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HomeMy WebLinkAboutProperty - Acquisitions - 902 04/05 Condemnation & Appraisal for Municipal Service Center Monterey/Meritage Homes RV Neighborh F. ANN RODRIGUEZ, RECORDER DOCKET: 12791 RECORDED BY: K_O PAGE: 3807 DEPUTY RECORDER of/1"1% NO. OF PAGES: 8 1861 PE2 qSEQUENCE: 20060800807 SOROV � IZ 04/26/2006 TOWN OF ORO VALLEY 1' ;`� AG 15:56 11000 N LA CANADA .-41072014?' ORO VALLEY AZ 85737 MAIL AMOUNT PAID $ 9.50 SETTLEMENT AGREEMENT This Settlement Agreement ("Agreement") is entered into as of this 22nd day of July, 2005 by and between Meritage Homes Construction, Inc., an Arizona corporation, as successor by merger to Monterey Homes Construction, Inc., an Arizona corporation (hereinafter called "Meritage") and the Town of Oro Valley, an Arizona Municipal Corporation (hereinafter called the "Town"), and collectively called the "Parties", to settle claims asserted by the Town in Pima County Superior Court Cause Number C2004- 6184 2004-b184(the"Condemnation Action"). RECITALS WHEREAS, on or about November 14, 2004, the Town filed the Condemnation Action against Meritage and other parties pursuant to A.R.S. § 12-1111 et seq., to condemn land (hereinafter referred to as the"Property")for the purpose of using the land as a municipal operations center and to exercise its right of eminent domain to acquire that land for such purposes; and WHEREAS, the aforesaid condemnation is for a public purpose, and the taking of that property was necessary for such purpose; and 2 7 WHEREAS, the Property being acquired is described in the Legal Description, attached 9 1 hereto as Exhibit"A". 0 3 8 TERMS 7 7 NOW THEREFORE,in consideration of the mutual promises contained herein, the parties hereby agree to the following terms: 1. Based on negotiations between the Town and Meritage,the Town agrees to pay to Meritage the total amount of Four Million Seven Hundred and Twenty Five CADocnmattc and Sdtingsgisa_hoakinlLocal SettingsVIcrvicorary],lance FiItx1OLK3Ctruud Oro V.tk-Mtritlgt Scbocment Agreartent.doc tom' ._...... • Thousand Dollars ($4,725,000.00) for the Property, plus statutory interest and costs. 2. The Town, pursuant to an Order for Immediate Possession, dated January 24, 2005, has already paid to Meritage's order the sum of Three Million Eight Hundred Thousand Dollars ($3,800,000.00), allowing the Town to take immediate possession of the Property. 3. In addition to the initial payment of Three Million Eight Hundred Thousand Dollars ($3,800,000.00), Meritage shall receive and the Town shall pay to Meritage the additional sum of Nine Hundred and Twenty Five Thousand Dollars ($925,000.00) plus statutory interest and costs (the "Settlement Amount") immediately upon on execution of this Agreement by Meritage and delivery of the settlement court documents to counsel for the Town as described below. 4. The Property is encumbered by an obligation to pay assessments to the Vistoso Community HOA. Meritage shall be responsible for outstanding assessments on the Property only up through and including the date of the Order of Immediate Possession. 5. Together with this executed Agreement, Meritage shall deliver to counsel for the Town approved forms of Disclaimer, Stipulated Final Judgment, Satisfaction of Judgment and Final Order of Condemnation captioned in the Condemnation 1 2 7 Action and executed by counsel for Meritage. Upon receipt of these documents, 9 1 the Town shall pay Meritage the sums as set forth above. The Town shall file the 0 • 3 8 Disclaimer in the Condemnation Action immediately, and shall hold the 0 8 Stipulated Final Judgment, Satisfaction of Judgment and Final Order of C',Documcnts and Seuing,lisa hoslao\Local Scetings\Te nporary Internet Filcs'OLK3CWina1 Oro Valley.Meritage Settlement Agreemeot.doc ► T 40 Condemnation until the Town completes its sale of bonds for the financing of the transaction and related purposes, at which point these remaining documents shall immediately be filed and lodged with the Court in the Condemnation Action. In the interim period, the Town shall remain in possession and control of the Property under the Order of Immediate Possession in the Condemnation Action. 6. Immediately upon delivery of this executed Agreement and the documents referenced above, the Parties shall file a Notice of Settlement in the Condemnation Action and shall take appropriate steps as are necessary to • continue the matter on the inactive calendar or otherwise keep it open pending completion of the Town's financing and submittal of the final court documents to conclude the case. 7. This Agreement is entered as a compromise and is intended to resolve all issues arising out of the Condemnation Action, and any claims of any kind which Meritage, or any related person, might have against the Town and all other officials, employees, agents oar representatives of the Town arising from, or related to, the foregoing. In accordance with Arizona law, the Town accepts the Property as is and with no warranties or representations regarding its condition or title from Meritage. 1 8. This Agreement shall not constitute an admission of liability by Meritage to the 1 2 9 rights,Town or any third party. It also shall not create any or limit the rights or 1 obligations of either party as to matters not covered by the Agreement. It is, 0 3 8 however, intended to resolve all issues between the Parties related to the Property 0 9 which is the basis for the foregoing Agreement. C:1Docunxnts and 5ettiogAlisa.hockin\Lnrsl Scuings\Tcinporuy Ininrrct Filca1QLK3l1FinaI Oro Valley-Mcrilagc Sculcmait Agroancncdoc . _ _ 411 9. As stated in its Complaint in the Condemnation Action, the Town is taking the Property for public purposes and uses only, and covenants that it has no plans to sell or exchange the Property for use by a private party. 10. With the exception of the covenants and terms in this Agreement, Meritage and the Town, for themselves, their agents, heirs, executors, administrators, and assigns, hereby fully release and forever discharge one another, their agents, successors, assigns and insurers, from any and all liability for all damages of any kind, including all damages for all known or unknown damages of any kind and all consequences thereof, even though presently unknown or unanticipated, which may be claimed now or in the future to have arisen from or be connected with the Condemnation Action. 11. The Parties shall each bear their own attorneys' fees and non-taxable costs and expenses relative to the Condemnation Action. 12, In the event that any portion of this Agreement is found to be unenforceable for any reason whatsoever, the unenforceable provision shall be considered to be severable, and the remainder of this Agreement shall continue in full force and effect. 13.This Agreement shall be binding upon the Parties to this Agreement and their successors, assignees and any other period or entity claiming by or through a 1 2 7 Party to this Agreement. 9 1 14.No waiver of any of the terms of this Agreement shall constitute a waiver of any 0 3 8 other terms, whether or not similar, no shall any waiver be a continuing waiver. 0 Any party may waive any provision of this Agreement intended for its benefit,but C',DocunKnls�d Sc do*lisa hoelon\Local SdtingelTemporary Int�tet FilesND[.K3CFinaai Oto Valley-Heritage Settlement Agrcancrtt.doc • such wavier shall in no way excuse any other party from the performance of any of its other obligations under this Agreement. 15.This Agreement constitutes the sole and entire agreement of the Parties with respect to the subject matter hereof, and supersedes any and all prior and contemporaneous agreements, promises, representations, negotiations, and understanding of the Parties,whether written or oral. There are no agreements of any nature whatsoever between the parties hereto except as expressly stated herein. 16. The laws and regulations of the State of Arizona shall govern the rights of the parties, the performance of this Agreement and any dispute thereunder. Any action relating to this Agreement and any dispute thereunder shall be brought in an Arizona Court. IN WITNESS WHEREOF, the parties hereto have executed this Agreement of the date and year first written above. MERITAGE HOMES CONSTRUCTION,INC., as successor by merger to Monterey Homes Construction,Inc. 1 By: 4111111.� Jeffrey R. Grobstein • Division President.Tucson 1 Title2 fo5o5 2 Date: 9 1 0 3 8 1 1 IC:�utMnlclltE and Sdlingaise.boskitlxcal SdtingskTemyorary loiand FiIcsALK1CTioal Oro Valley-Maitagc Scitkmcnt Agrccnxol.doc State of Arizona } } ss. County of Pima } . e me this 5-43-1 of The foregoing instrument was acknowled ed beforday 19-CMCAaki , 2005 by 4, on behalf of Meritage Homes Construction,Inc. WAA1 Cd4c7 Notary Public MAPK FELIX MyCommissio ►�'� Notary Pubtic-Afizona .ti's'_ Pima County q:l••T.��':L: My Commission Expires June 3,200$ -....=-46-kmwarmuiqrsapw. TOWN OF ORO VALLEY By: Ira( t Chuck Sweet,Town Manager ATTEST: APPROVED AS TO FORM: etircttp"; jj Air• 1(al Cuvelier,Town Clerk Melinda G•, • an,Town Attorney 1 2 7 9 i 1 0 3 8 1 2 C:'Documents amid Scmngs\Jisa.hoskin\Local Settings\Tersporary Internet FfUC3C Final Oro Valley-Menage Settlement Agreement.doc 1110 EXhIBIT "A" LEGAL DESCRIPTION OF P 1 2 7 9 1 0 3 8 1 3 C\Documeats and Settiigillisa.hockiulLocal Scttingsrionporyy[otanel PiaCLk3OFiaal Oro Viiky-Meritage SMUcomt Ageaaat[.doc ,.10-04-05 . 13:45 From-CHANDLER ALL +5207g23426 1110 T-116 P.02/02 F-452 1EXHUOT.� 2 � 3 LOTS I THROUGH 72,INCLUSIVE AND COMMON AR +A Ay B AND C, VISTOSO NEIGHBORHOCO 3 4 PARCELL 1-72 AND COMMON ARA.13 AND C A RDING' THE PLAT OFRECORD IN TUF OFFICF OF THE wry RECORDER OF SIA COUNTY,ARIZONA, RECORDED IN DOOK 57 OF MAPS AND PLATS,?AGE 100, 7 9 10 11 tit 12 134 14 its tg 15 62 16 17 18 19 20 21 22 1 2 23 ' 7 9 24 2$ 3 8 2 4 <:,,,37-44,„ ( I a4( • - • i I\tt,\\v‘ ..it,,,,,afI/ il '\-- ' P.O.Box 3145 :14;:-.7---:t4y: \'-,-.21F.:9- Christopher J.Roads Tucson,AZ 85702-3145 Chief Deputy Recorder F. Ann Rodriguez Registrar of Voters Located in the Old Courthouse at: 115 North Church Avenue,Tucson,AZ Pima County Recorder Document Recording: (520)740-4350 Voter Registration: (520)740-4330 http://wvvw.recorderepima.gov Recording history one document at a time. Fax: (520)623-1785 The foregoing instrument is a full true and correct copy of the original record in this office. Docket # -cgit / . , ,;--7)( --.-- Starting Page # ,-,.-of Ending Page # -37,44-1, __„,,......„ , . tif ''.2f,,I, .''', itaDate: ' If f WI - , i, n (,), , , . ,,.. , 3 tc I F. AN RQDRIGMZ•e ,,,Cotinty Recorder iictbCounty ...., - IN In al, t ike County of Nita5 State of Arizona — -; r•r- .v :1!'„):,14' `: 'C..)"1; '''',1 '''• ,,'• ,_ ' ':: •:q.t.!., . ....4 t.'* ' ' ,. '' Nicole Bisner l - „, , . • ):::;i:,; '' Dpputy Recorder ,,,,, . ,.,..,. $.--...:.,....., Form May 14,2004 F. ANN RODRIGUEZ, RECORDER DOCKET: 12476 RECORDED BY: LAMr PIk, PAGE: 4872 DEPUTY RECORDER lititr, NO. OF PAGES: 5 6545 PE3 i1 z SEQUENCE: 20050170967 REZMS � ::� ,tl� 01/26/2005 ��� R 17:30 VI EZ MESSENGER ATTORNEY SERVICE O r9�IZQ�4• Pt EZ- CHANDLER PICKUP AMOUNT PAID $ 9.00 FILED PATRiCIA / ri r z,, - A. —1 1 i .1 I'-';"r",:`;:::,',1,, 1 4 l'l 74 nt)1 S ?. : " . 1 CHANDLER.&UDALL,LP ArrOR s�+2 LAW 2 33 NORTH STONE AVEMJE SUITE 2100 .+' . '}- v �- �� TUCSON,ARTIONA 85701-1415 3 (520)623-4353 4 John J.Brady PCC#5712,SBN 006560 5 Attorneys fog• Defendant Town of Oro Valley 6 IN THE SUPERIOR COURT OF THE STATE OF ARIZONA 7 IN AND FOR THE COUNTY OF PIMA 8 TOWN OF ORO VALLEY, a body politic NO.C2004-6184 g incorporate. 10 Plaintiff, ORDER FOR IMMEDIATE POSSESSION • 11 i v s. 12 i FIRST AMERICAN TITLE INSURANCE,a California c orporation,as Trustee under Trust No. 9062;QST CAN TITLE 13 INSURANCE COMPANY,a California 14 ' corporation,as Trustee under Trust No. Assigned to:The Hon.John E.Kelly 9086; LANCELOT OVERLAND L.L.C.,an is Arizona limited liability corn� ppan ; MONTEREY HOMES CONSTRUCTION, 16 INC.,an Arizona corporation;FIRST 2 NATIONAL BANK OF ARIZONA; 4 17 COUNTY(JF PIMA.UNKNOWN 4 OWNERS_AND CLAIMANTS;and HEIRS 6 18 AND DEV{SEES OF THE ABOVE NAMED D ANTS,IF DECEASED., 0 4 1 g Defendant. 7 20 ' - 2 • 21 1 Having reviewed the foregoing Stipulation for Order for Immediate Possession, and 22 good cause appearing therefor, the Court finds and orders as follows: 23 ; 1. That these proceedings in eminent domain were commenced according to law. 24 2. That the use for which plaintiff seeks to condemn the Subject Property is a public 25 use authorized by law. 26 3. That the caking of the Subject Property is necessary to such use and the sum of • • • • . • • I ' I Three Million Eight Hundred Thousand and no/l00 Dollars ($3,800,000.00) is the total gh 2 "probable damages"resulting from the taking and is sufficient to allow Plaintiff into possession 3 E and full use of the Subject Property. 4. That upon the deposit of such amount with First American Title Insurance 5 Company,Escrow Operations#402, as Escrow Agent for the Defendants,Plaintiff shall be let intoPo ssession pursuant to the provisions of AILS. § 12-1116 and fun use of the following 7 ' described land(referred to as the"Subject Property'): :e Exhibit A attached hereto and made a part hereof by this reference 8 S� 9 5. That such deposit shall constitute disbursement of proceeds to the Defendants 10 ; pursuant to A.R.S. § 12-1116. p 11 6. That the Stipulation for Order for Immediate Possession and this Order shall not r.$ 12 constitute an admission by any party the value of the Subject Property. g. 13 DATI)this day of ,2005. V 14 15 5 16 By . �..... Oirt F,ICELLY 17 JUDGE OF THE PIMA CO UPERIOR COURT 18 ' 19 20 21 22 ' 2 4 23 7 6 24 ; 0 4 25 8 7 26 3 -2- ti 1 � 3 5 ' 6 7 8 ' 10i 11 12 13 EXHIBITA 4 u14 415 lbs 17 ' 18 19 20 i 21 1 22 2 4 23 67 2a ' 0 4 7 258 4 _3- • 4. 1 1 EXHIBIT A 2 3 LOTS 1 THROUGH 72,INCLUSIVE AND COMMON AREA A, B AND C, OF RANCHO VISTOSO NEIGHBORHOOD 3 4 i PARCEL B LOTS 1-72 AND COMMON AREA A,B AND C, ACCORDD GTO THE PLAT OF RECORD IN THE OITICE OF S THE COUNTY RECORDER OF PIMA COUNTY,ARIZONA, RECORDED IN BOOK 57 OF MAPS AND PLATS,PAGE 100. 6 ' 7 i r 8 9 10 11 , 8 r 12t N 13 r;`,. 14i 15 0r 16 ' z 17 18 19 20 21 ZZ I 12 4 23 6 24 0 4 25 8 7 26 5 -4` • ..a L 1 2 • STATE::0F.A. ctZt-)NA':. 4 i COUNTY przPIMA... 7 • •e''' �r� ;...��• ire tru �:.�t:��= • fu 1, true; egia rottifett c .; Attested' '� . c.4,,.•, • ?� ss�`�%DRi-.!'�.-•'`..'- � :•..`:.���, --.. �• . r le( a, liO\ - • . iktriL.i.,:ft:4 bc,e3) P.O.Box 3145 �.. Christopher J.Roads Tucson,AZ 85702-3145 .���'� Chief Deputy Recorder Registrar of Voters F. Ann Rodriguez Located in the Old Courthouse at: 115 North Church Avenue,Tucson,AZ Pima County Recorder Document Recording: (520)740-4350 Voter Registration: (520)740-4330 http: .r ecorder. ima.g ov Recording history one document at a time Fax: (520)623-1785 //wwwp The foregoing instrument is a full true and correct copy of the original in this office. Docket # /I /7(,:.• record i , ,,,,,,,,,, Starting Page # 43 eEnding Page # 4.---(8/7( ....,,,, : -k,,,,.. - . ,... ,, 0,-, , y, 1. ,:.. Date. ., , .; , , ja . j . ' , 45 .r. ,x.:72 F, AN R *County Recorder _., ....., In aid fort � � �County y ofjima, State of Arizona . ' 7...,-) '. , - 7 ,..., 7. .-, - i .....,t,, 1, ,. #' t . B 4icole Bisne • ', Deputy'.., . - ...‘,.... 7••' .,%, -:::::::;,:, t r..,:,, , ,,, ;•.:, ,- it L ecorder ., 1`, .. ...T.., Form May 14,2004 DOCKET: 12683 F. ANN RODRIGUEZ, RECO ER• PAGE: 5063 RECORDED BY: BSB °F 2,j4 5 `4 NO. OF PAGES: DEPUTY RECORDER rrW� -*------ 0Ii SEQUENCE: 20052241207 0556 PE3 C4,6 •. .+.�z 11/18/2005 � ��.a `//,�, 17:3 0 REIMS � �/ OR EZ MESSENGER ATTORNEY SERVICE `lkYZO � EZ-CHANDLER PICKUP AMOUNT PAID $ 9.00 05140V 16 PH I: 59 1 I,:ti!._:)„ ,._::.. .. 1 CHANDLER&UDALL LLP s f.�'.V,.-; �' L.::i' • ATTORNEYS AT LAW Ey --. 2 33 NORTH STONE A SUITE 2100 i• TUCSON,ARIZONA 85701-1415 3 (520)623-4353 4 John J,Brady PCC#5712, SBN 006560 5 Attorneys for Defendant Town of Oro Valley 6 IN THE SUPERIOR COURT OF THE STATE OF ARIZONA 7 IN AND FOR THE COUNTY OF PIMA 8 TOWN OF ORO VALLEY, a body politic NO.C2004-6184 9 incorporate, Plaintiff, FINAL ORDER OF 10 CONDEMNATION 11 vs. 12 i FIRST AMERICAN TITLE INSURANCE, a California corporation,as Trustee under 062;FIRST AMERICAN TITLE 13 Trust No.9 INSURANCE COMPANY,a California corporation,as Trustee under Trust No. Assigned to:The Hon.John F.Kelly 14 9086; LANCELOT OVERLAND L.L.C.,an 15 Arizona limited liability company; HOMES CONSTRUCTION, MONTEREY 16 INC., an Arizona corporation;FIRST �2 NATIONAL BANK OF ARIZONA; 6 COUNTY OF PIMA,UNKNOWN 8 17 OWNERS AND CLAIMANTS;and HEIRS 3 18 AND DEVISEES OF THE ABOVE 0 NAMED DEFENDANTS,IF DECEASED., 5 0 r 19 6 Defendant. 3 20 ---- 21 IT APPEARING to the court that the Judgment-- ---- heretofore entered in favor of Defendant I 22 Meritage Homes Construction,Inc.and against Plaintiff Town of Oro Valley has been paid and 23 therefore satisfied;and 24 IT IS FURTHER APPEARING to the Court that pursuant to the provision of the 25 1 Judgment,this Court may now enter its Final Order of Condemnation. 26 IT IS THEREFORE, ORDERED, ADJUDGED AND DECREED, that fee simple r -s of real property legally described and designated on Exhibit A 1 interest in that certain parcelp p y g 2 attached hereto and incorporated herein bythis reference is hereby vested in the Plaintiff Town rp 3 of Oro Valley. 4 DONE IS OPEN COURT this. day of 2005. 5 • ' - ONOHNF. LY 8 JUDGE OF THE PIMA COUNTY S •'ERIOR COURT 9 10 11 $ 2 12 4t v 13 3 OD M 14 � � z 15 U x0 16 17 18 19 20 21 22 0 5 23 , 06 24 25 26 1 � 2 3i 4 I ` S 7 O 9 10 11 N n 12 ' y 13 14 EXHIBIT A te a O 15 r '4 S� o 16 Q z 17l 18 I 19 20 6 21 3 22 5 o 23 , 6 5 24 25 26 -3- C ND 4377898 (4Z‘4k #\ a) CI<C SIT"A" LOTS I THROUGH 72,INCLUSIVE AND COMMON AREA A,B AND C,OF RANCHO / 611_ 1 ,14 - ?..6!_1:41191.! _l �111 '- _� .la i • • t11 C,ACCORDING TO THE PLAT OF RECORD IN THE OFFICE OF THE COUNTY RECORDER OF PIMA COUNTY,ARIZONA,RECORDED IN BOOK 57 OF MAPS AND PLATS,PAGE 100, 1 2 6 8 • 3 0 5 0 6 6 6 fiX 1 2 b 8 3 1 STATE OF ARIZONA 1ss. 5 0 COUNTY OF LIMA 0 The foregoing instrument is a 6 full, true, and correct copy of the 6 original on file in this o. ice. rs At tosi:v 'f7 005 ,.r PA r IC -j' A. v.; 4,0, Clerk �� �i�''♦ _t:7 Deputy 'E isca Laurin� , / i 1 it ' A ' 4,{ .� r ,� �.,��----�;�.. Christopher J.Roads F.®. 4) �og�145 �iio� n AZ 35702-3145 Chief Deputy Recorder Tucson, Fe Ann RodriguezRegistrar of Voters Located in the Old Courthouse at: 115Church Avenue,Tucson,AZ Pima County Recorder Document Recording: (520)740-4350 North Voter Registration: (520)740-4330 http.//www • .recorder. ima.g ov Recording history one document at a time. Fax: (520)623-1785 http://www.recorder.pima.gov The foregoing instrument is a full true and correct copy of the original record in this office. Docket# 0,,,8-5 „..., , StartingPage # �.. � Endin Page # tyj' r. .:. -.,:. -,. 4. E ,ii,..If.......e.4 papillia: /7 , ii , ii _ 0 k.... ,,,,, - - F. r- ',,,„ 2.„-: 9.- ;.,, (4.,--,:, k <6.) 41.,.. --:. . ,-,t„iA. , , , .„--, -,.., : _,. . e-- .RODR1GU1Z, ounty.', Recorder ;.- . ' ' oun of I, :„in�a State of Arizona i . In atflor�the�-� : .ty Fr 3„' d i y• 1\11:69,14e Bisier - . .... , s Z CA'4...•-4,-,e7,,‘,‘,:,,-i•- # / ' . .:;/- 'ditlit c _ z. i Dep u • ecorder Form May 14,2004 RESOLUTION NO. (R) 04-100 A RESOLUTION OF THE MAYOR AND COUNCIL OF THE TOWN OF ORO VALLEY, ARIZONA, AUTHORIZING THE TOWN ATTORNEY TO NEGOTIATE THE PURCHASE OF OR, IF NECESSARY, TO FILE A CONDEMNATION ACTION TO ACQUIRE APPROXIMATELY 23.73 ACRES OF REAL PROPERTY (COMPRISED OF 83 PARCELS) PRESENTLY BEING DEVELOPED BY MONTEREY HOMES THAT LIES NORTHEAST OF VENTANA MEDICAL SYSTEMS COMPLEX IN RANCHO VISTOSO NEIGHBORHOOD 3, PARCEL B, FOR TOWN FACILITIES, AND DECLARING AN EMERGENCY TO EXIST. WHEREAS, Oro Valley is a municipal corporation within the State of Arizona and is vested with all the rights, privileges and benefits and entitled to the immunities and exemptions granted to municipalities and political subdivisions under the Laws of the State of Arizona; and WHEREAS, Oro Valley has the requisite statutory authority to acquire real property for use in connection with Town facilities, and to own, operate and maintain facilities for the benefit of the residents of the Town of Oro Valley; and WHEREAS, the Town's current Public Wnrkc yard located at 680 Calle Concordia is Public tt V111V 7Kar► avvv►..�r�.► vr♦ vvv Calle vv v inadequate to meet the growing needs of the Town; and WHEREAS, the Town Council deems it necessary and in the interest of the residents of the Town of Oro Valley to authorize the Town Attorney to negotiate the purchase of or, if necessary, top roceed with formal condemnation proceedings to acquire the approximately23.73 acres of real property (comprised of 83 parcels, as more particularly described and shown in Exhibit "A" attached hereto) presently being developed by Monterey Homes that lies northeast of Ventana Medical Systems complex in Rancho Vistoso Neighborhood 3, Parcel B, for use in connection with Town facilities. NOW, THEREFORE, BE IT RESOLVED by the Mayor and Town Council of the Town of Oro Valley, Arizona, that the Town Attorney is hereby authorized to negotiate the purchase of or, if necessary, to proceed with the filing of a condemnation action to acquire the approximately 23.73 acres of real property (comprised of 83 parcels, as more particularly described and shown in Exhibit "A" attached hereto) presently being developed by Monterey Homes that lies northeast of Ventana Medical Systems complex in Rancho Vistoso Neighborhood 3, Parcel B, for use in connection with Town facilities. BE IT FURTHER RESOLVED that it is necessary for the preservation of the health and safety of the Town of Oro Valley, Arizona that an emergency is declared to exist and this Resolution shall become immediately operative and in force from and after the date of adoption hereof. PASSED AND ADOPTED by the Mayor and Town Council of the Town of Oro Valley, Arizona this 15th day of September, 2004. TOWN OF ORO VALLEY a� 1 Paul H. Loomis,Mayor ATTEST: 1 / /1 K)1,L%-r. yn E. Cuvelier, Town Clerk APPROVED AS TO FORM: Mark J. Lan:' , To ; orney EXHIBIT A Page 1 of 2 PARCELS = 83 Total 219208800 219208310 219208810 219208320 219208820 219208330 219208830 219208340 219208840 219208350 219208850 219208360 219208860 219208370 219208870 219208380 219208880 219208390 219208890 219208400 219208900 219208410 219208910 219208420 219208920 219208430 219208930 219208440 219208940 219208450 219208950 219208460 219208960 219208470 219208970 219208480 219208980 219208490 219208990 219208500 219209000 219208510 219209010 219208520 219209020 219208530 219209030 219208540 219209030 219208550 219209030 219208560 219209030 219208570 219209040 219208580 219209040 219208590 219209040 219208600 219209040 219208610 219209040 219208620 219209040 219208630 219209050 219208640 219208650 219208660 219208670 219208680 219208690 219208700 219208710 219208720 219208730 219208740 219208750 219208760 219208770 219208780 219208790 4 EXHIBIT A Page 2 of / -fisiuminumibwiy,.. _____----- 60J rJ c C'� r C. 1, C'C c .GO • r'• rK C A ,:s'' -..,. <v SO* '' ''''''''-- ti . $;4-,.. A __________ _ _ _ _ - ./z - A-, wi I, . „ ),, % � �' gi � SITE -: �tt " „, � LOCATION - /MI' Ck'4 *W c c MB ' i TOWN OF ORO VALLEY Page 1 of 2 COUNCIL COMMUNICATION MEETING DATE: July 6, 2005 TO: HONORABLE MAYOR AND COUNCIL FROM: MELINDA GARRAHAN, TOWN ATTORNEY SUBJECT: DISCUSSION AND POSSIBLE ACTION TO APPROVE SETTLEMENT OF THE PENDING CASE AT A NEGOTIATED PURCHASE PRICE OF $4,725,000, TOGETHER WITH STATUTORILY MANDATED INTEREST AND ASSOCIATED CHARGES WITH DIRECTION TO STAFF TO PURSUE FINAL SETTLEMENT OF THE LITIGATION, AS WELL AS VARIOUS FUNDING OPTIONS (INCLUDING PUBLIC FINANCING) FOR POSSIBLE FUTURE ACTION BY COUNCIL. SUMMARY: In an effort to alleviate limitations that the Town is experiencing on its 5 acre facility at 680 Calle Concordia, in November of 2004 the Mayor and Town Council authorized condemnation of the 23 acre site owned by Meritage Homes, located just west of the intersection of Oracle Road and Rancho Vistoso Blvd. A tentative final purchase price of$4,725,000 plus mandated statutory interest and costs was recently arrived at through rigorous negotiations between Town staff, Council Member Terry Parish and Meritage Homes. To finalize this Condemnation Settlement, this is being submitted to the Mayor and Town Council for their direction and approval. Because of how Arizona condemnation law works, the Town has already paid $3,800,000 for the right to take immediate possession of the property. Based on the tentative settlement amount, the Town would owe the remaining $925,000 plus mandated statutory interest and costs if the Mayor and Town Council agree to move forward. In addition to moving forward with this settlement, staff requests direction and authority to explore the possible funding options available to the Town, including public financing. Finally, we endeavor to have cost and interest calculations available for Council review at or before the time of this meeting because they were not finalized at the time this communication was due. ATTACHMENTS: NA F:\Council\Regular\ZUUS CC\CC 0/0605 Re town Facilities Condemnation Cost.doc TOWN OF ORO VALLEY Page 2 of 2 COUNCIL COMMUNICATION MEETING DATE: July 6, 2005 FISCAL IMPACT: $4,725,000 plus mandated statutory interest and costs. SUGGESTED MOTIONS: I hereby move to direct the Town Attorney and Town Manager to pursue final settlement of the Town Facilities Condemnation at a purchase price of$4,725,000, together with statutorily mandated interest and associated costs with further direction to pursue various funding options to include public financing. Tobin Sidles for Melinda -arrahan Tow ttorney Chuck Sweet Town Manager F:\Council\Regular\2005 CC\CC U/0605 Re Town Facilities Condemnation Cost.doc JP�LEY; 'qR/ OQ' = TOWN OF ORO VALLEY LEGAL DEPARTMENT ill p► 11000 N. LA CANADA DRIVE It ORO VALLEY,ARIZONA 85737 , . ��.r.;�.3.„ (520)229-4760 Fax(520)229-4774 - r.- www.townoforovalley.corn A- '' :::: ::.:1:_ y i ttic SUNDED1g October 22, 2004 First American Title Trust No. 9062 c/o Trust Officer 1880 E. River Road, Suite 120 Tucson, Arizona 85718 Re: Rancho Vistoso,Neighborhood 3,Parcel B Dear Trust Officer, Trust No. 9062: As you may know, the Town of Oro Valley is interested in purchasing Rancho Vistoso, Neighborhood 3, Parcel B for use as the Town of Oro Valley's Facilities Maintenance yard, legally described as Lots 1 through 72 and Common Areas A, B and C, Rancho Vistoso Neighborhood 3 Parcel B, as Recorded in Book 57 of Maps and Plats at page 100 in Pima County. An independent appraiser was retained to determine the value of your property based on sales of similar properties and a copy of that appraisal is enclosed (Exhibit A). The attached appraisal is the basis for the Town's offer of just compensation. Pursuant to A.R.S. § 12.1116(A), the Town of Oro Valley ("Town") hereby offers to purchase the above referenced property for the sum of Three Million Eight Hundred Thousand Dollars ($3,800,000.00). If you accept the Town's offer, please sign and return three (3) originals of the Acquisition Agreement (Exhibit B). In order to facilitate this transaction, please provide us with a copy of the Corporate Resolution naming the individual or individuals authorized to sign and conduct business on behalf of the corporation. Please return the signed originals to Tobin Sidles, Acting Town Attorney, 11000 N. La Canada Drive, Oro Valley, Arizona 85737. I will be available to assist you, answer any questions you may have, and to address any comments or concerns you may have regarding this offer. Page 2 In the event the Town does not hear back form you within twenty (20) days of your receipt of this offer to purchase, an action for condemnation shall be commenced by the Town to acquire the property. Sincerely, Tobin Sidles Acting Town Attorney TS/ca Attachments Cc: Jeffrey R. Grobstein President—Tucson Division Monterey Homes 3275 W. Ina Rod, Suite 220 Tucson,Arizona 85741 Trust Beneficiary Randy Kirsch Lancelot Overland,LLC 6991 E. Camelback Road, Suite B310 Scottsdale, Arizona 85251 John Brady, Esq. Chandler&Udall, LLP 33 North Stone Avenue, Suite 2100 Tucson, Arizona 85701-1415 EXHIBIT"A" APPRAISAL EXHIBIT "B" ACQUISITION AGREEMENT TOWN OF ORO VALLEY REAL PROPERTY ACQUISITION AGREEMENT This Real Property Acquisition Agreement ("Agreement") is made by and between First American Title Trust 9062 % Lancelot Overland LLC (the "Owner"), and The Town of Oro Valley, a political subdivision of the State of Arizona(the "Town"). 1. Property. The Owner is the owner of property within the Town of Oro Valley with Pima County Tax Parcel Identification Numbers 219-20-8301 through 219-20-9050 inclusive (the "Owner's Property") as described in Exhibit A, including all improvements located thereon. 2. Fee Title. The Town has determined the need to acquire fee title to Owner's Property. In lieu of court proceedings and further to its power of eminent domain, the Town agrees to acquire fee title to the Property for three million eight hundred thousand dollars ($3,800,000.00). The Special Warranty Deed transferring title from Owner to the Town shall be in substantial conformance with the Deed Form attached hereto as Exhibit B. 3. Special Warranty Deed. The Owner shall convey to the Town title to the Property, free and clear of all liens and encumbrances by Special Warranty Deed. 4. Forms. Any and all other closing documents shall be done on forms to be provided by the Town's title company of choice. 5. Title Search. In the event the title to the Property cannot be cleared to the satisfaction of the Town pursuant to a title search,this agreement shall be void. 6. Security Interest. Monies payable under this Agreement may be due to holders (the "Lienholders") of certain notes secured by mortgages or deeds of trusts, up to and including the total amount of unpaid principal, interest and penalty on the notes, if any, and shall, upon demand by the Lienholders, be paid to the Lienholders. Owner shall obtain from the Lienholders releases for any fee transfer for the Property. 7. Closing. Closing shall be on or before the 30th day after the date of execution of this Agreement. 8. Environmental Representations. Owner hereby represents and warrants that, to the best of Owner's knowledge, no pollutants, contaminants, toxic or hazardous substances, wastes or materials have been stored, used or are located on the Property or within any surface or subsurface waters thereof; that no underground tanks have been located on the Property; that the Property is in compliance with all Federal, State and local environmental laws, 1 regulations and ordinances; and that no legal action of any kind has been commenced or threatened with respect to the Property. 9. Environmental Indemnification. The Town and the Owner agree that neither party is assuming any obligation of the other party relating to any potential liability, if any, arising from the environmental condition of the Property, and each party shall remain responsible for its obligations as set forth by law. 10. Environmental Inspection Rights. Owner shall permit Town to conduct such inspections of the Property as the Town deems necessary to determine the environmental condition of the Property. If the investigations reveal the presence of contamination or the need to conduct environmental clean up, Owner shall conduct the clean up of the Property adequate to bring the Property into compliance prior to closing or the Town may terminate this Agreement. If environmental inspection reveals possible contamination, the parties hereby mutually agree to extend date of closing for a reasonable time for Owner to complete environmental clean up. 11. No Leases. Owner warrants that there are no oral or written leases on any portion of the Property. 12. Closing Costs. Expenses incidental to transfer of title, including title reports, recording fees, escrow fees,releases and Owners Title Insurance Policy, shall be paid 100%by Town. 13. Right of Entry. The Owner hereby grants to Town, its agents and contractors a right-of- entry to the Property upon execution of this Agreement for the purposes of establishing the new Town Public Works Facilities. 14. No Sale. Owner shall not sell or encumber the Property before closing. 15. Conflict of Interest. This Agreement is subject to A.R.S. 38-511 which provides for cancellation of contracts by The Town of Oro Valley for certain conflicts of interest. 16. Survival of Representation and Warranties. All representations and warranties contained herein shall survive the closing. 17. Entire Agreement. This signed document shall constitute the entire Agreement between the parties and no modification or amendment to this Agreement shall be binding unless in writing and signed by both parties. The performance of this Agreement constitutes the entire consideration by Town, including all just compensation and severance damages to the remainder property and shall relieve the Town of all further obligation or claims relating to Property. 2 TOWN OF ORO VALLEY BY: Mayor DATE: ATTEST: BY: Town Clerk Oro Valley, Arizona 85737 REVIEW AS TO FORM: BY: Town Attorney DATE: 3 OWNER By: Date: STATE OF ARIZONA) ss: COUNTY OF PIMA ) On this day of ,2004,before me the subscriber personally appeared to me known and known by me to be the person who executed the within Agreement and(s)he duly acknowledged to me that(s)he executed the same. Notary My Commission Expires: 4 OWNER By: Date: STATE OF ARIZONA) ss: COUNTY OF PIMA ) On this day of ,2004,before me the subscriber personally appeared to me known and known by me to be the person who executed the within Agreement and(s)he duly acknowledged to me that(s)he executed the same. Notary My Commission Expires: 5 OWNER By: Date: STATE OF ARIZONA) ss: COUNTY OF PIMA ) On this day of ,2004,before me the subscriber personally appeared to me known and known by me to be the person who executed the within Agreement and(s)he duly acknowledged to me that(s)he executed the same. Notary My Commission Expires: 6 EXHIBIT "A" Legal Description of the Property LEGAL DESCRIPTION Lots 1 through 72 and Common Areas A, B and C, Rancho Vistoso Neighborhood 3 Parcel B, as Recorded in Book 57 of Maps and Plats at page 100 in Pima County EXHIBIT"B" Special Warrant Deed Form When Recorded Return To: Tobin Sidles Acting Town Attorney Town of Oro Valley . 11000 N. La Canada Drive Oro Valley,AZ 85737 SPECIAL WARRANTY DEED' For valuable consideration, : as Trustee oftthe , does hereby grant, sell and convey all right title and interest of Grantor in that certain real property 'located in Pima County, Arizona described: on the attachedExhibit A to the Town of Oro Valley. This conveyance is subject to.all taxes and assessments, patent reservations, all covenants, conditions,restrictions,-,servitudes, easements, declarations and any other matter of record or which anaccurate survey and physical inspection of the Property would reveal and zoning and further subject to any other restrictions,reservations, prohibitions,regulations and requirements imposed by any governmental authorities. • Grantor warrants the title to the Property against all acts of Grantor and no other, subject to the matters,set forth above. Grantor: First American Title Trust No. 9062, c/o Trust Officer 1880 E. River Road, Suite 120 Tucson, Arizona 85718 Trust Officer, Trust No. 9062 STATE OF ARIZONA ) ) ss. COUNTY OF PIMA ) The foregoing instrument was subscribed, sworn to and acknowledged before me this day of , 2004 by as Trustee of the dated , 2004. Notary Public My commission expires: SANDERS K. SOLOT & ASSOCIATES, INC. REAL ESTATE APPRAISERS AND CONSULTANTS 335 N.WILMOT, SUITE 520 • TUCSON,ARIZONA 85711 SANDERS K. SOLOT & ASSOCIATES, INC. PREPARED FOR MR. CHUCK SWEET TOWN OF ORO VALLEY PREPARED BY SANDERS K. SOLOT, MAI ANDRIA K. BURKE, MAI, ASSOC. APPRAISER DATE OF VALUE SEPTEMBER 25, 2004 FILE NUMBER 15358-L04.wpd A COMPLETE SELF-CONTAINED APPRAISAL REPORT OF THE APPROXIMATELY 23.73 ACRES OF PARTIALLY DEVELOPED LAND KNOWN AS RANCHO VISTOSO NEIGHBORHOOD 3,PARCEL B ON THE SOUTH SIDE OF RANCHO VISTOSO BOULEVARD, WEST OF ORACLE ROAD ORO VALLEY, PIMA COUNTY, ARIZONA SANDERS K. SOLOT & ASSOCIATES, INC. REAL ESTATE APPRAISERS AND CONSULTANTS October 8, 2004 SANDERS K. SOLOT, MAI, CRE File No.: 15358-L04.wpd ANDRIA K. BURKE, MAI JEAN TWORKOWSKI MARGARET WEMMER Mr. Chuck Sweet Town of Oro Val"py 11000 North La Canada Drive Oro Valley, Arizona 85737 Dear Mr. Sweet: At your request, we have appraised the approximately 23.73 acres of partially developed land known as Rancho Vistoso Neighborhood 3, Parcel B, located on the south side of Rancho Vistoso Boulevard, west of Oracle Road, in Oro Valley, Pima County, Arizona. The intended use of the appraisal is for potential acquisition of the subject property by the client. The purpose of this appraisal is to estimate the "as is" market value of the fee simple interest in the subject property, as of September 25, 2004. The date of our inspection was September 15, 2004. This appraisal is intended for use by Mr. Sweet, and the Town of Oro Valley, who are considered to be our clients and use of this report by others is not intended by the appraisers. The report has been prepared in conformance with Title XI of the Federal Financial Institution's Reform, Recovery, and Enforcement Act of 1989(FIRREA). It also complies with requirements set by the Uniform Standards of Professional Appraisal Practice (USPAP), the Code of Professional Ethics of the Appraisal Institute, and in conformance with the Town of Oro Valley. This is a Complete Self-Contained appraisal report of the subject property. As such, this report includes the factual data, assumptions, limiting conditions, investigation, supporting data, and analyses which formed the basis for the valuation conclusions contained herein. 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, 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: 1. Buyer and seller are typically motivated; 2. Buyer and seller are well informed or well advised, and acting in what they consider their own best interest; I 3. A reasonable time is allowed for exposure in the open market; I 335 North Wilmot, Suite 520 • Tucson, Arizona 85711 • Phone(520) 750-1550 • Fax (520) 750-1549 October 86, 2004 File No.: 15358-L04.wpd Page 2 4. Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and 5. The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. RULES AND REGULATIONS,FEDERAL REGISTER, VOL. 55, NO. 165, PAGE 34696. No inadequate soil conditions or hazardous contamination was noted on the subject property upon a visual inspection of the site. Though we are not qualified to test for such materials, we have no reason to believe that inadequate environmental considerations exist. If indeed hazardous materials are found upon the subject property, the value ascribed in this report is subject to change. sib 111 This report, or any portion thereof, is for the exclusive use of the client to whom this report is addressed, and is not intended to be used, sold, transferred, given, or relied upon by any person other than the client without the prior, expressed written permission of the authors, as set forth within the limiting conditions contained in this report. This transmittal letter is not valid for any purpose unless accompanied by the appraisal report referred to herein. ESTIMATED "AS IS"MARKET VALUE OF THE SUBJECT PROPERTY . . . . . . . $3,800,000 The "as is" value considers the subject in the condition it was in on the date of our inspection. As such, platting and engineering were complete, the site had been graded with roads and pads for houses defined 1111 and the sewer line was extended through the subdivision. Your attention is invited to the data and discussions contained in this report and to the pertinent exhibits. We do hereby certify that, to the best of our knowledge and belief, all statements and opinions contained in t,is'report are correct, subject to the limiting conditions which are made apart of this report. P P Re.pectfully submitted, m r / /77 /11,/ SA I 'S K. I LOT, MAI ARIZONA STATE CERTIFIED GENERAL REAL ESTATE APPRAISER, CERTIFICATE NUMBER 30094 rr )41/ tet""`_-�-.�_.. ANDRIA K. BURKE, MAI, ASSOCIATE APPRAISER ARIZONA STATE CERTIFIED GENERAL REAL ESTATE APPRAISER, CERTIFICATE NUMBER 30691 intI SUMMARY OF SALIENT FACTS DATE OF VALUATION September 25, 2004 DATE OF INSPECTION September 15, 2004 DATE OF REPORT October 8, 2004 TYPE OF REPORT Complete, Self-Contained OWNER OF RECORD 1 s' American Title Trust 9062 CLIENT Mr. Chuck Sweet Town of Oro Valley PROPERTY LOCATION Rancho Vistoso Neighborhood 3, Parcel B, located on the south side of Rancho Vistoso Boulevard, west of Oracle Road, Oro Valley, Pima County, Arizona. INTEREST APPRAISED Fee Simple TAX CODE NUMBERS 219-20-831 through -9050 current (was 223-02-019A, 219-20-052J) a .. SITE DATA - AS IS The site contains 23.73 gross acres and is platted into 72 lots for single family residential development. 1 Typical lot dimensions are 50' by 115'. The minimum lot size is 5,750 square feet. The maximum lot size is 12,194 square feet. The average lot size is 6,242 square feet. (As shown on Plat Map.) Access to the property is via Rancho Vistoso Boulevard, a four-lane, median divided arterial roadway. All utilities are available to the subject site, and sewer has been extended through the site. The site has been graded and the roads and house pads have been roughly defined. FLOOD HAZARD According to the National Flood Insurance Program's Flood Insurance Rate Map, Community Panel Number 04019C 1035K, revised February 8, 1999, the subject site is located within Flood Zone X, an area of 0 minimal flooding. There are natural washes along the east and west boundaries of the property. Common area A and B encompasses primarily wash area. ZONING Rancho Vistoso PAD: MDR, Medium Density Residential (Oro Valley) p SUMMARY OF SALIENT FACTS (CONTINUED) ENVIRONMENTAL CONSIDERATIONS No inadequate soils conditions or hazardous contamination was noted on the subject property upon a visual inspection of the site. Though we are not qualified to test for such materials, we have no reason to believe that inadequate environmental considerations exist. If indeed hazardous materials are found upon the subject property, the value ascribed in this report is subject to change. TAXES 2004 Taxes $927.18 2004 Full Cash Value $1,000 2005 Full Cash Value $2,015,988 $28,000/lot There are no delinquent taxes owed on the subject property. HIGHEST AND BEST USE As Vacant - Single Family Residential Use As Improved - Single Family Residential Use MARKETING TIME - AS IS 3 months SUBDIVISION DEVELOPMENT APPROACH $3,800,000 SUBDIVISION ANALYSIS $2,975,000 RECONCILED "AS IS" MARKET VALUE $3,800,000 SPECIAL LIMITING CONDITIONS The "as is" value considers the subject in the condition it was in on the date of our inspection. As such, platting and engineering were complete, the site had been graded with roads and pads for houses defined and the sewer line was extended through the subdivision. 10/21/2004 09:07 5207501549 SOLOT & ASSOCIATES PAGE 02 TABLE OF CONTENTS PURPOSE . 1 INTENDED USE OF THE APPRAISAL 1 DEFINITION OF MARKET VALUE I DATE OF VALUATION - • • 2 DATE OF INSPECTION 2 PROPERTY RIGHTS APPRAISED . . . , 2 PERSONAL PROPERTY AND BUSINESS VALUE 2 PROPERTY IDENTIFICATION 2 LEGAL DESCRIPTION 3 TAX PARCEL NUMBERS 3 OWNERSHIP/PROPERTY HISTORY 3 EXISTING FINANCING 3 SCOPE OF THE APPRAISAL 4 MARKET AREA DATA 17 SITE DATA - AS IS 22 ZONING 32 PROPERTY TAXES . . 34 MARKET OVERVIEW - - 35 HIGHEST AND BEST USE 40 VALUATION PROCESS 43 LAND VALUATION . 44 DEVELOPMENT COST APPROACH - AS IS 66 SUBDIVISION ANALYSIS - AS IS (INCOME APPROACH) 68 10/21/2004 09:07 5207501549 SOLOT & ASSOCIATES PAGE 03 TABLE OF CONTENTS (CONTINUED) RECONCILIATION . . 75 APPRAISERS' CERTIFICATION 76 QUALIFICATIONS OF SANDERS K. SOLOT, MAI, CRE 80 QUALIFICATIONS OF ANDRIA K. BURKE,MAI , 82 ADDENDUM 84 15358-L04.wpd PURPOSE The purpose of this appraisal report is to estimate the "as is" market value of the fee simple interest in the real property described in this report. INTENDED USE OF THE APPRAISAL This appraisal is to be used by Chuck Sweet and the Town of Oro Valley, who is considered to be our client. The intended use of the report is for potential acquisition. DEFINITION OF MARKET VALUE "AS IS" The value of specific ownership rights to what physically exists on the appraiser's date of inspection, excluding all assumptions concerning hypothetical conditions. "MARKET VALUE" Market value means the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, with 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 to a buyer under conditions whereby: 1. Buyer and seller are typically motivated; 2. Both parties are well informed or well advised, and acting in what they consider their best interests; 3. A reasonable time is allowed for exposure to the open market; 4. Payment is made in terms of cash or U.S. dollars or in terms of financial arrangements comparable thereto; and 5. The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. RULES AND REGULATIONS,FEDERAL REGISTER, VOL. 55, NO. 165, PAGE 34696. Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 1 15358-L04.wpd DATE OF VALUATION September 25, 2004 This is the date at which costs-spent-to-date information is based on. Construction costs have likely continued to increase since that date. DATE OF INSPECTION I The subject was inspected by Sanders K. Solot and Andria K. Burke, on September 15, 2004. PROPERTY RIGHTS APPRAISED 6 The interest to be appraised is the interest arising from the fee simple estate. The fee simple estate is defined as "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." (Dictionary of Real Estate Appraisal, 3rd Edition, page 140.) PERSONAL PROPERTY AND BUSINESS VALUE Unless specifically identified as such, no personal property or going concern value is estimated in this appraisal. Personal property is defined as a movable item of property that is not permanently affixed to, or part of, real estate. Going concern value includes an intangible enhancement to the value created • by a proven property operation. • PROPERTY IDENTIFICATION The subject property is known as Rancho Vistoso Neighborhood 3, Parcel B, located in Oro Valley, Y Pima County, Arizona. The property is situated on the south side of Rancho Vistoso Boulevard,just west of Oracle Road, in the Rancho Vistoso Master Plan Community. 1 6 Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 2 15358-L04.wpd LEGAL DESCRIPTION Lots 1 through 72 and Common Areas A, B and C, Rancho Vistoso Neighborhood 3 Parcel B, as Recorded in Book 57 of Maps and Plats at page 100 in Pima County . TAX PARCEL NUMBERS Book 219, Map 20, Parcels 831 through 905 OWNERSHIP/PROPERTY HISTORY As of the date of valuation, title to the subject was vested in the name of First America Title Insurance Company, as Trustee under Trust 9062, whose beneficiary is Lancelot Overland, LLC, as evidenced by a Special Warranty Deed, recorded June 8, 2004 in Docket 12318 at 3684 in the Pima County Recorder's office. This is a transfer of ownership into a trust and not a "sale". The subject property was purchased by Lancelot Overland, LLC from Lawyer's Title of Arizona, as Trustee under Trust 7811-T, whose beneficiary is Overland Vistoso LP, as recorded on June 3, 2004 in a Special Warranty Deed in Docket 12315 at Page 3269, in Pima County. This is the purchase of the subject site, as vacant land, platted and engineered. The sale price was$2,622,951, or$110,702 per acre. The buyer planned to "land bank" the property for Monterey Homes. Since the purchase, the buyer or Monterey Homes have spent approximately $550,000 in construction costs on the site to grade the site and install sewer to the individual lots. Our understanding is that once construction is complete and Monterey begins to sell homes on the individual lots, Monterey will purchase the lots from Lancelot at an undisclosed per lot price. To the best of our knowledge, there have been no other sales of the subject property within the three years prior to the date of valuation and the property is not currently listed for sale. EXISTING FINANCING Consistent with the definition of market value set forth in this appraisal, we have appraised the property as though sold for cash or its equivalent. 0 0 Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 3 15358-L04.wpd SCOPE OF THE APPRAISAL Preparation of this appraisal involved the collection, analysis, and reporting of data obtained from a number of sources. Primary data was obtained directly by the appraiser and included the buyers and 1111 sellers of real estate, those active in leasing and management of real estate, as well as public sources of data such as the Town of Oro Valley and Pima County. Secondary data was obtained from government studies and research firms such as CoStar Comps, Multiple Listing Service, Korpacz Real Estate Investor Survey and the Metropolitan Tucson Land Use Study prepared for the Pima County Real Estate Research Council, Inc. by the University of Arizona, The Office of Economic Development, and the Roy P. Drachman Institute for Land and Regional Development Studies. We have researched local real estate and economic conditions, including the effects of physical, social, economic, and governmental trends. For each approach used, factual data and the analysis and reasoning leading to the value conclusion are presented. All comparable data was confirmed with a party to the transaction, when possible. The geographic area surveyed is primarily Rancho Vistoso and surrounding areas. Competing residential subdivisions in the area were surveyed. In the Land Value Analysis and Sales Comparison Approaches, the subject is compared to similar properties that have been sold recently or for which offering figures are known. The Cost Approach considers construction costs obtained from the Marshall Valuation Construction Cost Manual, data retained in our files, as well as collection of market support for residential subdivision development. The Income Approach,or Subdivision Analysis,we have considered retail lot prices and absorption based on competing subdivisions, cost of development and an appropriate discount rate based on local and national market participants. All of the data and analyses are Reconciled at the end to estimate a final market value. • Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 4 15358-L04.wpd REGIONAL DATA Tucson is the commercial center for southeastern Arizona. It is second in the state in population only to Phoenix, approximately 120 miles to the northwest. Tucson is strongly influenced by its proximity to the international border with Mexico, approximately 60 miles south, at Nogales, Arizona. Metropolitan Tucson includes the cities of Tucson and South Tucson; the incorporated towns of Marana, Oro Valley, and Sahuarita; and the unincorporated areas of Green Valley, Catalina, Vail, Avra Valley and Three Points. These cities are clustered in the eastern half of Pima County, while the balance of the county is primarily Tohono O'Odham Indian Reservation and government held land. In order to fully understand the Tucson real estate market, it is necessary to analyze the forces that affect real property values. These forces fall within four major categories: social trends, economic forces, government controls and environmental conditions. Social Trends Social trends which affect value are the result of the demographics of an area and the resulting demands and choices made by the residents. The current population of Tucson is estimated at 521,684 (as of May 2004,City of Tucson Planning Department). Tucson's population grew 26.5% from 1990 to 2000. ANNUAL PERCENT CHANGE IN POPULATION & EMPLOYMENT PIMA COUNTY AND THE U.S., 1970 -2000 1970-80 1980-90 1990-2000 Pima County Population 5.1% 2.6% 2.7% Employment 5.8% 3.2% 3.0% U.S. Population 1.1% 0.9% 1.0% Employment 2.5% 1.9% 0.2% Source: Pima Association of Governments,Population Handbook,August 1994,p. 11; U.S. Census of Population and Housing, 1970, 1980, 1990; U. S. Bureau of Labor Statistics, Employment and Earnings; employment estimates based on recent growth trends. Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 5 15358-L04.wpd The median age in Tucson was 32.8 years in 1990 (slightly below the national average), and was 35.7 in 2000. The slow rise in the median age is due to the Baby Boomers' aging, not to any massive influx of seniors (City of Tucson Planning Department). The presence of the University of Arizona promotes strong in-migration among the 18 to 24 year old population. However, within Pima County, approximately 16 percent of the population is over 65. The growing population in the over-65 segment reflects the continuing draw of Tucson for retirement living. This has had a positive effect on areas promoting retirement populations such as Green Valley, Sun City Vistoso, Sunflower at Continental Ranch and Saddlebrooke. Economic Forces Economic conditions have a direct impact on property values in a region. Thus,economic forces such as employment, wage levels, availability of mortgage money, and the diversity of the economic base are significant. Pima County's unemployment rate was 3.8% in March 2004, compared to Arizona's rate of 4.9%, and the U.S. rate of 5.7%, according to the Arizona Department of Economic Security. Total employment • increased 3.8% over March 2003 (City of Tucson Planning Department). The following table shows employment by market sector. PERCENT SHARE OF EMPLOYMENT BY ECONOMIC SECTOR PIMA COUNTY, 1980-2002 INDUSTRY 1980 1985 1990 1995 2000 2001 2002 Mining 3.6 1.0 0.9 0.1 0.5 0.4 0.4 Construction 7.8 9.1 5.8 6.3 5.7 5.3 6.6 Manufacturing 11.5 13.5 10.4 9.1 8.8 8.5 8.4 Transportation, Communications, &Public Utilities (TCPU) 4.9 4.1 3.7 4.6 3.2 2.8 2.2 Trade Finance, Insurance and Real Estate(FIRE) 22.1 22.3 23.4 23.2 19.7 19.4 13.5 Services 4.6 5.0 4.5 3.9 3.7 3.7 4.1 Government 21.5 24.2 29.1 29.7 31.6 29.9 39.6 24.0 20.8 22.2 22.1 20.8 21.1 23.0 Source: Arizona Department of Economic Security reports and employment trend estimates by Kozlow&Associates. 2000-2003 • data from MTLUS, 1st Quarter 2003 Report. According to the Greater Tucson Economic Council's(GTEC's) Greater Tucson Economic Strategic Plan, high-paying services, construction, transportation, communications, public utilities and manufacturing jobs account for about a third of the employment in Tucson. Tucson's average personal income is projected to be $26,200 in 2004 by the City of Tucson Planning Department, an increase of 3.6% over 2003. Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 6 15358-L04.wpd In recent years, the Tucson area has been attempting to expand the local economic base. Growing industries include optics, high-tech, and bio-medical. Industry is attracted to the area because of its desirable climate, relatively inexpensive labor supply and because Arizona is a "right-to-work" state. The growth of high-tech industries, such as semiconductor manufacturing, software services, communications services, electronic components and accessories manufacturing and defense electronics manufacturing helped rank Arizona seventh in the nation for the value of high-tech exports. High-tech employers in Tucson include Raytheon (10,171 employees), IBM (1,700), Bombadier Aerospace (1,350), Texas Instruments (950), Honeywell (815) and Sargent Controls & Aerospace (220). Phelps Dodge announced the closure of its Sierrita Mine April, 2001, eliminating 750 jobs, another blow to the mining industry. In June 1999, BHP Copper closed its San Manuel mine leaving Sierrita and Asarco Mines as the only major copper mines in the area. The lay-off is due to rising energy costs and decreasing molybdenum prices (a by-product of copper). TUCSON'S TOP TEN EMPLOYERS FOR 2003 RANK EMPLOYER INDUSTRY FULL-TIME JOBS 1 U.S.Army Intel.Ctr.&Ft.Huachuca Military 11,939 2 Raytheon Missile Systems Company High Tech 10,171 3 University of Arizona Education 10,078 4 State of Arizona Government 9,753 5 Davis-Monthan Air Force Base Military 7,692 6 Tucson Unified School District Education 7,690 7 Pima County Government 6,987 8 City of Tucson Government 5,495 9 Wal-Mart Stores, Inc. Retail 4,420 10 Tohono O'Odham Nation Public Administration 3,515 TOTAL 77,740 Source: The Arizona Daily Star, "The Star 200,"March 2004 The University of Arizona, the second largest of the three state universities, is located in central Tucson. It is ranked as one of the top 20 research institutions in the nation. It has a financial impact of $1.5 billion on the state. The University of Arizona has an average fall enrollment of about 34,000 students, including 407 students in the College of Medicine, and 687 professional students in the College of Law and Pharmacy. The University offers over 150 undergraduate degree programs along with more than 200 post-graduate and doctoral programs. Full-time employees decrease by 11.09% from the previous year. Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 7 15358-L04.wpd Davis-Monthan Air Force Base, the fifth largest employer, contributes $680 million annually to the local economy. DMAFB was designated a "lead base" in March 1999, giving the base a more stable future. DMAFB has survived several rounds of base closures. The base employs about 6,000 military personnel and 1,700 civilians. There were 2,255 fewer full-time employees in 2003. There are about 13,000 military retirees residing in the Tucson area. Tucson's location approximately one hour from the Mexican border town of Nogales, Arizona, has a strong influence on Tucson's economy in the retail, health care and manufacturing industries. Many Mexican citizens come to Tucson for retail goods and medical treatment. The improvement in Mexico's economy is contributing to the strength of these industries. Under the Maquiladora, or "twin plant" concept, industries manufacture the components of a product in the United States and transport them to Mexico for assembly. This allows the manufacturer to take advantage of Mexico's low labor costs. Over the past five years, increased exports to Mexico created around 30,000 jobs in Arizona, with a significant number of these jobs occurring in Tucson. University of Arizona senior economist Marshall Vest predicts an increase of 13,000 to 14,000 jobs for Tucson this year, followed by almost 17,000 more jobs next year, a significant increase over previous years. From 2002 to 2003, the net gain for Tucson was only 2,100 jobs. Citigroup recently announced it would open a call center here that would employ approximately 1,300, and the city of Tucson is expecting to return to normal employment levels this year after a drop of more than 1,700 employees last year because of an early retirement option (Arizona Daily Star, 3/4/04.) Real Estate Markets The following table illustrates current vacancy factors for the different real estate sectors: CURRENT VACANCY RATES - OVERALL CITY OF TUCSON SECTOR Office Industrial Street Side Shopping Single Multi Commercial Centers Family Family Residential Residential VACANCY 14.10% 21.10% 9.90% 12.20% 1.17% 9.07% RATE Source:Metropolitan Tucson Land Use Survey, Fourth Quarter 2003 and First Quarter 2004 Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 8 15358-L04.wpd Office-Tucson has a total of approximately 13.4 million square feet of office space (approximately 9.4 million leaseable square feet), the majority of which is located Downtown and within the Midtown Business District, along Broadway between Alvernon and Wilmot. The "hot spots" for new office development are the Foothills, Swan Road corridor, River Road, and the Northwest. The Downtown area has the highest vacancy rate for leaseable space at 18.2%. The office market has been growing over the past three years. Industrial - Tucson has 38.16 million square feet of industrial space (21.56 million square feet is owner-occupied space and 16.6 million square feet is leaseable space), the majority of which is located on the south side of town, between I-10 and the Airport. The vacancy rate for leaseable space is somewhat high at 21.1%.Twenty-one industrial complexes were completed in 2003. This represented 519,531 square feet, of which 411,337 square feet were owner occupied. Of the remaining 108,194 square feet of leaseable space, 78,619 square feet has been absorbed. Twenty-seven percent of new leaseable space remained vacant in 2003. Five industrial complexes were completed in the 1st Quarter 2004 for a total of 70,230 square feet, of which 37,800 square feet is owner occupied. Fourteen percent of the remaining leaseable space is vacant. In general, the industrial market is stable. Retail - With a total of 38.5 million square feet, retail properties are spread throughout Tucson, primarily on major arterials. The redevelopment of both Park Place and El Con Mall in central Tucson has spurred retail activity in these areas as well. Retail sales are projected to increase 5.5% in 2003 and 2004. In 2003, little change in rental rates and vacancies is expected, although new national tenants continue to examine Tucson for potential growth. Residential- The single family residential market has experienced tremendous growth beginning in 1994 and continuing to the present. Low interest rates continue to drive the residential market. The average new home value(based on building permit construction costs)in First Quarter 2004 was$172,886, up from $164,962 a year ago (MTLUS). The residential market continues to be strong as interest rates remain low. Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 9 15358-L04.wpd YEAR NEW HOME SALES RESALES 1994 4,982 9,023 1995 4,180 9,338 1996 4,485 11,031 1997 4,445 11,389 1998 5,300 10,020 1999 8,926 14,650 2000 6,846 13,382 2001 6,601 11,581 2002 7,594 13,251 2003 7,961 14,618 SOURCES: John Strobeck, Tucson Housing Market Newsletter (01/04), MTLUS, Tucson Association of Realtors. Includes Sahuarita and Green Valley data. There were 2,027 detached single-family residential building permits issued in the Tucson Urbanized Area in the First Quarter 2004. Southeast area has the largest share of new development for this quarter, capturing 443 (21.9%) of all new home permits issued. Oro Valley-Catalina and Southwest has the next highest numbers of permits at 438(21.6%)and 435 (21.5%),respectively. The strong single family market is expected to continue as long as low interest rates make mortgage payments competitive with apartment rental rates. The multi-family residential market has had some setbacks due to overbuilding in past years, combined with the strong single family market. Overall, the apartment market is considered stable, but with limited demand for new construction. Governmental Forces Governmental actions influence the quality of public services and transportation networks,enact local zoning and building codes, and establish physical and legal policies that can greatly affect property values in an area. Two governments have jurisdiction over the majority of the Metropolitan Tucson area. The City of Tucson has a charter government, with an elected mayor and six council members who govern, and an appointed manager. Pima County also has jurisdiction and is operated by an elected board of five county Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 10 15358-L04.wpd supervisors and an appointed county manager. The incorporated towns of Oro Valley and Marana have their own councils governing much of Tucson's northwest side. These governing bodies have the ability to enact zoning regulations, approve rezoning requests and modify the area's transportation system. Rezoning Issues-Rapid growth and development in outlying areas has led to confrontations between pro-development forces and those opposed to uncontrolled growth and sprawl. Government officials, in general, claim to be "pro-business" while supporting controlled growth. The proposed Sonoran Desert Conservation Plan has growing support. The plan will limit rezonings in environmentally sensitive areas for two years, charge developer's fees to buy or maintain new public preserves, and allow developers to trade development rights on sensitive areas to non-sensitive ones. Further evidence of the county's stance was the rejection of the Canoa Ranch rezoning plan in January 1999. This 5,200 acre, master-planned community with 6,111 planned homes and two golf courses, was the largest rezoning defeat since 1973. A much scaled-down re-zoning proposal for 2,199 homes, 200 acres of commercial development and a 50- acre recreational vehicle park was recently approved by County government. The Pima County Board of Supervisors purchased the remaining 4,000 acres (approximately 85% of the 5,200-acre ranch), setting a new standard in open space preservation. The Northwest towns of Oro Valley and Marana have faced rapid development over the past five years which has overburdened the infrastructure,causing traffic congestion and other problems. In January 1995, Oro Valley implemented developmental impact fees to raise funds for transportation corridors, currently $1,035 per new single family dwelling. In November 1996, Pima County instituted an impact fee of$1,550 per home. In April 2001, to help fund the proposed Twin Peaks interchange, Marana began collecting a $2,435-per-home impact fee on new construction in the south Marana "benefit area," which includes all of Continental Ranch, Continental Reserve, Saguaro Springs and other areas. The Marana Town Council also recently approved a 3-4% increase in the town's construction sales tax. Three-quarters of the tax will be used to fund transportation improvements. Big Box Ordinance - On September 27, 1999, the Tucson City Council adopted the "Big Box Ordinance" which places considerable restrictions on developing retail buildings over 100,000 square feet. This ordinance established a "Large Retail Establishment" category for those stores over 100,000 square feet. In the past, most of the commercial zonings had no minimum lot size requirement and no maximum lot coverage ratio. While there were provisions for setbacks, there was relatively little restriction on the size of the building that could be constructed, as long as there was adequate room for parking, loading, landscaping and setback areas. Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 11 15358-L04.wpd Specific design criteria for "Large Retail Establishments" were created. These relate to access, visual and noise buffers,outdoor storage areas, trash collection areas and times, aesthetic characteristics, outdoor lighting, delivery times, and setbacks. "General Merchandise and retail sales shall not be combined with Food and Beverage Sales except where one of the land use classes consists of less than ten percent (10%) of the gross floor area." Noise mitigation plans and traffic impact analysis must all be submitted for approval. In addition, "Large Retail Establishments" now are to be "considered through a Special Exception Land Use process". This process ensures that plans must be discussed in at least two public hearings before the city zoning examiner and City Council. By being subjected to public hearings, there is considerably more potential for plans to be disapproved due to neighborhood distaste. Education - The Tucson metropolitan area has eight school districts with over 119 elementary schools, 34 middle schools, and 20 high schools. Public school enrollment is about 120,000. In addition, there are 27 parochial schools, 103 private schools and 10 vocational training schools. The University of Arizona, a four-year university, has an average fall enrollment of about 34,000 students. The University offers over 131 undergraduate degree programs along with 241 post-graduate and doctoral programs. Pima Community College is a two-year junior college with an enrollment of approximately 27,900 students in four campuses within Tucson and one in Sierra Vista. In addition, the University of Phoenix with an enrollment of 1500 students offers Bachelor Degree completion and evening Masters Degree programs. Environmental Forces Environmental forces can be natural,such as climatic conditions;or manmade, such as transportation systems. Tucson is located in a desert valley surrounded by mountain ranges. A large portion of the area surrounding Tucson is National Forest land, providing an abundance of outdoor activities. Much of Tucson's growth, especially its tourist industry, is attributable to its climate, scenery and recreational opportunities. There are four destination resorts which capitalize on Tucson's desert climate. Tucson is located in the Santa Cruz River Valley, and is approximately 2,400 feet above sea level. The city is surrounded by four mountain ranges: the Santa Catalina Mountains to the north, the Rincon Mountains to the east, the Santa Ritas to the south, and the Tucson Mountains to the west. A number of tributaries flow from the surrounding mountain ranges, through Tucson, into the Santa Cruz, Rillito, Pantano, Tanque Verde and Agua Caliente Washes. The mountain ranges vary in elevation from approximately 4,687 to 9,453 feet and support a wide variety of animal and plant life. Water - Tucson was formerly serviced entirely by wells which drew water from an underground aquifer. Replenishment of this underground source depends on runoff from the mountains and rainfall which averages only 11 inches per year. Continued population growth makes water availability a major Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 12 15358-L04.wpd public concern. Tucson is part of an "active management" area, which prohibits large private wells and advocates more renewable water resources, such as recharge and treated effluent for use on golf courses and parks. Tucson is now connected to the Central Arizona Project (CAP), an aqueduct system which diverts water from the Colorado River. In May 2001, Tucson Water began producing water for its customers from the Clearwater Renewable Resource Facility in Avra Valley, west of Tucson. Recharged CAP ground water is blended naturally in the underground water table. This will produce approximately 18 million gallons per day to the water system. Tucson Water continues to lay pipelines, drill and equip wells, build a reservoir and pumping station, and make other modifications to the water delivery system. Cactus Ferruginous Pygmy Owl - Portions of the valley are located within the critical habitat for the cactus ferruginous pygmy owl, an endangered species, as designated by the United States Fish and Wildlife Service, and published in the Federal Register on July 12, 1999. Much of Northwest Tucson, east of Interstate-10 and north of the Rillito River, is within critical habitat. Habitat typically has vegetation consisting of Ironwood, Palo Verde and Mesquite trees and Saguaros. Property in critical habitat is subject to regulation by the U.S. Fish and Wildlife Service, the Environmental Protection Agency and the U.S. Army Corps of Engineers. Because the property can only be developed in adherence to federal guidelines, it may not be possible to develop some land within the critical habitat in accordance with zoning and land use plans. Generally, high density residential development and commercial development will be much more difficult under current regulations. The existence of the owl and uncertainty about whether property can be developed or not has pushed development to other areas. Transportation - Land use patterns in the Tucson area are a result of the transportation system. Within the valley,the topography is relatively flat with few natural obstacles; therefore, major streets were built on a section line grid system. The grid system encouraged commercial development on a linear basis along major corridors such as Speedway and Broadway Boulevards and Oracle Road. Large commercial developments are clustered at arterial intersections while residential development is located on interior streets in the center of each square mile grid. Aside from Interstates 10 and 19, this arterial system is the primary means of circulating traffic through the metropolitan area. Within city limits, plans call for continued widening of existing arterials. Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 13 15358-L04.wpd Conclusion Tucson is in a growth stage, which is expected to last into the foreseeable future. The presence of the University of Arizona and Davis-Monthan Air Force Base have had a stabilizing effect on the economy. The real estate market is on an upward swing in most sectors and property values are generally on the rise. Low interest rates have spurred the economy, especially the residential sector. The area's mild climate and recreational opportunities, which were catalysts for past growth, continue to attract new residents and have established Tucson as a major resort destination and retirement community. Lower real estate acquisition costs, a relatively inexpensive labor supply and the University continue to be a strong draw for new industry. Sources: Tucson Update, June 2003, Tucson Planning Department; Me Arizona Daily Star, various articles; Community Profile- Tucson, December 2003, Arizona Department of Commerce; Metropolitan Land Use Survey, First Quarter 2004, Fourth Quarter 2003, Pima County Real Estate Research Council Inc.; PICOR Year-End Industrial Study;Arizona's Economy, April 2003, University of Arizona; Greater Tucson Economic Council. Sanders K.Solot and Associates,Inc. 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X !AJO ♦�kWYD a° '?x3 ES ASA TE O RD .a .,` W illill *it• Q %>� ,mI )c.,.l:;,,:a4...4,a,,,t,','.:1 � s. !NG •N U '• 1 -- TO t �� Davis-Mo iti afl ��� �` j • ,..,,,.Ameadeemeasier4vamovapacm.,, ) Lu w,DRE Y ; iliR �: Ryan a OHO>:.,.f• 7 �� 8`� o AFB Q Airfield O' O:p Q Q U Q v Y 1 .. 9 c''' p Z �: z a' p m n ` w Q VALENCIA� .............-.. RD..., �`,. � xL;�il^'� Z. illk: : ..., 1 ,f- ♦ p U i. �. U at 3� No- �, 4 lSt H. ci) �l 86 ' .4: _::r LOS REALES R• VALE IA ��ILI / Q.� • P v°LOS w... € � \ ,4 Q: ,� �' `It p,4 U ,a r t.. .L i 4P No ��,-a fi R• i P.,�O Tucson x\ testi ,\ n USAN ,': Int �-- ORO EAT •� :,rfr2,. ,isit �`. G'L ' sisL'4!"S;�.L? ' iE '`.x ': ♦ ernatn I�� • \ •CMO D .---,,,,,,,,,,,,,,,,-...•...._...,...•.. Air rt ��� o R P • PCO HE?A ...RDHUGHES m�«• .� T Tohono ACCESS RD �° �`,� G IGANS w ■ GU CH RD p Three Points 6 1. § .� Z �,' ROCKET` �` 2' �O pi Q a0 SUMMIT Z STRAY v` Q. K0�-;Q 86 Z O'OdhamUNI-Ir .61:° •RD GUYST ; : DBREKKE .. 4 i, HUMBLERS Rl:V Nation 9 r�N Z: ... C HILLTOP RD4O` .."7:- ?l;' i DAWN< � (San Xavier District) a Z NVioe.,w.bto,l' _,:.• .......,: N' ues f �� 'LlO�Q U } w \y p'. Sct 3II // //��Q Q Q_ z `. _. p: ' SON Q �= O 0 .. •i :..7,..;.,!,..::,,g,,....,..,...............:.,? „..�25`t'rtL :0 fr° PIMA z MINEteg- _ _: E • O >< Q ANDRADA d RD �� 286 2.,...x RANCH RD BUCKING a`HOR E . San Xavier Eh.? \19i �,III_IT!I41.F.S . ....... wRD > ; w zD� 17 SAHUARITA Q=m z RU...;Diamond a a 3 in o ,.:PY OCOTILLO RANCH m z SAHUARITA :. RU.... O Bell Ranch } o z _ :F „, sAH�ARITA RD...; CALL HELMET PEAK RD......,�, ,:,, RD..,..:' O QUATRO< o O>~ cn .. .:cc >a w w _ Q3 f Corona > •N >_ DA`SONS RD, F de Tucson 1:1) Q cn guTTES J_: ` BRITTON p ANTIGU 'Q Q qti x'9'1• z Viii 2 '; z: T,9 ti ' W � 83 .: ♦s Ov o a o::MCGE o,,..."......19-. ...Rp �;.',. �F...,,.... EOUAIL..n Ri Q h z °�- Coronado 3 2 ,.:0 1 2 3 4 5 6 7 8 9 10 1O{4: U J 1-1.l-- : : 1--1 '---1 !,1' Q HIDDEN SCALE IN MILES �RTAL. l''.... ', Continental �E�LVET,I:q SPRIN6RD e MIsstoN-T.:: 4 • t�` BUT. - t wH�T O: W s p O aA 1). CATERPILLAR TES • Fyo Green G > . F • w Nation PUBLISHED PPIN Y: Valley Q�!:: .o C-9 N • •sU PHOENIX MAPPING SERVICE .!z It..-94, �P W' din,of Wide World of Maps,Inc. C.• 0 N` �Q CANYON„t Phoenix,Arizona u_ �1 �' Copyright©2003 Wide World of Maps,Inc. ,, O- z Item N o.73943 All rights reserved,it is illegal,under United States Copyr ght Law,to copy z<n ! r O or reproduce this map by any method,in whole or in part,regardless of o purpose,without the express authodzation of Wide World of Maps,Inc. • zn,,,w><.„ `' Forest,- FRVILLE A O 7 • -0 1 - EMPI { 15358-L04.wpd MARKET AREA DATA II r The subject's market area is considered Northwest Tucson and is bounded by Orange Grove Road on the south, Oracle Road on the east, 1-10 on the west, and the Tortolita Mountains to the north. The subject property is located in the east end of the market area within the Town of Oro Valley and within the Rancho Vistoso Master Planned Community. Access Access to the subject's market area is good from all parts of Tucson. The major north/south arterial providing access to the area is Oracle Road, a fully improved, six lane, median divided highway with curbs, street lighting and drainage facilities. Oracle Road, also known as U.S. Route 77, is the busiest of the north/south arterials in the area,and extends from approximately two miles north of downtown Tucson, north to Apache Junction, east of Phoenix. Other north/south access is via La Canada, La Cholla Boulevard, Shannon Road, and Thornydale Road and Camino De Oeste. The major east/west arterials are Ina Road and Tangerine Road. Ina Road is an important commercial corridor, extending from the Tucson Mountains to the west, to the Catalina Foothills on the east. This six lane, fully improved street also has an interchange with Interstate 10. Tangerine Road also interchanges with I-10 and connects to Oracle Road. Tangerine has been recently improved and widened at its eastern end. Interstate-10 extends from the southeast to the northwest, and provides access from I-19 and the Mexican border, east to Albuquerque, El Paso, and beyond. Secondary east/west access is provided by Orange Grove Road, and Magee Road/Cortaro Farms Road, all of which have interchanges with Interstate 10, and extend east to Oracle Road. Commercial Development Land uses along the major arterials are primarily commercial in nature. Land uses along the secondary arterials are primarily residential with commercial uses at some intersections. Nearby shopping centers include Rooney Ranch, at the northwest and southwest corners of the ga intersection of North First Avenue and Oracle Road, anchored by Fry's, Home Depot, Albertson's, Osco Drug, Petsmart, and Ross. Further commercial development is proposed just north of this center. Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 17 15358-L04.wpd Safeway Vistoso Plaza shopping center is located at the northeast corner of First Avenue and Tangerine Road. Walgreens is located at the southeast corner of that intersection. A Bashas and Walgreens anchored shopping center is located at the northwest corner of Rancho Vistoso Boulevard and Oracle Road. Another Fry's shopping center is located at the northeast corner of Lambert and La Canada , Canada Hills Marketplace. A Walgreens is located at the northwest corner, and an Osco at the southeast corner. A striz retail center, Canada Crossing, is located at the southwest corner. According to the Second Quarter Metropolitan Tucson Land Use Study (MTLUS) 2004 report, shopping center vacancies in the Oro Valley/Catalina District (Economic District 2) are 2.0%, compared with the 9.8% vacancy rate for Greater Tucson. Street-side commercial category includes all small retail, service, and office buildings, but excludes shopping centers of 25,000 square feet or more, and industrial and office complexes of 5,000 square feet or more. This category was 10.6% vacant in the subject's sub-district. This compares with 9.9% for greater Tucson. Clearly, commercial properties are doing well in the neighborhood. Residential Characteristics Residential development in the subject's market area consists primarily of single-family residences with some patio homes, townhomes and apartment complexes located major streets. Single-family residences range in age from 50 years old to new, with a value range from approximately$200,000 to over $1,000,000. New development is primarily in the form of single-family residences. According to the MTLUS, Second Quarter 2004 report, residential vacancy rates in the Oro Valley/Catalina District of Tucson ranged from a low of 0.73% in the single family category, to a high of 10.83% for apartments. A total of 483 residential units were permitted in the Oro Valley/Catalina District during the Second Quarter 2004. This included 461 single-family permits, 20 townhouse permits, and two multi-family apartment units. Single-family building permits averaged $180,637 in value in the Oro Valley/Catalina ' " District compared with the Tucson Urbanized average of$165,219. This area continues to be strong in new residential construction. a Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 18 15358-L04.wpd Office Development The subject is located in the Northwest office sub-market (District 1) per MTLUS. Office development in the Northwest District is concentrated along Oracle and Ina Roads, although there are medical offices associated with Northwest Hospital at La Cholla and Orange Grove Roads. According to the most recent MTLUS publication, the sub-market includes a total inventory of about 1,349,810 square feet of leaseable space. Office vacancies in the Northwest District were 14.3% as of the First Quarter 2004, the most recent study available. This is a decrease over the 19.9% rate one year ago. Office vacancies for all of Greater Tucson were 14.1%, so the subject market area is in-line with overall Tucson. Medical Services The nearest hospitals currently servicing the subject's market area include Northwest Medical Center, located near the intersection of Orange Grove Road and La Cholla Boulevard; and the Tucson Heart Hospital near the southeast corner of River Road and Stone Avenue, across from the Northmall Centre. Triad,the owner of Northwest Hospital, is constructing a 96-bed,265,000 square foot medical center and adjacent 80,000 square foot medical office building, on the north side of Tangerine Road, east of the Canada Del Oro Wash,just west of Oracle Road, in order to serve an estimated 100,000 residents in this rapidly growing area. The center is expected to open in 2005 and will have an 18-bay emergency room, four operating rooms, and will eventually have 180 beds. Northwest Hospital's Rancho Vistoso Outpatient Center, located northwest of Oracle Road and Rancho Vistoso Boulevard, opened in November 2000 and will care for an estimated 56,000 patients this year. 111 Northwest Medical Center recently completed a$60 million expansion because of growing demand in the neighborhood. Construction included a 30-bed Women's Center, and more than doubled the previous number of labor and delivery beds. Also included were three operating rooms and three out- patient surgery suites, plus the number of emergency room bays was doubled. These expansions add "B 177,000 square feet to the existing hospital and another 150,000 square feet of medical office space. The hospital recently embarked on a second expansion at a cost of $31 million that includes a four-story inpatient tower, bringing its total bed capacity to 253. • Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 19 15358-L04.wpd General The subject's market area is served by either the Town of Oro Valley(east end), the Town of Marana (west end), or Pima County (middle). Fire protection and trash collection are available by private contract. Public education is provided by the Amphitheater and Marana School Districts. The Town of Oro Valley governmental center is located southeast of the intersection of Naranja and La Canada. Cactus Ferruginous Pygmy Owl A significant portion of the neighborhood, excluding the subject property, is located within the critical habitat for the cactus Ferruginous pygmy owl, an endangered species, as designated by the United States Fish and Wildlife Service, and published in the Federal Register on July 12, 1999. Sib Property in the critical habitat of the cactus ferruginous pygmy owl is subject to regulation by U.S. Fish and Wildlife Service, the Environmental Protection Agency and the U.S. Army Corps of Engineers. Because the property can only be developed in adherence to federal guidelines, it may not be possible to develop some land within the critical habitat in accordance with zoning and land use plans. High density residential development and commercial development will be much more difficult under current regulations. Generally, land in the critical habitat can be developed to a maximum of 20% to 30% of the area, greatly reducing the potential density. Alternatively, other land within the habitat may be purchased for mitigation. This has had the effect of driving up prices of land outside the critical habitat. 11 The subject property is not located within the critical habitat, but is within Survey Zone Two for the cactus ferruginous pygmy owl. Given several recent court cases and continuing debate on this issue, property owners must consult with local government officials on a case by case basis. Conclusion In summary, the subject's market area is in a growth stage of development. Major routes, such as Oracle Road, Thornydale Road, Tangerine Road and Ina Road make the area easily accessible. Proximity to shopping, schools, churches, recreational facilities, medical facilities, and other services is good and provides assurance of continued economic strength and stability. Both the commercial and residential markets are strong in this area. The designation of large tracts of land to the north as critical habitat will serve to reduce the density of development in those areas, lowering values in the habitat, and driving up prices of land outside the habitat. Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 20 15358-L04.wpd MARKET AREA MAP ;orbs()P.,`^ e.,,,,,,,z-, .'"". :4;.. .... , ..- "- 0 "' .: 300LD C`7 , W •� fi� .,,� m 477,:,i ffi' O•+t-�b t ,Os.,• ....• :. ./ 0,,r —rt. , 30P:Z9 >~ M1s Sf18M�f1109�j •l t. i , s (..)-••••..!..;\ ,- 'it'd � it,l•.. - 3Q(}6£ 1 �1v11A'�(� •\ CJ Q W f.,ct Q l.�ON '` T..: 1 '+�'�.r:fir., .:... 4,� _ a NN O Qd � :1▪�▪ �' � � ��.r :r rti� 'T i3SZ119.� �'� svtk, 6 oe •.' ••%-•;t47;‘,4-4,.• c r1 ,.� . �,, r=� 1 3001f.= w113111,13 , V: %. '‘. . 2 & EP ,,,i,-;;Iiits 77.'.•••_...'"',1-......-.• . N, , iv : •'1 .. ,,7'...., 30061 g y� iII i 4...-.1. :LitO! LI-1 .. ..,,.,..,.... 4 4y-:... u_ — , „. , 0 1Sl 51 -'w''''' i I '\< 18; :1'."iy ;.- . 2MOO EON ¢ u ,:, • t� _ _ I (f,.. - 1),$,(4, � W _ i M , .9 4, - f —or Don 'a t, l,„- . -6,...$ _ V _4_. adNV� u. =V1 4 .„„„ias Im 9 Imo ',6 51''''. , 6 g •Ft: oct., c. . i gi.;ii 3 ,..... :L °"-5,,,v)< 3 m001 i e. ,,,t• . ___,Go_., 5-vri-—arm -6—. c..QV ri ril n ,. • r,: - INTI0H300.111risiM cr c, ,:, , drrea 7,1211 g -,.: .F.5 •\.-_, 4 i.' i , .-Yr. . , I . INommis Oyu _� t- Ott. 1. n x.'1'11 f w•. (^71•Y/VNIHI . I WS ►- I ' '( Lr, � O J d .. i� Sil i " M00911 ' 11S30 + IV ' , < \ 3o i01MMIV3 31S3b 3ONMIV� y" ; i' ,,: ; '. .3A Qi , . - , 2 a -. ,- k ,/, I ;„,, .-.' ',, ' •44 ;, : l M00Z9 r., • 2,.:&10.,' ''/' ..-'- '.,%. M Ai . ., ,. '.:n �, �, Mr‘A+}s Sir. ,x: :4 T. :' ‘.::.:',.-7._,. '' ' --- / ',leggit,: ... :_ ,k ,'* rtk 4 S J .7,-,s„,..- ' wTr rl J.Y..• .. . • ;- ,t. y !3'i,'} ,ani, .'r:G I i ty*1 O — ''�.' �.•----....;r..��r i wTsL ��♦ , I.MeV 'Y•. //11`� • '4�..- ~LA.. ,/..'ILII l 1 C4 Di .i( , =11 y I /// ,fr_.: :- ., • ,.o , Zit,„,.. ...,i„,,,.. , oii 0 :.,,,:', ..-k,s,:„-.-4,.t.-,- a ori v y k s M000lu iz �ei , _''''-'4.-::. c -,.: •-•! Z �' 01! 3111 f _ _ 2 ,62�°p z cov# I .z ....... : $2'^ GPa �/' $ a � °`i o IMOO91 i ,:b r: :_- a. z A / r = _ = ' ig" M009Z1 S /1 sums as , S8308 VS- - ,°a P J, ff I si , ` ' NI i ! 7v eura t _i' I, , .vj + - VNOZ/Hy ARIZ/A ' fr - // - . >/ i` i�,ttMOOZHI o • M00051 cat' %'( a-NG /5 r g Ste...0 se ,4 s r �' 1 4c M001151 _� o8 _ 0 88L 08 . oallil t G 4. a >J Q fi M00991 / p �/ Ie ; 4e74,1' e j (,fie o .s© - cm AVMNV mI / iY t, , CTI �i y// co ib IM00>bLl ir - .-,cC, as ri o filli Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 21 15358-L04.wpd SITE DATA - AS IS Location The subject site is known as Rancho Vistoso Neighborhood 3, Parcel B, located on the south side of Rancho Vistoso Boulevard, west of Oracle Road. Size and Shape The subject site is irregular in shape and contains about 1,033,678 square feet, or 23.73 gross acres, according to the plat provided. The site has been platted into 72 individual single-family residential lots, as recorded in Book 57 at Page 100. There are Common Areas for open space and drainage along the east and west boundaries. Common Area C, about 37,332 square feet, is for Recreation and is in the center of the subdivision. Access to Site Access to the site is good via a curb cut on Rancho Vistoso Boulevard. Rancho Vistoso Boulevard is a four-lane, median divided arterial providing access through the Rancho Vistoso community. It starts at Oracle Road and ends at Tangerine Road after looping northwest and south through the community. It carries an average daily traffic volume of 4,200 vehicles per day(2003 count)in the vicinity of the subject. Topography The subject site has been graded and is in the process of development. It slopes downward gently from north to south. The site is elevated over the surrounding parcels to the east, west and south. Therefore, there are good views of the Catalina Mountains to the east, city views to the south and some views of the Tortolita Mountains to the northwest. I Layout of Individual Lots The subject property consists of 72 platted lots which range in size from 5,750 square feet to 12,194 square feet, averaging 6,242 square feet. The majority of the lots back up to open space or are larger than "standard" size. Therefore, lot premiums can be charge for about 70% of the lots. Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 22 15358-L04.wpd LOT TYPE MINIMUM LOT TOTAL # OF LIKELY DIMENSIONS NUMBERS LOTS PREMIUM/ OR SIZE % OF TOTAL LOT Standard - Interior 50' x 115' 23-25, 27, 28, 22 $0 5,750 s.f. 55,56,58-72 30% Standard - Exterior 50' x 115' 1-18, 31 - 42, 41 $10,000 (Adjacent to open space) 5,750 s.f. 44-54 57% 60' x115' �"' 6,177 s.f. Large Lots Interior 7,195 -12,194 s.f. 20-22, 26, 29, 7 $10,000 to 30, 57 10% $20,000 Large Lots - Exterior 7,236 to 7,925 19,43 2 $20,000 (Adjacent to open space) s.f. 3% The Standard Interior Lots are the smaller lots located in the center of the subdivision. These lots back up to another home, do not back up to open space and/or back up to Rancho Vistoso Boulevard. The Standard Exterior Lots are the smaller lots that back up to open space. The subject has many of these types of lots, backing up to the washes. The Large Interior Lots are larger than average size, but back up to another home or a road. The Large Exterior Lots are larger than average size and back up to the open space. Most of the exterior lots along the east boundary (lots 31 through 50) have good views of the Catalina Mountains to the east. Most of the exterior lots along the west boundary have views of the city or Tortolita Mountains in the distance (lots 1 through 19). Clearly,the Standard Interior lots would command no premium. The remaining lots would command premiums with the largest lots adjacent to open space and perhaps lot 21 (at 12,194 s.f.) commanding the highest premium. Premiums are estimated based on competing subdivisions in the area. Access to Individual Lots The lots will be accessed from the 0.51 miles of new interior neighborhood streets. These streets will be asphalt paved with curbs. Easements and Restrictions There are no apparent easements or restrictions noted on the recorded deeds and plat reviewed. However, a Title Report was not provided. There are Conditions, Covenants and Restrictions recorded for Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 23 15358-L04.wpd z Rancho Vistoso which have not been specifically reviewed for this report. We assume that the current plat 11 and development of the site do not violate these CC&R's. Flood Status According to the National Flood Insurance Program's Flood Insurance Rate Map, Community Panel a Number 04019C 1035K, revised February 8, 1999,the subject site is located within Flood Zone X, an area eis of minimal flooding. According to our inspection and the plat map, there is a wash on either side of the subject site, that is along the west and east boundary. The eastern portion of the site is completely within a wash and is considered Common Area A for Open Space and B for Drainage There is an erosion hazard setback from the wash. The wash along the west boundary is largely outside the subject site, but is shown as Common • Area A for Open Space on the plat. Common Area C, about 37,332 square feet, is for Recreation. Soil and Subsoil Conditions/Environmental Considerations No inadequate soils conditions or hazardous contamination was noted on the subject property upon • a visual inspection of the site. Though we are not qualified to test for such materials, we have no reason to believe that inadequate environmental considerations exist. If indeed hazardous materials are found upon the subject property, the value ascribed in this report is subject to change. Utilities All utilities are currently available to the subject property line. The sewer has been extended onto the subject site and to the individual lots. Services are provided as follows. Electricity Trico Electric • Natural Gas Southwest Gas Company Water Tucson Water Sewer Pima County Telephone Qwest Easements and Restrictions There are Covenants, Conditions and Restrictions recorded in Docket Book 11238 at page 998 and in Docket 11445 at page 1506. In addition, a Homeowners Association has been established for the Continental Reserve Master Planned Community. • Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 24 15358-L04.wpd Surrounding Land Uses The surrounding land uses are a mixture of developed and vacant commercial and industrial land. The adjacent uses are as follows: East Vacant land (C-1,Commercial zoning), Giant gas station West Vacant land (CPI, Commerce Park Industrial), Southwest Parks Association Office South Ventana Medical Systems, Vacant land (CPI) North Vacant land (C-1) Northeast Bashas & Walgreen's anchored Shopping Center Conclusion The subject property in its "as is" condition consists of a block within a master planned community that is in the middle of development for single family residential development. It is surrounded by land planned for or developed with commercial and industrial uses. As of the date of valuation, the site had been graded and the sewer extended throughout the new interior roadways. Sanders K.Solot and Associates. Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 25 15358-L04.wpd PLAT MAP _, li o1 .� � W g a o =ff CD J .:i O e I 4 1 N�tlp Y t. f ~ . ^ is < �< W : ; g d! 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VIEW SOUTHEAST OF SUBJECT PROPERTY (photo taken 9/15/04) SANDERS K. SOLOT AND ASSOCIATES, INC. REAL ESTATE APPRAISERS AND CONSULTANTS f„ t 15358-L04 "7.4- ^wry ,y l f'~� 116 ' ? VIEW SOUTH OF WASH RUNNING ALONG WEST BOUNDARY . (photo taken 9/15/04) SSS 'v •.tea. .j R# } a ,,, .P,'? tic M Jk y.. .,,... 4e o v '-.....- rt Y• „}_. II, ..ham,i4 t '•:ra q 001 '1--' :,,V.7'..4.,'',,, , ' i - , . ':,..-,,ik*'' :,,;''''' .' , • ' p ilia ' * ' - ' ft? $104'.' _„ dri 4 VIEW SOUTH OF WASH RUNNING ALONG EAST BOUNDARY (photo taken 9/15/04) SANDERS K. SOLOT AND ASSOCIATES, INC. REAL ESTATE APPRAISERS AND CONSULTANTS 29 15358-L04 111 IMP . ....:. .... /11° t .a< VIEW EAST OF SUBJECT PROPERTY (photo taken 9/15/04) • • a ' > Yv) VIEW EAST OF RANCHO VISTOSO BOULEVARD (photo taken 9/15/04) SANDERS K. SOLOT AND ASSOCIATES, INC. REAL ESTATE APPRAISERS AND CONSULTANTS 30 15358-L04 • i4st VIEW WEST OF RANCHO VISTOSO BOULEVARD (photo taken 9/15/04) SANDERS K. SOLOT AND ASSOCIATES, INC. REAL ESTATE APPRAISERS AND CONSULTANTS 31 10/21/2004 09:07 5207501549 SOLOT & ASSOCIATES PAGE 04 15358-L04.wpd ZONING The subject property is zoned C-1, Community Commercial, according to the Rancho Vistoso Planned Area Development. This zone allows for neighborhood and community shopping including retail and service establishments. A full range of commercial uses are permitted including: schools, hospital, medial office, child care, hospitality, retail, auto repair, restaurant with liquor, drug store, and other similar enterprises of the same class. Development standards include: Maximum building height of 34 feet, or three stories; front yard setback of 20 feet, rear yard setback of 25 feet, 10 feet between buildings; 10% open space retention. We have considered the potential for rezoning the property to a more intensive use. The property is within the CP, Commerce Park, designation under the Town of Oro Valley General Plan. CP allows for commercial, office and/or light manufacturing in a planned business park-type environment. This is consistent with the C-1 zoning. The subject is also subject to the Oracle Road Scenic Corridor Overlay, Section 10-401-B. Under the old version of the ORSCO, less intense uses were permitted to be developed than the actual zoning in place. This happened with the "downzoning" by Monterey from C-1 to MDR. Under the current ORSCO, this has been deleted. According to the Oro Valley Planning and Zoning Department, an owner of the property might be able to abandon the existing plat and revert to the C-1 zoning. The subject was developed under the MDR,Medium Density Residential,zoning at a density of 3.03 RAC. The MDR zone, under the Rancho Vistoso PAD, allows a density range of 3.1 to 6.0 RAC with minimum lot size of 5,000 square feet. Other development standards include: Maximum building height of 30 feet or two stories; Front yard setback of 20 feet, rear yard of 10 feet and side yard 5 feet or 0 feet for common wall on zero lot line development. The existing plat conforms to the MDR zone. Given the original designation under the PAD and the Oro Valley General Plan, the site could have been developed with a commercial or light industrial use. Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 32 PI ...r.., ............1 III-A,.I i A.rim ' t11 i���� PAD>t.DESIONAT10N 4.♦�`4'44 64 . r.•74 �'s.,.,.;x.,,.Pi+_- ,,.;- g . ♦, *4.104#, (ij EI Conquistador tn.. � ��7 � 0 ( �,� / +1,Area Aa ;��� •���r • 130k• R �r,wit ::1;"`.+:..+. 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I 1 11 t0Firc—r fAM I 1,3,0--- i iii } _ witul alar Notes: '�'�� O ■xn.��f i s 1-Resioential Orly;Conform to Rancho Vistoso South Area Ptan(Onry in TZ-TR Zone) t: 1-„, 01. '..1,1 its.041.0....7.. 1 ii-Tkeivsis,201.1. 1 C ,,,,“.3 0,,,tEY.4, J G Planning Area Parcels OQ�. 9. '- ,..._,__ , . ,�_ v` Oro Valley Town Limits ._` Planned Area -- > Rancho Vistoso Neighborhoods I ',...:-.-.,-:_.,.,_ 0 Available School Sites e-' Develo , ma � TC 15358-L04.wpd PROPERTY TAXES The subject property is vacant for residential use and is assessed at 10% of full cash value. The subject is identified by tax code numbers 219-20-831 through -9050. The site was formerly tax parcel numbers 223-02-019A and 219-20-052J,prior to replatting in 2004. Therefore the 2004 and earlier taxes and full cash values are based on the original tax parcels and are assessed as part of larger investment holdings. The 2005 full cash value reflects the current platted condition of the subject. Real estate taxes and full cash values for the subject property are tabulated below. YEAR FULL CASH TOTAL TAX YEARLY CHANGE IN VALUE TAX BILL 2005 $2,015,988 N/A N/A 2004 $1,000 $927.18 N/A 2003 $1,000 $25.88 N/A Taxes for the subject property are current. There are no delinquent taxes. Once the individual lots are developed with infrastructure, they will be revalued at a considerably higher rate. However, since we anticipate the lots will be likely sold out by that point, the developer will not likely pay taxes based on that higher rate. Therefore, the actual 2004 taxes are used in this analysis. 41, IMP Sanders K. Solot and Associates. Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 34 I 15358-L04.wpd MARKET OVERVIEW - SINGLE FAMILY RESIDENTIAL To adequately assess the single-family residential market in the Tucson Metropolitan area and the subject's market area, many factors have been considered: demographics, the local economy, availability of mortgage financing, competition, and supply and demand must be considered. Real estate activities are tied directly to population growth, employment growth, and disposal income. These factors combine to create demand. Consideration must also be given to supply factors. These pertain to existing and proposed housing inventories which will compete with the subject property. By analyzing the absorption rate of competitive subdivisions,and taking into account changes in supply and demand,absorption for the subject up ,,,, property can be approximate. Demographics According to the City of Tucson Planning Department, the total resident population of Pima County IP is estimated at 933,695, with 97.5% of this population within the Tucson Urbanized Area. The annual growth rate has averaged about 2.9% for the past ten years. The majority of this growth is due to immigration from other states. 11 Economy and Employment Growth According to the Arizona Department of Economic Security, unemployment in the Tucson Metropolitan area was 3.7% as of June 2004. Pima County's unemployment rate is below the average rate of Arizona. Retail sales have grown at approximately 5.6% per year over the past ten years., with growth P of about 6-7% occurring each year for the past two years. Personal income has increased on average, . 6.4% per year. • i Mortgage Financing p. Mortgage interest rates have climbed steadily from October of 1998 when the rates dipped to 6.5%. r However, The Fed dropped rates eleven times in 2001. Thirty year fixed rate mortgages are currently in the 6.4% to 6.8% range. v. Supply and Demand ... The subject property is located in the Oro Valley-Catalina sector(Sector 2), of the Tucson Urbanized `' Area defined by MTLUS. This includes an area east of I-10, West of the Coronado National Forest, south of the Pinal County line and north of Overton and the Canada del Oro Wash. This area is also considered P Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 35 15358-L04.wpd Tucson's "Far Northwest side" According to the Metropolitan Tucson Land Use Study (MTLUS), there were 899 new single-family permits issued in the subject's economic district through the Second Quarter of 2004. This represents 20% of all new home permits in Pima County. This compares to713 units during the same time period last year, and 1,546 in full year 2003. In 2003, this district captured about 19% of Mir all new home permits in Pima County. Within the Town of Oro Valley, 230 permits were issued through the Second Quarter 2004, accounting for 5% of all new permits in the Tucson Metropolitan Area. The average permit value within the subject's District 2 was $180,637 in the Second Quarter 2004, compared with $165,219 countywide. The average square footage of the permitted homes was 2,516 square feet, versus 2,710 square feet for greater Tucson. Single-family vacancies in the subject's district were 0.73% compared with 1.02% citywide. Overall, the subject's area statistics indicate that this area has a strong market share of new homebuilding that is generally higher than average in price and lower than average in size and vacancy. The subject is located in Rancho Vistoso, a master planned community northwest of Oracle and Tangerine Roads. This 7,000 acre community has experienced strong growth and development over the past ten years. The following table summarizes absorption figures for competing subdivisions in the subject's immediate market area. We chose subdivisions with comparable locations and a similar base price and lot size range. The subject will clearly face considerable competition. • • COMPETITIVE SUBDIVISIONS - ABSORPTION Project Avg Lot SF Lot Premium Status #Lots #Sold #Months Sales/Mo Vista Marbella 5,750 $25-$60Active 55 49 14 3.50 Model SF Base Price Base$/SF Monterey open 08/03 1,687 $198,900 $117.90 1,856 $201,900 $108.78 1,964 $203,900 $103.82 2,167 $216,900 $100.09 2,503 $233,900 $93.45 A"- V 2,607 $237,900 $91.25 2,655 $246,900 $92.99 2,729 $235,900 $86.44 2,271 $222,025 $99.34 Averages ar Sanders K.Solot and Associates, Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 36 15358-L04.wpd I Project Avg Lot SF Lot Prem to Status #Lots #Sold #Months Sales/Mo 111 Verde Ranch 9,058 $15-$65Active 158 105 6 17.50 Model SF Base Price Base$/SF Monterey open 04/04 1,547 $238,900 $154.43 1,857 $246,900 $132.96 111 2,135 $272,900 $127.82 2,541 $281,900 $110.94 2,587 $298,900 $115.54 II 2,490 $325,900 $130.88 2,780 $339,900 $122.27 3,492 $375,900 $107.65 4,581 $415,900 $90.79 2,668 $310,789 $121.47 Averages Project Avg g Lot SF Lot Prem to Status #Lots # Sold #Months Sales/Mo Stone Terrace 8,500 $85,000 Active 88 35 23 1.52 Model SF Base Price Base$/SF US Home as of 6/04 open 07/02 2,038 $294,500 $144.50 2,362 $314,400 $133.11 2,512 $312,900 $124.56 2,602 $314,900 $121.02 2,908 $329,900 $113.45 3,121 $349,900 $112.11 4,106 $363,400 $88.50 • 2,807 $325,700 $119.61 Averages Project Avg Lot SF Lot Prem to Status #Lots #Sold #Months Sales/Mo Vista Serena 5,500 $35,000 Sold out 35 35 11 3.18 3/31/04 Model SF Base Price Base$/SF Monterey open 04/03 1,687 $187,900 $111.38 1,856 $192,900 $103.93 1,964 $197,900 $100.76 2,167 $205,900 $95.02 2,503 $222,900 $89.05 2,598 $226,900 $87.34 2,649 $224,900 $84.90 2329 $235,900 $86.44 2,269 $211,900 $94.85 Averages 0 Sanders K. Solot and Associates, Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 37 15358-L04.wpd Project Avg Lot SF Lot Prem to Status #Lots #Sold #Months Sales/Mo Black Horse Ranch 7,440 $10,500 active 280 103 14 7.36 Model SF Base Price Base$/SF KB Homes open 08/03 1364 $158,990 $116.56 1850 $179,990 $97.29 2,045 $190,990 $93.39 2,082 $190,990 $91.73 2,245 $196,490 $87.52 2,483 $203,990 $82.15 2,760 $213,990 $77.53 2,886 $217,490 $75.36 3,233 $236,990 $73.30 3,589 $246,990 $68.82 2,454 $203,690 $86.37 Averages Project Avg Lot SF Lot Prem to Status #Lots # Sold #Months Sales/Mo Black Horse Ranch 8,000 $30,000 active 77 65 11 5.91 Model SF Base Price Base$/SF US Home open 11/03 1,752 $200,400 $114.38 2,156 $215,400 $99.91 2,198 $222,400 $101.18 2,347 $230,400 $98.17 2,713 $239,400 $88.24 2,233 $221,600 $100.38 Averages The subject is proposed for development with similar models as at Vista Marbella. Monterey projects an average sale price of$278,500,including upgrades and premiums. The average lot size is 6,242 square feet. Considering a typical upgrade ratio of 15%, the average base price will be about $236,725. Stone Terrace has the lowest absorption rate, but also has the highest average base price. The infrastructure of this subdivision is not yet complete. These are custom homes and are not considered highly competitive with the subject. They are included to show an upper level. With the exception of Verde Ranch. The remaining subdivisions have experienced sales of 3.1 to 7.36 per month. Verde Ranch has a very high absorption rate. This is likely due to its relatively recent opening. The absorption rate will likely lower over the overall sell-out period. It does give support to the upper end of the range. We note that Bella Vista,which will be discussed as Land Sale One, had a sell-out of 36 lots within about four months indicating absorption of about 9 per month. Residential Resale Market Another factor to consider in discussion of supply and demand is the residential resale market. The following data is published by the Tucson Association of Realtors' Multiple Listing Service (MLS). Sanders K. Solot and Associates, Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 38 15358-L04.wpd EXISTING HOME SALES-TUCSON METROPOLITAN AREA YEAR TUCSON AVERAGE %CHANGE #HOMES PRICE 1995 8,121 $118,861 N/A 1996 8,386 $127,526 7.30% 1997 8,472 $132,096 3.60% 1998 10,020 $137,323 4.00% 1999 14,650 $147,180 7.20% 2000 13,382 $155,907 5.90% 2001 8,675 $167,779 7.60% 2002 9,624 $182,783 8.90% 2003 10,708 $195,994 7.20% 2004* 9,012 $227,549 16.10% *Thru 09-25-04 As the table demonstrates,property values in Greater Tucson have increased steadily over the past ten years. The subject is within the Northwest Market which has consistently had an average sale price right around that of overall Tucson. Multi-Family Housing Market One further area to consider in the study of supply and demand is the multi-family housing market. High vacancy rates in apartments leads to lower rents, more concessions and greater competition with the new home market. According to data provided by MTLUS for the Second Quarter 2004, apartments in the Oro Valley-Catalina sector have average vacancy rates of 10.83%,almost the same as the 10.99%rate one year ago. This compares with the current rate of 9.92%for Greater Tucson. No units were permitted or are under construction in the subject district. A total of 621 units have been permitted throughout Tucson,with 430 total units under construction. Only 67 units were completed throughout Tucson in this quarter. The multi-family market is suffering from the low interest rates that are fueling a very strong single family market. Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 39 15358-L04.wpd Conclusion me In conclusion,there is strong demand for single-family residences in the Tucson Metropolitan area. ,w,. The continued positive net migration to Pima County, increased employment and personal income, low overall vacancy rates and availability of favorable mortgage financing, make the outlook for this project favorable. New homebuilding continues to remain strong in the Northwest. In addition,the proposed project conforms to market demand in its neighborhood. Based on the absorption rate at other subdivisions in the area,we estimate a rate for the subject of seven units per month.This will result in the sell-out of all 72 lots within 10 months after construction is complete. HIGHEST AND BEST USE Or Highest and best use is a concept which is derived from market forces including scarcity, demand and purchasing power. These forces are studied with a focus on their effect on the subject property in order to draw a conclusion as to the use that will produce the highest net return to the property. Highest and best use may be defined as follows: "The reasonably probable and legal use of vacant land or an improved property, which is physically possible,appropriately supported,financially feasible,and results in the highest value." There are four criteria which must be met in : a highest and best use analysis. 1 Legally permissible: What uses are permitted by zoning and deed restrictions? 2 Physically possible: What uses are physically possible? 3.Financially feasible: What possible and permissible uses will produce a positive return? 4. Maximally productive:Among the feasible uses,which use produces the highest present 6 value? Highest and Best Use of Land,As If Vacant This analysis provides a basis for the selection of comparable vacant sites to determine land value. In addition, it helps identify the type of improvement that would put the site to its highest use,and provides the basis for determining whether the existing improvements actually contribute to the site,as though vacant. p Legally Permissible Uses The first step in the highest and best use analysis is consideration of legally permissible uses. Private or deed restrictions,zoning ordinances,building codes and environmental regulations can disallow many potential uses. p Sanders K.Solot and Associates, Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 40 15358-L04.wpd The subject is platted under the MDR,Medium Density Residential,in conformance with the Rancho Vistoso Planned Area Development. This plan allows primarily single-family residential development at a minimum 5,000 square foot lot size. The underlying zone is C-1,under the Rancho Vistoso PAD. The Oro Valley General Plan would support a commercial or light industrial use. The legally permissible use include single-family residential, commercial and light industrial. Physically Possible Uses The second criterion in a highest and best use analysis is that the use must be physically possible. To be physically possible,the size,configuration and topography must conform with the demands of that use. In addition, capacity and availability of public utilities is a criterion of physically possible uses. The subject contains 72 platted lots. As is,there are adequate utilities available to the site to allow subdivision development. The topography and drainage of the site also lend themselves to residential development.Commercial and light industrial uses could be physically constructed on the site,as well,with some modification of the grading that has occurred. The legally permissible uses are also physically possible. Financially Feasible The third criterion in determining the highest and best use of the subject property is the financial feasibility of the various alternative uses. These uses are analyzed further to determine which are likely to produce a return equal to or greater than the amount required to satisfy operating expenses, financial obligations and capital amortization. In order to be financially feasible,a use must produce a positive return. The single-family residential market overview which preceded this section showed that demand continues to be strong for this use. As discussed in the Regional Data,a shift in new home construction has occurred away from the Northwest side to the Southeast, Southeast and West areas of Tucson,however the Oro Valley-Catalina area continues to draw the third largest number of permits. Low interest rates continue to drive the residential market. As will be shown in the valuation sections of this report, the.cost of developing the site with a residential subdivision is feasible. Therefore, a single-family residential use is considered feasible. We have also considered a commercial or light industrial use of the site. Industrial vacancies throughout Tucson,and the subject neighborhood,are currently high. The First Quarter 2004 MTLUS report states a 21% vacancy rate for all leaseable space in Tucson and a 21.2% vacancy for the subject's North District. The closest concentration of industrial parcels to the subject is on Oracle Road at First Avenue. MTLUS reports about 9,400 square feet of vacant space there. There are a total of six industrial complexes Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 41 U- 15358-L04.wpd noted in the MTLUS study totaling 174,715 square feet. Of this, 78,000 square feet, or 45%, is owner occupied. Only 1.2% of the leaseable space is vacant. This would suggest a high demand for industrial space in this area. However,given the overall high vacancy rate for Tucson,the feasibility of a speculative industrial building is questionable. 1111 There is limited retail commercial facilities in the vicinity of the subject. There is a Bashas and Walgreens anchored shopping center just northeast of the subject,at Rancho Vistoso Boulevard and Oracle Road. This center is 100%occupied. A strip center at 1171 E. Vistoso Boulevard, Mountain View Plaza, is 94%occupied. The Safeway Center at Vistoso Boulevard and Tangerine Road is 96% occupied. All of these centers are at signalized intersections. While the subject parcel is large enough to support a shopping center, since it doesn't have a signalized corner location most such developers would not consider it. Additional small commercial uses have been permitted in the area. A Wells Fargo Bank was built on Tangerine,just west of Vistoso Boulevard. A Family Dollar Store and Dental Office are being built on Oracle Road in the town of Catalina, further north. This shows demand for the heavier traveled arterials of Oracle and Tangerine Roads for commercial development at this time. Office vacancies in the subject neighborhood are running about 14.3%,close to the Tucson average of 14.1%,according to the First Quarter 2004 MTLUS. Most of the eight office complexes near the subject are well occupied and all or partially owner occupied. The Rancho Vistoso Professional Offices have 6,000 square feet of vacant space in the 15,606 square foot building. About 71,000 square feet of new medical • office space was permitted in December 2003 at 1521 E.Tangerine. We are uncertain as to whether or not this was the hospital or ancillary medical office space. There appears to be moderate demand for office space in this area. Maximally Productive Of the financially feasible uses,that use which produces the highest value,based on the required rate of return, is the highest and best use of the property. There is strong demand in the area for residential development and moderate demand for industrial, retail or office use. The recent purchase andurrent development of the site for single family residential development give a strong indicator of highest and best use. If another type of user was willing to pay a higher price for the site, they would have done so. There is still an adequate amount of commercially zoned land surrounding the subject and in the general area to support future commercial and industrial uses,when demand becomes higher.Given the above analysis, we have concluded that the highest and best use of the subject site, as though vacant, is for the construction of a single-family residential subdivision at a density of about 3 RAC. Sanders K.Solot and Associates, Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 42 15358-L04.wpd VALUATION PROCESS The valuation of real estate is typically based upon use of the Cost, Sales Comparison,and Income Approaches to value. The greatest reliance is given to the method which is most appropriate for the property type being appraised and for which the most objective and reliable data is available. The Cost Approach is based upon the premise that the value of a property can be estimated by the cost to construct a reproduction or replacement for the improvements, minus the amount of depreciation evident in the structure from all causes,plus the value of the land and entrepreneurial profit. The value of land is based upon comparison to sales of similar sites. The improvement value is based on replacement cost less depreciation from all causes. The Cost Approach is most reliable when the property being appraised is proposed or newly constructed and puts the site to its highest and best use because the subjectivity of the depreciation estimation is minimized. The Cost Approach was used in this report. The land value was developed through the Sales Comparison Approach with the cost of the improvements made as of the date of valuation added to that value. The Sales Comparison Approach is reliable when there are recent sales of properties that are highly similar to the subject and sufficient data about leases, terms of sale, and financing are available. We have been able to verify the purchases of comparable properties within two years of the date of valuation. The price per acre and per lot indicators of these sales provided a good indication of market value for the land as if vacant. The Income Approach, or Subdivision Analysis, is appropriate for properties which are typically bought and sold based on their ability to generate income. The most likely purchaser of the subject property is a homebuilder. The homebuilder would consider the price at which he could sell the lots with a home on them and all the costs involved with developing and marketing the property. A Discounted Cash Flow Analysis reflects the thinking of a typical buyer. This approach has been used for both the "as is" and "as if complete" values. In the Reconciliation,the appraiser evaluates and weighs each of the applied approaches as to their applicability, accuracy, and the quantity and quality of data, arriving at a final estimate of value. �-- Sanders K.Solot and Associates. Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 43 15358-L04.wpd LAND VALUATION-AS IF VACANT(SALES COMPARISON APPROACH) The principle of substitution states that when a property can be replaced,its value tends to be set by the cost of acquisition of an equally desirable substitute property that can be acquired without undue or costly delay. Land valuation reflects this principle, since there is greatest demand for the lowest priced site. There are a variety of techniques that can be used to value vacant land,including sales comparison, allocation,extraction,subdivision development,land residual,and ground rent capitalization. Of these,the most common technique,and most reliable when comparable sales are available,is sales comparison. With this method,sales of similar parcels of land are analyzed. Adjustments are made for differences to the sales prices for dissimilar characteristics between the comparable sale and the land being appraised. From this analysis a conclusion is formed as to the likely market value of the subject land. The sales comparison technique has been chosen to value the subject land, as is. Following are the comparable sales used to value the subject parcel, and an adjustment grid. This adjustment grid is not intended to imply a scientific level of accuracy;however,the grid reflects our thought processes so that market adjustments are understandable. Sanders K. Solot and Associates, Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 44 15358-L04.wpd LAND SALE ONE SUBDIVISION NAME Bella Vista at Rancho Vistoso LOCATION North side of Desert Fairways Drive, east of La Canada Drive, northwest of Moore Road and Rancho Vistoso Boulevard TAX CODE NUMBER 224-25-002S LEGAL DESCRIPTION Parcel W,Neighborhood 10,Rancho Vistoso; Section 26, T11S, R13E RECORDING INFORMATION By Special Warranty Deed recorded January 22,2003, in Docket Book 11971 at page 756. SELLER Vistoso Partners, LLC BUYER Lancelot Rancho LLC SALES PRICE $1,530,000 TERMS Cash SITE SIZE 385,506 square feet or 8.85 acres CASH EQUIVALENT PRICE PER ACRE $172,881 CASH EQUIVALENT PRICE PER LOT $27,818 based on 55 lots $42,500 based on 36 lots ZONING PAD, Oro Valley(High Density Residential) SITE CHARACTERISTICS Rolling, irregularly shaped parcel on golf course with all off-sites. Golf course along the north and east side. Platted and engineered for 55 single family lots(6.2 RAC). The buyer developed the property with only 36 lots at an average lot size of 7,063 sq. ft. INTENDED USE To develop 36 single family lots. MARKETING TIME N/A COMMENTS Seller kept 25%of premiums on golf course lots. Sold out in 4 months.No models built. As of 10/04,average closed home price is $268,060. CONFIRMATION With Lisa Hoskins, Monterey Homes, by JT, on 6/11/03 and with SKS in 10/04.. Sanders k.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 45 15358-L04 .4 ,; r i . rF • • , , , . , it , ix moi:. ' 4 LAND SALE ONE -Bella Vista (photo taken 10/12/04) ( --„,"mir0 W, .o z 0 0 tio. $1V,' Hifi . 0 ............. . s." �9 Seco F' • . ,a V %-`".7\r".0 0°°, 40. . lib ----0 \ .,,_ 11$S, —i3 ow val <„, 4 4 low..., as • .. 0.1 No go* #(w,.-- ife' ,wo o .. ..L 4 I FMfil ,,,,..-- FSE. ,� --.—�______ ._..--,„ Avr 11111wiN - all o W,WTLI W LIL $$1 p.411 .-E.F....ii&L Ira wi a 0 6,.......... 4•1111, Wilik isMal-1 il _....rs INS SANDERS K. SOLOT AND ASSOCIATES, INC. REAL ESTATE APPRAISERS AND CONSULTANTS 111 15358-L04.wpd LAND SALE TWO LOCATION North side of Tangerine, east of Rancho Vistoso Boulevard TAX CODE NUMBER 223-02-023A LEGAL DESCRIPTION Portion E2 Section 31, Ti1 S, R14E p RECORDING INFORMATION By Special Warranty Deed recorded February 7, 2003 in Docket Book 11983 at page 1062. SELLER Banner Health System BUYER Northwest Hospital SALES PRICE $4,712,976 TERMS Cash SITE SIZE 1,524,425 square feet or 34.996 acres I CASH EQUIVALENT PRICE PER ACRE $134,672 op CASH EQUIVALENT PRICE PER SQ. FT. $3.09 ZONING PAD, Oro Valley(Hospital per plan) SITE CHARACTERISTICS Irregularly shaped future corner lot with rolling topography and all offsites. Approximately one-quarter mile of frontage on Tangerine Road. INTENDED USE To construct a 185-bed hospital with adjoining physician offices. MARKETING TIME N/A TRAFFIC COUNT Tangerine Road: 5,900 VPD (2001) COMMENTS Part of an assemblage totaling 62.49 acres. Additional 27.49 acres adjacent north purchased for $3,781,007, or $137.541 per acre. CONFIRMATION With Mike Carlier, broker, by JT on 5/14/03. Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 46 15358-L04 4 II , ' . t 1 0- '. ..-: - iftliWI ",wag , !trim , ' i ,,,.. , .. _ .._ .+ "y' 'oma s. .„ ....,, ,,,,.. a *to- '.y ,..,::.,:,-,,,,,-,,-,,:,:. ...,.:,-„::,.., -, — - .. .�..1• 1~ if•-Yy ,),,,,:.,,..4..,!V 0*****Sif..116:' ' -' LAND SALE TWO -Northwest Hospital (photo taken 10/12/04) (--- .,, i ............., t D G� a 'A O --o 23 r 4 c,,„. / g I c E ALLEN a PL :1, ‘ OP. E TANGERINE RD rANn 1i Wp O z .�P3� ERNE Ro w w OU VC 18' :1,zite,4,,, __ - ---' ' 1 N ' 2 I n --- SANDERS IC SOLOT AND ASSOCIATES, INC. f, REAL ESTATE APPRAISERS AND CONSULTANTS • 15358-L04.wpd LAND SALE THREE PROJECT NAME Spendido at Rancho Vistoso LOCATION East side of Rancho Vistoso Boulevard, north of Moore Road TAX CODE NUMBER 219-21-627B LEGAL DESCRIPTION Part of Section 25, T11S,R13E RECORDING INFORMATION By Special Warranty Deed recorded June 23, 2003 in Docket Book 12077 at page 8723 SELLER Rancho Vistoso Partners LLC BUYER Tucson Mather Plaza, LLC SALES PRICE $6,586,054, total; $5,415,161, net of option TERMS Cash SITE SIZE Approximately 27.5 acres CASH EQUIVALENT PRICE PER ACRE $196,915 net CASH EQUIVALENT PRICE PER SQ. FT. $4.52 net ZONING PAD, Rancho Vistoso, Oro Valley; high density residential - 8-21 RAC SITE CHARACTERISTICS Nearly rectangular parcel with gently rolling topography. A wash bisects the property. All utilities are available. INTENDED USE To develop a senior adult independent living project. MARKETING TIME N/A TRAFFIC COUNT Rancho Vistoso Boulevard: 4,800 VPD (2000) Sanders K.Solot and Associates, Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 47 15358-L04.wpd LAND SALE THREE (continued) COMMENTS Sale is Phase I of a two Phase project. Phase II to be purchased in June 2005. The seller has agreed to a density transfer from other properties within the project to the subject property to increase the density to 18 or more units, and to commence construction of a golf course by May 2007. The seller has also agreed to a limitation on competing facilities within the project. An additional $1,170,893, the "additional Phase I purchase price" was paid by the buyer at close of escrow and credited against the Phase II price. This is not considered part of the sale price of Phase I,as it reflects the price of the option on an additional 13 acres. The net sale price reflects the option price being deducted. CONFIRMATION With copy of sales agreement,by JT on 6/06/03 and public records 10/04. Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 48 15358-L04 , , ' . ._. z iii , iv,..._ i 1 .,, *Pflir i 40iat T" A ,. . , , k '' --,A1 7 c I LAND SALE THREE - Splendido at Rancho Vistoso (photo taken 10/12/04) I / ..,‘,..,,I __•• ..I ) 'IP ›*‘-'4 -`04 .1-3_ .‘-• gIvi .,-- ,,A ww) s r.o-♦ �i�0`'ii •� -s _____________ �,, % I -,4 `4.,..„ • �K --.40 .4;, 44\.. ,* %,, ri is - ,a nummutu* -se* ,r,:::-ki P ' M ,.: •gin70...%‘0 ;1 Ii i, N Fr ,, A 00A t% M;d . :I. ,ice \� ,,, gillo 0°Vi'\tor ar .. ki. at,-E, :li„s's'ioei • .#0 e4--,n at. e -t; :-...0/ '',/,,, •-,?„, .4, p, nom-• SANDERS K. SOLOT AND ASSOCIATES, INC. REAL ESTATE APPRAISERS AND CONSULTANTS 15358-L04.wpd LAND SALE FOUR-A SUBDIVISION NAME Verde Ranch, Phase I LOCATION Southwest of Tangerine and La Canada Drive TAX CODE NUMBER Portion of 224-07-001 &-002 LEGAL DESCRIPTION Portion of Government Lot 1, SE4 NE4, Section 3, T12S, R13E RECORDING INFORMATION By Special Warranty Deed recorded July 1, 2003, in Docket Book 12083, at Page 1932 SELLER Tucson Land&Realty Advisors LLC BUYER Inca Capital Fund 23 LLC SALES PRICE $3,853,659 TERMS Cash to seller. New institutional financing,construction loan. SITE SIZE 43.5 acres NUMBER OF LOTS 94 CASH EQUIVALENT PRICE PER ACRE $88,570 CASH EQUIVALENT PRICE PER LOT $40,996 ZONING PAD-R-7, Oro valley SITE CHARACTERISTICS Platted and engineered lots with all utilities to the site. The lots will be 60-70 feet wide averaging 9,058 square feet. There is 34% open space over the entire project. Lot costs are budgeted at$20,791 per lot INTENDED USE Land bank for Monterey Homes MARKETING TIME N/A SALES HISTORY Seller purchased as part of 74.25 acre larger parcel on July 1, 2003 for$5,500,000, or$74,074 per acre. TRAFFIC COUNT Tangerine 10,700 VPD(2003) La Canada 8,900 VPD(2003) CONFIRMATION Lisa Hoskin, Monterey Homes, 10/04 Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 49 15358-L04 I, 4;" ,..,:,.:::,,,-0-, .-. ••r-#• - . . ..� ..:;: 1111, ''♦" 1111. y .-, 1111^ !t;1111 ^- 1111. .-1111. :,1111 r. ., y : _ 1111 _ � -, 1111 i , R. , V 1111 • 1111.-. 1111 , .' ;' 1111..,-,. � .- s � a�".� ,1111 u . r 1111. . Y . • � Fh 1111 1111,1111 -, r 1111 y .,�� -1111 11:11 fi 1111 t k � 1111 1111_�.. 1111 11:111111 .v x� - r. - T �,, 1111 - < 'A -v , Yl�v"`3.t{7'sAP'°'..w,w-?b T„•,�,-.,Ym,� -.,1111.., 1111 -C 11 11 .. 11 11 1111 : 1111 1111 '� t 1111 1111 1111 . — 1111 1111 .... 1111 11:11 ::1111 1111. ., y... Y .. 1111 _ . ♦ � H.�:,' �-' �z:" .,- 1111 :. 1111. 1111 1111 1111 , SALE FOUR-Verde Ranch (photo taken 10/12/04) } 9 I I I \1l Ir _ W-T-ANGER-IN-E-R D _-_ W TANGERINE RD Y W TANGERINE RD rS CC CC 2411i IOWA '� MI 111/. 0115I 6 1, Lee t 0UAf'T3-R-O" PL--, tip 11110iRtz'Air. 0 i 111/0 4 VI A 1 P '". 0 p1111140 El MINI 1. P � - e oAlba. 1111 '; ! ,, IJ ....., Lar w4 (, al im IN es , • f. Po TWOHP 111 Stair Vim iff /* ` ,Ams ' I i F- .m�} , K QR 1 ► ar 4c al 0 vi .. - -L NI i •I i\,\_j_j_____ Ifin •• sem-* 11�►�1�!!11 lift i 4 w �! ■- I TT1 I„ ;/«• r ♦� ., ,..�a fit ��'`,, -L:=�,' Ag NI I 1.' 'PL II; Vi'` AW II 1111 Alp - au €.”!Iii itt ... MP ,, /J4/4 wit,,, V a&' — lad at si ,- ....,ge#14:41-At* •**40 Idie . •R 6 B P 11 I al MI a IN MO 1 2.lal [c., i__—11112 Mir": IRI E WY y, r li 7 l�L� I I I l l r OM 1;1111 Is • L01/R RD __ A -GL '• ReiAer 'D W GL©�EH ' .s.0O5'A,MIME e A r 11 'Atiralgill A IIPPFAIIIIIN Er 4111-111 LI' 1, ma All.. Amp" ..I,y Ott..wammosecer rim 6 MI--.- 0 MI_ Cfliq:ICED- '7 1 4 ... .... ....,, ,, 0,- .. _ H ir-rn = =.,,,,, SANDERS K. SOLOT AND ASSOCIATES, INC. REAL ESTATE APPRAISERS AND CONSULTANTS 15358-L04.wpd LAND SALE FOUR-B SUBDIVISION NAME Verde Ranch,Phase II LOCATION Southwest of Tangerine and La Canada Drive TAX CODE NUMBER Portion of 224-07-001 & -002 LEGAL DESCRIPTION Portion of Government Lot 1, SE4 NE4, Section 3, T12S, R13E RECORDING INFORMATION By Special Warranty Deed recorded July 1, 2003, in Docket Book 12083, at Page 1932 SELLER Tucson Land&Realty Advisors LLC BUYER Monterey Homes Construction, Inc. SALES PRICE $2,721,341 TERMS $2,121,341 cash down (78%), seller carried balance of $600,000. Considered cash equivalent. SITE SIZE 30.74 NUMBER OF LOTS 64 CASH EQUIVALENT PRICE PER ACRE $88,528 CASH EQUIVALENT PRICE PER LOT $42,500 ZONING PAD-R-7, Oro valley SITE CHARACTERISTICS Platted and engineered lots with all utilities to the site. The lots will be 60-70 feet wide averaging 9,058 square feet. There is 34% open space over the entire project. Lot costs are budgeted at$20,791 per lot. INTENDED USE Land bank for Monterey Homes MARKETING TIME N/A SALES HISTORY Seller purchased as part of 74.25 acre larger parcel on July 1, 2003 for$5,500,000, or$74,074 per acre. TRAFFIC COUNT Tangerine 10,700 VPD (2003) La Canada 8,900 VPD(2003) CONFIRlMATION Lisa Hoskin, Monterey Homes, 10/04 Sanders K. Solot and Associates, Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 50 15358-L04.wpd LAND SALE FIVE SUBDIVISION NAME Stone Village LOCATION North side of Vistoso Highlands Drive,west of Rancho Vistoso Boulevard, Oro Valley TAX CODE NUMBER 219-19-1870 LEGAL DESCRIPTION Central portion of the N2 S2,lying north of and adjacent to Vistoso Highlands Drive, Section 23, Ti1 S, R13E, Pima County RECORDING INFORMATION By Warranty Deed recorded September 19, 2003, in Docket Book 12139, at Page 7399 SELLER Vistoso Partners BUYER Ventana del Cerro LLC SALES PRICE $1,956,000 ib TERMS Cash to seller, new loan from financial institution. p SITE SIZE 9.10 acres NUMBER OF LOTS 32 p gib CASH EQUIVALENT PRICE PER ACRE $214,945 CASH EQUIVALENT PRICE PER LOT $61,125 ZONING PAD & MDR, Oro Valley SITE CHARACTERISTICS Level,irregular parcel,with good mountain views to the north. Access is available along Vistoso Highlands,via Rancho Vistoso Boulevard. Utilities available to site. amp Located in unshaded Zone X, FEMA Map 04019C 1040K, revised 2/8/99. INTENDED USE Single family residential development ■' MARKETING TIME N/A, buyer approached seller. SALES HISTORY No sales in prior three years. p Sanders K.Solot and Associates, Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 51 15358-L04.wpd LAND SALE FIVE (continued) COMMENTS The site is under construction for development of a 32- lot single family residential development to be known as Stone Village at Rancho Vistoso. The typical lot size is 7,500 SF.Homes will range in size from 2,500-3,500 SF and in base price from the low $300,000's to low $600,000's. Lot premiums will range from $11,000 to $150,000. The higher lot premiums will be those lots along the golf course. According to the on-site sales agent, approximately 15 lots have been sold prior to construction of the model homes. According to the buyer, a premium was paid for the location adjacent to the golf course within a master planned community. Further, the site sold with a preliminary plat. The cost of lot development was estimated at $30,000 by the buyer. He expects the lot values/cost to equal 25% of base home prices. CONFIRMATION Mr. Josh Ellester, Pathway Builders, Buyer, 9/04 Sanders K. Solot and Associates, Inc. REAL EST.NIT APPRAISERS AND CONSULTANTS 52 15358-L04 � .tet �" .}t�,' i�c ��.aS e loop. ,,-4,.4,-, hit „.• ',.--,--, . . ellt '' w "~, t F IAIR :� t cr, 4-n.a. gid.` y. 's�, } gg �} * ., '..''..4 ,.'''t.''.-- -''''' 1-1151*- ***"t '''''''1.-' ?.'"...',- ,. ,, 'it......*:''''.`, ',:, ,„, '1' ' Ow en am LAND SALE FIVE - Stone Village (photo taken 10/12/04) Ilirs\A'' \ 4,e v Fes, Yi SpR ili‘ 411/7 ,..# :\ lit 4 or iiiiif..7_pRoprt 5.9.\ I All 111 it p Mr Ak Re, i ,it -ki, i,„ . I/ 0s°.0 0 UN. .q'5 CGIIICIIIIN gar - 0A '14k411111 111111111W Wif' eilil'f,: . ' SANDERS K. SOLOT AND ASSOCIATES, INC. REAL ESTATE APPRAISERS AND CONSULTANTS 15358-L04.wpd LAND SALE SIX- SUBJECT LOCATION Southwest side of Rancho Vistoso Boulevard, west of Oracle Road, Oro Valley TAX CODE NUMBER 219-20-8310 thru-9050 LEGAL DESCRIPTION Lots 1 through 72 and common areas A through C, Rancho Vistoso Neighborhood 3, Parcel B, Book 57, Page 100, Section 29,T11S, R14E, Pima County RECORDING INFORMATION By Deed recorded June 3,2004,in Docket Book 12315, at Page 3279 SELLER Lawyers Title Trust 7811(Overland Vistoso LP,Benef) BUYER Lancelot Overland(Randal Kirsch, President) SALES PRICE $2,626,951 TERMS Cash to seller,new loan from financial institution. SITE SIZE 23.730 acres NUMBER OF LOTS 72 CASH EQUIVALENT PRICE PER ACRE $110,702 CASH EQUIVALENT PER LOT $36,485 ZONING PAD-MDR, Oro Valley SITE CHARACTERISTICS Irregular parcel generally slopes downward from north to south and is situated on higher ground than its surrounds, with good mountain views of the Catalina Mountains to the east. Utilities to site. Access is good from Rancho Vistoso Boulevard, a four lane asphalt paved roadway with concrete curbs,sidewalks and street lighting.Washes on each site of the site.Site was platted and engineered at the sale with an average lot size of 6,242 square feet.. INTENDED USE Land bank for Monterey Homes MARKETING TIME Unknown SALES HISTORY No sales in the three years prior. TRAFFIC COUNT 4,200 VPD (2003) Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 53 +ter 15358-L04.wpd LAND SALE SIX- SUBJECT (Continued) COMMENTS The site was purchased to land bank for Monterey Homes for future residential development. At the time of purchase, the site had final plat approval. Although the sale closed in June 2004, the sale price was set in November 2002. The buyer plans to spend$27,000 per lot in construction costs. The projected average sale price of a home/lot package is $278,500. CONFIRMATION Lisa Hoskin, Monterey Homes, 10/04 Sanders K.Solot and Associates, Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 54 15358-L04 0. ft rap S�7 ..,... ,., .. A1 ..,. .., .... ,,,, ..,,,..4',','.:‘-',.,:. , _ .. ..... 11- - -- .....,_,•.. ..,..._._. - LAND SALE SIX- SUBJECT (photo taken 10/12/04) 0 W J z Ill!" $kCHO0i , Atii' •, 4 IN 1.-,,,,, 1 tp. / ic / ! .. - c, 1011 SI i LI., 1 pi 6• \*1111111z 1 °,,MERGE p I p tell% W L f 1 1 i O SANDERS K. SOLOT AND ASSOCIATES, INC. REAL ESTATE APPRAISERS AND CONSULTANTS 15358-L04.wpd LAND SALE SEVEN SUBDIVISION NAME Black Horse Ranch LOCATION South of Golder Ranch Road, west side Twin Lakes Drive, east of Oracle Road TAX CODE NUMBER 222-42-052 thru-062, -087 thru-131, -142 thru-148, - (originally 222-42-0050) LEGAL DESCRIPTION Lots 41-51, 76-120, 131-137, & 305 Black Horse RECORDING INFORMATION By Special Warranty Deed recorded July 30, 2004, in Docket Book 12355, at Page 7199. SELLER Lawyers Title Trust 8020(Black Horse Advisors LLC) BUYER First American Trust 4958 (KB Homes Tucson) SALES PRICE $1,600,000 TERMS Cash SITE SIZE 11.2 acres NUMBER OF LOTS 64 CASH EQUIVALENT PRICE PER ACRE $142,858 CASH EQUIVALENT PRICE PER LOT $25,000 ZONING CR-5, Pima County(5.7 RAC) SITE CHARACTERISTICS 64 platted and engineered lots in the existing Black Horse Ranch Subdivision. Average lot size is 7,440 square feet. Generally level to rolling topography. INTENDED USE SFR development MARKETING TIME N/A SALES HISTORY There have been no sales in prior three years. Sanders K.Solot and Associates, Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 55 15358-L04.wpd LAND SALE SEVEN (continued) COMMENTS This is the second phase of a total 280 lots. The deal was negotiated in May 2003 and includes a 10% increase for each phase. There are 150 lots left to purchase in two more phases. Each phase consists of a block of platted lots. The cost of improving the lots is estimated at$19,000 per lot. Models range in base price from$164,990 to$246,990, averaging$203,690. The buyer indicated a slow start in home sales due to the location, but that sales are now very strong with 130 sold since opening in August 2003. Lot premiums range from $4,000 to $10,500. The average upgrade price is 15% of base price. CONFIRMATION Art Flagg, Senior Vice President, KB Homes, and Mariah, on-site sales agent 10/04 by AB Sanders K. Solot and Associates, Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 56 15358-L04 -- a M SAM LAND SALE SEVEN -Black Horse Ranch (photo taken 10/12/04) (, ♦ 01111111111111 LF--_-/,-------/ ______°8,--1— / III i: \ I\ E GOLDER RANCH DR E GOLDEN RANCH DR Z�0 f � RR E C `9ra� r t1��. E' ►`I:A -41,II* VI,1 gi ' NEI".. .....ii, --_-=_- iitt 4.11 ..ret/4 wizoizr .--'14,%RN 4:.I' 0 Woos, HU 2 n F -44/AN., •-�� •' 'M �i , _'WO ` Ai , R RD . • LARK PL ge&V-e--'a aft.i i rq- IT,3-,7.7j,pinup ,..„ w.1-40-D\y-7:'I I___Liz 4 4,_ 4 sa .,P,rt .. Li I. o 4. Pte'• -PL AIN .•igif_ ------ -- ,loss ir, it; w4 4_,_____ PlAti - 1 -1110167 Tt' cii" pg II ' ' ill. E .--.11��alp EBR.',.,.0- EPL ' f p" -0 r• E-WILDS-R=D IN Wr.I R•D- Ely E .D -&NI , . . 1111 . i / 1 1 I � SANDERS IC SOLOT AND ASSOCIATES, INC. REAL ESTATE APPRAISERS AND CONSULTANTS 15358-L04.wpd LAND SALES TABULATION SALE DATE SELLER/BUYER SALES #ACRES! #LOTS/ ZONING! LOCATION PRICE $/ACRE $/LOT DENSITY 1 01/03 Vistoso Partners LLC/ $1,530,000 8.85 / 55 / PAD- Lancelot Rancho LLC $27,818 HDR Northwest of Moore Road and $172,881 6.2RAC Rancho Vistoso Boulevard 36/ Bella Vista©Rancho Vistoso $42,500 2 02/03 Banner Health/Northwest Hospital $4,712,976 34.996/ N/A PAD North side of Tangerine, east of Rancho Vistoso Boulevard $134,672 3 06/03 Vistoso Partners LLC/ $5,415,161 27.5 / N/A PAD- Tucson Mather Plaza LLC HDR East side of Rancho Vistoso $196,915 18 RAC Boulevard, North of Moore Road 4A 07/03 Tucson Land Realty Advisors/ $3,853,659 43.51 / 94/ PAD- Inca Capital Fund 23 LLC MDR Southwest of Tangerine Road and $88,570 $40,996 3.5RAC La Canada Drive Verde Ranch 4B 07/03 Tucson Land Realty Advisors/ $2,721,341 30.74/ 64/ PAD- Monterey Homes Construction R-7 Southwest of Tangerine and La $88,528 $42,520 2.1 RAC Canada Drive Verde Ranch 5 9/03 Vistoso Partners LLC/ $1,956,000 9.10/ 32/ PAD- Ventana del Cerro LLC MDR North side Vistoso Highland $214,945 S61,125 3.5 RAC Drive, West of Rancho Vistoso Boulevard Stone Village 6 6/04 Overland Vistoso LP/ $2,626,951 23.73/ 72/ PAD- Subject Lancelot Overland MDR South side of Rancho Vistoso $110,702 $36,485 3.03 RAC Boulevard,west of Oracle Road 7 7/04 Black Horse Advisors LLC/ $1,600,000 11.2/ 64/ CR-5 KB Homes Tucson 5.7RAC South of Golder Ranch Road, east $142,858 $25,000 of Oracle Road Black Horse Ranch Sanders K.Solot and Associates. Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 57 15358-L04.wpd LAND SALES MAP ,..., .f pX ..,,i,„,,,,.;.,,,, Q iz" w.wMotl : Otl trr/ttrMOtl .. - - ..._.. y, �•._.. hr�-��rti:rE•�� }` -� s>• { ,� BOUNDARY r4 � O 3 ''fia'-.+Vt T .y`r ' .` Mi' s.µ3.'4"Sif�''� JM1rr' 'a.►,,,-4 '1"`,•', 14c. :I is , ,. (_ - .,I O r+r-! r ".V:'4'�-. r` 1g.,4�j 4. 4 ' ' #`+: i1'''; , • :L ,C • ,,,:,,;,....,-.;,,4■ r .i'"i S_z Y `r.R i .tri (6 '�j ►.A.J0 r0 cowl wu►� r :Zig , . ,, ri "'. ), •;,1,4,,„ ,�Aa 1�. � � t•'. t - YF .,,,„e,..,'",;:"..,,:,,,,- •� c:...'t'w•y z i < ` 'i I -1 4 �'• K+1 Al, f{i 1 1'f lM1l.�y,��i• . '1 " .... �+ ; '{ � `� _� Q •'•;`Y�f!~ !3••,t'e• �t����-ti i� rF�tir'',���«• 'ki�` j: y'i�+.�•�ftirie4i'TT _ •� I t1, o moo• .- t �' 4 .,� ,- V{ . � . ' _ it, 9 0 •.•; , t 1J 1l,. ,r i e t{�f " ! K1;-T.+s.` A:' 1�y!�.'1..' f vf F-' . - ;..'� , r h,t. .p_ V'.::;:;"'— '- '.itR,y:;;�ipy'y T',;: :.4*It#p:> �. ,.':i'�'. 0'v 11••h,K_'9`.�I 4'14 P' '�. O:M.�.. s w�-'�.�. 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O Kg a . i'f � fA EA EA EA EA CA N N N T_N N_ N_ N cD N N -• CT o A A A A A Cpp H�AA�p C�pp a 2 t� v0 vT N VCT IO UAi O O CA71 O CAT1 G7 *o C) a 41 }W N N fD K-° W d a1 Cp 0oy 000g8, oa0o3' oR oy o3 e m Cn syao e3po G m7,7) § .- u 1 r r a a 4, .A . En EA FA to H EA Q7 A OD CO N N N N N N U1 N N QOf V V (!f(T HAUOi b'fCOT fACOT EA toT N o O W OCD O OD O O O 00 15358-L04.wpd Land Sales Analysis- As Is The preceding land sales were selected for comparison with the subject, including a recent sale of the subject. After careful consideration, these sales were felt to be the most appropriate available. Adjustments were considered for differences between the subject and the comparable sales for property rights conveyed, financing terms, conditions of sale, changing market conditions, locational and physical characteristics. The unit of comparison used is the price per acre since residential land is usually bought on that basis. Following is an analysis of the comparable sales. The subject purchase will be analyzed in the conclusion. Property Rights Conveyed We have considered whether any of the comparable sales were sold subject to ground leases. This was not the case. All of the sales were sold based on the fee simple interest. Therefore, no adjustment was made for property rights conveyed. Financing Terms Consistent with the market value definition as set forth in the letter of transmittal, the subject property is appraised based on a cash sale, or on terms equivalent to cash. That means if a sale has favorable financing, such as extremely low downpayment or low interest rate, it must be adjusted for cash equivalency. All of the comparable sales were sold on a cash basis, thus, no adjustment was required. Conditions of Sale The conditions of sale adjustment takes into consideration any unusual motivation of the buyer or seller. Unusual motivations can include a sale to an adjacent property owner, or a sale between related business partners or family members. All of the sales are considered arm's length, market transactions. We do not believe there were any atypical motivations on behalf of the buyers or sellers and no adjustments are made. Market Conditions This adjustment considers any difference in market conditions between the date of valuation of the subject property, September 2004, and the date of the comparable sale. Ideally, the sale and resale of the subject, or a comparable, provides the best indicator of changes in value over time. Sale One occurred Sanders K.Solot and Associates, Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 60 15358-L04.wpd in January 2003, over a year and a half ago. Since that time the market for residential land has remained strong due to continued low mortgage interest rates and continued population growth. Demand for land in the Northwest Market Area has also remained strong. There is no question that land values have increased during this time period. The only question is By how much? Sale Seven represents a sale of a block of lots to KB Homes. The purchase is based on four phases of take down. The original price was negotiated in mid-2003 and includes a 10% increase in purchase price for each phase. This would indicate market acceptance of about a 10% increase per year. We have queried the CoStar Comps database of real estate sales in Pima County. The query asked 1111 for all residential land sales sold in 2003 through September 29, 2004. The following tabulation summarizes the statistical information received. CoStar Comps - Residential Land Sales Data 01-01-2004 thru 09-29-04 01-01-03 through 12-31-03 All Pima County Total Acres Sold 9,513.65 8,314.67 Total Sale Price $238,420,126 $280,955,395 Average Price Per Acre $25,061 $33,790 North Submarket Total Acres Sold 2,008.48 2,490.00 Total Sale Price $60,560,979 $111,142,353 Average Price Per Acre $30,153 $44,621 O The statistics indicate that residential land values are actually decreasing. This decrease could be due to a variety of factors, such as a greater number of finished lot sales in 2003, and is only shown to give an overall view of the market. But, it does support a low adjustment for market conditions. The general perception of market participants is that the price of residential land continues to rise, although at a less brisk rate. Concerns about interest rate hikes in the near future are causing home builders to consider carefully how much they pay for land. While land prices for good locations have as much as doubled over the past three to four years, increases over the past year and half are believed to have been more modest. Sanders K. Solot and Associates, Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 61 15358-L04.wpd Based on the data gathered, and our discussions with market participants, we have made adjustments of 10% to Sales One and Two, 5% for Sales Three, Four and Five and no adjustment to Sale Four. While Sale Four was originally negotiated in May 2003, the price included an adjustment for time. Therefore, no further adjustment is warranted. Location The subject is located in Rancho Vistoso,an established master planned community in Oro Valley. This is a high growth area that is now experiencing commercial growth to support the residential subdivisions that have been built out or are under construction. The subject is on Rancho Vistoso Boulevard, just west of Oracle Road. Sale One is located in Rancho Vistoso, west of Rancho Vistoso Boulevard, south of Vistoso Highlands Drive. The site is in a residential area adjacent to the Golf Club of Vistoso golf course. (A more specific adjustment for golf course will be made later.) No adjustment is made as it is within the Rancho Vistoso development. Sale Two is also within Rancho Vistoso, but is located on Tangerine Road, west of Oracle. Tangerine Road has a higher traffic volume than Rancho Vistoso Boulevard. Tangerine was in the process of being widened and improved when this sale occurred. It will likely see a considerable increase in traffic in the future. This site has superior visibility to drive by traffic and therefore, a downward adjustment is made. Sale Three is within Rancho Vistoso, on Rancho Vistoso Boulevard, north of Moor Road. Like the subject is has frontage on Rancho Vistoso Boulevard. No adjustment is made, Sales Four A and B are located at the intersection of Tangerine Road and La Canada Drive. While this is a signalized intersection, this site is outside Rancho Vistoso. We believe these two factors are offsetting and have made no adjustment for location. Sale Five is located in Rancho Vistoso, between the Golf Club at Vistoso and Stone Canyon Club, two golf courses. This property is located in a more "upscale" portion of Rancho Vistoso. Because of this, we have adjusted the price downward for superior location. Sale Seven is located northeast of the subject, in the unincorporated town of Catalina. This site is east of Oracle Road, south of Golder Ranch Road. This area is considered inferior to the subject as it does not have the name recognition of Rancho Vistoso and because it is "tucked away" off the major thoroughfare. A discussion with the buyer supports this conclusion in that sales were slow at first, due to its location. An upward adjustment of 20% is made. Sanders K. Solot and Associates, Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 62 15358-L04.wpd Physical Characteristics All of the comparables are considered similar to the subject in terms of physical characteristics. They are generally in the same size range. They all have all utilities available to them. As stated, the subject sewer lines have been installed through the site on the date of valuation. Since we are first estimating the value of the land as vacant, we have made adjustments for utilities based on having all utilities to the lot line. The site has been roughly graded and has no vegetation. It is in the middle of development. Again, this has not been considered in the as if vacant condition. The only adjustments felt necessary for physical characteristics were for size and golf course proximity. Size-Typically, the smaller that size of the parcel, the higher the price per acre. This is generally reflected in the sales. Sales Two and Three are similar in size to the subject and warrant no adjustment. Sales One, Five and Seven are considerably smaller than the subject. Only Sales One and Five are given downward adjustments for their smaller size. The price of Sale Seven is based on the total project, containing 280 lots(compared to the subject's 72 lot size.) The price per acre of Sale Seven also reflects only the size of the lots and not the common areas and roads that are also part of the sale. This skews the price per acre upward. When looking at the subject property, and considering that about 10.32 acres will actually be contained in lots (72 lots X 6,242 average lot size), this indicates a lot to total size ratio of 43%. Sale Seven has a higher density of development, almost double, that of the subject. If we divide the size of the lots in Sale Seven of 11.2 acres, by a ratio of 80% to reflect the lower amount of common area and road, this would indicate a gross acreage of the sale of 14 acres. Dividing the total sale price of $1,600,000 by 14 acres indicates an adjusted price of $114,286 per gross acre. This is 20% below the price per net acre. Since our calculations are rather subjective, a downward adjustment of only 10% has been made to reflect our thinking. Sales Four A and B are considered together when making the adjustment for size. While there are two separate buyers for these sales, both were land banking for Monterey Homes. The sale prices were based on an overall subdivision containing 74.25 acres and 153 lots. Unlike Sale Seven, which is also based on a larger subdivision, Sales Four A and B took down the entire larger parcel at one time. Therefore, a significant upward adjustment is made for size. Golf Course Proximity - Lots adjacent to golf courses sell for a higher price than those not on a golf course. The closed sale prices examined for the Bella Vista subdivision, Sale One, show a higher Sanders K. Solot and Associates, Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 63 15358-L04.wpd average price for those home adjacent to the golf courses. Sale Five, Stone Terrace, has lot premiums up to $85,000 for the golf course lots. Lot premiums for Pepper Viner's Eighth Green at Rancho Vistoso charges lot premiums around$100,000 for golf course lots. Therefore, downward adjustments have been made to Sales One,Three and Five to reflect their ability to charge higher premiums for proximity to a golf course. While Sale Three is not currently on a golf course, part of the purchase included an agreement by the seller to construct the golf course within a couple of years. Zoning The subject is developed based on the MDR zone at a density of 3.03 RAC. Typically, the higher the proposed density, the higher the price per acre. Only Sale Five is considered virtually the same in zoning and proposed density to the subject. Sales Four A and B are at a slightly lower density of 2.1 RAC. A small upward adjustment is made to these two sales. Sales One and Seven were purchased platted at almost double the density, 6.2 and 5.7 RAC respectively. While ultimately Sale One was re-platted for development at 4.2 RAC, the underlying zoning allowed the higher density. Downward adjustments of 10% are made to Sales One and Seven. Sale Two was not zoned for residential use and was planned for hospital use. This is considered a higher intensity of use than Medium Density Residential. While the subject could have been developed at a higher intensity than it is being developed, it could not likely have been developed at the intensity of a multi-story hospital. Therefore, a small downward adjustment is made. Sale Three was zoned for high density residential use with a proposed density of 18 RAC, about six times that of the subject. A significant 20% downward adjustment reflects the subject's lower density. Y Legal Considerations The subject has a final plat in place, as of the date of valuation. All of the sales proposed for residential subdivision were platted at the time of sale. Sales Two and Three were not. Therefore, we have added an adjustment for the cost of platting. The amount of the adjustment is based on the cost of platting. The cost of one subdivision in Continental Reserve was estimated at$70,366, or$3,737 per net acre, and $925 per lot. A subdivision in Rancho Sahuarita had an actual cost of$60,000, or $3,840 per acre, $674 per lot, for platting. We have therefore, used an adjustment of$3,700 per acre. Sanders K.Solot and Associates, Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 64 15358-L04.wpd Conclusion Before adjustments, the comparables range in sale price from$88,528 to$214,945 per acre. After adjustments, the range is narrowed to $116,193 to $169,269 per acre. Excluding the highest and lowest sales (Four and Five) the range is tightened even further to $128,572 to $148,433 per acre. We have also considered the recent purchase of the subject property. In June 2004, the subject was purchased as vacant, platted land for$110,702 per acre. This transaction is an arm's length, market transaction based on a cash price. The buyer was land banking the property for Monterey Homes to develop. The price was negotiated in November 2002, a year and a half prior to closing. As discussed above, Sales One and Two were adjusted upward 10% for changes in market conditions, or date of sale. Applying the same adjustment to the subject indicates a current value of $121,772 per acre. The comparable sales analyzed indicate a range above that adjusted price. We estimate the market value of the land to be $135,000 per acre. When multiplied by the subject's site size of 23.73 net acres, this equals $3,203,550, rounded to $3,200,000. This is equal to $44,444 per lot. The comparables have an unadjusted range in price of$25,000 to $61,125 per lot. The value is within this range and is considered reasonable. ESTIMATED MARKET VALUE OF THE LAND AS IF VACANT $3,200,000 Sanders K.Solot and Associates. Inc. REAL ESTATE:APPRAISERS AND CONSULTANTS 65 15358-L04.wpd DEVELOPMENT COST APPROACH - AS IS The Cost Approach is the first of the approaches to value that will be used to estimate the market value of the subject property. Like all the approaches, the Cost Approach is based on comparison. This reflects the principle of substitution which states that a prudent investor would not pay more for a property than the cost to construct a building with equivalent utility, without undue delay. Within the Cost Approach, then, an estimate is made of the cost to replace the property, as of the date of the appraisal, less depreciation, plus the site value. When this cost is measured against the cost of a similar building, market thinking is reflected. The Cost Approach, therefore, relates value to cost. The steps followed in the Cost Approach to value are: 1. Estimate the value of the site as though vacant and available to be developed to its highest and best use. This was done in the preceding Land Value section, and the conclusion of value was for the land, as though vacant. 2. Estimate the reproduction, or replacement cost, new of the site improvements as of the appraisal date. 3. Estimate the amount of accrued depreciation. 4. Deduct the estimated depreciation from the cost new of the improvements. 5. Add the value of the improvements to the site value to obtain an indication of the value of the subject by the Cost Approach. Development Cost Approach Analysis As of the date of valuation, the property has been partially improved. It has been grades, home pads and roads defined and sewer line installed throughout the subdivision. Monterey Homes indicated that as of the date of valuation, approximately$550,000, or$7,639 per lot, had been spent on construction costs. Marshall Valuation Service, a widely used cost estimation service, indicates an average of$14.90 per linear foot for grading a 40 foot wide street and $63.95 per linear foot for extension of sewer in a residential subdivision. The subject has a total of 0.51 miles of new roadway, or 2,693 linear feet. Multiplying the two costs above of$78.85 by the 2,693 linear feet is $212,345. This does not consider the cost of grading the entire site, defining the home lot pads and drainage work that has been done. We have obtained a recent cost estimate for a new subdivision on Tucson's west side. It will consist of 40 lots roughly similar in size to the subject's lots. The cost of onsite earthwork and public Sanders K. Solot and Associates, Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 66 15358-L04.wpd sewer is estimated at $8,286 per lot. The subject is larger and should have a lower cost. A 76 lot subdivision in Continental Reserve, with average lot sizes of 7,500 square feet, had grading and sewer costs of about$4,332 per lot in 2002. That site was already rough graded at purchase and the development took place two years ago. The cost of the subject should be higher. Our cost comparables support Monterey's estimate of costs spent to date. Conclusion: To the estimated cost of$550,000, we have added entrepreneurial profit estimated at 12% based on interviews with market participants. If the property were sold as is, the seller would want a profit on top of the amount spent to get it to the current condition. Including profit, the total cost as complete is estimated at $616,000. Since the improvements are new, and will not suffer from any form of obsolescence, no depreciation has been deducted. When the "as is" land value, reconciled at$3,200,000 is added to the cost, the indicated value, as complete, is$3,816,000, rounded to$3,800,000. This equates to $52,917 per lot. ESTIMATED AS IS MARKET VALUE OF THE SUBJECT PROPERTY THROUGH THE DEVELOPMENT COST APPROACH $3,800,000 Sanders K. Solot and Associates. Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 67 15358-L04.wpd SUBDIVISION ANALYSIS - AS IS (INCOME APPROACH) A subdivision analysis, or discounted cash flow analysis has been used to measure the economic potential and wholesale value of the subject's lots. This analytic method estimates the present worth of future cash flow expectancies by individually discounting each anticipated cash flow at an appropriate discount rate. In the subject analysis, the quarterly cash flows are reduced by projected operating expenses. The analysis includes assumptions as to growth of income and expenses. Each of the quarterly cash flows is individually discounted to present value using an appropriate yield rate. The discounted cash flows are then summed indicating the market value of the subject site, in its "as is" condition. Income - Retail Lot Values The income stream from the project is based on the gross revenues from the sale of the lots. There are two methods of estimating the value of the retail lots; sales comparison and allocation. Sales comparison is the preferred method when adequate data is available. However, we are not aware of any subdivisions in this price range that offer lots separately from the home. Therefore, the retail lot values cannot be derived from sales of individual lots, since these lots are only sold when developed with homes. Rolling options have been considered, but these represent conditions of sale that place the value between retail and wholesale. Due to the lack of data, we have used the allocation method of estimating retail lot values. Allocation is based on the principle of contribution, which asserts that there is a typical land to building ratio for specific types of real estate. The ratio is truest when the improvements are new, with little or no depreciation. As a new product, the ratio of land to home value will be most reliable. Typically, the value of an improved lot is approximately 20% to 28% of the value of the final home value. As land prices have increased, so has the ratio. This has been confirmed with several builders including Karol George of K.E. & G. Homes, David Mehl of Cottonwood Properties, Andy Kelly with Whetstone Homes, Art Flagg with KB Homes and David Greenberg with Gennessee Homes. We have compared a few rolling option sales to the average base home price. Sanders K. Solot and Associates,Inc. REAL LSTA IE APPRAISERS AND CONSULTANTS b8 15358-L04.wpd ROLLING OPTION SALES SALE DATE SUBDIVISION/BUILDER LOT SIZE PRICE/LOT AVG.BASE %OF HOME (S.F.) HOME PRICE PRICE 12/03 Bella Vista 7,063 $61,940 $268,060* 20% to 23% 02/04 Monterey Homes $53,860 08/04 Verde Ranch 9,058 $67,245 $310,789 22% Monterey Homes *Based on closed home sale prices. The percentage of value attributed to the land is clearly on the rise. The sale in 2004 was 20%. The two sales in 2004 have a range of 22% to 23%. While the cost of the land is also pushing home prices up, clearly the homebuilders are compensating somewhat by increasing the percent of value attributed to the land. We have estimated the lot value at 25% of the overall sale price. The projected average home price, including premiums and upgrades, is estimated by Monterey at $278,500 per home. This is considered reasonable based on competing subdivisions. Using a 25% ratio indicates a retail lot value of $69,625. We have reconciled at$70,000 per finished lot. This is at the upper end of the rolling option sales, which is reasonable. This figure accounts for the full range in value between the least desirable and most desirable lots. It considers the likelihood of premiums being paid for many of the lots. And it considers the rising cost of finished lots. Absorption We previously estimated a probable absorption rate of seven sales per month, or twenty-one sales per quarter. These revenues will not be received, however, until lot development and the homes sold are completed. We have considered that construction will continue in the first quarter, with home sales beginning in the second quarter. Based on this rate of absorption, the sellout period for the subject subdivision is estimated to be within one year. Development Expenses The development expense includes all project costs and lot development expenses. These include both on-site and off-site costs for street improvements, extension of all utilities to each lot, drainage improvements including retaining walls, storm drains, landscaping and irrigation, and lot preparation. We Sanders K.Solot and Associates, Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 69 15358-L04.wpd have also split out the real estate taxes as a separate line item. The cost of platting, engineering, grading and extension of the sewer have not been deducted as these items have already taken place. Total lot development costs have been estimated by Monterey Homes at about$27,000 per lot. Deducting the costs spent of$7,639 indicates$19,361 left to spend on construction. We have considered whether or not Monterey's overall cost estimate is consistent with the market. Marshall Valuation estimates the complete cost of a standard 40-foot wide street including all utilities to be$319 to $378 per linear foot of a typical 40 foot wide residential street. The subject property will have a total of 2,693 linear feet of new public roads, according to the tentative plat. Multiplied by $319 to $378 per linear foot, this total ranges from $859,067 to $1,017,954. This equals $11,931 to $14,138 per lot. Not included in these figures is the cost of grading the entire site, the cost of defining the home lot pads, drainage issues and the proposed playground (Common Area C). The cost for the subject would be considerably higher than the figures estimated through Marshall Valuation. We have therefore cross-checked these figures with other local developers. Art Flagg, with KB Homes, stated that a typical subdivision construction cost is between$18,000 to$20,000 per lot,excluding platting and engineering. He stated the costs for Black Horse Ranch are running about$19,000 per lot for average 7,440 square foot lots. Subdivisions developed in Continental Reserve in 2003 were running lot costs, excluding platting and engineering, in the range of$14,700 to $20,000 per lot. Josh Ellester, with Pathway Builders, a custom home builder, stated his construction cost for Stone Village is running about $30,000 to $35,000 per lot for average 7,500 square foot lots. His costs are higher than typical because they include a gate for the subdivision, architectural planning for the models and because he is a small custom builder. Projected costs for a 40-lot subdivision on Silverbell Road are running about$23,838 per lot. Another west-side subdivision is projecting lot costs of$23,483 for a 104 lot subdivision with 42 and 72 foot wide lots. The cost of developing Verde Ranch, a 158-lot subdivision by Monterey, was estimated at $20,800 per lot. That subdivision had larger lot sizes, better topography and not as many retaining • wall/drainage issues. Based on these market indications, the developer's estimate appears higher than typical. Clearly, • subdivision development costs can vary greatly. A buyer of the subject would be basing his decision on typical lot costs. Only one subdivision, for which costs are known, is spending more per lot than the subject and that project is for custom homes on a golf course. Therefore, we are estimating $23,000 per lot. Deducting the $7,639 already spent, indicates $15,361 left to spend on development. • Sanders K.Solot and Associates, Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 70 15358-L04.wpd Real Estate Taxes The proposed subject lots are not currently assessed individually. In the first year, taxes charged are based on the estimated 2004 full cash value for the vacant land. In the second year, the lots would be assessed separately. The full cash value for 2005, we believe, considers the platted, but unfinished lots. However, by the time the 2005 taxes are due, the subdivision should be almost sold out. Therefore, the current taxes of$13 per lot are included for the first three quarters. We have input $100 per lot for the remainder of the sell-out. Marketing Marketing costs are the expenses incurred to advertise and ultimately sell the lots. Typical marketing costs include advertising and promotional fees, the cost of marketing materials such as sale brochures, real estate commissions, and lot closing costs. These costs have been estimated at 7% of gross sales attributable to the land, which have been confirmed as reasonable with other developers. This cost is not adjusted for inflation because it is a function of the sales volume. Developer Profit Developer profit is the expectation of profits that motivates a developer to purchase or develop a project such as the subject. Developer profit is a market driven figure that reflects the amount an entrepreneur or developer expects to receive in return for the risk of developing a subdivision. Developer profit is often included as a line item deduction in the discounted cash flow analysis, and is estimated as a percentage of gross revenues. Interviews with developers, however, indicate that their own pro-forma discounted cash flow analyses do not deduct profit as a line item but consider it in the internal rate of return for the project. When developer profit is not deducted in the cash flow forecast, the discount rate, or internal rate of return used must reflect not only the expected return to the capital invested in the project, but also an adequate provision to compensate the developer for the entrepreneurial effort needed to create a successful project. Sanders K. Solot and Associates, Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 71 15358-L04.wpd Discount Rate The following table illustrates the expectations of various local developers. DEVELOPER/BUILDER COMPANY YIELD RATE Art Flagg KB Homes 25% Peter Aronoff A F Sterling Homes 25% - 30% David Garber 25% Lex Sears Sears Financial 18% - 35% Andy Kelly Whetstone Homes 16% - 25% Terry Klipp Terramarr Properties 20% - 30% Chris Sheafe The Sheafe Company 18% - 30% We have also considered the most recent survey for Korpacz Real Estate Investor Survey. The Second Quarter 2004 report indicates a range in discount rates, including developer profit for land development of 11.0% to 30.0%, with an average of 18.45%. This is virtually unchanged from the Fourth Quarter 2003. This range considers all types of land, including office and industrial. Considering only those developers who include residential property in their portfolio, the range narrows to 15.0% to 30%. The high end is for a California residential developer. The study states a strong residential market indicating that rates at the top of the range are for other property types. Since many local home builders are driven by national companies, examining the national trend is appropriate. As mentioned previously, if entrepreneurial profit is not deducted as a line item in the cash flow analysis, the discount rate used must reflect not only the expected return to the capital invested in the project, but also an adequate provision to compensate the developer for the entrepreneurial effort needed to create a successful project. It is our opinion that a rate at the lower end of the range is appropriate due to the small size of the project and the short sell-out time. We have estimated a discount rate of 20%, or 5.0% per quarter. This is consistent with the national survey, as well as local developers. Sanders K. Solot and Associates, Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 72 r 15358-L04.wpd VALUATION OF MONTEREY HOMES-AS IS DISCOUNTED CASH FLOW SPREADSHEET ASSUMPTIONS: Total Lots in Development: 72 Lots Average Retail Price Per Improved Lot: $70,000/lot Absorption Per Quarter 7/month 21.0 lots/quarter Commissions,Marketing and Closing Costs: 7.0% Real Estate Taxes Per Lot/Year-2004 tax year $13/lot Real Estate Taxes Per Lot/Year-2005 tax year $100/lot Discount Rate: 20%annual 5.00%`/quarter Increase in Lot Value per Year 1.05 INVENTORY OF LOTS: QUARTER QTR. 1 QTR.2 QTR.3 QTR.4 QTR.5 Total Lots: Lots Unsold at Beginning of Quarter 72 72 51 30 9 Less Annual Absorption Per Quarter O. (21.0) (21.0) (21.0) (9.0) 0 Lots Unsold at End of Quarter 72 51 30 9 0 QUARTER QTR.1 QTR.2 QTR.3 QTR.4 QTR.5 INCOME: Retail Price Per Lot $70,000 $70,000 $70,000 $70,000 $73,500 x Absorption Per Quarter/Lots 0 21 21 21 9 TOTAL INCOME PER QUARTER: $0 $1,470,000 $1,470,000 $1,470,000 $661,500 LESS OPERATING EXPENSES: Real Estate Taxes $232 $164 $97 $225 $0 Commissions,Marketing and Closings Costs $0 $102,900 $102,900 $102,900 $46,305 Subdivision Construction Costs $1,106,064 SO $0 SO a TOTAL OPERATING EXPENSES ($1,106,296) ($103,064) ($102,997) ($103,125) (S46,305) NET OPERATING INCOME ($1,106,296) $1,366,936 $1,367,003 $1,366,875 5615,195 EFFECTIVE INCOME: ($1,106,296) $1,366,936 $1,367,003 51,366,875 5615,195 X DISCOUNT FACTOR 0. 0.907029 0.863838 0.822702 0.783526 952381 SUBTOTALS ($1,053,615) $1,239,851 $1,180,869 S1,124,531 5482,021 ESTIMATED MARKET VALUE OF THE SUBJECT PROPERTY,AS IS: $2,973,658 ROUNDED TO: $2,975,000 Conclusion Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 73 15358-L04.wpd Conclusion The net cash flows from each quarter required to absorb the project are discounted back to present value at the selected yield rate. The sum of these cash flows, or the net present value, has been estimated at $2,973,658, rounded to $2,975,000. This equates to $41,319 per lot, or $125,369 per acre. ESTIMATED MARKET VALUE, "AS IS" THROUGH SUBDIVISION ANALYSIS . $2,975,000 Sanders K. Solot and Associates, Inc. REAL LSTA FE APPRAISERS AND CONSULTANTS 74 15358-L04.wpd RECONCILIATION Reconciliation of the indicated values from each approach to value is the final step in the valuation process. In the reconciliation we have reviewed the data that led to each indication of value. There are three criteria which are the basis for weighing the significance of each of the approaches: appropriateness, accuracy and quantity of evidence. These will be examined individually. Development Cost Approach This approach is appropriate as a seller would not sell the property for less than what he has sunk into the property. The development cost approach was used to value the site as is,partially developed with 72 single family residential lots. The development costs were provided by the developer, but were cross checked with Marshall Valuation,and cost estimates reported by other builders. The land value is based on seven sales of comparable properties,including the subject property. This value is also considered reliable. Therefore, this approach is given strong weight. Subdivision Analysis This approach is appropriate as it reflects the income and expenses anticipated by the developer. In this approach, the retail lot values were estimated based on the allocation method, due to the lack of comparable retail sales of lots. The ratio of lot value to overall value was supported by market participants and sales. The absorption rate was supported by those of other subdivisions in the subject's market area. Costs were based on market and actual. The discount rate is also supported by interviews with market participants and a national survey. While this approach is well supported,there are many assumptions that have to be made. Changing any of the assumptions slightly can have a big influence on the overall value indication. Therefore, this approach is given supporting weight. Following is a recap of the value conclusions for the subject property, as if complete. DEVELOPMENT COST APPROACH $3,800,000 SUBDIVISION ANALYSIS $2,975,000 Based upon the above comments on the appropriateness, accuracy and quantity of the data used in each approach,we have given greater weight to the Development Cost Approaches and have estimated the "as is"market value of the subject property, as of September 25, 2004, to be $3,800,000. ESTIMATED "AS IS" MARKET VALUE OF THE SUBJECT PROPERTY $3,800,000 Sanders K. Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 75 15358-L04.wpd APPRAISERS' CERTIFICATION WE CERTIFY THAT, TO THE BEST OF OUR KNOWLEDGE AND BELIEF.... — the statements of fact contained in this report are true and correct. — the reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are our personal, unbiased professional analyses, opinions, and conclusions. — we have no present or prospective interest in the property that is the subject of this report,and we have no personal interest or bias with respect to the parties involved. — we have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. — our engagement in this assignment was not contingent upon developing or reporting predetermined 11 results. — our compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. — our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. — we certify that the use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representative. — Sanders K. Solot and Andria K. Burke have made a personal inspection of the property that is the subject of this report. — no one provided significant professional assistance to the persons signing this report. — we certify that, to the best of our knowledge and belief, the reported analysis, opinions and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the Appraisal Institute. — as of the date of this report, Sanders K. Solot is subject to voluntary compliance with the Continuing Education Program, and has not completed the requirements of the continuing education program of the Appraisal Institute. — as of the date of this report, Andria K. Burke, has completed the requirements of the continuing education program of the Appraisal Institute. In our opinion, the following is indicated, as of September 25, 2004: IlMATED "AS IS " MA KE V.f. UE OF THE SUBJECT PROPERTY $3,800,000 : 1 / i / , / S' NDE' '. SOL O T, MAI ARIZONA STATE CERTIFIED GENERAL REAL ESTATE APPRAISER, CERTIFICATE NUMBER 30094 .c.__, --t--el- 6.---e..---d----- /1e,: . ANDRIA K. BURKE, MAI, ASSOCIATE APPRAISER ARIZONA STATE CERTIFIED GENERAL REAL ESTATE APPRAISER, CERTIFICATE NUMBER 30691 0 Sanders K. Solot and Associates, Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 76 15358-L04.wpd UNDERLYING ASSUMPTIONS AND LIMITING CONDITIONS . . . Special Limiting Conditions-The "as is" value considers the subject in the condition it was in on the date of our inspection. As such,platting and engineering were complete, the site had been graded with roads and pads for houses defined and the sewer line was extended through the subdivision. . . . Complete Self-Contained Report covering the property setting forth the factual data, Assumptions and Limiting Conditions, investigation and analysis completed, and the data which formed the basis for the valuation conclusions. The report will conform to USPAP, the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation, and the Code of Professional Ethics of the Appraisal Institute. . . . Unless otherwise stated, the estimate of value is based on the assumption that this property is in compliance with the Americans with Disabilities Act of 1990 (ADA). The appraisers are not qualified to perform an ADA survey or make a determination as to compliance. If deviations from regulations exist, the value estimate ascribed in this report is subject to change. . . . No opinion as to title is rendered. Data related to ownership and legal description was obtained from county records and is considered reliable. Title is assumed to be marketable and free and clear of all liens, encumbrances, easements and restrictions except those specifically discussed in the report. The property is appraised assuming it to be under responsible ownership and competent management,and available for its highest and best use. . . . No survey or engineering analysis of this property has been made by the appraisers. The appraisers assume the existing boundaries to be correct, that no encroachments exist and assume no responsibility for any condition not readily observable from customary investigation and inspection of the premises, which might affect the valuation, excepting those items which were specifically mentioned in the report. . . . The report is based, in part, upon information assembled from a wide range of sources and, therefore, the incorporated data cannot be guaranteed. An impractical and uneconomic expenditure of time would be required in attempting to furnish unimpeachable verification in all instances, particularly as to engineering and market- related information. It is suggested that the client consider independent verification within these categories as a prerequisite to any transaction involving sale, lease, or other significant commitment of subject property, and that such verification be performed by the appropriate specialists. . . . The date of value to which 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 rendered was based upon the purchasing power of the American dollar existing on that date. . . . The appraisers assume no responsibility for economic or physical factors which may affect the opinions in this report which occur after the date of the letter transmitting the report. . . . The appraisers reserve the right to make such adjustments to the analyses, opinions and conclusions set forth in this report as may be required by consideration of additional data or more reliable data that may become available. . . . No opinion is expressed as to the value of subsurface oil, gas or mineral rights or whether the property is subject to surface entry for the exploration or removal of such materials except as is expressly stated. Sanders K.Solot and Associates, Inc. REAL ESTA TE APPRAISERS AND CONSULTANTS 77 15358-L04.wpd . . The property is appraised assuming it is not in violation of any federal or state environmental policy, act, statute or regulation. 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. The appraisers have no knowledge of the existence of such materials on or in the property. The appraisers, however, are not qualified to detect such substances. The presence of substances such as asbestos, urea-formaldehyde foam insulation, toxic waste or subsoil gases, or other potential 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 or the cost or containment, removal, or clean-up of hazardous materials. The client is urged to retain an expert in this field, if desired. . . . No opinion is intended to be expressed for matters which require legal expertise or specialized investigation or knowledge beyond that customarily employed by real estate appraisers. . . . In the event the report is placed in the hands of a third party, it is requested that such party be made cognizant of any and all limiting conditions resulting from the basis of appraisers' employment and discussions related thereto as well as those set forth in the report. . . . No consideration has been given in the appraisal as to the value of personal property (as considered by the appraisers) located on the premises, or the cost of moving or relocating such personal property; only the real property has been considered. . . . No detailed soil studies covering the subject property were available to the appraisers. Therefore, it was assumed that existing soil conditions are capable of supporting development of the subject property to its assumed highest and best use without extraordinary foundation or soil remedial expense. . . . Testimony or attendance in court or at any other hearing is not required by reason of rendering this appraisal, unless such arrangements are made a reasonable time in advance. . . . Maps, plats and exhibits included in the report are for illustration only as an aid in visualizing matters discussed within the report. They should not be considered as surveys, or relied upon for any other purpose, nor should they be removed from, reproduced, or used apart from the report. . . . The property is appraised assuming it to be in full compliance with all applicable federal, state and local environmental regulations and laws, unless otherwise stated. . . . The property is appraised assuming that all applicable zoning and use regulations and restrictions have been complied with, unless otherwise stated. . . . The property is appraised assuming that all required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state, or national government or private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is based, unless otherwise stated. . . . The possession of this report, or a copy of it, does not carry with it the right of publication. It may not be used for any purpose by any person other than the party to whom it is addressed without the written consent of the appraisers, and in any event only with proper written authorization and only in its entirety. . . . The liability of Sanders K. Solot and Associates, Inc., and the appraisers responsible for this report is limited to the client who is stipulated in the Letter of Transmittal as the addressee, only and to the fee actually received by the appraisers. Further, there is no accountability, obligation or liability to any third party. If this report is placed in the hands of anyone other than the client, the client shall make such party aware of all limiting Sanders K. Solot and Associates, Inc. REAL EST:\TE APPRAISERS AND CONSULTANTS 78 15358-L04.wpd conditions and assumptions of the assignment and related discussion. The appraisers are in no way to be responsible for any costs incurred to discover or correct any deficiencies of any type present in the property, physically, financially and/or legally. . . . Acceptance of and/or use of this appraisal report by the client or any third party constitutes acceptance of the above conditions. Appraisers' liability extends only to the stated client, not subsequent parties or users, and limited to the amount of fee received by appraisers. «N. OW WM .41110 Sanders K.Solot and Associates, Inc. REAL IS"L'AT'E APPRAISERS AND CONSULTANTS 79 15358-L04.wpd QUALIFICATIONS OF SANDERS K. SOLOT, MAI, CRE FORMAL EDUCATION Bachelor of Science Degree in Business Administration, University of Arizona, 1951 PROFESSIONAL MEMBERSHIPS Life Member, Appraisal Institute, MAI designation, Certificate Number 3140. Arizona State Certified General Real Estate Appraiser, Certificate Number 30094. Board Member, Arizona State Land Department Board of Appeals. Term expires 1-21-2008. Former Board Member, Arizona State Board of Appraisal,January 1998 to January 2001. Member, American Society of Real Estate Counselors, (CRE), of the National Association of Realtors, Certificate Number 1120. President,Arizona Chapter Number 41 of the American Institute of Real Estate Appraisers for the year 1964. President, Tucson Chapter Number 116 of the Society of Real Estate Appraisers for the year 1960. Member, Equal Opportunity Committee of the Appraisal Institute b Governing Councilor of the American Institute of Real Estate Appraisers in 1983, 1984, and 1985. PROFESSIONAL EDUCATION American Institute of Real Estate Appraisers courses: Course I - Appraisal Principles/Course II - Urban Properties Adjunct Professor at Pima Community College, 1988 to Current Lecturer and faculty member in the College of Business and Public Administration at the University of Arizona, in the Department of Finance and Real Estate from 1964 to 1988. es National faculty member of the Appraisal Institute and qualified to teach Real Estate Appraisal Principles & Procedures and Standards of Professional Practice courses. Attended specialized seminars on the subject of"Teaching of Appraisal Courses" for the Society of Real Estate Appraisers and for the American Institute of Real Estate Appraisers. lap Sanders K.Solot and Associates, Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 80 15358-L04.wpd QUALIFICATIONS OF SANDERS K. SOLOT(CONTINUED) Seminars: "NAFTA," Appraisal Institute, 1994 "Update on Lender Requirements,"Appraisal Institute, 1995 "Litigation and the Appraiser," Appraisal Institute, 1995 "Highest and Best Use Applications,"Appraisal Institute, 1996 "Litigation Skills for the Appraiser; An Overview,"Appraisal Institute, 1997 "Loss Prevention,"Appraisal Institute, 1997 "Investigating the Property: Planning and Development Issues," 1998 "Criteria for Site Selection," 1998 "Acquisitions and Appraisals of State Lands," 1998 "Tucson in Review: A Forum," 1998 "Partial Interest Valuation -Undivided",Appraisal Institute, 2000 "Advanced RE Appraisal",2001 "2003 Pima County Commercial Real Estate Market Forecast", 2003 "Update to the AI Code of Professional Ethics",2003 "Appraisal Consulting: A Solution Approach for Professionals", 2003 "After the Fire",Appraisal Institute, 2003 EXPERIENCE Principal Appraiser of Sanders K. Solot and Associates Qualified as an expert witness as to value in the Superior Courts of Pima, Pinal, Cochise, Santa Cruz,Yuma, Gila, and Maricopa Counties, Arizona. Received the Professional Recognition Award of the American Institute of Real Estate Appraisers in November, 1975,covering the years 1976, 1977,and 1978,and received the award again in November, 1978, covering the years 1979, 1980, and 1981. Experience includes valuation of most types of urban real property or interest in real property. These classes of real estate values include single and multi-family residential, income, commercial, industrial, and vacant land. Many special-purpose properties have also been appraised. Completed valuation reports concerning transmission line easements,leasehold interest,rights-of-way,access rights, and other minority interests in real property. SCOPE OF APPRAISAL PRACTICE Appraisal practice is classified into six categories: Mortgage Loan Appraisal Taxation Valuation Eminent Domain Appraisal Market Value for Private Negotiation Purposes Counseling Appraisal Review Clientele includes governmental agencies, corporate organizations, financial institutions, public and private educational institutions, and public utilities. Sanders K.Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 81 15358-L04.wpd QUALIFICATIONS OF ANDRIA K. BURKE, MM FORMAL EDUCATION Bachelor of Arts Degree in English, University of Arizona, May 1989. PROFESSIONAL AFFILIATIONS Member, Appraisal Institute, Certificate Number 11689 06- Arizona State Certified General Real Estate Appraiser, Certificate Number 30691 Member, Board of Directors, Tucson Commercial Real Estate Women, 2002-present Partner, Arizona-Kazakhstan Real Estate Appraisers Partnership, 2002-present Member, State Board of Equalization, 2002-2004 Chapter Services Representative, Region VII, Appraisal Institute, 2004-2005 Education Chairman, Southern Arizona Chapter of the Appraisal Institute, 1999, 2003-2004 President, Southern Arizona Chapter of the Appraisal Institute, 2002 PROFESSIONAL EDUCATION Successfully completed the following courses given by the American Institute of Real Estate Appraisers or The Appraisal Institute: Course 1A-1, Real Estate Appraisal Principles, 1990 Course 1A-2, Basic Valuation Procedures, 1990 Course 1B-A, Capitalization Theory and Techniques, Part A, 1990 Course 1B-B, Capitalization Theory and Techniques, Part B, 1990 Course SPP-A, Standards of Professional Practice, Part A, 1991, 1996 Course SPP-B, Standards of Professional Practice, Part B, 1991, 1996 Course SPP-C, Standards of Professional Practice, Part C, 2001 Course 2-1, Case Studies in Real Estate Valuation, 1993 Course II-540, Report Writing and Valuation Analysis, 1994 Attended the following seminars: "NAFTA", Appraisal Institute, 1994 "Litigation and the Appraiser", Appraisal Institute, 1995 "Highest and Best Use Applications", Appraisal Institute, 1996 "Litigation Skills for the Appraiser; An Overview", Appraisal Institute, 1997 • "Loss Prevention", Appraisal Institute, 1997 "Investigating the Property: Planning & Development Issues", 1998 "Criteria for Site Selection: Current'Views from Commercial Experts", 1998 "Preservation Law & Environmental Impacts of R.E. Development", 1999 "The ADA and the Real Estate Professional", 1999 "Valuing Manufactured Housing", Appraisal Institute, 1999 "Partial Interest Valuation - Undivided", Appraisal Institute, 2000 "Comprehensive Appraisal Workshop", Ted Whitmer, MAI, 2000 "Residential Lot Valuation Issues", Appraisal Institute, 2002 "1031 Exchanges", Tucson CREW, 2003 "Appraisal Consulting", Appraisal Institute, 2003 Sanders K.Solot and Associates, Inc. dim 82 REAL ESTATE APPRAISERS AND CONSULTANTS 15358-L04.wpd QUALIFICATIONS OF ANURIA K. BURKE, MAI (continued) PROFESSIONAL EXPERIENCE 1992 - Date: Associate Appraiser with Sanders K. Solot & Associates, Inc. President: Sonny Solot, MAI 1989 - 1992: Associate Appraiser with Southwest Appraisal Associates, Inc. President: Steve Cole, MAI Appraisal experience includes valuation of many types of real estate including: single-family and multi-family residences, residential subdivisions, sorority/fraternity houses, office, retail commercial, regional mall, various industrial,vacant land, special purpose, condemnation, leased fee and leasehold interests,partial and partnership interests. Geographical areas of experience include primarily Southern Arizona, specifically Pima, Pinal, Santa Cruz, Cochise, Graham, Greenlee and Yuma Counties. 111 Sanders K. Solot and Associates,Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 83 15358-L04.wpd ADDENDUM r 0 Sanders K. Solot and Associates. Inc. REAL ESTATE APPRAISERS AND CONSULTANTS 84 • TOWN OF ORO VALLEY CCOUNCILCOUNCIL �COMMUNICATION TICA.TION MEETINGDATE:AT�: Ja�naxv 1�, 2003 • TO: HONOR LE MAYOR& COUNCIL FROM: David Ronquillo,Planner I COT'TC�N�'Ot��33 P'�.+CJP�RTIES �7,E�,� M . SUBJECT: CSV 2-0a-03 C,. NI TINA., REPRESENTING APPROVAL OF A FREI iLI,\ARY PLAT FOR RANCHO VISTOSQ PARCEL B. LOCATEDY MILE WEST FROM TEE '��I���O R:��+CSD_ � --z--._ IiTFRSECTIONx OF ORACLE ROAD AND RANCHO V ISTOSD BOULEVARD VARD ON THE SOUTH SIDE OF RANCHO VISTOSO BOULEVARD. PP ARCEL#22302O19A BACKGROUND: ND: The subject property consists of 23,73 acres with a Ictal of 72 lots. The zoning is Rancho �,;istoso Planned Area • with a land use designation of Commercial (C-1); however, residential development is Development (PAD) � p ennitted on this specific site per the Oracle Road Scenic Corridor Overlay District, SUMMARY: willconsist of single familydwellings with a minimum lot area of 5,000 square feet. The majorityof the The plat c.�c�ns n� )fS range in sizefrom 750-7�200 scuaae fee:. The development standards are consistent with the existing 5 - residential lots for Medium Density Residential lots within Rancho Vistaso. Sub dreton subdivision r. . ► will provide access off Rancho Vistosz Boulevard and Discover,Way Lane, A temporary paved The �ubdl�Ys��,r� - be constucted until DiscoveryWay lane is complete. Overall, the proposed subdivision is a turn arc�i�nd will . improvement from the original designby integrating a centralized recreation area, meaningful open considerable impr� } space trade, suitable lot relationship and adequate traffic calming measures. Surrounding Lund Uses North—Rancho Vistoso PAD, Commercial (C-4), undeveloped. South --Rancho Vistoso PAL), Campus Park Industrial(CPI). undeveloped. East — Rancho Vistoso PAD, Commercial (C-I), undeveloped. West— Rancho Vistoso PAD, Campus Park Industrial (CPQ, undeveloped p • Setbac'ksMaxim ern B;iildin_� � ht The following are the standard setbacks for this subdivision; Front 20', Side and Rear HY with a maximum ' ding height of 30'. The proposed setbacks comply with the standards for Medium Density Residential building � 1 Rancho Vistoso PAD.��ell..ng5 tr.the 4 TOWN OF ORO VALLEY 70UNCIL CONIALTISICATION Pae 2 of 4 Oven Space t• portionofnatural open space area along the west and east sides of tl�e The Ranche Vistoso PAD designates a p property. Open space is defined as any natural, completely undisturbed,desert area. The applicant caxz has proposed a trade area to encroach into a portion of open space. �- 3 - 2 will encroach into portions of undisturbed open space (•94 acres). On the Lots :-1��, 13-20, ��, ��; 3� & �� �� ��ill other �. hard:, the proposed encroachment into lots 21-23, 26-30, 38, 39 & 40 will be into areas that have been as • a utility easement byTrico Electric Cooperative Inc ( 70 acres). The total previously graded and designated open space encroachment is approximately 1.64 acres. 25%slo ' also designates various ridges with slopes of 25% or greater. The grading of these The Rancho � xstosc P.�? � the requirements of the P.D. The Rancho Vlistas° PAD states that development of any area slopesmust meet. q �� limitedencroachment has been ally occurring slopes 25% and greater is generally prohibited, but �.ncroachz that has naturally g allowed via interpretation of the PAD. 30, 32, 38, 40 & 52-54 will encroach into areas of 253 slopes. The total .25% Slope encroachment is approximately .1 7 acres. trade Prlizgai The total Open Space Sz. 25% c�, encroachment is 1.81 acrn. As a trade, the applicant has provided 1.90 acres of meaningful o space. The majority of the trade area preserves the e;istin ; sandy bottom wash fed by culverts pen p ace1 underneath Rancho Vistoso Boulevard (abutting lots 44-54) on the north part of the subdivision. P In sum, the equity of open space, 8: 25% Slope traie is adequate and the proposed design preserves densely vegetated areas of a previously unprotected wash. RecreationArea/Trail ' �'s' .8 4 acres of recreation area and .85 acres has beer• provided. it is located centrally The subdi�1`ion requires � within the subdivision south .of lots E5 &. F6, providing accessibility and safety for residents. Planning, Police F and Parks & Recreation completely support the location of the recreation area. A trail designated the east side of the site extending the lengthof the property from 1 to south. PAD �_all is de5.� along . - has been provided from the recreation area to the trail on .he east side of me property Uetweezl A trail connection lots 42 & 43. Traffic 1 c generated from this development will lave a minimum impact to the area highway w • tbound let: turn pocket in Rarichc Vistcso Blvd :s sufficient for storm:. for left turning vehicles into the site. . �s ::'.23)o,.12..,c-O3 \?FTC;Fc.1.:kx. I • •.r TOWN OF ORO VALLEY Mi e3of To prevent the street system in the proposed subdivision �o becoming a cut through for non-lacai traffic, the consultant has provided traffic calming methods such as neck downs, chicanes, striping :Find signage. The Ten Engineer ineer has a reed to the measures in concept stn . will gradingpermit will be required to install the utilities, This subdivision ���lI be mass graded, type two v nt and grade the site. The Rancho Vistosograding standards apply to thisroadway, drainage lmpro erne �, subdivision, which specifies unlimited cuts and fills. Drainage The existing drainageag,. patterns willmaintained. A temporary detention facility will be installed behind lots �e 42tothedeveloped runoff rate to the pre-developed runoff rate. The Rancho Vistoso Home 39 - limit post elop► c. remove this after thepermanent facility is constructed south of block lot eight Owners Association may facility . - � , increases in tlxe 100- year 3. Floodplain encroachment will be minor and\.will not cause measurable irl.Neighborhood R year floodplain elevations. DEVELOPMENT REVIEW BOARD ACTION: t 'rmeetingof October 2002 the Development Review Board recommended to continue the t:�er. regular preliminary ary plat for this project.. The DRB expressed concerns with the following issues; • Location of recreation area/park design & concept • Equity of open space trade/Preservation of wash area • Future location of electric lines in utility easement • Reduction in the number of lots to preserve views and lot relationship • Number of conditions in Exhibit A With the cooperative effort of the applicant, all the aforementioned issues were resolved. regular meeting of December 10, 2002, the Development Review Beard conditionally approved the �■, At the relixninary plat for this roj ect. To date, all the issues/condi tions haVe been resolved. � � P p GENERAL PLAN CONFORMANCE: that the proposed Preliminary Plat is in conformance with the General Plan Policy Elements. In Staff finds P p ,! . ., _ protect-, the lits; al natural particular 6.2G, which states, Preserve and enhance open space areas that rr tect the , Policy � ,�� exceptior. minor encroachments along�� the perimeter of and cultural resources of the community". With the of the site within sparse areas, the majority of open space ace on the northeast side of the subdivision (wash area) will 1 p be preserved in place. UBLIC COMMENT: LThis application has been noticed in accordance with the Tom Policies. To date, `v teen comments have ot been received from any concerned residents. .0,-.ov.2 14000'1./a-c04)3CY?•fir: it.1.doh. TOWN OF ORO VALLEY Page_„_o�f� 70ISINEIL.LfOINIMUNICAM_r N RECOMMENDATION: • � � � Rancho w'istoso� Neighborhood 3 Parcel B with thc: recommends approval of the preliminary p.at for Staff �� conditions in Exhibit A. SUGGESTED MOTIONS; Th.;Town Council may wish,to consider one of the following motions: .. - rPlatRancho Vistoso Neighborhood 3 Parcel B, effective on I move to approve O`V l�-�C�-�3C, Preliminary for �� A, the date of satisfaction of the conditions listed in Exhibit" ' . OR move to approve 0V12-00-03C, Preliminary Plat for Rancho Vistoso Neighborhood 3 Parcel B, effective on following- conditions: - 'tio listed in Exhibit"A" and the tollo���ink,added the date of satisfaction of the conditions OR move to deny 0V12-00-03C, Preliminary Plat for R.anr-ky© Vistoso Neighborhood 3 Parcel B, finding that: Attachments: 1. Exhibit"A" / 2. Preliminary Plat L- lib Ai- .... .„..... P.anru lit d Zo es,Administrator JJ ♦ : c,‘ . 7 . iffy Developrn- -,P irectcr 4, ___.rte Town Manager F:\oti-‘ov12'tiD4:o..12-00 3C'PPTcrat,1,doc .•* EXHIBIT A (?V12-00-03C RST NB 3 PARCEL- B 1 + wall system for slopes at rear of lots 36 and 3 7 �. Provide terraced grading or I'�taJT`,1I'1� • •• p F`OV\Ov 12\2000,:2-00-03C\PPTC:rrt• .vac