Certification Statement ..................................................................................................... 4 1
Appraisal Services of Bozeman, Inc. Page 5
Summary of Important Facts and Conclusions
G ENERAL
Subject: A 26,500 square foot vacant lo t used by the City of
Bozeman for a public parking lot.
Owner:
City of Bozeman
Legal Description:
Original Plat of Bozeman Amended NE4, Section 7,
Township 2 South, Range 6 East N. 78’ Lots 18-22
Block E Plat C-1-F, and Lot 17-A.
Tax Identification:
RGH33779 Exempt
Date of Report:
October 5, 2011
Intended Use:
The intended use is for city purposes.
Intended User(s):
The client. No other users ar e identified by the appraiser.
.
Sale History: The subject has not sold in th e last three years, according
to public records.
Current
Listing/Contract(s):
The subject is not currently listed for sale, or under
contract.
P ROPERTY
Land Area:
26,500 square feet
Zoning:
B-3 Central Business District
Highest and Best Use
of the Site:
The highest and best use of the subject, as vacant, is for
commercial development.
Highest and Best Use
as Improved:
The highest and best use of the subject, as vacant, is for
commercial development.
V ALUE I NDICATIONS
Land Value: $1,500,000
Reconciled Value(s): As Is
Value Conclusion(s) $1,500,000
Effective Date(s) September 14,
2011
Property Rights Fee Simple
Appraisal Services of Bozeman, Inc. Page 6
Definitions
Market Value:3
The most probable price, as of a specified date, in cash, or in terms equivalent
to cash, or in othe r precisely revealed terms, fo r which the specified property
rights should sell after reasonable exposure in a competitive market under all
conditions requisite to a fair sale, with the bu yer and seller each acting
prudently, knowledgeably, and for self-interest, and as suming that neither is
under undu e duress.
A Fee Simple estate is defined 3 as:
Absolute ownership unencum bered by any othe r interest or estate, subject
only to the limitations imposed by th e governmental power s of taxation,
eminent domain, police power, and escheat.
A Leased Fee interest is defined 3 as:
A freehold (ownership interest) where the possessory interest has been
granted to another party by the creation of a contractual landlord-tenant
relationship (i.e ., a lease).
Marketing Time is defined 3 as:
An opinion of the amount of time it mi ght take to sell a real or personal
property interest at the concluded market value level during the period
immediately after the effectiv e date of the appraisal.
Marketing time differs from exposure time, which is always presumed to
precede the effective date of the appraisal.
Advisory Opinion 7 of the Appraisal Standards Board of The Appraisal
Foundation and Statement on Appraisa l Standards No. 6, "Reasonable
Exposure Time in Real Property a nd Personal Property Market Value
Opinions" address the determination of reasonable exposure and marketing
time.
Exposure Time is defined 3 as:
1. The time a property remains on the market.
2. The estimated length of time the property interest being ap praised would have
been offered on the market prior to th e hypothetical consummation of a sale at
market value on the effective date of the appraisal; a retrospective estimate based
3 Appraisal Institute, The Dictionary of Real Estate Appraisal, 5th ed. (Chicago: Appraisal Institute, 2010).
Appraisal Services of Bozeman, Inc. Page 7
on an analysis of past events assuming a competitive and open market.
See Marketing Time, above.
Gross Building Area (GBA): Total floor area of a bu ilding, excluding unenclosed areas,
measured from the exterior of the walls of the above-grade area. This includes
mezzanines and basements if and when typically included in the region.3
Rentable Area (RA): For office buildings, the tenant ’s pro rata portion of the entire
office floor, excluding elements of the buildi ng that penetrate thr ough the floor to the
areas below. The rentable area of a floor is computed by measuring the inside finished
surface of the dominant portion of the perm anent building walls, excluding any major
permanent penetrations of the floor. Alterna tively, the amount of space on which the rent
is based; calculated acco rding to local practice.3
Gross Leasable Area (GLA): Total floor area designed for the occupancy and exclusive
use of tenants, including basements and mezzan ines; measured from the center of joint
partitioning to the outside wall surfaces.3
As Is Market Value
The estimate of the market value of the real property in its current physical condition, use
and zoning as of the appraisal date.3
Stabilized Value
Stabilized value is the prospective value of a property after construction has been
completed and market occupancy and cash flow have been achieved.4
As Complete Value
The prospective value of a property after all construction has been completed. This value
reflects all expenditures for lease-up and occupancy that may be expected to have
occurred at that point in time, which may or may not put the property at stabilized value.
4 Narrative1.com. Thomas W. Armstrong, MAI
Appraisal Services of Bozeman, Inc. Page 8
Limiting Conditions and Assumptions
Acceptance of and/or use of this report constitutes acceptance of the following limiting
conditions and assumptions; these can only be modified by written documents executed
by both parties.
This appraisal is to be used only for the purpos e stated herein. While distribution of this
appraisal in its entirety is at the discretion of the client, individual sections shall not be
distributed; this report is intended to be used in whole and not in part.
No part of this appraisal, its value estimates or the identity of the firm or the appraiser(s)
may be communicated to the public through adve rtising, public relations , media sales, or
other media.
All files, work papers and documents developed in connect ion with this assignment are
the property of Appraisal Services of Bozem an, Inc. Information, estimates and opinions
are verified where possible, but cannot be guaranteed. Plans provi ded are intended to
assist the client in visualizing the property ; no other use of these plans is intended or
permitted.
No hidden or unapparent conditions of the pr operty, subsoil or stru cture, which would
make the property more or less valuable, we re discovered by the a ppraiser(s) or made
known to the appraiser(s). No responsibil ity is assumed for such conditions or
engineering necessary to disc over them. Unless otherwise st ated, this appraisal assumes
there is no existence of hazardous materials or conditions, in any form, on or near the
subject property.
Unless otherwise stated in this report, the existence of hazardous substances, including
without limitation asbestos, polychlorinated bi phenyl, petroleum leakag e, or agricultural
chemicals, which may or may not be pres ent on the property, was not called to the
attention of the appraiser nor did the a ppraiser become aware of such during the
appraiser’s inspection. The appraiser has no know ledge of the existence of such materials
on or in the property unless othe rwise stated. The appraiser, ho wever, is not qualified to
test for such substances. The presence of su ch hazardous substances may affect the value
of the property. The value opinion developed he rein is predicated on the assumption that
no such hazardous substances exist on or in the property or in such proximity thereto,
which would cause a loss in value. No res ponsibility is assumed for any such hazardous
substances, nor for any expertise or knowledge required to discover them.
Unless stated herein, the prope rty is assumed to be outside of areas where flood hazard
insurance is mandatory. Maps used by public and private agencies to determine these
areas are limited with respect to accuracy. Due diligen ce has been exercised in
interpreting these maps, but no responsibil ity is assumed for misinterpretation.
Good title, free of liens, encumbrances a nd special assessments is assumed. No
responsibility is assumed for matters of a legal nature.
Appraisal Services of Bozeman, Inc. Page 9
Necessary licenses, permits, consents, legisl ative or administrative authority from any
local, state or Federal government or priv ate entity are assumed to be in place or
reasonably obtainable.
It is assumed there are no zoning violat ions, encroachments, easements or other
restrictions which would affect the s ubject property, unle ss otherwise stated.
The appraiser(s) are not required to give te stimony in Court in c onnection with this
appraisal. If the appraisers are subpoenaed pursuant to a court order, th e client agrees to
pay the appraiser(s) Appraisal Services of Bozeman, Inc. regular per diem rate plus
expenses.
Appraisals are based on the da ta available at the time th e assignment is completed.
Amendments/modifications to appraisals base d on new information made available after
the appraisal was completed will be made, as soon as reasonably possible, for an
additional fee.
Americans with Disabilities Act (ADA) of 1990
A civil rights act passed by Congress guarant eeing individuals with disabilities equal
opportunity in public accommodations, em ployment, transportation, government
services, and telecommunications . Statutory deadlines become effective on various dates
between 1990 and 1997. Appraisal Services of Bozeman, Inc. has not made a
determination regarding the subjec t’s ADA compliance or non-compliance . Non-
compliance could have a negative impact on valu e, however this has not been considered
or analyzed in this appraisal.
Appraisal Services of Bozeman, Inc. Page 10
Scope of Work
According to the Uniform Standards of Pr ofessional Appraisal Practice, it is the
appraiser’s responsibility to de velop and report a scope of work that results in credible
results that are appropriate for the appraisal problem and intended user(s). Therefore, the
appraiser must identify and consider:
● the client and intended users;
● the intended use of th e report;
● the type and definition of value;
● the effective da te of value;
● assignment conditions;
● typical client expect ations; and
● typical appraisal work by p eers for similar assignments.
This appraisal is prepared for Mr. Paul Bu rns, Parking Manager, City of Bozeman. The
problem to be solved is to estimate the 'as is' market value of th e subject property. The
intended use is for city purposes. This appraisa l is intended for the use of client. No other
users are identified by the appraiser. .
S COPE OF W ORK
Report Type: This is a Summary Report as defined by Uniform
Standards of Professional Appraisal Practice under
Standards Rule 2-2(B). This format provides a
summary of the appraisal pr ocess, subject and market
data and valuation analyses.
Property Identification: The subject has been identified by the legal description
and the assessors' parcel number.
Inspection: An exterior viewing of the subject property has been
made, and photographs taken.
Market Area and Analysis of
Market Conditions:
A complete analysis of market conditions has been
made. The appraiser maintains and has access to
comprehensive databases for this market area and has
reviewed the market for sale s and listings relevant to
this analysis.
Highest and Best Use Analysis:
A complete as vacant and as improved highest and
best use analysis for the subject has been made.
Physically possible, legally permissible and financially
feasible uses were cons idered, and the maximally
productive use was concluded.
Appraisal Services of Bozeman, Inc. Page 11
Valuation Analyses
Cost Approach:
A cost approach was not a pplied as the property is a
vacant lot.
Sales Comparison Approach:
A sales approach was applied as there is adequate data
to develop a value estimate and this approach reflects
market behavior for this property type.
Income Approach:
An income approach was not applied as the subject is
not an income producing property.
Hypothetical Conditions:
There are no hypothetica l conditions for this
appraisal.
Extraordinary Assumptions:
There are no Extraordinary Assumptions for this
appraisal.
Appraisal Services of Bozeman, Inc. Page 12
Market Area Summary
The four forces that influence value in a market are social, economic, governmental, and
environmental. This analysis identifies the characteristics that influence value trends in
the past and that may affect values in the future.
Bozeman, the county seat, is located in the southwest portion of the state in Gallatin
County. The county area is 2,510 square miles. Billings, the state's largest city, is located
150 miles to the east; Butte is located approxi mately 80 miles to the west. Helena, the
capitol, is located 90 miles to the north. Gallatin County ha s been one of the fastest
growing areas in the state.
Social Influences
In the market area analysis, the social ch aracteristics that influence property values
include: population density, whic h is important in central bus iness districts and high-rise
residential neighborhoods; skill levels or em ployment categories, which are important in
industrial or high-technology dist ricts; age levels, which is important in residential
neighborhoods; house-hold size; employment status, including types of unemployment;
extent of crime; extent of litter; quality and availability of educational, medical, social,
recreational, cultural, and commercial services; and presence of community
organizations.
According to the U.S. Census Bureau the current population of Montana is 989,415.
Gallatin County’s population is 89,513. Bozem an’s population is 37,280 which is an
increase of35.5 percent since 2000.
Gallatin County has a well-educated work for ce. Of the county adult population over 25
years of age, 41% have college degrees; in Bozeman, that number increases to 49.5%.
Gallatin County has experienced steady population growth in recent decades. More than
90% of the population lives in Bozeman or w ithin 30 minutes of Bozeman. According to
the Bozeman Planning Office approximately 25,000 people come into the city each day.
The age distribution for Gallatin County in 2000 is as follows: under 10, 11.7%; 10-19,
15.2%; 20-29, 21.9%, 30-39%; 40-49, 16.0%; and 60 & over, 11.4%. The age
distribution for Bozeman in 1990 is as follows: under 10, 11.4%; 10-19, 15.7%; 20-29,
31.2%; 30-39, 16%; 40-49, 9.3%; and 60 & over, 11.4%.
The average persons per household in Ga llatin County for 2000 were 2.46 and for 1990
were 2.50. The average persons per household in Bozeman for 1990 were 2.27.
According to the Montana Employment & La bor Trends Quarterly; the civilian labor
force of Gallatin County in December of 2000 was 43,401, the number of employed
workers was 42,114, and the number of unemployed was 1,287, with an unemployment
rate of 3.0%. The civilian labor force in December of 2001 was 44,329, the number of
employed workers was 42,937, and the number of unemployed was 1,053, with an
unemployment rate of 1.2%. The civilian labor force in January 2010 was 47,686, the
Appraisal Services of Bozeman, Inc. Page 13
number of employed workers was 44,134, a nd the number of unemployed was 3,552 with
an unemployment rate of 8.0%. The civilia n labor force for November 2010 was 46,685
with the number of unemployed at 3,437 or an unemployment rate of 7.4%
The historical unemployment rates are as follows:
Year Montana % Gallatin County %
2011 7.1 6.1
2010 7.1 7.4
2009 5.9 5.5
2008 3.8 2.9
2004 3.8 2.4
2003 4.4 2.5
2002 4.6 2.7
2001 4.6 2.5
2000 4.9 2.7
Gallatin County has 32 schools in 16 school dist ricts, offering educational programs from
kindergarten through high school. Gallatin County’s total enro llment of students,
including private sc hool numbers is 10,942.
Montanan State University is one of two university systems w ithin the state. During the
2005 fall semester, 12,300 students were enrolle d with a current enrollment over 13,400.
The university offers baccalaureate degrees in 50 fields, master’s degr ees in 40 fields and
doctorates in 13 fields.
Bozeman has a full range of me dical professionals, several clinics, two urgent care
clinics, a low-income clinic, and a modern short-term acute care hospital. There are
approximately 100 doctors and 35 dentists, 114 practical and 377 regist ered nurses in the
community.
The number of increasing passenger boarding at Gallatin Field Airport is an indication of
strength in the tourism and r ecreation in Gallatin County. Bozeman is a destination point
to Yellowstone National Park, which continues to attract over 3 million visitors each year.
The alpine skiing is excellent with Bridger Bowl located 15 miles north of town and Big
Sky, a destination resort ski area, located 50 miles south of town. Both ski areas offer
beginner to expert ski runs. There are numerous cross-country ski trails in the area. The
area is known for its fishing on three rivers , the Gallatin, the Jefferson, and the Madison,
which form the Missouri River. Access to the Yellowstone River in Park County is 25
miles east of Bozeman.
There are 48 religious organizations in the Bozeman area representing a variety of
affiliations and denominations.
Bozeman has more than 70 motels/hotels with 1,400 rooms and more than 50 restaurants.
Appraisal Services of Bozeman, Inc. Page 14
Economic Influences
Economic considerations relate to the financia l capacity of a market area’s occupants and
their ability to rent or own property, to main tain it in an attractiv e and desirable condition,
and to renovate it when needed. The economic characteristics include; mean and median
household income, per capita income, income distribution, extent of owner occupancy,
property rent levels and trends, property value levels and trends, vacancy rates for various
types of property, and amount of development.
The economy in Gallatin County and Bozeman is both broad based and diverse, with
3,400 establishments employing over 41,000 people. Major sectors of the economy, in
addition to Montana State University, incl ude recreation, retail trade, agriculture,
services, manufacturing, and natural resource-bas ed industry such as mining and forestry.
Growing segments within thes e sectors are technology-based, and sports and recreation-
based businesses that find university resource s and an educated and recreational active
labor force to be significant assets.
The largest employer in the area is M ontana State University, which employs
approximately 3,500 personnel. Employment numbers indicate that retail trade
employee’s make-up 26% of the covered labor force, with government at 20%, and
services at 25%. Manufacturing is the ne xt largest segment, employing 9% of the
covered labor force.
In 1999 the median household income for M ontana was $33,024 with a per capita income
of $17,151. The median household income fo r Bozeman was $32,156 with a per capita
income of $16,104. For the year 2008 the me dian household income for Bozeman was
$44,776 with a per capita income of $23,783.
Housing statistics for 2000 are as follows; Residential housing units in Montana 412,633,
and for Bozeman 10,877. The persons pe r household in Montana were 2.45 and
Bozeman was 2.26 with the homeownership ra te in Montana of 69.1% and Bozeman was
42.9%.
Residential building permits for Bozeman singl e-family and multi-family units were as
follows: 2001 - 295; 2002 - 346; 2003 - 431; 2004 – 639; 2007 – 442; 2008 – 199; 2009 –
118; 2011 - 49 for an 89% decrease since 2007. Source: City of Bozeman Building
Office.
The average rental prices in Bozeman as of August 2011 for apartments were: 1 bedroom
$300-$500; 2 bedrooms $500-$795; 3 bedrooms $650-$1000. The average studio rental
was $275-$400. The average house rental wa s: 2 bedrooms $600-$850 and 3 bedrooms
$800-$1,200. Source: Peak Property Management.
According to the City of Bozeman Buildi ng Division the new construction valuation,
including both residential and commercial for Bozeman:
2000 $81.2 million
2001 $78.9 million
Appraisal Services of Bozeman, Inc. Page 15
2002 $85.8 million
2003 $133.1 million
2004 $144.2 million
2008 $33.6 Million
2009 $6.7 Million
2010 $18 Million
2011 $17 Million
The residential real estate market had b een strong until 2007. The average price of a
single family residential home wa s $77,500 in 1991 increasing to $331,722 for 2007.
However the average price has decreased to $275,054 for the past twelve months, which
is an 18% decline in value since 2007.
According to the Southwest Multiple Listi ng Services and the Gallatin Association of
Realtors, listed below is the annual sold st atistics for Commercial Land with Buildings
within the Bozeman City Limits.
Number
of Sales
Total Sales Average
Sales
Median Price
Range
2000 33 $8,076,750$244,750$210,000
38,900-
$740,000
2001 25 $8,412,600$336,504$280,000
$8,500-
$1,350,000
2002 27 $10,109,420$374,423$255,000
$40,000-
$1,900,000
2003 42 $14,259,525$339,513$245,000
$28,000-
$1,577,625
2004 9 $11,244,500$1,249,388$882,000
$205,000-
$4,000,000
2005 25 $14,046,115$561,844$400,000
$79,900-
$4,200,000
2006 10 $12,376,600$1,237,660$034,300
$364,000-
$4,500,000
2007 10 $8,281,500$828,150$710,250
$305,000-
$1,850,000
2008 11 $4,602,085 $418,371 $270,000 $101,200-
$2,000,000
2009 4 $1,403,000 $350,750 $285,000 $133,000-$700,000
2010 10 $5,228,835 $522,883 $457,500 $206,835-$1,100,000
The average price has decreased 37% since 2007.
Appraisal Services of Bozeman, Inc. Page 16
MLS data for commercial land and building sales for the Bozeman Suburban area shows
the following:
Number
of Sales
Total
Sales
Average
Sales
Median Price
Range
2007 5 $4,828,500 $965,700 $650,000 $410,000-$2,500,000
2010 5 $3,245,000 $649,000 $700,000 $410,000-850,000
The data shows a 33% decline in the average price since 2007.
According to the Southwest Multiple Listi ng Services and the Gallatin Association of
Realtors, listed below are the annual sold statistics for Commerci al Vacant Land within
the city limits.
Number
of Sales
Total SalesAverage
Sales
Median Price
Range
2000 13 $2,743,900$211,069$127,000
$96,200-
$257,500
2001 9 $1,697,180$188,576$152,320
$39,700-
$380,900
2002 27 $7,255,650$268,728$215,000
$11,900-
$1,300,000
2003 20 $5,990,329$299,516$150,000
$33,000-
$1,787,040
2004 6 $2,283,285$380,547$272,000
$152,895-
$930,000
2005 19 $7,344,569$386,556$295,000
$85,000-
$785,000
2006 10 $5,994,188$599,418$375,500
$219,500-
$1,300,000
2007 3 $1,543,000$514,533$574,000
$222,100-
$747,500
2008 1 $1,050,000 $552,500 $552,500 $205,000-$900,000
2010 0
MLS data for commercial land sales for th e Bozeman Suburban area shows the following:
Number
of Sales
Total
Sales
Average
Sales
Median Price
Range
2007 8 $2,733,319 $341,664 $304,492 $105,500-$549,835
Appraisal Services of Bozeman, Inc. Page 17
2009 2 $310,000 $155,000 $155,000 $145,000-$165,000
2010 0
Currently there are twenty-two vacant commerci al lots listed with an average price of
$951,095 and 305 days on the market.
According to the Southwest Multiple Listi ng Services and the Gallatin Association of
Realtors, listed below are the annual sold st atistics for Commercial Condominiums within
the Bozeman city limits:
Number
of Sales
Total SalesAverage
Sales
Median Price
Range
2000 7 $1,033,815$147,688$127,000
$96,200-
$257,500
2001 11 $2,177,130$197,921$220,375
$38,000-
$354,000
2002 26 $3,807,638$146,448$177,450
$8,500-
$272,035
2003 20 $4,144,805$207,240$147,000
$19,500-
$1,100,000
2004 9 $1,889,716$209,968$222,500
$111,716-
$322,000
2005 9 $3,493,113$388,123$300,000
$69,048-
$681,800
2006 24 $5,883,720$243,071$247,975
$60,000-
$422,000
2007 22 $7,494,095$340,640$201,200
$99,500-
$1,250,000
2008 6 $3,595,500 $599,250 $567,750 $150,000-$1,200,000
2009 6 $1,529,220 $254,870 $226,160 $117,675-$488,000
2010 5 $1,197,500 $239,500 $150,000 $98,000-$699,500
The data shows a 61 percent decline in the aver age value for the past thirty-six months.
Governmental Influences
Governmental considerations relate to laws , regulations, and propert y taxes that affect
properties in the market area and the admi nistration and enforcement of zoning laws,
building codes, and housing and sanitary c odes. The government al characteristics
include; property tax burden re lative to services provided compared with other areas in
the community; special assessments; zoning, building, and housing codes; quality of
Appraisal Services of Bozeman, Inc. Page 18
public services, such as fire and police protection, schools, a nd other governmental
services; and environmental regulations.
In 1921, the city of Bozeman adopted a Co mmissioner-Manager form of government.
The day-to-day operations of local government are administered by the City Manager.
All department heads are responsible to the Ci ty Manager, who is in turn responsible to
the City Commission. Five commissioners are elected at large for four-year overlapping
terms. The City Judge, the only other elected o fficial, is also electe d at large for a four-
year term.
The city provides water and sewer services that is supported by user fees. Garbage
collection and landfill operations costs are covered by an annual assessment of property-
owners. Through its general taxing authority, the City of Bozeman also provides library,
parks, cemetery, street, and tree maintenance services.
The Bozeman City/County Planning Offi ce advises the Bozeman City Commission,
Gallatin County Commission and Bozeman City/County Planning Board on matters
within the planning jurisdictional area. The staff reviews subdivision requests,
annexation requests, Master Plan amendmen ts, zone changes; conditional uses, and
makes recommendations to the respective bodies . The staff is also responsible for
carrying out long range, comprehensive planni ng programs. The Department administers
the Bozeman area-zoning ordinance, which contains provisions for site review and
planned unit-development. The planning st aff administers all housing-programs and
historic preservation.
Environmental Influences
Environmental considerations consist of a ny natural or man-made features that are
contained in or affect the market area a nd its location, including: building size, type,
density, and maintenance; topographical feat ures (terrain and ve getation); open space;
nuisances and hazards from nearby facilities ; the adequacy of public utilities; the
existence and upkeep of vacant lo ts; general maintenance; the attractiveness and safety of
routes into an out of the area ; effective ages of properties; changes in property use and
land use patterns; microclimate characterist ics (temperature, wind, humidity, snowfall,
etc.); environmental liab ilities (landslides, floods, et c.); and access to public
transportation, schools, stores and services establishments, parks and recreational
facilities, house of worship, and workplaces.
The Gallatin Valley is surrounded by several mo untain ranges and thousands of acres of
national forest land, where trail systems and wilderness areas abound. Two of the
entrances to Yellowstone Park, America’s olde st and best-known park are within a 90-
mile drive of Bozeman. Yellowstone Nati onal Park can be enjoyed year round and
Glacier National Park is a s hort-days drive to the west.
Bozeman is near ten national forests that accommodate a variety of outdoor recreational
experiences. There are several areas that are designed to accommodate the needs of
people with disabilities, families with small children, and senior citizens.
Appraisal Services of Bozeman, Inc. Page 19
Many organizations and Recreation Department use public lands and city/county facilities
to conduct programs. The city of Bozeman supports 23 parks and recreation areas, 19 of
which are owned by the city. The city mainta ins 17 public tennis courts with three public
parks are converted to outdoor i ce skating rinks in the winter.
Bozeman’s climate reflects its mountain valley location. Summers are pleasant,
characterized by warm days, cool nights, and an abundance of sunshine. Hot weather and
humid conditions are infrequent. Bozeman is located in one of the few regions in the
country where the average summer climate is comfortable due to the moderate combined
heat and humidity.
The average high temperatures for the summer s are in the 70’s and 80’s; the average low
temperatures are in the mid 40’s and low 50’s. The autumn high daily temperature is 70
degrees until the middle of October then between 20 and 50 degrees in October and
November. The average monthly high and lo w temperatures for December, January and
February are 35 and 16, 31 and 11, and 37 and 17 degrees. The average temperatures for
spring are between 53 and 72 degrees. The average snowfall for Bozeman is 73.1 inches.
Appraisal Services of Bozeman, Inc. Page 20
Property Description
The following description is based on a propert y inspection, assessment records, and plat.
S ITE
Location: The subject is located at the southeast intersection of Black
Avenue and Mende nhall Street.
Current Use of the
Property:
Public parking lot.
Site Size: 26,500 square feet
Shape: Rectangular
Frontage/Access:
The subject property has good access with frontage on Black
Avenue and Mende nhall Street.
Visibility: Average
Topography: The lots have level topography at grade.
Soil Conditions: The soil conditions observed at the subject appear to be typical
of the region and adequate to support development.
Utilities:
Electricity: Available
Sewer: Available
Water: Available
Natural Gas: Available
Underground Utilities: No
Adequacy: Average
Flood Zone: The subject is located in an area mapped by the Federal
Emergency Management Agency (FEMA). The subject is
located in FEMA flood zone X, which is not classified as a
flood hazard area.
FEMA Map Number: 300028 0012 C
FEMA Map Date: July 15, 1988
Appraisal Services of Bozeman, Inc. Page 21
Site Plan
Appraisal Services of Bozeman, Inc. Page 22
Appraisal Services of Bozeman, Inc. Page 23
Parking Lot
Looking Southwest
Appraisal Services of Bozeman, Inc. Page 24
Mendenhall Street
Looking West
Appraisal Services of Bozeman, Inc. Page 25
Black Avenue
Looking South
Appraisal Services of Bozeman, Inc. Page 26
Parking Lot
Looking East
Appraisal Services of Bozeman, Inc. Page 27
Mendenhall Street
Looking East
Appraisal Services of Bozeman, Inc. Page 28
Black Avenue
Looking North
Appraisal Services of Bozeman, Inc. Page 29
Assessment and Taxes
R EAL E STATE A SSESSMENT AND T AXES
Taxing Authority State of Mo ntana and Gallatin County
Assessment Year 2010
T AXES
Tax Identification Number RGH33779 Exempt
Appraisal Services of Bozeman, Inc. Page 30
Zoning
L AND U SE C ONTROLS
Zoning Code
B-3
Zoning Description
Central Business District
Actual Density of Use
Entire lot, exclusive of required yards and parking.
Current Use Legally Conforming
Current Use Legally Conforming
Zoning Change Likely
N/A
Zoning Change Description
N/A
Set Back Distance
No minimum yards except a 7-foot front yard
setback on Babcock an d Mendenhall Streets.
Appraisal Services of Bozeman, Inc. Page 31
Highest and Best Use
Highest and best use may be defined as
the reasonably probable and legal use of vacant land or improved property, which is
physically possible, appropriately supported, fi nancially feasible, and that results in
the highest value.
1. Legally Permissible: What uses are permitted by zoning and other legal
restrictions?
2. Physically Possible: To what use is the site physically adaptable?
3. Financially Feasible: Which possible and permissible use will produce any net
return to the owner of the site?
4. Maximally Productive. Among the feasible uses which use will produce the
highest net return, (i.e., th e highest present worth)?
Highest and Best Use of the Site
The highest and best use of the site, as vacant, is for commercial use.
Highest and Best Use as Improved
The highest and best use of the subject, as improved, is for commercial development.
Appraisal Services of Bozeman, Inc. Page 32
Valuation Methodology
Three basic approaches may be us ed to arrive at an estimate of market value. They are:
1. The Cost Approach
2. The Income Approach
3. The Sales Comparison Approach
Cost Approach
The Cost Approach is summarized as follows:
Cost New
- Depreciation
+ Land Value
= Value
Income Approach
The Income Approach converts the anticipated flow of futu re benefits (income) to a
present value estimate through a capitali zation and or a discounting process.
Sales Comparison Approach
The Sales Comparison Approach compares sales of similar properties with the subject
property. Each comparable sale is adjusted for its inferior or superior characteristics. The
values derived from the adjusted comparable sales form a range of value for the subject.
By process of correlation and analysis, a final indi cated value is derived.
Final Reconciliation
The appraisal process concludes with the Fina l Reconciliation of the values derived from
the approaches applied for a single estimate of market value. Differe nt properties require
different means of analysis and lend themse lves to one approach over the others.
Analyses Applied
A cost analysis was not developed because the property is a vacant lot.
A sales comparison analysis was considered and was developed because there is
adequate data to develop a value estimate and this approach reflects market behavior for
this property type.
An income analysis was not developed because the s ubject is not an income producing
property.
Appraisal Services of Bozeman, Inc. Page 33
Land Value
The subject’s land value has been developed via the sa les comparison approach.
Sales Comparison Approach – Land Valuation
The Sales Comparison Approach is based on the premise that a buyer would pay no more
for a specific property than the cost of obtai ning a property with the same quality, utility,
and perceived benefits of ownership. It is based on the principles of supply and demand,
balance, substitution and externalities. The following steps describe the applied process
of the Sales Comparison Approach.
The market in which the subject property competes is investigated; comparable
sales, contracts for sale and current offerings are reviewed.
The most pertinent data is further analy zed and the quality of the transaction is
determined.
The most meaningful unit of value for the subject property is determined.
Each comparable sale is analyzed and wh ere appropriate, adjusted to equate with
the subject property.
The value indication of each comparable sa le is analyzed and the data reconciled
for a final indication of value vi a the Sales Comparison Approach.
Land Comparables
I have researched four comparables for this analysis; these are documented on the
following pages followed by a location map a nd analysis grid. All sales have been
researched through numerous sources, insp ected and verified by a party to the
transaction.
ComparableAddressDatePriceLand SF Unit AcresLand SFZoning
Subject Black Ave. &
Mendenhall St.
1/21/100$0N1 050320100275
1 223 E. Main
Street
2/15/11$310,000$76.540.094,050B-3
2 219 E. Main St.8/17/09$225,000$57.690.093,900B-3
3 519 E.
Mendenhall St.
5/6/11$157,000$18.690.198,400B-3
4 527 E.
Mendenhall St.
5/6/11$157,500$18.750.198,400B-3
0
0
0
0
Comments
Appraisal Services of Bozeman, Inc. Page 34
ID 106 Date 2/15/11
Address 223 E. Main Street Price $310,000
City Bozeman Land SF Unit Price $76.54
State MT Financing Trust Indenture
Property Rights Fee Simple
Grantor Ann Bates
Grantee Provenance Place, LLC Verification Source Owner
Legal Description The E 16.5 Feet of Lot 6 & W
Acres 0.1
Land SF 4,050 Zoning B-3
Utilities City water & sewer
Site
Transaction
Land Comparable 1
0
Appraisal Services of Bozeman, Inc. Page 35
ID 107 Date 8/17/09
Address 219 E. Main St.Price $225,000
City Bozeman Land SF Unit Price $57.69
State MT Financing Cash
Property Rights Fee Simple
Grantor Sanks Family Trust
Grantee F & H, LLC Verification Source Ross Wenger
Legal Description E 14.5 Feet Lot 5 & W 11.5
Acres 0.1
Land SF 3,900 Zoning B-3
Utilities City water & sewer
Transaction
Land Comparable 2
Site
0
Appraisal Services of Bozeman, Inc. Page 36
ID 108 Date 5/6/11
Address 519 E. Mendenhall St.Price $157,000
City Bozeman Land SF Unit Price $18.69
State MT Financing Cash
Property Rights Fee Simple
Grantor Bobinski
Grantee GHT Investments, LLC Verification Source MLS #161960-Public
Legal Description Lots 5 & 6, Block H Rouse's
Acres 0.2
Land SF 8,400 Zoning B-3
Utilities City water & sewer
Land Comparable 3
The property was purchased along with Comparable Four with plans to remove the existing improvement within four to
five years and replace with new commercial improvements.
Notes
Site
Transaction
Appraisal Services of Bozeman, Inc. Page 37
ID 109 Date 5/6/11
Address 527 E. Mendenhall St.Price $157,500
City Bozeman Land SF Unit Price $18.75
State MT Financing Cash
Property Rights Fee Simple
Grantor Bobinski
Grantee GHT Investments, LLC Verification Source MLS #161962 & Public
Legal Description Lot 7, Block H Rouse's First
Acres 0.2
Land SF 8,400 Zoning B-3
Utilities City water & sewer
Land Comparable 4
Transaction
Site
The property was purchased along with Comparable Three with plans to remove the existing improvement within four
to five years and replace with new commercial improvements.
Appraisal Services of Bozeman, Inc. Page 38
Analysis Grid
The above sales have been analyzed and co mpared with the subject property. I have
considered adjustments in the areas of:
Property Rights Sold
Financing
Conditions of Sale
Market Trends
Location
Physical Characteristics
On the following page is a sales comparis on grid displaying the subject property, the
comparables and the adjustments applied.
Appraisal Services of Bozeman, Inc. Page 39
Address
City
State
Date
Price
Land SF
Land SF Unit Price
Property Rights
Fee
Simple0.0%
Fee
Simple0.0%
Fee
Simple0.0%
Fee
Simple0.0%
Financing
Trust
Indentu
re0.0%Cash0.0%Cash0.0%Cash0.0%
Conditions of SaleNormal0.0%Normal0.0%Normal0.0%Normal0.0%
Expenditures After Sale
Market Trends Through 1/21/10 0.0%
Location
% Adjustment
$ Adjustment
Land SF
% Adjustment
$ Adjustment
Topography
% Adjustment
$ Adjustment
Shape
% Adjustment
$ Adjustment
Zoning
% Adjustment
$ Adjustment
Volume Discount
% Adjustment
$ Adjustment
Net Adjustments
Gross Adjustments 0.0%
0.0%
0%0%
$18.75 $18.69
0.0%0.0%
0.0%
0.0%
0.0%0.0%
Adjusted Land SF Unit Price
0.0%
$57.69 $76.54
0%
$0.00
0%
0%
0
$0.00
$0.00
Rectangular
0%
0
B-3
Rectangular
Level
B-3B-3
0%
$0.00 $0.00
0%0%0%
Rectangular Rectangular
8400.00
$0.00$0.00 $0.00$0.00
0%0%0%
4050.00
0%
$0.00
0%
$0.00
3900.00
0%
Superior
0%
Superior
Varied
Good
$0.00
Adjusted Land SF Unit Price $76.54
0.00
$0.00$76.54
0.0%
$18.69 $57.69
$0.00
0.0%
Adjusted Land SF Unit Price$76.54
Cash
Conventional
$0.00
3,900.00 4,050.00
Fee Simple
Transaction Adjustments
$18.69
$157,000
8,400.00
$225,000
$57.69
MT
223 E. Main 219 E. Main 519 E. Mendenhall
BozemanBozeman
MT
Comp 1Comp 2
Baxter Lane
Bozeman
MT MT
Bozeman
Land Analysis GridComp 4
MT
Bozeman'
Comp 3
527 E. Mendenhall
Average
$18.69
$18.75
$0.00
5/6/2011
$57.69
8,400.00
5/6/2011
$0.00
Level
$0.00
Rectangular
$0.00
$0.00
B-3
$0.00
B-3
None0
$0.00$0.00
0
8400.00
0%
0%
$0.00
0%
0
0%
0%
$0.00 $0.00
$0.00
0%
0
$0.00
Level
Average
$18.75
0%
$157,500
0.0%
$0
8/17/2009
$310,000
1/21/20102/15/2011
$0.00
$18.75
Appraisal Services of Bozeman, Inc. Page 40
Lot Value Calculations:
The value range of the sales is $18.69 to $76.54 per square foot. The indicated value of
the subject is $57.00 per square foot calculated as follows:
26,500 square feet multiplied by $57.00 = $1,510,500 rounded to $1,500,000.
Final Reconciliation
The process of reconciliation involves the an alysis of each approach to value along with
the quality of data applied, the significance of each appro ach as it relates to market
behavior and defensibility of each approach are considered and weighed. Finally, each is
considered separately and comparatively with each other. Sales one and two are located
on Main Street, which are considered prime commercial locations. Sales three and four
are located in the Central Business District; however, the location at the east end of the
district is inferior to sale s one and two and the subject. Al so sales three and four have
been purchased with the intent of rem oving the existing improvements and rebuilding
within four to five years. Sale one is the most recent sale of a vacant lot on Main Street
and is given weight; however, the subject’s loca tion off main street is considered to put
the value in line with sale two, wh ich is given the most weight.
Value Indications
Land Value: $1,500,000
Sales Comparison Approach
The Sales Comparison approach to value was considered appropriate for vacant
residential lots. The appropriateness was measured by the similarities of the comparable
sales. The similarities include similar locations for commercial development. Both the
appropriateness and the accuracy of the data we re considered in rela tion to the quantity of
data. The comparable sales chosen for this report were consider ed to be the best
available. The transactional data concerning each sale was verified and were considered
to be reliable. Based on the appropriatene ss, accuracy, quantity of evidence, and quality
of data; the comparable sales approach was considered the best indicator of value.
Value Conclusion
Based on the data and analyses developed in this appraisal, I have reconciled to the
following value conclusion(s), as of Se ptember 14, 2011, subject to the Limiting
Conditions and Assumptions of this appraisal.
Reconciled Value(s): Premise: As Is
Interest: Fee Simple
Value Conclusion: $1,500,000
One Million Five Hundred Thousand Dollars
Appraisal Services of Bozeman, Inc. Page 41
Certification Statement
I certify that, 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 conc lusions are limited only by the reported
assumptions and limiting conditions, and are my personal, impartial, and unbiased
professional analyses, op inions and conclusions.
I have no present or prospective future intere st in the property that is the subject of
this report, and have no personal interest with respect to th e 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 de veloping 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 am ount of the value estimate, the attainment of a stipulated
result, or the occurrence of a subsequent even t directly related to the intended use of
this appraisal.
My analyses, opinions, and conclusions we re developed, and this report has been
prepared, in conformity with the Unif orm Standards of Professional Appraisal
Practice (USPAP).
No one provided significant re al property appraisal assistance to the person(s) signing
this certification.
I certify sufficient competen ce to appraise this prope rty through education and
experience, in addition to the intern al resources of the appraisal firm.
The appraiser has not performed any prior se rvices regarding the subject within the
previous three years of the appraisal date.
Jerry R. Gossel has made an in spection of the subject property.
Jerry R. Gossel, Certified General
MT-106
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