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HomeMy WebLinkAbout160-19 RESOLUTION0, FAYErr� J L V m ... 9RKANSP 113 West Mountain Street Fayetteville, AR 72701 (479) 575-8323 Resolution: 160-19 File Number: 2019-0373 BENSON MOUNTAIN WATER TANK LAND SWAP: A RESOLUTION TO APPROVE THE PURCHASE OF 0.72 ACRES FROM DUSTIN AND RYAN DAVIS IN EXCHANGE FOR THE CONVEYANCE OF 0.06 ACRES OF CITY -OWNED LAND AND PAYMENT IN THE AMOUNT OF $25,000.00 PLUS THE CITY'S SHARE OF CLOSING COSTS, PAYMENT IN THE ESTIMATED AMOUNT OF $10,338.00 FOR WATER METERS, IMPACT FEES, AND THE RELOCATION OF UTILITY POLES TO FACILITATE THE REMOVAL AND RECONSTRUCTION OF THE BENSON WATER STORAGE STANDPIPE, AND TO APPROVE A PROJECT CONTINGENCY IN THE AMOUNT OF $2,000.00 WHEREAS, the City owns approximately 0.06 acres of land on which the current Benson Water Storage Standpipe is located that has been appraised at $5,000.00 and, therefore, competitive bidding for the sale of this parcel is not required by Arkansas law; and WHEREAS, the 0.72 acre parcel of land owed by Dustin and Ryan Davis that the City wishes to acquire for the construction of a new water standpipe is appraised at $30,000.00; and WHEREAS, the terms of the offer to purchase the 0.72 acre parcel include the conveyance of the 0.06 acre parcel and payment of $25,000 to Dustin and Ryan Davis, payment of approximately $4,338.00 for setting water meters and for the payment of impact fees for the property, payment of approximately $6,000.00 for relocation of 3 utility poles, and payment of the City's share of closing costs. NOW, THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Page 1 Printed on 713119 File Number: 2019-0373 Resolution 160-19 Section 1: That the City Council of the City of Fayetteville, Arkansas hereby approves the purchase of 0.72 acres of land from Dustin and Ryan Davis in exchange for the conveyance of 0.06 acres of land owned by the City of Fayetteville and payment of $25,000.00 to Dustin and Ryan Davis, authorizes payment of the City's share of closing costs in an amount up to $1,000.00, authorizes payment for water meters and impact fees in the estimated amount of $4,338.00, and authorizes payment for the relocation of utility poles in the estimated amount of $6,000.00, all of which are required for the relocation of the Benson water storage standpipe associated with the East Service Area Water System Improvements Project, and further approves a project contingency in the amount of $2,000.00. Section 2: That the City Council of the City of Fayetteville, Arkansas hereby authorizes Mayor Jordan to sign a Warranty Deed and any other documents necessary to effectuate the purchase and sale authorized by this Resolution. PASSED and APPROVED on 7/2/2019 Attest: Sondra E. Smith, City Clerk Treasu,� %111�t►r���� CLER =N. D •C= a. •�,�,��. � SAS Zee • • 0 Page 2 Printed on 7/3/19 . City of Fayetteville, Arkansas 113 West Mountain Street Fayetteville, AR 72701 (479) 575-8323 Text File File Number: 2019-0373 Agenda Date: 7/2/2019 Version: 1 Status: Passed In Control: City Council Meeting File Type: Resolution Agenda Number: A. 12 BENSON MOUNTAIN WATER TANK LAND SWAP: A RESOLUTION TO APPROVE THE PURCHASE OF 0.72 ACRES FROM DUSTIN AND RYAN DAVIS IN EXCHANGE FOR THE CONVEYANCE OF 0.06 ACRES OF CITY -OWNED LAND AND PAYMENT IN THE AMOUNT OF $25,000.00 PLUS THE CITY'S SHARE OF CLOSING COSTS, PAYMENT IN THE ESTIMATED AMOUNT OF $10,338.00 FOR WATER METERS, IMPACT FEES, AND THE RELOCATION OF UTILITY POLES TO FACILITATE THE REMOVAL AND RECONSTRUCTION OF THE BENSON WATER STORAGE STANDPIPE, AND TO APPROVE A PROJECT CONTINGENCY IN THE AMOUNT OF $2,000.00 WHEREAS, the City owns approximately 0.06 acres of land on which the current Benson Water Storage Standpipe is located that has been appraised at $5,000.00 and, therefore, competitive bidding for the sale of this parcel is not required by Arkansas law; and WHEREAS, the 0.72 acre parcel of land owed by Dustin and Ryan Davis that the City wishes to acquire for the construction of a new water standpipe is appraised at $30,000.00; and WHEREAS, the terms of the offer to purchase the 0.72 acre parcel include the conveyance of the 0.06 acre parcel and payment of $25,000 to Dustin and Ryan Davis, payment of approximately $4,338.00 for setting water meters and for the payment of impact fees for the property, payment of approximately $6,000.00 for relocation of 3 utility poles, and payment of the City's share of closing costs. 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 approves the purchase of 0.72 acres of land from Dustin and Ryan Davis in exchange for the conveyance of 0.06 acres of land owned by the City of Fayetteville and payment of $25,000.00 to Dustin and Ryan Davis, authorizes payment of the City's share of closing costs in an amount up to $1,000.00, authorizes payment for water meters and impact fees in the estimated amount of $4,338.00, and authorizes payment for the relocation of utility poles in the estimated amount of $6,000.00, all of which are required for the relocation of the Benson water storage standpipe associated with the East Service Area Water System Improvements Project, and further approves a project contingency in the amount of $2,000.00. City of Fayetteville, Arkansas Page 1 Printed on 71312019 File Number.' 2019-0373 Section 2: That the City Council of the City of Fayetteville, Arkansas hereby authorizes Mayor Jordan to sign a Warranty Deed and any other documents necessary to effectuate the purchase and sale authorized by this Resolution. City of Fayetteville, Arkansas Page 2 Printed on 7/3/2019 Tim Nyander Submitted By City of Fayetteville Staff Review Form 2019-0373 Legistar File ID 7/2/2019 City Council Meeting Date - Agenda Item Only N/A for Non -Agenda Item 6/18/2019 Submitted Date Action Recommendation: WATER SEWER (720) Division / Department Staff recommends approval of the purchase of 0.72 acres from Dustin and Ryan Davis in exchange for the conveyance of 0.06 acres of City -owned land and payment in the amount of $25,000.00 plus the City's share of closing costs, payment in the estimated amount of $10,338.00 for water meters, impact fees, and the relocation of utility poles to facilitate the removal and reconstruction of the Benson water storage standpipe, and to approve a project contingency in the amount of $2,000.00. Budget Impact: 5400.720.5600-5808.00 Water and Sewer Account Number Fund 12009.1 Water System Rehabilitation/Replacement Project Number Project Title Budgeted Item? Yes Does item have a cost? Yes Budget Adjustment Attached? No Current Budget Funds Obligated Current Balance Item Cost Budget Adjustment Remaining Budget $ 8,989,961.00 $ 2,802,308.11 [ $ 6,187,652.89 $ 38,338.00 $ 6,149,314.89 V20180321 Purchase Order Number: Previous Ordinance or Resolution # Change Order Number: Original Contract Number: Approval Date: Comments: The total potential cost of this request is $38,338.00, including the contingency. CITY OF FAYETTEVILLE ARKANSAS MEETING OF JULY 2, 2019 TO: Mayor and City Council THRU: Don Marr, Chief of Staff Tim Nyander, Utilities Director FROM: Corey Granderson, Utilities Engineer CITY COUNCIL MEMO DATE: June 18, 2019 SUBJECT: Approval of a Resolution to convey 0.06 acres of land owned by the City to Dustin Davis and to purchase 0.72 acres in order to facilitate the removal and reconstruction of the Benson water storage standpipe RECOMMENDATION: Staff recommends approval of the purchase of 0.72 acres from Dustin and Ryan Davis in exchange for the conveyance of 0.06 acres of City -owned land and payment in the amount of $25,000.00 plus the City's share of closing costs, payment in the estimated amount of $10,338.00 for water meters, impact fees, and the relocation of utility poles to facilitate the removal and reconstruction of the Benson water storage standpipe, and to approve a project contingency in the amount of $2,000.00. BACKGROUND: The East Service Area Water System Improvements project is in the engineering design phase, and includes the demolition of an aged and undersized water storage standpipe located east of the City of Goshen at approximately 22032 Tower Road (WC4343). The standpipe is located on approximately 0.06 acres of City -owned land, engulfed by a larger parcel. The new standpipe will be constructed in a different location on this larger parcel so that the old tank can remain in service during construction. Once the new tank is online, the old tank can be demolished and the property convey to the owner of the larger parcel. The City has negotiated for purchase of a new 0.72 -acre tract created for the new tank site. DISCUSSION: The City's current parcel is appraised at $5,000; therefore, that property may be sold without going through the competitive bidding process which is required for the sale of city land valued at more than $20,000.00. The new parcel necessary for the new water standpipe is appraised at $30,000 (due to larger area). Therefore, the terms of this offer include $25,000 for the net purchase of the property, approximately $4,338 for setting water meters and paying impact fees on this property, approximately $6,000 for relocation of 3 utility poles incidental to construction, and $1,000 towards the City's share of property closing costs. Additionally, this request will approve a project contingency in the amount of $2,000. The total potential cost of this request is $38,338.00, including the contingency. Mailing Address: 113 W. Mountain Street www.fayetteville-ar.gov Fayetteville, AR 72701 BUDGET/STAFF IMPACT: Funding for this project is available from the Water System Rehabilitation account. Attachments: Site Plan of Tract Split Property Appraisal Accepted offer letter to property owner 1tpE :Mn 'Sy)l:wGw�iit3w-SN:wMve! i9 .�1 wo��iam �oiM V-mmm ::W... J� !,L Y. � ro ' � zzzzz Hv 's•�l>r�3 � I s; § ,t '0 N I 'S a 3 3 N I J N 3 �� poa21 �eMol *Joee dIJMgSNINM 3iro rwtsvx •,,, u.a •• yd ;OD -1 I t iou �N� R, a — ^_ _ _. — — _.-. — — S 0074'JY E 12M.45' : --ro• ak:vs ss�aaa � 1�.i1 i �t — r Z \ 2 R 40 sm R \ — — `g N 0072*2r W 106110' T} _ Ey§ { y 3 rat yyI¢ a IRs a YAR g a 4 `,I� ��S�rgggg �.e1•�K.�y�� ge' �'Y R�&gs�� �_ �te-5 3sb8§ -x.§ ;1 -T_�_ yaE,Wf �TQ 6 .@Y�h`.;�€� az�xa a�., j3 �a I�a rfl ry $gg`oAn$L �c xi ^� Ta�,�k\�-wns,n: kyafa �l-tea"•� tt ��i55�€ s33§ �3�"e« *r y ,-ai R 4 YZ PCZ€`pi =e?+;€��.,aa�3o-�a.. f�Fs-::€SEC€-�<'���'�g�$��# •�<���i'�.�`,� .��g3�; Yr M 7CD: (( 11ltl Y d St4u/ 4K 'XMi=. \ ^.MptY .:3 Y3it1+Vt A i.:7 - 3dc91r1S .>N% -C - �tiJt t{3MS:t1 9!D: t6L\tttj 0 i }} 4_._ 7 T BENSON MTN TANK LAND 22032 WC 4343 1 ELKINS, ARKANSAS 72727 EFFECTIVE DATE I JANUARY 27, 2019 Prepared For: Holly Jones, Land Agent, Engineering Division I City of Fayetteville 125 W Mountain, Fayetteville, AR 72701 H01LAN1) COMMERCIAL APPRAISALS AND VALUATION SERVICES February 15, 2019 Holly Jones, Land Agent, Engineering Division City of Fayetteville 125 W Mountain Fayetteville, AR 72701 RE: Benson Mtn Tank Land 22032 WC 4343 Elkins, Arkansas 72727 Dear Ms. Jones: As you requested, we have appraised the property above for the purpose of rendering an opinion of the "market value" of the Fee Simple interest. We have not appraised this property within the last three years. The property was inspected and photographed January 27, 2019. The following report contains our research, findings, analysis, and resulting conclusions. This appraisal report conforms to the Uniform Standards of Professional Appraisal Practice (USPAP) adopted by the Appraisal Standards Board of the Appraisal Foundation. This appraisal assignment was not based on a requested minimum valuation, a specific valuation, or the approval of a loan. The subject property has no known significant natural, cultural, recreational, or scientific value. The appraisers signing this report have no knowledge concerning the presence or absence of toxic materials, asbestos, and/or urea formaldehyde foam insulation in existing improvements; if such is present, the value of the property may be adversely affected, and a reanalysis at additional cost necessary to estimate the effects of such. Our opinion of the market value of the Fee Simple interest in the subject property as of: Tract # 1 (0.06 Acre) January 27, 2019 is: $59000 Tract #2 (0.72 Acre) January 27, 2019 is: $309000 Respectfully submitted, r � 1 Zach J. olland ARG 291 I '� GCkERAi CGZSJ3 •'d 'st39cy'�RY J. 1i��~P�. Certification I certify that, to the best of my knowledge and belief - I. The statements of fact contained in this report are true and correct. 2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions. 3. 1 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. 4. 1 have performed no services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. 5. 1 have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. b. My engagement in this assignment was not contingent upon developing or reporting predetermined results. 7. My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. 8. My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice as well as the State of Arkansas. 9. To the best of the appraiser's ability, the analysis, opinions, and conclusions were developed and the report was prepared in accordance with the appraisal standards of the appropriate federal banking regulatory agencies. 10. Zach Holland made a personal inspection of the property that is the subject of this report. 11. Dallas Bartholomew (AR SR 44 12) provided significant real property appraisal assistance to the persons signing this certification. He researched physical characteristics and researched and verified comparable information. 12. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. 13. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. 14. As of the date of this report, Zoch Holland has completed the Standards and Ethics Education Requirements for Candidates of the Appraisal Institute. Zac J. Holland CG 2911 Benson Mountain Tank 22032 WC 4343 Elkins AR 72727 No City Zoning 12 Months, Exposure 5,000 Land Value As Vacant (Tract 1) 30,000 Land Value As Vacant (Tract 2) EXECUTIVE SUMMARY SUBJECT DESCRIPTION: The subject is two tracts of land. Tract # I is a landlocked +/-0.06 Acre parcel located on the northeast side of WC 4343, approximately 0.25 miles from the intersection of WC 4343 and Fire Tower Rd. and contains a water tank known as the Benson Mountain Tank. Tract #2 is a +/-0.72 acre parcel located just on the other side of WC 4343, approximately 0.25 miles from the intersection of WC 4343 and Fire Tower Rd. The City of Fayetteville is planning to remove and replace the water tank currently known as the Benson Mountain Tank. They have arranged with the adjoining property owner a "swap" so that they may deed him the current tank site and in exchange he will warrant them the property south of WC 4343(Tract #2). HIGHEST & BEST USE: Vacant Land as Investment APPRAISERS: Zach J Holland, AR CG 291 1 EXECUTIVE SUMMARY Extraordinary Assumptions Extraordinary Assumption is defined as follows: 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. An extraordinary assumption may be used in an assignment only if: o It is required to properly develop credible opinions and conclusions. o The appraiser has a reasonable basis for the extraordinary assumption. o Use of the extraordinary assumption results in a credible analysis. o The appraiser complies with the disclosure requirements set forth in USPAP for extraordinary assumptions. z Hypothetical Conditions Hypothetical Condition is defined as follows: 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 the analysis. Comment: Hypothetical conditions are contrary to known facts 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.' We are appraising both tracts as if vacant. We operate under the hypothetical condition that there are no improvements, tanks, etc on the site. We use this condition in order to reach a value for the underlying land only, as requested by the client. I Appraisal Institute. (2015). The Dictionary of Real Estate Appraisal (6th ed.). Chicago, IL: Author. 83-84. 2 Appraisal Standards Board. (2016). Uniform Standards of Professional Appraisal Practice (2016-2017 ed.). USA: Appraisal Foundation. 19. 3 Appraisal Institute. (2015). The Dictionary of Real Estate Appraisal (6th ed.). Chicago, IL: Author. 1 13. SUBJECT PROPERTY SATELLITE IMAGERY PERSONAL INSPECTION PHOTOGRAPHS Personal Inspection Photographs, Continued Personal Inspection Photographs, Continued Table of Contents Extraordinary Assumptions/Hypothetical Conditions ......................... EXECUTIVE SUMMARY Propertyto be Appraised........................................................................................................................ I Purposeof this Appraisal.........................................................................................................................4 PropertyRights Appraised......................................................................................................................4 Personal Property / Intangible Assets...................................................................................................4 Useof this Appraisal.................................................................................................................................4 AppraiserCompetency............................................................................................................................5 Dateof Valuation.......................................................................................................................................5 Dateof Report...........................................................................................................................................5 Definitionof Value.....................................................................................................................................6 Estimated Reasonable Exposure............................................................................................................6 Scopeof this Appraisal.............................................................................................................................7 Ownership and Marketing History..................................................................................................... 10 Assessment and Tax Data.................................................................................................................... 12 SiteDescription...................................................................................................................................... 13 HIGHEST AND BEST USE ANALYSIS...................................................................................................... 40 THE VALUATION PROCESS......................................................................................................................43 LANDVALUE.................................................................................................................................................. 44 Introduction and Overview City of Fayetteville Project #20 19-00000 168 File # 1037 Property to be Appraised Address: 22032 WC 4343, Elkins, Arkansas 72727 Location: Tract # 1: Located on the northeast side of WC 4343, approximately 0.25 miles from the intersection of WC 4343 and Fire Tower Rd. Tract #2: Located on the southwest side of WC 4343, approximately 0.25 miles from the intersection of WC 4343 and Fire Tower Rd. Legal Description: Parent Tract: A part of the East Half (E '/2) of the East half (E 'h) of the Southeast Quarter (SE '/4) of the Southeast Quarter (SE 1/4) of Section 27, Township 17 North, Range 28 West, Washington County, Arkansas. Tract # 1 The East Half (E'/2) of the Southeast Quarter (SE 1/4) of the Southeast Quarter (SE V4) of Section 27 in Township Seventeen (17) North, Range Twenty-eight (2 8) West, Washington County, Arkansas. Tract #2 A part of the East Half (E ''/z) of the East Half (E ''/2) of the Southeast Quarter (SE '/4) of the Southeast Quarter (SE '/4) of Section 27, Township 17 North, Range 28 West, Washington County, Arkansas. I Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000 168 File # 1037 ' Property to be Appraised, Continued Parent Tract, Tract #2, & Parcel # 001-14105-000 i E'>_re Info 9 M30 I; Parcel. 001-14105-000 RPID: 20701 Prev.Parce1:101837-000-00 Type: Agri improved Owner: DAVIS, DUSTIN & RYAN Sub: 27-17-28 YOUNGBLOOD City: Fayetteville Address: 22014 TOWER (WC 4343) RD Assessed Value: 29,930 Mail Address: 22014 TOWER RD ELKINS, AR 72727 S -T -R: 27-17-28 Block / Lot: N/A / N/A Acres: 8.660 Legal: PT SE SE 8.66 A FURTHER DESCRIBED AS: The East Half (E 112) of the Southeast Quarter (SE 114) of the Southeast Quarter (SE 1/4) of Section 27 in Township Seventeen (17) North, Range Twenty-eight (28) West, Washington County, Arkansas. LESS AND EXCEPT: A part of the SE 1/4 of the SE 1/4 of Section 27, Township 17 North, Range 28 West, being more particularly described as follows: From the SE corner of the SE 1/4 ofihe SE 114 of said Section 27, run North 43°32'24" W a distance of271.61 feet to the Point of Beginning, thence South 0148'58" E 69.71 feet to a set iron pin; thence North 47°28' 19" W J 03.12 feet to a set iron pin; thence East 75.00 feetto the Point of Beginning, containing 0.06 acres, more or less excepted herein. LESS AND EXCEPT: The West Half of the East Half of the Southeast Quarter of the Southeast Quarter of Section 27, Township 17 North, Range 28 West, Washington County, Arkansas, being more particularly described as follows, to -wit: Beginning at a point N 89"42'41" W 331.44 feet from the Southeast corner of said forty acre tract and running thence N 89°42'41" W 331.44 feet to a set iron pin; thence N 00°10'29" W 1322.11 feet to a set iron pin; thence S 89°54'07" E 330.70 feet to a set iron pin; thence S 00112'23" E 1323.21 feet to the point of beginning, containing 10.05 acres, more orless. Tract #1 & Parcel # 001-14105-002 i More Irfa Parcel: 001-14105- RPID: 9 R's ❑ c 002 20703 Owner: CITY OF FAYETTEVILLE Address: 22032 TOWER (WC 4343) RD Mail Address: 113 W MOUNTAIN ST FAYETTEVILLE, AR 72701-6083 Legal: WATER TOWER PT SE SE 0.06AC Prev.Parcel:001.14105- Type: Ex. 000 Government Sub: 27-17.28 City: Fayetteville Assessed Value: 0 S -T -R: 27-17-28 Block / Lot: N/A / N/A Acres: N/A COUNTY PARCELS 2 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 File # 1037 Property to be Appraised, Continued COUNTY MAPS Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 File # 1037 Purpose of this Appraisal The purpose of the appraisal is to render an opinion of the market value, as defined, of the fee simple interest in the subject property as vacant land. Property Rights Appraised The fee simple estate is defined as follows: 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. 4 Personal Property / Intangible Assets Personal Property is defined as follows: Movable items of property that are not permanently affixed to, or part of the real estate. Personal property is not endowed with the rights of real property ownerships No personal property values were included in this conclusion of value. No Intangible assets were included in this conclusion of value. Client and Intended User City of Fayetteville is the "client/intended user" with regard to this appraisal report, and this appraisal report is prepared for the sole and exclusive use of the appraiser's client. No third parties are authorized to rely upon this report without the express written consent of the appraiser. Use of this Appraisal This report is to provide information and supportive documentation to assist The City of Fayetteville in arriving at the final market value estimate of two different tracts of land. Tract #I is owned by the City of Fayetteville and is approximately 0.06 acres. Tract #2 is owned by a second party and is approximately 0.72 acres. The city intends to deed the 2"' party Tract #1 in exchange for Tract #2 and consequently use this appraisal to justly compensate the owner. 4 Appraisal Institute. (2015). The Dictionary of Real Estate Appraisal (6th ed.). Chicago, IL: Author. 90. 5 Appraisal Institute. (2013). The Appraisal of Real Estate (14th ed.). Chicago, IL: Author. 7. 4 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #20 19-00000168 File # 1037 Appraiser Competency The appraisers signing this report are competent to prepare appraisal reports for the subject property type. Zach J Holland, Appraisal Institute, Candidate for Designation: Zach Holland has been preparing commercial appraisals since 2007. He is a certified general appraiser in Arkansas and Oklahoma. He has appraised many land, office, retail, industrial, lodging, special purpose, multifamily, and other commercial properties throughout Arkansas, Oklahoma, Mississippi, Missouri, Louisiana, and Tennessee. He has provided expert testimony in federal court. He serves as Principal Appraiser at HCA and reviews appraisals of contractors and trainees. He has completed the continuing education program for the state licensing board and the Appraisal Institute. Date of Valuation Effective Date: The date in which the appraisal or review opinion applies. b The estimate and opinion of value is applied as of January 27, 2019. Date of Report Date of the Report: The date on which the report is transmitted to the client 7 The date of this report is February 15, 2019. 6 Appraisal Institute. (2015). The Dictionary of Real Estate Appraisal (61h ed.). Chicago, IL: Author. 74. 7 Appraisal Institute. (2015). The Dictionary of Real Estate Appraisal (6th ed.). Chicago, IL: Author. 59. 5 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 File # 1037 1 r Definition of Value This appraisal has been prepared in accordance with the Federal Deposit Insurance Corporation (FDIC) Final Rules, 12 CFR Part 323.2(f), which incorporates the following market value definition. Market Value is: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:8 o Buyer and seller are typically motivated o Both parties are well informed or well advised, and acting in what they consider their own best interests o A reasonable time is allowed for exposure in the open market o Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto o 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. Estimated Reasonable Exposure Exposure Time is: The estimated length of time that 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. Comment: Exposure time is a retrospective opinion based on an analysis of past events assuming a competitive and open market. 9 Based on historical average days -on - market of similar properties in the market area10 and on our experience and knowledge of the neighborhood, we estimate exposure time for the subject property to be within 12 months at the appraised value. Time frame is from Jan 2017 to Dec 2018 Town is 'Fayetteville' Property Type is 'Land' Results calculated from 129 listings 8 Appraisal Standards Board. (2016). Uniform Standards of Professional Appraisal Practice (2016-2017 ed.). USA: Appraisal Foundation. 150. 9 Appraisal Institute. (2015). The Dictionary of Real Estate Appraisal (6th ed.). Chicago, IL: Author. 83. 10 nwa.mismatrix.com 6 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR J � City of Fayetteville Project #2019-00000168 File #1037 Scope of this Appraisal As described in the engagement letter from our client, the scope of this appraisal report is to estimate the "market value of the fee simple interest" of the subject property as vacant. This appraisal is completed in phases; general data collection and analysis, neighborhood data collection and analysis, subject property data collection and analysis, highest and best use analysis, market data collection, verification and analysis, valuation, and report preparation. Each phase is performed as applicable to the property and market. 1) General Data Collection and Analysis This phase includes collection of data relating to national, regional, and local trends, and identification and analysis of the social, governmental, and environmental forces affecting the market value of the subject property. 2) Neighborhood Data Collection and Analysis This phase entails visiting the subject neighborhood; collecting data related to growth trends, demographics, physical characteristics, available utilities, public improvements and services, etc.; and analyzing the impact on the subject property. 3) Subject Property Data Collection and Analysis In this phase, we inspect the subject property, interview the owner, engineer and other pertinent professionals available to obtain and review maps and site plans. Upon inspection, we ask owners, managers, and/or tenants about the property condition and recent updates. We collect information about real estate taxes, zoning and other governmental factors. We analyze the functionality, condition, etc. of the subject property. We cannot guarantee that the property is free of encroachments or easements, and we recommend further investigation and an ALTA survey. Our conclusion of value is based upon the assumption that there are no hidden or unapparent conditions of the property that might impact the buildability. We recommend due diligence be conducted through the local building department or municipality to investigate buildability and whether property is suitable for intended use. Roofs, interior framework, and foundations are not always visible and sometimes can only be assumed to be in similar condition to the visible areas of the building. We recommend an inspection by a professional building inspector. We make no representations, guarantees or warranties. 7 Benson Mountain Water- Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 4) Market Data Collection and Analysis File # 1037 SCOPE OF THIS APPRAISAL Continued: In this phase, we obtain and verify comparable sales data for vacant land and improved properties from public records and from personal interviews. We collect market data related to construction costs, depreciation, etc. from a variety of sources. All data is verified when possible. We attempt to interview parties to the transactions to shed light on details of the property and sale and/or lease. County records in this market are typically dependable sources of comparable sales data, but, at a minimum, we find two sources of comparable price and size by cross- referencing tax records, deeds, MLS, subscription sales databases, GIS data, commercial listings, and local press. Comparable leases are typically provided by property owners, but they frequently prefer the details remain confidential, relegating us to divulge only property type, general location and characteristics if we wish to include the details of the rental rate and other terms. Leases from public sources often include less details or are asking rates, but they are also included in order to provide non -confidential, detailed lease comparables as well as provide an estimate of the current asking rates. 5) Highest and Best Use Analysis In highest and best use analysis, we analyze all compiled data to determine: supply and demand, legal uses, physically possible uses, feasible uses, and that use which is maximally productive for the site as vacant and/or improved. The appraisers utilize inferred market analysis. The projections utilized are based on the appraisers' experience with other similar properties in the market area and the market studies at our disposal. If unforeseeable changes in the market or subject property occur, the highest and best use and value may be impacted. 6) Valuation In the valuation phase, we utilize the Sales Comparison Approach. 7) Report Preparation In the final phase, we prepare a narrative appraisal report, a Real Estate Appraisal Report under Standards Rule 2-2, as defined in the Uniform Standards of Professional Appraisal Practice, USPAP, a complete appraisal performed under Standards Rule I of the USPAP. 8 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 Subject Property Details File # 1037 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #20 19-00000 168 File # 1037 Ownership and Marketing History Research of Washington County Public Records indicates that the Parent Tract and Tract #2 is owned by Davis, Dustin, & Ryan Youngblood while Tract #1 is owned by The City of Fayetteville. There are no sales on record in the past three years. We found no evidence of current listings of the subject property. The City of Fayetteville is planning to remove and replace the water- tank currently known as the Benson Mountain Tank. They have arranged with the adjoining property owner (Davis, Dustin, & Ryan Youngblood) a "swap" so that they may deed him the current tank site and in exchange he will warrant them the property south of WC 4343(Tract #2). We assume consideration or cash will be exchanged to make up for any differenc in value. The screen capture below is the transfer record from tax records: Parent Tract, Tract #2, & Parcel # 001-14105-000 Deed Transfers Document Images brought to you by your County C.rcuit Clerk, Kyle Sylvester View Deed Est. Deed Date Book Page Stamps Grantee Code Type Image Type Sale DAVIS, DUSTIN rj 7/24/2012 2012 35307 Survey & RYAN YOUNGBLOOD DAVIS, DUSTIN rj 3/13/2012 2012 29628 Survey & RYAN YOUNGBLOOD DAVIS, DUSTIN rj 6/21/2011 2011 17411 Warr. 280.50 585,000 & RYAN Additional Improved Deed properties YOUNGBLOOD r " 12/1512010 2010 37128 CorrDeed ARVEST BANK unval. r 11/30/2010 2010 ` 35820 ARVEST BANK Unval. 1016/2009 2009 32651 Adrnin.D E 9/24/2001 2001 117865 Quit Claim Ej 1/1:"1985 1148 312 Warr.Deed BENSON, DIANA M Un ral. M BENSON, 0.00 So RICHARD. KRISHER, 0.00 $0 BENSON. Valid RICHARD C Improved 10 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 Tract #1 & Parcel# 001-14105-002 / /7% File # 1037 Ownership and Marketing History, Continued Deed Transfers Document Images brought to you by your County Circuit Clerk, Kyle Sylvester Sale Price: View Deed Est, Deed Type: Davis Dustin Deed Date Book Page Stamps Ryan Youngblood Grantee Code Type Image Type Sale $5,000 Nominal 12/30/1996 96 81284 Warr. 0.00 so CITY OF FAYETTEVILLE, Land Seller Name Deed Davis Dustin & Ryan ARKANSAS Only 2/23/1994 9,1 1,1676 Warr. 0�00 so WHITE RIVER RURAL WATER Tract #1 & Parcel Deed ASSOC Realist.com, an MLS subscriber service that accesses tax records reports the current ownership and sale history as follows: Parent Tract, Tract #2, & Parcel # 001-14105-000 Last Market Sale &Sales History Sale Date: 11/30/2010 03/01/2016 Sale Price: 982,500 $255,000 Owner Name: Deed Type: Davis Dustin Ovmer Name 2: Arvest Bk Ryan Youngblood Sale/Settlement Date 03/01/201E 11,19/2012 Sale Price $255,000 $5,000 Nominal Commissioner's Deec Administrator's Deec Buyer Name 'Mounce Pamela & lust:r Henderson Scott Seller Name Day Jackie Davis Dustin & Ryan Document Number D5411 D35009 Document Type Vfarranty Deec Rerecorded Deec Tract #1 & Parcel # 001-14105-002 mls.realist.com Seller: Day Jackie DOCUrnent Number: D5411 Deed Type: Warranty Deed Price Per Square Feet: $113.03 11/19/20117 11/30/2010 10/06/200S 12/30/1996 982,500 Owner Name. y Deed Type: y Henderson Scott Arvest Bk Benson Diana V Davis Dustin & Ryan Commissioner Of Circuit Court!"Wa Benson Richard C D35306 D35820 D32651 kl,larranty Deec Commissioner's Deec Administrator's Deec Last Market Sale & Sales History Sale Date: 12/30/1996 Document Number: Owner Name. City Of Fayetteville Deed Type: Seller: White River Rural Water Assn Sale/Settlement Date 12,130/1996 02/23/1994 Buyer Name City Of Fayetteville White River Rural Water Assn Seller Name White River Rural Water Assn Owner Record Document Number D81284 D11676 Document Type Deed (Reg) Deed (Reg', mls.realist.com D81284 Deed (Reg) 11 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 File # 1037 Assessment and Tax Data In Arkansas, real estate is assessed by the county tax assessor and the tax collected by the county collector for the city and the county. There is no state real property tax. Assessment is based upon 20% of the assessor's appraised valuation and the current assessment rate as established by the County quorum court and public vote. The combined appraisal and assessment has been taken directly from the county tax assessor's office data, for the subject parcel: Parent Tract, Tract #2, & Parcel # 001-14105-000 Market and Assessed Values Taxes Estimated Full Assessed Taxable 1196 Market (20N, Market Value Taxes: 0 Value VaIuE) estimates only. Contact Land 1 21,350 4,270 4,270 Building 128,300 25,660 25,660 Totals ! 149.650 29,930 29.930 Taxes Tract #1 & Parcel # 001-14105-002 Market and Assessed Values Taxes Estimated Full Assessed Taxable Estimated Estimated 1196 t,:larket Taxes: Taxes: 0 Note: Tax amounts are Value estimates only. Contact Homestead 350 the countytparish tax Credit: collector for exact amounts. Tract #1 & Parcel # 001-14105-002 Market and Assessed Values Taxes Estimated Full Assessed Taxable Estimated t,:larket (20�c Market Value Taxes: 0 Value Value) Lane! Note; Tax amounts are Homestead estimates only. Contact the 0 Building D, Credit: countylparish tax collector for ..... exact amounts. Totals ' The estimated tax liability appears to be in line with competing properties in the subject neighborhood. 12 Benson Mountain Water- Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 File #1037 SITE DESCRIPTION The subject is two tracts of land. Tract #1 is a landlocked +/-0.06 Acre parcel located on the northeast side of WC 4343, approximately 0.25 miles from the intersection of WC 4343 and Fire Tower Rd. and contains a water tank known as the Benson Mountain Tank. Tract #2 is a +/- 0.72 acre parcel located just on the other side of WC 4343, approximately 0.25 miles from the intersection of WC 4343 and Fire Tower Rd. The City of Fayetteville is planning to remove and replace the water tank currently known as the Benson Mountain Tank. They have arranged with the adjoining property owner- a "swap" so that they may deed him the current tank site and in exchange he will warrant them the property south of WC 4343(Tract #2). Census Tract: The subject property is located in Block 100, Block Group 150, Census Tract 140, Washington County, Arkansas. Abutting Land Uses: North: Residential; South: Residential; East: Vacant Land; West: Vacant Land Size of the Site: Tract #I and Tract #2 are: +/-2,614 SgFt & 31,363 SgFt respectively. Shape of the Site: Tract #I: Triangular Tract #2: Triangular Soils: No soil test or analysis was available to the appraisers and no responsibility is taken for the soil conditions. The soil appears to be stable for the improvements. Topography: The tracts are level. Utilities: The tracts have water available at the street but no sewer. 13 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 File #1037 - Site Description, Continued Streets (Ingress/ Egress): WC 4343 is a single lane dirt road with no traffic. Traffic counts: No traffic count data available. Easements/Encroachments: The property appears to be subject to typical utility easements and road right-of-ways. Also, per a recent survey, the Cit of Fayetteville currently has an easement with the owner of the parent tract to allow access to the Benson Mountain Water Tank (Tract # 1). Zoning: The subject property has no city zoning. Flood Status: The subject property site does not appear to be located within a flood hazard zone of the 100 -year flood boundary per Flood Insurance Rate Map Community Panel #05143CO275F, effective 05/16/2008, a portion of which map is included below. FLOOD PLAIN MAP 14 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project x`2019-00000168 Para 5or�, r+�r rNs £M X.r fl r?} M aH 4vNrM LWrr (4 !J.) W CM Swa.M Oic�tr :: X,.0. 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SURVEY Parent Tract Tract #1 15 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #20 19-00000 168 Market Area Description File # 1037 16 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 Northwest Arkansas File # 1037 The industrialization and urbanization of the state have made agriculture secondary in the past decade. Manufacturing accounts for almost 29 percent of the gross state product. Arkansas' manufacturing base is so diversified that it includes products from every major Standard Industrial Classification (SIC) code category for manufacturing except one - tobacco and tobacco related products. Labor unions are strong in transportation, utilities, construction, and the heavy industries. However, most of the state's labor force is unorganized. The rapid growth of retail giant Wal-Mart and several other companies based in Arkansas contributed to the shift away from agricultural dominance, but agricultural companies maintain a significant presence in the state. A great deal of the state's growth is in food processing. Poultry is the largest food processing segment in the state thanks to such companies as ConAgra, Hudson Foods, and Tyson Foods. Tyson Foods, headquartered in Springdale, is the state's largest food processing firm and is one of America's largest producers, processors, and marketers of chicken and other meat products. Trucking distribution is another- industry of note in Arkansas including, JB Hunt, one of the nation's largest trucking distributors. Wal-Mart was founded in 1962, with the opening of the first Wal-Mart discount store in Rogers, AR. Wal-Mart now serves customers at more than 8,650 retail units under 55 different banners in 15 countries. With fiscal year 2015 sales of $482 billion, Wal-Mart employs more than 2 million associates worldwide. 17 Benson Mountain Water- Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 File # 1037 ` MARKET AREA DESCRIPTION, Continued: Washington County is located in the Northwest corner of the State of Arkansas, which encompasses a large portion of the Fayetteville -Springdale -Rogers MSA, a commercial center- for northwest Arkansas and the headquarters for retail giant, Wal-Mart/Sam's Club. A majority of the modern workforce works in manufacturing, retail, or education industries with major employers including Wal-Mart, Tyson (among other large poultry processors), University of Arkansas, other local colleges and primary schools, JB Hunt Trucking, Allen Canning, and there is a substantial medical community employing many local residents. The population of the Fayetteville -Springdale -Rogers MSA has seen tremendous growth since 2000. Much of the growth has been attributed to the parallel growth of retailers Wal-Mart, Tyson, and other local businesses which expanded rapidly over the last three decades. The county is located within the Ozark mountain range. Topography ranges from slightly sloping and level to extremely hilly. Most of the county is rocky with soils in the county varying widely from some crop/ pastureland to bottomland or wetland areas along the significant watersheds. Health Care: Virtually all health care needs are served within the MSA including many new, modern facilities. There are multiple hospitals, medical parks, specialized clinics, and doctor's offices within 45 minutes of most residential and commercial areas including the subject location. Education: Benton and Washington Counties have a number of public schools with grades from kindergarten to 12`' grade. Fayetteville School District year -in and year -out ranks among the top three public school districts in the state for academics, arts/cultural and athletics. Springdale's HAR-BER High School, is ranked among the best high schools in the State of Arkansas. Benton County reportedly offers the highest teacher pay in the state. Northwest Arkansas also offers post -secondary educational opportunities including Northwest Arkansas Community College and two four-year institutions within a 30 -mile radius: the University of Arkansas at Fayetteville and John Brown University in Siloam Springs. The University of Arkansas is based in Fayetteville with a student body of over 24,000 and employing approximately 4,000 faculty and staff. Transportation: There are approximately thirteen motor freight carriers that have service in the Bentonville and Northwest Arkansas area including, but not limited, to JB Hunt, P.A.M., Cannon Express and Willis -Shaw. 18 Benson Mountain Water- Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 File # 1037 MARKET AREA DESCRIPTION, Continued: Northwest Arkansas Regional Airport-(XNA) provides commercial air carrier service to the region. American Airlines, Delta Airlines, Continental, and U.S. Air serve the region. The airport is located at the southwest border of the Bentonville city limits and has an 8,800 -foot runway. XNA is also serviced with a Regional Jet Center that caters to non-commercial air- services. The Regional Jet Center is a state of the art service with meeting spaces and pilot accommodations. Recreation: Northwest Arkansas is located at the foothills of the Ozark Mountains, and there are many outdoor recreation opportunities throughout the region. Cultural opportunities in Fayetteville, Rogers and Bentonville include theaters which accommodate large touring plays, ballets, and musical acts. The University of Arkansas draws and supports cultural activities of all variety. The most notable recent addition to the area is Crystal Bridges Museum in Bentonville. Crystal Bridges is a world-class museum opened in 2012: the first of its kind in the region, and the museum and resulting hotels and tourism are sure to have profound impact on Benton County. From a Washington Post article about the museum: "`It is unprecedented what she is doing," says Julian Zugazagoitia, director of the Nelson -Atkins Museum in Kansas City, Mo., the closest major art museum to Bentonville. Zugazagoitia says his museum expects to benefit in a spike of visitors as patrons drawn to Crystal Bridges explore regional options. "I hope for a Bilbao effect' in Bentonville, he says, referring to the Guggenheim outpost that opened in Spain in 1997, transforming a little-known Basque city into a major cultural hub. He says Crystal Bridges is already a good neighbor, planning collaborations with his museum.' Endowed by the Walton Family Foundation with $800 million, Crystal Bridges instantly joins the ranks of the richest museums in this country, and it has been using its extraordinary resources to assemble a collection of American art that may rival in quality, if not quantity, anything available to museum visitors in New York, Washington, Los Angeles or Chicago. It has aggressively pursued some of the most prized and iconic pieces of American art to come on the market in the past five years, leading some observers to detect an impact on prices that they call the "Walton effect." More recently, Crystal Bridges is planning a new art space which is one of many planned developments transforming central Bentonville and drawing tourists to NWA": Crystal Bridges Museum of American Art in Bentonville, Ark. — home to Walmart — has announced plans to transform a defunct Kraft cheese plant into a raw space for contemporary -art exhibitions, artists' projects, music, theater and filrn. The 63,000 -square -foot space is intended to function somewhat in the way that MoMA PSI in Long Island City, Queens, serves as an edgier, more experimental affiliate of the Museum of Modern Art. It is expected to open in 2018, Crystal Bridges officials said, and the location, in downtown Bentonville, would not only provide a place to show more contemporary art but would also continue a transformation of the small city and the surrounding region into a cultural alternative to cities like New York and Los Angeles. "This project is going to be huge for the younger generation, the millennials," said Tom Walton, 32, a nephew of the museun's founder, Alice L. Walton, in a telephone interview. He added that the hope was that Bentonville, whose population is 40,000, surrounded by rapidly growing neighborhoods and towns, would "become one of the hottest destinations in the country." I I http://www.nytimes.com/2016/03/30/arts/design/crystal-bridges-museum-to-open-new-space-for-contemporary-art.html 19 Benson Mountain Water- Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 File # 1037 ' MARKET AREA DESCRIPTION, Continued: The project will be supported by the Walton Family Foundation as part of its efforts to enhance the quality of life in northwest Arkansas, officials said. Steuart and Tom Walton — grandsons of Walmart's founder. Sam Walton, and his wife, Helen — are overseeing the development of the space, in a factory building from the 1940s, that will become part of what is being envisioned as a downtown market district in Bentonville. Crystal Bridges — the brainchild of Alice Walton, the youngest child of Sam Walton and one of the world's wealthiest people, with an estimated worth of about $33 billion — is the first museum of its size to be established between the coasts in more than a generation. It is home to a growing number of masterpieces of American art from the 19th and 20th centuries. And since its opening in 2011, it has become a major tourist draw and economic driver in its area. Last fall it announced that it had welcomed more than two million visitors in its first four years. Tom Walton, who is also developing a culinary center in downtown Bentonville, said the Kraft plant, which closed in 2012, helped shape the museum's thinking about the need for a place where it could do things it might not be able to on the site of its permanent collection. He said that he thought of the industrial space as a "kind of living room for the community," where art, music, performance and food would be on offer in unexpected ways. The site is being developed in consultation with the Massachusetts Museum of Contemporary Art and will be reshaped by Wheeler Kearns Architects of Chicago to maintain its industrial feel. It is worth noting some of the awards granted in recent years, in order to display the growing awareness of the area which is contributing to the population increases: REGIONAL RANKINGS Best cities to launch a career Realtor.com in mid -2017 created a list of the 10 Best Cities to Launch a Career. Northwest Arkansas joined far larger middle America regions on the list, including Dallas, Kansas City and Nashville. Among the places listed, only Kansas City had a lower median home price. Best Affordable Places to Live U.S. News & World Report put Northwest Arkansas at No. 8 on its April 2018 ranking of the 25 Best Affordable Places to Live in the U.S. Best cities for jobs Forbes put the Fayetteville -Springdale -Rogers MSA at No. 2 on its list of Best Midsize Cities for obs. The ranking was published in May 2018. The publication noted the region's job count is up 20 percent since 2012. Best -Performing Cities The Milken Institute, which published a new report in January 2018, put the Fayetteville - Springdale -Rogers Metropolitan Statistical Area's economy at No. 25 among large metropolitan areas. The region was especially strong in job growth. 20 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #20 19-00000168 Best Places to Live L File # 1037 MARKET AREA DESCRIPTION, Continued: U.S. News & World Report put the Fayetteville -Springdale -Rogers (Northwest Arkansas) Metropolitan Statistical Area at No. 5 on its 2017 list of Best Places to Live. Best Suburb to Purchase a Home According to Realtor Magazine's June 2015 issue, Centerton in Northwest Arkansas was ranked by online publication Niche at No. 3 for best places in the nation to purchase a home with an average home price of $133,400. Niche recently ranked America's suburbs, factoring in home values, property taxes, housing costs, and age of new homebuyers. Family Friendliness Researchers at Chapman University's Center for Demographics and Policy in California determined in a report that Northwest Arkansas ranked No. I in the nation in family friendliness. The report, called Building Cities for People and made public in January 2016, measured metropolitan areas in such categories as commute times, housing costs, income and migration. Fastest -Growing Economy through 2021 The Fayetteville -Springdale -Rogers Metropolitan Statistical Area (Northwest Arkansas) economy, according to a report by IHS Global Insight for the U.S. Conference of Mayors. The report showed the region's economic growth rate will rank No. 5 nationally through 2021. Only four U.S. regions — two in Utah and two in Florida — are expected to see their economies grow at a faster rate. The 3.9 percent annual growth rate predicted for Northwest Arkansas will push the region's economy past $30 billion. The report is available here, and Page 36 shows the expectation regarding Northwest Arkansas' future growth. NORTHWEST ARKANSAS JOINS LARGEST METROS IN 2019 "Northwest Arkansas ranked among the nation's fastest-growing places in the most recent year, and a conservative estimate shows the region should soon be among the nation's 100 largest metropolitan areas. The new Census numbers, which show accelerated growth in Northwest Arkansas between July 2016 and July 2017, led the Council to adjust its previous timeline that had the region joining the Top 100 metropolitan statistical areas near the end of 2019.,,1 z 12 http://www.nwacouncil.org/news/2018/3/22/analysis-northwest-bentonville-fayetteville-arkansas-census-top-100-population 21 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 File # 1037 STATEWIDE UNEMPLOYMENT RATE MARKET AREA DESCRIPTION, Continued: This market area has relatively high incomes as compared to the state averages, and much of the high earning levels associated with this area result from the Wal-Mart Corporate Headquarters located in Bentonville. Unemployment rates in the area are considerably lower than state and national averages. Unemployment Rate Rankings for Arkansas Counties June 2018 Not Seasonally Adjusted, Preliminary Estimates Area Rate Rank Washington County 2.8 1 Carroll County 2.9 2 Madison County 2.9 2 Benton County 3.0 4 Newton County 3.1 5 Craighead County 3.3 6 Grant County 3.3 6 Lonoke County 3.3 6 Saline County 3.3 6 STATEWIDE UNEMPLOYMENT RATE '10 01 11 C'l -'12 01 1 1 14 If 1 1, 1- "1 22 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR 4- '10 01 11 C'l -'12 01 1 1 14 If 1 1, 1- "1 22 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #20 19-00000168 File #1037 MARKET AREA DESCRIPTION, Continued: 23 Benson Mountain Water- Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 File # 1037 MARKET AREA DESCRIPTION, Continued: FRED:��'— 60,CnJ6 50.000 40,000 ;0,02,0 20,000 10,000 a 1910 1975 3900 1985 1990 1995 2000 2005 2010 2015 U.S. Bureau of Economic Analysis, Per Capita Personal Income in Fayetteville -Springdale- Rogers, AR- https://fred.stlouisfed.org/series/FASPCPI - August 2018. FRED 200 190 186 176 160 156 ,46 130 1.26 110 100 1996 1998 2000 2002 22004 2T06 2068 2010 20!2 2014 2016 2018 ' 111 U.S. Federal Housing Finance Agency, All -Transactions House Price Index for Fayetteville -Springdale - Rogers, AR -MO (MSA) August 2018. 24 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 File # 1037 MARKET AREA DESCRIPTION, Continued: NWA LARGEST EMPLOYERS, WalMart Corp Retailer 7,500 Tyson Foods, Inc. Protein Processing 4,300 University of Arkansas Education 4,000 George's Inc. Poultry Processing 2,500 J.B. Hunt Motor Freight Carrier 2,500 Mercy Health of NWA Healthcare 2,000 Washington Regional Medical Center Medical 1,750 Pinnacle Foods, Intl Frozen Dinners 1,750 Superior Industries Cast Aluminum Wheels 1,750 Bentonville School District Education 1,500 McKee Foods Snack Foods 1,400 Rogers Public Schools Education 1,300 Simmons Foods Food Products 1,206 Mercy Health System of NWA Medical 1,200 Cargill, Irc. Poultry Processing 1,000 Rockline Industries Moist Towelettes 930 Glad Manufacturing Glad Plastic Bags 850 Cherokee Casino Casino 804 Danaher Tool Group Small Hand Tools 800 Fayetteville School District Edcuation 750 Benton County Public Service 750 Rogers Tool Works Cutting Tools 700 Kawneer Company Aluminum Extrusion 600 R T W — A Division of Kennametal Tools 553 Siloam Springs School District Public Education 550 Superior Industries International Aluminum Road Wheels 520 Crossland Construction General Contractors. 500 Northwest Arkansas Community College Education 493 Gates Corporation Rubber Belts & Hose 465 Aliens, Inc. Canned Fruits & Vegetables 427 John Brown University Higher Education Institution 405 http://web.siloamchamber.com/Economic_Development/NWA_Largest_Employees.aspx 25 Benson Mountain Water- Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #20 19-00000168 f r� File #1037 MARKET AREA DESCRIPTION, Continued: NORTHWEST ARKANSAS COUNCIL 2018 STATE OF THE REGION REPORT Northwest Arkansas Economic Indicators Indicator Most Recent Annual Data Previous Year Percent Change from Previous Year Population Estimate, July 2017 537,463 525,176 23% A Real GDP (millions of chained 2009 dollars), 2017 $25,341 $24,507 3.4% Average Annual Unemployment Rate, 2017 2.8% 2.9% -0.1% V Total Nonfarm Employment, 2017 253,500 245,900 33% A Median Household Income, 2017 $56,038 $51,848 83% Average Annual Wages, 2017 $45,830 $44,980 19•% A Business Establishments, 2017 13,047 12,653 3.1% A Percent of Adult Population with a Bachelor's Degree or Higher, 2017 31.8% 309•% 0.9•% Poverty Rate, 2017 12.1% 13.2% -13% R&D Expenditures (in thousands), 2016 $145,020 $133,660 8S1. AL Average Annual Domestic Airfare, 2017 $538 $509 5.8% IL http://www.nwacouncil.org PEER REGION COMPARISONS Change in ileal GDP Source: U.S. Bureau of Economic Analysis us 2.2%1 2.2% Ark nsas 139 Peer Av� rage 4.6% F 4.0% Provo -Orem MSA ( 6 79G S.6% Rateig MSA 3.9% Durham -Chapel Hit MSA 0� 8% 0.0% Madison MSA 895 Des Moines -West Des Moines MSA 4.59: i � i2.99L t Austin -Rotund Rock MSA 6'4 Fayetteville -Springdale -Rogers MSA4.9% 3.4% 1 -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% S.0% 6.0% 7.0% 8.0% ■ 2012-2017 Average Annual Growth 2016-2017 26 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 6.0Y. 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% File #1037 MARKET AREA DESCRIPTION, Continued: Business Establishment Growth Source: U.S. Bureau of Labor Statistics FwWav tw Mntin-Rountl Dw#A*W� MWi—M&A DuOc tW*RMSA Wo+e0— Nw Arwade Ar%b us Sp -g".• Re MSA SW A Or Child Ka MSA Rama MSA MW.w MSA MSA ■ 2012-2017 2016-2017 Northwest Arkansas business establishment growth from 2016 to 2017 was 3.1 percent, higher than both the state and the nation, but slightly slower than the average growth rate in peer regions. The five-year change in the number of establishments from 1 1,683 in 2012 to 13,047 in 2017 represents an annual increase of 2.2 percent. Median Household Income Source: U.S. Census Bureau The median household income for Northwest Arkansas grew 8.1 percent to $56,038 from 2016 to 2017. The region's median household income was 80.5 percent of the peer- region median income and 92.9 percent of the national median household income. Northwest Arkansas' average annual rate of change was 4.0 percent, the same as average growth rate in the peer regions. 27 Benson Mountain Water- Tank, 22032 WC 4343, Elkins, AR 0 o w $80.000 $70,000 $60,000 an O.N $50,000 _ .. .._ ......... .._..._ .n o%. _.. $40.000 . .... �. ._._... _. $10,000 .... .... = ,„. �' .._..., $20,000 $10.000 iayettevN.- A fi- D - m— M.diroa D .,h— PW iXfi MSA Pr -Ors_ Peer Ark.ro.s US SPd.Sd.l_ R—JR—k W.9Des MSA o.P.l HAS Z MSA A.-e.as. Rag.. MSA MSA Marines MSA MSA ■ 2013 201'5 ■ 2017 The median household income for Northwest Arkansas grew 8.1 percent to $56,038 from 2016 to 2017. The region's median household income was 80.5 percent of the peer- region median income and 92.9 percent of the national median household income. Northwest Arkansas' average annual rate of change was 4.0 percent, the same as average growth rate in the peer regions. 27 Benson Mountain Water- Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 File #1037 MARKET AREA DESCRIPTION, Continued: Average Annual Wages Source: U.S. Bureau of Labor Statistics $70.000 0 —_ $60,000 Q�a s50.000 p�+vyi $40,000 $30,000 $20,000 . . 510.000 s0 .... ., ��. F."tt-10- Aurt1m 0.s M i. - M64— D-1— Rst.iafi MSA Prow-Onm P— Mkuras Spd,e"- R—d Red, Wert 0- MSA cl psl No MSA Arrsjs R.S. MSA MSA M h—MSA PASA .208 2015.20V u5 In spite of having a low unemployment rate, average annual wages in Northwest Arkansas is the second lowest among peer regions at $45,830 in 2017. From 2013 to 2017, average wages grew 2.5 percent in Northwest Arkansas, placing the region in the middle of the pack when compared to the peer regions. 25.0% 20.0%. 1S.0% 10.05: S.0% 0.0% Fsy.ft-Ae- Actin- Det Moines- M-1— D-fifi— Raleigh MSAP.mmv 0—P—A—ga AA--- SpA,gdals- P—d Roh W.*D— MSA Chapel Ni/ MSA PoVm MSA MSA Molted MSA MSA ■2013 A015 ■2017 Median Cost of Homeownership as Percent of Income Sourer. U.S. Census auraau us The cost of homeownership as a percentage of monthly household income for Northwest Arkansas continued to be lower than all the peer regions and the nation. Homeownership costs were 15.2 percent of household income in 2017, down 0.1 percent from the previous year. Since 2013, median homeownership cost as a percent of household income in Northwest Arkansas has dropped 1.0 percent as a result of improvement in the region's household incomes. 28 Benson Mountain Water- Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 File # 1037 MARKET AREA DESCRIPTION, Continued: HISTORICAL TRENDS: The real estate market in the Fayetteville -Springdale -Rogers MSA went through a correction period from 2009 to 2013, like much of the state and nation. The local correction period was the result of excessive supply introduced into the market from 2003 to 2007 and declining economic conditions during the national recession. Prices were high for the state and region, but they were somewhat protected by the fact that they were still relatively low as compared to national averages, especially for MSA's experiencing similar economic and population growth. Prices declined somewhat, but overall, as long-term investments, most properties have recaptured their value, due to a thriving, diverse local economy including Wal- Mart, JB Hunt, Tyson, and the University of Arkansas among others. The local multifamily market weathered the recession relatively well and was among the first to resume construction. It is worth noting that economists are beginning to predict a potential repeat of a less severe recession. "/f the markets go down, it could bring on another recession. The housing market has been an important element of economic activity. If people start to get pessimistic about housing and pull back and don't want to buy, there will be a drop in construction jobs and that could be a seed for another recession. By the way, we're overdue for another recession." — Economist Robert Shiller; October 2018 CURRENT TRENDS: "The fact that cap rates have reached record lows speaks to the interest investors continue to have in commercial real estate," MBA Vice President of Commercial Real Estate Research Jamie Woodwell; November 2018 "During the first half of 2018, the overall vacancy rate for commercial real estate (NWA) increased to 10.8 percent, up from 9.7 percent at the end of 2017. This increase was the result of 421,692 square feet of negative net absorption across all types of commercial space."" The Arvest Skyline Report is our primary source of market data in the following profiles. The Arvest Skyline Report is a biannual analysis of the latest commercial, single-family residential and multifamily residential property markets in Benton and Washington counties. The report is sponsored by Arvest Bank and conducted by the Center for Business and Economic Research (CBER) in the Sam. M. Walton College of Business at the University of Arkansas. In 2004, Arvest Bank contracted with CBER to collect information about the local real estate markets. CBER researchers aggregated and analyzed data from local governments, property managers, visual inspections and the business media to provide a complete picture of the status of property markets in the two counties. 11 2018 Arvest Skyline Report 29 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000 168 Multifamily File #1037 L MARKET AREA DESCRIPTION, Continued: Historical Trends: The unhealthy housing market resulted in increased demand for apartments. After a short period of increasing vacancy, oversupply was absorbed, and recovery was underway in the multi -family market by 2010. Current Trends: There have been several successful midsize to large apartment complex developments in Fayetteville in more recent years, mostly serving the rapidly increasing student body. There are also several new multi -family projects directed at downtown living in Fayetteville and Bentonville. The project absorptions have exhibited demand in both cities, but there have also been some multi -family project stall -outs in Fayetteville, resulting in REO land sales that keep multi -family land prices from increasing in some areas (depending on the specific location). Some of those projects were subsequently resumed in the period of increased construction beginning in 201 S. "What we are seeing in the data is that more and more people are choosing to lease apartments instead of buying homes, because the apartments tend to be closer to the amenities they desire and are considered to be more affordable. This, in turn, is fueling the insatiable growth in the multifamily market, which continues to add new multifamily properties at a rapid pace without any sustained increase in the vacancy rate of those properties." 15 Much of the new multifamily construction includes pocket communities and modern townhomes that can be leased or purchased, mostly aimed at either student living or downtown dwellers. These relatively high-priced, high-density homes are a new property type in Northwest Arkansas, and they have proven that demand for these properties exists. These new developments often include tear -downs and redeveloping old single-family homes, and they are driving residential land prices up in select areas of downtown Fayetteville and especially Bentonville where townhome prices have regularly surpassed $230 per SgFt, some reportedly over $300 per SgFt. 15 2018 Arvest Skyline Report 30 Benson Mountain Water- Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 Retail File # 1037 MARKET AREA DESCRIPTION, Continued: Historical Trends: The retail sector- was the strength of the commercial market through 2008. Then, economic conditions deteriorated and vacancies increased or remained stagnate through 2009, 2010, and 201 1. Around the beginning of 201 1 the retail market began to show improved occupancy which increased steadily and current demand is strong, although new construction has been mostly limited to only specific segments, including fast food and free-standing retail buildings. Current Trends: "The retail submarket, which has been under severe pressure nationally, showed resilience in Northwest Arkansas in the first half of the year. Despite adding 77,000 square feet of new space and the closing of major retailers Sears and Toys -R- Us, the retail vacancy rate remained below 10 percent. The vacancy rate ended 201 7 at 8.9 percent and rose to 9.7 percent in the first half of 2018. CBER researchers specifically pointed out that many retail spaces formerly used for selling goods are now being utilized for selling services." "During this cycle, we were also impressed with the retail market, as it continues to outperform national trends, even as large national retailers close and vacate local retail space. While the vacancy rate increased, it remains at healthy levels, and the market seems to be adjusting to the new retail landscape."" "As consumers have increasingly embraced online shopping, it stands to reason that these new shopping preferences will have on impact on different types of commercial real estate with the retail real estate market softening while the warehouse market begins to tighten, I think that is what we are likely witnessing here in Northwest Arkansas." — Kathy Deck, U of A Econ. 'a 2018 Arvest Skyline Report 31 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 Industrial t.. File # 1037 MARKET AREA DESCRIPTION, Continued: Historical Trends: The total vacancy rate has experienced increases over the last year, partially due to new flex space construction. Due to the timing of the delivery of the CrossMar Industrial 2 site, only 50,000 square feet (so preleased, vacancy of flex space has climbed with the additional 150,000 sf of vacant space added to the inventory. The new availability in the Bentonville area would not be expected to remain vacant for long as the vacancy of the area had remained below 2% for more than five quarters. The new availability is expected to be heavily sought after, but the positive side of the delivery may not be seen until I Q 2018 or even later as tenants begin to occupy. Generally, industrial growth has been limited to the expansion of existing companies, with a few exceptions. Statewide industrial prices fluctuated within a relatively small range and have shown recent upward trends. Northwest Arkansas has exhibited some of the most substantial price increases, especially in high-quality and new industrial properties, while existing industrial prices remain relatively stable. Overall, we consider the industrial real estate market to be stable to growing. The primary growth sector is expected to be light industrial flex space. Current Trends: "The warehouse submarket was the most significant contributor to the overall total negative absorption (of all commercial properties) as it accounted for 210,335 of negative net absorption, roughly half of the total. Interestingly, this was not because of newly constructed space entering the market but, rather, driven by previously leased warehouse space becoming vacant." "And while the warehouse sector experienced a very week period in the first half of the year, this has always been a volatile market due to its small size in this area. To have a bad six-month period and still have a vacancy rate of just 8.1 percent tells us that there is no significant reason to worry about the warehouse market as the move to more e-commerce is expected to create sustained, long-term need for warehouse space." " 17 2018 Arvest Skyline Report 32 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 Office File # 1037 MARKET AREA DESCRIPTION, Continued: Historical Trends: Office lease rates declined from 2009 to 2012. Then they started to show improvement, which has continued to date, with some office classes meeting or surpassing pre - recession occupancy and rental rates. While more recent leasing activity has remained steady, the bulk of the transactions checked in less than 2,500 sf in size with only one transaction greater than 10,000 sf. The larger vacancies that hit in 2017: ConAgra, Iberia Bank and Springs Industries resulted in a climbing vacancy rate. While Fayetteville CBD and East Springdale submarkets offer the most affordable asking rents in the market, they also have had the lowest vacancy rates. Users looking in those submarkets will likely be pushed north into Benton County. Bentonville and Rogers have substantial new supply entering their area. Some local experts were reporting a shortage of Class A office space for out of town vendors moving into the area. That perception led to new Class A office developments which added new office supply of more than 300,000 SgFt., but the impact to overall availability is minimal as the projects were delivered with substantial pre -leased occupancy. Current Trends: "The office submarket demonstrated continued strength, as 134,688 square feet of new office space was added while 165,224 square feet was absorbed, leading to the office vacancy rate being unchanged from the second half of 2017 at 9. I percent. Researchers at the Center for Business and Economic Research (CBER) at the Sam M. Walton School of Business at the University of Arkansas specifically noted the strength of Class A and B office space in Bentonville as being a major contributor to the office sector's overall positive performance."18 "The office market in Northwest Arkansas continues to show strength and the ability to absorb the new space being introduced in the market," said Mervin Jebaraj, CBER director. 18 2018 Arvest Skyline Report 33 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 File # 1037 MARKET AREA DESCRIPTION, Continued: CONCLUSIONS: The MSA continues to experience a favorable interest rate environment. Recent population and employment numbers reflect growth and job supply. The unemployment rate for the MSA remains favorable relative to the national and state levels. Incomes and GDP are on the rise. We expect that continued economic improvement will support the towns and bedroom communities within Benton and Washington County for the foreseeable future, and, local real estate values are expected to continue to improve. During the first half of 2018 commercial building permits totaled $188,503,803, a 61.4 percent increase from the $1 16,812,224 in permits issued in the first half of 2017. Chris Thornton, loan manager with Arvest Bank of Springdale, said about the commercial market Skyline results, `7t is very encouraging to see the commercial real estate market in Northwest Arkansas continue to grow and remain well balanced. We continue to work with our real estate development customers to help them identify the specific types of developments needed to match the growth in the market. Our commercial real estate financing teams will continue helping customers build the right projects at the right place and in the right time."19 19 2018 At -vest Skyline Report 34 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 File # 1037 MARKET AREA DESCRIPTION, Continued: Market area is defined as: The geographic region from which o majority of demand cones and I which the majority of competition is located. Depending on the market, a market area may be further subdivided into components such as primary, secondary, and tertiary market areas, or the competitive market area may be distinguished from the general market orea.20 Market areas are characterized by a number of factors, including, but not limited to: physical features (such as topography, transportation types, structure types, street patterns, vegetation, lot sizes, soil types, etc.), the demographic and socio-economic make-up of the area population, the condition of the improvements (age, upkeep, ownership, vacancy rates), and land- use trends. To identify the boundaries of a market area, an appraiser: • Examines and analyzes the subject property • Examines and analyzes the area's physical features • Examines and analyzes land -use propensities • Draws preliminary boundaries based on these analyses • Examines and analyzes the demographic and socio-economic character of the delineated area • Reconciles these analyses to determine the best market -area boundaries for the assignment 21 We define the subject market area as Washington County, and we will search the area for comparable sales and information. We focus our search efforts to mainly the rural areas in Washington County or more specifically the northeastern side of the county. The search area is bordered by Springdale to the north, Fayettville to the west, and elkins to the south. 20 Appraisal Institute. (2015). The Dictionary of Real Estate Appraisal (6th ed.). Chicago, IL: Author. 139. 21 Appraisal Institute. (2013). The Appraisal of Real Estate (14th ed.). Chicago, IL: Author. 165-166. 35 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 File # 1037 MARKET AREA DESCRIPTION, Continued: E,m s us ii - 412 - A4 12 S in Sprin H,� Oki, 1112 I'd 24, Whi. lock 112 11 Rhea e 59 0 170 Vinay Grove Summers Gmw �"s -0 1 Ria 255 0 71 Lm W S! N 45 Hogeye 1 fi Card r Clyde 'c' ,,.,s cl"'!Ch %Vis SUK,M& , I 7Bfackbum 0 14 Fla 74 w CRA'WFORD COUNTY 3 NuD HA mg 412 Alayfiel Habbetlon 15 74 91 I Subject I WASHINGTON COUNTY * = County Seat 36 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 File # 1037 MARKET AREA DESCRIPTION, Continued: When comparables cannot be located in the immediate area of the subject we attempt to find sales and rented properties in areas that share similar characteristics and have similar price levels. The subject neighborhood is also described below for the clients' benefit in understanding the immediate surroundings and the characteristics we will seek out in comparable property neighborhoods within the market area. More extensive and specific market information and analysis is also included in the income approach later in this report. Neighborhood is: A group of complementary land uses, a congruous grouping of inhabitants, buildings, or business enterprises.22 A neighborhood exhibits a greater degree of uniformity than the larger surrounding area. A neighborhood will generally exhibit a more homogenous landscape with regard to building types, building styles, and building ages than would be found in the larger surrounding area. Social, economic, and governmental forces operating within a neighborhood further define it. Goshen Goshen is a town in Washington County, Arkansas. Area: 11.52 mi' Zip code: 72735 2018 Population = 1,760 While the subject has an Elkins address, its actually much closer to Goshen, AR and therefore we consider Goshen its neighborhood. Goshen has historically been an agricultural community though some residents work in Fayetteville, Springdale, Rogers, etc. It is a very small residential community with very few commercial properties.The highway corridor hosts a limited number of commercial businesses. The commercial properties are sparse and there's no new development. Highway 45 is a state highway in Northwest Arkansas with moderate traffic and it runs though town from Fayetteville. 22 Appraisal Institute. (2015). The Dictionary of Real Estate Appraisal (6th ed.). Chicago, IL: Author. 156. 37 Benson Mountain Water- Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 File # 1037 MARKET AREA DESCRIPTION, Continued: The existing commercial properties have been maintained on a fair to average basis consisting of ages varying from 65 years old to 13 years old. Most businesses serve the highway travelers. It is currently in a stable stage of the market life cycle due to its highway location and its proximity to the growth center of NWA which makes it likely to continue as a stable area with potential for some growth. 0 '_ r 0 Neighborhood Outlook: The neighborhood has benefitted from the population increases and income increases of the greater market area, and it enjoys solid employment. Overall, as a part of the greater, healthy Northwest Arkansas market, Goshen and Elkins are expected to remain a stable real estate market experiencing price trends similar to the greater market area. 38 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 Analysis and Conclusions „- File #1037 39 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 File # 1037 HIGHEST AND BEST USE ANALYSIS Highest and Best Use is: The reasonablyprobable 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. �3 The theoretical focus of highest and best use analysis is on the potential uses of the land as though vacant. In practice, however, the contributory value of the existing improvements and any possible alteration of those improvements are also important in determining highest and best use and, by extension, in developing an opinion of the market value of the property. In the analysis of highest and best use of land as though vacant, we ask the following questions: o Should the land be developed or left vacant? o If left vacant, when would future development be financially feasible? o If developed, what kind of improvements should be built? In the analysis of the highest and best use of the property as improved, the appraiser must additionally answer: o Should the existing improvements on the property be maintained in their current state, should they be altered in some manner to make them more functionally efficient, or should they be demolished to create a vacant site for a different use? o If renovation or redevelopment is warranted, when should the new improvements be built? 24 Typically, when the value of a property as improved is greater than the value of the land as though vacant, the highest and best use is "as improved". Sometimes, a property's existing use may represent an interim use in which case the value equals the land value for the proposed highest and best use plus the contributory value of the current improvements until the proposed highest and best use is later achieved. Property owners redeveloping a parcel of land sometimes remove an improvement even when the value of the property as improved exceeds the value of the vacant land. The costs of demolition and any remaining improvement values are taken into consideration when testing the financial feasibility of redevelopment. Four steps are applied in the following order to determine the appraiser's highest and best use opinion: Physically Possible; Legally Permissible; Financially Feasible; Maximally Productive 23 Appraisal Institute. (2015). The Dictionary of Real Estate Appraisal (6th ed.). Chicago, IL: Author. 109. 24 Appraisal Institute. (2013). The Appraisal of Real Estate (14th ed.). Chicago, IL: Author. 337. 40 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 Physically Possible: File #1037 HIGHEST AND BEST USE ANALYSIS continued: The availability and capacity of public utilities appear to be adequate for the subject property, and the land is located outside of the flood hazard area. No subsoil study was provided the appraiser and it is assumed that the subsoil conditions will not make utilization of the site restrictive or costly and that the site's potential future use is not affected. Alternative uses that would require a larger site are physically prohibited. "As vacant," the subject property could be developed as any number of uses that would not be limited by the property's size and shape, terrain or by the availability of utilities. The smaller of the two tracts is too small to serve many uses on its own, but as a supplementary tract to be added to a larger adjoining site, it has similar value to the land surrounding it. Legally Permissible: The property is not subject to zoning restrictions. "As vacant," the subject property could legally be put into service for any use consistent with the neighborhood. Financially Feasible: There may be numerous uses for the subject property. All uses that are expected to produce a positive return, after expenses, are regarded as economically feasible. A comprehensive marketability or feasibility study was not requested nor performed in conjunction with this report. The appraisers utilize inferred market analysis. The projections utilized are based on our experience with other similar properties in the market area and the market studies at our disposal. The subject market is stable and balanced, based on current supply and demand observed. "As vacant": Given immediate neighborhood trends, residential or light industrial uses would be considered feasible. Uses dependent on city sewer or commercial traffic would not be feasible. 41 Benson Mountain Water- Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 Maximally Productive: File # 1037 HIGHEST AND BEST USE ANALYSIS continued: The physically possible, legally permissible, and financially feasible use that results in the highest present value is the Maximally Productive Use. This assumes maximized profitability. Maximum profitability is somewhat subjective depending on ownership knowledge, management ability, management costs, changes in supply as well as other fluctuations in income and expenses, but it can be narrowed to a reasonable conclusion which also considers the risk of the use. "As vacant": Given immediate neighborhood trends, the maximally productive use is as land to serve as a future home site or just to hold as vacant land as an investment. 42 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 File # 1037 THE VALUATION PROCESS The Valuation Process is: A systematic procedure an appraiser follows to provide answers to a client's questions about real property value. " The number of steps depends on the intended use of the assignment results, the nature of the property, the scope of work, and the availability of data. In assignments to develop an opinion of market value, the ultimate goal of the valuation process is a well -supported value conclusion that reflects all of the pertinent factors that influence the market value of the property being appraised given the intended use and users. To achieve this goal, an appraiser studies a property from three different viewpoints, which are referred to as the approaches to value. The three approaches to value typically used in the valuation process are briefly introduced below: I. In the Cost Approach, value is estimated as the current cost of reproducing or replacing the improvements (including an appropriate entrepreneurial incentive or profit) minus the loss in value from depreciation plus the land value. 2. In the Sales Comparison Approach, value is indicated by recent sales of comparable properties in the market. 3. In the Income Capitalization Approach, value is indicated by a property's earning power, based on the capitalization of income. One or more approaches to value may be used depending on which approaches are necessary to produce credible assignment results, given the intended use. This appraisal utilizes the Sales Comparison Approach to value the subject property. This is the most common and applicable method of valuation of vacant land. From the approaches applied, the appraiser derives separate indications of value for the property being appraised. To complete the valuation process, the appraiser integrates the information drawn from market research, data analysis, and the application of the approaches to form a value conclusion. This conclusion may be presented as a single point estimate of value or, if the assignment permits, as a range within which the value may fall (or as a point referenced from a benchmark). An effective integration of all the elements in the process depends on the appraiser's skill, experience, and judgment." 25 Appraisal Institute. (2015). The Dictionary of Real Estate Appraisal (6th ed.). Chicago, IL: Author. 243. 26 Appraisal Institute. (2013). The Appraisal of Real Estate (14th ed.). Chicago, IL: Author. 35-36. 43 Benson Mountain Water- Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 File # 1037 LAND VALUE The Sales Comparison Approach is: The process of deriving a value indication for the subject property by comparing similar properties that have recently sold with the property being appraised, identifying appropriate units of comparison, and making adjustments to the sale prices (or unit prices, as appropriate) of the comparable properties based on relevant, market -derived elements of comparison. The sales comparison approach may be used to value improved properties, vacant land, or land being considered as though vacant when on adequate supply of comparable sales is available." To apply the sales comparison approach, appraisers follow a systematic procedure: • Research the competitive market for information on properties that are similar to the subject property and that have recently sold, are listed for sale, or are under contract. Consider the characteristics of the properties such as property type, date of sale, size, physical condition, location, and land use constraints. The goal is to find a set of comparable sales as similar as possible to the subject property to ensure they reflect the actions of similar buyers. Market analysis and highest and best use analysis set the stage for the selection of appropriate comparable sales. • Verify the information by confirming that the data obtained is factually accurate and that the transactions reflect arm's-length market considerations. Verification should elicit additional information about the property and the market so that comparisons are credible. • Select the most relevant units of comparison in the market (e.g., price per acre, price per square foot, price per front foot) and develop a comparative analysis for each unit. • Look for differences between the comparable sale properties and the subject property using all appropriate elements of comparison. Then adjust the price of each sale property, reflecting how it differs, to equate it to the subject property or eliminate that property as a comparable. This step typically involves using the most similar sale properties and then adjusting for any remaining differences. If a transaction does not reflect the actions of a buyer who would also be attracted to the subject property, the appraiser should be concerned about comparability. • Reconcile the various value indications produced from the analysis of comparables to a value bracket and then to a single value indication.28 27 Appraisal Institute, The Appraisal of Real Estate, 14th Edition, 2013 p45 28 Ibid p45-46 44 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #20 19-00000168 File # 1037 Land Value, continued A wide search of MLS and County Records for land sales of any variety returned no sales of 0.10 acres or less in Washington County. There was only I sale of less than 0.07 Acres in the last 5 years, but it was located in Benton County, and it was a small neighborhood lot with typical utilities including sewer service. It was deemed incomparable. Considering the intended use of the appraisal, it is more appropriate to use typical land sales from the surrounding area as they best represent the value difference and value lost by the land swap. COMP SET — EAST FAYETTEVILLE RURAL LAND — 0,4 ACRE TO I ACRE Comp# MLS#'",'Location Sewer ,:'Address ,"'.Town 86 :. 1020107 Rural, East Fay N 358 N Vaughan Rd Fayetteville 29,000 105 0.49 $ 59,184 4.' 1024896 Rural N 15572 Hamestring Road Fayetteville $ 1000680 Twn edge, nbrhd Y3695 Huntsville Road Fayetteville 24 1018965 Rural Subd N 13436 Lichen Fayetteville $ 1036722 Rural N 16478 Hicks Road Elkins 30,753 1025987 Rural nbrhd N 19984 Combs -Bell We 31 Elkins Com � , Sold Dat( _Sold Price, -',. DOM p -��[ _ ;Acres Fa ]Price/Acre 9/23/2016 $ 20,000 86 0.43 $ 46,512 12/2/2016 $ 29,000 105 0.49 $ 59,184 7/8/2016 $ 33,000 260 0.64 $ 51,563 7/8/2016 $ 29,000 24 0.75 $ 38,667 1/24/2017 $ 28,600 0.93 $ 30,753 1 1/18/2016 $ 16,000 73 1.00 $ 16,000 45 Benson Mountain Water- Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 File # 1037 Land Value, continued Adjustments to Comparable Sales are: Mathematical changes made to market data to facilitate comparison or understanding. When dollar adjustments are used, individual differences between comparable properties and the subject property are expressed in terms of plus or minus dollar amounts. With percentage adjustments, individual differences are reflected in plus or minus percentage differentials. 79 Despite all efforts to extract quantitative adjustments, some elements of value offer- no quantitative basis but still warrant adjustment. In these cases, we use qualitative adjustment. We judge the properties on a scale of poor; fair; average; good; excellent, and we apply a difference to each level of disparity, based on the range displayed by the comparable set. It is a method of relative adjustment used by our peers and approved by the Appraisal Institute. This method has proven, over time, to reach reasonable market -guided results, given proper selection and verification of the comps and using the appraisers' experience in the local market. a r • �� �� �.�• r r Comp ## Cond Mkt Loc Net r 11% -24% -9% $ 53,719 3 13`6 -20% -7% $ 47,840 4 13 13% $ 43,609 5 10 10% $ 33,er41 . 11% 11% $ 17,753 Explanation of Adjustments: The subject and sales all occurred under typical condition, financing and with similar property rights. The only substantial differences between the sales as they apply to the subject tracts, and the only adjustments necessary to perform reliable curve fit analysis on the comparable sales are for changing Market Conditions since the sale and Locational attributes including neighborhood property values, access, and utilities or lack thereof. 29 Appraisal Institute. (2015). The Dictionary of Real Estate Appraisal (6th ed.). Chicago, IL: Author. 4-5. 46 Benson Mountain Water- Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 File #1037 Land Value, continued Market Conditions (Time) Adjustment: Market statistics drawn from MLS indicate average market appreciation of approximately 5% per year for residential and agricultrural land in the Washington County. Location Adjustment: We adjusted qualitatively for sales located closer to town, including consideration for comps which had sewer service, making them superior to the subject location. Size Adjustment: A wide search of MLS and County Records for land sales of any variety returned only I sale of less than 0.10 Acres in the last 5 years. Since there were not sufficient sales of similar size to compare with Tract I, we opt to utilize curve fit analysis to estimate the two respective subject tract prices per acre projected by the trendline set by the comparable sale points. CONCLUSION: Curve Fit Analysis (Linear): In curve fit analysis, a statistical formula is used to calculate a line or curve that represents the best fit for the data .30 The trend line is placed at the position that results in the least variation between the data in the chart and the trend line. The trend line formula can then be used to make a projection or to estimate the value implications of some variable. The trend line calculation in Excel is based on regression analysis. However, for application in determining adjustments in an appraisal, the term curve ft analysis may be more appropriate than the term regression analysis. It may not be appropriate to consider this application a statistical regression analysis for several reasons: I. The number- of sales or rents in an appraisal analysis is often too small to provide any statistical reliability. 2. Appraisers are not generally able to use the kinds of controls on collection of data that would be considered necessary to avoid introducing bias into the statistics. 3. An appraiser may even make some preliminary adjustments to the data before completing graphic analysis, which may not be appropriate for regression analysis. An important distinction is that, in curve fist analysis, it is important to only include sales which have already been researched and determined as reliable indications of subject value. The sales were chosen due to a high degree of similarity with the subject 30 Appraisal Institute Advanced Concepts and Case Studies Part 2 — 31; 2016 47 Benson Mountain Water Tank, 22032 WC 4343, Elkins, AR City of Fayetteville Project #2019-00000168 $90,000 $80,000 $ 70,000 $60,000 $50,000 $40,00d — $30,000 $ 20,000 $10,000 File # 1037 Land Value, continued Ad j $ f Acre y = -54756x+80149 RZ = 0.8604 - 0.20 0.40 0.60 0.80 1.00 1.20 The R2 value on the chart above indicates a strong correlation between size and price per acre and that the trendline equation is a reliable predictor of value or adjustment for size. The R2 value is a measure of the correlation of all sale points to the trend line with I being all points falling on the line. We find the subject tract size on the bottom axis, and the comparable set trendline gives us the corresponding price per acre indicated for that size. —Y -Int SI a _e Sulo Acrs = Value/Acre e 80149.03111 + -54756.264 0.06 $ 76,864 $ 4,612 Indicated Value of Tract I Rounded $ 5,000 Y -Int Slope Sub} Acres Value/Acre` 80149.03111 + -54756.264 0.72 $ 40,725 $ 29,322 Indicated Value of Tract 2 Rounded $ 30,000 48 Benson Mountain Water- Tank, 22032 WC 4343, Elkins, AR Assumptions / Limiting Conditions Unless otherwise specifically noted in the body of the report, it is assumed that title to the property or properties appraised is clear and marketable and that there are no recorded or unrecorded matters or exceptions to title that would adversely affect marketability or value. HCA is not aware of any title defects nor has it been advised of any unless such is specifically noted in the report. HCA however, has not examined title and makes no representations relative to the condition thereof. Documents dealing with liens, encumbrances, easements, deed restrictions, clouds and other conditions that may affect the quality of title have not been reviewed. Insurance against financial loss resulting in claims that may arise out of defects in the subject's title should be sought from a qualified title company that issues or insures title to real property. 2. Unless otherwise specifically noted in the body of this report, it is assumed: that the existing improvements on the property or properties being appraised are structurally sound, seismically safe and code conforming, that all building systems (mechanical/electrical, HVAC, elevator, plumbing, etc.) are in good working order with no major deferred maintenance or repair required, that the roof and exterior are in good useful condition and free from intrusion by the elements; that the property or properties have been engineered in such a manner that the improvements, as currently constituted, conform to all applicable local, state, and federal building codes and ordinances. HCA professionals are not engineers and are not competent to judge matters of an engineering nature. HCA has not retained independent structural, mechanical, electrical, or civil engineers in connection with this appraisal and, therefore, makes no representations relative to the condition of improvements. Unless otherwise specifically noted in the body of the report: no problems were brought to the attention of HCA by ownership or management Structural problems and/or building system problems may not be visually detectable. If negative findings are reported by engineering consultants, HCA reserves the right to amend the appraisal conclusions reported herein. 3. Unless otherwise stated in this report, the existence of hazardous material, which may or may not be present on the property was not observed by the appraisers. HCA. has no knowledge of the existence of such materials on or in the property. HCA., however, is not qualified to detect such substances. The presence of substances such as asbestos, urea formaldehyde foam insulation, contaminated groundwater or other potentially hazardous materials may affect the value of the property. The value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in this field, if desired. We have inspected, as thoroughly as possible by observation, the land; however, it was impossible to personally inspect conditions beneath the soil. Therefore, no representation is made as to these matters unless specifically considered in the appraisal. 4. All furnishings, equipment and business operations, except as specifically stated and typically considered as port of real property, have been disregarded with only real property being considered in the report unless otherwise stated. Any existing or proposed improvements, on or off-site, as well as any alterations or repairs considered, are assumed to be completed in a workmanlike manner according to standard practices based upon the information submitted to HCA. This report may be subject to amendment upon re -inspection of the subject subsequent to repairs, modifications, alterations and completed new construction. Any estimate of Market Value is as of the date indicated, based upon the information, conditions and projected levels of operation. 5. It is assumed that all factual data furnished by the client, property owner, owner's representative, or persons designated by the client or owner to supply said data are accurate and correct unless otherwise specifically noted in the appraisal report. Unless otherwise specifically noted in the appraisal report, HCA. has no reason to believe that any of the data furnished contain any material error. Information and data referred to in this paragraph include, without being limited to, numerical street addresses, lot and block numbers, Assessor's Parcel Numbers, land dimensions, square footage area of the land, dimensions of the improvements, gross building areas, net rentable areas, usable areas, unit count, room count, rent schedules, income data, historical operating expenses, budgets, and related data. Any material error in any of the above data could have a substantial impact on the conclusions reported. Thus, HCA. reserves the right to amend conclusions reported if made aware of any such error. Accordingly, the client -addressee should carefully review all assumptions, data, relevant calculations, and conclusions within 30 days after the date of delivery of this report and should immediately notify HCA. of any questions or errors. 6. The date of value to which any of the conclusions and opinions expressed in this report apply, is set forth in the Letter of Transmittal. Further, that the dollar amount of any value opinion herein rendered is based upon the purchasing power of the American Dollar on that date. This appraisal is based on market conditions existing as of the date of this appraisal. Under the terms of the engagement, we will have no obligation to revise this report to reflect events or conditions which occur subsequent to the date of the appraisal. However, HCA will be available to discuss the necessity for revision resulting from changes in economic or market factors affecting the subject. 7. HCA assumes no private deed restrictions limit the use of the subject. 8. Unless otherwise noted in the body of the report, it is assumed that there are no mineral deposit or subsurface rights of value involved in this appraisal, whether they be gas, liquid, or solid. Nor are the rights associated with extraction or exploration of such elements considered unless otherwise stated in this appraisal report. Unless otherwise stated it is also assumed that there are no air or development rights of value that may be transferred. 9. HCA. is not aware of any contemplated public initiatives, governmental development controls, or rent controls that would significantly affect the value of the subject. 10. The estimate of Market Value, which may be defined within the body of this report, is subject to change with market fluctuations over time. Market value is highly related to exposure, time promotion effort, terms, motivation, and conclusions surrounding the offering. The value estimote(s) consider the productivity and relative attractiveness of the property, both physically and economically, on the open market. I I. Any cash flows included in the analysis are forecasts of estimated future operating characteristics are predicated on the information and assumptions contained within the report. Any projections of income, expenses and economic conditions utilized in this report are not predictions of the future. Rather, they are estimates of current market expectations of future income and expenses. The achievement of the financial projections will be affected by fluctuating economic conditions and is dependent upon other future occurrences that cannot be assured. Actual results may vary from the projections considered herein. HCA does not warrant these forecasts will occur. Projections may be affected by circumstances beyond the current realm of knowledge or control of HCA. 12. Unless specifically set forth in the body of the report, nothing contained herein shall be construed to represent any direct or indirect recommendation of HCA to buy, sell, or hold the properties at the value stated. Such decisions involve substantial investment strategy questions and must be specifically addressed in consultation form. 13. Also, unless otherwise noted in the body of this report, it is assumed that no changes in the present zoning ordinances or regulations governing use, density, or shape are being considered. The property is appraised assuming that all required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state, national government or private entity or organization have been or can be obtained or renewed for any use on which the value estimates contained in this report is based, unless otherwise stated. 14. This study may not be duplicated in whole or in part without the specific written consent of HCA nor may this report or copies hereof be transmitted to third parties without said consent, which consent HCA reserves the right to deny. Exempt from this restriction is duplication for the internal use of the client - addressee and/or transmission to attorneys, accountants, or advisors of the client -addressee. Also exempt from this restriction is transmission of the report to any court, governmental authority, or regulatory agency having jurisdiction over the party/parties for whom this appraisal was prepared, provided that this report and/or its contents shall not be published, in whole or in part, in any public document without the express written consent of HCA which consent HCA reserves the right to deny. Finally, this report shall not be advertised to the public or otherwise used to induce a third party to purchase the property or to make a "sale" or "offer for sale" of any "security", as such terms are defined and used in the Securities Act of 1933, as amended. Any third party, not covered by the exemptions herein, who may possess this report, is advised that they should rely on their own independently secured advice for any decision in connection with this property. HCA shall have no accountability or responsibility to any such third party. 1 S. Any value estimate provided in the report applies to the entire property, and any pro ration or division of the title into fractional interests will invalidate the value estimate, unless such pro ration or division of interests has been set forth in the report 16. The distribution of the total valuation in this report between land and improvements applies only under the existing program of utilization. Component values for land and/or buildings are not intended to be used in conjunction with any other property or appraisal and are invalid if so used. 17. The maps, plats, sketches, graphs, photographs and exhibits included in this report are for illustration purposes only and are to be utilized only to assist in visualizing matters discussed within this report. Except as specifically stated, data relative to size or area of the subject and comparable properties has been obtained from sources deemed accurate and reliable. None of the exhibits are to be removed, reproduced, or used apart from this report 18. No opinion is intended to be expressed on matters which may require legal expertise or specialized investigation or knowledge beyond that customarily employed by real estate appraisers. Values and opinions expressed presume that environmental and other governmental restrictions/conditions by applicable agencies have been met, including but not limited to seismic hazards, flight patterns, decibel levels/noise envelopes, fire hazards, hillside ordinances, density, allowable uses, building codes, permits, licenses, etc. No survey, engineering study or architectural analysis has been made known to HCA unless otherwise stated within the body of this report. If the Consultant has not been supplied with a termite inspection, survey or occupancy permit, no responsibility or representation is assumed or made for any costs associated with obtaining some or for any deficiencies discovered before or after they are obtained. No representation or warranty is made concerning obtaining these items. HCA assumes no responsibility for any costs or consequences arising due to the need, or the lack of need, for flood hazard insurance. 19. Acceptance and/or use of this report constitutes full acceptance of the Contingent and Limiting Conditions and special assumptions set forth in this report. It is the responsibility of the Client, or client's designees, to read in full, comprehend and thus become aware of the aforementioned contingencies and limiting conditions. Neither the Appraiser nor HCA. assumes responsibility for any situation arising out of the Client's failure to become familiar with and understand the some. The Client is advised to retain experts in areas that fall outside the scope of the real estate appraisal/consulting profession if so desired. 20. HCA assumes that the subject analyzed herein will be under prudent and competent management and ownership; neither inefficient or super -efficient. 21. It is assumed that there is full compliance with all applicable federal, state, and local environmental regulations and laws unless noncompliance is stated, defined and considered in the appraisal report. 22. No survey of the boundaries of the property was undertaken. All areas and dimensions furnished are presumed to be correct. It is further assumed that no encroachments to the realty exist 23. The Americans with Disabilities Act (ADA) became effective January 26, 1992. Notwithstanding any discussion of possible readily achievable barrier removal construction items in this report, HCA. has not made a specific compliance survey and analysis of this property to determine whether it is in conformance with the various detailed requirements of the ADA. It is possible that a compliance survey of the property together with a detailed analysis of the requirements of the ADA could reveal that the property is not in compliance with one or more of the requirements of the ADA. If so, this fact could have a negative effect on the value estimated herein. Since HCA. has no specific information relating to this issue, nor is HCA qualified to make such an assessment, the effect of any possible non-compliance with the requirements of the ADA was not considered in estimating the value of the subject. 24. Client shall not indemnify Appraiser or hold Appraiser harmless unless and only to the extent that the Client misrepresents, distorts, or provides incomplete or inaccurate appraisal results to others, which acts of the Client approximately result in damage to Appraiser. Notwithstanding the foregoing, Appraiser shall have no obligation under this Section with respect to any loss that is caused solely by the active negligence or willful misconduct of a Client and is not contributed to by any act or omission (including any failure to perform any duty imposed by law) by Appraiser. Client shall indemnify and hold Appraiser harmless from any claims, expenses, judgments or other items or costs arising as a result of the Client's failure or the failure of any of the Client's agents to provide a complete copy of the appraisal report to any third party. In the event of any litigation between the parties, the prevailing party to such litigation shall be entitled to recover, from the other, reasonable attorney fees and costs. Addenda Rd Fayetteville Aft Couniy Parcel . 001-11202-000 Property Type Vacant Land Property Sub Type Dev Potential Planned Use Residential Zoning No City Zoning Land Area 0.43 Acres Land Area 18,731 SgFt Excess Land Acres Flood Status No Traffic Counts N/A VPD UtiUttes No Sewer Closed/Listing/Pending Closed Fee =Sinplen eased Fee Fee Simple Sale Date 9/23/2016 Sale Price $ 20.000 MLS # 1020107 Price / SgFt Asking Price $ 22.000 Sale to List 91% DOM 86 Adjusted Price $ - Adl Price / SgFt $ Deed Previous Sale Dace N A 0.0 Yrs since sale `� l Previous Sale Price WA $ Price Change 0.0% 'Recorded Buyer Jack Carpenter Recorded Seller Karen L Deal True Buyer Jack Carpenter True Seller Karen L Deal Contact Contact Source: County Records and MLS all report similar details for the property and sale. We verified and compliled the most reliable details from each source. Attemtped to reach buyer but was unsuccessful On Site Septic Existing, Public Water on Site Remarks: $1.07 / SgFt. Utils: Water, Elec. MLS # 1020107 Public Remarks: This is agent owned it has electric, water and septic on the property. I6478 Hicks Rd Elkitis AR 72727 • County Parcel 001-14329-000 Property Type Vacant land Property Sub Type Dev Potential Planned Use Residential "w r Zoning No City Zoning Land Area 0.93 Acres e. Land Area 40.511 SgFt 1� Excess Land - Acres 4 r/� Flood Status No Traffic Counts WA VPD 118l No Sewer d&ie4 '' stirs eQQj Closed Fee Simple/Leased Fee ' Fee Simple Sale Date 1/24/2017 Sale Price $ 28,600 MLS = 1036722 Price / SgFt Asking Price $ 28.600 Sale to List 1001• DOM Adjusted Price $ - Adj Price 1 SgFr $ Deed Previous Sale Date Ni 0.0 Yrs since sale Price Change(Year Previous Sale Price NIA $ Price Change Recorded Buyer Jacob & Christina Geurin Recorded Seller Daniel R Selph True Buyer Jacob & Christina Geurin True Seiler Daniel R Selph •�o11ffiCG,,�..or/ ';.. KIFTI , 01411 IT -TI Contact Source: County Records and MLS all report similar details for the property and sale. We verified and compliled the most reliable details from each source. Attempted to reach buyer but was unsucessful Public Water. No Sewer Remarks: $0.71 / SgFt. Utils: Water, Elec. MLS # 1036722 Public Remarks: No public remarks were available. 16478 Hicks Rd, Elkins, AR 72727 Sub Type: Residential DOM: 0 ML#: 1036722 County: Washington Description: None Subdivision: n/a School Dist: Non Listed Flood Zone: $28,600.00 Parcel I D: 001-14329-000 List Agt: Other -Specify In Remarks Lst Agt Email: info@nwarealtors.org List Ofc: Non MLS Sales Buy Agt Fee: 2.7 LP/HtSF: PT NW SE 1.00AC SP/HtSF: Sold before print Subject To: Non Listed LP/Acre: $28,600.00 Water/Sewer: Other -Specify In Remarks Roads: County Road Topography: Level Lot Desc: Cleared Legal: PT NW SE 1.00AC Public Remarks: Sold before print Directions: Sold before print E� • a • - Map data x2019 Google Lot: n/a Frontg: Internal Information Agt Cell: Variable: No List Date: 01/24/2017 With Date: Features Fencing: None ---- Sold Information Selling Office: Prime Real Estate & Development Selling Agent: Calvin Tackett Sell Agt Email: calvinCcbprimesellsnwa,com Days Pending: Prepared By: Zachary Holland , Holland Commercial Appraisals Information deemed reliable but not guaranteed. LAND List: $28,600 Sold: $28,600 Sold Date: 01/24/2017 Sold Block: n/a Acres: 1.00 Taxes: $622 Manuf Hm: No Homestead: No Agt Phone: 479-770-0241 Ofc Phone: Agt Fax: Exp Date: 01/24/2017 Pend Date: 01/24/2017 Agency: SP/Acre: $28,600.00 Phone: 479-571-1515 Phone: 479-841-7445 Monday, February 11, 2019 4:55 PM 13436 Lichen, Fayetteville, AR 72704 Sub Type: Residential DOM: 24 ML#: 1018965 County: Washington Location: Neighborhood Description: Curbing Subdivision: Harmon Trails Estates School Dist: Springdale Flood Zone: Variable: No Agt Fax: Zoning: At Street Parcel ID: 223-00020-000 si3 Map data -02019 G(>og:le List: $29,000 Sold: $29,000 Sold Date: 07/08/2016 Sold Lot: 20 Block: 0 Frontg: Covenant: Yes Internal Inf rm ti n Acres: 0.75 Taxes: $419 Manuf Hm: No Disclosure: Yes Homestead: No LAND List Agt: Midtown Associates o a o Agt Cell: 479-366-7321 Agt Phone: 479-268-5170 Lst Agt Email: admin@)midtown.today List Date: 06/14/2016 Exp Date: List Ofc: NWA Realty Group, LLC Ofc Phone: 479-273-6900 Co-Agt: Michelle Dearing CoAgt Phone: 479-366-7321 Co-Agt Email: Michelle@Midtown.Todav SP/Acre: Buy Agt Fee: 3 Variable: No Agt Fax: Showing Inst: Call Appt Center Call to Show: Direct Cont: Michelle Dearing LP/HtSF: List Date: 06/14/2016 Exp Date: SP/HtSF: With Date: Pend Date Subject To: N/A Agency: LP/Acre: $38,666.67 SP/Acre: Features Electric: At Street Lake/Prop: Gas: At Street Internet/TV: Cable At Street Water/Sewer: Public Water At Street Roads: Public Topography: Level Fencing: None Lot Desc: Cleared, Curbing, In Subdivision Legal: Lot 20 Harmon Trails Public Remarks: The perfect lot to build! Directions: From I49, take Exit 72 west down Hwy 412. Left onto Harmon Rd. Right on Lichen. Sold Information 10/31/2016 06/14/2016 Exclusive Right to Sell $38,666.67 Selling Office: RE/MAX Associates Phone: 479-684-5757 Selling Agent: Peggy Lucero Phone: 479-236-8438 Sell Agt Email: plucero@sellinanwa.com Days Pending: Prepared By: Zachary Holland , Holland Commercial Appraisals Monday, February 11, 2019 4:55 PM Information deemed reliable but not guaranteed. 15572 Hamestring Rd, Fayetteville, AR 72704 Sub Type DOM: ML#: County: Description: Subdivision: School Dist: Flood Zone: Zoning: Parcel ID: Residential 105 3P.L33 d7]� �Y Td 3EO7 3819 , r • r ,-I data 02019 Google 1024896 Washington Lot: B Other -Specify In Remarks, Will Consider Divide Baughman Lt Split Farmington Frontg: Covenant: 106-00002-000 Internal Information -- List Agt: Nicole Brekelbaum Agt Cell: 479-366-2658 Lst Agt Email: brekelbaum.realestatengmail.com Yes List Ofc: Gibson Real Estate Homestead: Buy Agt Fee: 2.7 Variable: No Showing Inst: Apmt Only, Call List Agent, Lockbox -Supra, Vacant LP/HtSF: List Date: 08/19/2016 SP/HtSF: With Date: Subject To: N/A LP/Acre: $66,326.53 List: $32,500 Sold: $29,000 Sold Date: 12/02/2016 Sold Block: - Acres: 0.49 Taxes: $367 Manuf Hm: Yes Disclosure: Yes Homestead: No Agt Phone: Ofc Phone: Agt Fax: Exp Date: Pend Date: Agency: SP/Acre: LAND 479-366-2658 479-267-4427 02/18/2017 09/18/2016 Exclusive Right to Sell $59,183.67 --- ---------- Features Electric: On Site Lake/Prop: Water/Sewer: On Site Septic Existing, On Site Well Existing, Public Water on Site Roads: Public, Surface Paved Topography: Level, Partially Wooded, Sloping Fencing: Total Lot Desc: Not In Subdivision, Out of City, Rural Property Legal: - Public Remarks: Nice piece of land in west Fayetteville with existing septic, rural water, well and electric on site! Nice double door shop, well house/storage, and access from W. Double Springs or Hamestring. Removal of older buildings is negotiable. Lot lines are being surveyed and redrawn. This parcel will end up being closer to .75-1 acre. Contract will need to be contingent on survey and lot split approval. Additional 4 acres available for $40,000. Directions: Travel west on Wedington, take right onto Hamestring road. Property on the right (just before paved road turns to gravel) SCLi Selling Office: Gibson Real Estate Selling Agent: Nicole Brekelbaum Sell Agt Email: brekelbaum.realestateDgmail.com Days Pending: Prepared By: Zachary Holland , Holland Commercial Appraisals Information deemed :'eliable but not guaranteed. Phone: 479-267-4427 Phone: 479-366-2658 Monday, February 11, 2019 4:55 PM 3695 Huntsville Rd, Fayetteville, AR 72701 Sub Type: Residential DOM: 260 MLd#: 1000680 County: Washington Description: Sidewalk Subdivision: Fayetteville Outlots School Dist: Fayetteville Lot Dim: Ofc Phone: 479-521-6701 Flood Zone: No Zoning: Showing Inst: Aso/POA Fee: Parcel ID: 765-14243-000 333 F Nei>•,�vitle €fid Map data ✓2619 Gcr,•gle Lot: 0 Frontg: 113 Covenant: Aso/POA Paid: None i t I I F List: $39,900 Sold: $33,000 Sold Date: 07/08/2016 Sold Block: 0 Acres: 0.64 Taxes: $363 Surveyed: Yes Manuf Hm: No Disclosure: Yes Homestead: Ofc Phone: 479-521-6701 LAND Information deemed reliable but not guaranteed. n erna n ormation List Agt: Rhonda Sullivan Agt Cell: 479-366-4427 Agt Phone: 479-366-4427 Lst Agt Email: rhonda@turn-kevhomesofnwa.com List Ofc: Lazenby Real Estate Ofc Phone: 479-521-6701 Buy Agt Fee: 5 Variable: No Agt Fax: Showing Inst: Call List Agent LP/HtSF: List Date: 10/22/2015 Exp Date: 08/31/2016 SP/HtSF: With Date: Pend Date: 06/20/2016 Subject To: N/A Agency: Exclusive Right to Sell LP/Acre: $62,343.75 SP/Acre: $51,562.50 Features Electric: At Street Lake/Prop: Gas: At Street Internet/TV: Water/Sewer: Public Sewer At Street, Public Water At Street Roads: Highway Topography: Level Fencing: 1 Side Lot Desc: Cleared Legal: A part of the SW 1/4 of the SE 1/4 of Section13,Township 16 North,Range30 West Washington County Arkansas. Public Remarks: Convenient location right off of HWY 16. Current NC Zoning allows for home or duplex. All utilities on site only need to pay tap fees. MLS Remarks: Convenient location right off of HWY 16. Current NC Zoning allows for home or duplex. All utilities on site only need to pay tap fees. Directions: From HWY 256 and HWY 16 Intersection, go East on HWY 16 approximately 1.25 miles. Property is on your right before the White River Bridge. Sold Information Selling Office: Keller Williams Market Pro Realty - Bentonville Phone: 479-657-6797 Selling Agent: John Grogan Phone: 479-935-5336 Sell Agt Email: idgrogan@live.com Days Pending: Prepared By: Zachary Holland , Holland Commercial Appraisals Monday, February 11, 2019 4:55 PM Information deemed reliable but not guaranteed. 19984 Combs -Bell We 319 Rd, Elkins, AR 72727 Sub Type: Residential DOM: 73 ML#: 1025987 County: Washington Location: Neighborhood, Rural Description: None, Other -Specify In Remarks Subdivision: rural elkins School Dist: Elkins Flood Zone: Zoning: Parcel I D : 001-10101-006 List Agt: Lst Agt Email: List Ofc: Buy Agt Fee: Showing Inst: LP/HtSF: SP/HtSF: Subject To: LP/Acre: i W_-1zW III' : 317 • ` Map data OE 2015 Googic List: $16,900 Sold: $16,000 Sold Date: 11/18/2016 Sold Lot: 10 Block: 28 Frontg: Covenant: Internal Information Kathy Martine Agt Cell: 479-263-7407 riverwoodkathyCaamail.com Prime Real Estate & Development 5 Variable: No Call List Agent, Call List Office, Vacant List Date: 09/06/2016 With Date: N/A $16,900.00 Features Electric: On Site Lake/Prop: Gas: On Site Internet/TV: Cable At Street Water/Sewer: On Site Septic Existing Roads: County Road Topography: Gently Rolling, Sloping Fencing: None Lot Desc: Out of City Legal: PT SE SW 1.00AC Public Remarks: One acre building site (original home burned down). Buyer to determine if home is repairable; Seller does not warranty that it is repairable. SOLD AS IS. MLS Remarks: This property is one acre. House burned down. Utilities on site. Vehicles will be moved prior to sale. Directions: Hwy 16 E to Elkins, take Hwy 74 toward Goshen, left on McGuire MT, County RD 323, to left on Combs Bell. Sold Information - Selling Office: Crye-Leike, REALTORS -Fayetteville Phone: 479-695-1277 Selling Agent: Marilyn Shoffit Phone: 479-871-1082 Sell Agt Email: marilynshoffitCdamail.com Days Pending: Prepared By: Zachary Holland , Holland Commercial Appraisals Monday, February 11, 2019 4:55 PM Acres: 1.00 Taxes: $100 Manuf Hm: Yes Disclosure: Yes Homestead: No Agency: Exclusive Right to Agt Phone: 479-263-7407 OfcPhone: 479-571-1515 Agt Fax: 479-442-7628 Exp Date: 03/06/2017 Pend Date: 10/24/2016 Agency: Exclusive Right to Sell SP/Acre: $16,000.00 Information deemed reliable but not guaranteed, Cn = City of Fayetteville oa City of Fayetteville 125 W Mountain r 113 W Mountain St Fayetteville, AR 72701 r- FAYETTEVILLE, AR 72701 O O VENDOR 91801 Holland Commercial Appraisals 0 Holland Commercial Appraisals O 209 N. College Ave. DFAYETTEVILLE, AR 72703 n :If. 01- JWFAYETTEVILLE ARKANSAS DELIVER BY SHIP VIA FREIGHT TERMS ORIGINATOR RESOLUTION # PAYMENT TERMS PURCHASE ORDER NO. 2019-00000168 DATE 01/28/2019 02/11/2019 1 Holly Jones 30 • ®DESCRIPTION • 1 TOTAL• 1.0000 Each Professional Services - Other - Fee Simple Appraisal 5400.720.5600-5314.00 (Professional Services :) $2,200.00 10006.1 (Benson Mountain Pressure Plane Upgrade, Benson Mountain Pressure Plane Upgrade) $2,200.0000 $2,200.00 SUBTOTAL SALES TAX PAGE 1 OF 1 TOTAL DUE $2,200.00 $0.00 r $2,200.00 APPROVED BY SPECIAL INSTRUCTIONS To: Jones, Holly <hiones@favetteville-ar.gov> Subject: Re: Benson Mountain Tank Site Appraisal Bids could provide one report with the two values for $2200, and I could complete within 2 weeks. Thanks for the opportunity. Get Outlook for Android From: Jones, Holly <hiones@fayetteville-ar.gov> Sent: Thursday, January 3, 2019 9:49:39 AM To: Zach Holland Subject: Benson Mountain Tank Site Appraisal Bids The City of Fayetteville is planning to remove and replace the water tank currently known as the Benson Mountain Tank. We have arranged with the adjoining property owner a "swap" so that we may deed him the current tank site and in exchange he will warrant us the property south of the road as shown on the attached lot split draft as Tract 2. For this to occur, we'd like to know the fee simple value of both tracts, the City of Fayetteville tract and Tract 2 as shown on the lot split survey attached by Hawkins -Weir. Please provide a bid for a fee simple value of the City of Fayetteville property which currently contains the water tank, as well as Tract 2 as shown on the Benson Mountain Pressure Plan -Benson Tank Site Lot Split DRAFT pdf attached, where we'd like to move the tank. I will also need to know your timeline as well. Thank you for your time, Holly Jones Land Agent, Engineering Division City of Fayetteville, Arkansas 479-444-3414 ZACH J. HOLLAND Certified General Appraiser HCA Principal Commercial Appraiser HOLLAND � � � � � D PO Box 1501 Fayetteville, AR 72702 COMMERCIAL 479-276-2149 Direct/Mobile A P P R A I S A L S holland@hollandcommercialappraisals.com _ __ AND VALUATION SERVICES EDUCATION University of Arkansas - Walton College of Business Fayetteville, AR BSBA International Economics and Business - Graduated 2001 Advanced Appraisal Education: Al Advanced Market Analysis and Highest & Best Use, Al Quantitative Analysis, Al Advanced Income Capitalization, Al Appraisal Mathematics, Finance, & Statistics, AI Analyzing Tenant Credit Risk and Commercial Lease Analysis, Al Advanced Spreadsheet Modeling for Valuation Applications, Al Advanced Concepts and Case Studies, Income Capitalization Principles and Procedures, Fundamentals of Real Property Appraisal, Basic Appraisal & Reports, Al Basic Income Capitalization, Al Report Writing and Case Studies, Uniform Standards of Professional Appraisal Practice USPAP, Al Business Practices and Ethics, Al Demonstration Report Writing, Al Practical Regression for MS Excel, Al Specialized Experience Full Credit Study Abroad - Benemerita Universidad Autonoma de Puebla Puebla, Mexico - Summer 2001 RELATED EXPERIENCE CERTIFIED GENERAL APPRAISER (AR CG 2911, OK 13094CGA) OFFICE MANAGER Current HOLLAND COMMERCIAL APPRAISALS Fayetteville, AR February 2006 to December 2017 FERSTL VALUATION SERVICES Little Rock and Fayetteville, AR Perform appraisals throughout central US multi -state region including office buildings, light -industrial facilities, hotels, medical facilities, retail centers, specialty properties, subdivisions, vacant land, residential properties, etc. April 2004 to June 2005 CROMWELL ARCHITECTS/ENGINEERS Fayetteville, AR Generated and logged client correspondence, payment applications, Statement of Qualifications letters, hardware submittals, etc. Measured buildings for feasibility studies. ADMINISTRATIVE ASSISTANT June 1999 to June 2000 LINDSEY & ASSOCIATES REALTY Fayetteville, AR OTHER Zach Holland, Appraisal Institute, Candidate for Designation REALTOR, Northwest AR Board of Realtors Has provided EXPERT TESTIMONY in federal court. KEEP FAYETTEVILLE BEAUTIFUL COMMITTEE member since 2016 --------------------------------------- ARKANSAS --------------------------------ARKANSAS ; EL� APPRAISER LICENSING & CERTIFICATION BOARD This is to certify that Zachary Holland License #: CG 2911 has complied with the requirements of Arkansas Code Section ©11.14-201 et seq,; and is the holder of a valid certificate. This card is for identification purposes only. 6/30f2019 t Expuation Date Chairman ------------------------------------ z 1"1a N*001 "MONK fh loom MMMMW ok � w < see bw�r ilrfYrb iww�f � w < CITY OF FAYETTEVILLE ARKANSAS April 11, 2019 Dustin & Ryan Youngblood Davis 22014 Tower Road Elkins, AR 72727 RE: Benson Mountain Water Tank Improvement Project Parcel No. 001-14309-000 Offer Letter Dear Mr. and Mrs. Davis: We are in receipt of your counter offer email from March 19. We have reviewed your email and all your concerns and offer the following in return: The City of Fayetteville hereby offers $25,000.00 for 0.72 acres south of the road as shown on the proposed lot split. This value is represented on the appraisal prepared by Zach Holland of Holland Commercial Appraisals for the City which gave this tract a total value of $30,000 00 less the tract belonging to the city where the current tank sits and valued at $5,000.00 which we will trade back to you with this transaction. The City of Fayetteville will pay $475.00 each for 3 taps for a total cost of $1,425.00, as well as the water impact fees associated with those at a rate of $971.00 each or a total of $2,913.00. That total for taps and fees is $4,338.00. These fees are not waived but paid on your behalf from the Benson Mountain Water Tank Improvement Project Budget and placed into the impact fees/meter budget. The City will also bear the cost of moving the electric lines from your side of the road to our side of the road at a cost of $2,000.00 per pole for 3 poles and a total of $6,000.00. Our original offer will stay the same but the costs we bear total $10,338.00 before Engineering, closing costs and filing fees. This trade of property is subject to Lot Split approval by Washington County and the City of Goshen as well as approval for purchase of new property and sale of city owned property by the City Council of the City of Fayetteville, Arkansas. Title insurance will be required, and a closing will be requested once a final settlement has been agreed upon by all parties. Representatives of our department will be happy to meet with you to discuss this offer further or you may return a signed copy of this letter to Holly Jones or Brandi Samuels via email as your acceptance of this offer. A City Land Agentwill be glad to meet with you at your convenience and discuss all phases of this project and the associated acquisitions. Please contact Holly Jones at (479) 444-3414 (hjon'a, etteville-argov) or Brandi Samuels (479) 444-3421 (bsamucls fa etteville—argon). For questions or concerns, please contact Corey Granderson, Utilities Engineer at cgrandersorf f ettevilte argov or Tim Nyander, Utilities Director at � rder,&fayettevdle ar_qov. Sincerely, 4440A �sfin Davis—1 Y.vis �r"' Pre company is Tim Nyander �' Lenders Title - Brandi Hoskins Utilities Director Date (479) 444-3333 TN/hl i 1 – , i t. City of Fayetteville Water & Sewer: 479-575-8386 v Mailing Address: 113 W. Mountain Street www.fayetteville-ar.gov Fayetteville, AR 72701