STEGALL,BENTON &ASSOCIATES, LLC REAL ESTATE APPRAISAL & COUNSELING 4403 Z ENITH S TREET M ETAIRIE ,L OUISIANA 70001 (504) 888-8161 APPRAISAL REPORT OF Multiple Vacant Parcels of Land Located in City of Kenner Kenner, LA 70062 (New Orleans International Airport “Noise Properties”) Agreement Number: K14-1073 (Bundles 13-16 and 27-31) OUR FILE NO. 15-64 FOR Mr. Sheldon Demas Real Estate Property Manager New Orleans International Airport P.O. Box 20007 New Orleans, LA 70141
Mr. Sheldon DemasReal Estate Property ManagerNew Orleans International AirportP.O. Box 20007New Orleans, LA 70141
Re: Appraisal Report ofMultiple vacant Parcels of LandLocated in City of KennerKenner, LA 70062(New Orleans International Airport-Noise Properties)Agreement Number: K14-1073(Bundles 13-16 and 27-31)Our File No. 15-64
Dear Mr. Mouton:
An Appraisal Report of the above captioned property is herein submitted for yourreview. This appraisal is based upon a number of enclosed assumptions and limitingconditions. All of the data considered pertinent in arriving at an estimate of the “As Is”Market Value of the Fee Simple Interest in the subject property has been considered.
The term Market Value is defined as: "The most probable price in terms of money whicha property should bring in a competitive and open market under all conditions requisiteto a fair sale, the buyer and seller each actively prudently and knowledgeably, assumingthe price is unaffected by undue stimuli . . ."
The subject consists of nine vacant land parcels located within the southeastern portionof the City of Kenner and in the vicinity of the Louis Armstrong International Airport.The parcels range in size from ±4,330 SF to 165,535 SF. The majority of parcels aremostly vacant and cleared with the exception of scattered trees/minor vegetation. Twoof the parcels (Bundles V-1 and W-1) contain older improvements not considered tocontain any contributory value. At the request of the client, the appraisers have utilizeda Hypothetical Condition which assumes these improvements have been demolished.The majority of the parcels are commercially zoned (S-I, Special Industrial District or
C-1-PO, Neighborhood Commercial District-Planned Unit Development Option). Threeof the parcels (Bundles L, M and N) are zoned R-2, Two Family Residential District.This appraisal is based on the Extraordinary Assumption that these three parcels havebeen re-zoned to S-I, Special Industrial Districts. The subject properties are encumberedby the Airport Hazard Aerial Zone and by the Airport Compatible Land Use PropertyRestriction. These encumbrances affect potential development of some of the subjectproperties. This appraisal considers requirements regarding airport covenants andrestrictions, etc. See Scope of Work Section.
As a result of the enclosed analyses, it is the appraisers’ opinion that the “as is” MarketValues of the Fee Simple Interest, as of March 24, 2015, is ......
Bundle ID Lot Nos. Square Location Size (SF) Zoning Market Value
13 K 1-6, 16-18, A, B and C 87 Oxley, Maria, 9th and 10th 45,641 S-I $185,000
14 L 1-14 1 Worth Street and Kenner 70,773 R-21 $150,000
15 M 1-26 2 Worth, Charles, Sherly and Kenner 155,600 R-21 $265,000
16 N 1-22 3 Hollandey, Charles, Sherly and Kenner 165,535 R-21 $280,000
272 V-1 1-14 36 4th, Maria and Duncan 59,233 S-I $135,000
28 V-2 25 36 Duncan 4,330 S-I $11,000
292 W-1 1-6 1 Jefferson Hwy and George 21,724 C-1-PO $65,000
30 W-2 13,14 and pt of 11 and 12 1 Fourth and Butler 11,859 S-I $30,000
31 W-3 17-22 1 Fourth and George 22,294 S-I $55,000
1 Based on Extraordinary Assumption (See Scope of Work)2 Based on Hypothetical Condition (See Scope of Work)
The estimated future marketing times for the properties is up to two years. The marketvalue estimate above assumes that the marketing period has already passed (exposuretime) and that this is the price that was negotiated as of the effective date of theappraisal.
Transmitted herein is an appraisal report showing the value conclusions and techniquesused in arriving at those conclusions. This report is prepared in accordance with ourinterpretation of current federal regulations which state that the level of detail within thereport must be commensurate with the complexity of the real estate appraised. Thisvaluation is also predicated on the Assumptions and Limiting Conditions found herein.This report also notes all requests from the client. Please note that the signatories of thisreport do not have a debt relationship with the client.
This appraisal report has been prepared in conformity with, and subject to, the reportingrequirements of the Code of Professional Ethics and Standards of Professional AppraisalPractice of the Appraisal Institute, the Uniform Standards of Professional AppraisalPractice (USPAP) adopted by the Appraisal Foundation, Title XI of the FinancialInstitutions Reform, Recovery, and Enforcements Act of 1989 (FIRREA). This reportis in compliance with USPAP and the statement of Appraisal Standards No. 2-2(a),effective January 1, 2014 through December 2015.
USPAP 2014 has changed the three appraisal reporting options of “Self-Contained”,“Summary” and “Restricted Use” to two reporting options of “Appraisal Report” and“Restricted Appraisal Report”. The reporting options set forth in USPAP are minimumsfor each type of report and may be expanded and/or supplemented, when necessary, toensure that any intended user of the appraisal is not misled and that the report complieswith applicable content requirements set forth in Standards Rule 2. The appraisal reportfor this assignment contains content and detail similar to the previous “SummaryAppraisal” reporting option.
Thank you very much for the opportunity to be of service to you. If you have anyquestions or comments with regard to any of the enclosed information, please do nothesitate to contact us.
Sincerely yours,
_________________________ ___________________________David O. Melancon, Associate Bush G. Benton, MAILouisiana Certified Louisiana CertifiedGeneral Real Estate Appraisal General Real Estate AppraisalLicense No. G1539 License No. G0847
TABLE OF CONTENTS
Purpose of the Appraisal 1Definition of Market Value 1Intended Use of the Report 1Property Rights Appraised 1Effective Date of Value 2Scope of the Appraisal 3
Neighborhood Data and Analysis 7Subject Photographs and Descriptions 10Site Data and Analysis 20History of the Subject Property 20Zoning Data and Analysis 21Tax and Assessment Data and Analysis 22
Highest and Best Use Analysis 25Estimate of Value by the Sales Comparison Approach 26
Addenda
Certification of the Appraiser(s)Assumptions and Limiting ConditionsQualifications of the Appraiser(s)Letter of Engagement
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PREMISE OF THE APPRAISAL
Intended Use of the Appraisal
The intended use of this appraisal report is exclusively assist the client for internal financialdecisions regarding sale of surplus properties. This report is intended to be used only by theclients. Use of the report by others is not intended by the appraisers.
Purpose of the Appraisal
The purpose is this appraisal is to estimate the “as is” market value of the Fee Simple Interestin the subject properties.
The term "market value" is defined by Federal Financial Institutions Regulating Agenciesas,
"The most probable price which a property should bring in a competitive and open marketunder all conditions requisite to a fair sale, the buyer and seller each acting prudently andknowledgeably, and assuming the price is not affected by undue stimulus. Implicit in thisdefinition is the consummation of a sale as of a specified date and the passing of title fromseller to buyer under conditions whereby:
1. Buyer and seller are typically motivated;
2. Both parties are well informed or well advised, and each acting in what they consider their own best interest;
3. A reasonable time is allowed for exposure in the open market;
4. Payment is made in terms of cash in US 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.”
INTEREST VALUED: The term "Fee Simple Estate" is defined in the Dictionary of RealEstate Appraisal, 5th Edition as follows:
"Absolute ownership unencumbered by any other interest or estate; subject only to thelimitations imposed by the governmental powers of taxation, eminent domain, police power,and escheat."
The appraisers have employed a extraordinary assumption within this appraisal. Accordingto USPAP (2014-15 edition, The Appraisal Foundation), an extraordinary assumption isdefined as “an assumption directly related to a specific assignment, as of the effective dateof the assignment results, which, if found to be false, could alter the appraisers’ opinion orconclusions”.
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A Hypothetical Condition is defined as:
“That which is contrary to what exists but is supposed for the purpose of analysis.Hypothetical conditions assume conditions contrary to known facts about physical, legal, oreconomic characteristics of the subject property; or about conditions external to the property,such as market conditions or trends; or about the integrity of data used in an analysis.”
EFFECTIVE DATE OF VALUE: March 24, 2015.
DATE OF REPORT: May 11, 2015.
Marketing Time
Marketing time is defined as "an estimate of the amount of time it might take to sell aproperty interest in real estate at the estimated Market Value during the period immediatelyafter the effective date (valuation date) of the appraisal." (Source: USPAP AdvisoryOpinionG-7). Throughout this report, the assumption for the interest appraised is that it can bemarketed in the future within a period of about one year Further inherent in this assumptionis the idea that all factors relating to the property appraised (both physical and economic)remain the same. Please be aware that past marketing times reported by the sales informationis not necessarily indicative of future marketing times. Again, there is no such thing as aperfect time indicator. Each property sells based on its own unique characteristics within themarketplace. Marketing times and values are based on conversations with local buyers andsellers along with discussions with real estate professionals. Furthermore, the appraiser(s)paid attention to the marketing history of the comparables utilized. The estimated marketingtime for the subject property is up to two years.
Exposure Time
Exposure time is defined in the Uniform Standards of Professional Appraisal Practice as "theestimated length of time the property interest being appraised would have been offered onthe market prior to the hypothetical consummation of a sale at market value on the effectivedate of the appraisal; a retrospective estimate based upon an analysis of past events assuminga competitive and open market". This estimate is based on the property being exposed forsale on the open market at a price in line with the market value estimate shown herein andwith the property being aggressively marketed by a quality/experienced brokerage firm(allowing for high visibility and a determined marketing effort).
Exposure time is a theoretical concept included in this report solely because of itsrequirement by USPAP. Real estate by its physical characteristics is an illiquid commodity.Real estate markets in general are imperfect by their very nature. Individual parcels of realestate are each inherently different with their own specific characteristics. An extraordinarysales effort at any point in time (even when supply and demand of the market is present)might not result in a rapid sale. Further, a quick turn around can occur for an unusual pieceof property with little or no marketing effort when a specific buyer desires a particular pieceof property at a given point of time. The reader of this report should not rely in any way onthe exposure time estimate herein in conjunction with any decision making process.
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Based upon all of the information contained in this report, as well as information gatheredthrough the appraisal process (which includes interviews with brokers, tenants, propertyowners, local government officials, etc.), it is the appraisers' opinion that the subject of thisappraisal within the surrounding environment (both macro and micro economic factorsconsidered) would have had an exposure time of about two years.
The subject consists of multiple properties (surplus land) which is assumed for the purposeof this appraisal assignment to be one property. Marketing/exposure time does not considermultiple properties being marketed for sale at the same point in time.
SCOPE OF WORK: The scope of work (type and extent of research and analysis) is basedon what is required to produce creditable assignment results in the context of the intendeduse. Creditable results are defined as “results that require support by relevant evidence andlogic, to the degree necessary for the intended use. The results must be in compliance withthe appraisers’ peers.” The appraisers’ peers are defined as “those appraisers who haveexpertise and competency in a similar type assignment.” As per the client’s request, theappraisers are to produce a Summary Appraisal.
The Scope of the Appraisal describes the extent of the appraisal process, i.e., collecting,confirming and reporting data. These three categories are discussed below.
Collecting Data
This appraisal has been based upon a review of comparable sales, listings, etc. Marketinformation includes comparable sales, etc. The appraisers also researched the local MLSand Deedfax, discussions with agents, buyers, sellers, conveyance records, as well as theUniversityof New Orleans’ Real Estate Market Analysis. The appraisers have also discussedthe subject property with agents, brokers and other real estate professionals familiar with thesubject market, etc.
To perform the scope of work the appraisers researched to produce accurate information forvaluing the property. The conclusions in this report include various appraisal techniques inorder to produce an unbiased conclusion of value for the subject property. All comparablespresented within this report have been personally inspected by the appraisers. Additionally,overall market supply/demand conditions have been researched. Our perception of the markethas been combined with specific comparable data in order to determine present levels ofdemand, current price structure, and overall occupancy. This in turn was translated into anestimate of market value.
Confirming Data
Subject physical information was confirmed during inspections. The ownership of theproperty, as well as its taxes, were confirmed with the Parish Assessor's Office andcourthouse records. All office file sales information has been verified with no less than oneof the associated parties and the courthouse.
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Reporting Data
The appraisal report contains two major sections which are described below. The manner inwhich the material will be presented and analyzed is discussed at greater length throughoutthe report. Please note that any and all Assumptions and Limiting Conditions will be listedin the section of the report with that title.
Subsequent to a brief outline of the underlying factors upon which this appraisal has beenprepared, the first phase of the report contains an identification of the subject property anda review of the subject's three year past history of sales. An Area Analysis and NeighborhoodAnalysis set forth the relationship of the city and neighborhood to the subject property. Thesite condition, etc. are described in detail. The subject's zoning classification and itsimplementations, and the subject's conformity thereto, are presented. The subject's real estateassessment, levy and parity are discussed. The improvements are then discussed followed bya Highest and Best Use section. After which, all pertinent approaches to value are utilizedto estimate the current market value of the subject property.
The appraisers inspected the subject; however, no inspection was done to the structuralsystems, etc. Noticeable conditions were noted. Unknown conditions may exist but theappraisers have only made a general inspection and only those noted were considered whenvaluing the property. If unknown problems do exist, there may be cause for reconsiderationof the value conclusion. This appraisal assumes no title problems exist and/or deedrestrictions, mineral leases, surface rights, easements, servitudes, etc. This also applies tothe structural components of the property as the appraisers are not engineers. This appraisalconsiders the property to be free and clear of any environmental and hazardous problems.
The three steps specific to the appraisal process as defined by USPAP are: (1) identify theproblem to the solved; (2) determine and perform the scope of work necessary to developassignment results; and (3) disclose the scope of work in the report.
The problem to be solved
The appraisal problem involves estimating the current market value of the subject properties.
The scope of work necessary
The subject properties are identified by legal descriptions, surveys, and personal inspection.The subject properties were inspected and photographed by the appraiser(s).
Disclose the scope of work
The subject consists of nine vacant land parcels located within the southeastern portion ofthe City of Kenner and in the vicinity of the Louis Armstrong International Airport. Theparcels range in size from ±4,330 SF to 165,535 SF. The majority of parcels are mostlyvacant and cleared with the exception of scattered trees/minor vegetation. Two of the parcels(Bundles V-1 and W-1) contain older improvements not considered to contain anycontributory value. At the request of the client, the appraisers have utilized a Hypothetical
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Condition which assumes these improvements have been demolished. The majority of theparcels are commercially zoned (S-I, Special Industrial District or C-1-PO, NeighborhoodCommercial District-Planned Unit Development Option). Three of the parcels (Bundles L,M and N) are zoned R-2, Two Family Residential District. This appraisal is based on theExtraordinary Assumption that these three parcels have been re-zoned to S-I, SpecialIndustrial Districts.
As mentioned, Bundles 13, 14 and 15 are presently zoned R-2, Two Family ResidentialDistrict. Jay Hebert of the Kenner Zoning Department indicated that these parcels couldpossibly be re-zoned to S-I, Special Industrial District. The appraisers feel a discountedmarket value would apply which would consider the re-zoning process a pending purchaserwould have to go through, etc.
As per the clients’ request, the appraisers consulted with Hank Tatje, MAI and GayleBoudousquie, MAI regarding Airport Hazard Aerial Zones and the Airport Compatible LandUse Property Restrictions. The appraisers spoke/met with Mr. Tatje and Ms. Boudousquiein order to go over such information which is deemed correct for this appraisal report.
In order to comply with the assignment, the subject properties were inspected to determineits physical condition, construction quality and current occupancy level. The appraisers willutilize the Sales Comparison Approach in order to value the subject. This Appraisal Reportis a brief recapture of some of the appraisers’ data, analyses and conclusions similar to aformer Summary Appraisal as discussed in the Letter of Transmittal. A significant amountof other comparables were reviewed and analyzed for the purpose of this report. However,the comparables chosen in the analysis are considered most applicable in the valuation of thesubject property. Supporting documentation is retained in the appraisers’ files.
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DESCRIPTION OF THE REAL ESTATE APPRAISED:
Neighborhood Description: The subject properties are located on the east bank of theMississippi River in Jefferson Parish. The subject's neighborhood is located within the Cityof Kenner, which is within the metropolitan New Orleans area. More specifically, the subjectproperties are located within close proximity of the Louis Armstrong International Airport.Major arteries in the subject’s neighborhood include Williams Boulevard (LA 49) andAirline Highway (US 61). These are two major thoroughfares running through Kenner. Thesubject's neighborhood boundaries are generally considered to be the Airline Highway to thenorth, the Jefferson/St. Charles Parish line to the west, the Mississippi River to the south, andWilliams Blvd. to the east.
The general area consists of mostly lower income and light industrial uses with somecommercial uses along major thoroughfares (i.e., Airline Drive, Williams Blvd.). There aresingle and multi-family residential dwellings interspersed throughout the neighborhood. Aspreviously stated, the subject is located just north of Airline Highway (US 61). AirlineHighway is the major traffic artery of the general subject neighborhood area and has alwaysbeen predominantly developed with a variety of older mixed commercial uses. Prior to theconstruction of I-10, Airline Highway was the state's primary east/west thoroughfare. Thisparticular area of Airline Highway (just east of the Jefferson/St. Charles Parish line) isgenerally improved with office/warehouse facilities and older commercial properties. Thisarea includes numerous properties serving the nearby airport (i.e. parking facilities, hotels,rental car companies, etc).
Basically, the subject neighborhood is largely comprised of lower income residential andlight industrial properties. The subject properties are located just east and just south of theLouis Armstrong International Airport which dominates the subject's area. This area shouldremain a viable light industrial "pocket" area for many years to come. The general NewOrleans market is perceived to be in a slow growth phase. Generally, the subject isconsidered to be in an average location from a metropolitan perspective.
East of the subject properties is Williams Boulevard, a heavily trafficked thoroughfarerunning north to south through Kenner from Lake Pontchartrain to the Mississippi River.This is a major thoroughfare connecting the east/west arteries of Jefferson Highway, AirlineHighway, I-10, Veterans Blvd. and W. Esplanade Avenue. The major east/west trafficcorridor throughout the general neighborhood of the subject is Airline Highway. AirlineHighway extends westward to Baton Rouge and eastward to New Orleans. Airline Highwayis a major four-lane highway, which expands to six lanes after crossing the railroad overpass(eastbound). River Road is located south of Airline Highway and runs parallel to theMississippi River. River Road connects to Jefferson Highway in Harahan and extends fromthe Bonnet Carre Spillway in St. Charles Parish on the west into Orleans Parish on the east.River Road is a secondary thoroughfare that is frequently utilized by the local residents.
Several industrial parks have been developed in East Jefferson Parish: Elmwood IndustrialPark, located southeast of the subject, south of Airline Highway between Hickory andClearview Parkway; Labarre Industrial Park, at Airline Highway and Labarre Road;Bainbridge/Crestview Industrial Parks (formerly Kenner Project), just north of Louis
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Armstrong International Airport; and the James and Riverbend Business Parks, locatedsouthwest of the subject along Airline Highway in St. Charles Parish. Each of these industrialareas are generally more desirable than the subject's. The subject is situated in an older areacomposed of mixed uses, including a considerable amount of (mostly) older warehousing.
There are some vacant sites and warehouses listed in the subject's vicinity. Currentdevelopments coming on line and current listings, market trends, etc. will be discussedwithin the land sales comparison approach within this report. According to the most recentedition of the University of New Orleans' Real Estate Market Analysis, the overall warehouseoccupancy in Kenner is ±90%. The appraisers also reviewed the most recent Max DerbesIndustrial Report. According to this study, the overall New Orleans market showed a fasterpace of combined sales and leasing activity in 2014 than in 2013. Overall inventory is downto 3,650,000 SF, which is the lowest amount of available space since the economic downturnbegan in 2008. It is worth noting that there is still a shortage of buildings in the 10,000 SFto 40,000 SF range, both for lease and for sale. Typical marketing times for quality propertiesrange from 6-12 months with secondary properties (poor condition or location) being in the12 to 18 month range. Sales of industrial properties in the area have been limited in recentyears. The poor overall state of the economy and tightened lending are underlying factorscontributing to the lack of sales activity.
In general, demand for industrial properties in the immediate area is considered to be averagewith rents expected to remain steady. Rental rates in the area are currently not high enoughto warrant new construction of passive investor industrial properties in the area. Supply anddemand for warehousing within the subject's area is considered more or less in balance. Thisis considered an older, mature area with property values likely remaining stable over theforeseeable future.
The subject properties are located just east and south of the Louis Armstrong InternationalAirport in Kenner. The general area is developed with mostly older industrial uses and lowto moderate level housing in the vicinity. Overall demand for industrial real estate in theimmediate area appears to be average. The subject's locations are considered to be an older,established area for industrial development with an average future outlook.
On the following page is a chart listing the legal descriptions, sizes, street frontages andzoning designations of the different parcels.
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Property Descriptions
Bundle ID Lot Nos. Square Location Size (SF) Zoning
13 K 1-6, 16-18, A, B and C 87 Oxley, Maria, 9th and 10th 45,641 S-I
14 L 1-14 1 Worth Street and Kenner 70,773 R-21
15 M 1-26 2 Worth, Charles, Sherly and Kenner 155,600 R-21
16 N 1-22 3 Hollandey, Charles, Sherly and Kenner 165,535 R-21
27 V-1 1-14 36 4th, Maria and Duncan 59,233 S-I
28 V-2 25 36 Duncan 4,330 S-I
29 W-1 1-6 1 Jefferson Hwy and George 21,724 C-1-PO
30 W-2 13,14 and pt of 11 and 12 1 Fourth and Butler 11,859 S-I
31 W-3 17-22 1 Fourth and George 22,294 S-I
1 Extraordinary Assumption that lots have been re-zoned to SI.
On the following pages are photographs and lot and block maps
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SUBJECT PHOTOGRAPHS-Bundle 13
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Lot and Block Map-Bundle 13
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SUBJECT PHOTOGRAPHS-Bundles L, M and N
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SUBJECT PHOTOGRAPHS-Bundles L, M and N (Continued)
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Lot and Block Map-Bundles L, M and N
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SUBJECT PHOTOGRAPHS-Bundles V-1 and V-2
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Lot and Block Map-Bundles V-1 and V-2
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SUBJECT PHOTOGRAPHS-Bundles W-1, W-2 and W-3
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SUBJECT PHOTOGRAPHS-Bundles W-1, W-2 and W-3 (Continued)
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Lot and Block Map-Bundles W-1, W-2 and W-3
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Site Data: The subject consists of nine vacant land parcels located in the vicinity of the NewOrleans International Airport in the southern portion of Kenner, LA. The parcels range in sizefrom ±4,330 SF to 165,535 SF. The parcels very in shape and size but all contain average togood visibility from fronting streets. The parcels are located within close proximity of bothWilliams Boulevard (LA 49) and Airline Highway (US 61). Williams is a major north/souththoroughfare connecting the subject to I-10 and Airline is a major east/west thoroughfarerunning east to New Orleans and west to Baton Rouge and beyond. Fronting streets aregenerally bi-directional, concrete/asphalt paved streets with subsurface drainage and overheadstreetlights.
At the time of inspection, the majority of parcels were mostly vacant and cleared with theexception of scattered trees/minor vegetation. As mentioned, Bundles V-1 and W-1 containolder improvements considered to have no contributory value. The majority of the parcels arelevel and at/slightly above street grade. To the appraisers’ knowledge, all public utilities areavailable to the sites.
According to FEMA (Community Panel 22051C0030E, dated 3/23/1995) the subject parcelslie within Flood Zone "X" and Flood Zone “AE”. Flood Zone "X" is not a flood hazard area.Flood Zone “AE” is a flood hazard area. Flood zones are reported for information purposesonly. To the appraisers’ knowledge, the subject did not flood during Hurricane Katrina. Asubsoil study was not provided to the appraisers. Evidence of soil problems were not noted.This report assumes that foundation and soil problems do not exist.
The appraisers were provided with multiple surveys of the majority of the subject sites(mostly completed between 1990 and 2000). Several of the surveys indicate formerimprovements which have since been demolished. Upon inspection, the appraisers notedpower poles and overhead power lines along many of the fronting streets of the sites.
The surrounding land use history of the adjacent properties is unknown. This report assumesthat the market value of the subject properties are not adversely impacted by any type of pastor present liability from adjoining property parcels (see Assumptions and LimitingConditions). The environmental history of the subject properties is not really known, as wellas the history of the surrounding sites. According to a representative of the owner, there areno environmental problems with the subject sites. Environmental hazards were not noted norsuspected. The appraisers are not experts in this field. Experts should be consulted, if desired.
At the time of inspection, the majority of parcels were mostly vacant and cleared with theexception of scattered trees/minor vegetation. As mentioned, Bundles V-1 and W-1 containolder improvements considered to have no contributory value. No restrictions, easements,servitudes, or other encumbrances are known to exist which would adversely affect the valueof the subject that have not already been discussed. As a result of its location, zoning,neighborhood influences and existing improvements on the site, the subject is consideredsuitable for its present use.
History: According to the Assessor’s Office, the subject parcels are currently owned by TheCity of New Orleans/New Orleans Aviation Board. To the appraisers’ knowledge, notransactions involving the subject property have taken place within the past three years.
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Zoning: According to the most recent City of Kenner zoning maps, the majority of the parcelsare commercially zoned (S-I, Special Industrial District or C-1-PO, NeighborhoodCommercial District-Planned Unit Development Option). Three of the parcels (Bundles L,M and N) are zoned R-2, Two Family Residential District.
Bundles K, V-1, V-2, W-2 and W-3 are located in an "S-I, Special Industrial District". Thepurpose of this district is to "provide sufficient space in appropriate locations for certain typesof business and manufacturing relatively free from offense, in modern landscaped buildingsand to make available more attractive locations for these businesses and industries. Thisdistrict provides for a transition area between associated land uses. Residential uses areexcluded, except for overnight facilities for watchman and/or caretaker employed on thepremises." It is worth noting that this district calls for special requirements including all uses(except horticultural) to be conducted within completely enclosed buildings, no exteriormaterial storage, special landscaping requirements, and special fencing requirements"(requirements are discussed in their entirety in the Kenner Comprehensive Ordinance, whichis available online). Permitted uses include uses allowed in C-2 districts (commercial) and anarray of warehousing uses with many commercial uses permitted. The subject's current usesof storage, office, and showroom area appear to be in compliance with these requirements.
Area regulations in the S-I district call for a front yard depth of 20' providing, however, thatwhere structures located within 50' on both sides of the proposed use have observed a frontyard line of less than 20', then the proposed structure may be located in line with the mostrearward of the two adjacent structures, but not less than 10'. For properties abuttingresidential districts (the subject does), side yards of 10' are required and rear yards of 20' arerequired. Minimum lot area is 5,000 SF with a minimum width of 50' and a minimum depthof 100'. Parking requirements call for one space for each 300 SF for "business andprofessional office" related uses.
Bundle W-2 is located with the "C-1-PO, Neighborhood Commercial District-Planned UnitDevelopment Option". The purpose of this district is to provide retail shopping and personalservice uses similar to the C-1, Neighborhood Commercial District, but because of thecharacter of the existing developments in the district, an option is granted to apply forapproval of uses more restrictive than the C-1 District by means of a planned unitdevelopment (PUD). District regulations are such as to encourage compatibility with theresidential surroundings. Permitted uses include any permitted use in the C-1 District, and/oruses permitted in the R-1, R-1A, RR-1, R-2, RR-3, R-3 and G-O Districts when approved bythe City Council after submission of a planned unit development. The height restriction is45.
Bundles L, M and N are located within the R-2, Two Family Residential District. The purposeof this district is to provide for two-family dwellings and to also permit accessory uses andsuch nonresidential uses that are compatible with residential surroundings. Permitted usesinclude any use permitted in the R-1, R-1A and RR-1 Single Family District, child carecenters and houses of worship (minimum site area of 12,000 SF), two family dwellings,townhouses, etc. The height restriction is 35.
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The subject properties were acquired under federal regulations regarding the acquisitionprogram that restricts the properties from ever being developed with residential uses. AnExtraordinary assumption considers the R-2 zoned portions to be re-zoned for industrial uses.Discussions with Kenner Planning and Zoning indicated that the re-zoning of these parcelsis possible but must go through the re-zoning process, etc.
As mentioned, the subject properties are encumbered by the Airport Hazard Aerial Zone andby the Airport Compatible Land Use Restrictions. The height restriction protects land underflight patterns as aircrafts land/take off by limiting the height of building improvements basedon proximity from the end of each runway. This apparently pertains to all of Square 3 and±50% of Square 2. The closest points from these spaces to the runway was measured by theappraisers at ±1,900 to 2,000. Building restrictions are 1 for every 50 from the runway.Thus, building restrictions limitations would be ±38 to 40. Considering the Highest and BestUse is for industrial or secondary commercial development, the appraisers do not feel this isdetrimental to the subject properties.
Regarding Noise Level Restrictions (LDN), this is the yearly day-night average sound level.As the LDN increases between 65-70 and above, building and design materials are needed inorder to reduce noise levels in buildings. This increases construction costs, etc. All of thesubject bundles include an LDN of 75 except Bundles 13 and 14. Bundle 13 has a mixed LDNof 65/75 and Bundle 14 has an LDN of 65. The appraisers do not feel that Bundle 13 is trulyaffected as portions are vacant with an LDN of 65 whereby an improvement could beconstructed. The appraisers feel the same regarding Bundle 14. A review of the Land UseCompatibility Chart (upcoming page) shows that commercial/industrial related uses are notaffected. Regarding Bundles with an LDN of 75, these are considered affected and such willbe considered when finalizing values.
Tax Assessment and Data: The subject parcels are owned by a government entity andtherefore currently exempt from all property taxes.
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Noise Mitigation Map
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Flood Map
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Zoning Map
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HIGHEST AND BEST USE
Highest and Best Use is defined in The Dictionary of Real Estate Appraisal, 5th Edition, as“The reasonably probable and legal use of vacant land or an improved property, which isphysically possible, appropriately supported, financially feasible, and that results in thehighest value. The four criteria the highest and best use must meet are legal permissibility,physical possibility, financial feasibility, and maximum productivity.”
Based on the above analysis and a study of the surrounding land use patterns, existing zoninglaws, financial/profit maximization principles, etc., the appraisers believe that the highest andbest use of the subject sites "as if vacant" would be for some form of light industrialdevelopment. The subject consists of nine vacant land parcels located near the New OrleansInternational Airport in Kenner, LA. As mentioned, the properties are restricted fromresidential development. As previously discussed, the subject sites are located in older areasdeveloped with low-income residences and older warehousing. According to the most recentCity of Kenner zoning maps, the majority of the parcels are commercially zoned (S-I, SpecialIndustrial District or C-1-PO, Neighborhood Commercial District-Planned Unit DevelopmentOption). Three of the parcels (Bundles L, M and N) are zoned R-2, Two Family ResidentialDistrict. As mentioned, this appraisal is based on the Extraordinary Assumption that thesethree parcels have been re-zoned to S-I, Special Industrial Districts. Rents in this area are notgenerally not high enough to justify most types of passive investment construction. Thus, asvacant, the highest and best use is for proprietary development of an industrial use, possiblelight/secondary commercial use or to hold for potential future development.
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ESTIMATE OF SITE VALUE BY THE SALES COMPARISON APPROACH
There are six recognized techniques to estimate the value of land. The appropriateness of eachis dependent upon the specific site and the data available. These six techniques are brieflydescribed below.
1. The Sales Comparison Approach--in this technique sales of parcels of land similar tothe subject site are analyzed, compared and adjusted to provide a value indication forthe land being appraised. By analyzing market transactions the appraiser can determinethe applicable units of comparison and elements of comparison. For example, a sitemay be valued by the front foot, the square foot, the square yard, the acre or other unitused by the market. Elements of comparison are the characteristics of land that causethe prices paid to vary. Examples of elements of comparison are the site's size, shape,frontage, topography, and location. The sales comparison technique is the mostcommon method of valuing land and is the preferred method when comparable salesare available.
2. Allocation--this technique is based on the premise that there is a normal or typical ratioof land value to property value for specific categories of real estate in specificlocations. The allocation method does not produce conclusive value indications, butit can be used to establish land value when the number of vacant land sales isinadequate.
3. Extraction--this technique is a variant of the allocation method. The land value isextracted from the sale price of an improved property by deducting the valuecontribution of the improvements. The value contribution of improvements can beestimated from their depreciated costs and, in some cases, paired sales.
4. Subdivision Development--this technique is appropriate when subdivision anddevelopment represent the highest and best use of the subject parcel of land. In thistechnique the number of potential sites is determined, the timing and amount of incomeflows from site sales and the expenses associated with these sales is estimated, and theresulting cash flows are discounted into a present value estimate.
5. Land Residual--this technique is applicable when the building value is known or canbe accurately estimated, when stabilized annual net operating income to the propertyis known or can be accurately estimated, and when both building and landcapitalization rates can be extracted from the market. The technique involvesallocating the net operating income between the building and land components andcapitalizing the income attributable to the land by a land capitalization rate. Thistechnique may be most useful in testing the feasibility of alternate uses of a particularsite.
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6. Ground Rent Capitalization--in this technique ground rents are capitalized at a marketderived land capitalization rate to indicate the market value of a site. This procedureis useful when an analysis of comparable sales of leased land indicate a range of rentsand capitalization rates.
In the case of the subject property adequate market transactions have occurred to rely solelyon the sales comparison approach. This approach was selected as it most directly reflects theactions and motivations of buyers and sellers in this market and because of the quality andquantity of the data available to apply this technique.
The location of the subject property and the comparable sales is depicted on the followingComparable Land Sales Map.
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COMPARABLE LAND SALE NO. 1
LOCATION: 10619 River Road, St. Rose, Louisiana
DATE: May 23, 2012
RECORDATION: COB 772, folio 191
VENDOR: KBMB Holdings, Inc., represented by Jeanne Gautreaux
VENDEE: Bergeron Property Holdings, LLC, represented by TroyBergeron
SALE PRICE: $410,000 cash
LEGAL DESCRIPTION: Lot 1-A-1, Section 39 & 40, Township 12 South, Range 9East, River Bend Business Park, Almedia/FairviewPlantation, St. Charles Parish, Louisiana
DIMENSIONS: Various
LOT AREA: ±94,416 SF or 2.17 acres
UNIT PRICE: $4.34 PSF
ZONING: B-2, Batture – Industrial District
COMMENTS: This is the sale of a triangular shaped, vacant, interior siteon River Road near St. Rose. The purchaser intends toconstruct a distribution center for his business on the site.This tract will require some clearing prior to development.According to the listing agent, the site is near street gradeand probably will not need any fill prior to construction.
VERIFICATION: Courthouse records and listing agent Jonathan Shaver,CCIM
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COMPARABLE LAND SALE NO. 2
LOCATION: River Road (LA Highway 48), Kenner, LA
DATE: June 25, 2010
RECORDATION: Book 3273, Page 836
VENDOR: River Road Real Estate, LLC. represented by Jugal K.Taneja
VENDEE: Tri-logistics Construction Co., LLC., represented by Jody R.Cannon
SALE PRICE: $359,000 Cash, Cash Equivalent Price of $734,000 (seeComments)
LEGAL DESCRIPTION: Undesignated Lot situated in Oakland Plantation or ButlerPlantation, City of Kenner, Jefferson Parish, LA
DIMENSIONS: 206.48’/202’ x 935’/947’
LAND AREA: 179,903 SF or 4.13 acres
ZONING: L-I, Light Industrial District
UNIT SALE PRICE: $4.08 PSF
COMMENTS: This sale consists of a vacant parcel of ground which abutsthe Jefferson/St. Charles Parish line. This site had formerlybeen used along with the adjacent improved property (formermatch box manufacturing facility) located at 10016 RiverRoad. Both properties were being marketed for sale together.The site required clearing and also included a reservoirwhich had been utilized in conjunction with the adjacentimproved site. Other site improvements include minorconcrete roadways and a ditch running through portions ofthe site. The vendee indicated that fill costs for the formerreservoir/ditch and reminder site area along with clearingcosts were approximately $375,000 or $2.08 PSF. Thus, acash equivalent price of $734,000 or $4.08 results.
VERIFICATION: Courthouse records and David Quinn/Tom Tripi, MaxDerbes Realtors and Vendee
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COMPARABLE LAND SALE NO. 3
LOCATION: Third Street, Kenner, Louisiana 70062
DATE: October 30, 2012
RECORDATION: NA# 11251704
VENDOR: Anthony H. Weber, Jr. and Robert A. Weber, Sr.
VENDEE: C. Mullin Investments, LLC, represented by CharlesMullin, Jr.
SALE PRICE: $160,000 cash
LEGAL DESCRIPTION: Lot B, Square 2, Hanson Place Subdivision, City ofKenner, Jefferson Parish, Louisiana
DIMENSIONS: 394.44(Third) x 434.72 (Alliance) x various
LAND AREA: ±82,971 SF or 1.90 acre
ZONING: S-I, Special Industrial District
UNIT SALE PRICE: $1.93 PSF
COMMENTS: This is the sale of a vacant corner site on 3rd Street andAlliance Avenue in Kenner. The parcel was acquired forthe operation of a proprietary landscaping business. Thistract will require clearing and fill prior to development.
VERIFICATION: Courthouse records and vendee
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COMPARABLE LAND SALE NO. 4
LOCATION: 120 James Drive East, St. Rose, LA
DATE: April 16, 2012
RECORDATION: COB 770, folio 408
VENDOR: James Park Properties, LLC, represented by EdwardRenton, Jr. and Robert Tarifa
VENDEE: NOLA Airport Inn, LLC, represented by Prakash Patel
SALE PRICE: $375,000 cash
LEGAL DESCRIPTION: Lot 3, Square 2, James Business Park, St. Charles Parish,LA
DIMENSIONS: 411.91’ (Airline) x 524.09’ x 333.13’ x 131.87’ (radius=282’)
LAND AREA: ±102,802 SF or ±2.36 acres
ZONING: M-1, Light Manufacturing District
UNIT SALE PRICE: $3.65 PSF
COMMENTS: This is the sale of a vacant tract of land which was clearedand level at the time of sale. The site is irregularly shapedand subject to James Business Park restrictions. It waspurchased for future hotel/motel development.
VERIFICATION: Courthouse records, and Charlie Mullin, listing agent
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COMPARABLE LAND SALE NO. 5
LOCATION: West 27th Street, Kenner, LA
DATE: September 21, 2012
RECORDATION: Instrument # 11244612
VENDOR: Josie Ann Bavido Troyer and James P. Troyer
VENDEE: P&M Real Estate, LLC, represented by Paul and MandyAustin
SALE PRICE: $225,000, cash
LEGAL DESCRIPTION: Lots 18-A-1 and 7-11, Square 225, Crestview Office andIndustrial Park, Jefferson Parish, LA
DIMENSIONS: 340 (W 27th) x 125
LOT AREA: 42,500 square feet, 0.98 acres
UNIT PRICE: $5.29 per square foot
ZONING: H-I, Heavy Industrial District
COMMENTS: This is an interior site that was level and improved with anolder, open-ended warehouse and ancillary structures inpoor condition at the time of sale. Portions of the site werepaved. The purchaser indicated no contributory value wasascribed to the existing improvements.
VERIFICATION: Courthouse records and vendee
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COMPARABLE LAND SALE NO. 6
LOCATION: Industry Road, Kenner, LA (no actual frontage)
DATE: July 31, 2013
RECORDATION: Instrument # 11338067
VENDOR: Johnson Warehouse-Louisiana, LLC, represented by MarkK. Johnson, sole member
VENDEE: Conhagen Industries (Louisiana), LLC, represented byVincent H. Kliesch, representative
SALE PRICE: $318,188.42, cash
LEGAL DESCRIPTION: LotD-1-C, Hanson Place Subdivision, Jefferson Parish, LA
DIMENSIONS: 428.88 x 364.18 x 288.79 x 304.29
LOT AREA: 100,059.25 square feet, 2.297 acres
UNIT PRICE: $3.18 per square foot
ZONING: H-I, Heavy Industrial District
COMMENTS: This is an irregularly shaped, interior site with no actualfrontage on Industry Road. It is situated to the rear of anadjoining parcel owned by the vendee that fronts IndustryRoad. This site will requiring clearing and fill prior todevelopment. It was purchased for yard storage.
VERIFICATION: Courthouse records and vendee
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Smaller Sales Reviewed
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COMPARABLE LAND SALE NO. A
LOCATION: 24th Street, Kenner, LA
DATE: March 21, 2014
RECORDATION: NA# 11411308
VENDOR: Circuit Services Inc, represented by Daniel J. Sensebe
VENDEE: Erika K. Bush wife of and Lance P. Roques
SALE PRICE: $124,800 cash
LEGAL DESCRIPTION: Lots 37-44, Square 32, Crestview Office and Industrial Park,Jefferson Parish, LA
DIMENSIONS: 160 x 120
LAND AREA: 19,200 SF or 0.44 acres
ZONING: L-I, Light Industrial District
UNIT SALE PRICE: $6.50 PSF
COMMENTS: This sale is consists of a partially cleared parcel of landlocated on the southern side of 24th Street between PiedmontStreet and Crestview Avenue. The parcel will require someclearing and fill prior to development. The vendee intends toutilize the site for his landscaping business.
VERIFICATION: Courthouse records and vendor
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COMPARABLE LAND SALE NO. B
LOCATION: 27th Street, Kenner, LA
DATE: May 27, 2014
RECORDATION: NA# 11420710
VENDOR: Lynn Plonsky Dim
VENDEE: Amanda Katherine Maltese Bongard wife of and David A.Bongard
SALE PRICE: $105,000 cash
LEGAL DESCRIPTION: Lot 37A, Square 225, Crestview Office and Industrial Park,Jefferson Parish, LA
DIMENSIONS: 120 x 125
LAND AREA: 15,000 SF or 0.34 acres
ZONING: L-I, Light Industrial District
UNIT SALE PRICE: $7.00 PSF
COMMENTS: This sale is consists of a partially cleared parcel of landlocated on the southern side of 27th Street between CrestviewAvenue and the Jefferson/St. Charles Parish Line. At thetime of sale, the parcel included fencing, several sheds anda greenhouse. According to the vendee, no value wasattributed to these items. The vendee intends to develop thesite in the future with an owner user light industrialdevelopment.
VERIFICATION: Courthouse records and vendee
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COMPARABLE LAND SALE NO. C
LOCATION: Tifton Street, Kenner, LA
DATE: May 7, 2014
RECORDATION: NA# 11419424
VENDOR: Diversified, Inc, represented by Brian Mock
VENDEE: Tow Rays Oysters, Inc, represented by Raymond S. Vath
SALE PRICE: $74,000 cash
LEGAL DESCRIPTION: Lot 18B, Square 86, Bainbridge Office and Industrial Park,Jefferson Parish, LA
DIMENSIONS: 100 x 120
LAND AREA: 12,000 SF or 0.28 acres
ZONING: L-I, Light Industrial District
UNIT SALE PRICE: $6.17 PSF
COMMENTS: This sale is consists of a vacant and cleared interior parcel ofland located on the eastern side of Tifton Street between 24th
and 25th Streets. At the time of sale, the parcel included someperimeter fencing. The vendee is currently using the parcelfor yard storage.
VERIFICATION: Courthouse records and Max Derbes Realtors
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LAND VALUE ANALYSIS AND CONCLUSIONS
The appraisers have conducted a thorough examination of comparable land sales within theKenner/St. Rose area. The appraisers are familiar with the subject area and has extensiveexperience in the subject’s marketplace.
Sale 1 Sale 2 Sale 3 Sale 4 Sale 5 Sale 6
LOCATION River Rd. River Rd. Third James W. 27th Industry
Sale Date 5/22/12 6/25/10 10/30/12 4/16/12 9/1/12 7/31/13
Sale Price $410,000 $359,000 $160,000 $375,000 $225,000 $318,188
The subject’s parcels range in size from ±4,330 SF to ±165,535 SF and are located just southand east of the New Orleans International Airport. The comparable sales (Nos. 1-6) occurredbetween June 2010 and July 2013 and range in size from 42,500 SF to 179,903 SF. Theappraisers also presented smaller industrial land sales (A-C) which help to give furtherconsideration for valuation of the subject’s smaller parcels. Sale Nos. 4-6 are located in anearby modern industrial parks (superior to the subject parcels). Therefore, these sales areconsidered superior from a location standpoint. From a physical standpoint, Sale Nos. 1, 3,A and B are considered to be inferior to the subject parcels (required clearing and fill). Afterreviewing the sales, the appraisers believe Bundle 13 which contains ±45,641 SF wouldcommand a value near the upper end of the range. This considers this parcel’s location whichis north of Airline Drive. Bundle W-1 would also likely command a value towards the upperend of the comparables due to location (Jefferson Hwy frontage). A value near the middle ofthe range will be estimated for the remaining parcels except Bundle L which has belowaverage utility (long and narrow). Sales A-C are smaller comparables ranging in size from12,000 SF to 19,200 SF. These sales are located within existing nearby industrial parksconsidered superior from a location standpoint. These sales show unadjusted unit valuesbetween $6.17 PSF to $7.00 PSF. These comparables were also used along with the mainsales (Nos. 1-6) to establish market values for the subject’s smaller parcels. As mentioned,Bundles 13, 14 and 15 are presently zoned R-2, Two Family Residential District. The KennerZoning Department indicated that these parcels would likely be re-zoned to S-I, SpecialIndustrial District in most re-development scenarios. The appraisers feel a market value nearthe lower end of the range is justified for these sales. As indicated earlier, discussions withKenner Planning and Zoning officials indicated that it would be likely for these sites to be re-zoned to S-I, Special Industrial District. Nevertheless, a purchaser would have to go throughthe re-zoning process, etc. Therefore, a value toward the lower end of the range is justified forthese sales.
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Airport Compatible Land Use Property Distribution Adjustment
As mentioned, all bundles except Nos. 13 and 14 are considered to be affected. These bundleshave LDN readings of 75 which will require additional building restrictions for soundreduction which increases costs, etc. The appraisers are of the opinion that an adjustment of25% to 30% is warranted considering required time, cost, etc. involved with construction. Thepercentage discount and Final Market Values are shown on the following page.
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Market Value Estimates
Bundle ID Lot Nos. Square Location Size(SF)
PricePSF
Market Value(R/O)
LDN % Discount Final MarketValue (R/O)
13 K 1-6, 16-18, A, B and C 87 Oxley, Maria, 9th and 10th 45,641 $4.05 $185,000 65/75 0% $185,000
14 L 1-14 1 Worth Street and Kenner 70,773 $2.12 $150,0001,3 65 0% $150,000
15 M 1-26 2 Worth, Charles, Sherly and Kenner 155,600 $2.25 $350,0001,3 75 25% $265,000
16 N 1-22 3 Hollandey, Charles, Sherly and Kenner 165,535 $2.24 $370,0001,3 75 25% $280,000
27 V-1 1-14 36 4th, Maria and Duncan 59,233 $3.20 $190,0002 75 30% $135,000
29 W-1 1-6 1 Jefferson Hwy and George 21,724 $4.14 $90,0002 75 30% $65,000
30 W-2 13,14 and pt of 11 and 12 1 Fourth and Butler 11,859 $3.37 $40,000 75 30% $30,000
31 W-3 17-22 1 Fourth and George 22,294 $3.36 $75,000 75 30% $55,000
1 Based on Extraordinary Assumption (See Scope of Work)2 Based on Hypothetical Condition (See Scope of Work)3 Discounted to reflect re-zoning process (See Scope of Work)
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The estimated future marketing time for the property is up to two years. The market valueestimate above assumes that the marketing period has already passed (exposure time) and thatthis is the price that was negotiated as of the effective date of the appraisal.
It is the appraisers’ opinion that the subject property could be successfully marketed at theabove value within a period of about one year. This is considered to be a "reasonable time forthe subject property to be exposed to the open market". This assumption is also predicated onthe fact that the subject is aggressively marketed with a quality/experienced brokerage firm(allowing for high visibility and a determined marketing effort).
Thank you very much for the opportunity to complete this appraisal assignment. We trust ourfindings will prove to be of a beneficial nature to you. If you have any questions or comments,please do not hesitate to call.
Sincerely yours,
___________________________ ___________________________David O. Melancon, Associate Bush G. Benton, MAILouisiana Certified Louisiana CertifiedGeneral Real Estate Appraisal General Real Estate AppraisalLicense No. G1539 License No. G0847
CERTIFICATION
I/we certify that, to the best of my/our knowledge and belief:
- the statements of fact contained in this report are true and correct. However, no responsibility is assumed forthe accuracy of such information as survey, title information, measurements, and other information such ascomparable and other data furnished by others.
- the reported analyses, opinions and conclusions are limited only by the reported assumptions and limitingconditions and are my/our personal, unbiased professional analyses, opinions and conclusions. The report mayalso be limited by the market value premise imposed by the terms of the assignment (any limitation is clearlystated).
- I/we have no present or prospective personal interest in the property which is the subject of this report.
- I/we have no personal bias with respect to the property that is the subject of this report or to the parties involvedin this assignment.
- my/our compensation is not contingent upon an action or event resulting from the analyses, opinions orconclusions in, or the use of, this report. This appraisal assignment was not based on a requested minimumvaluation, a specific valuation, or the approval of a loan.
- the report analyses, opinions and conclusions were developed, and this report has been prepared in conformitywith the requirements of the Appraisal Institute's Code of Professional Ethics and Standards of ProfessionalAppraisal Practice, which include the Uniform Standards of Professional Appraisal Practice. The fee for makingthis report does not include any court testimony or pre-trial conferences.
- the use of this report is subject to the requirements of the Appraisal Institute relating to review by its dulyauthorized representatives, as well as the requirements of the State of Louisiana relating to review by the RealEstate Appraisal Subcommittee of the Louisiana Real Estate Commission.
- Bush G. Benton is currently certified under the Appraisal Institute and is Louisiana Certified General RealEstate Appraisal License No. G0847.
- as of the date of this report, Bush G. Benton has completed the requirements of the continuing educationprogram of the Appraisal Institute.
- I/we have made a personal inspection of the property that is the subject of this report and have inspected allcomparables utilized in this report (unless otherwise noted).
- no one provided significant professional appraisal assistance to the person or persons signing this report otherthan the person(s) already prominently mentioned at the appropriate section of the report where the nature of thecontribution was noted.
- I/we have not performed appraisal services regarding the property that is the subject of this report within athree-year period immediately preceding acceptance of this assignment. I/we have not performed any otherservices pertaining to the subject property within the past three years.
________________________________ ______________________________David O. Melancon, Associate Bush G. Benton, MAILouisiana Certified Louisiana CertifiedGeneral Real Estate Appraisa General Real Estate AppraisalLicense No. G1539 License No. G0847
ASSUMPTIONS AND LIMITING CONDITIONS
1. This report is subject to the following conditions and to such specifications and limitingconditions that also might be set forth in this report. These conditions affect the analyses;opinions, and value conclusions contained in this report.
2. It is assumed that the property is owned in Fee Simple Title. Fee Simple Title implies that theproperty is owned free and clear, unencumbered and unless otherwise specified. There are tobe no leases, liens, easements, encroachments or other encumbrances on the subject propertythat have not been specified in this report.
3. No responsibility is assumed for matters of a legal nature affecting the appraised property ortitle. This appraisal assumes that the subject property is presented with a good and marketabletitle unless otherwise specified. The appraiser(s) has not rendered an opinion as to the title anddoes not have the expertise to do so. Data on ownership and legal descriptions were obtainedfrom sources generally considered reliable.
4. The property is appraised assuming it is to be under responsible ownership and competentmanagement. Unless otherwise specified, the property is assumed to be available for its highestand best use.
5. Any survey contained in this report is assumed to be true and correct, and it is also assumed thatthere are no hidden encroachments upon the property appraised except as noted. Any sketchprepared by the appraiser(s) and included in this report may show approximate dimensions andis included to assist the reader in visualizing the property only. The appraiser(s) has not madea survey of the property and does not warrant any surveys or other presented plans or sketches.
6. The appraiser(s) assumes that there are no hidden or unapparent conditions of the property,subsoil, or other structures, which would render it more or less valuable. The appraiser(s)assumes no responsibility for such conditions or for engineering which might be required todiscover these factors. This includes the presence of unusual/extraordinary mineral depositsor subsurface rights not typically transferred with normal comparable data (i.e., valuablemineral rights associated with oil/gas production, etc., are not part of this assignment).
7. Any distributions of the valuation of the report between land and improvements apply onlyunder the existing program of utilization. The separate valuation for land and building must notbe used in conjunction with any other appraisal and are invalid if used in conjunction with anyother appraisal.
8. No responsibility is assumed for changes in matters that are legal, political, social, or economicwhich could affect real estate values that take place after the effective date of this valuation.
9. Information, estimates, and opinions furnished to the appraisers, and contained in the report,were obtained from sources considered reliable and believed to be true and correct. However,no responsibility for the accuracy of such information furnished to the appraiser(s) during theappraisal process is warranted by the appraiser(s). The appraiser(s) assumes no responsibilityfor the accuracy of such information as measurements, survey, title information, and otherinformation furnished by comparable sales data found in courthouse records and informationobtained from realtors and other parties during any type of comparable survey.
10. This report is predicated upon the assumption that the property has reached a stabilizedoccupancy as of the date of valuation, unless otherwise noted.
11. On all appraisals, subject to satisfactory completion, repairs, or alterations, the appraisal reportand value conclusion are contingent upon completion of the improvements in a workmanlikemanner and in accord with the referred to plans and specifications.
12. The appraiser(s) is not required to give testimony or appear in court because of having madethe appraisal with reference to the property in question unless arrangements have previouslybeen made therefore with additional compensation typically required.
13. Disclosure of the contents of this appraisal report is governed by the By-Laws and Regulationsof the Appraisal Institute.
14. Neither all nor any part of the contents of this report, especially any conclusions as to value,identity of the appraiser(s) or the firm with which he (they) is connected or any reference to theAppraisal Institute shall be disseminated to the public through advertising media, publicrelations media, news media, sales media, or any other public means of communication withoutprior consent of the undersigned. Further, if this report is released to a third party for review(even with the knowledge of the appraisers), warranty of the report's content is not consideredtransferred. The appraisers owe a contractual duty only to the original client as to the accuracyof the ultimate value conclusions found in the report for which they have been paid a fee.Reliance on this report's accuracy by a third party in any decision making process is done so atthe SOLE RISK of the Third Party unless the appraiser(s) has been re-contracted.
15. It is assumed that the subject property is in full compliance with all applicable federal, state,and local environmental regulations unless non-compliance is stated and otherwise considered.
16. Unless otherwise stated in this report, the existence of hazardous material, which may or maynot be present on the property, was not observed by the appraiser(s). The appraiser(s) has noknowledge of the existence of such materials on or in the property. The appraiser(s), however,is not qualified to detect such substances. The presence of substances such as asbestos, urea-formaldehyde foam insulation, or other potentially hazardous materials or gases may affect thevalue of the property. The value estimate is predicted on the assumption that there is no suchmaterial on or in the property that would cause a loss in value. No responsibility is assumedfor such conditions, or for any expertise or engineering knowledge required to discover them.The client is urged to retain an expert in this field, if desired. This report further assumes thatthere are no under/above ground storage tanks of any kind on the property (unless otherwisenoted). Possible leakage problems have not been addressed. The site history of the subjectproperty has not been explored, nor has the historical land use patterns of surroundingproperties been investigated. Again, the appraiser(s) has not addressed any environmentalissues that might affect value. This report assumes that no such issues of any kind are presentor affecting the Fee Simple Value in any manner (unless otherwise noted). The appraiser(s)urges the client to retain an outside environmental expert to determine the subject property'sstatus from this perspective.
17. The appraiser(s) has personally inspected the property and finds no obvious evidence ofstructural deficiencies except as stated in the report. However, no responsibility for hidden orunnoticed defects is assumed. No responsibility for conformity to specific governmentalrequirements (such as fire, building and safety, earthquake, or occupancy codes) can beassumed without provisions of specific professional or governmental inspections.
18. The appraiser(s), again, has personally inspected the subject property and found no evidenceof termite damage or infestation (unless otherwise noted). No termite inspection report wasmade available to the appraiser(s). The appraiser(s) is not responsible for damages resultingfrom any type of insect infestation whatsoever. This is beyond the scope of the appraisalassignment.
19. No consideration in this appraisal assignment has been given to personal property placed on thepremises, or to the cost of moving or relocating such personal property. Only the value of realestate has been considered. The appraiser(s) has no knowledge of the liquidation value ofpersonal property and is not an expert in determining the contributory value of the FF&E withregard to the going concern value. For this type of valuation, separate reports must be renderedby experts in the field.
20. The Americans with Disabilities Act ("ADA") became effective January 26, 1992. I (we) havenot made a specific compliance survey and analysis of this property to determine whether it isin conformity with the various detailed requirements of the ADA. We may (at our discretion)address some likely problems associated with the new law. This should in no way be construedas a complete, full compliance survey or study of the subject property. It is possible that a fullcompliance survey of the property, together with a detailed analysis of the requirements of theADA, could reveal that the property is not in compliance. If so, this fact might have a negativeeffect upon the value of the property. I (we) generally did not consider possible non-compliance with the requirements of ADA in estimating the value of the property. We are notqualified to determine compliance or non-compliance. We do not warrant any consultant'sreport found addressing this problem. We have taken into account in this valuation both the factthat no professional compliance survey has been completed on the subject building and that thestatus of compliance or non-compliance of the comparable sales used herein is unknown whenforming our opinion of value. We take no responsibility for the precise accuracy of thehandling of this matter.
21. The EPA will soon ban production of CFCs (chlorofluorocarbon coolants). As a result, othertypes of refrigerants will have to be used in existing air conditioning systems (coolants such asHCFCs, hydrochlorofluorocarbons) and HFCs (hydrofluorocarbons). The appraisers have notaddressed problems concerning retrofitting of air conditioning systems within the subject. Mostbuildings will switch slowly to HCFCs and this appraisal assumes that no problems will occurwithin the subject property for this type of compliance (when and if it happens).
22. Flood hazard information is reported for information purposes only. The appraisers assume thisto be the latest flood zone information and maps. The appraisers are not engineers or expertsin this field. If the client wants an exact flood zone determination, the client is responsible forobtaining an expert in the field.
23. Insurable Replacement Cost Estimates are done to the best of the appraisers' ability. Theappraisers are not contractors or cost consultants. These values are estimates only and moreprecise values should be provided by an expert. This should be understood by the client.
QUALIFICATIONS:Owner of Stegall, Benton & Associates, LLC. Since 1990, has been appraising and counseling variousreal estate properties including commercial/retail, industrial, multi-family and special purpose uses.Mr. Benton’s work includes the metropolitan New Orleans area, portions of south Louisiana, etc.
REAL ESTATE EXPERIENCE:Formed Stegall, Benton & Associates, LLC (1996 to present). The firm is located in New Orleansand maintains its present posture as a quality, independent real estate appraisal firm that providesa range of services including real estate appraisals, reviews, counseling, litigation, and investmentanalysis.
Affiliated appraiser with Steven Stegall & Associates, from April, 1991 to 1996, a commercial,industrial, and consulting firm.
Affiliated appraiser with Kenneth Kuebel & Associates, from January 1990 to May, 1991, acommercial, industrial and investment real estate appraisal, consulting, brokerage anddevelopment firm.
Marketing assistant with B.J.F. Development, Inc. from November 1988 to May 1989, a assetmanagement firm.
PROFESSIONAL AFFILIATIONS AND ACTIVITIES:Member of the Appraisal Institute, MAI Designation (Certificate No. 10,943)Louisiana Certified General Real Estate Appraisal License No. G0847Co-Chairman of the Louisiana Chapter of the Appraisal Institute (1998)Secretary of the Louisiana Chapter of the Appraisal Institute (2000)Treasurer of the Louisiana Chapter of the Appraisal Institute (2001)Vice President of the Louisiana Chapter of the Appraisal Institute (2002)President of the Louisiana Chapter of the Appraisal Institute (2003)Licensed Real Estate Salesman - State of Louisiana (No. 1080)Graduate, Missouri Auction School (Nov. 1997)
EDUCATION:Louisiana State University, Baton Rouge - B.A. Degree General Studies; minor in BusinessAdministration
Bush G. Benton, MAIQualificationsPage 2 of 3
Successful completion of the following courses and examinations:
APPRAISAL INSTITUTECourse 1A-1: Real Estate Appraisers Principles, Tuscaloosa, AL 1990Course 1A-2: Basic Valuation Procedures, Jackson, MS 1990Course SSP: Standards of Professional Practice, Baton Rouge, LA 1991Course 1BA: Capitalization Theory and Techniques, Pt. A, Austin, TX 1991Course 1BB: Capitalization Theory and Techniques, Pt. B, Houston, TX 1992Course 550: Advanced Applications, Houston, TX 1993Course 540: Report Writing & Valuation Analysis, Athens, GA 1994
COURT TESTIMONY/ARBITRATION/MISCELLANEOUS:
Approved and testified as an Expert Real Estate Appraiser for the Louisiana Tax Commissionhearings. Testified in 1999 regarding high-rise CBD office buildings in New Orleans. Testified inbehalf of 201 St. Charles Avenue (Capital One Building), June 2014.
Arbitration work between Equity Developments Systems, LTD., Slidell, LLC and Steven N.Sirgler v. The City of Slidell, Louisiana, et al. May 2003. U.S. District Court, Eastern District.
8000 Lakeshore Drive, New Orleans, LA. Arbitration case between Landry’s Seafood House-NewOrleans, Inc v. The Board of Commissioners of the Port of New Orleans Levee District. June2005. Court of Appeal of Louisiana, Fourth Circuit.
2525 St. Bernard Avenue, New Orleans, LA. Prepared appraisal for U.S. District Court, Section“C”. Doussan Properties, LLC v. Doussan Gas and Supply, LLC. June 2006.
2600 Gravier Street, New Orleans, LA. Orleans Parish Civil District Court. Boes Corporation Inc.v. Larry Hamm and Falstaff Inc. Provided appraisal (March 2009) and testified May 2009.
1826-34 Canal Street, New Orleans, LA. Board of Supervisors Louisiana State University andAgriculture and Mechanical College v. Tukandu, et, al, Appraisal (November 2009) anddeposition (April 2014).
Appraisal (March 2011) and deposition (August 2014) The Department of Transportation andDevelopment v. Centre at Westbank. 24th Judicial Court, Jefferson Parish.
Levy Gardens Partners 2007, LP v. Lewis Title Insurance Company Inc. Eastern District Court,Section N, Orleans Parish. Appraisal/Deposition (August 2011) and trial.
723 Toulouse Street, New Orleans, LA. Peterson Yokum, et al. v. 544 Funky, LLC, et al.Appraisal (September 2013) and Deposition (October 2013).
Commercial hearing officer for Orleans Parish Real Estate Tax Appeals, 2011-2014.
Bush G. Benton, MAIQualificationsPage 3 of 3
QUALIFICATIONS OF THE APPRAISERDAVID O. MELANCON
WORK EXPERIENCE:
February 2000 to present: Affiliated appraiser with Stegall, Benton andAssociates. The firm is located in Metairie andmaintains its present posture as a quality independentreal estate appraisal firm that provides a range ofservices including real estate appraisals, reviews,counseling, litigation and investment analysis.
January 1999 to January 2000: Richard L. Murphy and Associates in Metairie, LA.Job description includes residential appraisals ofcondominiums, townhomes, vacant land, singlefamily homes and multi-family residences.
June 1998 to December 1998: Western Geophysical Company in London, England.Worked on a team that monitored health and safety ofthe company's vessels primarily located in the NorthSea.
January 1998 to May 1998: Western Geophysical Company in Metairie, LA. Jobdescription included indexing seismic prints, logs,maps and support data relevant to offshore wells inthe Gulf of Mexico.
PROFESSIONAL AFFILIATIONS & ACTIVITIES:
Louisiana Certified General Real Estate Appraisal License No. G1539State of Louisiana Licensed Real Estate Sales Person No. 0995684355
EDUCATION:
Louisiana State University, Baton Rouge - B.S. degree in Geography, 1997
Successful completion of the following courses and examinations:Appraisal Institute
Course 110: Appraisal Principles, Houston, TX 2000Course 120: Appraisal Procedures, Houston, TX 2000Course 310: Basic Income Capitalization, San Antonio, TX 2002Course 320: General Applications, Chicago, IL 2002Course 410: USPAP: Standards of Professional Practice, Houston, TX 2004Course 420: Business Practices and Ethics, Houston, TX 2004Course 510: Advanced Income Capitalization, Houston, TX 2003Course 520: Highest & Best Use and Market Analysis, Atlanta, GA 2004Course 550: Advanced Sales Comparison & Cost Approaches, Houston, TX 2007Course 540: Report Writing and Valuation Analysis, Houston, TX 2008Course 550: Advanced Applications, Houston, TX 2010
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