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Item 4D
CITY OF SOUTH LAKE MEMORANDUM (September 21, 2010) To: Shana Yelverton, City Manager From: Robert H. Price, P.E., Director of Public Works Subject: Approve purchase of right -of -way for Kirkwood Boulevard Improvements from the property at 1371 East Highland Street. Action Requested: Approve purchase of right -of -way for Kirkwood Boulevard Improvements from the property at 1371 East Highland Street. Background Information: The City is currently acquiring Right -of -Way (ROW) necessary for the construction of Kirkwood Boulevard from Blessed Way (Carroll Middle School location) to East Highland Street. One of the properties where additional ROW is necessary is located at 1371 East Highland Street. The property was appraised and an initial offer of $162,800 for the entire parcel of land. Through negotiations with the property owner, a final amount of $179,000 was agreed upon and falls within the parameters previously approved by the City Council. Although the entire parcel is not required in order to construct Kirkwood Boulevard, the estimated damages that the City would be required to pay are $47,350. Acquiring the entire parcel will maximize the investment of City funds. Future disposition of the remainder property will be addressed at a later date. The ROW is necessary to accommodate travel lanes and installation of both city utilities and franchise utilities. Financial Considerations: Funding for the ROW purchase is available in the FY 2010 capital improvement program budget. Strategic Link: The improvements to Kirkwood Boulevard link to the city's strategy map relative to the focus areas of Mobility and Infrastructure. The specific corporate objectives that are met by this purchase is investing to provide and maintain high quality public assets, providing high quality customer service and providing travel convenience in the city and region. Citizen Input/ Board Review: N/A Legal Review: N/A Alternatives: The City Council may approve or deny this purchase. Supporting Documents: Location Map Contract of Sale Appraisal Staff Recommendation: Approve purchase of right -of -way for Kirkwood Boulevard Improvements from the property at 1371 East Highland Street. Staff Contact: Robert H. Price, P.E., Public Works Director Gordon J. Mayer, Jr., P.E., City Engineer Michelle McCullough, P.E., Civil Engineer G 0 V O J CONTRACT OF SALE STATE OF TEXAS § COUNTY OF TARRANT § THIS CONTRACT OF SALE is made by and between the estate of Verna Marie Eubanks, of Tarrant County Texas, (referred to in this Contract as "Seller ") and the City of Southlake, a home rule municipal corporation in Tarrant County, Texas, (referred to in this Contract as "Purchaser "). ARTICLE I. PURCHASE AND SALE By this Contract, Seller sells and agrees to convey, and Purchaser purchases and agrees to pay for, a tract of land situated in Tarrant County, Texas, which is more particularly described as follows: a 0.8265 acre of land located in the RICHARD EADS SURVEY, ABSTRACT NO. 481, in the City of Southlake, Tarrant County, Texas, and being more particularly described by metes and bounds in Exhibit "A ", attached hereto and incorporated herein for all purposes, and being more particularly shown on a survey drawing marked Exhibit "B ", attached hereto and incorporated herein for all purposes together with all and singular the rights and appurtenances pertaining thereto, including any right, title and interest of Seller in and to adjacent streets, alleys or rights -of -way (all of such real property, rights, and appurtenances being referred to in this Contact as the "Property "), together with any improvements and fixtures, situated on and attached to the Property. This Contract is made for the consideration and upon and subject to the terms, provisions, and conditions set forth below. ARTICLE IL PURCHASE PRICE The purchase price for the Property shall be ONE HUNDRED SEVENTY NINE DOLLARS AND 00 /100 DOLLARS ($179,000.00) cash. ARTICLE III. PURCHASER'S RIGHTS AND OBLIGATIONS 4.01 Preliminary Title Report. Within twenty (20) days after the date hereof, Seller, at Purchaser's sole cost and expense, shall have the Title Company issue a preliminary title report (the "Title Report ") accompanied by copies of all recorded documents relating to easements, rights -of -way, etc., affecting the Property. Purchaser shall give Seller written notice on or before the expiration of ten (10) days after Purchaser receives the Title Report that the condition of title as set forth in the title binder is or is not satisfactory, and in the event Purchaser states that any conditions are not satisfactory, Seller shall promptly undertake to eliminate or modify all Page 1 unacceptable matters to the reasonable satisfaction of Purchaser. In the event Seller chooses not to do so or is unable to do so within twenty (20) days after receipt of written notice, this Contract shall thereupon be null and void for all purposes. If written notice is not received by Seller within the 20 day period, all conditions shall be deemed to be acceptable and any objection thereto shall be deemed to have been waived for all purposes. 4.02 Survey. Attached as Exhibit "B" is a copy of the survey that Purchaser caused to be prepared for Property. 4.03 New Surveys and Tests. Within ten (10) days after the date of execution, Seller shall provide to Purchaser a copy of any environmental site assessment that Seller has caused to be prepared for the Property, or that Seller has received. Within 20 (twenty) days after the date of execution, Purchaser is granted the right to conduct an environmental and engineering survey and feasibility study of the Property at Purchaser's sole cost and expense, and in this connection Purchaser or Purchaser's designated agents may enter upon the Property for purposes of soil analysis, core drilling, or other tests which may be deemed necessary to Purchaser or Purchaser's engineer. If Purchaser determines, in Purchaser's sole judgment, that the Property is not suitable for the intended purposes, then and in this event, Purchaser may, on written notice to Seller within twenty (20) days after receipt of survey, terminate this Contract and it shall be null and void for all purposes. If the written notice is not received within this twenty (20) day period, the condition shall be deemed to be acceptable and any objection thereto shall be deemed to have been waived for all purposes. 4.04 Property Condition. Within twenty (20) days after the date of execution, Purchaser may have the property and facilities inspected by an inspector permitted by law to make such inspections. Seller shall permit access to the property at reasonable times for inspection, repairs, and treatment and for reinspection after repairs and treatment have been completed. Purchaser will have twenty (20) days after receipt of the inspection report to review and approve same. In the event any portion of the inspection report is unacceptable to Purchaser, then Purchaser shall, within the twenty (20) day period, give Seller written notice of this fact. Unless otherwise agreed by Seller and Purchaser, Seller shall, complete all agreed repairs and treatment prior to the Closing Date. If Seller fails to complete any agreed repairs and treatment prior to Closing Date, Purchaser may terminate this Contract and the Contract shall thereupon be null and void for all purposes. Purchaser's failure to give Seller this written notice shall be deemed to be Purchaser's acceptance of the property in its current condition. ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF SELLER Seller, to its current actual knowledge, hereby represents and warrants to Purchaser as follows, which representations and warranties shall be deemed made by Seller to Purchaser also as of the Closing Date: (1) Seller is the sole owner of the Property and has the right and ability to convey good and marketable title in fee simple to the Property to Purchaser without the approval or participation of any other person and free and clear of any and all liens, encumbrances, conditions, assessments and restrictions. Page 2 (2) During Seller's ownership of the Property (1) no excavation of the Property occurred, (2) no landfill was deposited on or taken from the Property, (3) no construction debris or other debris (including, without limitation, rocks, stumps, and concrete) was buried upon the Property, and (4) no toxic waste or "hazardous substances" as that term is defined in the Comprehensive Environmental Response, Compensation and Liability Act of 1988, or petroleum products and derivatives thereof, were deposited on the Property. Seller further represents and warrants that, to its current actual knowledge, none of the foregoing occurred on the Property prior to Seller's ownership of the Property. (3) That there are no real estate brokers', agents' or finders' fees or commissions due arising in connection with the execution of this Contract or from the consummation of the sale contemplated herein. This representation and warranty shall survive closing. ARTICLE V. CLOSING 6.01 Closing Date. The closing shall be held on , 2010, at the Title Company (which date is herein referred to as the "Closing Date "). 6.02 Conditions at Closing. The closing and Purchaser's obligations under this Agreement to purchase the Property are expressly conditioned on: (1) Seller's delivery to Purchaser a duly executed and acknowledged Grant of Permanent Right of Way in the form attached hereto as Exhibit "C" conveying to Purchaser a permanent right -of- way on the Property, free and clear of any and all liens, encumbrances, conditions, assessments, and restrictions other than as provided in this Contract. (2) Seller's delivery to Purchaser of a duly executed and acknowledged Temporary Construction Easement in the form attached hereto as Exhibit "D ". (3) Delivery to Purchaser, at Purchaser's sole expense, of a Texas Owner's Title Policy, issued by the Title Company in the full amount of the purchase price, insuring Purchaser's permanent right -of -way on the Property, subject only to those title exceptions listed in this Article VI, if any, such other exceptions as may be approved in writing by Purchaser, and the standard printed exceptions contained in the usual form of Texas Owner's Title Policy, provided, however: (a) The boundary and survey exceptions shall be deleted; (b) The exception as to restrictive covenants shall be endorsed "None of Record "; and (c) The exception as to the lien for taxes shall be limited to the year of closing and shall be endorsed "Not Yet Due and Payable." Page 3 (3) Seller's execution of such documents and instruments reasonably requested by the title company to consummate the transactions contemplated herein. (4) Delivery to Purchaser of possession of the Property. 6.03 Failure of Conditions. Should any of the conditions specified in Paragraph 6.02 of this Contract fail to occur within twenty (20) days after the establishment of Closing as provided in Paragraph 6.01 of this Contract, Purchaser shall have the power, exercisable by written notice to Seller, to cancel the closing, terminate this Contract, and recover any amounts paid by Purchaser to Seller or to the Title Company on account of the purchase price of the Property. The exercise of this power by Purchaser shall not, however, constitute a waiver of any other rights Purchaser may have against Seller for breach of this Agreement. The Title Company (Escrow Agent) shall be and is hereby irrevocably instructed by Seller on any such failure of condition and receipt of such notice from Purchaser by it to immediately refund to Purchaser all monies and instruments deposited by Purchaser pursuant to this Contract. 6.04 Prorations. Any assessments against the Property as of the Closing Date shall be paid by Seller on or before the closing. General real estate taxes for the then current year relating to the Property, interest on any existing indebtedness, and rents if any, shall be prorated as of the closing date and shall be adjusted in cash at the closing. In the event any roll back or other deferred taxes exist which are retroactive to the period of Seller's ownership of the Property or any time prior thereto pursuant to a change in zoning, use, ownership or otherwise, such retroactive taxes shall remain the obligation of Purchaser. This provision shall survive the closing. 6.05 Closing Costs. All costs and expenses of closing in consummating the sale and purchase of the Property shall be borne and paid as follows: Owner's Title Policy paid by Purchaser Survey paid by Purchaser Environmental and Engineering Survey, if any, paid by Purchaser Inspection Reports, if any, paid by Purchaser Filing fees paid by Purchaser Attorney's fees paid by the party incurring same ARTICLE VI. REAL ESTATE COMMISSIONS Seller shall pay, at Seller's sole cost and expense, any commissions or brokerage fees associated with this Contract which are owed by Seller. Seller agrees to indemnify and hold the City harmless from claims made by any person for any such fees, commission or like compensation claiming to have dealt with the Seller. ARTICLE VII. BREACH BY SELLER In the event Seller shall fail to fully and timely perform any of its obligations hereunder or shall fail to consummate the sale of the Property for any reason, except because of Purchaser's termination of this Contract or because of Purchaser's default, Purchaser may either terminate the Page 4 Contract, enforce specific performance of the Contract, or seek other remedies available at law, in equity, or by statute. Seller's failure to satisfy Purchaser's objections under Article VI shall constitute a default by Seller. ARTICLE VIII. BREACH BY PURCHASER If Purchaser shall fail to consummate this Contract for any reason, except Seller's default or the termination of this Contract pursuant to a right to terminate given herein, Purchaser shall be in default and Seller may at its sole and exclusive remedy have the Escrow Deposit paid to Seller as liquidated damages for the breach of Contract thereby releasing Purchaser from this Contract. ARTICLE IX. MISCELLANEOUS 10.01 Effective Date. The effective date of this Contract will be the date the last parry executes the contract. 10.02 Survival of Covenants. Any of the representations, warranties, covenants, and contracts of the parties, as well as any rights and benefits of the parties, pertaining to a period of time following the closing date of the transactions contemplated hereby shall survive the closing. 10.03 Notices. Any notice required or permitted to be delivered hereunder shall be deemed received when sent by certified United States mail, postage prepaid, return receipt requested, addressed to Seller or Purchaser, as the case may be, at the address set forth below the signature of the party hereunder. 10.04 Texas Law to Apply. This Contract shall be construed under and in accordance with the laws of the State of Texas, and all obligations of the parties created hereunder are performable in Tarrant County, Texas. 10.05 Parties Bound. This Contract shall be binding upon and inure to the benefit of the parties and their respective heirs, executors, administrators, legal representatives, successors and assigns where permitted by this Contract. 10.06 Legal Construction. In case any one or more of the provisions contained in this Contract shall for any reason be held to be invalid, illegal, or unenforceable in any respect, this invalidity, illegality, or unenforceability shall not affect any other provision hereof, and this Contract shall be construed as if the invalid, illegal, or unenforceable provision had never been contained herein. 10.07 Gender. Words of any gender used in this Contract shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, and vice versa, unless the context requires otherwise. 10.08 Time. In this Contract, time is of the essence and compliance with the times for performance is required. Page 5 10.09 Attorneys Fees. The prevailing parry in the adjudication of any proceeding relating to this Agreement shall be authorized to recover its reasonable and necessary attorney's fees pursuant to Sec. 271.159 of the Texas Local Government Code. EXECUTED this day of SELLERS: Wilma Burgess 1371 East Highland Street Southlake, Texas 76092 2010. PURCHASER: CITY OF SOUTHLAKE, TEXAS By John Terrell, Mayor 1400 Main Street Southlake, Texas 76092 Cleva Jo Lilly 1371 East Highland Street Southlake, Texas 76092 Page 6 ACKNOWLEDGMENTS STATE OF TEXAS § COUNTY OF TARRANT § Before me, the undersigned authority in and for the State of Texas, on this day personally appeared David Keener, known to me (or proved to me on the oath of or through [description of identity card or other document]) to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purposes and consideration therein expressed. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of 2010. Notary Public in and for The State of Texas My Commission Expires: STATE OF TEXAS § COUNTY OF TARRANT § Typed or Printed Name of Notary Before me, the undersigned authority in and for said County, Texas, on this day personally appeared John Terrell, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he is the Mayor of the City of Southlake, Texas and is duly authorized to execute this Contract for the purposes and consideration therein expressed. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of 2010. Notary Public in and for The State of Texas My Commission Expires: Typed or Printed Name of Notary Page 7 NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS INSTRUMENT BEFORE IT IS FILED FOR RECORD IN THE 'PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER. CITY OF SOUTHLAKE PERMANENT RIGHT -OF -WAY THE STATE OF TEXAS KNOW ALL MEN BY THESE PRESENTS COUNTY OF TARRANT THAT, CLEVO JO LILLY and WILMA BURGESS, of the County of Tarrant, State of Texas, for and in consideration of ONE DOLLAR, and other good and valuable considerations paid by the City of Southlake, a municipal corporation of Tarrant County, Texas, receipt of which is hereby acknowledged, does hereby grant, bargain and convey to said City, its successors and assigns, a permanent right -of -way and the right to construct, reconstruct and perpetually maintain a public street and/or drainage facilities and utilities, together with all necessary appurtenances thereto, and with the right and privilege at any and all times, to enter said premises, or any part thereof, as is necessary to the proper use of any other right granted herein, and for the purpose of constructing, reconstructing and maintaining said public street and /or drainage facilities and utilities, and for making connections therewith, in, upon and across that certain tract or parcel of land in Tarrant County, Texas, being described as follows: EXHIBITS "A" and "B ", attached hereto and made a part hereof. TO HAVE AND TO HOLD that said conveyed property unto the Grantee for the purposes herein set forth, Grantor hereby binds itself, its successors and assigns, to warrant and forever defend the said conveyed property and rights granted herein unto Grantee, its successors and assigns every person whomsoever lawfully claiming or to claim the same or any part thereof. WITNESS MY HAND, this the day of CLEVO JO LILLY STATE OF TEXAS COUNTY OF TARRANT 201 Q. WILMA BURGESS BEFORE ME, the undersigned authority, in and for said County, on this day personally appeared CLEVO JO LILLY and WILMA BURGESS, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that s /he executed the same for the purposes and considerations therein expressed, and in the capacity therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of , 2010. Notary Public in and for The State of Texas Commission Expires: EXHIBIT "A" LEGAL DESCRIPTION PARCELS BEING 0.825 acre of land located in the RICHARD EADS SURVEY, ABSTRACT NO. 481, City of Southlake, Tarrant County, Texas, and being all of the tract of land conveyed to C. E. Eubanks, and wife, Marie Eubanks, by the deed recorded in Volume 5734, Page 861 of the Deed Records of Tarrant County, Texas. Said 0.825 acre of land being more particularly described by metes and bounds as follows BEGINNING at a' /z" iron rod at the Southeast corner of said Eubanks Tract; THENCE S 89 55'52" W 150.00 feet, along the South boundary line of said Eubanks Tract to a point at the Southwest corner of said Eubanks Tract; THENCE N 03° 02'06" E 240.00 feet, along the West boundary line of said Eubanks Tract, to a point at the Northwest corner of said Eubanks Tract, and lying in the approximate centerline of East Highland Street; THENCE N 89° 55' 52" E 150.00 feet, along the North boundary line of said Eubanks Tract and the approximate centerline of East Highland Street to a point at the Northeast corner of said Eubanks Tract; THENCE S 03° 02' 06" W 240.00 feet, along the East boundary line of said Eubanks Tract, to the POINT OF BEGINNING containing 0.825 acre (35,947 square feet) of land. G1009TEGALSWH- HIGHLANOIROW 5 Off' � 4•���, �' � , EXHIBIT »B" LOT 11 HIGHLAND ESTATES VOL- 388 -134, PG. 100 P.R•T.C.T. EAST HIGHLAND STREET (VARIABLE WIDTH RIGHT -OF -WAY) N 89 °55'52 "E 150.00' X r SCHOOL DISTRICT fip ° - VOL. 5734, PG. 859 i <Ill�r D.R.T.C.T. CNQ AQ� k�C? AREA TABLE 0.825 ACRES TOTAL (35,947 SQ. FT.) 0.079 ACRE IN PRESCRIPTIVE RIGHT -OF -WAY 0.746 ACRE NET (32,509 SQ. FT.) S 89 ° 55'52" W 150.00' SURVEYED ON THE GROUND L ©•F.., r NOVEMBER 24, 2009 IRE =IRON ROD FOUND� 1/2" IRS - IRON RODS SET ARE CHRIS..L..eLEVINS 1 /2' IRON RODS MARKED s. RITTAIN & CRAWFORD" 5792 CHRIS L. BLEVINS �� �• °• ;F s s :° �fl� REGISTERED PROFESSIONAL o SURIJ LAND SURVEYOR STATE OF TEXAS NO. 5792 SOUTHL_AKE SOUTHLAKE, TARRANT COUNTY, TEXAS 1 LXAS KIRKWOOD BOULEVARD IMPROVEMENT PROJECT RITTAIN & CRAWFORD EXHIBIT MAP OF o LAND SURVEYING & /� �? LAN TOPOGRAPHIC MAPPING 0.825 ACRE O LAND u B (817) 225 -0211 - MEVO (H17) 429 -5112 LOCATED IN A. 60x. �. FAX No. {817) 926 -934Y 1174 3908 SOUTH FREEWAY THE RICHARD FADS SURVEY, p3 FORT WORTR. TEXAS 76110 ABSTRACT No. 481 EUNU odmm®hnl R61- I —told .com TARRANT COUNTY, TEXAS SCALE 1 " :40' a 0 0' L�c� ot) o RiO�T 116 C.E. EUBANKS and wife, MARIE €UBANKS - rn `ky VOL. 5734, PG. 861 1 12" IRS D.R.TC.T. qR0 FAO 0- S URV EY , RI�� STRAIT A O � I POINT OF BEGINNING N GATEWAY CHURCH (1/2" IRON ROD FOUND) ° D204303704 ° D- R.T.C.T. z (J.U.) KH -SLAKE - KIRKW00U \9H- SLAKE- KIRKWOOD -ROW O(3C5- EU6ANKS.Cw9 _r _APPARENT- PRESCRIPTIVE_RIGHT_OF -WAY _, 0 m V l.J CO o rq G✓�� i CU7 o z Q \�Q d =8 52' 31" o CD ` 4' 4 f'�OI�QSb l L 1 0 .�.. s ~ = ' 159.55 o d 1/2 IRS „ ' AC R � �yT CH =N 66'57 "55 "W c\r � OF 159.39' � ARROLL INDEPENDENT SCHOOL DISTRICT fip ° - VOL. 5734, PG. 859 i <Ill�r D.R.T.C.T. CNQ AQ� k�C? AREA TABLE 0.825 ACRES TOTAL (35,947 SQ. FT.) 0.079 ACRE IN PRESCRIPTIVE RIGHT -OF -WAY 0.746 ACRE NET (32,509 SQ. FT.) S 89 ° 55'52" W 150.00' SURVEYED ON THE GROUND L ©•F.., r NOVEMBER 24, 2009 IRE =IRON ROD FOUND� 1/2" IRS - IRON RODS SET ARE CHRIS..L..eLEVINS 1 /2' IRON RODS MARKED s. RITTAIN & CRAWFORD" 5792 CHRIS L. BLEVINS �� �• °• ;F s s :° �fl� REGISTERED PROFESSIONAL o SURIJ LAND SURVEYOR STATE OF TEXAS NO. 5792 SOUTHL_AKE SOUTHLAKE, TARRANT COUNTY, TEXAS 1 LXAS KIRKWOOD BOULEVARD IMPROVEMENT PROJECT RITTAIN & CRAWFORD EXHIBIT MAP OF o LAND SURVEYING & /� �? LAN TOPOGRAPHIC MAPPING 0.825 ACRE O LAND u B (817) 225 -0211 - MEVO (H17) 429 -5112 LOCATED IN A. 60x. �. FAX No. {817) 926 -934Y 1174 3908 SOUTH FREEWAY THE RICHARD FADS SURVEY, p3 FORT WORTR. TEXAS 76110 ABSTRACT No. 481 EUNU odmm®hnl R61- I —told .com TARRANT COUNTY, TEXAS SCALE 1 " :40' a 0 0' L�c� ot) o RiO�T 116 C.E. EUBANKS and wife, MARIE €UBANKS - rn `ky VOL. 5734, PG. 861 1 12" IRS D.R.TC.T. qR0 FAO 0- S URV EY , RI�� STRAIT A O � I POINT OF BEGINNING N GATEWAY CHURCH (1/2" IRON ROD FOUND) ° D204303704 ° D- R.T.C.T. z (J.U.) KH -SLAKE - KIRKW00U \9H- SLAKE- KIRKWOOD -ROW O(3C5- EU6ANKS.Cw9 AN APPRAISAL OF PROPERTY LOCATED ALONG THE SOUTH SIDE OF EAST HIGHLAND STREET, EAST OF NORTH CARROLL AVENUE, SOUTHLAKE, TEXAS; OWNED BY ESTATE OF VERNA MARIE EUBANKS PREPARED FOR: CITY OF SOUTHLAKE 1400 Main Street, Suite 320 Southlake, Texas 76092 PREPARED BY: HANES APPRAISAL COMPANY LLC 1404 West Mayfield Road, Suite A Arlington, Texas 76015 James S. Hanes, MAI HANES APPRAISAL COMPANY LLC REAL ESTATE APPRAISAL AND CONSULTATION SERVICES 1404 West Mayfield Road, Suite A Arlington, Texas 76015 March 23, 2010 Mr. Michael James, PE, CFM Civil Engineer City of Southlake 1400 Main Street Southlake, Texas 76092 Dear Mr. James: Phone (817) 445 -1025 Fax (817) 468 -8283 In accordance with your request, I have prepared an appraisal of Parcel No. 5, which consists of a right - of -way parcel of the Kirkwood Boulevard Improvement Project. This parcel is part of a whole property that is located along the south side of East Highland Street, approximately 885 feet east of North Carroll Avenue, Southlake, Texas. It has a municipal address of 1371 East Highland Street and is legally described as being a tract of land located in the Richard Eads Survey, Abstract No. 481, City of Southlake, Tarrant County, Texas. The property is owned by the Estate of Verna Marie Eubanks aka Marie Eubanks aka V. Marie Eubanks, deceased. The purpose of the appraisal was to estimate the total compensation to which the owner of the subject property is entitled for the proposed acquisition by the City of Southlake. The definition of value used in this appraisal is market value as defined by the courts of Texas. The definition of the property rights appraised is given in the report. The function, or use, of the appraisal is as an aid to the client in making decisions regarding the subject property, and the intended users of the report are the proper officials of the City of Southlake, and anyone they designate. I inspected the property on March 5, 2010, and this is the effective date of this appraisal. I prepared the appraisal during the period between February 11 and March 23, 2010. I have inspected the subject property, the neighborhood and comparable data and am submitting herewith a report which describes the property and sets forth the analysis used in arriving at the estimated compensation to which the owner is entitled for the proposed acquisition. The report is a summary appraisal report, as defined in the Uniform Standards of Professional Appraisal Practice. The appraisal is subject to numerous assumptions and limiting conditions which are stated in the report. In my opinion, the estimated compensation for the acquisition, as of March 5, 2010, was: ONE HUNDRED THIRTY ONE 'THOUSAND TWO HUNDRED DOLLARS $131,200 I appreciate this opportunity to be of service to you. Respectfully submitted, HANES APPRAISAL COMPANY LLC By: James S. Hanes, MAI TABLE OF CONTENTS pay le Scopeof Work .................................. ............................... 1 Summary of Salient Pacts and Conclusions ............ ............................... 2 General Assumptions and Limiting Conditions ............... . ........................ 4 Premises of the Appraisal ......................... ............................... 7 Purpose of the Appraisal .................... ............................... 7 Jurisdictional Exceptions .................... ............................... 7 Process of Estimating Total Compensation ... ............................... . .. 7 Definition of Value ........................ ............................... 8 Definition of Property Rights Appraised ........ ............................... 8 Effective Date of the Appraisal and Date of the Report ........................... 8 Inspection of the Property ................... ............................... 8 Function of the Appraisal .................... ............................... 8 Client and Users of the Report .... . ........... ............................... 9 Type of Appraisal Report ................... ............................... 9 Identification of the Subject Whole Property .......... ............................... 10 Area, City and Neighborhood Analysis .............. ............................... 11 Description of the Subject Tract of Land ............. ............................... 16 Description of the Improvements ................... ............................... 23 Photographs of the Subject Property ................ ............................... 25 Pertinent Data Regarding the Subject Property ........ ............................... 31 Highest and Best Use Analysis of the Whole Property .. ............................... 32 The Valuation Process -Whole Property ............. ............................... 34 Analysis of Exposure Time ................. ............................... 44 The Valuation Process - Estimated Compensation ...... ............................... 45 The Estimated Market Value of the Part To Be Acquired ......................... 45 The Estimated Market Value of the Remainder Property Before the Acquisition ........... ............................... 46 The Estimated Market Value of the Remainder Property After the Acquisition ............. ............................... 46 Summation.............................. ............................... 50 Certification of the Appraiser ..................... ............................... 53 Qualifications of the Appraiser .................... ............................... 54 SCOPE OF WORK The Appraisal Foundation's Uniform Standards of Professional Appraisal Practice requires that in developing a real property appraisal, an appraiser must: 1. identify the problem to be solved; 2. determine and perform the scope of work necessary to develop credible assignment results; and 3. disclose the scope of work in the report. In the process of identifying the problem to be solved, determining the scope of work, and preparing this appraisal, information and data that are considered to be pertinent to the valuation of the subject property were collected and analyzed. This included both specific and general information and data. The specific data relates to the client, any other intended user, and uses of the appraisal; the purpose of the appraisal; the type and definition of value sought; the effective date of the appraisal; the physical, legal, and economic features of the subject property, as well as the physical, legal, and economic features of comparable properties; etc.. The general data relates to the locational and economic features of the region, city, and neighborhood; that is, all elements outside the subject property which influence its value and reflect the action of the forces that affect value. The specific information and data were obtained from the client, an inspection of the property, and sources such as a representative of the property owner, deed records, city offices, brokers, buyers and sellers, etc.. The general information and data were obtained from numerous sources such as city offices, county offices, etc., and from personal observations. This information and data is discussed and analyzed, and the resulting estimation of values, may be found in the following pages of this report. SUMMARY OF SALIENT FACTS AND CONCLUSIONS Effective Date of Appraisal: March 5, 2010 Location of the Whole Property: Along the south side of East Highland Street, approximately 885 feet east of North Carroll Avenue in Southlake, Texas. It has a municipal address of 1371 East Highland Street, Southlake, Texas. Legal Description of the Whole Property: A tract of land located in the Richard Eads Survey, Abstract No. 481, City of Southlake, Tarrant County, Texas. Property Owner: Estate of Verna Marie Eubanks aka Marie Eubanks aka V. Marie Eubanks, deceased Property Rights Appraised: Fee Simple Interest Value Estimated: Market Value Description of the Land: A rectangular shaped tract of land that contains a total land area of approximately 0.8265 of an acre, or 36,000 square feet, of which approximately 3,439 square feet lie within the right -of -way of East Highland Street, leaving a net land area of approximately 32,561 square feet, or 0.7475 of an acre. The net land area has approximately 150 feet of frontage along the south side of East Highland Street. It has the availability of city water, natural gas, electricity, and telephone service. The tract is zoned "AG" Agricultural District by the City of Southlake and, according to the city's land use plan map, the future use of the tract is to be mixed use, which is intended for medium to higher- intensity office buildings, hotels, commercial activities, retail centers, and residential uses. Description of the Improvements: An older one -story single- family dwelling, detached storage buildings, and other related site improvements. Description of the Part to be Acquired - Parcel No. 5 Right -of -Way Parcel: A part to be acquired in fee simple out of the north portion of the whole tract of land. It has a slightly irregular shape and contains a total land area of 20,210 square feet, of which 3,439 square feet lie within the right -of -way of East Highland Street, which leaves an area of approximately 2 16,771 square feet, or 0.385 of an acre, net of the area in East Highland Street. Estimated Value of the Whole Property: $162,800 Estimated Value of Part To Be Acquired: $ 83,850 Estimated Value of Remainder Before the Acquisition: $ 78,950 Estimated Value of Remainder After the Acquisition: $ 31,600 Estimated Damages, if any: 47,350 Total Estimated Compensation: $131,200 Estimated Exposure Time: 9 -12 months Assumptions and Limiting Conditions: Included in the report Certification of the Appraiser: Included in the report Appraiser: James S. Hanes, MAI 91 GENERAL ASSUMPTIONS AND LIMITING CONDITIONS All opinions formulated and the conclusions drawn relative to the subject property are specifically subject to, and contingent upon, all of the following general assumptions and limiting conditions and additional specific assumptions and limiting conditions, if any, which may be set out elsewhere in this report. Acceptance of and /or use of this report constitutes acceptance of all assumptions and limiting conditions stipulated herein and elsewhere in the report. The legal description or descriptions covering the subject property which were furnished by others were assumed to be current, accurate, and reliable. I assume no responsibility for legal matters and render no opinion whatsoever with respect to the accuracy of the legal description or the title to the subject property, which was assumed to be good and merchantable. Any information provided by the client or by a third party and relied upon in the performance of the services hereunder shall be assumed to be true, correct and reliable. To the extent deemed reasonable and necessary, a reasonable effort was made to verify any such information provided by others. However, I assume no responsibility whatsoever with respect to the accuracy of any such information provided. Unless otherwise specified, all mortgages, deeds of trust, liens, security agreements, financial title encumbrances, leases, and servitude pertaining to the subject property were disregarded. It was recognized, however, that potential purchasers in the market will likely take advantage of the best available financing, and in this connection, the effect of such financing or financing availability on the value of the subject property was considered unless otherwise specified. The valuation estimates assumed responsible ownership and capable management of the subject property. Unless otherwise stated, no soil tests were conducted or made available relative to the subject property, and it was therefore assumed that soils were of adequate consistency and /or elasticity to provide satisfactory support for any existing improvements or any future structural development, provided proper design, materials, workmanship, and construction supervision are utilized. I assume no liability whatsoever with respect to the condition of the subject property or for any hidden or unapparent conditions, if any, of the subject property, subsoil, or structures, and further assume no liability or responsibility whatsoever with respect to the correction of any defects which may now be existing or which may develop in the future. Equipment components considered, if any, were assumed to be adequate for the needs of the property's improvements, and in good working condition, unless otherwise reported. 0 Unless otherwise stated in this report, the existence of hazardous substances, including without limitation asbestos, polychlorinated biphenyls, petrolcum leakage, or agricultural chemicals, which mayor may not be present on the property, or other environmental conditions, were not called to my attention nor did I become aware of such during the inspection. I have no knowledge of the existence of such materials on or in the property unless otherwise stated. I am not, however, qualified to test such substances or conditions. 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 such proximity thereto that it would cause a loss in value. No responsibility is assumed for any such conditions, nor for any expertise or engineering knowledge required to discover them. Any maps, drawings, or sketches provided in connection with the performance of professional services were provided in order to aid the client in visualizing the subject property or the item which is the subject of such map, drawing, or sketch. I made no survey of the subject property and assume no responsibility for such matters. It was also assumed that there was no property encroachment or trespass existing on the subject property, unless otherwise stated. It was assumed that all public and private zoning and use restrictions and regulations had been complied with, unless non - conformity was stated, defined, and considered in this report. No environmental impact studies were conducted or requested in conjunction with this assignment, and it is assumed that there was total compliance with all applicable federal, state, and local environmental regulations and laws, unless non - compliance was stated, defined, and considered in the report. I however, reserve the right to alter, amend, revise, or rescind any and all opinions and conclusions relative to the subject property should such investigation or studies, in my opinion, indicate change or modification is necessary or appropriate. Any written report or analysis provided to the client in connection with the performance of professional services shall be for the sole use and benefit of the client or designees of the client and shall not be utilized by any third party without my prior written consent. Possession of this report or a copy of this report does not construe the right of publication or use, nor may the report be reproduced in whole, or in part, in any manner, by any person, without my prior written consent. Neither all nor any part of this report shall he disseminated to the general public by the use of advertising media, public relations media, news media, sales media, or other media for public communication without any prior written consent. Any apportionment or distribution of total value between land and improvements thereon apply only under the existing or specified prograan of utilization, if any. Separate valuation for land and improvements thereon shall not be used in conjunction with any other study or appraisal, and shall be invalid if so used. 1 am prepared, but not required, to give testimony or attendance in legal or other proceedings relative to the valuation of the subject property, if satisfactory additional arrangements are made prior to such needs. m PREMISES OF THE APPRAISAL PURPOSE OF THE APPRAISAL The purpose of this appraisal is to estimate the total compensation to which the owner of the subject property is entitled for the proposed acquisition, by the City of Southlake, ofa part of the subject property for street improvements. Market value is the basis for the value estimations. JURISDICTIONAL EXCEPTIONS The appraisal of the whole property and the part to be acquired considers all factors willing, knowledgeable buyers and sellers would consider in negotiating the purchase price of the property except the influence of the proposed street project. This exception is made under the Jurisdictional Exception provision of the Uniform Standards of Professional Appraisal Practice. The appraisal of the remainder property after the acquisition considers all factors willing, knowledgeable buyers and sellers would consider in negotiating the purchase price of the property including the use to which the part to be acquired is to be put and the effects of the condemnation but excluding the effects of all non- compensable elements (diversion of traffic, increased circuity oftravel, lessened visibility, and interim construction inconvenience). Such exclusion is permitted under the Jurisdictional Exception provision of the Uniform Standards of Professional Appraisal Practice. PROCESS OF ESTIMATING TOTAL COMPENSATION The total compensation to which the owner is entitled is considered to be comprised of the estimated market value of the part to be acquired in fee simple, together with the estimated damages, if any, to the remaining property as a result of the acquisition, as of the effective date of the appraisal. There are, therefore, several estimates of value that are considered to be pertinent in this appraisal and they are as follows. 1) The estimated market value of the fee simple interest in the whole property; 2) The estimated market value of the part to be acquired in fee simple considered as severed property; 3) The estimated market value of the fee simple interest in the remainder property before the acquisition; and 4) The estimated market value of the fee simple interest in the remainder property after the acquisition. The first portion of this appraisal will be concerned primarily with the estimated market value of the fee simple interest in the whole property. After this value has been estimated, the remaining values will be estimated. 7 DEFINITION OF VALUE Market value as defined by the courts of Texas, which is as follows: Market Value is the price which the property would bring when it is offered_for sale by one who desires, but is not obliged to sell, and is bought by one who is under no necessity of buying it, taking into consideration all of the uses to which it is reasonably adaptable and for which it either is or in all reasonable probability will become available within the reasonable future. DEFINITION OF PROPERTY RIGHTS APPRAISED The Fee Simple Interest, or Fee Simple Estate, in the property is the property right being appraised. Fee simple estate is defined in The Dictionary of Deal Estate Appraisal Fourth Edition, Appraisal Institute, 2002, page 113 as: Absolute ownership unencumbered by any other interest or estate subject only to the limitations imposed by governmental powers of taxation, eminent domain, police power, and escheat. The property rights considered in this appraisal are the surface rights. Mineral rights have not been considered. I am not aware of any unusual liens, title defects, or unusual deed restrictions which may encumber the subject property, other than those stated in the report. EFFECTIVE DATE OF THE APPRAISAL AND DATE OF THE REPORT I inspected the property on March 5, 2010, and this is the effective date of this appraisal. I prepared the appraisal during the period between February 11 and March 23, 2010, the latter being the date of the report. INSPECTION OF THE PROPERTY Ms. Cleva Jo Lilly, one of the representatives of the Estate of Verna Marie Eubanks aka Marie Eubanks aka V. Marie Eubanks, deceased, the owner of the property, was contacted by telephone to arrange for the property inspection. She gave me permission to inspect the property and stated that she did not care to be present during the inspection. As stated, I inspected the property on March 5, 2010. FUNCTION OF THE APPRAISAL The function, or use, of the appraisal is as an aid to the client in making negotiation decisions regarding acquiring the needed portion of the subject property. CLIENT AND USERS OF THE REPORT The client is the City of Southlake, and the intended users of the report are the proper officials of the City, and anyone they designate. TYPE OF APPRAISAL REPORT This is a summary appraisal report as defined in the Uniform Standards of Professional Appraisal Practice. 7 IDENTIFICATION OF THE SUBJECT WHOLE PROPERTY The subject whole property consists of a rectangular shaped tract of land, that contains a total land area of approximately 36,000 square feet, of which approximately 3,439 square feet lie within the right-of-way of East Highland Street, leaving a net land area of approximately 32,561 square feet, or 0.7475 of an acre, improved with an older, one- story, single- family dwelling, detached storage buildings, and other related site improvements. The property is located along the south side of East Highland Street, approximately 885 feet east of North Carroll Avenue in Mansfield. It has a municipal address of 1371 East Highland Street, Southlake, Texas, and is legally described as a tract of land located in the Richard Eads Survey, Abstract No. 481, City of Southlake, Tarrant County, Texas. The property is owned by the Estate of Verna Marie Eubanks aka Marie Eubanks aka V. Marie Eubanks, deceased. 10 AREA, CITY AND NEIGHBORHOOD ANALYSIS AREA ANALYSIS The subject property is located in the northeastern portion of Tarrant County and the north portion of the City of Southlake. In 1983, Tarrant County was one of the nine counties included in the newly adopted Consolidated Metropolitan Statistical Area (CMSA). This CMSA was designated in accordance with new federal guidelines and is known locally as the "Metroplex ". The Metroplex's economy has historically been generally vigorous and growth oriented with strong development trends in most construction categories. It is, however, currently impacted by an economic slowdown. From a long - range standpoint, the Metroplex should continue to grow both in population and in all major development categories, assuming future improvement in the economic conditions both at the local and national levels. The growth in the next few years, however, will probably continue to be at a relatively slow but steady rate, as property values will likely remain stable. CITY ANALYSIS The City of Southlake is located approximately 19 miles northeast of downtown Fort Worth and is located on the Tarrant and Denton County lines with convenient access via State Highway 114, Southlake Boulevard (Farm -to- Market Road 1709), State Highway 26, F.M. Road 1938, and numerous city arteries. The city is also located on the southwest side of Lake Grapevine, which is one of the primary recreational lakes in North Texas. Although the city is an incorporated municipality, its economy is closely tied to, and is greatly influenced by, the dominant economic centers of Fort Worth and Dallas. The City of Southlake has experienced dynamic population growth within the last fifteen years, growing from 2,808 people in 1980 to 7,082 people in 1990 to 21,519 people in 2000 to approximately 26,650 people as of January 1, 2009. The January 1, 2010 population estimate, however, is not yet available. The city has also had steady to dynamic economic growth during recent years. The population and economic growth in the next few years, however, will probably continue to be at a relatively slow but steady rate, as property values will likely remain stable. The city has a council- manager form of government with a mayor and city council. The quality of the police and fire protection and the public utilities are considered equal to or superior to those of similar cities in the area. The school districts that service the city have adequate schools for the existing population, and they have good educational reputations. There are several colleges and universities in the area for higher education. The city and area's medical, shopping, cultural, recreational, and religious facilities are considered adequate for the present population. Street extension and maintenance programs are considered adequate and have kept up with the growing city over the last decade. The city does have a zoning ordinance and a comprehensive plan, both of which regulate property development. 11 There are five general developmental uses for real estate and they are agricultural, residential, commercial, industrial, and special purpose uses. Each of these uses is present in the City of Southlake in various degrees. The agricultural uses in the city are generally limited to the remaining large blocks of vacant land scattered throughout the city. This land is not presently being purchased for its agricultural potential, but rather for further development of other development uses, primarily single family residential and commercial. Therefore, the highest and best use of the land currently used for agricultural uses is not for agricultural use, but this use is considered a reasonable interim use until future growth warrants development. Residential development, especially single- family dwellings, is the most common general developmental use in Southlake. These properties are located throughout the city. The single- family residential properties range in age from new to approximately fifty years, feature both tract and custom dwellings, feature frame and masonry construction, and vary in degrees of condition. The commercial development in Southlake includes a variety of development from low intense day care and office properties to high intense retail properties such as shopping centers, convenience stores and restaurants. This development is located primarily along the major arteries, i.e., Southlake Boulevard, State Highway 114, Kimball Road, etc.. This development reflects wide ranges of nature, age and condition; however, much of the development, such as the Southlake Town Square and the Gateway Plaza centers, is new to a few years old and reflects good quality and condition. The industrial development in Southlake is generally located in the southern and southeastern portions of the city in industrial park type development with other industrial properties scattered in other various locations. The development includes mostly office /warehouse properties and warehouse properties. These properties primarily feature metal and concrete tilt -wall construction, and vary in age and condition. There are a variety of special purpose properties in the city which relate to government, school, religious and medical facilities. There are also city parks, golf courses, etc.. The City of Southlake has enjoyed dynamic population and dynamic economic growth over the past several years. Property values, however, on most property types are considered stable, and the long term outlook for the real estate market appears to be favorable. NEIGHBORHOOD ANALYSIS As mentioned, the subject property is located in the north portion of the city. The boundaries of the neighborhood in which the property is located are not easily defined due to the variety of uses; however, for the purposes of this appraisal, the neighborhood in which the property is located is considered to be the City of Southlake and the surrounding areas. Access for the neighborhood is convenient via the previously mentioned arteries of State Highway 114, Southlake Boulevard, State Highway 26, F.M. Road 1938, and numerous city arteries. 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I I I I + I J . -rl'a Ab Y� M1'1`NWj h I_R i 1 ! �.14rM' f,L,M {1 ,,,y+m¢ f�W,Nur, r .lam .Ra JI I I f €{ j a"'\ !_d+ppr+ "�n'�Q,�, `.�•. � �t �•.� JJy3y , . j{$ > Ewow<rru� C 5 'Ft f1 �, S—A 1 J � I,H� y f ' FI�K I tL ,�.'IHa- M.�6 /Y �/ !f''0a R` - 4 l L WMU". ` L1 �,�s/ .. tc ,w )I i � ; *'1 � I ,.,�1 I I I i _�.. � #" g a tlx v •.,_ I n RR a ny �• _ d S � � y R![RU l � Ip y IN City/Neighborhood Map 15 DESCRIPTION OF THE SUBJECT TRACT OF LAND The subject tract of land is described as follows, and pertinent exhibits are at the end of this section. Legal Description: A tract of land located in the Richard Eads Survey, Abstract No. 481, City of Southlake, Tarrant County, Texas. Location Along the south side ofEast Highland Street, approximately 885 feet east ofNorth Carroll Avenue in Southlake. It has a municipal address of 1371 East Highland Street, Southlake, Texas. Orientation Interior. Size I was not provided, nor did I have prepared, a survey or a metes and bounds description of the whole tract. Based, however, upon information provided by the client, the tract contains a total land area of approximately 0.8265 of an acre, or 36,000 square feet, of which approximately 3,439 square feet lie within the right- of -way of East Highland Street, leaving a net land area of approximately 32,561 square feet, or 0.7475 of an acre. Shape Rectangular - see exhibits at the end of this section. Street Trontgye The net land area has approximately 150 feet of frontage along its northern boundary along East Highland Street. At the location of the tract, East Highland Street is a two -way, two -lane, undivided street with asphalt paving and bar ditches. The right -of -way of East Kirkwood Boulevard, which is unimproved, dead -ends into the east side of the tract. As mentioned in the Premises of the Appraisal section of this report, the purpose of this appraisal is to estimate the total compensation to which the owner of the tract is entitled for the proposed acquisition by the City of Southlake of a part of the tract for the construction of East Kirkwood Boulevard through a portion of the tract. Also, however, as mentioned, the appraisal of the whole property, partto be acquired, and remainder property before the acquisition does not consider the influence of the proposed street project. 16 Access Access is allowed along East Highland Street, and the tract has two drives on the street which are currently being used for the subject dwelling. Terrain The terrain of the net land area of the tract is generally level to gently sloping, and there are native trees, grasses, and brush on the tract. Flood Prone Area According to the Federal Emergency Management Agency's Flood Insurance Rate Map No. 4843900185 H, dated August 2, 1495, which is included at the end of this section, none of the tract is within a flood prone area. 7onin The City of Southlake has a zoning ordinance, and the tract is zoned "AG" Agricultural District under the ordinance. According to the ordinance, this district "is to provide for compatible land, building and structure uses primarily oriented to agricultural farming and ranching, and extremely low density residential purposes. The district may also serve as (1) a transitional land use element pending future, more intensive urbanization; (2) open space for the protection and enhancement of scenic areas, vistas, and recreational uses; and (3) low density development where unusual or problematic soils, topographic conditions or sensitive ecological features are present that would normally not be conducive or appropriate to more intensive forms and patterns of urbanization." The tract is also in the 65 db DFW Noise Corridor. The city's land use plan reflects the potential use of the tract to be Mixed Use, which is "intended for medium- to higher- intensity office buildings, hotels, commercial activities, retail centers, and residential uses." Based on an analysis of the tract, current zoning on the tract and the future land use plan, and my discussion with a representative of the city, it is my opinion that the potential for changing the zoning to a single family residential district or to a lower intense commercial district is good. The potential for changing the zoning to a higher intense commercial or industrial district, however, is considered unlikely due to the general residential and special purpose flavor of the immediate area. Additional information concerning the agricultural classification, potential classifications for the tract, set back requirements, landscaping requirements, etc. can be found in the city's zoning ordinance. Easements/ Restrictions I am not aware of any unusual deed restrictions or unusual easements, other than those imposed by the zoning ordinance, that would regulate the use of the tract, and this appraisal is based on the assumption that none exists. 17 Utilities Public utilities available to, and in use at, the net land area of the tract are city water, electricity, natural gas, and telephone service. Public sanitary sewer service is not available to the tract. The required extension of public sanitary sewer for the tract, or possibly the installation of a septic system (one -acre minimum per city ordinances), are rated adverse inasmuch as they will be the responsibility of the owner /developer. Site Improvements The tract is improved with an older, one - story, single- family dwelling, and related. improvements. These improvements will be discussed in the following section of this report. Surrounding Properties North: Single - family residences on small tracts of land. Bast: vacant land. South and 'West: property owned by Carroll Independent School District. In my opinion, the surrounding properties are generally typical for the neighborhood. Nuisances /Hazards I did not note, nor am I aware of, any nuisances or hazards on or near the net land area of the tract. I am not, however, qualified to detect possible hazards such as leaking underground storage tanks, oil spillage, etc.. This appraisal is based on the assumption that such hazards do not exist; however, if test results reflect that they do, I reserve the right to revise my estimates of value accordingly. Overall Adequacy Based on the foregoing features of the net land area of the tract, it is considered a functionally adequate tract with the only significant problem being the lack of public sanitary sewer service to the tract. Note the exhibits which follow. UM TN Vicinity Map 19 TN ►c Aerial Map TN Flood 'lain Map 21 T 22 Zoning Map DESCRIPTION OF THE IMPROVEMENTS The net land area of the tract is improved with a one - story, single family dwelling; detached storage buildings; and related site improvements. The property is reportedly occupied by family members of the owner of the property. The dwelling is located on the north central portion of the property and faces north towards East Highland Street. According to the Tarrant Appraisal District records, the original portion of the dwelling was built in 1930, and it appears that the cast side of the whole dwelling was added at a later date. According to my measurements and calculations, the dwelling contains approximately 1,682 square feet of finished living area. According to Ms. Lilly, a representative of the owner of the property, the living area reportedly has four bedrooms, two bathrooms, and 2 kitchen areas. A brief description of the improvements is summarized as follows. The dwelling has a pier and beam foundation; brick veneer, asbestos siding and metal siding over wood frame exterior walls; composition shingle roof on wood decking and wood rafters; a covered, concrete front porch, an open concrete stoop on the east side and a wood stoop with wood steps on the west side; hollow core metal and wood doors in wood frames with a screen door at the front entry; and single hung glass in wood frame windows with some window screens. The interior features are unknown but are assumed to include original hardwood and linoleum covering floors; textured and painted gypsum board walls; textured and painted gypsum board ceilings; incandescent light fixtures; window units and wall panel heating; etc.. Other plumbing fixtures include two water heaters and kitchen sinks. Additional features are assumed to include built -in wood shelves and cabinets with countertops, oven and stovetop, etc.. The dwelling generally reflects poor condition due to the age and the lack of maintenance to it. Additional improvements to the net land area of the tract, other than the dwelling, include a 10' x 12', wood siding over wood frame storage building to the southeast of the dwelling; a 6'x 8', wood siding over wood frame storage building to the southeast of the dwelling; and two, metal -clad, storage buildings to the southeast of the dwelling. The other related site improvements on the tract include two dirt /gravel paved drives on the north side of the tract; a septic system; a water well that is no longer in use; fencing improvements consisting of chain link fencing with a few gates; etc.. The septic system is assumed to be a conventional system. I do not know the size of the septic tank nor the length of the drain field; however, they are assumed to be adequate for the existing property. The native trees, brush, and grasses on the tract are considered to be a part of the tract and have not been included as site improvements. The related site improvements are assumed to have a similar condition as the dwelling. Considering the location and condition of the improvements, the potential use of the subject, etc., these improvements are considered insignificant and have no contributory value, and the cost to remove them 23 at the time of development, during site preparation, is considered to be minimal. Therefore, the improvements are not considered to be adverse factors to proper development and are considered no further in this appraisal, Note the photographs of the subject property which follow. 24 PHOTOGRAPHS OF THE SUBJECT PROPERTY 25 View from East Highland Street looking southwest at the subject whole property. View from East Highland Street looking south at the subject whole property. View from East Highland Street looking southwest at the subject whole property. the rear of the subject dwelling. 26 View from the west portion of the subject whole property looking northeast at at the subject. at the subject. 27 View from the southwest portion of the subject whole property looking northeast View from the southeast portion of the subject whole property looking northwest the rear of the subject dwelling. 28 View from the east portion of the subject whole property looking northwest at View from the northeast portion of the subject whole property looking west at the part to be acquired. acquired. 29 View from west of the subject whole property looking east at the part to be View from north of the subject property looking east along East Highland Street. View from north of the subject property looking west along East Highland Street. ON PERTINENT DATA REGARDING THE SUBJECT PROPERTY Tax and Assessment Analysis The property is in the jurisdiction of the Tarrant Appraisal District (TAD), and it has an account number of 03873455. Properties were reassessed as of January 1, 2010; however, the 2009 assessment reflects the latest assessment on which taxes were calculated. The 2009 total assessed value for the subject property was $92,300 ($61,800 land and $30,500 improvements). The subject is within the following taxing jurisdictions: City of 5outhlake, Carroll Independent School District, Tarrant County, Tarrant County Hospital District and Tarrant County College District. The unexempt, combined taxes for these entities on the subject property for 2009 were $2,313.57. It should be noted that $2,162.23 of the levy was paid, leaving $164.97 ($151.34 levy due plus $13.63 penalty and interest) still outstanding due to delinquency. For purposes of this appraisal, I have assumed that the seller would pay all past due taxes up to the date of closing of the sale, and I have not deducted past due taxes from the forthcoming estimate of market value. The "assessed" valuation is considered lower than the forthcoming estimate of market value but no positive value factor is realized as reassessments are done often and it is speculative whether the assessed valuation will stay low. Tax rates on the subject property are considered typical. Based on these factors, no positive or negative factors are present due to the impact of ad valorem taxes. Sales History of the Property The Appraisal Foundation's Uniform Standards of Professional Appraisal Practice requires that in developing a real property appraisal, an appraiser must, if such information is available to the appraiser in the normal course of business: (a) consider and analyze all agreements of sale, options, or listings of the subject property current as of the effective date of the appraisal; and (b) consider and analyze all sales of the subject that occurred within three (3) years prior to the effective date of the appraisal. Also, a five -year sales history is required by some condemning authorities for eminent domain. The owner of the subject property is the Estate of Verna Marie Eubanks aka Marie Eubanks aka V. Marie Eubanks, deceased, which has owned the property since July 2, 1974 (when C.E. Eubanks and wife, Marie Eubanks acquired the property), which is longer than the prescribed five years. To my knowledge, no sale of the property has occurred during the prescribed five years. Also, I am not aware of any listing, agreement of sale, or option on the property. 31 HIGHEST AND BEST USE ANALYSIS OF THE WHOLE PROPERTY The value of real property is estimated in terms of the property's highest and best use. Highest and best use is defined in The Appraisal of Real Estate 12th Edition, Appraisal Institute, 2401, page 305 as: The reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported, and financially feasible, and that results in the highest value. The estimated highest and best use for a property must meet four criteria. It must be 1) physically possible, 2) legally permissible, 3) financially feasible, and 4) maximally productive. These criteria are considered sequentially in the order listed. Failure of a developmental use to meet a criteria will eliminate it from further testing in subsequent criteria. When the property being appraised consists of land together with improvements, the highest and best use analysis basically consists of two parts. In the first part of the analysis, the land is analyzed as though vacant and available for any use which may meet the qualifications for an estimated highest and best use. The second part of the analysis is the estimation of the highest and best use of the subject property as improved under the same four criteria used to test the highest and best use of the land. Land As Though _Vacant The first part of the highest and best use analysis, as stated, is to estimate the highest and best use of the subject land as though vacant. This can be accomplished by considering each of the four criteria given and analyzing the logical, feasible general development uses of the land, i.e. agricultural, residential, commercial, and industrial (special purpose uses are excluded), in regards to each criteria. The physical features, i.e, location, size, shape, terrain, utilities, etc., of a tract of land affect the uses to which it can be developed. The physical features of the subject tract are such that each of the various uses, i.e. agricultural, residential, commercial, and industrial, would be physically possible. Agricultural uses are common in the general area on larger tracts, and most agricultural uses require larger blocks of land than the subject to justify usage. Therefore, this use is possible, but not considered likely. Single - family residential uses would be possible and would conform to neighboring residential uses. Multi- family residential uses would be possible but would not conform to the existing development in the immediate neighborhood. Commercial uses would be possible on the subject due to the existing commercial development to the west of the subject. Industrial uses would also be possible on the subject, but these uses would most likely be hindered on the tract because these uses generally favor sites and tracts of land in developed industrial parks which feature similar types of uses as opposed to sites and tracts along an artery near residential development, and also due to the relatively small size of the tract. 32 Therefore, based on the first criteria, the remaining three uses would be physically possible; however, the location of the tract would have an adverse effect on multi - family residential, some commercial, and industrial uses. The zoning classification within a municipality, private restrictions, building codes, etc., determine what uses are legally permissible. As discussed, the subject tract is zoned "AG" Agricultural District. For this tract and other similar tracts, it is the zoning classification placed on tracts until they are ready for development, at which time the classification is changed to the appropriate classification to permit proper development. As discussed, the city's land use plan reflects the potential use of the tract to be Mixed Use, which is "intended for medium- to higher - intensity office buildings, hotels, commercial activities, retail centers, and residential uses." Based on an analysis of the tract, current zoning on the tract, the future land use plan, and my discussion with a representative of the city, it is my opinion that the potential for changing the zoning to a single family residential district or to a lower intense commercial district is good. The potential for changing the zoning to a multi - family residential, higher intense commercial or industrial district, however, is considered unlikely due to the general residential and special purpose flavor of the immediate area. Therefore, it is my opinion that the zoning on the tract could be changed to a single - family residential district or to a lower intense commercial district if requested. This appraisal is based on the assumption that the zoning can be so changed. To my knowledge, no unusual restrictions exist on the tract which deserve legal consideration. The uses that meet the first two criteria will be analyzed further to determine if they are financially feasible. Based on my analysis, the value of a tract with the physical and legal characteristics of the subject tract would make single- family residential uses or some type of low intense commercial uses financially feasible and consistent with returns afforded these type properties. The last step is to estimate which of the remaining general uses is considered the most maximally productive use. Based upon an analysis of the tract, and taking into consideration the physically possible, legally permissible, and financially feasible uses, it is my opinion that the maximally productive use of the tract is speculative but that it would most likely be for uses such as single family residential development or some type of low intense commercial development. Therefore, considering the four sequential criteria for testing the highest and best use of the land as though vacant, it is my opinion that the highest and best development use of the tract is speculative but that it would most likely be for uses such as single family residential development or some type of low intense commercial development. Property As Improved The second part of this analysis is to estimate the highest and best use of the whole property as improved. As discussed, the subject tract is improved with an older, approximate 1,6$3- square foot, single - family residential dwelling, detached storage buildings, and other related site improvements. Based upon my analysis of the highest and best use of the land, the estimated value of the land, and the location, age, nature and condition of the improvements, it is my opinion that these improvements have no contributory value. 33 THE VA UA TION PROCESS - WHOLE PROPER TY The value of the land must always be considered in terms of highest and best use. Even if the land has improvements, the value of the land must be based on its highest and best use as though vacant and available for development to its highest and best use. There are four methods that may be used to estimate the value of a site or tract of land, i.e., Sales Comparison, Allocation, Extraction, and Income Capitalization. The most common method used to estimate the value of a tract similar to the subject, and by far the best method to utilize when adequate data are available, is the Sales Comparison Method. This is the method utilized in this appraisal. This method, or approach, calls for appraisal by comparing, weighing and relating sales of similar properties to the property being appraised. This approach is based on the Principle of Substitution, A .tich states that a purchaser is not justified in paying more for a certain parcel of real estate than he would pay for another tract, provided that the characteristics and use potential are similar, and that no untimely delay is encountered in making the other purchase. There are two additional standard or traditional approaches to value recognized by the appraisal profession that can usually be adapted for use in the appraisal of real estate, and these are known as the Cost and Income Capitalization Approaches. The Cost Approach is the method whereby the estimated value of the subject improvements is added to the estimated value of the subject land in order to arrive at an indication of value of the whole property. This approach is based on the principle of substitution which asserts that an informed purchaser would pay no more for a property than the cost of acquiring land and constructing improvements with the same amenities and utility, provided no untimely delay is encountered in acquiring the land and constructing the improvements. Inasmuch as the subject basically consists of a vacant tract of land, the Cost Approach is not applicable in this instance. The Income Capitalization Approach is the method whereby the income producing ability of the property is analyzed and projected into an indication of value. It is based on the principle of anticipation that value is created to an investor by the expectation of future benefits. An investigation in the area did not reveal any leased sites or tracts of land similar to the subject tract of land that could be compared to the subject as a basis for estimating the market rental potential of the subject under its highest and best use. Any income projection for the subject tract would, therefore, require numerous assumptions and the resulting indication of value by an Income Approach would add little, if any, validity to the indication of value by the Sales Comparison Approach. The Income Approach, therefore, is not applicable in this instance. In arriving at an indication of value of the subject tract via the Sales Comparison Approach, an investigation was made throughout the subject and surrounding neighborhoods for sales of sites and tracts 34 of land that are considered to be reasonably similar to the subject whole tract. This investigation revealed some sales which are considered to be pertinent in this analysis. Of the sales considered in this analysis, the following are considered to be the most pertinent, and they have been included as the best basis for comparison and the primary basis for the value estimate. For comparison purposes, the sales were analyzed on a sales price per square foot unit of comparison. Note the location of the comparable sales in relation to the subject on the map which follows. 35 Sale No. 1 Location: North side of East Highland Street, a short distance east of Stanhope Court (1982 East Highland Street), Southlake Sale Date: September 24, 2009 Recording: D209260909, DRTCT Grantor: Allen E. Beller and spouse, Blanca D. Beller Grantee: Robert J. Milstead and Michelle Milstead Prop. Rights Conv.: Fee simple interest, including all mineral rights owned by grantor Legal Description: A tract of land out of the Frances Throop Survey, Abstract No. 1511, City of Southlake, Tarrant County, Texas Land Area: 40,246 square feet, or 0.9239 of an acre, net of area in street right -of -way Shape: Generally rectangular Frontage: Approximately 210 feet of frontage along East Highland Street Zoning: "SF1A" Single Family Residential District Easements: No known adverse easements Improvements: Older single - family residence considered to have no contributory value Topography: Level to gently sloping with scattered trees Utilities: All available except sanitary sewer, with the closest line being west of the property. Sales Price: $249,900 Sales Price /sf: $6.21 Financing Terms: Cash to seller Proposed Use: Develop with single family residence Comments: The tract was listed for sale for $249,900 at the time of sale. It is located in the Carroll Independent School District. Subsequent to the sale, the residence was razed and removed from the tract. kro Sale No. 2 Location: West side of Costa Azul Court, just north of East Highland Street (1208 Costa Azul Court), Southlake Sale Date: February 2, 2009 Recording: D209032045, DRTCT Grantor: Panorama Properties, Ltd. Grantee: Abdul Lateef Prop. Rights Conv.: Fee simple interest Legal Description: Lot 3, of Villas Del Sol, an Addition to the City of Southlake, Tarrant County, Texas Land Area: 46,261 square feet, or 1.062 acres Shape: Slightly irregular Frontage: Approximately 143.49 feet of frontage along Costa Azul Court Zoning: "SF1A" Single Family Residential District Easements: No known adverse easements Improvements: None at the time of sale Topography: Level Utilities: All available Sales Price: $250,000 Sales Pricelsf: $5.40 Financing Terms: Cash to seller Proposed Use: Develop with single family residence Comments: The site was listed for sale for $255,000 at the time of sale. It is located in the Carroll Independent School District. 37 Sale No. 3 Location: West side of South Peytonville Road, a short distance south of Southlake Boulevard (210 South Peytonville Road), Southlake Sale Date: August 28, 2008 Recording: D208349706, DRTCT Grantor: Robert Curtis Greenwood and Andrea D. Greenwood Grantee: NSP 210 Peytonville, LLC Prop. Rights Conv.: Fee simple interest Legal Description: A tract of land out of the W.R. Eaves Survey, Abstract No. 500, City of Southlake, Tarrant County, Texas Land Area: 42,522 square feet, or 0.9762 of an acre, net of area in street right-of-way Shape: Narrow, rectangular Frontage: Approximately 104 feet of frontage along South Peytonville Road Zoning: "SP2" Generalized Site Plan District with a land use plan designation of medium density residential, which allows residential and low intense commercial uses. Easements: No known adverse easements Improvements: Older single - family residence considered to have no contributory value Topography: Level to gently sloping with scattered trees Utilities: All available Sales Price: $205,000 Sales Pricelsf $4.82 Financing Terms: Cash to seller Proposed Use: Speculative investment /develop with office building Comments: The tract is now listed for sale for $220,000, which equates to $5.17 per square foot of land area. It is located in the Carroll Independent School District. Subsequent to the sale, the residence was razed and removed from the tract. 38 Sale No. 4 Location: West side of Westcoat Drive, just north L D. Lockett Road (6108 Westcoat Drive), Colleyville Sale Date: August 31, 2009 Recording: D209246899, DRTCT Grantor: John Ramage and Linda Ramage Grantee: George A. Ondarza and wife, Maritza Ondarza Prop. Rights Conv.: Fee simple interest Legal Description: East one -half (%) of Lot 16, Block 1 of Westcoat Place, an Addition to the City of Colleyville, Tarrant County, Texas Land Area: 30,000 square feet, or 0.6887 of an acre Shape: Generally rectangular Frontage: Approximately 150 feet of frontage along Westcoat Drive Zoning: "R -40" Single Family Residential District Easements: No known adverse casements Improvements: None at the time of sale Topography: Level to gently sloping Utilities: All available except sanitary sewer Sales Price: $190,000 Sales Price /sf: $6.33 Financing Terms: Cash to seller Proposed Use: Develop with single family residence Comments: The tract was listed for sale for $230,000 at the time of sale. It is located in the Grapevine- Colleyville Independent School District. 39 ImVPI'R"-q Dr I. t 2 0 Bnar LP rr `i Ou"my Lm El Qr 3rok'n Bard Dr Agipgn IL91: FGX Fire Enclave CI Cove A& aa D, 1 ; Ar Ln Prm"e Ln Lazy L : -; SON Fawkeg Ln 0- B rp El", I a Subject Salle La*ewood• • r Ha AVG Frone"ce RC m 30.11N a lie n. ° n n thweat Pk JCII-1.30n Ad Amm"e md SmImake Btvd ;E qwy Sale 3 G,Hy Up 'U a; "fie S1 > ilen Ln rD WdUOW EAwd a q, NAsh SI sr MrarllrMrtt� Apr ;L < % % - A F -U W3 28 . (D C"Imomal amid Ilk 8 Vd; Ir m r; 2, DT MW 4<10" P Gree� Rd 03spidil TFI a�� Rd m A mccgq Rd JG" MCI Rurr 3m m Gr�ipewme AA,donw(Ill Schcmi Rd M N" Lq, a -4 1 le Clir TrOkeff Rd v M f. xr JiAvaca TFII g Salle 4 gL -P HaR Rd 121 R Cal " Rd Arbur 7 d VJk LKT COd IILFp m ;1. Glade Road O!ade Rd nk 5T &Pa�dk OF rx R&FAM Rd M Oak K 121 ft,,I D , I? z 9 y Lai Ln HeTw Or Ar men Or Mid Cilles Glyd Cm;-&*-SPargA ROM Woudf'ed Way 0A Lim M (A L lIttp:Uww.dfwnmJ4a'3 'C�o M i cwnnll� Dr Ash Vr t N Sales Map 40 The foregoing sales indicate a range of unit prices from $4.82 to $6.33 per square foot of land area. Each of the properties was compared to the subject tract and adjustments to the sales were based on the following elements of comparison. Property Rights Convey This category includes consideration of the real property interest, i.e., fee simple, leased fee, etc., conveyed in the sales. Financing Terms This category includes any advantageous financing terms. Conditions of Sale This category includes consideration of any unusual conditions or motivations by either party which affected the sales price. Market Conditions This category, also known as time, takes into consideration the change in price from the date of sale of the comparable to the effective date of the appraisal. Location This category includes consideration of the differences in the sales and the subject property in regards to environmental factors, proximity to existing development, type of street frontage, corner influence, and other related factors. Size and Shane This category includes consideration of the differences in actual physical size, shape, and amount of street frontage of the sales and the subject property. Use Potential This category includes consideration of the uses to which the sales and the subject property can be put, including present or potential zoning, deed restrictions, man -made encumbrances, impact of existing improvements, etc.. Terrain Features This category includes consideration of the differences in the sales and the subject property in regards to drainage, trees, flood prone area, etc.. Utilities This category includes consideration of the differences in the availability of public utilities to the sales and the subject property. The best method of ascertaining the proper amount of adjustment for each of the comparative factors is the paired data set method. This is a method of estimating the amount of adjustment for the presence or absence of any factor, or for varying quantities of any factor, by pairing the sales prices of otherwise identical properties with and without the factor in question. The investigation did not reveal adequate sales data to permit the use of a detailed paired data set method. Other adjustment methods exist for certain categories, i.e., present value method for financing terms, cost to install for utilities, etc., all of which are market derived. The adjustments for the various comparative factors are based upon a variety of these methods including records of historical paired data sets; an analysis of general market trends; discussions with buyers, sellers, brokers; etc.. On the sales which are considered superior to the subject for an element, a minus adjustment is made to the unit price to reflect what it would have sold for if it exhibited the same attribute as the subject. likewise, on the sales which are considered inferior to the subject for an element, a plus adjustment is made to the unit price to align it with the subject. On the sales which are considered similar or equal to the subject for an element, no adjustment is made to the unit price. The adjustments for each element, or category, are shown on the Summary of Data and Comparison Grid showing the dollar amount of adjustment made under each category. Also, for proper handling of the adjustments, the four non - physical elements of comparison are adjusted in sequential order with an adjusted sales price calculated after each element is considered. The physical elements of comparison M are then adjusted non - sequentially. On the Summary of Data and Comparison Grid to follow, the adjustments are made in dollars, but in some categories are based on percentages. A Summary of Data and Comparison Grid for the subject and comparable land sales reflecting the adjustments to the sales follows. 42 43 SUMMARY OF DATA AND COMPARISON GRID Sale Sale Sale Sale Subject 1 2 3 4 Sales Price /sq.ft. $6.21 $5.40 $4.82 $6.33 Prop. Rights Conv. Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple incl. minerals -$1.00 Similar Similar Similar Adjusted Price $5.21 $5.40 $4.82 $6.33 Financing Terms Cash Cash Cash Cash Cash Adjusted Price $5.21 $5.40 $4.82 $6.33 Conditions of Sale Market Market Market Market Market Adjusted Price $5,21 $5.40 $4.82 $633 Market Condition 3/5/2010 9/24/2009 21212009 8/28/2008 8131/2009 Adjusted Price $5.21 $5.40 $4,82 $6.33 Physical and Functional Location Southlake /Avg, Southlake /Avg. Southlake /Good Southiake /Avg. Colleyville /Good Interior Interior Interior Interior Interior E. Highland E. Highland Costa Azul S. Peytonville Westcoat Similar -$0.50 Similar -$1.25 Size /Shape 32,561 s.f. 40,246 s.f. 46,261 s.f. 42,522 s.f. 30,0,0 s,f Rectangular Rectangular Sl. Irregular Narrow, Rect. Rectangular Similar Similar +$0,25 Similar Use Potential "AG" Agr, "SF1A" SFR, "SF IA" SFR, "SP2" Site Plan, "R -40" SFR, SFR/Low SFR use SFR use SFR/Low SFR use int. comm. use int, comm. use Similar 'Similar Similar Similar Terrain Features Level /gently Level/gently Level Level /gently Level /gently sloping, trees sloping, trees sloping, trees sloping Similar +$0.25 Similar +$0.25 Utilities All avail. exc. All avail. exc. All available All available All avail exc. san. sewer san, sewer san. sewer Similar -$0.25 40.25 Similar Net Phy. /Funs. Adjustment 0 -$0.50 0 -$1,00 Indicated Value /sq,ft. $5.21 $4.90 $4.82 $5.33 43 Sale No. 1 is rated similar to the subject tract in regards to financing terms, conditions of sale, market conditions, location, size and shape, use potential, terrain features, and utilities. The sale is rated superior to the subject in regards to property rights conveyed because the grantor transferred the fee simple interest in the property, including the mineral rights, to the grantee in the sale.. Sale No. 2 is rated similar to the subject tract in regards to property rights conveyed, financing teens, conditions of sale, market conditions, size and shape, and use potential. The sale is rated superior to the subject in regards to location due to the sale being located along Costa Azul Court in the Villas Del Sol addition. The sale is rated inferior to the subject in regards to terrain features because the subject is a fairly wooded tract as compared to the sale having no native trees. The sale is rated superior to the subject in regards to utilities due to the sale having the availability of all utilities whereas the subject does not have the availability of public sanitary sewer. Sale No. 3 is rated similar to the subject tract in regards to property rights conveyed, financing terms, conditions of sale, market conditions, location, use potential, and terrain features. The sale is rated inferior to the subject in regards to size and shape because of its more narrow shape. The sale is rated superior to the subject in regards to utilities due to the sale having the availability of all utilities whereas the subject does not have the availability of public sanitary sewer. Sale No. 4 is rated similar to the subject tract in regards to property rights conveyed, financing terms, conditions of sale, market conditions, size and shape, use potential, and utilities. The sale is rated superior to the subject in regards to location due to the sale being located along Westcoat Drive in a superior immediate neighborhood. The sale is rated inferior to the subject in regards to terrain features because the subject is a fairly wooded tract as compared to the sale having no native trees. The foregoing adjusted sales indicate a range of unit values of $4.82 to $5.33 per square foot of land area. Based upon the foregoing analysis, and with consideration for trends in the area, it is my opinion that the estimated unit value of the subject tract is $5.00 per square foot of land area. This unit value applied to the land area in the tract of 32 square feet, indicates a market value of the fee simple interest in the subject tract, in its actual state of development (as is), as of the effective date of this appraisal of $162,800 (32,561 square feet x $5.00 /sq. ft. rounded). Analysis of Exposure Time: It is appropriate that the exposure time for the subject property at the foregoing estimated value be estimated. Exposure time is defined as the estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of appraisal. Based upon an analysis of the physical and legal characteristics of the subject property, it is my opinion that the estimated exposure time to sell the property at the foregoing estimated market value, assuming being actively marketed, would be no more than 9 to 12 months. 44 THE VA UA TION PROCESS- ESTIMA TED COMPENSA TION The City of Southlake proposes to acquire a part of the subject property in fee simple for street improvements. The total compensation to which the owner is entitled is considered to be comprised of the estimated market value of the part to be acquired, together with the estimated damages, if any, to the remaining property as a result of the acquisition, as of the effective date of the appraisal. As discussed, there are several estimates of value that are considered to be pertinent in this appraisal. The first value, the value of the fee simple interest in the whole property, has been estimated. Now, the remaining values will be estimated in the following pages. ESTIMATED MARKET VALUE OF THE PART TO BE ACQUIRED The part to be acquired in fee simple consists of a strip of land, and the improvements thereto, out of the north portion of the whole tract along the East Highland Street frontage. It contains a total land area of approximately 20,210 square feet, of which 3,439 square feet lie within the right -of -way of East Highland Street, which leaves an area of approximately 16,771, or 0.385 of an acre, net of the area in East Highland Street. The land in the part to be acquired features a slightly irregular shape and a generally level to gently sloping terrain. There are some native trees, grasses and brush on the part to be acquired. The value of the trees, grasses and brush on the part to be acquired is considered in the estimated value of the land. Improvements within the part to be acquired consist of the single family dwelling, the detached storage buildings, the dirt /gravel paved drives, a water well that is no longer in use, and a portion of the fencing improvements. As previously discussed, however, these improvements are considered to have no contributory value. The part to be acquired is to be acquired in fee simple. The metes and bounds legal description and a diagram of the part to be acquired follow. Inasmuch as the land area of the part to be acquired has the same general locational and physical attributes as the whole tract except for size, the highest and best general developmental rise of the part is also estimated to be speculative but most likely be for uses such as single family residential development or some type of low intense commercial development as in the whole property. However, three other possible considerations of the highest and best use of the part to be acquired must be considered and they are 1) as an economic unit by itself, 2) as part of an economic unit smaller than the whole tract (but including all the part to be acquired), and 3) as part of the whole tract. The land in the part to be acquired could be considered a usable tract for development insofar as size of land area alone is concerned; however, the potential residential zoning classifications on the tract prohibit such use since the minimum lot area for single - family residential use is 20,000 square feet, and the potential low intense commercial zoning classifications on the tract would be restricted due to minimum M setback requirements which would Ieave limited land area to develop a feasibly adequate building area. Therefore, the land in the part to be acquired would not likely command a higher unit price than the unit price of the whole tract, so it is not a possibility for consideration. Also, any economic unit smaller than the whole tract would not likely command a higher unit price than the unit price of the whole tract. Therefore, the highest and best use of the part to be acquired is estimated to be as part of the whole tract. In view of the foregoing, the estimated unit value of the land in the part to be acquired is considered to be the same as the unit value of the land in the whole tract, as previously derived. The estimated unit value of the whole tract is $5.00 per square foot. This unit value, applied to the net land area of the part to be acquired in fee simple of 16,771 square feet (0.385 of an acre), reflects a market value of the fee simple interest in the land in the part to be acquired of $83,850 (16,771 square feet x $5.00 per square foot, rounded). THE ESTIMATED MARKET 'VALUE OF THE REMAINDER PROPERTY BEFORE THE ACQUISITION The estimated market value of the fee simple interest in the whole property of $152,800 less the estimated market value of the part to be acquired of $83,850 reflects a market value of the fee simple interest in the remainder property before the acquisition of $78,950. THE ESTIMATED MARKET VALUE OF THE REMAINDER PROPERTY AFTER THE ACQUISITION The remainder property after the acquisition will consist of an approximate 15,790- square foot, or 0.3625 -acre, tract of land improved with a few related site improvements. There are some changes to the subject remainder tract after the acquisition. As mentioned, it will contain approximately 15,790 square feet, or 0.3625 of an acre, and it will have a slightly irregular shape. After the acquisition, the remainder tract will have frontage along the newly constructed Kirkwood Boulevard, with 159.55 feet of frontage along the south side of the new right- of-way of the street. Kirkwood Boulevard will feature concrete paving, concrete curbs and gutters, concrete sidewalks, underground drainage, and street lights. At the general location of the remainder tract, it will initially feature an undivided two lanes. It will ultimately feature four lanes, divided. It is my understanding that there may be a slight grade change of the street. If there is need for a retaining wall along the new north property line, I assume that any drive will be graded in such a way to provide an adequately sloped driveway that ties into the new roadbed. It should be noted that East Highland Street will junction into the northeast side of Kirkwood Boulevard near the remainder tract. The traffic flow to and from the tract for west bound traffic on Kirkwood Boulevard will ultimately be affected due to the median in the ultimately designed Kirkwood Boulevard. In my opinion, however, any effect to value that the median might cause A +, to the remainder tract falls under circuity issues, which are not considered compensabie and are, therefore, not considered in this appraisal. Public sanitary sewer service will still not be available to the remainder tract. The required extension of public sanitary sewer or the installation of a septic system for the remainder tract, which is significantly smaller than the whole tract, are rated a further adversity as compared to the whole tract. The remainder tract's terrain features, zoning, etc., are basically the same as described for the whole tract. Based upon an analysis of the remainder tract after the acquisition, the remainder tract could be considered a feasible, usable, and legally conforming tract for low intense commercial development. The potential single- family residential zoning classifications in the city, however, prohibits such use on the remainder tract since the minimum lot area for single- family residential use is 20,000 square feet. Even though the remainder tract would be considered non - conforming due to the minimum lot area requirement for single - family residential uses, the city would most likely not subject the remainder tract to the limitations of a typical, legal, non - conforming use since the acquisition of right -of -way forced the remainder into the non- conforming use. The remainder tract could still be assembled with adjoining property to make a larger, more useable tract. The adjoining properties, however, are under different ownership, and there is no assurance that the subject could ever be assembled with one of them. In view of this, assemblage is considered no further in this analysis. Therefore, it is my opinion that the highest and best use of the remainder tract is the same as that for the whole tract, i.e., speculative but most likely for uses such as single family residential development or some type of low intense commercial development. However, the physical features of the remainder tract, namely the smaller size, will change enough to adversely affect the unit value of the tract. Based upon a comparison of the land sales to the remainder tract with consideration for the foregoing, the unit value of the remainder tract is estimated to be lower than for the whole tract. As mentioned, the remainder improved property will still feature a few related site improvements, i.e,, primarily perimeter fencing. It is further my opinion that the remainder improvements have no contributory value. The procedure for estimating the value of the fee simple interest in the remainder property after the acquisition is the same as used in estimating the value of the fee simple interest in the whole property. The sales used in The Valuation Process -Whole Property are considered to be applicable in this section since the remainder tract is a generally similar tract as the whole tract with the exception of being significantly smaller. The adjustments as indicated in the valuation of the whole tract are also considered to be pertinent in this analysis with the exception of the adjustments in the Size and Shape category as well as the Utilities category. In comparison of the sales to the remainder tract, the Size and Shape category will change due to the discussed issues, namely the smaller size. Also, in regards to the Utilities 47 category, the required extension of public sanitary sewer to the remainder tract, which is significantly smaller than the whole tract, is rated a further adversity as compared to the whole tract. This is reflected on the Summary of Data and Comparison Grid which follows. .• 49 SUMMARY OF DATA AND COMPARISON GRID Sale Sale Sale Sale Subject 1 2 3 4 Sales Price /sq.ft. $6.21 $5.40 $4.82 $6.33 Prop, Rights Conv. Tee Simple Fee Simple Fee Simple Fee Simple Fee Simple Incl. minerals -$1.00 Similar Similar Similar Adjusted Price $5.21 $5.40 $4.82 56.33 Financing Terms Cash Cash Cash Cash Cash Adjusted Price $5.21 $5.40 $4.82 $6.33 Conditions of Sale Market Market Market Market Market Adjusted Price $5.21 $5.40 $4.82 $6.33 Market Condition 3/5/2010 9124/2009 212/2009 8/2812008 8131/2009 Adjusted Price $5.21 $5.40 $4.82 56.33 Physical and Functional Location Southlake /Avg, Southlake /Avg. Southlake /Good Southlake /Avg. Colleyville /Good Interior Interior Interior Interior Interior Kirkwood E. Highland Costa Azul S. PeytonviIle Westcoat Similar -$0.50 Similar -$1.25 Size /Shape 15,790 s.f. 40,246 s.f. 46,261 s.f. 42,522 s.f. 30,000 s.f S1. Irregular Rectangular Sl. Irregular Narrow, Rect. Rectangular -$2.00 42.00 -$1.75 -$2.00 Use Potential "AG" Agr, "SF IA" SFR, "SFIA" SFR, "SP2" Site Plan, "R -40" SFR, SFR/Low SFR use SFR use SFR/Low SFR use int. comm. use int. comm. use Similar Similar Similar Similar Terrain Features Level /gently Level/gently Level Level /gently Level/gently sloping, trees sloping, trees sloping, trees sloping Similar +$0.25 Similar +$0.25 Utilities All avail. exc. All avail, exc. All available All available All avail exc. san. sewer san. sewer san. sewer -$1.00 -S 1.25 -$1.25 -$1.00 Net Phy./Func. Adjustment -$3.00 -53.50 -53.00 -$4,00 Indicated Value /sq.ft. $2.21 $1.90 $1.82 $2.33 49 Based on the foregoing analysis, the estimated unit value of the fee simple interest in the remainder tract is $2.00 per square foot. This unit value applied to the area of the remainder tract, 15,790 square feet, reflects a value of the fee simple interest in the remainder tract of $31,600, rounded. SUMMATION Based on the foregoing, the estimated market value of the part to be acquired is $83,850. The estimated market value of the fee simple interest in the remainder property, before the acquisition, is $78,950. The estimated market value of the fee simple interest in the remainder property, afler the acquisition, is $31,600. The difference between the values of the remainder, before and after the acquisition, is $47,350, which reflects the total amount of damage. The estimated compensation for the acquisition is the sum of the value of the part to be acquired and the estimated damages, $131,200. The summation of the foregoing analysis is as follows: The Estimated Market Value of the Fee Simple Interest in the Whole Property $162,800 The Estimated Market Value of the the Part To Be Acquired in Fee Considered as Severed Property The Estimated Market Value of the Fee Simple Interest in the Remainder Property Before the Acquisition $ 78,950 The Estimated Market Value of the Fee Simple Interest in the Remainder Property After the Acquisition $ 31,600 Damages, if Any Estimated Total Compensation $ 83,850 47,350 $131,200 50 EXHIBIT "A" LEGAL DESCRIPTION PERMANENT RIGHT-OF-WAY PARCELS BEING 0.464 acre of land located in the RICHARD EADS SURVEY, ABSTRACT NO, 481, City of Southlake, Tarrant County, Texas, and being a portion of the tract of land conveyed to C. E. Eubanks, and wife, Marie Eubanks, by the deed recorded in Volume 5734, Page 861 of the Deed Records of Tarrant County, Texas. Said 0.464 acre of land being more particularly described by metes and bounds as follows: BEGINNING at a'h" iron rod marked "Brittain & Crawford" set in the new South right -of -way line of Kirkwood Boulevard and the East boundary line of said Eubanks Tract, being located N 03° 02' 06" E 71.56 feet from the Southeast corner of said Eubanks Tract; THENCE NORTHWESTERLY 159.55 feet, along the new South right - of -way line of Kirkwood Boulevard with a curve to the left having a radius of 1030.00 feet, a central angle of 08 °52'31 ", and a chord bearing N 66° 57' 55" W 159.39 feet, to a %" iron rod marked "Brittain & Crawford" set in the West boundary line of said Eubanks Tract and the East boundary line of a tract of land conveyed to Carroll Independent School District by the deed recorded in Volume 5734, Page 859 of the Deed Records of Tarrant County, Texas; THENCE N 03° 02'06" E 105.80 feet, along the West boundary line of said Eubanks Tract and the East boundary line of said Carroll Independent School District Tract, to a point at the Northwest corner of said Eubanks Tract, and lying in the approximate centerline of East Highland Street; THENCE N 89° 55' 52" E 150.00 feet, along the North boundary line of said Eubanks Tract and the approximate centerline of East Highland Street to a point at the Northeast comer of said Eubanks Tract; THENCE S 03'02'06" W 168.44 feet, along the East boundary line of said Eubanks Tract, to the POINT OF BEGINNING containing 0.464 acre (20,210 square feet) of land. 51 Q� EXHIBIT " B " LOT 11 HIGHLAND ESTATES VOL. 388-1:54, PG. 100 P, R. T,C.T, FAST HIGHLAND STREET (VARIABLE WIDTH RIGHT - OF - WAY) N 89 °55'52 "E 150.00' ________`_ f 0 07 S _ ---- �PTIVE_RIGHIT_DF_WAY Lo cc a 0 cv 0 cl W cn & k lQO. ©'jLFOQl) ` cp 0 R�GyT> ��D c+r 0 cD A =8° 52' 31" _ SpUrH ° R= 1030.00' L= 159.55' R�U CH =N 66 °57'55 "W 1/2" IRS 1 159.39' Otc- CARROLL INDEPENDENT K✓�} SCHOOL DISTRICT VOL, 5734, PG, 859 C //V D.R.T.C.T. AREA TABLE I 0.464 ACRES TOTAL ' (20.210 SQ. FT.) 0.079 ACRE IN PRESCRIPTIVE I ' RiGHT -OF -WAY I 0.385 ACRE NET (16,771 SQ. FT.) C.E. EUBANKS and wife, MARIE EUBANKS 1 VOL. 5734, PG. B61 DRTCT w d' e1• CID to cc a cv 0 cl G cn & k lQO. ©'jLFOQl) ` O4 R�GyT> ��D a F kqr� k POINT OF BEGINNING " (1/2" IRON ROD SET) W SURREY +p GATEWAY CHURCH R +CI'1a5 8A T N A � 4 � 1 D D.R T C T. 1/2" IRF LEGEND IRF =IRON ROD FOUND 1/2" IRS = IRON RODS SET ARE 1/2" IRON RODS MARKED " RITTAIN do CRAWFORD" I I SURVEYED ON THE GROUND ��•... °• F.. NOVEMBER 24, 2009 CHRIS L. ULEVINS .�..... .... a .. :a 5792 �P�;: CHRIS L. BLEVINS REGISTERED PROFESSIONAL se1RN�� LAND SURVEYOR STATE OF TEXAS NO. 5792 ' r E', ss �'''" "' SOUTH LAKE, TARRANT COUNTY, TEXAS TEXAAS A►K KIRKWOOD BOULEVARD IMPROVEMENT PROJECT BRITTAIN & C RAWFORD EXHIBIT MAP OF o LANs TOPOGRAPHIC MAPP 0.464 ACRES OF LAND APH[C MAPING (R17) 92R -0211 - METRO (RI7) 429 -5112 LOCATED IN F AX N 9. (R.7) 915 -9x THE RICH `^^ FADS SURVEY, P.O. RR% 11774 ,7908 SOUTH FREEW0.Y FORT WORTH, TLX45 76110 ASST 11 EWIL: ndmin @6rittaio- crowima. mom TARRAN' 52 ERAS SCALE 1 " =40' IRK'gODD\KF4- SLAKE- KIRKWODD -ROW DOGS -CUBAN KS.cfwg CERTIFIiC'ATION OF THE APPRAISER 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 onlyby the reported assumptions and limiting conditions, and are mypersonal, impartial, and unbiased professional analyses, 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 value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of the appraisal; * my analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice, the Code of Professional Ethics and the Standards of Professional Practice of the Appraisal Institute, and the Texas Deal Estate License Act; * the use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives; * as of the date of this report, James S. Hanes has completed the requirements of the continuing education program of the Appraisal Institute. * I have made a personal inspection of the property that is the subject of this appraisal; * no one provided significant professional assistance to the person signing this report, other than those specifically named in the report. I awes S. Hanes, MAI 53 QUALIFICATIONS OF JAMES S. HALVES EMPLOYMENT James S. Hanes has been a real estate appraiser and consultant since 1991. He is the owner of HANES APPRAISAL COMPANY LLC, a diversified real estate services finn with offices in Arlington, Texas. He is actively engaged in the appraisal of, and counseling on, all types of real estate for various governmental agencies, financial institutions, corporations, attorneys, accountants, and individuals. He is also an adjunct lecturer of Real Estate Appraisal, a semester long college course at Tarrant Community College, Northeast Campus. His valuation experience includes the valuation of various types of retail, commercial, and industrial properties; unimproved land; special purpose properties, such as churches, long -term care facilities, etc.; residential subdivisions; apartments and other multi - family properties; and single- family residential dwellings. EDUCATION Graduate of Baylor University with a. Bachelor of Arts degree. Majored in Religion with minor studies in Sociology and Real Estate. Attended and successfully completed the following appraisal courses and other requirements for designation. Appraisal Institute: Real Estate Appraisal Principles, 1A118 -1; Basic Valuation Procedures, 1 A2; Standards of Professional Practice, Parts A & B; Capitalization Theory and Techniques, Part A; Capitalization Theory and Techniques, Part B; Case Studies in Real Estate Valuation; Report Writing and Valuation Analysis; Income Demonstration Report; and Comprehensive Examination. Also attended numerous appraisal seminars and workshops. PROFESSIONAL AFFILIATIONS Designated member of the Appraisal Institute with the Member Appraisal Institute (MAI) designation. LICENSES /STATE CERTIFICATIONS Real Estate Broker - Texas License No. 0394202 State Certified General Real Estate Appraiser - Certificate No. TX 1323916 -G 54