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HomeMy WebLinkAbout268-24 RESOLUTION113 West Mountain Street Fayetteville, AR 72701 (479) 575-8323 Resolution: 268-24 File Number: 2024-599 FAYETTEVILLE WAREHOUSE PARTNERS, LLC. (LAND PURCHASE): A RESOLUTION TO AUTHORIZE THE PURCHASE OF PROPERTY LOCATED ON NORTH GREGG AVENUE OWNED BY FAYETTEVILLE WAREHOUSE PARTNERS, LLC FOR THE AMOUNT OF $261,473.00, PLUS $10,000.00 FOR CLOSING COSTS, AND TO APPROVE A BUDGET ADJUSTMENT — 2019 STREET IMPROVEMENT BOND PROJECT WHEREAS, the extension of Futrall Drive has long been on the City's Master Street Plan to provide additional access to approximately 150 acres of undeveloped property west of the railroad tracks, east of Garland Avenue, and north of Drake Street; and WHEREAS, on December 15, 2020, City Council approved an agreement with the Arkansas Missouri Railroad for the construction of a new railroad crossing at North Futrall Drive and North Gregg Avenue which required the closure of an existing crossing; and WHEREAS, after the agreement with the railroad was approved, City staff began looking at options to allow for the closure of the existing railroad crossing at Jocelyn Lane and staff recommends purchasing the property owned by Fayetteville Warehouse Partners, LLC rather than creating an alternative access. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1: That the City Council of the City of Fayetteville, Arkansas hereby authorizes the purchase of property located on N. Gregg Avenue owned by Fayetteville Warehouse Partners, LLC for the amount of $261,473.00, plus $10,000.00 for the estimated associated closing costs. Section 2: That the City Council of the City of Fayetteville, Arkansas hereby approves a budget adjustment, a copy of which is attached to this Resolution. PASSED and APPROVED on November 7, 2024 Page 1 Resolution: 268-24 File Number: 2024-599 Approved: Page 2 Attest: FAY' TTE� ILLS Office of the City Clerk Treasurer Kara Paxton — City Clerk Treasurer Jackson Shelton — Senior Deputy City Clerk OF 4AYETTF 1 i 0 µM .. 4 RKAN SPS 113 W. Mountain Street, Suite 308 Fayetteville, Arkansas 72701 Phone: 479.575.8323 cityclerk@fayetteville-ar.gov Departmental Correspondence To: Lioneld Jordan, Mayor From: Kara Paxton, City Clerk Treasurer'��G CC: City Attorney Kit Williams, Senior Assistant Blake Pennington, Chief of Staff Susan Norton & Chief Financial Officer Paul Becker Date: November 8, 2024 RE: City Clerk Treasurer Kara Paxton — Out of Office due to Medical Procedure Mayor Lioneld Jordan, Due to a medical procedure, I will be unavailable to sign documents or attend meetings starting November 11th, 2024. 1 plan to be back in the office as of November 25th, 2024. Senior Deputy City Clerk Treasurer Jackson Shelton or Deputy City Clerk — Codifier Courtney Spohn will notify you should these dates change. The recommended recovery time for my medical procedure (Spinal Cord Stimulator Implant) ranges from 4 to 8 weeks. The surgeon stated that I must be off work for at least one week. The surgeon also encouraged me to utilize telework options in the weeks following the initial surgery week. He also stated that should I need to physically come to work, I need to park as close to the building as possible, no lifting/carrying heavy or large objects, and no sudden twisting or turning. In my absence, I authorize Senior Deputy City Clerk Treasurer Jackson Shelton to attest your (Mayor Lioneld Jordan) signature. Should an issue arise that Mr. Shelton is not available to sign within a 24- hour timeframe, I authorize Deputy City Clerk — Codifier Courtney Spohn to sign in our absence. As the official custodian of the City's seal, I authorize Mr. Shelton and Ms. Spohn to use the seal for official purposes only. Please direct city staff to route all Alcohol Permits to Mr. Shelton for review and electronic signature. Please notify the Accounting Department that check requests will be reviewed and signed by Ms. Spohn before being emailed to the Accounting Department. Ms. Spohn will also be responsible for approving purchase requests submitted November 11th — November 15th, 2024. Mr. Shelton and Ms. Spohn will go above and beyond to ensure that our office continues to support all our internal and external customers while I am out of office. Over the last 3 years Ms. Spohn has continuously demonstrated her professionalism and advanced skillset in her positions. Mr. Shelton has been with our office for almost 2 years now and has consistently impressed me by going above and beyond in his work duties. I am confident that Mr. Shelton and Ms. Spohn will successfully manage the office while I am out. M/10 CITY OF FAYETTEVILLE ARKANSAS MEETING OF NOVEMBER 7, 2024 CITY COUNCIL MEMO 2024-599 TO: Mayor Jordan and City Council THRU: Chris Brown, Public Works Director Susan Norton, Chief of Staff FROM: Matt Casey SUBJECT: Approval of a resolution authorizing the purchase of property located on N Gregg Avenue owned by Fayetteville Warehouse Partners, LLC, in the amount of $261,473.00 plus $10,000 for the associated closing costs and to approve a budget adjustment. RECOMMENDATION: Staff recommends approval of a resolution authorizing the purchase of property located on N Gregg Avenue owned by Fayetteville Warehouse Partners, LLC, in the amount of $261,473.00 plus $10,000 for the associated closing costs and to approve a budget adjustment BACKGROUND: The extension of Futrall Drive has long been on the City's Master Street Plan, to provide additional access to approximately 150 acres of undeveloped property west of the railroad tracks, east of Garland Avenue, and north of Drake Street. The connection will provide a more direct access from the property to the Fulbright Expressway and will include pedestrian facilities to allow for safe crossings at the railroad and Gregg Avenue. On December 15, 2020, the City Council approved an agreement with the Arkansas Missouri Railroad for the construction of a new railroad crossing at North Futrall Drive and North Gregg Ave. As part of the agreement, the railroad required the closure of an existing crossing. DISCUSSION: After the agreement with the railroad was approved, City staff began looking at options to allow for the closure of the existing railroad crossing at Jocelyn Lane. The original concept included the extension of a private drive from the south that included a new bridge crossing of Sublett Creek to access the two properties served by the existing railroad crossing. A preliminary design was prepared, and a cost estimate was developed. With a cost estimate of over $1,000,000, staff decided to explore other options. The City Land Agents ordered appraisals of the two properties to evaluate the option to purchase the properties instead of providing access. These properties both are located along the Razorback Greenway and could be an asset to the City's trail system. The 2022 appraised value of the two properties was $695,000. With the significant savings possibility with this option, staff reached out to the property owners to begin conversations regarding the purchases. Fortunately, both owners were open to the discussion. In February of 2024, the City Council approved the purchase of 2633 N Gregg Avenue. City Staff has negotiated the purchase of this property from Fayetteville Warehouse Partners, LLC and is Mailing address: 113 W. Mountain Street www.fayetteville-ar.gov Fayetteville, AR 72701 prepared to close on the property if approved by the City Council. BUDGET/STAFF IMPACT: The proposed source for the funding would be the 2019 Transportation Bond Funds. ATTACHMENTS: SRF (#3), BA (#4), Fayetteville Warehouse Partners - Land Sale Agreement (#5), Fayetteville Warehouse Partners - N Gregg Avenue Appraisal Report (#6) Mailing address: 113 W. Mountain Street www.fayetteville-ar.gov Fayetteville, AR 72701 City of Fayetteville, Arkansas 113 West Mountain Street Fayetteville, AR 72701 (479) 575-8323 Legislation Text File #: 2024-599 Approval of a resolution authorizing the purchase of property located on N Gregg Avenue owned by Fayetteville Warehouse Partners, LLC, in the amount of $261,473.00 plus $10,000 for the associated closing costs and to approve a budget adjustment. A RESOLUTION TO AUTHORIZE THE PURCHASE OF PROPERTY LOCATED ON NORTH GREGG AVENUE OWNED BY FAYETTEVILLE WAREHOUSE PARTNERS, LLC FOR THE AMOUNT OF $261,473.00, PLUS $10,000.00 FOR CLOSING COSTS, AND TO APPROVE A BUDGET ADJUSTMENT — 2019 STREET IMPROVEMENT BOND PROJECT WHEREAS, the extension of Futrall Drive has long been on the City's Master Street Plan to provide additional access to approximately 150 acres of undeveloped property west of the railroad tracks, east of Garland Avenue, and north of Drake Street; and WHEREAS, on December 15, 2020, City Council approved an agreement with the Arkansas Missouri Railroad for the construction of a new railroad crossing at North Futrall Drive and North Gregg Avenue which required the closure of an existing crossing; and WHEREAS, after the agreement with the railroad was approved, City staff began looking at options to allow for the closure of the existing railroad crossing at Jocelyn Lane and staff recommends purchasing the property owned by Fayetteville Warehouse Partners, LLC rather than creating an alternative access. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1: That the City Council of the City of Fayetteville, Arkansas hereby authorizes the purchase of property located on N. Gregg Avenue owned by Fayetteville Warehouse Partners, LLC for the amount of $261,473.00, plus $10,000.00 for the estimated associated closing costs. Section 2: That the City Council of the City of Fayetteville, Arkansas hereby approves a budget adjustment, a copy of which is attached to this Resolution. Page 1 City of Fayetteville Staff Review Form 2024-599 Item ID 11/7/2024 City Council Meeting Date - Agenda Item Only N/A for Non -Agenda Item Matt Casey 9/30/2024 ENGINEERING (621) Submitted By Submitted Date Division / Department Action Recommendation: Staff recommends approval of a resolution authorizing the purchase of property located on N Gregg Avenue owned by Fayetteville Warehouse Partners, LLC, in the amount of $261,473.00 plus $10,000 for the associated closing costs and to approve a budget adjustment 4702.860.7220-5805.00 Account Number 46020.7220 Project Number Budgeted Item? Yes Does item have a direct cost? Yes Is a Budget Adjustment attached? Yes Purchase Order Number: Change Order Number: Original Contract Number: Comments: Budget Impact: 2022 Transportation Bond Funds Fund Futrall/Gregg and Shiloh/Gregg RR Crossings Total Amended Budget Expenses (Actual+Encum) Available Budget Item Cost Budget Adjustment Remaining Budget Project Title $ 2,323,280.00 $ 1,592,080.93 r$ 731,199.07 $ 271,473.00 $ 271,473.00 $ '31,_99.07 Previous Ordinance or Resolution # Approval Date: V20221130 City of Fayetteville, Arkansas - Budget Adjustment (Agenda) Budget Year Division ENGINEERING (621) /Org2 2024 I Requestor: Matt Casey Adjustment Number BUDGET ADJUSTMENT DESCRIPTION / JUSTIFICATION: Staff recommends approval of a resolution authorizing the purchase of property located on N Gregg Avenue owned by Fayetteville Warehouse Partners, LLC, in the amount of $261,473.00 plus $10,000 for the associated closing costs and to approve a budget adjustment RESOLUTION/ORDINANCE COUNCIL DATE: 11/7/2024 ITEM ID#: 2024-599 Polly Black 913012024 3:46 PN1 Budget Division TYPE: JOURNAL#: GLDATE: CHKD/POSTED: Date D - (City Council) TOTAL - - v.2024826 Increase / (Decrease) Proiect.Sub# Account Number Expense Revenue Project Sub.Detl AT Account Name 4702.860.7220-5805.00 271,473 - 46020 7220 EX Land - Acquisition 4702.860.7999-5899.00 (271,473) - 46020 7999 EX Unallocated - Budget G:\Divs\Engineering\Engineering Design Services\Projects\BOND PROGRAM\2019 Bond Program\RR Crossings Shiloh and Futrall\Council and Committee Actions\Leflor Property Purchase\2024-599 BA Lefler Property Purchase 1 of 1 Docusign Envelope ID: 121CC8F6-1211-476D-8BC4-DA47EEBFD4DB LAND SALE AGREEMENT This Land Sale Agreement is made and entered into by and between the City of Fayetteville, Arkansas, an Arkansas municipal corporation (hereinafter "City" or "Fayetteville") and Fayetteville Warehouse Partners, LLC, an Arkansas limited liability company (hereinafter "the Seller"). TERMS AND CONDITIONS PURCHASE AND SALE Subject to the terms and conditions, mutual promises and covenants of this Agreement, the City of Fayetteville agrees to purchase, and the Seller agrees to sell, the following described property (the "Property"): SEE ATTACHED EXHIBIT "A" FOR PROPERTY DESCRIPTION PURCHASE PRICE Subject to the terms and conditions, mutual promises and covenants of this Agreement, the City agrees to purchase the Property for Two hundred sixty-one thousand, four hundred seventy-three and no/100 dollars ($261,473.00) to be paid to the Seller by the City on or before the Closing Date. CONTINGENCIES The Parties agree that this sale and all the Agreements set forth herein are subject to and contingent upon approval by the Fayetteville City Council and subsequent execution hereof by the Mayor, of the original offer amount of $261,473. The Parties agree that this sale shall be contingent upon the property being vacant of all tenants at the time this Agreement is signed by the Seller and Seller is responsible for maintaining that vacancy until closing. CLOSING DATE AND PLACE Closing shall occur within 90 days following the date this Agreement has been executed by the parties. The Closing shall occur at 113 West Mountain Street, Fayetteville, Arkansas in a room supplied by the City of Fayetteville or at another location agreed upon by the parties. The Closing Date may be extended upon the mutual agreement of the parties. DATE OF POSSESSION Possession of the Property shall be delivered to the City of Fayetteville on the Closing Date free of any tenancies or other third -party possessory rights. TITLE INSURANCE The Seller shall order a title commitment on the Property, as soon as practicable following the full execution of this Agreement, through City Title & Closing, LLC. If the report on title, binder or commitment discloses any defects in title (other than liens or encumbrances of a definite or ascertainable amount which may be paid at closing), The Seller shall have thirty (30) days from the date of the City notice of such defects to attempt to cure such defects, but shall have no obligations to do so, and to furnish a report showing the defects cured or removed. If such defects are not cured within thirty (30) days, the City may terminate this agreement or may, at its election, take title subject to any such defects (the "Permitted Exceptions"). The cost of the title commitment and the cost of the owner's title policy shall be borne by the Seller. Docusign Envelope ID: 121CC8F6-1211-476D-8BC4-DA47EEBFD4DB DEED, TAXES, CLOSING COSTS, AND OTHER DOCUMENTS On the Closing date, the Seller shall convey marketable and insurable title to the premises by special warranty deed, subject only to the Permitted Exceptions. Taxes and special assessments due on or before the date of closing shall be paid by Seller. Ad valorem taxes applicable to the year of the closing shall be prorated as of the date of closing. The City and the Seller shall equally share the cost of a reasonable closing fee imposed by the closing agent employed by parties provided however that the City shall be responsible for any revenue stamps resulting from this transaction and all recording fees for the deed and other documents that need to be filed. RISK OF LOSS Risk of loss as to the Property shall remain with the Seller until the Closing date. 9. THE CITY OF FAYETTEVILLE'S DUE DILIGENCE The City may enter upon the Property to conduct any surveying, testing or inspection it deems necessary to ensure the Property will be appropriate and safe. If the City discovers any problems that would adversely impact its development and use of the Property for its facilities, the City shall notify the Seller who shall be granted sixty (60) days to remediate any problem, but shall not be obligated to do so. The Seller may also terminate this Agreement without penalty rather than remediating any problem or issue discovered by the City. If the City elects to proceed to closing after conducting its due diligence as herein provided, its acquisition of the Property is and shall be "as is, where is" and without all faults, defects, and deficiencies, and without any representation or warranty by the Seller, all such representations and warranties hereby being disclaimed by the City. 10. NOTICES Notices required by this Agreement shall be in writing and shall be delivered to: City of Fayetteville Fayetteville Warehouse Partners, LLC, ATTN: Mayor's Office ATTN: TL Asset Management, LLC, Manager, c/o T.J. Lefler, Manager 113 W. Mountain Street 5100 JB Hunt Drive STE 800 Fayetteville, AR 72701 Rogers, AR 72758 11. AUTHORITY Each of the undersigned individuals represent and warrant that they are authorized to enter into this Agreement on behalf of themselves or their respective entities and that execution hereof will bind all parties to this Agreement. 12. COUNTERPARTS This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same agreement. 13. FACSIMILE For purposes of executing this Agreement, a scanned or facsimile signature shall be as effective an as actual signature. 14. APPLICABLE LAW Docusign Envelope ID: 121CC8F6-1211-476D-8BC4-DA47EEBFD4DB This Agreement shall be construed and enforced in accordance with the laws of the State of Arkansas with venue in Washington County, Arkansas. 15. SURVIVAL The representations, warranties, and agreements of the parties contained herein shall survive the closing date. 16. NO WAIVERS The waiver by either party hereto of any condition or the breach of any term, covenant or conditions herein contained shall not be. deemed to be a waiver of any other condition or of any subsequent breach of the same or of any other term, covenant or condition herein contained. 17. TIME OF ESSENCE Time is of the essence in this Agreement. 18. INVALIDITY If for any reason any term or provision of this Agreement shall be declared void and unenforceable by any court of law or equity, it shall only affect such term or provision of this Agreement and the balance of this Agreement shall remain in full force and effect and shall be binding upon the parties hereto. 19. COMPLETE AGREEMENT All understandings and agreements heretofore existing between the parties are merged into this Agreement that alone fully and completely expresses their agreement. This Agreement may be changed only in writing signed by all the parties hereto and shall apply to and bind the successors and assigns of each of the parties hereto and shall not merge with the deed delivered to the City at closing. IN AGREEMENT WITH ALL OF THE TERMS AND CONDITIONS of this Land Sale Agreement and after being properly authorized by the Fayetteville City Council, the Mayor and City -Clerk Treasurer of the City of Fayetteville, Arkansas, Purchaser, sign their names below: [SIGNATURE PAGE TO FOLLOW] Docusign Envelope ID: 121 CC8F6-1211-476D-8BC4-DA47EEBFD4DB CITY OF FAYETTEVILLE, ARKANSAS �tttttrr►rrr By: ATTEST: ���G . G\ �' pr •q�G''. Aioneld Jor r C). By: _ FAYETTEVILLE ; ? Date: 1 2024 J on Shelton Senior Deputy City % 9• :9RkA,PS .•�`�: Clerk�VG IN AGREEMENT WITH ALL OF THE TERMS AND CONDITIONS of this Land Sale Agreement, S Wo,j 1Nk ,0` through its authorized agent or representative, signs below: FAYETTEVILLE WAREHOUSE PARTNERS, LLC, An Arkansas limited liability company BY: TL Asset Management, LLC, its Manager �yn•e e. By: 1 9, (� WITNESS: Troy Ja EIefv�Mlanager of TL Asset Management LLC Date: 8/27/2024 By. Docusign Envelope ID: 121CC8F6-1211-476D-8BC4-DA47EEBFD4DB EXHIBIT A A part of the South Half of the Southeast Quarter of Section 34, Township 17 North, Range 30 West, being more particularly described as follows: Commencing at a point which is S87°23'51"E 3909.13 feet from the Southwest corner of the of said Section 34 and running thence N20°47'43"E 38.22 feet; thence N15°03'08"E 196.71 feet; thence N17°01'27"E 99.29 feet; thence N06°24'17"E 343.09 feet; thence N08°14'17"E 140.98 feet' thence N85°19'38"E 53.29 feet; thence N34°18'04"W 80.78 feet to the centerline of Scull Creek and the Point of Beginning; thence along said creek centerline the following: NO2°31'03"E 190.38 feet; thence N25°46'12"W 163.70 feet; thence N00°53'41 "W 68.60 feet; thence leaving said creek centerline N87°04'48"E 193.98 feet to an existing rebar; thence S57°32'36"E 5.40 feet to an existing rebar; thence S58°19'21 "E 46.59 feet; thence along a curve to the left having a radius of 53.00 feet and a chord bearing and distance of S23°41'19"E 105.44 feet to an existing rebar; thence N60°52'50"E 63.59 feet to an existing rebar on the Westerly right of way of the Frisco Railroad; thence along said right of way the following: S28°29'12"E 93.60 feet; thence along a curve to the right having a radius of 1894.03 and a chord bearing and distance of S29°47'17"E 44.35 feet to an existing rebar; thence leaving said right of way S64°44'30"W 141.41 feet; thence S38°15'47"E 30.85 feet; thence S62°51'49"W 258.30 feet to the point of beginning and containing 2.07 acres, more or less. (Per survey by Bates and Associates, Inc. dated 09/29/2020 Drawing #20- 138 ALTA and signed by Derrick L. Thomas) RESTRICTED APPRAISAL REPORT AVALUATIONS APPRAISAL COMPANY Commercial land N. Gregg Avenue I Fayetteville, AR 72703 As of: July 1, 2022 Prepared For: City of Fayetteville 125 W. Mountain Street I Fayetteville, AR 72701 Prepared By: Avaluations, LLC P.O. Box 2991 1 Fayetteville, AR 72702 avaluations.com July 8, 2022 City of Fayetteville Attn: Brandi Samuels 125 W. Mountain Street Fayetteville, AR 72701 RE: Appraisal of commercial land located at N. Gregg Avenue, Fayetteville, AR 72703 Our file number: City of Fayetteville Dear Ms. Samuels: In fulfillment of our agreement as outlined in the letter of engagement, Avaluations, LLC is pleased to transmit our Restricted Appraisal Report developing an opinion of the fee simple estate in the above referenced real property as of July 1, 2022, on an "As Is" basis. The opinion of value reported below is qualified by certain assumptions, limiting conditions, certifications, and definitions, which are set forth in the report. The appraisal will be used by the City of Fayetteville for internal analysis purposes. It may not be distributed to or relied upon by other persons or entities without written permission of Avaluations, LLC. However, the City of Fayetteville may provide only complete, final copies of the appraisal report in its entirety (but not component parts) to third parties who shall review such reports in connection with loan efforts. The appraisers are not required to explain or testify as to appraisal results other than to respond to the client for routine and customary questions. Please note that our consent to allow an appraisal report prepared by Avaluations, LLC or portions of such report, to become part of or be referenced in any public offering, the granting of such consent will be at our sole discretion and, if given, will be on condition that we will be provided with an Indemnification Agreement and/or Non -Reliance letter, in a form and content satisfactory to us, by a party satisfactory to us. We do consent to your submission of the reports to rating agencies, loan participants or your auditors in its entirety (but not component parts) without the need to provide us with an Indemnification Agreement and/or Non -Reliance letter. The following appraisal sets forth the most pertinent data gathered, the techniques employed and the reasoning leading to the opinion of value. The analysis, opinions and conclusions were developed based on, and this report has been prepared in conformance with, our interpretation of the guidelines and recommendations set forth in the Uniform Standards of Professional Appraisal Practice (USPAP), the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute, The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), and Title XI Regulations. Based on the analysis contained in the following report, the market value of the subject property is concluded as follows: MARKET VALUE CONCLUSION Appraisal Premise Interest Appraised Effective Date Value Conclusion As Is Fee Simple July 1, 2022 $240,000 The analysis contained in this appraisal is based upon assumptions and estimates that are subject to uncertainty and variation. These estimates are often based on data obtained in interviews with third parties, and such data are not always completely reliable. In addition, we make assumptions as to future behavior of consumers, and the general economy, which are highly uncertain. It is, however, inevitable that some assumptions will not materialize and that unanticipated events may occur which will cause actual achieved operating results to differ from the financial analyses contained in this report, and these differences may be material. Therefore, while our analysis was conscientiously prepared on the basis of our experience, and the data available, we make no warranty of any kind that the conclusions presented will, in fact, be achieved. Additionally, we have not been engaged to evaluate the effectiveness of management, and we are not responsible for future marketing efforts, and other management actions upon which actual results may depend. We believe, based on the assumptions employed the value conclusion represents a market price achievable within 6 months prior to the effective date. The value conclusion was based upon the following extraordinary assumptions or hypothetical conditions. Extraordinary Assumptions An extraordinary assumption is defined by USPAP (2020 — 2021 Edition) as: An assumption directly related to a specific assignment, as of the effective date of the assignment results, which if found to be false, could alter the appraiser's opinions or conclusions. ➢ None Noted. Hypothetical Conditions A hypothetical condition is defined by USPAP (2020— 2021 Edition) as: A condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purposes of analysis. ➢ None Noted. avaluations.com We take no responsibility for any events, conditions, or circumstances affecting the market that exists subsequent to the effective date of this appraisal. This letter is invalid as an opinion of value if detached from the report, which contains the text, exhibits, and addenda. It has been a pleasure to assist you in this assignment. If you have any questions concerning the analysis or if Avaluations, LLC can be of further service, please contact us. Respectfully submitted, Aaron Crawley, CG1562 Certified General Appraiser AVALUATIONS avaluations.com Certification and limiting Conditions I CERTIFY THAT TO THE BEST OF MY KNOWLEDGE AND BELIEF THAT: ❖ The statements of facts 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 the development or reporting predetermined results. ❖ My compensation for completing this assignment is not contingent upon the development and 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. ❖ 1 have made a personal inspection of the property that is the subject of this report. ❖ Brett Cooper, SR4508, provided significant real property appraisal assistance to the person signing this certification. He participated in the subject history research, neighborhood analysis, courthouse research, MLS and Costar research, and the sales comparison approach. ❖ In compliance with USPAP standards, I certify that I have not performed services as an appraiser, or in any other capacity, regarding the subject property within a three-year period immediately preceding acceptance of this assignment. Aaron Crawley, Certified General Appraiser AR CG 1562, exp. 6/30/2023 OK 13112CGA, exp. 2/28/2024 avaluations.com General Assumptions & Limiting Conditions I suggest that anyone using this appraisal read the following limiting conditions and assumptions thoroughly. The acceptance and/or use of the appraisal report constitutes acceptance of the following conditions. In rendering my opinions, I have made certain assumptions and my opinions are conditioned upon and are subject to certain qualifications including, but not limited to, the following: Information Used No responsibility is assumed for accuracy of information furnished by others or from others, including the client, its officers and employees, or public records. I am not liable for such information or for the work of contractors, subcontractors and engineers. The comparable data relied upon in this appraisal has been confirmed with one or more parties familiar with the transaction unless otherwise noted; all are considered appropriate for inclusion to the best of my factual judgment and knowledge. Certain information upon which the opinions and values are based may have been gathered by research staff working with the appraiser. Names, professional qualifications and extent of their participation can be furnished to the client upon request. Legal, Engineering, Financial, Structural or Mechanical Nature, Hidden Components, Soil No responsibility is assumed for matters legal in character or nature, nor matters of survey, nor of any architectural, structural, mechanical or engineering nature. No opinion is rendered as to the legal nature or condition of the title to the property, which is presumed to be good and marketable. The property is appraised assuming it is free and clear of all mortgages, liens or encumbrances, unless otherwise stated in particular parts of this report. The legal description is presumed to be correct, but I have not confirmed it by survey or otherwise. I assume no responsibility for the survey, any encroachments or overlapping or other discrepancies that might be revealed thereby. I have inspected, as far as possible by observation, the land and improvements thereon; however, it was not possible to personally observe conditions beneath the soil or hidden structural, or other components, or any mechanical components within the improvement; as a result, no representation is made herein as to such matters unless otherwise specifically stated. The estimated market value assumes that no such conditions exist that would cause a loss of value. I do not warrant against the occurrence of problems arising from any of these conditions. It is assumed that there are no hidden or unapparent conditions to the property, soil, subsoil or structures, which would render them more or less valuable. No responsibility is assumed for any such conditions or for any expense or engineering to discover them. All mechanical components are assumed to be in operating condition standard for the properties of the subject's type. The condition of the heating, cooling, ventilation, electric and plumbing equipment is considered to be commensurate with the condition of the balance of the improvements, unless otherwise stated. No judgment is made as to the adequacy of insulation, engineering or energy efficiency of the improvements or equipment. avaluations.com Information relating to the location or existence of public utilities has been obtained through verbal inquiry to the appropriate utility authority, or has been ascertained from visual evidence. No warranty has been made regarding the exact location or capacities of public utility systems. Subsurface oil, gas or mineral rights were not considered in this report unless otherwise stated. The appraisal is based on the premise that there is or will be full compliance with all applicable Federal, State and local environmental regulations and laws, unless otherwise stated in the report; and that all appropriate zoning, building and use regulations and restrictions of all types have been or will be complied with, unless otherwise stated in the report. It is assumed that all require licenses, consent, permits or other legislative or administrative authority, whether local, State, Federal, and/or private, have been or can be obtained or renewed for the use intended and considered in the value estimate. Component Values The distribution of the total valuation of this report between land and improvements applies only under the proposed program of utilization. The separate valuations of land and buildings must not be used in conjunction with any other appraisal, and are invalid if so used. A report related to an estate that is less than the whole fee simple estate applies only to the fractional interest involved. The value of this fractional interest, plus the value of all other fractional interests, may or may not equal the value of the entire fee simple estate considered as a whole. A report relating to the geographic portion of a larger property applies only to such geographic portion and should not be considered as applying with equal validity to other portions of the larger property or tract. The value for such geographic portions, plus the value of all other geographic portions, may or may not equal the value of the entire property or tract considered as a single entity. All valuations in the report are applicable only under the estimated program of the highest and best use and are not necessarily appropriate under other programs of use. Auxiliary and Related Studies No environmental or impact studies, special market study or analysis, highest and best use analysis study or feasibility study has been requested or made by us unless otherwise specified in this report or in my agreement for services. I reserve the unlimited right to alter, amend, revise or rescind any of these statements, findings, opinions, values, estimates or conclusions upon any subsequent study or analysis or previous study or analysis that subsequently becomes available to us. Dollar Values, Purchasing Power The value estimates and the costs used herein are as of the date of the estimate of value. All dollar amounts are based on the purchasing power and price of the United States dollar as of the date of value estimate. Inclusions Furnishings and equipment or business operations, except as otherwise specifically indicated, have been disregarded, with only the real estate being considered. 81 City of Fayetteville avaluations.com Proposed Improvements Conditioned Value For the purpose of this appraisal, on- or off -site improvements proposed, if any, as well as any repairs required, are considered to be completed in a good and workmanlike manner according to information submitted and/or considered by us. In cases of proposed construction, the report is subject to change upon inspection of the property after construction is complete. The estimate of value, as proposed, is as of the date shown, as if completed and operating at levels shown and projected. Value Change, Dynamic Market Influences The estimated value is subject to change with market changes over time. Value is highly related to interest rates, exposure, time, promotional effort, supply and demand, terms of sale, motivation and conditions surrounding the offering. The value estimate considers the productivity and relative attractiveness of the property both physically and economically in the marketplace. The estimate of value in this report is not based in whole or in part upon race, color or national origin of the present owners or occupants of the properties in the vicinity of the property appraised. In the event this appraisal includes the capitalization of income; the estimate of value is a reflection of such benefits and my interpretation of income and yields and other factors which were derived from general and specific market information. Such estimates are made as of the date of the estimate of value. As a result, they are subject to change, as the market is dynamic and may naturally change over time. The date upon which the value estimate applies is only as of the date of valuation, as stated in the letter of transmittal. The appraisal assumes no responsibility for economic or physical factors occurring at some later date which may affect the opinion stated herein. An appraisal is the product of a professionally trained person, but nevertheless is an opinion only, and not a provable fact. As a personal opinion, a valuation may vary between appraisers based upon the same facts. Thus, the appraiser warrants only that the value conclusions are his best estimate as of the date of valuation. There are no guaranties, either written or implied, that the property would sell for the expressed estimate of value. Sales History Unless otherwise stated, the appraiser has not reviewed an abstract of title relating to the subject property. No title search has been made, and the reader should consult an attorney or title company for information and data relative to the property ownership and legal description. It is assumed that the subject title is marketable, but the title should be reviewed by legal counsel. Any information given by the appraiser as to a sales history is information that the appraiser has researched; to the best of my knowledge, this information is accurate, but not warranted. Management of the Property It is assumed that the property which is the subject of this report will be under prudent and competent ownership and management over the entire life of the property. If prudent and competent management and ownership are not provided, this would have an adverse effect upon the value of the property appraised. Confidentiality We are not entitled to divulge the material (evaluation or valuation) content of this report and analytical findings or conclusions, or give a copy of this report to anyone other than the client or his designee, as specified in writing, except as may be required by the Appraisal Institute, as they may request in confidence for ethic enforcement, or by a court of law with the power of subpoena. All conclusions and opinions concerning the analyses as set forth herein are prepared by the appraisers whose signatures appear. No change of any item in the report shall be made by anyone other than the appraiser, and the firm shall have no responsibility if any such unauthorized change is made. Whenever our opinion herein with respect to the existence or absence of fact is qualified by the phrase or phrases "to the best of our knowledge", "it appears" or "indicated", it is intended to indicate that, during the course of our review and investigation of the property, no information has come to our attention which would give us actual knowledge of the existence or absence of such facts. The client shall notify the appraiser of any error, omission or invalid data herein within 10 days of receipt and return of the report, along with all copies, to the appraiser for corrections prior to any use whatsoever. Neither our name nor this report may be used in connection with any financing plans which would be classified as a public offering under State or Federal Security Laws. Copies, Publication, Distribution, Use of Report Possession of this report, or any copy thereof, does not carry with it the right of publication, nor may it be used for other than its intended use. The physical report remains the property of the firm for the use of the client, with the fee being for the analytical services only. This report may not be used for any purpose by any person or corporation other than the client or the party to whom the report is addressed. Additional copies may not be made without the written consent of an officer of the firm, and then only in its entirety. Neither all nor any part of the contents of this report shall be conveyed to the public through advertising, public relations effort, news, sales or other media without my prior written consent and approval of the client. It has been assumed that the client or representative thereof, if soliciting funds for his project, has furnished to the user of this report complete plans, specifications, surveys and photographs of land and improvements, along with all other information which might be deemed necessary to correctly analyze and appraise the subject property. Trade Secrets This appraisal was obtained from Avaluations, LLC or related companies and/or its individuals and consists of "trade secrets and commercial or financial information" which is privileged and confidential. Notify the appraisers signing the report or an officer of Avaluations, LLC of any request to reproduce this report in whole or in part. 101 City of Fayetteville avaluations.com Testimony, Consultation, Completion of Contract for Appraisal Services A contract for appraisal, consultation or analytical services is fulfilled and the total fee payable upon completion of the report. The appraisers or those assisting in the preparation of the report will not be asked or required to give testimony in court or hearing because of having made the appraisal in full or in part, nor will they be asked or required to engage in post appraisal consultation with client or third parties except under separate and special arrangement and at an additional fee. Any subsequent copies of this appraisal report will be furnished on a cost plus expenses basis, to be negotiated at the time of request. Limit of Liability Liability of the firm and the associates is limited to the fee collected for preparation of the appraisal. There is no accountability or liability to any third party. Fee The fee for this appraisal or study is for the service rendered, and not for time spent on the physical report. The acceptance of the report by the client takes with it the agreement and acknowledgement that the client will pay the negotiated fee, whether said agreement was verbal or written. The fee is in no way contingent on the value estimated. Assignment Overview and Scope of Work Date of Inspection The subject was inspected on July 1, 2022. Date of Value and Interest Appraised The date of value and interest appraised is described in the following table: Market Value Date As Is Fee Simple July 1, 2022 Date of Report The date of report is July 8, 2022. Purpose of Appraisal The purpose of this appraisal was to estimate the "As Is" market value of the subject property as of the effective date of appraisal. The current economic definition agreed upon by agencies that regulate federal financial institutions in the U.S. (and used herein) is contained in the definitions section of this report. Intended Use and User of Appraisal The intended use of this report is to estimate the value of the security offered for internal analysis purposes for the intended user — City of Fayetteville. Competency of Appraisers The appraisers' specific qualifications are included within this report. These qualifications serve as evidence of their competence for the completion of this appraisal assignment in compliance with the competency provision contained within the Uniform Standards of Professional Appraisal Practice as promulgated by the Appraisal Standards Board of the Appraisal Foundation. The appraisers' knowledge and experience, combined with their professional qualifications, are commensurate with the complexity of this assignment based on the following: •'• Professional experience ❖ Educational background and training ❖ Business, professional, academic affiliations and activities The appraisers have previously provided consultation and value estimates for similar commercial land and various types of commercial properties in Northwest Arkansas. 121 City of Fayetteville Scope of the Appraisal The scope of this appraisal assignment involves the completion of several steps performed within the guidelines of commonly accepted appraisal procedures. The scope of the assignment relates to the extent and manner in which research is conducted, data is gathered and analysis is applied, all based upon the purpose of the appraisal and its intended use, as previously outlined. Avaluations, LLC completed the following steps for this assignment: The subject property was identified to the appraiser by the client providing the property address and the current owner's name. A tax card and plat were pulled for that address via a third -party provider. The property boundaries were pointed out to the appraiser by the Washington County GIS mapping software. The following approaches to value have been considered in the scope of work decision for the main "Value Opinion": y The Direct Comparison Approach was performed. Please be aware that the term "Inspection" may be used on some standard appraisal forms which the appraiser cannot modify. The term inspection found anywhere in this report is to mean a "Personal Visual Inventory" of the subject's or comparable property's components. This is opposed to a "Home Inspection", which investigates the appropriateness and soundness of various components of the improvements. The American Disability Act (ADA) became effective January 26, 1992. The appraiser has not made a specific compliance survey or analysis of the property or comparable sales to determine whether or not they are in conformity with one or more of the requirements of the act. The appraiser is competent to perform this assignment in terms of geographic area, property type, market, and the related analytical methods. Extent of Research of the Subject Property The Census Tract information for the subject property was obtained from a third -party provider based on the property address via my appraisal software. The flood zone information for the subject property was obtained from a third -party provider based on the property address via my appraisal software. The subject property data that was obtained from second-hand sources was validated by the appraiser personally accessing the subject property. I did personally make a visual inventory of the subject property while walking over the land. I am familiar with the subject neighborhood and the market area. I have worked in and around this area for a number of years. I did drive through parts of this neighborhood in conjunction with this assignment. avaluations.com Unless a professional home inspection, structural engineer study, or similar report was provided to the appraiser; the subject property information was obtained by a method of data gathering known as a "Personal Visual Inventory". This consists of the appraiser compiling notes of what components are there and how many of them there are. This personal visual inventory may be made on -site or from the curb, but not from photos or a video presentation. The extent of the subject property accessed was stated above; and did not include accessing any part of the property that could not be walked through in an upright manner, or that required the use of special equipment such as a ladder. None of the property components were dissected or inspected by the appraiser. The appraiser has not performed a "Home Inspection" which is a process utilized to rate the appropriateness and usability of the various components of the structure. This process involves inspecting and testing. Should you have concerns about these issues please seek a qualified professional to investigate these issues for you. The information obtained from a home inspection may affect the value of the subject property, so the appraisal should be made after the home inspection rather than vice versa. Neither police records nor past issues of newspapers have been researched concerning the subject property's past use for anything that might affect the safety or health of present and future occupants. This includes but is not limited to the by-products of methamphetamine production, infectious disease, or environmental hazards. If available in the normal course of business the appraiser has evaluated any previous sales within the past 3 years prior to the effective date of the appraisal, and current contract, listing, or option of the subject property for its applicability in forming an opinion of current market value and/or marketability. Extent of the Analysis & Associated Research The following analysis and associated research have been performed in conjunction with the main opinion of value: The Direct Sales Comparison was performed by an analysis in which the subject is compared to similar properties that have a recent marketing history. An opinion of the value was formed by the Direct Comparison Approach. A quantitative line by line adjustment grid was utilized. Many of the property characteristics were considered including; the size of the improvements, land size, date of sale, view, topography and location. The comparable properties were obtained from a thorough search of office files, the local MLS and/or Tax office. The tax data was supplied by a third -party provider. The physical property characteristics, sales price, and date were not verified by any other source. However, the second-hand data records were analyzed for errors and inconsistencies. The records with errors and discrepancies were not used. Records that showed a large discrepancy from the other data was not used. 141 City of Fayetteville avaluations.com Previous Market Activity of the Subject The subject property has sold within the past three years prior to the effective date of this report. The subject property (with additional parcels) sold on 10/02/2020 for $2,500,000 from ARKA Holdings, LLC to Fayetteville Warehouse Partners, LLC via Warranty Deed as recorded in Deed Book 2020, Page 36694. This appears to be a typical arms -length transaction with the price near market levels. The subject property has not been listed for sale within the past year prior to the effective date of this report, per Northwest Arkansas MILS data sources. Interest Appraised Fee Simple Interest Exposure Time Exposure Time is defined as "The estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal" (The Dictionary of Real Estate Appraisal, Fourth Edition, page 105). The opinion of reasonable exposure time for the subject property is around 12 Months. Marketing Time Reasonable marketing time is defined as an opinion of the amount of time it might take to sell the property interest being appraised at the concluded market value immediately after the effective date of the appraisal. It is a function of price, time, use, and anticipated market conditions. The user should rely on this opinion with caution, as the appraiser cannot foresee spastic changes in the economy. There is no significant changing environmental, economic, government, or social trends in this market. No major events have occurred or are expected to occur subsequent to the data analyzed in the "exposure time" analysis that indicate changes in the market conditions. For this reason, the anticipated marketing time is the same as my opinion of the subject's exposure time of around 12 months. Restricted Use Report This is a Restricted Use Appraisal Report, which is intended to comply with the reporting requirements set forth under Standard Rule 2-2 (c) of USPAP for a real property appraisal report. There may be insufficient information presented for this report to be understood. Supporting documentation concerning the data, reasoning, and analyses is retained in the appraiser's work file. The information contained in the report is specific to the needs of the client and for the intended use stated in this report. However, in order to meet the requirements for an "evaluation" according to the Interagency Appraisal and Evaluation Guidelines, this report has been supplemented with additional information about the subject property and its market, as well as the data, reasoning, and analyses that were used in the valuation process. Highest and Best Use The highest and best use of the subject property as though vacant is for a warehouse/ manufacturing facility in accordance with the physically possible, appropriately supported, and financially feasible use of the site. Subject Information The subject property is located on the west side of N. Gregg Avenue, north of the N. Gregg Avenue/ W. Sunbridge Drive intersection in northern Fayetteville. More generally, the subject property can be described as its street name of: N. Gregg Avenue, Fayetteville, Arkansas. The subject site consists of a single platted parcel of land, which is located on the west side of N. Gregg Avenue. The subject parcel is irregular shaped with approximately 1.90 acres or 82,764 square feet of land area, per the courthouse records. The subject site is level to gently sloping and has around 211' of frontage along Jocelyn Lane. The subject is visible from N. Gregg Avenue; however, it lacks direct frontage along N. Greg Avenue due to the St. Louis & San Francisco Railroad. The railroad runs north to south along the east side of the subject site. An overhead powerline easement runs north to south on the eastern side of the subject site. Also, the subject site is currently located within the 1-1; Heavy Commercial and Light Industrial District zoning. Legal description of the subject property is as follows: Part of S % of the SE % of Section 34, Township 17 North, Range 30 West, Washington County, Arkansas (see the full legal description in the addendum of this report). The subject site is located in census tract #0107.03. Also, the subject is located on F.E.M.A. Panel #05143CO210F dated 05/16/2008. Per this map, the subject is located within the 100-year floodplain as it lies within flood zone AE (see the attached flood map in the addendum of this report). Methodology Applicable to the Subject The subject is being appraised on the basis of its value "As Is". Based upon the type of property and scope of this assignment, I have used the Sales Comparison Approach to estimate the market value of the subject property. Sales Comparison Approach Land Sales Analysis with Adjustments Subject N. Gregg Avenue Sale 1 S. Crossover Road Sale 2 1849 S. Garland Salle 3 N. Frisco Avenue Avenue City Fayetteville Fayetteville Fayetteville Fayetteville Recording Date ----- 9/21/2021 12/13/2021 4/10/2020 Sale Price ----- $ 250,000 $ 575,000 $ 300,000 Land Area (SF) 82,764 110,207 152,460 93,654 Land Area (Acres) 1 1.90 2.53 3.50 2.15 Price/ Sq. Foot Comparison $ 2.27 $ 3.77 $ 3.20 Property Rights Conveyed Percent Adjustment 0.0% 0.0% 0.0% Dollar Adjustment $ - $ - $ - A Price .27 S 3.77 Financing Terms Percent Adjustment 0.0% 0.0% 0.0% Dollar Adjustment $ - $ - $ - Conditions of Sale Percent Adjustment 0.0% 0.0% 0.0% Dollar Adjustment $ - $ - $ Time/Market Conditions Appraisal Date 7/1/2022 Months Elapsed --------- 9.43 6.67 27.07 Annual % Adj. 0.00% Percent Adjustment 0.0% 0.0% 0.0% Dollar Adjustment $ - $ - $ Location Comparable Comparable Comparable Percent Adjustment 0.0% 0.0% 0.0% Site Size Larger Larger Larger Percent Adjustment 5.0% 14.0% 2.0% Dollar A mn Public Utilities Comparable Comparable Comparable Percent Adjustment 0.0% 0.0% 0.0% Dollar Flood Zone Comparable Superior Comparable Percent Adjustment 0.0% 20.0% 0.0% Railroad Tracks Superior Superior Comparable Percent Adjustment 10.0% 10.0% 0.0% Dollar A m n Net Percent Adjustment -5.0% -16.0% 2.0% Net Adjustment $ (0.11) $ (0.60) $ 0.06 Adjusted Price $ 2.16 $ 3.17 $ 3.27 Weight 30% 3091. 40% Price/ Sq. Foot Comparison # of Comps ............................................. 3 Maximum............................................... $ 3.27 Weighted Avg ........................................ $ 2.90 Minimum................................................ $ 2.16 Indicated Subject Value Land Area(SF)........................................ 82,764 Indicated Value Per SF..._.___._. ...... $ 2.90 Indicated "As Is" Value ....................... $ 240,335 Indicated Value Rounded To ............... $ 240,000 I. ,+ oml, x • {Rtl s" �a`et"A 117 Jol,r sol` Johnson Rd K2 avaluations.com 8 CL'Charlie' a-� 3 Willie George P,1 Shady Grove Botanical Garden of the,Ozarks 0 Lake Fayetteville Park'w a E Don Rd qb a Bi.d s7 Washington Regional C_ ® \� Medical Center Gary Hempfon � xs Field © SusieCT N Gregg Ave 'A . � W DrMa Si N� 6] Gulley Park COMPARABLqUniversi'ty iV N Frisco A 1°O 1.57 miledical c lliWilsonPark 0 of Arkansas Q r COMPARABLE No, 1 Mt. Sequoyah Cross S Crossover Rd ® 7100 Fayetteville 3.62 miles SE Family u , I Displa •' M I. K Jr BNd ' COMPARABLE No. 2 Walker Park Bayyari Park 1849 S Garland Ave 3.90 miles S kFayetl W 1 Sth st 16 , �I 16 1>0 q 1 I t6V Junction Kessler J Mountain Regional Park 701 ?6s FT 0-51 57 Arkansas Air and ® Military Museum p9 �197 L J 1191 4763 Lake Greenland Wilson Park V7 Reconciliation Reconciliation and Final Concluded Value The pertinent approaches to value have been summarized in this appraisal analysis. A summary of the value conclusions of each of these individual approaches indicates the following: Cost Approach - The cost of reproducing or replacing the subject property, less depreciation from all sources, plus the land value as determined through market N/A comparison. Direct Sales Comparison Approach - The value as indicated by recent sales of comparable properties, as adjusted to account for all differences in physical, $240,000 location and economic characteristics. Income Approach - The value which can be supported by the property's net earning capacity, based upon capitalization of the net income imputable to the N/A property. The Sales Comparison Approach to value is relevant in this appraisal situation and market data was available for this approach. Since the subject consists of commercial land the Cost and Income Approaches were not applicable approaches to value and were not performed. When adequate market sales are available, the Sales Comparison Approach is considered the most reliable indication of market value. An adequate sample of comparable properties were available from the subject market area; therefore, this approach was given all the weight. Based on the foregoing, the market value of the subject has been concluded as follows: MARKET VALUE CONCLUSION Appraisal Premise Interest Appraised Effective Date Value Conclusion As Is Fee Simple July 1, 2022 $240,000 avaluations.com Definitions adjusted sale price The figure produced When the transaction price of a comparable sale is adjusted for elements of comparison in the valuation process. assessed value The value of a property according to the tax rolls in ad valorem taxation; may be higher or lower than market value, or based on an assessment ratio that is a percentage of market value. cash equivalency analysis An analytical process in which the sale price of a transaction with nonmarket financing or financing with unusual conditions or incentives is converted into a price expressed in terms of cash or its equivalent. client 1. The individual, group, or entity who engages a valuer to perform a service. (SVP) 2. The party or parties who engage, by employment or contract, an appraiser in a specific assignment. Comment: The client may be an individual, group. Or entity, and may engage and communicate with the appraiser directly or through an agent. (USPAP, 2016-2017 ed.) 3. Generally the party or parties ordering the appraisal report. It does not matter who pays for the work. (CUSPAP, 2014 ed.) curable functional obsolescence An element of depreciation; a curable defect caused by a flaw in the structure, materials, or design, which can be practically and economically corrected. depreciation 1. In appraisal, a loss in property value from and cause; the difference between the cost of an improvement on the effective date of the appraisal and the market value of the improvement on the same date. See also external obsolescence; functional obsolescence; physical deterioration. 2. In accounting, an allocation of the original cost of an asset, amortizing the cost over the asset's life; calculated using a variety of standard techniques. developer's fee Typically, a payment by the property owner to a third party for overseeing the development of a project from inception to completion, included among the direct and indirect costs of development. Sometimes, the term is used to describe the time, energy, and experience a developer invests in a project as well as a reward for the risk undertaken. direct capitalization A method used to convert an estimate of a single year's income expectancy into an indication of value in one direct step, either by dividing the net income estimate by an appropriate capitalization rate or by multiplying the income estimate by an appropriate factor. Direct capitalization employs capitalization rates and multipliers extracted or developed from market data. Only one year's income is used. Yield and value changes are implied, but not explicitly identified. discounted cash flow (DCF) analysis The procedure in which a discount rate is applied to a set of projected income streams and a reversion. The analyst specifies the quantity, variability, timing, and duration of the income streams and the quantity and timing of the reversion, and discounts each to its present value at a specified yield rate. disposition value The most probable price that a specified interest in property should bring under the following conditions: 1. Consummation of a sale within a specified time, which is shorter than the typical exposure time for such a property in that market. 2. The property is subjected to market conditions prevailing as of the date of valuation. 3. Both the buyer and seller are acting prudently and knowledgeably. 4. The seller in under compulsion to sell. 5. The buyer is typically motivated. 6. Both parties are acting in what they consider to be their best interests. 7. An adequate marketing effort will be made during the exposure time. 8. Payment will be made in cash in US dollars (or the local currency) or in terms of financial arrangements comparable thereto. 9. 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. This definition can also be modified top rovidefor valuation with specified financing terms. See also distress sale; forced -sale price; liquidation value; market value. distress sale A sale involving a seller acting under undue duress. See also disposition value; forced sale; liquidation value. elements of comparison The characteristics or attributes of properties and transactions that cause the prices of real property to vary; include real property rights conveyed, financing terms, conditions of sale, expenditures made immediately after purchase, market conditions, location, physical characteristics, and other characteristics such as economic characteristics, use, and non -realty components of value. entrepreneurial incentive The amount an entrepreneur expects to receive for his or her contribution to a project. Entrepreneurial incentive may be distinguished from entrepreneurial profit (often called developers profit) in that it is the expectation of future profit as opposed to the profit actually earned on a development or improvement. The amount of entrepreneurial incentive required for a project represents the economic reward sufficient to motivate an entrepreneur to accept the risk of the project and to invest the time and money necessary in seeing the project through to completion. See also entrepreneurial profit. entrepreneurial profit 1. A market -derived figure that represents the amount an entrepreneur expects to receive for his or her contribution to a project; the difference between the total cost of a property (cost of development) and its market value (property value after completion), which represents the entrepreneurs compensation for the risk and expertise associated with development. An entrepreneur who successfully creates value through new development, expansion, renovation, or an innovative change of use is rewarded by entrepreneurial profit. Entrepreneurs may also fail and suffer losses. 2. In economics, the actual return on successful management practices, often identified with coordination, the fourth factor of production following land, labor, and capital; also called entrepreneurial return or entrepreneurial reward. See also entrepreneurial incentive. excess land Land that is not needed to serve or support the existing use. The highest and best use of the excess land may or may not be the same as the highest and best use of the improved parcel. Excess land has the potential to be sold separately and is valued separately. See also surplus land. external obsolescence A type of depreciation; a diminution in value caused by negative external influences and generally incurable on the part of the owner, landlord, or tenant. The external influence may be either temporary or permanent. extraordinary assumption An assumption, directly related to a specific assignment, as of the effective date of the assignment results, which, if found to be false, could alter the appraiser's opinions or conclusions. Comment: Extraordinary assumptions presume as fact otherwise uncertain information about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis. (USPAP, 2016-2017 ed.) See also special assumption. fee simple interest 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. forced -sale price The price paid in a forced sale or purchase, i.e., a sale in which a reasonable time was not allowed to find a purchaser or the purchaser was forced to buy. See also disposition value; distress sale; liquidation value. gross building area (GBA) 1. Total floor area of a building, 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 market area of the type of property involved. 2. Gross leasable area plus all common areas. 3. For residential space, the total area of all floor levels measured from the exterior of the walls and including the super -structure and substructure basement; typically does not include garage space. highest and best use The reasonably probable use of property that results in the highest value. The four criteria that the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum productivity. The use of an asset that maximizes its potential and that is possible, legally permissible, and financially feasible. The highest and best use may be for continuation of an asset's existing use or for some alternative use. This is determined by the use that a market participant would have in mind for the asset when formulating the price that it would be willing to bid. (IVS) [The] highest and most profitable use for which the property is adaptable and needed or likely to be needed in the reasonably near future. (Uniform Appraisal Standards for Federal Land Acquisitions) hypothetical condition A condition that is presumed to be true when it is known to be false. (SVP) A condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis. Comment: Hypothetical conditions are contrary to known facts about physical, legal, or economic characteristics of the subject property; or about the integrity of data used in an analysis. (USPAP, 2016-2017 ed.) incurable functional obsolescence An element of depreciation; a defect caused by a deficiency or super adequacy in the structure, materials, or design that cannot be practically or economically corrected as of the effective date of the appraisal. land to building ratio The proportion of land area to gross building area; one of the factors determining comparability of properties. leased fee interest The ownership interest held by the lessor, which includes the right to receive the contract rent specified in the lease plus the reversionary right when the lease expires. liquidation value The most probable price that a specified interest in property should bring under the following conditions: 1. Consummation of a sale within a short time period. 2. The property is subjected to market conditions prevailing as of the date of valuation. 3. Both the buyer and seller are acting prudently and knowledgably. 4. The seller is under extreme compulsion to sell. 5. The buyer is typically motivated. 6. Both parties are acting in whatthey consider to be their best interests. 7. A normal marketing effort is not possible due to the brief exposure time. 8. Payment will be made in cash in US dollars (or the local currency) or in terms of financial arrangements comparable thereto. 9. 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. This definition can also be modified to provide forvaluation with specified financing terms. See also disposition value; distress sale; forced -sale price. market rent The most probable rent that a property should bring in a competitive and open market reflecting the conditions and restrictions of a specified lease agreement, including the rental adjustments and revaluation, permitted uses, use restrictions, expense obligations, term, concessions, renewal and purchase options, and tenant improvements (Tls). market value A type of value that is the major focus of most real property appraisal assignments. Both economic and legal definitions of market value have been developed and refined, such as the following. The most widely accepted components of market value are incorporated in the following definition: 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. Market value is described, not defined, in the Uniform Standards of Professional Appraisal Practice (USPAP) as follows: A type of value, stated as an opinion, that presumes the transfer of a property (i.e., a right of ownership of a bundle of such rights), as of a certain date, under specific conditions set forth in the definition of the term identified by the appraiser as applicable in an appraisal. Comment: Forming an opinion of market value is the purpose of many real property appraisal assignments, particularly when the client's intended use includes more than one intended user. The conditions included in market value definitions establish market perspectives for development of the opinion. These conditions may vary from definition to definition but generally fall into three categories: a) The relationship, knowledge, and motivation of the parties (i.e., seller and buyer); b) The terms of sale (e.g., cash equivalent, or other terms); and c) The conditions of sale (e.g., exposure in a competitive market for a reasonable time prior to sale). Appraisers are cautioned to identify the exact definition of market value, and its authority, applicable in each appraisal completed for the purpose of market value. (USPAP, 2016-2017 ed.) USPAP also requires that certain items be included in every appraisal report. Among these items, the following are directly related to the definition of market value: • Identification of the specific property rights to be appraised. • Statement of the effective date of the value opinion. • Specification as to whether cash, terms equivalent to cash, or other precisely described financing terms are assumed as the basis of the appraisal. • If the appraisal is conditioned upon financing or other terms, specification as to whether the financing or terms are at, below, or above market interest rates and/or contain unusual conditions or incentives. The terms of above- or below - market interest rates and/or other special incentives must be clearly set forth; their contribution to, or negative influence on, value must be described and estimated; and the market data supporting the opinion of value must be described and explained. 3. The following definition of market value is used by agencies that regulate federally insured financial institutions in the United States: The most probable price that 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 the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: • Buyer and seller are typically motivated; • Both parties are well informed or well advised, and acting in what they consider their best interests; • A reasonable time is allowed for exposure in the open market; avaluations.com l Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and 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. (12 C.F.R. Part 34.42(g); 55 Federal Register 34696, August 24, 1990, as amended at 57 Federal Register 12202, April 9, 1992; 59 Federal Register 29499, June 7, 1994) 4. The International Valuation Standards Council defines market value for the purpose of international standards as follows: The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm's length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion. (IVS) 5. The Uniform Standards for Federal Land Acquisitions defines market value as follows: Market value is the amount in cash, or on terms reasonably equivalent to cash, for which in all probability the property would have sold on the effective date of the appraisal, after a reasonable exposure time on the open competitive market, from a willing and reasonably knowledgeable buyer, with neither acting under and compulsion to buy or sell, giving due consideration to all available economic uses of the property at the time of the appraisal. (Uniform Appraisal Standards for Federal Land Acquisitions) net operating income (NOI) The actual or anticipated net income that remains after all operating expenses are deducted from effective gross income but before mortgage debt service and book depreciation are deducted. Note: This definition mirrors the convention used in corporate finance and business valuation for EBITDA (earnings before interest, taxes, depreciation, and amortization). net reversionary interest. The lump -sum benefit that an investor receives at the termination of an investment after the deduction of sales commissions and outstanding mortgage debt. See also reversion. obsolescence One cause of depreciation; an impairment of desirability and usefulness caused by new inventions, changes in design, improved processes for production, or external factors that make a property less desirable and valuable for a continued use; may be either functional of external. paired data analysis A quantitative technique used to identify and measure adjustments to the sale prices or rents of comparable properties. To apply this technique, sales or rental data on nearly identical properties, or adjusted data, is compared to isolate and estimate a single characteristic's effect on value or rent. Often referred to as paired sales analysis. point estimate A value indication reported as a single dollar amount. In estimating market value, a point estimate is typically regarded as the most probable number, not the only possible number. pro forma A projected income and expense statement for proposed development. range of value In final reconciliation, the range in which the final market value opinion of a property may fall; usually stated as the interval between a high and low value limit. reconciliation A phase of a valuation assignment in which two or more value indications are processed into a value opinion, which may be a range of value, a single point estimate, or a reference to a benchmark value. reconstructed operating statement A statement prepared by an appraiser or other analyst to reflect the potential future performance of a property, considering its historical income and expenses. In preparing reconstructed operating statements, appraisers may consult accountants' financial statements, comparable properties, auditors' statements, or historical data provided by the ownership entity. reversion A lump -sum benefit that an investor receives or expects to receive upon the termination or sale of an investment; also called reversionary benefit. sequence of adjustments The order in which quantitative adjustments are applied to the sale prices of comparable properties. special assumption An assumption, directly applicable to a specific service, which if found to be false, could alter the opinions or conclusions in an appraisal or review. (SVP) An assumption that either assumes facts that differ from the actual facts existing at the valuation date or that would not be made by a typical market participant in a transaction on the valuation date. INS) supply and demand In economic theory, the principle that states that the price of a commodity, good, or service varies directly, but not necessarily proportionately, with demand, and inversely, but not necessarily proportionately, with supply. In real estate appraisal context, the principle of supply and demand states that the price of real property varies directly, but not necessarily proportionately, with demand and inversely, but not necessarily proportionately, with supply. surplus land Land that is not currently needed to support the existing use but cannot be separated from the property and sold off for another use. Surplus land does not have and independent highest and best use and may or may not contribute value to the improved parcel. Uniform Standards of Professional Appraisal Practice (USPAP) In the United States, professional standards, developed for appraisers and users of appraisal services by the Appraisal Standards Board of The Appraisal Foundation, that are required for use in federally related transactions. Compliance with USPAP is also required in certain appraisals by state certification and licensing boards. vacancy and collection loss A deduction from potential gross income (PGI) made to reflect income reductions due to vacancies, tenant turnover, and nonpayment of rent; also called vacancy and credit loss or vacancy and contingency loss. Source: Appraisal Institute, The Dictionar'v of Real Estate Appraisal, 61h ed (Chicago Appraisal Institute, 2015). avaluations.com Addendum Photo Pages Looking southwesterly from N. Gregg Avenue at the front of the subject property. avaluations.com 18 1 High Street Investments 1, L L C Looking northerly at the subject property. Looking southerly at the subject property. avaluations.com L i• - � j our ' K S 1 i- f. �� P. :a. ..2 40 -tea" 20 1 High Street Investments 1, L L C avaluations.com ti Y i Z _ i� Looking southerlydown on the right. t '7 CN ~ r r �M 211 High Street Investments 1, L L C Flood Map InterFlood by la mode St W Drake Si d a Qg d 2 Meade Ave a' a t✓ 3 Z W Bowers SI cassatl St Reynolds Rd =101117A. FEMA Special Flood Hazard Area Yes Map Number 05143CO210F Zone- AE Map Date May 16, 2008 FIPS. 05143 W Drake St Prepared for Avaluations (479) 695-1371 N Gregg Ave 91 tiencnmark meoicai v g W Bishop or � e S � y o a 0 U Vine of Enlightenment $ Ayahuasca Tribal Church ® _ z Village Lake or E Drake St Auguste or a Forsythia or c a c L J p� v z h E Roblee Orthodontics 19 W--'r, ytdown. Or E Sunbndge Or t► s,'�i'/� so nlc. School Q ��� JIhNhN Arkansas dr / W To p St`II,/ E T ownshlp Cb /I Z � fif Fayetteville / Creative School f d / 2 A MAP LEGEND Po.omd by Cwel.ogcm ElAreas inundated by 500-year flooding ® Protected Areas Areas inundated by 100-year flooding ® Floodway Velocity Hazard O Subject Area Legal Description A part of the South 1/2 of the SE 1/4 of Section 34. Township 17 North, Range 30 West. being more particularly described as beginning at a point 2747.91 feet East of the Northwest corner of the fractional NW 1/4 of Section 4, Township 16 North, Range 30 West, and running thence North 1208.724 feet; thence N 84°30' E 639.746 feet to the Point of Beginning, said point being on the South right of way of a public road and also the centerline of Scull Creek; thence S 04°10'57" W with the centerline of said creek 60.55 feet; thence S 27045'27" E with centerline of said creek 167.301 feet; thence S 00°07' 18" E with centerline of said creek 193.83 feet; thence leaving said creek N 60°47' E 233.09 feet; thence N 40*02' W 30.87 feet; thence N 6291' E 141.15 feet to the West right of way of Frisco Railroad; thence along said right of way N 31035' W 138 feet to the intersection of a public street right of way and said railroad right of way; thence S 58°25' W along said right of way 62 feet; thence along said street right of way around a curve to the right having a radius of 53 feet, a distance of 223 feet, to a point on the South right of way of a public road; thence N 60*30' W along said right of way 84.16 feet; thence S 84*30' W along said right of way 184.00 feet to the Point of Beginning. containing 1.90 acres, more or less. 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This card is for identification purposes only. 6/30/2023 �aL Expiration Date Chairman APPRAISER LICENSING & CERTIFICATION BOARD Attest That ,M RON Q Cfl WLET On this date was certified as a STATE CERTIFIED GENERAL APPRAISER The Arkansas Appraiser licensing and Certification Board hereby affirms that this Certificate is issued in accordance with all the recluketnmb of Arkansas Code Annotated, section S 17-14 101 et seq., and subsequently adopted 'Rules and Regulations' arhd shall remain in force when poperly supported by a cement poctet idenb icatlon cud. TEBfR,Z%,ART 13, 2002 CGI562 Dort. Irraee Certificate Number, cn.�h 30 1 High Street Investments 1, L L C avaluations.com Appraiser Resume P.O. Box 2991, Fayetteville, AR 72702 Phone: (479) 695-1371 Email: avalue@coxanternet.com Aaron Crawley Education 1994-1998 University of Arkansas Fayetteville, AR • Bachelors of Science in Business Administration —Financial Management Professional Designations Arkansas — Certified General Real Estate Appraiser, CG1562 Oklahoma — Certified General Real Estate Appraiser, 13112CGA Educational courses from the Avoraisal Institute: Appraisal Principles — University of Colorado, Boulder, Colorado Appraisal Procedures — Universityof Colorado, Boulder, Cobrado Uniform Standards of Prof. Appraisal Practice: St. Louis, Missouri; Dallas, Texas; Fayetteville, AR; Little Rock AR. Eminent Domain & Condemnation Appraising, Manhattan, NY Advanced Income & Capitalization, Houston, Texas Advanced Sales Comp. & Cost Approach, Houston, Texas Residential Sales Comparison Approach, Grand Rapids, Michigan Educational seminars from the Appraisal Institute or McKissock: Analyzing Operating Expenses Online Internet Search Strategies for Real Estate Appraisers Appraising Nursing Facilities Office Building Valuation: A Contemporary Perspective Appraising Convenience Stores Appraisal of Residential Property for Foreclosure & Pre -Foreclosure Business Practices and Ethics Reviewing Residential Appraisals Commercial Clients Seminar Regression Analysis General Report Writing & Case Studies Advanced Hotel Appraising —Full Service Hotels Appraisal of Fast Food Facilities Appraisal of Land Subject to Ground Leases Employment 2001—Present Avaluations, LLC Fayetteville, Arkansas bpwWrice Managing Owner/Operator Perform all aspects of commercial real estate appraisals, review and consulting in Northwest Arkansas, Fort Smith region and Eastern Oklahoma. • 1997-2001 Danehower & Associates Rogers, Arkansas Licensed Staff Appraiser Types of Appraisals Airport Hanger Performed Amusement Facility Car Lot / Open Display Facility Carwash Chapel/ Reception Hall Church/ Religious Facility Commercial Cave Convenience Store Daycare Fitness Center/ Gym Industrial/ Manufacturing Facility Laundromat Lodge Medical Office Mini -Storage Facility Mobile Home Park Motel/ Hotel Multi -Family Residential Neighborhood Shopping Center Nursing Home Pharmacy Professional Office Restaurant Retail Facility Residential Subdivision RV Park Warehouse 479-695-1371 1 P.O. Box 2991, Fayetteville, AR I avaluations.com AVALUATIONS APPRAISAL COMPANY