Download - WILLIAM C. PORTH LAW 1791 ROBKNSON 25326
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ROBKNSON &McELWEE
June 2 1 , 2006
BY HAND DELIVERY
Mrs. Sandra Squire Executive Secretary West Virginia Public Service Commission 201 Brooks Street Charleston, WV 25301
Re: Appalachian Power Company Case No. 06-0692-E-PC
Dear Mrs. Squire:
I enclose herewith a single copy of the responses of Appalachian Power Company to the Staffs first set of discovery requests in the above-referenced proceeding.
WILLIAM C. PORTH ATTORNEY AT LAW
P.O. BOX 1791 CHARLESTON, WV 25326
DIRECT DIAL: (304) 347-8340 E-MAIL: [email protected]
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WCP:dlm Enclosures
Very truly yours, wk e . William C. Porth (W.Va. State Bar #2943)
Counsel for Appalachian Power Company
PHONE: (304) 344-5800 FAX: (304)344-9566 WEBSITE: www.ramlaw.com 400 FIFTH THIRD CENTER 700 VlRGINIA STREET, EAST CHARLESTON, WV 25301
Appalachian Power Company Responses to the Staffs
First Set of Discovery Requests Case No. 06-0692-E-PC
Request No. 1:
The accounting history, including the account numbers used, the original cost, and the date of purchase of the property at issue.
Response No. 1:
The property was purchased on June 11, 1940 from Leopold Marmet for $29,776.00. The cost of the property was recorded in account 121, Nonutility Property. In 1984, the Company added $84,598 of improvements including sewer lines, water lin and landscaping to convert the property to a mobile home park. These ad were also recorded in account 121.
Appalachian Power Company Responses to the Staffs
First Set of Discovery Requests Case No. 06-0692-E-PC
Request No. 2:
Any proposed assignment or allocation of the book value of the subject parcel of land to the total parcel of land used as ApCO's transmission and distribution service facility.
Response No. 2:
There is no proposed assignment or allocation of the book value of the subject parcel of land. The property is recorded in account 121 Nonutility Property in general plant account 389, Land and Land rights.
Appalachian Power Company Responses to the Staff's
First Set of Discovery Requests Case No. 06-0692-E-PC
Request No. 3:
All of the proposed journal entries associated with the sale or transfer of the real property, including account numbers and amounts.
Response No. 3:
See the attached spreadsheet, detailing the journal entries related to this sale.
Appalachian Power Company Marmet Sale of 4.23 acres
Sale of 4.23 Acre Tract in Marmet to Leonard Johnson Funeral Home
Journal Entries
Credit - Debit Account # Account Name - 121 122
131 122
122 Various
122 421 1
Nonutility Property Accumulated provision for depreciation To retire the original cost of the property
Cash (proceeds from sale) Accumulated provision for depreciation To record cash proceeds from the sale
Accumulated provision for depreciation Costs Related to Sale (estimated) To record costs related to the sale
Accumulated provision for depreciation Gain on Land Sale To record the gain on sale
TOTALS
$1 14,374.00 $1 14,374.00
$226,000.00 $226,000.00
$20,506.72 $20,506.72
$91 ,I 19.28 $91 ,I 19.28
$452,000.00 $452,000.00
Appalachian Power Company Responses to the Staffs
First Set of Discovery Requests Case No. 06-0692-E-PC
Request No. 4:
The method of determining open market value of subject real estate along with a copy of the latest appraisal of the real estate.
Response No. 4:
The property was put up for sale by sealed bid. The highest bid, from the proposed Buyer, effectively established the market value of the property. The appraised value was a lower amount. A copy of the appraisal obtained by the Company is attached hereto.
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APPRAISAL OF AMERICAN ELECTRIC POWER COMPANY A.K.A. APPALACHIAN POWER COMPANY
HIGH LINE MOBILE HOME PARK 91st STREET, MARMET
KANAWHA COUNTY, WEST VIRGINIA
C o m m e r c i a l and I n d u s t r i a l R e a i E s t a t e
1014 Bridge Road P.O. Box 271 Telephone. (304) 343-5695 Charleston, West Viginii 25321 FAX (304) 343-5694
September 15,2003
Joyce Halteman Leachan American Electric Power Company Land Management 700 Morrison Road Gahma, Ohio 43230
Re: High Line Mobile Home Park 9ISt Street, Mannet, Kanawha County, West Virginia
Dear Ms. Leachman:
At your request I have observed the High Line Mobile Home Park, which is a twelve space mobile home park located off of 9ISt Street in Marmet, Kanawha County, West Virginia. The site contains approximately 3.42 acres, according to the Kanawha County tax records and the only improvements include hfhstructure for the mobile home park such as roads, utilities and parking pads. The purpose of this appraisal is to provide an opinion of the current market value and assist you with decisions regarding the disposition of the property.
The date of my observation and the effective date of the appraisal was August 26,2003.
Market value is defined Within the body of this report. The report is intended to meet the requirements of the Uniform Standards of Professional ADpraisal Practice. It is a complete appraisal and summary appraisal report. The appraiser is competent to appraise this type of property through experience and training.
It is my opinion that the market value of the subject property as of the appraisal date of August 26,2003, was:
One Hundred Sixty Five Thousand Dollars ~~
($165,000.00)
Joyce Halterman Leachman September 15,2003 Page Two
Attached to this letter of transmittal is a narrative appraisal report, which includes information on the property and its surroundings, limiting conditions and certifications, qualifications, and other pertinent data.
This letter must remain attached to the report, which contains 63 pages plus related exhibits, in order for the value opinions set forth to be considered valid.
Sincerely,
GOLDMAN ASSOCIATES, INC.
Todd Goldman WV State Certification #255
TGcas Attachments
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TABLE OF CONTENTS
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CONTINGENT AND LIMITING CONDITIONS
SUMMARY OF SALIENT FACTS AND CONCLUSIONS
SUBJECT PROPERTY ................................................................................................................................... 1
PURPOSE AND INTENDED USE OF THE APPRAISAL ................. ............................... ........................ ..... 1
APPRAISAL TYPE ........................................................................................................................................ 1
DEFINITION OF MARKET VALUE .......................,.,,,,.............,.,,..,..,,.............~,,..~,...,.,......~......................... 2
-TENT OF DATA COLLECTION ................................................................................................................ 2
DATE OF REPORT ....................................................................................................................................... 3
RIGHTS APPRAISED .................................................................................................................................... 3
ENVIRONMENTAL CONDITIONS ................................................................................................................ 4
LEGAL DESCRIPTION .................................................,.....,....,.......,,,..,.,.,.,. ................................................. 4
TAX DATA .........................................................,.....,........,,........,..,..,,.,,...................................................... 24
AREA DATA ..................................................................................,.......................,....~.,~,,,,,.,,,,,..........,.,,.,.. 25
NE 10 H BO RHOOD DATA , . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . , . . . . . . . . . . . . . .32
SITE DATA .................................................................................................................................................... IMPROVEMENT DATA ......................... .................................................................. ........ ... ..................... .... 40
HIGHEST AND BEST USE .....,...................................,,.,,..,,........,..,,.,,..,,.,.......,.....,................................... 41
APPRAISAL PROCESS ...........................,.,,.,.............................................. ... .,.......... .......... ...................... 43 DIRECT SALES COMPARISON APPROACH - IMPROVEMENTS ............................ ......... ................ . .... 46
COST APPROACH .....................................,...,..,....,.................................,....................,........ . .................... 54 INCOME APPROACH ................................................................,,.,...,......................................................... 55 CORRELATION AND FINAL ESTIMATE OF VALUE ...................................................... ...... ..................... 61
EXPOSURE AND MARKETING TIME .................................................,...,......,,.....,.................................... 62
QUALIFICATIONS ...... .... ....... . ...... . ...... , ..... , ... ... ... . .. .. .. ... ... . ... ... ... ... . ... ... . ... .... .... . ... . ... . ... .... ......... ... ... .... .. . .... .63
ADDENDA SUBJECT PHOTOGRAPHS
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CONTINGENT AND LIMITING CONDITIONS
This appraisal report and the certification are made expressly subject to the following assumptions and limiting conditions and any special limiting conditions contained in the report which are incorporated by reference.
The legal description furnished is assumed to be correct. I assume no responsibility for matters legal in character nor do I render my opinion as to the title, which is assumed to be good. All existing liens and encumbrances, if any, have been disregarded and the property is appraised as though free and clear, under responsible ownership and competent management.
The user of this report may wish to have legal, engineering, or physical component inspections made by qualified experts in those fields to determine the suitability of the property for the proposed or present use. The appraiser has not conducted these types of inspections.
The sketch in this report is included to assist the reader in visualizing the property. I have made no survey of the property and assume no responsibility in connection with such matters.
I believe to be reliable the information which was furnished by others, but assume no responsibility for its accuracy.
Possession of this report, or a copy thereof, does not carry with it the right of publication, nor may it be used for any purpose by any but the applicant without the previous written consent of the appraiser or the applicant and then only with proper qualifications.
I am not required to give testimony or to appear in court by reason of this appraisal, with reference to the property in question, unless arrangements have been previously made therefore.
The distribution of the total valuation in this report between land and improvements applies only under the existing program of utilization. The separate valuations for land and building must not be used in conjunction with any other appraisal and are Invalid if so used.
The land, and particularly the soil, of the area under appraisement appears firm and solid. Subsidence in the area is unknown or uncommon, but this appraiser does not warrant against this condition or occurrence.
Subsurface rights (minerals and oil) were not considered in making this appraisal. The appraiser observed the buildings involved in this appraisal report, and damage, if any, by
termites, dry rot, wet rot, or other manifestations, was reported as a matter of information by your appraisers, and I do not guarantee the amount or degree of damage, if any.
All furnishings and equipment, except those specifically indicated and typically considered as a part of real estate, have been disregarded by this appraiser. Only the real estate has been considered.
m e comparable sales data relied upon in this appraisal is believed to be from reliable sources. However, i t was not p ossible to inspect the comparables completely, and it was n ecessary to rely on information furnished by others as to said data. Therefore, the value conclusions are subject to the correctness and verification of said data.
Our observation m akes i t reasonable t o a ssume, for a ppraisal purposes, that no insulation or other product banned by the Occupational Safety and Health ACT (OSHA), the Consumer Product Safety Commission, or Environmental Protection Agency (EPA) has been introduced into the appraised premises.
The appraiser has inspected, as far as possible, the land and the improvements thereon. However, it was not possible to personally observe conditions beneath the soil or hidden structural components within the improvements. Therefore, no representations are made herein as to these matters and, unless specifically considered in the report, the value estimate is subject to any such conditions that could cause a loss in value. Condition of heating, cooling, ventilating, electrical and plumbing equipment is considered to be commensurate with the condition of the balance of the improvements unless otherwise stated.
The liability of the appraiser is limited to the fee received from the client for the preparation of the report.
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 he is consequently connected) shall be disseminated to the public through advertising media, news media, sales media or any other public means of communication
-without thepriorwritten-consentandapproval-of-the~undersigned~ ~ ~ ~ ~~~~ ~~
CERTIFICATION
I certify that, to the best of my 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 I imiting conditions, a nd a re my p ersonal, impartial, and unbiased professional a nalyses, opinions, and conclusions.
I have no present or prospective interest in the property that is the subject of this report, and no personal interest with respect to the parties involved.
I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment.
My engagement in this assignment was not contingent upon developing or reporting predetermined results.
My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.
My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.
I have made a personal inspection of the property that is the subject of this report. No one provided significant real property appraisal assistance to the person signing the report.
Respectfully submitted,
Todd Goldman WV Certification #255
SUMMARY OF SALIENT FACTS AND CONCLUSIONS
Location:
Tax District:
Client:
Owner:
Purpose of Appraisal:
Appraisal Type:
Ownership Interest:
Type of Improvements:
Land Area:
Zoning:
Highest and Best Use:
Current Year Taxes:
Date of Observation:
Date of Appraisal:
Market Value Estimate:
High Line Mobile Home Park, 9ISt Street, Marmet, Kanawha County, West Virginia
Marmet M aplParcel : 31239
American Electric Power
Appalachian Power Company (A.K.A. American Electric Power)
Provide an Opinion of Current Market Value
Complete Appraisal and Summary Appraisal Report
Fee Simple Estate
Infrastructure for Mobile Home Park (Le. Roads, Utilities, Parking Pads)
3.42 Acres
None
Mobile Home Park
2003 - $1,807.80
August 26,2003
August 26,2003
$1 65,000.00
PROPERTY DATA
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Subject Property
The subject property is known as the High Line Mobile Home Park and located
along the Kanawha River at the end of 91st Street in Marmet, Kanawha County, West
Virginia. The property is currently owned by Appalachian Power Company and includes
a twelve space mobile home park located on 3.42 acres. The mobile home park is fully
occupied and all of the buildings are owned by the tenants and the only infrastructure
includes roads, utilities and parking pads.
Purpose and Intended Use of Appraisal
The purpose of this appraisal is to provide an opinion of the current market value
of the fee simple estate. The intended use of the appraisal is to assist American
Electric Power Company with decisions regarding the disposition of this property.
The information and opinions contained in this appraisal set forth the appraiser's
best judgment in light of the information available at the time of the preparation of this
report. Any use of this appraisal by any other person or entity, or any reliance or
decisions based upon this appraisal are the sole responsibility and ai the sole risk of the
third party, The appraiser accepts no responsibility for damages suffered by any third
party as a result of a reliance on, decisions made, or actions taken based on this report.
Appraisal Type
This i s a complete a ppraisal and summary appraisal report. The appraiser is
competent to appraise this type of property through experience and training and the
report is intended to be in compliance with the Uniform Standards of Professional
Appraisal Practice, as amended January 1 , 2003.
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Property Data
Definition of Market Value
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The definition of market value is defined by the Office of the Comptroller of the
Currency under 12CFR, Part 34, Subpart C-Apmaisals. 34.42 Definitions lq as follows:
'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 knowfedgeably, and assumlng 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 condltlons whereby:
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buyer and seller are typically motivated;
both parties are well informed or well advised, and acting in what they consider their best interests;
a reasonable time is allowed for exposure in the open market;
4. payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto;
5. the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone assodated with the sale.
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Extent of Data Collection
The scope of the assignment is to formulate the appraiser's opinion of the
estimated market value of the fee simple estate of the subject property. The property
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was observed on August 26, 2003. The appraiser has attempted to use all three
approaches to value to determine the value estimate. These approaches included the
Income Approach, Sales Comparison Approach and the Cost Approach.
Information in this appraisal has come from a variety of sources. The appraiser
toured the site alone on August 26, 2003. Joyce Leachman with American Electric
Power provided documentation regarding the property including maps. She indicated
that all of the leases are for short terms and the expense sharing structure. Factual
information regarding the subject property was obtained from the Kanawha County
Courthouse with the Clerk's and Assessor's Offices. A representative of the City of ~~ ~~
Marmet confirmed that there is no zoning in this area. Market information was obtained
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by reviewing sales of similar size properties in the area, reviewing sales of mobile home
parks and from conversations with local real estate brokers and appraisers that are
familiar with this type of property. All of this information was obtained, analyzed and
used to develop an opinion of value.
Date of Report
The date of observation and the effective date of the appraisal was August 26,
2003.
Rights Appraised
The rights appraised were the fee simple interest, subject to any easements or
right-of-ways discovered in a thorough title examination or survey. There is one obvious
right-of-way that is a power transmission line that travels along the bank of the Kanawha
River between the road and the river on the subject property. This area could not be
used based on the aerial easement, which prohibits construction in the power line right-
of-way. It could be used for parking or for green space. Ne other easements or right-of-
ways were identified that would restrict the value or use of the property. According to
Ms. Leachman, all of the leases are based on $140.00 per month and they all have 30
to 60 day cancellation clauses. These are viewed as short term leases, however many
of the residents have been in place for several years. The actual leases were not
reviewed because they were not provided by the client, however the terms are all the
same.
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Environmental Conditions
The assumption is made that there are no adverse environmental conditions
affecting the property caused by the previous ownership of the property that may
adversely impact the value. It is always prudent to obtain a Phase I Environmental
Audit to make a final determination of any environmental conditions.
No environmental reports were submitted for the appraiser’s review, so the
existence of environmental concerns is unknown. If any adverse environmental
conditions are discovered within the subject property, this could affect the indicated
value.
Legal Description
The subject property is described in Deed Book 1590 at Page 598 in the
Kanawha County Clerk’s Office. The property was conveyed from Leopold K. Marmet,
et al. to Appalachian Power Company on June I I, 1970. The Deed conveys several
parcels and the specific Deed reference for this property appears on Page 606. A copy
of the Deed is located on the following pages for the specific legal description.
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DEED
TAX DATA
Tax Data
The subject property is assessed in the name of Appalachian Power Company in
the Kanawha County Assessor's Office in the Marmet Tax District on Map 3 as Parcel
239. In most cases, Appalachian Power Company would not be taxed because it is a
public utility. In this case, the property is leased for investment purposes and therefore
it is taxed. The 2002 tax assessment and the 2003 taxes are as follows: -
Tax Map 3 Parcel 239
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Land Building Total
Class IV Tax Rate Annual Taxes
$ 53,340.00 8,520.00
$ 61,860.00
0.029224 $ 1,807.80
County Real Estate Assessors are supposed to appraise property at 100% of
market value and then apply a 60% assessment for tax calculation.
the assessed value. The appraised value for this property is $
appraisals typically differ significantly from market value appraisals.
This is known as
03,100.00. Tax
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Area Data
West Virginia is geographically located in the mid-Atlantic region which extends
as far north as Pittsburgh, Pennsylvania; as far west as Columbus, Ohio: as far east as
Washington D. C.; and as far south as Richmond, Virginia. According to the 2000
Census, within this state there are approximately 1.8 million people, which is an
increase of approximately I % from 1990.
Charleston is the State Capital and the County Seat of Kanawha County. The
Charleston Standard Metropolitan Statistical Area includes approximately 251,662
people and intersects with the Huntington Standard Metropolitan Statistical Area which
has a similar amount. These two combined areas have slightly less than one third of .- . . the state's total population. Charleston and Huntington are located approximately fifty
miles apart. The trade area encompasses portions of Ohio and Kentucky. Charieston
has the heaviest concentration of governmental offices and is the financial and
professional center of the state.
Population
According to the United States Census Bureau and estimates by the City of
Charleston, population figures for Charleston and Kanawha County since 1970 are
shown below:
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As shown above, the population of the City of Charleston has decreased overall
since 1970. The most recent estimate is the findings of the 2000 Census. The
population of Kanawha County has also decreased overall since 1970. The population
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for Kanawha County in 2000 was 200,073. Although the population has decreased in
Charleston a nd Kanawha County, Charleston continues to serve a much larger area
with daytime employment.
Employment
Kanawha County's unemployment rate in June 2003, was 4.8%, which compares
to 5.2% one year earlier. West Virginia's unemployment rate in June 2003, was 6.3%.
The following table summarizes employment for the county and state:
The following table summarizes and displays the 2001 per capita income figures
on a county, state, and national level.
The typical civilian employee in Kanawha County, as of August 2000, works
either in Services (33%), Trade (22%), or Government (19%). The median household
Effective Buying Income for 2002 was estimated on a city, county and state tevel as
fof lows:
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Kanawha County $32,595.00 West Virginia $43,532.00
School Electric
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The ten largest employers in the Metro Charleston Area are summarized as
Kanawha County American Electric Power
follows:
Gas Water/Sewer
Telephone
Services
Allegheny Power Municipal Systems
Verizon (f.k.a. Bell Atlantic of WV)
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Transportation
Charleston is served with Interstate Highways 64, 77, and 79, and Appalachian
Corridor G (U.S. Route 1 'l9) that connects Charleston with the Kentucky border through
the southwestern portion of the state. There are several major federal and state
high ways.
Charleston is served with Yeager International Airport, which has direct flights to
major connecting hubs.
The rail service is provided by Amtrak, CSX, and Norfolk Southern.
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Area Data
The Kanawha River is a heavily used industrial waterway which maintains a 9’
channel depth. Recent upgrades have been made to the Winfield Locks and Dam and
the Marrnet Locks are scheduled for upgrade over the next three years.
Retail Sector
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The largest retail center in downtown Charleston is the Charleston Town Center,
which is a 1,000,000 square foot mall containing approximately 180 storefronts. The
project is approximately 18 years old, and it has had a stabilizing effect in downtown
Charleston.
Southridge Centre, another major retail development, is located approximately 6
miles south of Charleston on Corridor G. Southridge includes big-box tenants such as
Sam’s, Wal-Mart, along with the accompanying fast food restaurants and specialty
stores. Home Depot will open in early 2003.
The Shoppes at Trace Fork is located approximately one quarter of a mile from
the Southridge Centre off of Corridor G. The shops located at this plaza include, Kohl’s,
Goody’s, Books-A-Million, Office Depot, restaurants and specialty stores.
Dudley Farms is an additional retail center located across the Corridor from The
Shoppes at Trace Fork. This shopping center includes a Target, Dick‘s Sporting Goods,
Lowe’s H orne C enter a nd severai other entities including some fast food chains and
restaurants.
Hotel Sector
Charleston is fortunate to have major hotels located in the downtown area and at
interstate interchanges. The major hotels in downtown include the following:
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Hotel Number of Rooms
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Marriott Hotel Elk River Town Center Inn Charleston House Holiday Inn Embassy Suites Civic Center Holiday Inn Super 8 Fairfield Inn Hampton Inn
352 Rooms 300 Rooms 256 Rooms 252 Rooms 200 Rooms 160 Rooms 136 Rooms 113 Rooms
Office Space
Charleston is a compact office market, which includes several major office
buildings. They are shown in the accompanying chart.
Building Number of Square Feet
4 Laidley Tower 4 BankOne 4 + Huntington Banks 4 United Bank
B B & T Building
21 5,162 square feet 273,000 square feet 250,429 square feet 1 16,000 square feet 151,102 square feet
There a re other m id-rise buildings in the Charleston market, and a number of
older office buildings, which have been renovated in the village district. The Federal
Courthouse was recently completed and is one of the largest buildings in Charleston.
The former Diamond Department Store renovations were recently completed and
the State has taken occupancy of the building. This adds approximately 1,000 people
to downtown each day.
Education
Charleston is served by the following colleges and universities:
. . . + University of Charleston 4 4 West Virginia State College 4
West Virginia University Medical Center
Marshall University and College of Graduate Studies
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Public Facilities
Charleston is currently undertaking an $120 Million Center for the Arts. &
Sciences. It opened in June of 2003 after four years of construction. It is located just
outside of the Central Business District of Charleston on Lee Street, Washington Street,
Leon Sullivan Way and Brooks Street. The Charleston Civic Center and Coliseum
provides an arena for sports, conventions and trade shows. It recently has been
renovated for additional convention center area. The State Capital Complex is also a
major tourist attraction.
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NEIGHBORHOOD DATA
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Neighborhood Data
A neighborhood is a portion of a larger community in which there is a
homogenous grouping of inhabitants, buildings, or business enterprises. Neighborhood
boundaries may consist of w ell-defined n atural or m anmade barriers or they may be
more or less well defined by distinct changes in land use or in the character of the
inhabitants. In evaluating a neighborhood, the appraiser must consider physical
boundaries, legal boundaries, use patterns, and the availability of services.
The Town of Marmet is located approximately five miles east of Kanawha City,
which is the eastern most boundary of Charleston. Marmet was founded based on the
coal boom and chemical industry boom in the 1930s and 1940s. This area has been
densely developed with small lots and primarily residential housing. Marmet has never
adopted zoning regulations so commercial businesses, industrial land uses and
residential properties all coexist with no real pattern. Most of the commercial activity
takes place along MacCorkle Avenue, which travels eastlwest through the town and is a
major a rtery in the K anawha Valley. MacCorkle Avenue begins in Chesapeake and
travels west to St. Albans.
Like many small towns in West Virginia, Marmet used to be self-sufficient and
have all of the retail shopping opportunities necessary for the local citizens. In the era
of big retailers, most of these small businesses have been replaced with bigger
businesses located in Charleston. For example, there is a locally owned hardware store
in Marmet, but there is a relatively new Lowe's in Kanawha City. Most of the
commercial uses in Marmet are now geared toward immediate needs such as
convenience stores and fast food restaurants.
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, Neighborhood Data
Interstate 64 runs parallel to MacCorkle Avenue and has an intersection in
Marmet. This provides immediate access to the West Virginia Turnpike and to three
different interstates within ten minutes. Access to the surrounding area is good, which
has also been harmful to the local commercial businesses. M armet i s now primarily
used as a bedroom community to Charleston and the Kanawha Valley and
predominantly for residential housing. It is unlikely that there would be a significant
change in the foreseeable future, The Marmet Locks and Dam are in the process of
being u pgraded, but most o f t he p roperty that has an immediate impact h as a lready
been purchased by the Army Corps of Engineers. This has provided a boost t o the
local residential market because there have been several hundred displaced families.
Other significant changes are not predicted for the next five to ten years.
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- Goldman Associates, Inc. Page 33
NEIGHBORHOOD MAP
SITE DATA
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Site Data
The subject property is estimated to contain 3.42 acres, according to the
Kanawha County tax records. It is a long narrow site that is bordered on one side by
the Kanawha River and the other side by private property owners. It has access from
two points and a main asphalt road that provides direct access to each of the
residences. One of the main access points is 91" Street and the site is several blocks
east of MacCorkle Avenue.
The majority of the site is level and at grade with the access roads. There is a
portion along the Kanawha River that is quite steep and would never be developable.
Between the Kanawha River a nd the main i nterior access road is a power company
transmission line. This area has an aerial right-of-way that would prohibit any type of
construction in that area. It leaves that area open for parking, green space or roads.
The mobile homes have been lined along the western boundary of the subject property
and adjacent to other residential land uses. The site is plenty large for its current use
and even though the configuration is long and narrow, it is easily adaptable to this type
of application.
All utilities are available at the site including public water, sewer, natural gas,
electric, telephone and cable. It has access from two City streets and is well situated in
the community based on residential uses. There is no zoning that effects the subject
property because the Town of Marmet has not adopted zoning regulations.
Surrounding land uses are almost exclusively for residential purposes, although the
former American Electric Power Coal Loading Facility is located south of the property.
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Due to having a different access and some separation along the southern boundary, the
adjacent use does not impact the subject site. The property appears to be located
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Site Data
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outside of the 100 year flood hazard area, however there is undoubtedly some portion
of the riverbank that would be prone to flooding. A surveyor would need to make a final
determination regarding the elevation of the subject property and the location of the
flood hazard area. The property is shown on Federal Emergency Management Agency
(FEMA) Flood Insurance Rate Map, Community Panel 540079 0001 C, dated April 3,
1985.
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Site Data i
TAX MAP
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Site Data
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FLOOD ZONE MAP
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Improvement Data
The only improvements on the subject property are infrastructure that is
necessary for the mobile home park use. These include asphalt roads, utilities and
parking pads. These are fairly minimal improvements to the property and all of the
dwellings are owned by the residents.
Goldman Associates, Inc. Page 40
HIGHEST AND BEST USE
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Highest and Best Use
Based on The Dictionary of Real Estate Appraisal, Fourth Edition, published by
The Appraisal Institute, the definition of highest and best use is as follows:
The reasonably probable and legal use of vacant land or an improved property,
which is physically possible, appropriately supported, financially feasible, and that
results in the highest value. The four criteria the highest and best use must meet are
legal permissibility, physical possibility, financial feasibility, and maximum productivity.
The site is unzoned because the Town of Marmet has not adopted zoning
regulations. The potential land uses would be limitless or only limited by the physical
specifications of the site. Access to the property is fairly good and surrounding land
uses are for residential purposes. The site is large enough to accommodate a variety of
uses, however the configuration would indicate that a dense commercial or industrial
use would be unlikely. There is interaction with the Kanawha River, which would be a
positive, but the existence of the power line right-of-way and the aerial easement would
limit access to the Kanawha River to pedestrian type traffic. If a site were vacant, the
logical use of the property would be for some type of residentiai development. It may
take the form of dividing the property into numerous single-family residential lots that -
- would have access to the Kanawha River or a multi-family residential development that
would be for apartment dwellers. The access would lend itself to residential
applications and the configuration would not severely restrict how the property is
developed for residential uses. The highest and best use of the site, as though vacant,
would be for single-family residential development.
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The property has improvements in the form of infrastructure needed for a mobile
7 home park. They include asphalt roads, underground utilities and parking pads. While
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these are not significant improvements in the sense that they cost a lot, they are
significant to the use of the property. The property has been used for a mobile home
park for over a decade and it is a logical way of developing the property to create a
return to the owner and maximize the use of the site. The historical operation of the
property has proven to be financial feasible and maximizes the value of the property, as
imp roved.
Goldman Associates, Inc. Page 42
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APPRAISAL PROCESS
Appraisal Process
The appraisal process is the analysis of the various data to arrive at an estimate
of market value. In order to express a reasonable opinion of the market value of the
subject property, the appraiser has considered various valuation methods. The three
approaches that are available include the Sales Comparison Approach, Cost Approach
and the Income Approach. Information for each of these approaches comes from the
market place and at times is interrelated.
Direct Sales Comparison Approach - Improvements
The Sales Comparison Approach is the most easily understood and probably the
most widely used. It is most appropriate and applicable when similar types of improved
properties are available for direct comparison. This approach involves analyzing key
factors of similarity and dissimilarity of similar type properties that are located in the
same or competing areas. The principle underlying this technique is that it is expressive
of the value established by informed buyers and sellers in the market area. This
approach also serves as a reliable indicator regarding the amount of market activity. Its
limitations are lack of similar data, older data and sales, which lack comparability. It is
also utilized when developing an opinion of value for the land, as vacant.
Cost ApDroach
The Cost Approach considers t he current c ost of reproducing or replacing the
existing improvements with consideration for depreciation and obsoiescence.
Replacement costs are typically used because it allows for replacing the existing
improvements with modern building materials that are common in the market at the time
of the appraisal. The depreciation that is deducted can come from three sources
including physical deterioration, functional obsoiescence and external obsolescence.
Goldman Associates, Inc. Page 43
Appraisal Process
The value of the land, as though vacant, is added to the depreciated value of the
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improvements to indicate the market value from the Cost Approach. This approach is
directly related to the principle of substitution, which states that no one is likely to pay
more for an existing property than what it would cost to recreate it.
Income Approach
The measure of value in this approach is directly related to the net income that
the subject can create during the remaining economic life of the improvements. The
process includes estimating the gross income, vacancy and expenses that are incurred
by the property owner from leasing the property. Several methods are available for this
approach, including capitalization of the first year's net operating income, as well as an
analysis of the discounted cash flow over a forecasted holding period. The net income
is capitalized to arrive at an indication of value from the standpoint of an investment.
Competing investments may i nclude r ea1 estate, s ecurities o r a variety o f i nvestment
vehicles. All of the information in this procedure must be obtained from the market to
use standards, which are accepted by investors in the area. The principle underlying
this method is the present worth of anticipated future benefits (net income) derived from
the property.
Conclusion
The appraiser, in applying the tools of analysis to the problem in question, seeks
to simulate the thought process of a probable decision maker rather than a particular
one with specific individual interests. The various approaches to valuation are merely a
simulation of these alternative courses of action, potentially open to the decision maker.
The appraiser's judgement concerns the applicability of alternative tools of analysis to
the facts o f the problem, the data, information needed to apply these tools, and the
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selection of the most applicable approaches to solve the appraisal problem. Some
appraisal problems will fully utilize each valuation procedure while others may lack
enough data to develop each approach. In all assignments each approach will be
considered.
Goldman Associates, Inc. Page 45
DIRECT SALES COMPARISON APPROACH - IMPROVEMENTS
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Direct Sales Comparison Approach - Improvements
The appraiser has conducted research through the Kanawha Valley to find the
most recent comparable properties that are used for mobile home parks. The subject is
relatively s mall compared to m ost mobile h ome parks by o nly h aving twelve s paces.
Some of the larger mobile home parks may have between I00 and 200 spaces. These
types of investments are typically sought after by local investors because they are
primarily cash businesses and there is minimal overhead such as maintenance, repairs
and management time. For this reason, owners are reluctant to sell these type
properties and with the ability to refinance at significantly lower interest rates, many
properties cash flow better now than they have in the last ten to fifteen years. In other
words, owners have preferred to refinance these investments and hold onto them rather
than sell the property, pay capital gains tax and then search out a new investment. This
is also an affordable investment for local investors. The reason that these factors have
been discussed is because the data is somewhat old and it is the best that is available,
is older than what would be ideal. A summary of the sales that have been considered is
as follows:
"~ - Goldman Associates, Inc. Page 46
IMPROVED SALES MAP
Direct Sales Comparison Approach - Improvements
Location:
Sale Date:
Grantor:
Grantee:
Sale Price:
Building Size:
Lot Size:
Unit Price:
Comments:
Location:
Sale Date:
Grantor:
Grantee:
Sale Price:
Bhlding Size:
Lot Size:
Unit Price:
Comments:
Comparable Building Sale One
Ohio Avenue & West Virginia Turnpike, Marmet, Kanawha County, West Virginia
4/00 Recorded: 2496127
Tomahawk Land, L.L.C.
R & D Land, L.L.C.
$106,000.00
Seven Mobile Homes; One Billboard
0.75 Acres
$1 0,857.00 Per Lot (Based on Billboard Value of $30,000.00)
This has seven mobile home lots leased for $150.00 per month each and a billboard leased for $280.00. The value of the billboard is estimated at $30,000.00. The park is not as good quality as the subject property.
Comparable Building Sale Two
West Main Street, St. Albans, Kanawha County, West Virginia
1 I98 Recorded: 2432/900
Hugh Caudill, et al.
Brent Mallory
$50,000.00
Seven Mobile Home Lots
0.56 Acres
$7,143.00 Per Lot
This lot i s along the river and was not as good o f quality as fhe subject property. It is also a very small lot.
Goldman Associates, Inc. Page 48
Direct Sales Comparison Approach - Improvements t
Comparable Building Sale Three
Location:
Sale Date:
Grantor:
Grantee:
Sale Price:
Lot Size:
Unit Price:
Comments:
Location:
Sale Date:
Grantor:
Grantee:
Sale Price:
Lot Size:
Unit Price:
Comments:
Kensington Drive, Cross Lanes, Kanawha County, West Virginia
7/96 Recorded: 2390/410
B & G Mobile Park, Inc.
Larry and Kathryn Westfall
$310,000.00
3.96 Acres
$5,652.00 Per Lot (i $50,000.00 is applied to home and trailers)
There was a house and five mobile homes included in the sale price. The condition of this park is below average.
Comparable Building Sale Four
Near 40* &Williams Dr., Nitro, Kanawha County, West Virginia
6/93 Recorded: 2321/942
Charles S. Bracken, Ill
David and Melody Douglas
$2 1 0,000 .oo
13.5 Acres
$6,000.00 Per Lot
The mobile home community had approximately 35 usable sites. The park was older and in fair condition. The mobile home sites were rented for $137.00 per month that includes water, sewer and garbage.
Goldman Associates, h c . Page 49
Direct Sales Comparison Approach - Improvements
Location:
Sale Date:
Grantor:
Grantee:
Sale Price:
Lot Size:
Unit Price:
Comments:
Location:
Sale Date:
Grantor:
Grantee:
Sale Price:
Lot Size:
Unit Price:
Comments:
Comparable Building Sale Five
Lower Falls Road, St. Albans, Kanawha County, West Virginia
3/94 Recorded: 2335/356
Thelma M. Kingston Trust
Gordon Ray and Sheila A. Sutphin, II
$140,000.00
8.75 Acres
$1,555.00 Per Lot
The mobile home sites were rented for $100.00, which includes water and sewer. This is a n o lder mobile home community with approximately 50% occupancy. Lot sizes were originally for smaller mobile homes but the new owner reorganized the sites.
Comparable Building Sale Six
240 Offutt Drive, Big Chimney, Kanawha County, West Virginia
6/95 Recorded: 2366/41 I
L. Angle Parsons
Terry A. Smart
$60,000.00
0.637 Acres
$7,500.00 Per Lot
The site was occupied by eight mobile homes that rented for $150.00 per month that included water, sewer and garbage. The park was in good condition but the lots were very small.
Goldman Associates, Inc. Page 50
Direct Sales Comparison Approach - hmovements
rt Based on Billboard Value of $30,000.00
The comparable building sales indicate a price per lot between $1,550.00 to
$10,860.00. The lowest unit price is reflected by a sale where there was approximately
50% vacancy and the rents were low. The indicated range per lot when it is excluded is
between $5,650.00 and $10,860.00 and the subject is considerably better quality than
those developments.
Comparable Building Sale One is the only mobile home park that is located near
the subject in the Marmet vicinity. This property contains seven mobile homes and one
billboard. The rents for the mobile home spaces were $150.00 per month and the
billboard was leased for $280.00 per month. The tenants were responsible for their own
utilities at this location. By assigning the value of $30,000.00 to the billboard, the
indicated unit price of the mobile home spaces was $10,860.00. This is the most recent
transaction and also indicates the highest unit price. It is the only property that is
relatively close to the subject.
Comparable Building Sale Two is a seven space mobile home park in St. Albans.
It is located along the river and sold five years ago. I his unit price was $/,lsoroB per
Goldman Associates, Inc. Page 51
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Direct Sales Comparison Approach - Improvements
lot and the tenants were responsible for their own utilities. Information regarding the
rents at the time of the sale was not available,
Comparable Building Sale Three is approximately seven years old. This park is
located in Cross Lanes within two miles of Interstate 64. It is an older park and has not
been maintained as well as the subject property and it contains approximately forty-six
mobile home lots. There is also a home on the property that is rented. The purchase
price was $310,000.00, which reflected the forty-six mobile home lots, one home and
five mobile homes that are rented by the owners. The lot size of the property is
approximately four acres, which equates to 3,750 square feet per lot. This sale required
a $50,000.00 adjustment to reflect the value of a home and trailers that were part of the
transaction. This indicates a unit price of approximately $5,600.00 per lot.
Comparable Building Sale Four is a ten year old sale of a mobile home
community in Nitro that had thirty-five spaces. The lot size was thirteen and a half
acres, which provided ample room for the trailer lots and at the time of the sale the lots
were rented for $137.00 per month. That price included water, sewer and garbage
service. This sale represents a unit price per space of $6,000.00 and this property is
considered inferior to the subject.
Comparable Building Sale Five is a mobile home community located in St.
Albans that transferred in 1994. There were approximately ninety trailer lots, however
only half of those were occupied at the time of the sale. The property suffered from lack
of management and was not in as good condition as the subject property. The rent at
the time was $100.00 per space per month and that included water and sewer. Overall
this property is considered inferior to the subject and the rental rates were substantially
Goldman Associates, Inc. Page 52
Direct Sales Comparison Approach - Improvements
rower. This property was reconfigured into 54 spaces and rents were raised to $130.00
per month.
Comparable Building Sale Six is a small mobile home community located in Big
Chimney, North of Charleston. The sale price was $60,000.00 for eight lots indicating a
unit price of $7,500.00 per site. This sale is approximately eight years old and is inferior
to the subject. The rental rates at the time of the sale were $150.00 per month and
water, sewer and garbage were included.
Obviously, the building sales that were considered are several years old and lack
many of the amenities that the subject property has. The subject has a newly paved
road, substantial green space around the traiiers, is along the river and is well
maintained. It is within close proximity too many amenities such as grocery stores and
schools. The subject property is substantially better than the comparable sales for
several reasons. One of the primary considerations is that the occupancy at the subject
site has remained high and according to Ms. Leachman there has been a waiting list.
This is a good indication that the park will continue to perform well. There is also good
maintenance at the subject and most of the expenses are paid for by the tenants. The
unit price for the mobile home lots at the subject should be above the range established
by the comparable sales because it has better amenities. This also accounts for the
difference in market conditions during the last few years, which has had a positive
impact on values. A unit price of $13,000.00 will be adopted, indicating a market value
of $1 56,000.00 rounded to $155,000.00.
Goldman Associates, Inc. Page 53
COST APPROACH
Cost Approach
The Cost Approach is an effective method of determining the current market
value o f properties that are new or have m inimal identifiable depreciation. It is also .-
useful when valuing special use properties, such as governmental buildings, museums
or properties that do not frequently sell.
The Cost Approach can be developed utilizing several methods. The most
common method is using national cost estimators such as Marshall Valuation Service or
Boeckh General Estimate Manual to provide a base rate for a specific type of
construction, which is then adjusted for the local market. A secondary approach would
be to speak with contractors that are familiar with this type of construction and obtain
proposals to recreate the building. The third approach would be the appraiser basing
cost on experience with prior assignments that are similar to the subject.
The improvements on the subject property contribute to the highest and best use
in the sense that they are necessary for a mobile home park. However, the majority of
the income is due to leasing these sites in conjunction with the improvements and that
is how the value of the property is maximized. In this situaiion, the Cosi Approach
would not indicate a value indicative of the overall value of the property and the Income
Approach is a far more suitable method of valuing the property.
- Goldman Associates, Inc. Page 54
INCOME APPROACH
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Income Approach
The Income Approach is one of the more heavily relied upon indications of value
for commercial real estate. This is particularly true when a property is owned strictly as
an investment. This would indicate that an investor purchasers the property and then
leases the land or improvements, or both, for their highest and best use. The cash flow
to the property owner is viewed as the return on their investment and can be measured
to estimate value. The Income Approach must take into consideration the quality,
quantity and longevity of the future cash flows.
There are multiple methods that can be employed to develop the Income
Approach. Two of the most common include the capitalization approach and the
discounted cash flow analysis. The capitalization approach takes into consideration the
first year of stabilized income and expenses and applies a capitalization rate to the net
operating i ncome. A d iscounted cash flow a nalysis will view m ultiple years d uring a
hypothetical holding period and the net operating income cash flow is discounted to the
current period to provide an estimate of value.
The first step in developing the Income Approach is to determine what the
potential gross income would be for the subject. The subject property has twelve
mobile home lots that create monthly income. The property owner provided current
data regarding the lease rates and expense terms. The tenants own their own mobile
homes and pay $140.00 per month for each space. The tenants pay all of their utilities
and cut the grass. The owner has liability insurance and pays the real estate taxes.
The appraiser conducted a review of six other mobile home parks in the
Kanawha Valley to obtain various information such as vacancies, what amenities are
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Pine Valley Valley Brook
Income Atmroach
91 < 5% X X X X $1 50.00 90 < 5% X X $1 50.00
included and the monthly fees. The following table outlines the information regarding
the other properties:
Country Roads Walnut Valley
Dal ewood
132 < 5% X X X X $145.00 49 < 5% X X X $155.00 88 < 5% X X X $155.00
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The rental rates at the other mobile home parks focus around $150.00 per lot.
Two of the parks include water and sewer, which is an additional benefit to the tenant.
The rents at the subject property are slightly below the market for similar mobile home
parks, but since tenants are expected to pay their own utilities and trash service, the
difference is offset. The potential gross income for the mobile home lots will be based
on the current rents of $140.00 per month or $20,160.00 per year.
From this estimate, the vacancy and credit loss will be deducted to arrive at the
effective gross income. The vacancy and credit loss will account for vacancies at the
subject property, as well as tenants that leave with rental payments due. By reviewing
the information on the six mobile home parks in the area, vacancies are relatively low
and are consistently less than 5%. All of the other parks have low vacancies and Ms.
Leachman indicates that they have had few vacancies at this park and typically a
waiting list. A vacancy and credit loss at the subject property of 2% will be used. This
indicates that the effective gross income of the subject property is $19,757.00 per year.
From this estimate, expenses will be deducted to arrive at a net operating
income. ine expenses ttmtwrH oe 2
maintenance and repairs, reserve account and management fees. Since tenants pay
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Income Approach
their own utilities and garbage fees and they cut the grass, there are minimal expenses.
Property taxes are based on the actual amount. Insurance is estimated because it is
wrapped into one main policy for AEP. A maintenance and repairs account was based
on conversations with Ms. Leachman and from a review of other mobile home parks
that the appraiser has knowledge of. A reserve account of $50.00 per space will be
deducted to account for long term capital improvements. For the subject property, this
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will mainly consist of repairs to the roads and parking pads.
A management fee of 5% is included to recognize the oversight of this operation.
This type of facility is typically owner managed, but the management fee takes into
consideration the time and effort involved in managing the property. While owner
managers typically do not pay themselves a management fee, there should be some
acknowledgement for their efforts. Expenses such as lawn service and utilities are paid
by the tenants. The following Pro Forma Income Statement was developed based on
the pre-stated assumptions:
Pro Forma Income Statement
Potential Gross Income (12 Spaces @ $140.00/Month) Less: Vacancy and Credit Loss (2%) Effective Gross Income
$ 20,160.00 403.00
$ 19,757.00
Expenses Insurance $ 500.00 Property Taxes 1,850.00 Maintenance & Repairs 500.00 Reserve Account ($25.00 @ 12 Lots) 300.00 Management (5%) 990.00 $ 4,140.00
Net Operating Income $ 15,617.00
The estimated net operating income before depreciation and interest expense is
$1 5,617.00 per year. Now that the net operafing income has been determined it can be
used to indicate an overall value of the property. There are several approaches that
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Income Approach
can be used to determine a capitalization rate that can be used to capitalize the net
operating income into an overall value. An overall capitalization rate must be estimated
based on market data that is available. The most pure method of developing a
capitalization rate is through extracting it from the real estate market. This would be
done by locating a sale of a similar property that has taken place in the recent past and
where the net operating income and sales price are known. This can be difficult to
establish because owners are reluctant to divulge income and expense information.
A secondary approach to establishing a capitalization rate is through a Band of
Investments model. This model is developed by utilizing current lending criteria by local
lending institutions and based upon equity investors expected return on their money. A
confidential real estate transaction is known to the appraiser where the investor built a
building based on a 12% equity capitalization rate. This took place several years ago
and will be adjusted up to reflect the current market. This information will be used in the
Band of Investments model, which is as follows:
Band of Investments Loan to Value 80%
Loan Term 20 years Mortgage Constant ,0895
Loan Rate 6.5%
Equity Capitalization Rate 12%
Equity 0.2 x .I200 - 0.071 6 0.0240 0.0956
Rounded to 9.55%
- - - Loan 0.8 x .0895
The overall capitalization rate, based on the Band of Investments formula, is
9.55%.
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The final method that is often used to develop a capitalization rate is by
researching national data regarding capitalization rates. One of the pitfalls of using this
information is that the data is collected from markets that are substantially larger than
Charleston or West Virginia and are typically locations such as Pittsburgh, Richmond,
Atlanta and Columbus. The appraiser subscribes to a quarterly publication known as
KorDacz Real Estate Investor's Survev that i s prepared by P riceWaterhouseCoopers.
This publication breaks down the commercial real estate markets into certain segments,
as well as geographic locations. The most recent publication is from the Second
Quarter of 2003 and the information that will be used is the national net lease market.
The reason that this will b e u sed i s because a mobile home park i s s imilar to a net
lease, since the landlord is not responsible for very many expenses. The expenses that
the landlord is responsible for are fairly stable and easy to predict. The overall
capitalization rate quoted for the Second Quarter of 2003 has a range of 7.5% to 10%
with an average of 8.6%. This is an eighteen basis point decrease from last quarter and
a fifty five basis point decrease from one year ago. In general, capitalization rates for
commercial property have been dropping but the trend has stabilized and may be
moving in the opposite direction. These rates are expected to be lower than what is
found in the local market because there are more purchasing opportunities and more
financing opportunities in larger cities.
With two estimates of a capitalization rate, the subject would fall somewhere
within the established range. The Band of Investments indicates an average return for
an average investment in the market area. The subject has below average risk and
thus would indicate a slightly lower Capitalization rate. A rate of 9.S% will be adopted.
Based on an estimated net operating income of $15,617.00 and the indicated
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Income Approach
capitalization rate, the market value is estimated at $1 64,390.00 rounded to
$1 65,000.00.
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CORRELATION AND FINAL ESTIMATE OF VALUE
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Correlation and Final Estimate of Value
Three approaches to value have been considered in this assignment. Only two
approaches arrive at value indications and they are as follows:
Sales Comparison Approach for Improvements $ 155,000.00
Cost Approach N/A
Income Approach $ 165,000.00
The Income Approach is undoubtedly a better method of valuing this type of
property. This property is always purchased as an investment and only for that reason.
The Income Approach takes into consideration the expectations of a potential investor
and how they would view the property as an investment. It can only be valued based on
the positive cash flow that is created. In this case, the Sales Comparison Approach for
Improvements also indicated a similar value, which supports the Income Approach, but
the Income Approach is the overriding factor.
Based on the information in this appraisal, it is the appraiser's opinion that the
market value of the subject property as of August 26, 2003, was:
One Hundred Sixty Five Thousand Dollars
($1 65,000.00)
- Goldman Associates, Inc. Page 61
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EXPOSURE AND MARKETING TIME
Exposure and Marketing Time
The only source of data that tracks commercial property transactions in the
Kanawha Valley is the Multiple Listing Service. This indicated the time needed to
expose a property to the market to create a sale. The data is somewhat flawed
because it does not include prior marketing efforts by a separate broker or if a property
had been for sale by owner. Most residential properties in the Kanawha Valley have an
average marketing time of approximately 100 days and investment residential
properties are closer to four to six months. This type of property would peak interest in
the market because it is a good quality investment and is affordable to many buyers.
This should shorten the exposure and marketing time to a range of three to six months.
This is based on the property being priced appropriately and marketed through a real
estate broker.
__ Goldman Associates, Inc. Page 62
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QUALIFICATIONS
Todd Goldman Goldman Associates, Inc.
APPRAISAL QUALIFICATIONS
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Education 8s Degree in Finance - Virginia Polytechnical Institute and State University MBA - Marshall University
Member - Local, State, and National Board of Realtors CClM - Certified Commercial Investment Member (REALTORS)
Professional Membershim
Teachina Experience Adjunct faculty member -The College of West Virginia Junior Achievement - Success Skills
Licenses and Certifications West Virginia #006769 - Real Estate Sales License Virginia #lo225037927 - Real Estate Sales License West Virginia #255 - State Certified General Real Estate Appraiser
Courses Completed: Advanced Income Capitalization - Appraisal Institute; Basic Income Capitalization - Appraisal I nstitute; Appraisal Principles - Appraisal I nstitute; Appraisal Procedures - Appraisal Institute; Standards of Professional Practice, Part A - Appraisal Institute; Decision Analysis for Commercial Real Estate - CIREI; Standards of Professional Practice, Part B - Appraisal Institute; Advanced Techniques in Leasing and Marketing - ClREl
Real Estate and Appraisal Courses
Previous Clients
1014 Bridge Road Charleston, WV 25314
American Electric Power National Park Service Branch Banking & Trust (BB & T) Parkline, Inc. City National Bank Standard Laboratories Cline Resources State of West Virginia Harrison County Bank Union Carbide Kanawha County Commission United Bank Kanawha County Ambulance Authority United States Postal Service Mingo County Commission WesBanco Mountain International Williams-Union Boiler
Other Banks, Attorneys, Companies, and Individuals
Testimony Qualified as an expert witness in the following Courts: Putnam and Kanawha Circuit Courts; Federal Bankruptcy Court, Southern District, West Virginia
Charleston Rotary Club Salvation Army Advisory Board
Goldman Associates, Inc. Page 63
ADDENDA
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Interior View Looking East
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91" Street Access
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Appalachian Power Company Responses to the Staff's
First Set of Discovery Requests Case No. 06-0692-E-PC
Request No. 5:
Describe the terms and conditions of the leases, or encumbrances, for the mobile homes situated on the property at issue. Additionally, please describe the notification procedure APCO will use to notify tenants of the proposed sale of the property at issue.
Response No. 5:
The leases were originally written for a term of one year with a clause extending the lease after the original term on a month-to-month basis. Month-to-month tenants were notified of the impending sale via the attached notification. Several of the newer leases have original terms which do not expire until dates in 2006 or 2007. Since the sale will be made subject to those leases, the original terms will not be impacted and the tenants will be sent a notice comparable to that sent to the month-to-month tenants.
April 1,2002
TO ALL RESIDENTS OF THE HIGHLINE MOBILE HOME PARK
As the operations of Appalachian Power Company have changed and we have centralized most of our operations out of our North Charleston Service Center, we are forced to evaluate our need for the property located in Marmet, West Virginia. It has been decided that this property will be placed on the market for sale in April 2002. The mobile home park will be sold in its entirety.
Your lease agreement will continue as usual and will be assigned to the new owner of the park. The sale could take 6-9 months to complete. We anticipate the transfer of ownership to have very little impact on your day-to-day lives; however, we are aware that any change can be stresshl, therefore, we will keep you informed as to how the sale is proceeding.
Please continue to make your monthly payments as usual and direct any questions or concerns to Joyce Leachman at (304) 348-4733 or E-mail address [email protected].
LAND MANAGEMENT SECTION
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Appalachian Power Company Responses to the Staff‘s
First Set of Discovery Requests Case No. 06-0692-E-PC
Request No. 6:
Please explain what the Buyer’s intended use of the property is. This would include the Buyer’s intent to comply with current leases and/or options.
Response No. 6:
The sale is being made subject to the existing leases. The Buyer has indicated to the Company that it has no plan to change the use of the property.
Appalachian Power Company Responses to the Staffs
First Set of Discovery Requests Case No. 06-0692-E-PC
Request No. 7:
Please describe the terms and conditions of the parking lease with Barlow Bonsall Funeral Home situated on the property at issue. Additionally, please describe the notification procedure APCO will use to notify Barlow Bonsall of the proposed sale of the property.
Response No. 7:
The lease with Barlow Bonsall Funeral Home was for an original term of one year, followed by a month-to-month tenancy. Leonard Johnson Funeral Home d/b/a Barlow Bonsall Funeral Home is the proposed Buyers of this property. Due to the identity of Buyer and Tenant, there was complete knowledge of the transaction and no need for any independent notice.
VERIFICATION
STATE OF WEST VIRGINIA, 1
COUNTY OF KANAWHA, TO-WIT: 1
Steven H. Ferguson, Principal Regulatory Consultant for Appalachian
Power Company, after being duly sworn, states that, to the best of his information and
belief, all of the facts and allegations contained in the foregoing Responses are true and
correct.
n
%\ %$*. Steven H. Ferguson
Taken, subscribed and sworn to before me on the Ifday of June, 2006.
My commission expires: / h 23, 2015 ,
s.K*-m ~
Notary Public (SEAL)
PUBLIC SERVICE COMMISSION OF WEST VIRGINIA
CHARLESTON
CASE NO. 06-0692-E-PC
APPALACHIAN POWER COMPANY
CERTIFICATE OF SERVICE
I, William C. Porth, counsel for Appalachian Power, do hereby certify that a true
copy of APPALACHIAN POWER COMPANY’S RESPONSES TO THE STAFF’S
FIRST SET OF DISCOVERY REQUESTS was served upon the Staff by hand
delivery this 21St day of June, 2006, addressed as follows:
Leslie J. Anderson, Esquire Public Service Commission of West Virginia 201 Brooks Street P. 0. Box 812 Charleston, West Virginia 25323
A
william c. Porth (WV State Bar No. 2943)