505 Old Fitzhugh Rd.

Background Info and Valuation Considerations

505 Old Fitzhugh Rd.

• 7.38 acres

• Located in Old Fitzhugh Historic District of Dripping Springs

505 Old Fitzhugh Rd.

• Re-zoning application from SF-1 to GR unanimously approved by City Council on 2/15/17

• General Retail (GR) allows comprehensive residential and/or commercial use • Permitted: Grocery stores, book stores,

office uses, hotel/motel uses, community scale retail, bed-and-breakfasts, SF-3 (towncenter), SF-4 (duplex), SF-5 (townhome) and MF (Multi-Family), and more

• Not permitted: Commercial services, industrial uses, single family detached (SF-1 and SF-2)

• See Section 3.11 for full GR definition

505 Old Fitzhugh Rd.

• Natural Features • 7.35+ acres of flat, green

landscape

• Natural springs tucked away in back of property

• 70+ Live Oak trees

• Adjacent property shares green space drainage easement, which should protect against future adjacent development

505 Old Fitzhugh Rd.

• Existing Structures: • Historic homestead, unoccupied

• 1600 sq ft

• Rehabilitated for commercial use

• New electric, HVAC, plumbing, septic

• 5 trailers, occupied • Signed lease agreements, month to

month tenancy

• $3190/month rental income

• 7 water, 6 wastewater hookups (LUEs)

City of Dripping Springs Wastewater Status

• Currently, city wastewater is 100% committed • i.e. no available wastewater hookups for new

developments

• City of Dripping Springs has filed for permit with TCEQ to increase capacity • Permission to discharge of treated domestic

wastewater into or adjacent to water in the state

• Currently, there is no guarantee of approval, nor estimation of timing.

• Any new developments without access to existing wastewater LUEs must resort to septic • 6 LUEs on property are a high value asset

Tax Increment Reinvestment Zone:

Old Fitzhugh Street and Drainage Improvements

• Tax Increment Reinvestment Zone (TIRZ) No. 1:

• The TIRZ affo ds the oppo tunity for the City to plan and prepare for the provision of public infrastructure to areas within its City Limits, including Old Fitzhugh Road street

and drainage improvements, Town Center improvements, Triangle/US 290/RR12 area road and drainage improvements, Public Parking downtown, and other road and drainage improvements.

• City planning consultant to TIRZ board: Old Fitzhugh is MOST important street

to develop in Dripping Springs

City of Dripping Springs General Market Assessment

• 40% population growth rate in 2015 • 10,000+ new homes in

development

• Tourism: • 35 wedding venues within 15

mile radius, hosting more than 1000 weddings per year

• 15+ wineries, breweries, and distilleries

Hotel Fitz: Vision and Marketing Assets

• Rezoning application to City Council presented a vision fo Hotel Fitz bouti ue hotel • St. Cecilia, El Cosmico, and San Jose hotels

presented as inspirational concepts

• Application was unanimously approved, with many city councilmen and city staff eager to see the boutique hotel use case in Old Fitzhugh district

• Fitz Marketing • Logos created for 505 Fitz, Hotel Fitz, and Bar Fitz

concepts

• 505Fitz.com website registered

• @505Fitz reserved on Twitter and Instagram

• @HotelFitz reserved on Twitter and Instagram

Valuation Summary i.e. How has value increased since purchase?

1. Property was undervalued at point of purchase • Negotiated purchase price significantly below market comps

2. Re-zoning application unanimously approved by City Council • GR zoning classification offers significantly more permissible use cases

3. Increasing value of LUEs • Status to increase wastewater capacity is unknown and unpredictable; no new LUEs available

for new developments. 6 LUEs on property are appreciating in value.

4. Increasing market value of Old Fitzhugh district • TIRZ money committed to improve infrastructure (traffic, lighting, drainage) of Old Fitzhugh

Rd

5. Rehabilitated historic building, along with significant cleanup and improvements to land

6. Signed month-to-month leases with trailer tenants • Provides income, but tenants can be removed at anytime with minimal friction