real property appraisal

(21-139-T)

REAL PROPERTY APPRAISAL

Wallace Springs Utility

Expansion Project

Southern Quadrant Arey and

Wallace Springs Roads

Statesville, Iredell County,

NC 28677

Type Report: Appraisal

Valuation Date

June 26, 2021

(21-139-T)

R e a l P r o p e r t y A p p r a i s e r s a n d C o n s u l t a n t s 1 4 3 0 S o u t h M i n t S t r e e t , S u i t e 1 0 2 , C h a r l o t t e , N o r t h C a r o l i n a 2 8 2 0 3

T e l e p h o n e : 7 0 4 - 3 3 4 - 4 6 8 6 F a x : 7 0 4 - 3 3 4 - 2 7 5 9 8 0 0 - 4 5 3 - 4 4 3 9 W e b : w w w . t b h a r r i s j r . c o m

July 9, 2021

Ron Smith

City of Statesville

City Manager

915 Winston Ave.

Statesville, NC 28687

RE: Appraisal of three contiguous parcels located on the southern quadrant of Arey and

Wallace Springs Roads, Statesville, Iredell County, NC. Tax Parcels 4733-21-7290,

4733-21-9457 and 4733-31-0286.

Dear Mr. Smith:

T.B. Harris, Jr. & Associates has completed an appraisal of the above referenced assemblage and

is providing our analysis and opinion of value for the assemblage. The scope of the assignment

calls for the valuation of the assemblage before and immediately after a proposed acquisition of

easement rights across the subject property by the City of Statesville. The assignment originally

called for the valuation of the two parcels impacted by the acquisition; however, upon research of

the properties, we concluded that the corner parcel’s highest and best use was for assemblage. In

consideration that the adjacent parcel is under the same ownership and the theory of unity of use,

we have included the parcel along Arey Road in the assignment.

Market Note: Recent events including the pandemic of Covid-19 have added speculation into the

market. As of the effective date of this report, the market has recognized some impact to the short-

term real estate market with uncertain long-term impacts. The uncertainty has led to a wide range

in speculation of real estate markets which could impact values of real property in the near term

and possibly long term, either positively or negatively. The United States is a consumer driven

market, and the recovery has commenced, but speculation about the timing of recovery in some

sectors is active and the short-, mid- and long-term impacts are unknown.

Based on our inspection and analysis of the information obtained, it is our opinion that the Market

Value of the Fee Simple interest in the assemblage, as of June 26, 2021 before and immediately

after the proposed acquisition, are:

Land Value Before $100,000

Land Value After $95,525

Difference $4,475

RON SMITH

July 9, 2021

Page 2

(21-139-T)

The appraisal is intended to conform with the Uniform Standards of Professional Appraisal

Practice (USPAP), the Code of Professional Ethics and Standards of Professional Appraisal

Practice of the Appraisal Institute, and the Appraisal guidelines of our client.

The opinion of value is supported by the data and reasoning set forth in the attached narrative.

Your attention is invited to the Assumptions and Limiting Conditions section of this report. The

appraisers certify that we have no present or contemplated future interest in the property appraised,

and that our fee for this assignment is in no way contingent upon the value estimate concluded.

EXTRAORDINARY ASSUMPTIONS AND HYPOTHETICAL CONDITIONS:

• It is an extraordinary assumption of this report that the information provided for this

assignment by the City of Statesville including but not necessarily limited to plans, survey

and areas of acquisition and rights to be acquired are correct. The appraisal relies on this

information in developing our opinions of value and that the project will be completed in

accordance with said plans. Should this information be proven inaccurate, then we reserve

the right to amend this report and alter our conclusions if necessary.

• It is an extraordinary assumption of this assignment; the subject assemblage consists of

3.6 acres. Public records indicate a total size of 5.03 acres. However, the area of the three

parcels appear to include the right-of-way for Wallace Springs and Arey Roads. We have

relied on the measuring tool on the Iredell County website in estimating the total acreage.

We consider the estimate reasonably accurate and the results credible.

• It is an extraordinary assumption that any disturbances made within the Permanent Utility

Easement (PUE) and Temporary Construction Easement (TCE) area will be restored to

their original condition before completion of the project. This is applicable to all items

except the items identified in the report. Should the PUE or TCE not be restored, then we

reserve the right to amend this report and alter our conclusions if necessary.

• Consistent with the assumption regarding the temporary construction easement, we

assume that the project will not impair the use of the existing improvements in the after

value except for those noted in the report. The project will include subterranean

installation of utilities. Based on discussions with our client, the assumption is reasonable

and appropriate given the purpose and intended use of this report.

• The valuation of the property before the acquisition does not consider the influence of the

proposed project. Further, the valuation after the acquisition is performed under the

hypothetical condition that the project is complete. Considering the purpose and intended

use of the appraisal, the hypothetical conditions are reasonable and appropriate.

The content and conclusions of this report are intended for our client and for the specified intended

uses only. They are also subject to the assumptions and limiting conditions as well as the specific

extraordinary assumptions and hypothetical conditions set forth in this report.

RON SMITH

July 9, 2021

Page 3

(21-139-T)

Thank you for the opportunity to be of service. If you have any questions or comments, please let

us know.

Sincerely yours,

T.B. HARRIS, JR. & ASSOCIATES

(21-139-T) T.B. HARRIS, JR. & ASSOCIATES

SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS

Property and Location: Vacant Land

Southern Quadrant Arey and Wallace Springs

Roads

Statesville

Iredell County

NC 28677

Tax Map Reference: 4733-21-7290, 4733-21-9457 and 4733-31-0286

Property Owner: James and Jane Tarman

Appraisal Valuation Date: June 26, 2021

Purpose of Appraisal: Report our opinion of Market Value before and

immediately after a proposed acquisition of

easement rights.

Property Rights Appraised: Fee Simple Interest

Zoning: R20 & RA

Land Area: 3.60 Acres or 156,816 SF

Improvements: None

Present Use: Vacant Land

Highest and Best Use: Residential Development

Appraisal Procedures: Sales Comparison Approach

FINAL VALUE OPINION(S):

Land Value Before

Land Value After

Difference

$100,000

$95,525

$4,475

Appraiser: Michael P. Berkowitz

SQ WALLACE SPRINGS AND AREY ROADS, STATESVILLE, NC of 76


TABLE OF CONTENTS

SCOPE OF THE ASSIGNMENT ....................................................................................................................... 7 PREMISES OF THE APPRAISAL .................................................................................................................... 7

Identification of Subject..................................................................................................................................... 7 Client, Purpose, and Intended Use and Intended Users ..................................................................................... 7 Appraiser ........................................................................................................................................................... 8 Property Inspection ............................................................................................................................................ 8 Value Appraised ................................................................................................................................................ 8 Property Rights Appraised ................................................................................................................................. 9 Extraordinary Assumptions/Hypothetical Conditions of Appraisal ................................................................. 10 Effective Date of Value ................................................................................................................................... 11 Date of Report.................................................................................................................................................. 11 Type Report ..................................................................................................................................................... 11 Prior Services ................................................................................................................................................... 11

BACKGROUND DATA ..................................................................................................................................... 11 Ownership and History of the Property ........................................................................................................... 11 Appraisal Assistance ........................................................................................................................................ 12 Report Format .................................................................................................................................................. 12 Community Analysis ....................................................................................................................................... 13

PROPERTY ANALYSIS ................................................................................................................................... 15 Site Analysis .................................................................................................................................................... 15 Improvement Analysis ..................................................................................................................................... 19 Real Estate Taxes and Assessment .................................................................................................................. 19 Zoning and Other Restrictions ......................................................................................................................... 20

HIGHEST AND BEST USE ANALYSIS ......................................................................................................... 21 Highest and Best Use, As Vacant .................................................................................................................... 21 Most Likely Buyer ........................................................................................................................................... 23

VALUATION METHODOLOGY .................................................................................................................... 23 VALUATION ANALYSIS ................................................................................................................................. 24

Land Valuation – Sales Comparison Approach ............................................................................................... 24 THE ACQUISITION ......................................................................................................................................... 30

Description of the Acquisition ......................................................................................................................... 30 Effects of the Taking ....................................................................................................................................... 35 Highest and Best Use After the Taking ........................................................................................................... 35 Valuation of the Property After the Taking ..................................................................................................... 35 Acquisition of Easements ................................................................................................................................ 35

FINAL VALUE CONCLUSION ....................................................................................................................... 36 EXPOSURE AND MARKETING TIME ........................................................................................................ 37

Exposure Time ................................................................................................................................................. 37 Marketing Time ............................................................................................................................................... 38

ADDENDA .......................................................................................................................................................... 39 Certifications ................................................................................................................................................... 40 Assumptions and Limiting Conditions ............................................................................................................ 42 Deeds/Legal Descriptions ................................................................................................................................ 48 Surveys ............................................................................................................................................................ 55 Easement Language ......................................................................................................................................... 58 Appraiser License ............................................................................................................................................ 71 Qualifications of the Appraiser ........................................................................................................................ 73



SCOPE OF THE

ASSIGNMENT

This appraisal report addresses the appropriate and applicable

methods of appraisal subject to the extraordinary assumptions

and hypothetical conditions set forth in this report. The

appraisal document has been prepared in compliance with the

Uniform Standards of Professional Appraisal Practice

(USPAP).

Our firm was originally engaged to appraise two of the three

parcels constituting the subject before and immediately after

an acquisition of easement rights for the Wallace Springs

Utility Expansion Project. Based on our research, parcel 4733-

21-9457 consists of 0.41 acre. Given its physical

characteristics and associated setbacks with the R-20 zoning

designation, the highest and best use of this parcel is for

assemblage. In consideration that the adjacent parcels are

under the same ownership, we have appraised the three parcels

as an assemblage.

The purpose of the appraisal is to develop our opinion of the

market value of the fee simple interest in the property before

and immediately after the acquisition as of the effective date

of this report. The intended use of this report is as a tool for

measuring compensation to the property owner for the rights

acquired as of the effective date of this report.

PREMISES OF THE APPRAISAL

Identification of Subject 3.6 acres of vacant land

Southern Quadrant Arey and Wallace Springs Roads

Statesville, Iredell County, NC 28677

Tax Parcel ID’s: 4733-21-7290, 4733-21-9457 and 4733-31-

0286.

Client, Purpose, and

Intended Use and Intended

Users

Ron Smith

City of Statesville

City Manager

915 Winston Ave.


[email protected]



The purpose of this report is to provide our opinion of the

market value of the fee simple interest before and immediately

after the acquisition of property rights detailed in the report.

The intended use of this report is as a tool in assisting our

client in determining compensation to the property owner for

the indicated acquisition.

The client and intended users are City of Statesville and its

representatives only and for the intended use stated. The

appraisal and conclusions therein are not intended for any

other user or intended use. The appraisers are not responsible

for the unauthorized use of this report and its conclusions by

any other parties.

Appraiser Michael P. Berkowitz

T.B. HARRIS, JR. & ASSOCIATES

1430 South Mint Street, Suite 102

Charlotte, North Carolina 28203

704-334-4686

www.tbharrisjr.com

Property Inspection Michael Berkowitz made an off-site visual inspection of the

subject property on June 26, 2021. With approval our client,

we proceeded with the assignment with the off-site inspection

after attempts to contact the property owner did not receive a

response. We consider the off-site inspection adequate for the

purpose and intended use of this report. After the inspection,

Mr. Berkowitz received a call from the property owner. Mr.

Berkowitz provided information to Mr. Tarman regarding the

scope of the appraisal and discussed the property. Photographs

of the property were taken during the inspection.

Value Appraised

Market Value: Definitions of market value vary slightly based

on various exacting definitions required by certain courts and

jurisdictions, the Uniform Standards of Professional Appraisal

Practice (USPAP), and even international valuation standards.

The market value used in this report is set forth in the

Dictionary of Real Estate Appraisal, Sixth Edition, by the



Appraisal Institute. This definition is used by agencies that

regulate federally insured financial institutions in the United

States.

“The most probable price that 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:

• 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;

• Payment is made in terms of cash in

U.S. dollars or in terms of financial

arrangements comparable thereto; and

• 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.”

(12 C.F.R. Part 34.42(g); 55 Federal

Register 34696, August 24, 1990, as

amended at 57 Federal Register 12202,

April 9, 1992; 59 Federal Register

29499, June 7, 1994) (The Dictionary

of Real Estate Appraisal, 6th ed., 2015)

Property Rights Appraised Fee Simple Interest:

“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.” (The Dictionary of Real

Estate Appraisal, 6th ed., 2015)

For definitions of all other technical terms in this report, the

reader is referred to the most recent edition of The Dictionary

of Real Estate Appraisal published by the Appraisal Institute.

Extraordinary

Assumptions/Hypothetical

Conditions of Appraisal

It is an extraordinary assumption of this report that the

information provided for this assignment by the City of

Statesville including but not necessarily limited to plans,

survey and areas of acquisition and rights to be acquired are

correct. The appraisal relies on this information in developing

our opinions of value and that the project will be completed in

accordance with said plans. Should this information be proven

inaccurate, then we reserve the right to amend this report and

alter our conclusions if necessary.

It is an extraordinary assumption of this assignment; the

subject assemblage consists of 3.6 acres. Public records

indicate a total size of 5.03 acres. However, the area of the

three parcels appear to include the right-of-way for Wallace

Springs and Arey Roads. We have relied on the measuring

tool on the Iredell County website in estimating the total

acreage. We consider the estimate reasonably accurate and the

results credible.

It is an extraordinary assumption that any disturbances made

within the Permanent Utility Easement (PUE) and Temporary

Construction Easement (TCE) area will be restored to their

original condition before completion of the project. This is

applicable to all items except the items identified in the report.

Should the PUE or TCE not be restored, then we reserve the

right to amend this report and alter our conclusions if

necessary.

Consistent with the assumption regarding the temporary

construction easement, we assume that the project will not

impair the use of the existing improvements in the after value

except for those noted in the report. The project will include



subterranean installation of utilities. Based on discussions

with our client, the assumption is reasonable and appropriate

given the purpose and intended use of this report.

The valuation of the property before the acquisition does not

consider the influence of the proposed project. Further, the

valuation after the acquisition is performed under the

hypothetical condition that the project is complete.

Considering the purpose and intended use of the appraisal, the

hypothetical conditions are reasonable and appropriate. The

use of extraordinary assumptions and/or hypothetical

conditions may impact the conclusions of this report.

Effective Date of Value June 26, 2021

Date of Report July 9, 2021

Type Report Appraisal Report

Prior Services Appraisers are required to disclose other services they have

provided regarding the subject property in the prior three

years. These other services may include valuation,

management, brokerage, or any other real estates related

services. We have provided no appraisal or appraisal services

regarding the subject property for the three years preceding

the acceptance of this assignment.

BACKGROUND DATA

Ownership and History of

the Property

Owner of record:

James and Jane Tarman

548 Wallace Springs Road


It is important to note that the owner of record may not be the

current owner. The actual owner may be different depending

on recent transfers or lack of updated records at the county.

History According to the property owner, the land has been in his

family for many years. The most recent transactions involving



the subject property are what appears to be the transfer of

ownership between related parties. Parcel 4733-21-7290 was

acquired by the current property owner on December 23,

2010, according to a deed recorded in Deed Book 2099 Page

1306. The deed indicates a size of two acres subject to the

easement and right-of-way of NC Road 1338 (Wallace

Springs) and Old Road (Arey Road) if any. The inclusion of

right-of-way in the deed may account for the variances in the

sizes in public records. We provide a copy of this deed in the

Addenda.

The second deed referencing the subject is recorded in Deed

Book 683 Page 71. This deed was recorded on January 27,

1983. According to the stamps on the deed, the transaction did

not include any monetary considerations. We provide a copy

of the deed in the Addenda. We are unaware of any

transactions involving the subject property for the three

preceding the effective date of this report. We do not believe

the property is listed for sale or under contract as of the

effective date of this report.

Available Information T.B. Harris, Jr. & Associates requests information with

respect to title reports, surveys, building plans, income and

expense information, budgets, construction costs, leases, and

engineering reports. The following information was

requested, however not received.

• Title Opinion for Property

The inability to obtain this information may affect our value

opinion.

Appraisal Assistance This appraisal report has been completed by the Appraiser

identified within this document.

Report Format This report complies with Standard Rule 2-2(a) of the 2020-

2021 USPAP Edition. Flexibility regarding the level of



information in an Appraisal Report is dependent upon the

intended use and intended users of the appraisal.

This report contains adequate information at a depth and detail

commensurate with the defined appraisal issue and intended

use of the appraisal.

Community Analysis

Boundaries • The US Highway 21 corridor serves as the eastern

boundary of the community. The City of Statesville

and the US Highway 70 corridor serve as the northern

boundary. Buffalo Shoals Road serves as the western

boundary. Old Mountain Road serves as the southern

boundary.

Transportation and

Utility Linkages

• The site has average transportation linkage. US

Highway 21 to the east of the subject provides

connectivity to Interstate 77.

• The utility linkage for the subject is fair. For the

immediate area there is limited neighborhood-

oriented retail. Most services for the area are served

by developments in Troutman to the southeast,

Statesville to the north or the I-77 corridor to the east.

Developments The developments in the area are limited to residential

development. The development pattern is typical as once

rural areas of the Charlotte MSA are transitioning to

suburban developments.

• Hidden Lakes – Hidden Lakes is a residential

subdivision being developed on the northern quadrant

of the intersection of Wallace Springs and Arey

Roads. According to the community plan, there are

approximately 300 residential lots planned for the

development. A review of listings for the

development show houses for sale in the $300 to $350

thousand range.



• Giant Oak, LLC – Giant Oak, LLC purchased the

property just south of the subject along Wallace

Springs Road. The plans for the subdivision include

277 lots. The property was annexed into the City of

Statesville. This development is the impetus for the

extension of utilities and this appraisal.

Zoning and Area Planning • The subject has split zoning. Historically the area has

served as an agricultural area including low density

residential. The property is in unincorporated Iredell

County. We are aware of several larger agricultural

tracts that have been developed with higher density

residential. Annexation and the extension of

municipal water and sanitary sewer service are

common for these developments.

Land Uses Land uses in the area are primarily low-density residential

and vacant land. Some of the vacant land is used for

agricultural purposes. As noted earlier, there are some newer

residential developments in the area. The increase in roof tops

will eventually lead to non-residential development to meet

the needs of the growing population.

Outlook and Conclusions As the Charlotte MSA continues to grow, the demand for

land is highly competitive. The residential growth in the area

indicates a community at the onset of a growth phase. The

community provides an alternative to the higher land prices

to the areas immediately around Lake Norman and areas

closer to Charlotte. We anticipate the growth to continue as

the Charlotte MSA is in the growth phase of its economic life

cycle.



COMMUNITY MAP

PROPERTY ANALYSIS

Site Analysis Without the benefit of a current survey, the appraiser cannot

suggest the property is free of encroachments or easements

and recommends further investigation and a current survey.

Location

• Southern Quadrant Arey and Wallace Springs Roads

Statesville, Iredell County, NC 28677

• Tax ID’s: 4733-21-7290, 4733-21-9457 and 4733-

31-0286

Area/Shape/Dimensions • Size - 3.60 Acres. The size of the site is estimated

using the measuring tool on the Iredell County GIS

website. The dimensions appear reasonably accurate



and are provided on the tax map at the end of this

section.

• The shape of the individual parcels is irregular. By

assembling the three parcels, the shape is an “L” which

provide a higher level of utility.

Topography • The topography is rolling to level and is not an adverse

characteristic of the site.

Floodplain • The subject is not located in a designated floodplain

according to FEMA Flood Panel 3710473300J.

Access/Ingress/Egress

• The assemblage has frontage long two public roads.

The frontage is a contributing factor to the analysis of

the highest and best use.

• Ingress and egress patterns are typical for rural areas

of Iredell County.

Soil and Subsoil Analyses • Assumes no hidden, unapparent, apparent, or toxic

materials.

Utilities • The property does not appear to have access to

municipal water or sanitary sewer service. However,

the lines for these services are in such proximity that a

typical purchaser would recognize the possibility of

obtaining these services without significant expense.

Restrictions/Easements/

Encroachments/

Rights-of-Way

• We are unaware of any restrictions, easements,

encroachments, or rights-of-way that would adversely

impact the value of the subject. The survey provided

for this assignment shows a line 30 feet from the

centerline of Wallace Springs Road, which we assume

is the right-of-way for Wallace Springs Road.

Environmental Hazards • Unless otherwise stated in this report, none known.

Summary The subject site provides a higher level of utility as an

assemblage than as individual parcels. The shape and sizes of



the individual parcels in conjunction with the current zoning

would limit the utility of the corner lot. Therefore, the most

likely scenario for the sale of the subject is as an assemblage.

The assemblage increases the utility and provide for the

possible development of a wider range of potential uses.

TAX MAP



AERIAL MAP



TOPOGRAPHY MAP

Improvement Analysis The site is vacant with no significant improvements.

Therefore, the appraisal does not include an analysis of the

improvements.

Real Estate Taxes and

Assessment

The subject lies in unincorporated Iredell County. As such, the

tax liability for the subject includes a combined rate for Iredell

County and fire services. The combined rate for 2020 is

$0.6275 per $100 of assessed value. The following chart

provides a summary of the tax liability for the subject.

Tax Parcel No. Size*

Land

Assessment

Improvements

Assessment

Other

Assessment

Total

Assessment

CurrentTax

Burden (R)

4733-21-7290 2.00 $38,560 $0 $0 $38,560 $242

4733-21-9457 1.23 $26,170 $0 $0 $26,170 $164

4733-31-0286 1.80 $32,830 $0 $0 $32,830 $206

5.03 $97,560 $0 $0 $97,560 $612

*According to public records



The sizes of the individual parcels are significantly higher than

our research using the measuring tool from the Iredell County

GIS website. Parcel 9457 has a size of 0.41 acre, which is

significantly smaller than the 1.23 acres from the property card.

Recall that the deed for parcel 7290 indicated a gross size of

two acres subject to the right-of-way. It appears that the public

records include the right-of-way in their assessment. Absent a

survey, we have used the estimates from the measuring tool in

the valuation.

The effective date of the last revaluation of Iredell County is

January 1, 2019. Despite the apparent errors in size, the

assessed value is consistent with the concluded value of this

report before the acquisition. Development in the immediate

area has included higher density residential properties that have

placed upward pressure on land values in the area. As we will

show in the valuation, most of this activity occurred after the

last revaluation by Iredell County.

Zoning and Other

Restrictions

R20 & RA

As shown on the map, the subject has split zoning. The RA and

R-20 zoning designation are residential districts. Some

properties in the area have been annexed into the City of

Statesville. The properties have voluntarily been annexed

likely to acquire access to municipal utilities. The current use

of the property appears compliant with the current zoning

designation.

The area includes residential developments with a variety of

densities. Newer developments have more houses per acre than

the properties with older improvements. Further, there remains

several agricultural users in the immediate area. A change in

zoning may be required if the property were redeveloped, but

it would likely be a residential classification consistent with

other residential developments in the area.



ZONING MAP

HIGHEST AND BEST USE ANALYSIS

Highest and Best Use,

As Vacant

Physically Possible Uses The physical characteristics of the individual parcels are the

primary reasoning behind the determination that the

assemblage provides more utility than the individual parcels.

As shown in previous exhibits, the shape and size of the corner

parcel provides limited utility. However, the assemblage

mitigates some of these undesirable characteristics. Based on

the physical characteristics of the assemblage, the 3.6-acre site

provides utility for a variety of potential uses limited by the

“L” shape of the assemblage and the size of the site (3.6 acres).

Therefore, based on the physical characteristics, the highest

and best use is for a variety of uses.



Legally Permissible Uses The subject has split zoning. The recent residential

developments in the area have included annexation into the

City of Statesville and rezoning. Regardless, a residential

classification is the most likely use of the site as vacant. The

front setback for the R-20 zoning is 35 feet for a traditional lot

and 25 feet for a corner lot. The setbacks are a contributing

factor to the conclusion of assemblage as the building

envelope especially for the corner lot is limited. Annexation

would provide access to municipal water and sanitary sewer

service. While the annexation would be voluntary, a

knowledgeable buyer would be aware of this possibility.

Therefore, the highest and best use as vacant based on the

physical and legal characteristics is for residential

development as permitted by zoning.

Financially Feasible Uses Based on our analysis of the market we have considered

demand in the area, and it appears that residential

development is financially feasible. The market for residential

properties has shown a shortage in supply. Based on the lot

sales in the market, lots outside an established subdivision

have sizes more than one acre. Based on the analysis of the

assemblage, we consider it reasonable than three lots could be

developed with a redrawing of the boundaries of each parcel.

This would provide an average size of 1.2 acres per lot, which

is consistent with the residential lot market outside newer

subdivisions. As vacant, the highest and best use of the subject

is for residential development of three residential lots.

Maximally

Productive Uses

There does not appear to be any probable or reasonable use

that would support a higher or better use than residential

development. Development patterns within subdivisions show

smaller lots for development. However, there are some

subdivisions with larger lots. Most residential properties

outside existing or planned subdivisions have larger lot sizes.

Therefore, we conclude that the highest and best use as vacant

is for residential development of three residential lots.



Most Likely Buyer The most likely buyer of this property is a local builder or land

speculator given the market activity.

VALUATION METHODOLOGY

Appraisers typically consider three approaches to estimate

property value. These are the cost, sales comparison, and

income capitalization approach.

The cost approach is a set of procedures through which a

value indication is derived for the fee simple interest in a

property by estimating the current cost to construct a

reproduction of (or replacement for) the existing structure,

including an entrepreneurial incentive, deducting depreciation

from the total cost, and adding the estimated land value.

Adjustments may then be made to the indicated fee simple

value of the subject property to reflect the value of the

property interest being appraised. (The Dictionary of Real

Estate Appraisal, 6th ed., 2015, Page 54.)

The sales comparison approach is the process of deriving a

value indication for the subject property by comparing market

information for similar properties with the property being

appraised, identifying appropriate units of comparison, and

making qualitative comparisons with or quantitative

adjustments to the sales prices (or unit prices as appropriate)

of the comparable properties based on relevant, market-

derived elements of comparison. (The Dictionary of Real

Estate Appraisal, 6th ed., 2015, Page 207.)

The income capitalization approach is a set of procedures

through which an appraiser derives a value indication for an

income-producing property by converting its anticipated

benefits (cash flows and reversions) into property value. This

conversion can be accomplished in two ways. One year’s

income expectancy can be capitalized at a market-derived

capitalization rate or at a capitalization rate that reflects a

specified income pattern, return on investment, and change in

the value of the investment. Alternatively, the annual cash



flows for the holding period and a reversion can be discounted

at a specified yield rate. (The Dictionary of Real Estate

Appraisal, 6th ed., 2015, Page 115.)

Value indications from the approaches are reconciled based

on the quality and quantity of available data in the approaches

with consideration given to the applicability of each approach

and the subject property type.

VALUATION APPROACHES

Approach Applicability Use

Cost Approach Not Applicable Not Used

Sales Comparison Approach Most Applicable Used

Income Capitalization Approach Not Applicable Not Used

The proposed acquisition does not include or result in

damages to any of the site improvements. For this reason, the

valuation in this appraisal includes 1) the site value, developed

through the sales comparison approach, and 2) the

contributory value of site improvements (if any) impacted by

the acquisition, developed through a modified cost approach.

As noted earlier and detailed later in the report, the subject has

limited site improvements that appear within the right-of-way

dedicated as shown on the survey.

VALUATION ANALYSIS

Land Valuation – Sales

Comparison Approach

Site Valuation The preferred method of land valuation is by direct

comparison of comparable sites which have sold recently. The

sales price of each comparable is converted into an

appropriate unit of comparison, and then compared on a direct

basis with the subject.

Adjustments are made to the comparables for market

recognized dissimilarities. Adjustments are used to account



for differences between comparables and the subject. This

value conclusion is arrived at by extraction, judgment, and a

correlation process whereby greatest weight is given to the

sales that are most comparable to the subject.

The unit of comparison selected for the subject is a price per

lot. The physical and legal characteristics of the assemblage

would provide three lots with an average size of 1.2 acres.

This size is consistent with other residential lots in the

community. While some consideration is given to size, we

consider the price per lot most consistent with the market for

an end user. The following chart provides a summary of sales

found in the area. While some of the sales are not used for

direct comparison, we do consider it pertinent to provide the

information as background data to reflect the market.



LAND SALES SUMMARY

South Quadrant Wallace Springs and Arey Roads

Statesville, NC

DEED

Book &

TAX PARCEL SALES LAND SALES PRICE Page Grantor/

NO. LOCATION DATE Number Price Area/Acres Per Acre Number Zoning Grantee

Subject SQ Wallace Springs & Jun-21 4733-21-6060 N/A 3.60 N/A N/A RA & R-20 N/A

Arey Roads (Three Lots)

Statesville, NC

1 Lot 45 Davidson Woods Apr-21 4722-69-2202 $22,000 1.07 $20,561 2808/1848 R-20 Aleximael Rosario/

212 Winding Cedar Dr. CMH Homes, Inc.

Statesville, NC

2 Lot 11 Buffalo Creek Jan-21 4722-59-5475 $57,600 2.01 $28,714 2776/751 R-20 Robert &

162 Buffalo Creek Dr. Rosa Maria Coelho/

Statesville, NC Robert

Nielson, Jr.

3 Lot 7 Buffalo Creek Mar-21 4723-50-9172 $44,000 2.31 $19,072 2798/2435 R-20 Blackburn

187 Buffalo Creek Dr. Enterprises, Inc./

Statesville, NC Kyle & Laura

Rogers

4 Lot 2 Buffalo Creek Feb-21 4722-59-0470 $30,000 1.55 $19,405 2781/1080 R-20 Blackburn

123 Buffalo Creek Dr. Enterprises, Inc./

Statesville, NC Benjamin &

Laura Lonca

5 Land & Lot 4 Jan-21 4723-62-9262 $45,000 7.78 $5,784 2777/1255 R-20 Max & Betty

Buffalo Shoals Road 4723-71-1758 Davidson/

Statesville, NC Brette &

Andrea Thomas

6 Land Jan-21 4724-45-6696 $95,000 7.50 $12,667 2770/460 R-20 WRGR

Off Westminster Dr Properties, LLC/

Statesville, NC Ilie Ou

7 Land May-21 4730-29-1455 $130,000 11.17 $11,638 2815/2237 R-S Kristie &

Lytton Farm Road Gaddis Pepper/

Troutman, NC Theodore &

Lisa Delisi

8 Land May-21 4741-35-1631 $225,000 22.32 $10,083 2812/372 R-S MMLP, LLC/

Perry Road Bruce Larson

Troutman, NC Rev. Trust

9 Land Nov-20 4732-28-8431 $1,600,500 106.82 $14,983 2758/992 R-20 Jerry Stinson

Wallace Springs Road 4732-18-7463 et al/

Statesville, NC Giant Oak, LLC

NOTES

Abbreviations used: N/A- Not Applicable, N.A.- Not Available

SOURCE

T.B. Harris, Jr. & Associates and parties involved.



COMPARABLE LAND SALES LOCATION MAP

Sales One through Four are selected for direct comparison.

The remaining sales reflect the market for larger tracts of land.

In most cases, the land was purchased with the intent of

development. Sale Nine is the sale to Giant Oaks, LLC

referenced in the Community Analysis. The purchase price of

approximately $15,000 per acre reflects an increase in land

values for larger tracts in the area. As of the effective data

residential developers are fervently pursuing larger tracts of

land because of the low supply of residential properties and

dwindling supply of developable land. The other sales in the

data set were considered for direct comparison but were less

comparable than Sales One through Four. Regardless, the

market data does provide support for the conclusions from the

following analysis.

The conclusion of the highest and best use for the

development of three residential lots results in an overlapping



analysis and valuation. The following simultaneously values

the three lots. We considered a discount for the value of the

three lots. However, given the small number of lots and the

relative simplicity of reconfiguring the land, we have values

the assemblage as an aggregate of the concluded values for

each lot.

Explanation of

Adjustments

Adjustments are considered for a variety of factors including

market and physical characteristics. The following provides

an analysis of each type of adjustments deemed appropriate

based on our research of the market. Typically, we would

provide an adjustment chart for the sales; however, given the

wide range in prices paid, the analysis includes details on each

sale used for direct comparison.

Sale One is a residential lot located in Davidson Woods. The

lot has some inferior physical characteristics compared to the

subject lots. The shape of the lot is long and narrow reducing

the building footprint. This sale is slightly smaller than the

three lots constituting the subject. Approximately the rear

third of the lot has steep topography limiting its utility.

Overall, this sale is inferior to the subject and warrants upward

adjustments for shape and topography.

Sale Two is a residential lot located in the Buffalo Creek

subdivision. This is a smaller subdivision with a comparable

location to the subject. This lot is significantly larger than the

subject. As shown on the exhibit, the size and shape are

superior to the subject lots. This is the highest price point in

the data set reflective of the market premium paid for larger

lots with high levels of utility. The topography of the site is

comparable to the subject. Overall, this lot is superior to the

subject because of its larger size and superior building

envelope.



Sale Three is in Buffalo Creek as well. This site is slightly

larger than Sale Two but sold at a significantly lower price.

The analysis of this sale shows a location on a cul-de-sac with

only 57 feet of frontage. The site has an irregular shape that is

inferior to the subject. Conversely, the size of the lot is

significantly larger than the subject. Further, the location on a

cul-de-sac provides a higher level of privacy and seclusion

compared to the subject.

Sale Four is in Buffalo Creek as well. This site is smaller than

the other two lots used for comparison. The analysis of this

sale shows frontage on two sides of the lot increasing the area

dedicated for setbacks and reducing the building envelope.

The site is larger than the subject lots warranting a small

downward adjustment. The indication is that corner lots in this

market sell for less because of their smaller building envelope.

Market Adjustments The sales selected for direct comparison are reported as the

transfer of the fee simple interest with no unusual financing.

Therefore, no adjustments are warranted for property rights or

financing. The sales were reported as arm’s length

transactions; therefore, we make no adjustments for

conditions of sale. The market does not provide any empirical

evidence to support an adjustment for market conditions over

this time as all the sales closed in 2021.

The prices paid in the market show a range between $22,000

and $57,600. We acknowledge this is a wide range. The

analysis of each sale provides adequate information recognize

the various physical characteristics warranting adjustments.

For the non-cornet lots, we give credence to Sales Three and

Four as there are some offsetting characteristics. We conclude

that a value of $35,000 per lot is reasonable and supported by

the market. For the corner lot, we place credence on Sale Four

and conclude that a value of $30,000 is reasonable for the

corner lot.

As a test of reasonableness, we convert the concluded value

into a price per acre. Dividing $100,000 by the size of the



subject of 1.04 acres indicates a rate of value of $27,778 per

acre, which is on the upper end of the range of the sales

provided. We consider this test of reasonableness supportive

of the concluded value from the analysis as the site provides

good utility for low-density residential development.

The concluded value for the land is $100,000. We convert this

rate to a rate per square foot of $0.638 per square foot. This

unit of measure is used in the following analyses.

Before Acquisition Land

Value Summary

In the before-acquisition valuation, we would include any site

improvements affected by the acquisition. However, the site

is vacant with no significant site improvements. Therefore, the

land value before the taking is summarized as follows.

Before Land Value $100,000

Site Improvements $0

Improvement Value $ N/A

Total Before Value $100,000

$0.638/SF

THE ACQUISITION

Description of the

Acquisition

The information provided to us by the City of Statesville

includes the taking of property rights for the project impacting

the subject. The acquisition includes areas on two of the three

parcels constituting the assemblage. The following summary

of acquisition areas is followed by a description of the rights

acquired and illustrations of the acquisition. Abbreviations

used in this section include:

PUE- Permanent Easement

TCE – Temporary Construction Easement

Area To Be Acquired Area Remaining Total Area

Fee Simple

Outside R/W

Fee Simple

Inside R/W

Land Area: 0 SF 0 SF 156,816 SF 156,816 SF

0.000 Ac. 0.000 Ac. 3.60 Ac. 3.60 Ac.

Easements:

11,238 SF 5,591 SF 1.0 Yr

0.258 Ac. 0.128 Ac.

PUE Temporary Construction Easement



Easement Overview The rights to be acquired in each easement area are stipulated

in an easement agreement, a copy of which is included in the

addenda of this report. As noted in the agreement and

confirmed with the client, the rights extend only to the

construction and maintenance of those facilities identified in

the project plans, and not to subsequent projects.

Permanent Utility

Easement

The City of Statesville proposes a permanent utility easement

on the property for the Wallace Springs Utility Expansion

Project. The PUE will include the extension of utilities

including but not necessarily limited to municipal water and

sanitary sewer service to the proposed subdivision located

southwest of the subject.

Temporary Construction

Easement

The temporary construction easement extends ten feet on both

sides of the proposed easement. Based on the assumed right-

of-way for Wallace Springs Road, the proposed easement will

abut the right-of-way. Areas within rights-of-way for an

existing road are usually removed from land areas acquired.

Therefore, we have included an area of ten feet extending into

the site from the proposed easement.

Site Improvements

There are no site improvements within the proposed easement

area.



The following survey was provided for the assignment. The

survey shows the PUE only. We have derived the size of the

TCE from information on the survey and is considered

reasonable accurate.

SURVEY



SURVEY (CORNER PARCEL)



Effects of the Taking The overall functional utility of the site is not significantly

impacted by the acquisition. The permanent easement intends

to extend utilities in the area. Additionally, we assume that

access will be reasonably provided during the one-year TCE

period.

The proposed easements are located within the designated 35-

foot setback for the R-20 zoning district and the 25-foot

setback for the corner lot. This area cannot be built upon based

on its current zoning designation. Based on the location of the

easement adjacent to the assumed right-of-way, the subject

will not be adversely impacted by the proposed easement.

Highest and Best Use After

the Taking

The highest and best use of the property after the taking

remains the same as before the taking which is for the

development of three residential lots.

Valuation of the Property

After the Taking

The value of the property after the taking is estimated in the

same manner as the value before the acquisition. As with the

“before value,” the sales comparison approach for the land is

used in the “after value.” The same sales are used as well since

the total site size is not reduced by the project. All the

currently allowed uses under the subject’s zoning are still

allowed in the after scenario. Therefore, we conclude a value

of $100,000 for the 3.6 acres or $0.638 per square foot.

Acquisition of Easements The calculations for the easement acquisition are shown

below.

The PUE totals 11,238 square feet. Since the property will still

be owned in fee simple, an allocation less than 100% is

warranted. That is, the entire bundle of rights is not taken from

the property owner. Many easements are located within

designated setbacks. The utility of the acquired area before

and after the proposed taking is considered in the portion of

the bundle of rights taken.

The proposed acquisition is located along the assumed edge of

the right-of-way for Wallace Springs Road. The easement has

a depth of 20.17 feet on the northern end and 20 feet on the



southern boundary. The easement is located entirely within the

setback for the R-20 zoning district. Based on the analysis, we

conclude that an allocation of 50% of fee value is reasonable

for the proposed acquisition. The calculation is as follows:

Temporary Construction

Easement

The area in the temporary construction easement is used by

the contractor during construction. The estimated time frame

used for the temporary construction easement is one year, as

is typical for similar projects. Upon completion of the project,

the previously held property rights in this area revert to the

property owner.

Consideration for compensation of this area includes the

location and extent of the easement, typical land returns and

the temporary nature of the easement. We consider a

reasonable estimate of the TCE impact to be 25% over the area

of the easement. The calculations is shown as follows:

FINAL VALUE CONCLUSION

In estimating the value of the land to be acquired, the sales

comparison approach is used. Compensation is

recommended based on the value of the land on a per unit

basis. The improvements will be unaffected by the taking or

will be replaced with like kind materials, the contributory

value of the improvements remains the same before and

immediately after the acquisition

In developing an opinion of land value for the subject, we

have relied solely on the sales comparison approach as an

Easement - PUE

Easement Area (SF): 11,238

x Land Unit Value: $0.638

x Easement Percentage: 50%

Easement Value: $3,585

Temporary Construction Easement

Easement Area (SF): 5,591

x Land Unit Value: $0.638

x Easement Percentage: 25%

Easement Value: $892



indication of value in both the before and after scenarios. It

is our opinion, based on our analysis of the facts and

information presented in this report, that a reasonable

opinion of the market value for the subject, based on the

proposed acquisition, as of the date of value, is calculated as

follows:

The opinions, estimates, and forecasts included in this

appraisal document are by their nature prospective and

therefore subject to uncertainty and risk. Actual events and

property performance may vary based on economic

conditions that are subject to fluctuation about lenders,

interest rates, supply and demand, capitalization rates,

investor motivation, and the like. Also, in keeping with

traditional appraisal practice our conclusions and forecasts

are based in part upon third party sources, discussions,

meetings, and may not be in all cases from reliable sources.

Our opinion while supported throughout this document with

research and reason is based on available information at the

time of preparing our opinion. Therefore, we are not

responsible for future happenings that are not reasonably

expected to occur as of the date of the analysis.

EXPOSURE AND

MARKETING TIME

Exposure Time Had the property been exposed to the open market prior to our

date of valuation we believe the property would have required

After Land Value Before Easements: 100,000$

Less: Fee Simple Acquisition Outside R/W 0 SF x $0.638 /SF x 100% -$

Less Permanent Easement(s):

PUE 11,238 SF x $0.638 /SF x 50% (3,585)$

Less: Temporary Construction Easement 5,591 SF x $0.638 /SF x 25% (892)$

After Land Value: 95,523$

Total After Land Value*: 95,525$

*Rounded to the nearest $25

DIFFERENCE BETWEEN BEFORE AND AFTER VALUE

Difference

Land Value 4,475$

Improvement Value

Total Value rounded to nearest $25 4,475$

N/A

100,000$

N/A

100,000$

Before After

95,525$

N/A

95,525$



an exposure time of 6 to 9 months. The imbalance of supply

and demand for land and residential land tends to indicate a

shortened exposure time.

Marketing Time It is our opinion that an appropriate marketing time from the

date of valuation going forward to consummate a sale at the

appraised value would be 6 to 12 months. The marketing time

could be extended if the potential buyer intends to develop or

redevelop the property. As noted, annexation, rezoning and the

possibility of other conditions of sale could extend the

marketing time to the upper end of the range. Should the buyer

maintain its current use, then the marketing time would be on

the lower end of the range.

Michael P. Berkowitz

Appraiser



ADDENDA



Certifications



CERTIFICATION OF THE APPRAISER

I, Michael P. Berkowitz, certify that, to the best of my knowledge and belief,

1. The statements of fact contained in this report are true and correct.

2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions

and limiting conditions and are my personal, impartial, and unbiased professional analyses,

opinions, and conclusions.

3. 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.

4. I have performed no services, as an appraiser or in any other capacity, regarding the property

that is the subject of this report within the three-year period immediately preceding acceptance

of this assignment.

5. I have no bias with respect to the property that is the subject of this report or to the parties

involved with this assignment.

6. My engagement in this assignment was not contingent upon developing or reporting

predetermined results.

7. 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.

8. The reported analyses, opinions, and conclusions were developed, and this report has been

prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.

9. The use of this report is subject to the requirements of the Appraisal Institute relating to review

by its duly authorized representatives.

10. I have made a personal inspection of the property that is the subject of this report.

11. No one provided significant real property appraisal assistance to the person(s) signing this

certification other than those individuals having signed the attached report.

Michael P. Berkowitz (NC State Certified General Real Estate Appraiser #A6169)

(SC State Certified General Real Estate Appraiser #CG6277)

July 9, 2021

Date (Rev: 06/18/12)



Assumptions and Limiting Conditions



ASSUMPTIONS AND LIMITING CONDITIONS

Limit of Liability

The liability of T.B. HARRIS, JR. & ASSOCIATES and employees is limited to the client only

and to the fee actually received by our firm. Further, there is no accountability, obligation, or

liability to any third party. If this report is placed in the hands of anyone other than client, the client

shall make such party aware of all limiting conditions and assumptions of the assignment and

related discussions. Further, client will forever indemnify and hold T.B. HARRIS, JR. &

ASSOCIATES, its officers, and employees harmless from any claims by third parties related in

any way to the appraisal or study which is the subject of the report. Third parties shall include

limited partners of client if client is a partnership and stockholders of client if client is a

corporation, and all lenders, tenants, past owners, successors, assigns, transferees, and spouses of

client. T.B. HARRIS, JR. & ASSOCIATES will not be responsible for any costs incurred to

discover or correct any deficiencies of any type present in the property, physically, financially,

and/or legally.

Copies, Distribution, Use of Report

Possession of this report or any copy of this report does not carry with it the right of publication,

nor may it be used for other than its intended use; the physical report remains the property of T.B.

HARRIS, JR. & ASSOCIATES for the use of the client, the fee being for the analytical services

only.

The bylaws and regulations of the Appraisal Institute require each member and candidate to control

the use and distribution of each report signed by such member or candidate; except, however, the

client may distribute copies of this report in its entirety to such third parties as he may select;

however, selected portions of this report shall not be given to third parties without the prior written

consent of the signatories of this report. Neither all nor any part of this report shall be disseminated

to the general public by the use of advertising media, public relations, news, sales or other media

for public communication without the prior written consent of T.B. HARRIS, JR. &

ASSOCIATES.

Confidentiality

This report is to be used only in its entirety and no part is to be used without the whole report. All

conclusions and opinions concerning the analysis as set forth in the report were prepared by T.B.

HARRIS, JR. & ASSOCIATES whose signatures appear on the report. No change of any item in

the report shall be made by anyone other than T.B. HARRIS, JR. & ASSOCIATES. T.B. HARRIS,

JR. & ASSOCIATES shall have no responsibility if any such unauthorized change is made.

T.B. HARRIS, JR. & ASSOCIATES may not divulge the material contents of the report, analytical

findings or conclusions, or give a copy of the report to anyone other than the client or his designee

as specified in writing except as may be required by the Appraisal Institute as they may request in

confidence for ethics enforcement, or by a court of law or body with the power of subpoena.

Trade Secrets

This report was obtained from T.B. HARRIS, JR. & ASSOCIATES and consists of “trade secrets

and commercial or financial information” which is privileged and confidential and exempted from

disclosure under 5 U.S.C. 552 (b) (4) of the Uniform Commercial Code. T.B. HARRIS, JR. &

ASSOCIATES shall be notified of any request to reproduce this report in whole or in part.



Information Used

No responsibility is assumed for accuracy of information furnished by or work of others, the client,

his designee, or public records. We are not liable for such information or the work of

subcontractors. The comparable data relied upon in this report has been confirmed with one or

more parties familiar with the transaction or from affidavit or other sources thought reasonable; all

are considered appropriate for inclusion to the best of our factual judgment and knowledge. An

impractical and uneconomic expenditure of time would be required in attempting to furnish

unimpeachable verification in all instances, particularly as to engineering and market-related

information. It is suggested that the client consider independent verification as a prerequisite to

any transaction involving sale, lease, or other significant commitment of funds for the subject

property.

Financial Information

Our value opinion(s) have been based on unaudited financials, and other data provided to us by

management and/or owners. If these reports are found to be inaccurate, we reserve the right to

revise our value opinion(s). It is noted we are depending on these accounting statements as being

accurate and our interpretation of these statements as being accurate as well. If these assumptions

later prove to be false, we reserve the right to amend our opinions of value.

Testimony, Consultation, Completion of Contract for Report Services

The contract for report, consultation, or analytical service is fulfilled and the total fee payable upon

completion of the report, unless otherwise specified. T.B. HARRIS, JR. & ASSOCIATES or those

assisting in preparation of the report will not be asked or required to give testimony in court or

hearing because of having made the report, in full or in part, nor engage in post report consultation

with client or third parties except under separate and special arrangement and at an additional fee.

If testimony or deposition is required because of any subpoena, the client shall be responsible for

any additional time, fees, and charges, regardless of issuing party.

Exhibits

The illustrations and maps in this report are included to assist the reader in visualizing the property

and are not necessarily to scale. Various photographs, if any, are included for the same purpose as

of the date of the photographs. Site plans are not surveys unless so designated.

Legal, Engineering, Financial, Structural or Mechanical Nature, Hidden Components, Soil

No responsibility is assumed for matters legal in character or nature, nor matters of survey, nor of

any architectural, structural, mechanical, or engineering nature. No opinion is rendered as to the

title, which is presumed to be good and marketable. The property is appraised as if free and clear,

unless otherwise stated in particular parts of the report. The legal description is assumed to be

correct as used in this report as furnished by the client, his designee, or as derived by T.B.

HARRIS, JR. & ASSOCIATES.

T.B. HARRIS, JR. & ASSOCIATES has inspected as far as possible, by observation, the land and

the improvements; however, it was not possible to personally observe conditions beneath the soil,

or hidden structural, mechanical or other components, and T.B. HARRIS, JR. & ASSOCIATES

shall not be responsible for defects in the property which may be related.

The report is based on there being no hidden, unapparent, or apparent conditions of the property

site, subsoil or structures or toxic materials which would render it more or less valuable. No



responsibility is assumed for any such conditions or for any expertise or engineering to discover

them. All mechanical components are assumed to be in operable condition and status standard for

properties of the subject type. Conditions of heating, cooling, ventilation, electrical, and plumbing

equipment are considered to be commensurate with the condition of the balance of the

improvements unless otherwise stated. We are not experts in this area, and it is recommended, if

appropriate, the client obtain an inspection of this equipment by a qualified professional.

If T.B. HARRIS, JR. & ASSOCIATES has not been supplied with a termite inspection, survey or

occupancy permit, no responsibility or representation is assumed or made for any costs associated

with obtaining same or for any deficiencies discovered before or after they are obtained. No

representation or warranties are made concerning obtaining the above mentioned items.

T.B. HARRIS, JR. & ASSOCIATES assumes no responsibility for any costs or consequences

arising due to the need, or the lack of need, for flood hazard insurance. An agent for The Federal

Flood Insurance Program should be contacted to determine the actual need for Flood Hazard

Insurance.

Legality of Use

The report is based on the premise that there is full compliance with all applicable federal, state

and local environmental regulations and laws unless otherwise stated in the report; further, that all

applicable zoning, building and use regulations, and restrictions of all types have been complied

with unless otherwise stated in the report. Further, it is assumed that all required licenses, consents,

permits, or other legislative or administrative authority, local, state, federal and/or private entity

or organization have been or may be obtained or renewed for any use considered in the value

estimate.

Component Values

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 report and are invalid if so used.

Auxiliary and Related Studies

No environmental or impact studies, special market study or analysis, highest and best use analysis,

study or feasibility study has been required or made unless otherwise specified in an agreement

for services or in the report.

Dollar Values, Purchasing Power

The market value estimated and the costs used are as of the date of the estimate of value, unless

otherwise indicated. All dollar amounts are based on the purchasing power and price of the dollar

as of the date of the value estimate.

Inclusions

Furnishings and equipment or personal property or business operations, except as specifically

indicated and typically considered as a part of real estate, have been disregarded with only the real

estate being considered in the value estimate, unless otherwise stated. In some property types,

business and real estate interests and values are combined.



Proposed Improvements, Conditional Value

Improvements proposed, if any, onsite or offsite, as well as any repairs required, are considered

for purposes of this report to be completed in a timely, good and workmanlike manner, according

to information submitted and/or considered by T.B. HARRIS, JR. & ASSOCIATES. In cases of

proposed construction, the report is subject to change upon inspection of property after

construction is completed.

Value Change, Dynamic Market, Influences, Alteration of Estimate

The estimated value, which is defined in the report, is subject to change with market changes over

time. Value is highly related to exposure, time, promotional effort, terms, motivation, and

conditions surrounding the offering. The value estimate considers the productivity and relative

attractiveness of the property physically and economically in the marketplace.

In cases of reports involving the capitalization of income benefits, the estimate of market value or

investment value or value in use is a reflection of such benefits and T.B. HARRIS, JR. &

ASSOCIATES' interpretation of income and yields and other factors derived from general and

specific client and market information. Such estimates are as of the date of the estimate of value;

thus, they are subject to change as the market and value is naturally dynamic.

The “estimate of market value” in the report is not based in whole or in part upon the race, color,

or national origin of the present owners or occupants of the properties in the vicinity of the property

appraised.

Report and Value Estimate

Report and value estimate are subject to change if physical or legal entity or financing differ from

that envisioned in this report.

Management of the Property

It is assumed that the property which is the subject of this report will be under prudent and

competent ownership and management.

Hazardous Materials

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 T.B. HARRIS, JR. & ASSOCIATES become aware of such during

their inspection. T.B. HARRIS, JR. & ASSOCIATES had no knowledge of the existence of such

materials on or in the property unless otherwise stated. T.B. HARRIS, JR. & ASSOCIATES,

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 estimate is predicated on

the assumption that there is no such condition on or in the property or in the proximity 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.

Soil and Subsoil Conditions

Unless otherwise stated in this report, T.B. HARRIS, JR. & ASSOCIATES does not warrant the

soil or subsoil conditions for toxic or hazardous waste materials. Where any suspected materials



might be present, we have indicated in the report; however, T.B. HARRIS, JR. & ASSOCIATES

are not experts in this field and recommend appropriate engineering studies to monitor the presence

or absence of these materials.

Americans with Disabilities Act (ADA)

“T.B. HARRIS, JR. & ASSOCIATES has not made a specific compliance survey and analysis of

this property to determine whether or not it is in conformity with the various detailed requirements

of the Americans with Disabilities Act (ADA), which became effective January 26, 1992. It is

possible that a compliance survey of the property together with a detailed analysis of the

requirements of the ADA could reveal that the property is not in compliance with one or more of

the requirements of the Act. If so, this fact could have a negative effect upon the value of the

property. Since T.B. HARRIS, JR. & ASSOCIATES has no direct evidence relating to this issue,

we did not consider possible non-compliance with the requirements of ADA in estimating the

value of the property.”



Deeds/Legal Descriptions



Surveys



Easement Language



Appraiser License



Qualifications of the Appraiser



QUALIFICATIONS OF THE APPRAISER

Michael P. Berkowitz T.B. Harris, Jr. & Associates

1430 South Mint Street, Suite 102

Charlotte, North Carolina 28203

(704) 334-4686

FAX (704) 334-2759

EDUCATION AND CREDENTIALS

• Duke University

Major: Economics 1985-1989

• Central Piedmont Community College

R-1 - Introduction to Real Estate Appraisal 2002

R-2 - Valuation Principles and Procedures, 2002

R-3 - Applied Residential Property Valuation, 2002

G-1 - Introduction to Income Property Appraisal, 2003

• Bob Ipock and Associates

G-2 - Advanced Income Capitalization Procedures, 2003

G-3 - Applied Property Income Valuation 2004

• Appraisal Institute

520 Highest and Best Use and Market Analysis, 2004

Seminar Rates, Multipliers and Ratios 2005

530 Advanced Sales Comparison and Cost Approaches 2006

Seminar Apartment Appraisal, Concepts & Applications 2009

Seminar Appraising Distresses Commercial Real Estate 2009

Seminar Appraising Convenience Stores 2011

Seminar Analyzing Operating Expenses 2011

Seminar Argus Certification 2013

501 Advanced Income Capitalization Approach 2014

502 Quantitative Analysis 2015

PS-006RB Appraisal of Local Retail Properties 2016

• McKissock Learning Center

Seminar Basic Hotel Appraising 2019

Seminar Basics of Expert Testimony 2019

Seminar Advanced Hotel Appraising 2019

AFFILIATIONS AND ACTIVITIES

• Association Memberships

North Carolina State Certified General Real Estate Appraiser, October 2006, Certificate No.

A6169

RELATED EXPERIENCE

• Provided real estate consulting services for a variety of clients including real estate brokers,

property owners and financial planners



• Performed financial feasibility studies for multiple property types including golf communities,

and renovation projects.

• Developed plan for self-contained communities.

• Represented property owners, tenants and local governments for property tax appeals including

but not necessarily limited to race tracks, high-tech manufacturing facilities and complex

income producing properties.

APPRAISAL EXPERIENCE

A partial list of types of properties appraised include:

Retail Properties, Single and Multi-Tenant, Proposed and Existing

Office Single and Multi-Tenant Proposed and Existing

Mixed-Use Properties, Proposed and Existing

Industrial Properties, Warehouse, Flex and Manufacturing

Multifamily developments existing and proposed

Medical office space

Vacant Land

Condemnation

C-Stores

Race Tracks

CLIENTELE

Bank of America

Wells Fargo

South State Bank

First Citizens Bank

RBC Centura Bank

City of Charlotte

City of Concord

Union County

Cabarrus County

City of Statesville

Town of Matthews

Mecklenburg County

BB & T

Aegon USA Realty Advisors

Sun Trust Bank

First Charter Bank

Regions Bank

Charlotte Housing Authority

Alliance Bank and Trust

Broadway Bank

Duke Energy Corporation

Jim R. Funderburk, PLLC

Hamilton, Fay, Moon, Stephens, Steele & Martin

Senator Marshall A. Rauch

Perry, Bundy, Plyler & Long, LLP



Robinson, Bradshaw & Hinson

CSX Real Property

Baucom, Clayton, Burton, Morgan & Wood, PA

City of Mount Holly

Our Towns Habitat for Humanity

Parker, Poe, Adams & Bernstein, LLP

Central Carolina Bank

Horack, Talley, Pharr & Lowndes, P.A.

Hospice of Iredell County

New Dominion Bank

Peoples Bank

CLI Capital

Horizon Development Properties

Hazelhurst & Blake, PLLC

Grier, Furr & Crisp

Nexsen Pruett, PLLC

Blue Harbor Bank

Southern Community Bank and Trust

real property appraisal

Documents