Attachment 10 - Appraisal - 16283 S Report 9 28 - F45 Land (SDA) - Reduced.pdf

ATTACHMENT “10”

LEASE AND DEVELOPMENT OF VACANT NON-AERONAUTICAL LAND

NORTH PALM BEACH COUNTY GENERAL AVIATION AIRPORT

(RFP #NC 19-8)

APPRAISAL OF THE PROPERTY

7245 S.W. 87 Avenue, Suite 300

Miami, Florida 33173

APPRAISAL OF REAL PROPERTY

Approximately 80 to 100 Acres of Vacant Land Located at the

North Palm Beach County General Aviation Airport (F45)

Palm Beach County, Florida

Appraisal Report SJM File No. 16283-S

PREPARED FOR

Mr. Daniel Tompkins

CH2M

3001 PGA Boulevard, Suite 201-A Palm Beach Gardens, Florida 33410

Andrew H. Magenheimer, MAI Theodore W. Slack, MAI Cert. Gen. RZ1073 (1902- 1992)

Theodore C. Slack, MAI (1931-2015)

Sue Barrett Slack, MAI (Retired)

SLACK, JOHNSTON & MAGENHEIMER, Inc.

7245 S.W. 87 Avenue, Suite 300, Miami, Florida 33173 Telephone (305) 670-2111 • Email: SJMIAMI@aol.com

September 28, 2016

Mr. Daniel Tompkins

CH2M

3001 PGA Boulevard, Suite 201A Palm Beach Gardens, Florida 33410

RE: Appraisal of Real Property

Approximately 80 to 100 Acres of Vacant Land Located at the North Palm Beach County General Aviation (F45) Palm Beach County, Florida SJM File: 16283-S

Dear Mr. Tompkins:

At your request, we have prepared an appraisal report of the “as is” market value per acre and annual market rent per acre of the fee simple estate in the above referenced property, based on its highest and best use, as of June 10, 2016, the date of valuation and visit to the property.

The subject property consists of vacant land in a Subsidiary Development Area (SDA) of the North Palm Beach County General Aviation (F45). F45 is located within unincorporated Palm Beach County. F45 is general aviation airport and is a designated reliever for Palm Beach International Airport. The SDA contains approximately 170 acres and is more specifically located south of the Bee Line Highway and north of Aviation Boulevard.

The preliminary plan for the SDA is for development of approximately 765,600 square feet of industrial space which would require approximately 80 to 100 acres of land according to the planning consultant, Urban Design Kilday Studios. Based on the information provided by the client, approximately 73 acres of the SDA are jurisdictional wetlands. Without the benefit of a specific site plan, the exact amount of developable land cannot be determined; therefore, the valuation analysis has been based on a per acre basis assuming the subject site will range from 80 to 100 acres.

Mr. Daniel Tompkins September 28, 2016 Page Two

The subject property is zoned PO (Public Ownership) and has a future land use designation of U/T (Utility/Transportation). The property is also subject to an Airport Zoning Overlay (AZO). The Airport Zoning Overlay was created to govern development on County-owned and operated airports. The overlay district allows for airport related uses, as well as certain non-airport related development with the zone.

The valuation analysis has been based on four hypothetical conditions as follows:

1: The subject site contains from 80 to 100 acres;

2: Concurrency requirements for 765,600 square feet have been met;

3: Public water and sewer services are available to the subject property;

4: The subject property is exempt from wetland mitigation requirements and fees.

The reader is advised that the hypothetical conditions could impact the valuation of the subject property. The appraisal report states our opinion of market value, subject to various assumptions and limiting conditions contained in this appraisal report. The site visit and analyses that form the basis of our valuation have been performed by the undersigned. The appraisal has been prepared in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP) as adopted by the Appraisal Standards Board of the Appraisal Foundation.

Based on our investigation and analysis and subject to various assumptions, limiting and hypothetical conditions described herein, we have formed the opinion that the market value per acre and annual market rent per acre of the fee simple estate in the subject property as of June 10, 2016 were as follows:

Market Value - $200,000 Per Acre Annual Market Rent - $16,000 Per Acre, Per Year

The following report contains the results of our investigations and the explanation of the approaches to value.

Respectfully submitted, SLACK, JOHNSTON & MAGENHEIMER, INC.

Andrew H. Magenheimer, MAI

CERT. GEN. RZ1073

TABLE OF CONTENTS

SUMMARY OF SALIENT FACTS AND CONCLUSIONS

CERTIFICATION

ASSUMPTIONS AND LIMITING CONDITIONS

IDENTIFICATION OF THE PROPERTY

LEGAL DESCRIPTION

OWNERSHIP AND HISTORY OF THE PROPERTY

PURPOSE, INTENDED USE AND DATE OF THE APPRAISAL

SCOPE OF THE APPRAISAL

DEFINITION OF VALUE AND INTEREST APPRAISED

EXPOSURE AND MARKETING TIME

NEIGHBORHOOD ANALYSIS

DESCRIPTION OF THE SITE

REAL ESTATE TAX ANALYSIS

LAND USE AND ZONING

HIGHEST AND BEST USE

VALUATION PROCESS

SALES COMPARISON APPROACH

RECONCILIATION AND FINAL VALUE ESTIMATE

ADDENDUM A - PHOTOGRAPHS OF THE SUBJECT PROPERTY

ADDENDUM B - LAND SALES

ADDENDUM C - QUALIFICATION OF THE APPRAISER

SUMMARY OF SALIENT FACTS AND CONCLUSIONS

Property Appraised: Approximately 80 to 100 acres of vacant land located at the North Palm Beach County General Aviation (F45), Palm Beach County, Florida. More specifically located on the west side of the Bee Line Highway, east and north of Aviation Boulevard.

Property Type: Vacant land

Folio Numbers: A portion of 00-41-41-34-00-000-5000

2015 Assessment:

Land Assessment $129,182 Building Assessment $ 0 Total Assessment $129,182

2015 Real Estate Taxes: Tax exempt

Flood Insurance: Zone B – Community Panel No. 120192 0050 B, dated October 15, 1982

Ownership: Palm Beach County PREM Division 2633 Vista Parkway West Palm Beach, FL 33411

Interest Appraised: Fee Simple Estate

Land Area: 80 to 100 acres

Land Use: “UT” (Transportation and Utility)

Zoning: “PO” (Public Ownership) with an Airport Zoning

Overlay (AZO)

Highest and Best Use: Future development with industrial uses.

Date of Valuation: June 10, 2016

Date of Report: September 28, 2016

Market Value Indications:

Cost Approach Not Applicable Sales Comparison Approach $200,000 Per Acre Income Approach Not Applicable

Final Value Estimate: $200,000 Per Acre

Annual Market Rent: $16,000 Per Acre, Per Year

AERIAL PHOTOGRAPH OF THE SUBJECT PROPERTY

Subject property boundaries not to scale.

N

Subject

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, impartial, and unbiased professional analyses, opinions, and conclusions.

- we have no present or prospective interest in the properties that are the subject of this report and no personal interest with respect to the parties involved.

- we have no bias with respect to the properties that are 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 results.

- our compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.

- the reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute, which include the Uniform Standards of Professional Appraisal Practice (USPAP).

- the undersigned has made a visit to the property that is the subject of this report.

- Kimberly Magenheimer, CERT. GEN. RZ1386, provided significant real property appraisal assistance to the person signing this certification.

- the use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.

- we have performed services regarding the subject property within the prior three years.

- as of the date of this report, Andrew H. Magenheimer, has completed the continuing education program for designated members of the Appraisal Institute.

SLACK, JOHNSTON & MAGENHEIMER, INC.

Andrew H. Magenheimer, MAI

CERT. GEN. RZ1073

ASSUMPTIONS AND LIMITING CONDITIONS

The appraisal is subject to the following assumptions and limiting conditions:

1. No responsibility is assumed for the legal description or for matters including legal or title considerations. Title to the property is assumed to be good and marketable unless otherwise stated.

2. No legal opinion related to a title search was provided and all existing liens and encumbrances, including deed restrictions and developers agreements, have not been investigated unless otherwise stated. The property is appraised as though free and clear.

3. Responsible ownership and competent property management are assumed.

4. The information furnished by others has been gathered from sources deemed to be reliable, however, no warranty is given for its accuracy.

5. All engineering and surveying is assumed to be correct. Any sketches, plats, or drawings included in this report are included to assist the reader in visualizing the property. We have made no survey of the property, and assume no responsibility in connection with such matters.

6. It is assumed that there are no hidden or inapparent conditions of the property, subsoil, or structures that render it more or less valuable. No responsibility is assumed for unusual soil conditions and no opinion as to these matters is to be inferred or construed from the attached report other than those specifically stated in the report. Unless stated otherwise, the soil conditions of the subject property are assumed to be adequate to support development utilizing conventional construction techniques. We recommend the client obtain an opinion from a competent engineering firm.

7. It is assumed that there is full compliance with all applicable federal, state, and local environmental regulations and laws unless noncompliance is stated, defined, and considered in the appraisal report.

8. It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless a nonconformity has been stated, defined, and considered in the appraisal report.

9. It is assumed 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.

10. It is assumed that the utilization of the land and improvements is within the boundaries or property lines of the property described and that there is no encroachment or trespass unless noted in the report.

11. Any proposed or partially completed improvements included in this report are assumed to be completed in accordance with approved plans and specifications and in a workmanlike manner.

12. Our estimates of future values were formulated based upon market conditions as of the date of appraisal, considerate of future projections concerning supply and demand. The appraiser has no responsibility for significant events that alter market conditions subsequent to the effective date or dates of appraisal.

13. This study is to be used in whole and not in part. No part of it shall be used in conjunction with any other appraisal. Publication of this report or any portion thereof without the written consent of the appraiser is not permitted.

14. The appraiser, by reason of this report, is not required to give further consultation, testimony, or be in attendance in court with reference to the property in question unless arrangements have been previously made.

15. Neither all, nor any part of the contents of this report (especially any conclusions as to value, the identity of the appraiser, or the firm with which the appraiser is connected), shall be disseminated to the public through advertising, public relations, news, sales, or other media without the written consent and approval of the appraiser. The use of this report in any public offering or syndication document is specifically prohibited.

16. Unless otherwise stated in this report, the existence of hazardous substances, including without limitation asbestos, polychlorinated biphenyls, petroleum leakage, or agricultural chemicals, which may or may not be present on the property, or other environmental conditions, were not called to the attention of, nor did the appraiser become aware of such during the appraiser's inspection. The appraiser has no knowledge of the existence of such materials on or in the property unless otherwise stated. The appraiser, however, is not qualified to test such substances or conditions. If the presence of such substances, such as asbestos, urea formaldehyde foam insulation, or other hazardous substances or environmental conditions, may affect the value of the property, the value estimated is predicated on the assumption that there is no such condition on or in the property or in such proximity thereto that it would cause a loss in value. No responsibility is assumed for any such conditions, nor for any expertise or engineering knowledge required to discover them. It is recommended that the client retain an expert in this field, if needed.

17. Disclosure of the contents of this report by the appraiser is controlled by the Appraisal

Institute of which one or more signatures of this report is an MAI member and by the Florida Department of Professional Regulation, Division of Appraisal State Certification.

The analysis and value conclusions, as well as non-public information about the subject property, are confidential matters and cannot be divulged to any persons other than the party for whom the report is prepared.

Exceptions to this confidentiality provision are requests by committees of the Appraisal Institute or the Florida Department of Professional Regulations for peer review, and subpoenas by any court having jurisdiction to request production of the report.

Appraisal Assumptions

The valuation analysis has been based on four hypothetical conditions as follows:

1: The subject site contains from 80 to 100 acres;

2: Concurrency requirements for 765,600 square feet have been met;

3: Public water and sewer services are available to the subject property;

4: The subject property is exempt from wetland mitigation requirements and fees.

The reader is advised that the hypothetical conditions could impact the valuation of the subject property.

IDENTIFICATION OF THE PROPERTY

The subject property consists of vacant land in a Subsidiary Development Area (SDA) of the North Palm Beach County General Aviation (F45). F45 is located within unincorporated Palm Beach County. F45 is general aviation airport and is a designated reliever for Palm Beach International Airport. The SDA contains approximately 170 acres and is more specifically located south of the Bee Line Highway and north of Aviation Boulevard.

The preliminary plan for the SDA is for development of approximately 765,600 square feet of industrial space which would require approximately 80 to 100 acres of land according to the planning consultant, Urban Design Kilday Studios. Based on the information provided by the client, approximately 73 acres of the SDA are jurisdictional wetlands. Without the benefit of a specific site plan, the exact amount of developable land cannot be determined; therefore, the valuation analysis has been based on a per acre basis assuming the subject site will range from 80 to 100 acres.

The subject property is zoned PO (Public Ownership) and has a future land use designation of U/T (Utility/Transportation). The property is also subject to an Airport Zoning Overlay (AZO). The Airport Zoning Overlay was created to govern development on County-owned and operated airports. The overlay district allows for airport related uses, as well as certain non-airport related development with the zone.

LEGAL DESCRIPTION

The subject property is part of a larger parcel containing from 170 to 199 acres. A separate legal description for the subject property and/or SDA parcel was not provided.

OWNERSHIP AND HISTORY OF THE PROPERTY

According to the Palm Beach County tax rolls, ownership of the subject property is currently held by Palm Beach County, PREM Division, 2633 Vista Parkway, West Palm Beach, FL 33411. The Palm Beach County tax rolls reflect no ownership transfers within the past five years. Palm Beach County acquired the property through eminent domain in 1986.

PURPOSE, INTENDED USE AND DATE OF THE APPRAISAL

The purpose of this appraisal is to develop and report an opinion of the “as is” market property, based on its highest and best use, as of June 10, 2016, the effective date of appraisal. The date of the report is September 28, 2016. The client and intended user of this report is CH2M and the additional intended user is the Palm Beach County Department of Airports.

The intended use of the appraisal is for planning purposes. There are no other intended users or intended uses of this appraisal.

SCOPE OF THE APPRAISAL

The scope of this appraisal is to develop and report an opinion of the current market value per acre and annual market rent per acre of the fee simple estate in the subject property, subject to various assumptions and limiting conditions contained in this appraisal report and in accordance with its highest and best use. The client previously provided a Final Master Plan and Traffic Approval Letter.

The assignment began with a visit to the subject property and surrounding neighborhood.

Subsequent to our visit, research was conducted in support of an estimation of the highest and best use of the subject property. The highest and best use analysis considers all physically possible, legally permissible and economically feasible uses to which the property could be put as though vacant.

The appraisal process includes three basic approaches to value. These are the income, sales comparison, and cost approaches. The application of these approaches is determined by the type of property being appraised, as well as the scope of the valuation assignment. The sales comparison approach was considered the only applicable approach in the valuation of the subject property, which consists of vacant land.

Our research for comparable land sales extended from January, 2014 to the effective date of this appraisal. The search concentrated on sites containing 25 acres or more and suitable for industrial and/or commercial uses. The research initially concentrated on sites located within Palm Beach County; however, due to the limited data available, the search parameters were expanded to include neighboring Broward and Miami-Dade Counties.

The sales included in this report are representative of the best available market data.

Research of the selected sales included, to the extent possible, a visual inspection, reviewing the deed and confirming sale details with one or more of the parties to the transaction, or their representatives. Only those sales considered reasonably similar to the subject property were included.

A review of the market area indicates industrial sites are is typically owned in fee simple title and not leased and, accordingly, there is a lack of comparable site rental information to provide a direct rental comparison to the subject property. To estimate the fair market annual land rental for the subject property, the above referenced market value must be converted into a fair market annual rental rate. The fair market annual land rental rate for the subject property was estimated using the capitalization process.

The final step in our analysis is a reconciliation of the appraisal methods used. The quantity and quality of the data used, and the reliability of their value indications, are the basis for the final conclusion of value.

DEFINITION OF VALUE AND INTEREST APPRAISED

The Uniform Standards of Professional Appraisal Practice (USPAP 2015-16) defines Market Value as "a type of value, stated as an opinion, that presumes the transfer of a property (i.e. a right of ownership or a bundle of rights), as of a certain date, under specific conditions set forth in the definition of the term identified by the appraiser as applicable in an appraisal."

We have relied on the Dictionary of Real Estate Appraisal, Sixth Edition, definition of Market Value as "the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

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 in the open market;

4. payment is made in cash in United States 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.

(Federal Register 77472, Volume 75, No. 237, December 10, 2010)

Other pertinent definitions from the Dictionary of Real Estate Appraisal, Sixth Edition, as follows:

Fee Simple Estate is the “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.”

Leased Fee Interest is “the ownership interest held by the lessor, which includes the right to receive the contract rent specified in the lease plus the reversionary right when the lease expires."

Market Rent is “the most probable rent that a property should bring in a competitive and open market reflecting all conditions and restrictions of a specified lease agreement, including the rental adjustment and revaluation, permitted uses, use restrictions, expense obligations, term, concessions, renewal and purchase options, and tenant improvements (TIs).”

Hypothetical Condition is “1) a condition that is presumed to be true when it is known to be false. (SVP); 2) a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis. Comment: Hypothetical conditions are contrary to known facts about physical, legal or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis.”

Exposure Time is "the estimated length of time to property interest being appraised would have been offered in the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal."

Marketing Time is "an opinion of the amount of time it might take to sell a real or personal property interest at the concluded market value level during the period immediately after the effective date of the appraisals."

EXPOSURE AND MARKETING TIME

Exposure and marketing times are the typical periods of time necessary to expose and actively market the subject property on the open market to achieve a sale at a price consistent with the market value estimate and on terms consistent with the definition of market value recited herein. The length of time is a function of several factors including price, terms, investment quality and exposure to a given market. Exposure time is the hypothetical period immediately preceding the effective date of the appraisal and market time is the period immediately after the effective date of the appraisal.

A review of current market activity for land located in the subject market area, as well as conversations with brokers active within this market, was performed in order to estimate an exposure time for the subject property. Most brokers indicated that exposure/marketing times are typically less than one year, if the property is priced realistically. We have further estimated a marketing time of up to 12 months.

NEIGHBORHOOD ANALYSIS

The subject property is located on the north side of the North Palm Beach County General Aviation Airport (F45). F45 is one of the newer airports in Florida. Starting in the 1970’s the need for a reliever airport was identified to alleviate some of the general aviation traffic at PBI.

After a lengthy search process, the site for the airport was identified and acquired by Palm Beach County in 1986. Construction of the airport commenced in 1992 and the airport opened for operations in 1994. The airport property consists of 1,132 acres designated for environmental preservation. Since its opening, F45 has served its role to relieve general aviations traffic for PBI.

Access to the area is primarily via the Beeline Highway which runs along the north side of the airport. The Beeline interchanges with the Florida Turnpike approximately 5 to 6 miles southeast of the airport. PGA Boulevard also intersects with the Beeline in close proximately to the subject property. The Florida Department of Transportation recently announced that a six-mile section of Bee Line Highway will be widened from two lanes to four lanes. The six-mile section includes the portion of the highway located adjacent to F45. The $22 million project calls for building double lanes of traffic in each direction separated by a 40-foot-wide median. Lighting upgrades and pavement striping are planned along with a 5-foot-wide paved shoulder on both sides of the roadway.

The airport continues to grow and build improvements to serve the flying public in the northern areas of Palm Beach County. F45 is currently under a management agreement where Signature Flight Support is responsible for the management and leasing of the facilities at the airport. Signature Flight Support master leases certain improvements at the airport.

The area surrounding F45 includes large areas of conservation lands and wildlife management areas. The J.W. Corbett Wildlife Management area, established in 1947, encompasses approximately 60,348 acres and is located southwest of F45.

In addition to F45, industrial and commercial developments in the area include the Pratt and Whitney Rocket Division complex, Palm Beach International Raceway Park and First Park South Florida. These developments are north and northwest of F45.

The Pratt and Whitney facility was built in the 1950’s and the intention was to locate it as far from developed areas as possible. First Park South Florida (f/k/a Florida Research Park) encompasses approximately 1,247 acres and has development rights for up to 6 million square feet of industrial buildings. At present, Walgreens is the largest user in the park with a distribution facility of 880,000 square feet. Approximately 537 acres of the park was sold in December, 2014 for $100,000,000 ($186,218/acre). There are sites available for sale ranging in size from 1.10 to 80.00 acres. Pricing varies depending on the stage of readiness of the individual sites and location within the park; however, the prices are around $3.75 per square foot.

Residential development in the area is limited due in part to the extensive wetlands in the area. The residential development is largely comprised of ranchettes. Landstar Homes purchased the Vavrus Ranch adjacent to the west of F45 in October, 2012. The property is comprised of 4,763 acres. The sales price was $20,000,000. The project, to be known as Avenir, is expected to be approved in 2016. Preliminary plans for the property include 3,250 homes, 2 million square feet of office space, 400,000 square feet of retail space, as well as acreage set aside for schools, parks and civic uses.

Pratt Whitney

PB Intl Raceway

First Park

DESCRIPTION OF THE SITE

Location: Located at the North Palm Beach County General Aviation (F45), Palm Beach County, Florida. More specifically located on the west side of the Bee Line Highway, east and north of Aviation Boulevard.

Shape: Irregular

Land Area: 80 to 100 acres

Access: At present, there is no vehicular access to the site. The site has frontage along the east and north side of Aviation Boulevard and the site plan provided notes a future access and road relocation. The SDA also has frontage along the CSX Rail right-of-way.

Topography: Level and below street grade.

Soil Conditions: No soil report of the property was provided. It is assumed the soil would be of sufficient load bearing capacity to support the construction of permanent structures.

Flood Insurance: Zone “B” areas between limits of the 100-year flood and 500-year flood; or certain areas subject to 100-year flooding with average depths less than one foot or where the contributing drainage area is less than one square mile; or areas protected by levees from the base flood. Community Panel No. 120192 0050 B, revised October 15, 1982.

Utilities: This analysis is based on the hypothetical condition public utilities are available to the site.

Land Use Restrictions: No authoritative report of title has been provided or reviewed.

There do not appear to be any other easements, encroachments, or restrictions that would adversely affect the utilization of the site.

Environmental Study: An environmental study was not provided. It is assumed there are no environmental conditions preventing use of the site in accordance with its highest and best use.

Site Improvements: None

Comments: The valuation analysis has been based on four hypothetical conditions as follows:

1: The subject site contains from 80 to 100 acres;

2: Concurrency requirements for 765,600 square feet have been met;

3: Public water and sewer services are available to the subject property;

4: The subject property is exempt from wetland mitigation requirements and fees.

REAL ESTATE TAX ANALYSIS

The subject property is located within unincorporated Palm Beach County. The subject property is part of a larger parcel. The parcel is tax exempt because of its governmental ownership. According to the Palm Beach County tax rolls, the 2015 real estate taxes and assessments for the subject property are as follows:

Folio Number: A portion of 00-41-41-34-00-000-5000

2015 Assessment:

Land Assessment $129,182 Building Assessment $ 0 Total Assessment $129,182

2015 Real Estate Taxes: Tax exempt

LAND USE AND ZONING

The subject is zoned PO (Public Ownership) and has a land use designation of U/T (Utility/Transportation). The property is also subject to an Airport Zoning Overlay, which was created to govern development on County-owned and operated airports. The overlay district allows for airport related, as well as certain non-airport related development within the same zone. Permitted uses include a number of commercial uses such as office, industrial and retail.

HIGHEST AND BEST USE

The following definitions are from The Dictionary of Real Estate Appraisal (Sixth Edition) published by the Appraisal Institute:

Highest and Best Use is the “reasonably probable use of property that results in the highest value. The four criteria that highest and best use must meet are legal permissibility, physical possibility, financially feasibility and maximum profitability.”

Highest and Best Use As Though Vacant is the use “among all reasonable, alternative uses, the use that yields the highest present land value, after payments are made for labor, capital, and coordination. The use of a property based on the assumption that the parcel of land is vacant or can be made vacant by demolishing any improvements.”

In estimating highest and best use, there are essentially four stages of analysis:

1. Possible Use - normally dictated by physical constraints.

2. Permissible Use - what use would be permitted in consideration of existing zoning and other applicable laws governing the use of the property, as well as any deed restrictions that may exist.

3. Feasible Use - which possible and permissible uses will produce a net return to the owner of the site.

4. Maximally Productive - among feasible uses, which use will produce the highest net return to the land.

To meet the tests of highest and best use, the use cannot be speculative or conjectural. It must be legal and probable. There must be a profitable demand for such use and it must return to the land the highest net return for the longest period of time. These tests have been applied to the subject property, as though vacant.

The subject property has been analyzed as though vacant only. The valuation analysis has been based on four hypothetical conditions as follows:

1: The subject site contains from 80 to 100 acres;

2: Concurrency requirements for 765,600 square feet have been met;

3: Public water and sewer services are available to the subject property;

4: The subject property is exempt from wetland mitigation requirements and fees.

As Though Vacant

The highest and best use, as vacant, considers among all reasonable alternative uses, the use that yields the highest present land value, after payments are made for labor, capital, and coordination. The use of a property is based on the assumption that the parcel of land is vacant or can be made vacant by demolishing any improvements.

Physically Possible: The subject property is comprised of approximately 80 to 100 acres within the 170-acre SDA at the North Palm Beach County General Aviation. Although no soil report for the subject has been provided, a visit of the property, as well as existing developments in the area revealed no problems associated with the physical aspects of developing the site. The area has good access and availability to public utilities.

The physical characteristics of the site support a number of possible uses within the confines of its configuration and size.

Legally Permissible: Permissible or legal uses are those permitted by zoning and land use regulations. No recent title search was provided to the appraisers. Other than those discussed earlier, it is assumed that there are no other covenants, restrictions or easements that would adversely affect the use of the site to such an extent that it would negatively impact its value.

The subject is zoned PO (Public Ownership) and has a land use designation of U/T (Utility/Transportation). The property is also subject to an Airport Zoning Overlay, which was created to govern development on County-owned and operated airports. The overlay district allows for airport related, as well as certain non-airport related development within the same zone. Permitted uses include a number of commercial uses such as office, industrial and retail.

Feasible or Maximally Productive Use: It has been established that the subject property is of adequate size and shape to permit development. It has further been established that existing development in the area provides for potential development commercial/industrial uses.

Existing developments in the area include the Pratt and Whitney campus and First Park South Florida, a planned industrial park and home to a large Walgreens distribution facility. According to the broker marketing First Park South Florida, sales and leasing in the park has been slow in the past three years, but is expected to start to see a little more interest with the widening of Beeline Highway and anticipated Avenir (Landstar) project.

Conclusion: Considering the location, physical characteristics and permissible uses of the property, and based upon an analysis of the site, the surrounding neighborhood, land uses and the real estate market in general, it is our opinion that the highest and best use of the subject property, as vacant, would likely be for future development with light industrial uses.

VALUATION PROCESS

There are three generally recognized approaches considered in the valuation of real property. They include the income, sales comparison, and cost approaches. It should be noted that the appropriateness and reliability of each approach depends on the type of property being appraised, the age and condition of the improvements, if any, and the availability and quality of market data available for analysis.

The income approach provides an indication of value of a property based on a conversion of anticipated benefits (net income). The method of conversion is called capitalization and is either based on a single year's income (direct capitalization), or several years' income (discounted cash flow). The sales comparison approach provides an indication of value based on sales of properties considered similar. The cost approach provides an indication of the value of a property represented by the reproduction cost of the existing improvements, less accrued depreciation, to which is added the land value.

In this instance, only the sales comparison approach was applicable in the valuation of the subject property per acre, which consists of vacant land. The scope of this analysis also included an estimate of the annual market rent per acre for the subject property.

There are two generally accepted methods of estimating annual market land rent. One is by direct comparison of rentals paid and asked for similar properties, consistent with the definition of market rent. The second method is by land value direct capitalization, in which the market annual land rent is estimated by first estimating the underlying land value and then applying a market derived overall capitalization rate to arrive at annual market rent. Due to the lack of comparable land leases, in this analysis, we have used the capitalization method.

The appraisal process is concluded by a review and re-examination of each of the approaches to value employed. Consideration is given to the type and reliability of data used and the applicability of each approach. These factors are reconciled and a final value estimate is made. The fee simple market value analysis via the sales comparison approach to value will be followed by the annual market land rental analysis.

SALES COMPARISON APPROACH

Fee Simple Land Valuation

The sales comparison approach produces an estimate of value for real estate by comparing recent sales of similar properties in the subject's surrounding or competing area. Inherent in this approach is the principle of substitution, which states that when a property is replaceable in the market, its value tends to be set at the cost of acquiring an equally desirable substitute property, assuming that no costly delay is encountered in making the substitution.

By analyzing sales which qualify as arm’s-length transactions between willing, knowledgeable buyers and sellers, price trends can be identified from which value parameters may be extracted. Comparability in physical, locational, and economic characteristics are important criteria in evaluating the sales in relation to the subject property. The basic steps involved in the application of this approach are as follows:

1. Researching recent relevant property sales and current offerings throughout the competitive area.

2. A selection process to focus on properties considered most similar to the subject, and then analyzing the selected comparable properties giving consideration to the time of sale and any change in economic conditions which may have occurred as of the date of valuation. Other relevant factors of a physical, functional, or locational nature are also considered.

3. Reducing the sales to a meaningful unit of comparison, i.e., price per unit or price per square foot.

4. Making appropriate adjustments to the comparable properties.

5. Interpreting the data analyzed to draw a meaningful conclusion of value.

The validity of this approach is dependent upon the availability and relevancy of the data.

The sales of properties having characteristics similar as the subject have been collected and analyzed. Typically, land sells based on units of comparison particular to the property type (e.g., price per square foot, price per acre, price per unit). In this analysis, the price per acre was analyzed.

The subject property consists of vacant land in a Subsidiary Development Area (SDA) of the North Palm Beach County General Aviation (F45). F45 is located within unincorporated Palm Beach County. F45 is general aviation airport and is a designated reliever for Palm Beach International Airport. The SDA contains approximately 170 acres and is more specifically located south of the Bee Line Highway and north of Aviation Boulevard.

The preliminary plan for the SDA is for development of approximately 765,600 square feet of industrial space which would require approximately 80 to 100 acres of land according to the planning consultant, Urban Design Kilday Studios. Based on the information provided by the client, approximately 73 acres of the SDA are jurisdictional wetlands. Without the benefit of a specific site plan, the exact amount of developable land cannot be determined; therefore, the valuation analysis has been based on a per acre basis assuming the subject site will range from 80 to 100 acres.

Our research for comparable land sales extended from January, 2014 to the effective date of this appraisal. The search concentrated on those sites whose zoning classifications permit commercial and/or industrial development and are located within the subject’s market area, or competitive areas. A summary chart and location map are included on the following pages. Detailed information and an aerial photograph of the land sales are presented in the addenda.

The eight land sales under analysis occurred between January, 2014 and June, 2016. The sales reflected unadjusted per acre prices from $152,460 to $247,758 for sites containing from 29.53 to 89.20 acres.

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Land Sale 1 is located at the northeast corner of Sheridan Street (S.W. 72nd Street) and S.W. 205th Avenue in the City of Pembroke Pines, Broward County. This property has a corner location with two street frontages. It is bounded on the west and north by the South Broward County Landfill. The irregular shaped site contains approximately 66.00 gross acres. Excluding approximately 2.71 acres that is required for a 90-foot Sheridan Street dedication, the developable area was reported at 63.29 acres. In addition, approximately 5.84 acres of the site are encumbered by a Florida Power & Light electric transmission line easement. The property is zoned "PUD" (Planned Unit Development).

This property consists of a former women's detention center. This property sold in June, 2014 for $13,519,470, or $4.90 per square foot of land area ($213,612 per acre). At time of sale, the site was improved with several buildings totaling 224,497 square feet. The former detention center closed in 2012. The broker indicated that the buyer is responsible for the cost to demolish the existing buildings and site improvements on the site at a reported cost of $1.09 per square foot of land area ($13.36 per square foot of building area). Including the demolition cost, the land price is $5.99 per square foot.

At time of sale, this property was located within unincorporated Broward County. It was acquired by the City of Pembroke Pines to control its use as it is adjacent to their municipality. On January 6, 2016, the City of Pembroke Pines annexed this property and is currently in the process of changing its land use designation from "Community Facilities" to "Industrial", as well as changing its zoning classification to an industrial category, which is expected to take several months to complete.

The City of Pembroke Pines has reportedly placed the property under contract with a developer, who intends to redevelop the site with an industrial park. The contract price was reported at $14,250,000, or $5.17 per square foot of land area. Other than changing its land use and zoning classifications, the new buyer would be responsible for all development costs, including the demolition of the existing improvements on the site, as well fill in an existing lake along its Sheridan Street frontage. Including the demolition cost, the adjusted contract price would be $6.26 per square foot ($225,154 per acre).

Land Sale 2 is located on the southwest corner of S.W. 152nd Street (Coral Reef Drive) and S.W. 124th Avenue in Miami-Dade County. This property is located just west of the Zoo Miami property. This property has a corner location with three street frontages. The intersection of S.W. 152nd Street and S.W. 127th Avenue is signalized. The irregular shape site contains approximately 137.89 acres. This property contains approximately

43.36 acres of land classified as Natural Forest Communities and hammock preserve, which are not developable and are to be preserved. Approximately 5.33 acres are to be dedicated for the rights-of-way for S.W. 152nd Street (Coral Reef Drive) and S.W. 127th Avenue. The developable area was reported at 89.20 acres.

Prior to the current sale (2013), the land use designation for that portion of the site fronting on S.W. 152nd Street was changed from “Low-Medium Density Residential” to “Business and Office” and the zoning classification was changed from “AU” (Agriculture Use) to “BU-2” (Special Business District), “RU-4L” (Limited Apartment House District) and “PAD” (Planned Area Development).

This property sold in two separate transactions between the same parties. The total purchase price was $22,100,000, or $5.69 per square foot of net developable land area ($247,758 per acre). It should be noted that, based on our research concerning sales of parcels designated "NFC", as well as sales of other environmentally sensitive parcels, these properties sell for significantly less than developable parcels; typically in the range of $0.50 to $1.50 per square foot. Based on a hypothetical allocation of the sales price of Land Sale 4 between the NFC and developable portion of the parcel, we would estimate a value of the net developable parcel at about $5.25 per square foot, excluding an allocation of the sales price for the "NFC" designated land based on the middle of the range of sales of similar environmentally sensitive parcels.

At time of sale, the site was vacant. The developer intends to develop the site with a mixed-use project to contain commercial and residential components. The commercial component, containing approximately 47.82 developable acres, consists of a proposed shopping center development that is to include four big-box sites and seven outparcel sites. The residential component, containing approximately 41.38 developable acres, is to be developed in three phases. The first two phases are to contain a total of 600 multifamily units. The third phase has been set aside for future development. At present, the site remains undeveloped.

Land Sale 3 is located north of West Hillsboro Boulevard and east of Interstate 95 in the City of Deerfield Beach, Broward County. This property has exposure to, but no direct access, from Hillsboro Boulevard. Access to the site from Hillsboro Boulevard is via a four-lane, median divided road that travels between the sale site and Hillsboro Boulevard.

This property has a mid-block location with one street frontage. The north side of this property borders a canal. Although it has limited traffic exposure from Hillsboro Boulevard, it has exposure from Interstate and is at an interchange. The site is zoned "PID" (Planned Industrial Development) and "S" (Open Space). The irregular shaped site contains approximately 74.42 gross acres. That portion of the site zoned "S" (Open Space) has to be preserved as green space and cannot be developed. The developable area for this property was reported at 62.40 acres.

This property sold in March, 2015 for $10,000,000, or $3.68 per square foot of developable area ($160,256 per acre). This property consists of a former golf course and country club. The buyer acquired this property for redevelopment with an industrial park known as Hillsboro Technology Center. This business park has approvals for approximately 900,000 square feet of industrial space, 100,000 square feet of office space and 10,000 square feet of commercial space. As it is a former golf course, the buyer indicated that it required significant site work to make it a buildable site. At present, site work has begun for this development.

Land Sale 4 is located at 1199 West Lantana Road in Lantana, a municipality of Palm Beach County. The property was once the home of the A.G. Holley State Hospital. The property contains 73.34 acres. The site is zoned Mixed Use Development. This property was sold by the State of Florida in March, 2014. The sales price was $15,600,000 or $5.67 per square foot ($246,806 per acre). The buyer is planning to redevelop the site with a mixed use project to be known as Water Tower Commons. The project is slated to include 300,000 square feet of retail space and over 1,000 residential units. It was reported that the buyer is making a $2.5 million donation to the Town of Lantana to replace public sports facilities that were previously located on the property.

Land Sale 5 is located on the north side of Southern Boulevard, east of North Jog Road in unincorporated Palm Beach County. This property contains 68.80 acres and was vacant at the time of sale. The seller in this transaction had previously assembled this site in two separate transactions. The property has been platted as the Southern Light Industrial Park and has obtained entitlements for over 600,000 square feet of industrial buildings. Approximately 7.00 acres will be set aside as environmental preserve and 7.83 acres for water retention (lake). This latest transaction took place in August, 2014. The sales price was $12,000,000 or $4.00 per square foot ($174,429 per acre).

Land Sale 6 is…