1 Appraisal Report Unimproved Land in Tazewell County 111.08 Acres In

Appraisal Report

Unimproved Land in Tazewell County

111.08 Acres in East Peoria, IL

RIMS Project #13-000877-04-01

For: Alyssa Hudson Busey Bank 100 W. University Avenue PO Box 4028 Champaign, IL 61824-4028

By: Paul K. Knight Certified General Real Estate Appraiser LICENSE #553.001741 EXPIRES: 09/30/2015 And Anthony J. Corelis Associate Real Estate Trainee Appraiser LICENSE # 557.005830 EXPIRES: 9/30/2015

Date of Valuation: January 13, 2014

Date of Report: January 17, 2014

PRO-VAL TECH Professional Valuation Technology, LLC

Paul K. Knight

Real Estate Appraisal and Consultation 116 Scenic Bluff Drive East Peoria, IL 6161 309-339-0483 [email protected] FEIN 26-1616291

January 17, 2014 Ms. Alyssa Hudson Busey Bank 100 W. University Avenue PO Box 4028 Champaign, IL 61824-4028

RE: Appraisal of 111.08 acres of land in East Peoria, IL. (RIMS Project #13-000877-04-01)

Dear Ms. Hudson:

Pursuant to your request to estimate the market value of the unencumbered fee simple interest of the above described property. I submit the following report for your consideration. This report describes, in detail, the method of appraisal and contains the analysis of data gathered in my investigation and used in arriving at my conclusion of value.

I hereby certify that the site was inspected on January 13, 2014, and that I have no interest, present or prospective therein, and that all the data gathered in my investigation is from sources believed to be reliable.

Employment in and compensation for making this report is in no way contingent on the value reported, and I certify that I have no personal interest or bias with respect to the subject matter of this appraisal report or the parties involved.

To the best of my knowledge and belief, the statements contained in this appraisal and upon which opinions expressed herein are based are correct, subject to the limiting conditions herein set forth; also, this appraisal has been made in conformity with the Code of Ethics of the Appraisal Institute.

Based on the fact and opinions contained in the attached report and upon my inspection of the site, it is the opinion of the undersigned that the Market Value of the property herein described, as of January 13, 2014, is as follows: 2

………Eight Hundred Fifty Five Thousand Dollars ($855,000.00)

Respectfully submitted, ,

Anthony J. Corelis Paul K. Knight Associate Real Estate Trainee Appraiser Certified General Real Estate Appraiser License # 557.005830 License # 553.001741 Expires: 9/30/2015 Expires: 09/30/2015

Summary of Salient Features:

Purpose of appraisal: Market Value Property rights appraised: Fee Simple Date of Appraisal: January 13, 2014 Land Area: 111.08 acres, MOL Zoning: B-3, General Business Services R-2; Residential R-4; Multifamily Residential Flood Hazard Area: C Indications of Value: Cost Approach NA Sales Comparison Approach $855,000 Income Approach NA

Opinion of Market Value $855,000

TABLE OF CONTENTS

Letter of Transmittal Page 2

Summary of Salient Features 4

Table of Contents 5

Underlying Assumptions 6

Contingent Conditions 6

Definition of Market Value 7

Additional Contingent and Limiting Conditions 7

Appraiser’s Certification 8

Photographs of Subject Property 11

General Appraisal Information 17

Scope of Work 20

Subject Data 21

Neighborhood Data 28

Site Description 34

Highest and Best Use 40

Cost Approach to Value 42

Sales Comparison Approach 43

Income Approach 47

Reconciliation 48

Final Opinion of Value 48

Addendum 49

UNDERLYING ASSUMPTIONS

1. It is assumed that the legal description furnished the appraiser of subject property is correct. 2. That the title to the property is good and owned in fee simple and that there are no known encumbrances or defects of title other than those mentioned in this report. 3. That the property is free and clear of all liens other than those mentioned in this report, but subject to any existing easements, agreements, assessments or other obligations. 4. That certain opinions or estimates (which are properly identified) furnished by other individuals and/or other sources, and used in making the appraisal are correct. 5. The property is appraised as though under responsible ownership and competent management. 6. Any sketches in this report are included to assist the reader in visualizing the property, and do not constitute a formal survey.

CONTINGENT CONDITIONS

1. That neither all nor any part of the contents of this report will be conveyed to the public through advertising, public relations, news, sales or other media, without written consent and approval of the author, particularly as to the valuation conclusions, and identify of the appraiser or firm with which he is connected. 2. The appraiser will not be required to give testimony or appear in court by reason of this appraisal with reference to the property herein described unless prior arrangements have been made. 3. Additional assumptions and limiting conditions are located on the following pages.

DEFINITION OF MARKET VALUE

Market value is defined as:

The most probable price a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeable, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

1) buyer and seller are typically motivated; 2) both parties are well informed or well advised, and acting in what they consider their best interests; 3) a reasonable time is allowed for exposure in the open market; 4) payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and 5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

(Source: Office of the Comptroller of the Currency)

ADDITIONAL CONTINGENT AND LIMITING CONDITIONS:

1. The appraiser’s certification that appears in the appraisal report is subject to the following conditions:

2. The appraiser has examined the available flood maps that are provided by the Federal Emergency Management Agency (or other data sources) and has noted in the appraisal report whether the subject site is located in an identified Special Flood Hazard Area. Because the appraiser is not a surveyor, he or she makes no guarantees, express, or implied, regarding this determination.

3. The appraiser will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand.

4. The appraiser has estimated the value of the land in the cost approach (market data or sale approach in this appraisal) at its highest and best use and the improvements at their contributory value. These separate valuations of the land and improvements must not be used in conjunction with any other appraisal and are invalid if they are so used.

5. The appraiser has noted in the appraisal report any adverse conditions observed during the inspection of the subject property or that were discovered during the normal research involved in performing the appraisal. Unless otherwise stated in the appraisal report, the appraiser has no knowledge of any conditions of the property or adverse environmental conditions (including the presence of hazardous wastes, toxic substances, etc.) that would 7

make the property more or less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, express or implied, regarding the condition of the property. The appraiser will not be responsible for any such conditions that do exist or for any engineering survey required to discover whether such conditions exist. Because the appraiser is not an expert in the field of environmental hazards, the appraisal report must not be considered as an environmental assessment of the property.

6. The appraiser obtained the information, estimates, and opinions that were expressed in the appraisal report from sources that he or she considers reliable and believes them to be true and correct. The appraiser does not assume responsibility for the accuracy of such items that were furnished by other parties.

7. The appraiser will not disclose the contents of the appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice.

8. The appraiser must provide his or her prior written consent before the lender/client specified in the appraisal report can distribute the appraisal report (including conclusions about the property value, the appraiser’s identity and professional designations, and references to any professional appraisal organizations or the firm with which the appraiser is associated). The appraiser’s written consent and approval must be obtained before the appraisal can be conveyed by any other parties through advertising, public relations, new, sales, or other media.

APPRAISER’S CERTIFICATION

The Appraiser certifies and agrees that:

1. I have researched the subject market area and have selected a minimum of three recent sales of properties most similar and proximate to the subject property for consideration in the sales comparison analysis and have made when appropriate to reflect the market reaction to those items of significant variation. If a significant item in a comparable property is superior to, or more favorable than, the subject property, I have made a negative adjustment to reduce the adjusted sales price of the comparable and, if a significant item in a comparable property is inferior to, or less favorable than the subject property, I have made a positive adjustment to increase the adjusted sales price of the comparable.

2. I have taken into consideration the factors that have an impact on value in my development of the estimate of market value in the appraisal report. I have not knowingly withheld any significant information from the appraisal report and I believe, to the best of my knowledge, that all statements and information in the appraisal report are true and correct.

3. I stated in the appraisal report only my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the contingent and limiting conditions specified in this form.

4. I have no present or prospective interest in the property that is the subject to this report, and we have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base, either partially or completely, our analysis 8

and/or the estimate of market value in the appraisal report on the race, color, religion, sex, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties in the vicinity of the subject property.

5. I have no present or contemplated future interest in the subject property, and neither my current or future employment nor my compensation for performing this appraisal is contingent on the appraised value of the property.

6. I was not required to report a predetermined value or direction in value that favors the cause of the client or any related party, the amount of the value estimate, the attainment of a specific result, or the occurrence of a subsequent event in order to receive our compensation and/or employment for performing the appraisal. I/we did not base the appraisal report on a requested minimum valuation, a specific valuation, or the need to approve a specific mortgage loan.

7. I performed this appraisal in conformity with the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place as of the effective date of this appraisal, with the exception of the departure provision of those Standards, which does not apply. I acknowledge that an estimate of a reasonable time for exposure in the open market is a condition in the definition of market value and the estimate I developed is consistent with the marketing time noted in the neighborhood section of this report, unless I have otherwise stated in the reconciliation section.

8. I have personally inspected the subject property and all properties listed as comparables in the appraisal report, if applicable. I further certify that I noted any apparent or known adverse conditions in the subject improvements, on the subject site, or on any site within the immediate vicinity of the subject property of which I am aware and have made adjustments for these adverse conditions in my analysis of the property value to the extent that I had market evidence to support them. I have also commented about the effect of the adverse conditions on the marketability of the subject property.

9. I personally prepared all conclusions and opinions about the real estate that were set forth in the appraisal report. If I relied on significant professional assistance from any individual or individuals in the performance of the appraisal or the preparation of the appraisal report, I have named such individual(s) and disclosed the specific tasks performed by them in the reconciliation section of this appraisal report. I certify that any individual so named is qualified to perform the tasks. I have not authorized anyone to make a change to any item in the report; therefore, if an unauthorized change is made to the appraisal report, I will take no responsibility for it.

10. I have appraised the subject property once during the three year period preceding the date of assignment.

ADDRESS OF THE PROPERTY APPRAISED:

111.08 acres in Tazewell County, East Peoria, IL.

APPRAISER:

Anthony J. Corelis Paul K. Knight Associate Real Estate Trainee Appraiser Certified General Real Estate Appraiser License # 557.005830 License # 553.001741 Expires: 9/30/2015 Expires: 09/30/2015

PHOTOGRAPHS OF SUBJECT PROPERTY

View of Washington Road facing northeasterly from near the northwestern corner of subject.

View of Washington Road facing southwesterly as seen from the northwestern corner of subject property.

View of the western portion of subject facing southeasterly.

View of the western portion of subject facing easterly.

View of the northern property line as it follows Washington Road facing northeasterly.

View of the subject as seen from Washington Road.

View of subject property as seen from Washington Road.

View of the northeastern portion of subject.

View of subject facing southerly from the south side of event center.

GENERAL APPRAISAL INFORMATION

DATE OF VALUATION AND EFFECTIVE DATE OF THE APPRAISAL:

The date of valuation and effective date for this appraisal report is January 13, 2014.

AUTHORIZATION AND INSTRUCTIONS TO APPRAISER:

The appraiser has been authorized to prepare this report by Ms. Alyssa Hudson, Busey Bank, 100 W. University Avenue, PO Box 4028, Champaign, IL 61824-4028. Ms. Hudson has requested an opinion of market value, fee simple rights for the subject property. The report will be used by the client to assist with decisions related to underwriting a loan and/or credit decisions.

INTENDED USE AND INTENDED USERS:

The client is Busey Bank. The client is the intended user.

The intended use of this appraisal report is to provide an opinion of market value of the subject property. The report will be used by the client to assist with decisions related to underwriting a loan and/or credit decisions.

This appraisal report is prepared for the sole and exclusive use of the client.

PURPOSE OF APPRAISAL

The appraisal has been made for the purpose of arriving at an opinion of market value of the subject property, assuming the property is owned in fee simple title.

Market value is defined as:

5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

(Source: Office of the Comptroller of the Currency)

ESTIMATED MARKETING TIME

It is the appraiser’s opinion that a reasonable marketing time for the subject property would be six to eighteen months. This estimate is based upon a continuing analysis of properties that were listed, and ultimately sold in this market area.

ESTIMATED EXPOSURE TIME

The Appraisal Standards Board of The Appraisal Foundation (Authorized by Congress as the Source of Appraisal Standards and Appraiser Qualifications) annually publishes the Uniform Standards of Professional Appraisal Practice (USPAP). Their Statement on Appraisal Standards No. 6 addresses “Reasonable Exposure Time in Market Value Estimates” as follows:

Reasonable exposure time is one of a series of conditions in most market value definitions. Exposure time is always presumed to precede the effective date of the appraisal. Exposure time may be defined as follows:

The estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical valuation found within this report is 12 months.

COMPETENCY

The appraiser has experience appraising properties similar to the subject. No further actions are required to assure competency.

PERSONAL PROPERTY

None of the indications or opinions of value provided within this report are related to personal property. The client has requested an opinion of value for real property only.

ENVIRONMENTAL CONDITIONS:

The appraiser is not aware of any environmental conditions that would adversely affect the value or proposed use of the subject property; however, the appraiser is not an environmental expert. During a routine inspection of the subject site, the appraiser did not notice any environmental contaminants on the surface of the subject site. The previous uses are known to be industrial. During physical observation of the property, an above-ground fuel storage tank was noted.

The indications of value and opinions stated within this report are made based on the extraordinary assumption that no environmental issues related to the subject property exist. An extraordinary assumption is defined as:

18 an assumption, directly related to a specific assignment, which, if found to be false, could alter the appraiser’s opinions or conclusions. Extraordinary assumptions presume as fact otherwise uncertain information about physical, legal, or economic characteristics of the subject property; or about conditions external to the property such as market conditions or trends; or about the integrity of data used in an analysis.

An extraordinary assumption may be used in an assignment only if:

It is required to properly develop credible opinions or conclusions; The appraiser has a reasonable basis for the extraordinary assumption; Use of the extraordinary assumption results in a credible analysis; and The appraiser complies with the disclosure requirements set forth in USPAP for extraordinary assumptions.” Taken from The Dictionary of Real Estate Appraisal, 5th Edition, published by the Appraisal Institute (2010).

SCOPE OF WORK

The scope of work is to complete an appraisal/summary appraisal report, which is agreed by the appraiser and the client/intended user of this appraisal report. This appraisal report discloses and warns the appraiser’s opinions and conclusions set forth in this report cannot be understood properly without additional information in the appraiser’s work file. The work will be completed through the following steps:

Physical inspection of the subject site and the surrounding neighborhood;

Collection of factual information relative to the subject property and its surrounding neighborhood; Preparation of a highest and best use analysis of the subject site as though vacant and of the subject property as improved;

Collection of market data relative to application of the three traditional approaches to value;

Application of the Sales Approach to the subject;

Application of the Cost Approach to the subject, as applicable;

Application of the Income Approach to the subject, as applicable;

Reconciliation of the findings of the three approaches to value, or all applicable approaches, into a final value indication, and

Preparation of a narrative report, laying out the conclusions and the reasoning upon which they were based.

SUBJECT DATA

PROPERTY ADDRESS AND LEGAL DESCRIPTION:

The subject property exists as approximately 111.08 acres, MOL of unimproved land in Tazewell County. A full legal description is provided on the next several pages, as indicated by the client:

LOCATION MAP FOR SUBJECT PROPERTY

PARCEL NUMBER, TAX INFORMATION AND SPECIAL ASSESSMENTS:

The subject property consists of several parcels. The following table provides the assessment and tax information for each parcel:

Parcel AV Taxes

01-01-25-210-008 30 000.00 01-01-25-210-010 650 59.34 01-01-25-303-009 2,370 232.10 01-01-25-303-010 9,840 963.66 01-01-25-303-011 9,840 963.66 01-01-25-400-009 550 50.20 02-02-30-300-001 18,760 1,772.72

OWNERSHIP:

According to the Tazewell County records, the present owner is Elhisco LLC.

HISTORY OF THE SUBJECT PROPERTY

The subject property has never been improved, with the exception of two old barns that have reached the end of their useful lives. The property was formerly part of the estate surrounding a large home owned by the Powley family, which operated a business related to mining and sale of construction materials. A preliminary plat for the property was found in the records of the Tazewell County Recorder of Deeds Office. No final plat was found. The plat provides for several commercial lots along Washington Road (Illinois Route 8), an area of multifamily residential development, with the remaining acreage designated for single family residential development. It appears the plat provides for 80-90 lots.

PROPERTY RIGHTS APPRAISED:

Fee simple rights are being appraised, as requested by the client.

SALES DATA:

The Tazewell County records show no sales of the subject property related to the three year period preceding the date of valuation.

The owner also owns a large commercial building adjacent to the acreage that is known to be actively listed. All advertising related to the adjacent property indicate that additional acreage is available. No detailed information was found related to the listing.

NEIGHBORHOOD DATA “A neighborhood is a group of complementary land uses; a related grouping of inhabitants, buildings, or business enterprises”, as defined by The Appraisal of Real Estate, 13’th Edition , published 2008 by The Appraisal Institute.

The same source provides a similar definition for the term district:

A district is defined as a type of neighborhood that is characterized by homogeneous land use.

NEIGHBORHOOD BOUNDARIES AND CHARACTERISTICS:

The subject neighborhood can be described as a suburban area of the Greater Peoria-Pekin Metropolitan Statistical Area, commonly known as East Peoria, IL. The primary highway serving the subject site is Illinois Route 8, also known as Washington Road. The highway was recently expanded to four lane divided highway, with center turn lanes. The property is located near the eastern edge of the city of East Peoria. The property is in close proximity to Washington, Illinois. The subject is located approximately 3 miles east of Interstate 74, the primary interstate highway serving the Greater Peoria Metropolitan Area. Interstate 74 connects The Quad Cities area along the Iowa-Illinois border approximately 90 miles northwest of Peoria with Indianapolis and Cincinnati. Interstate 474 and 155 are located approximately 8 and 10 miles west and south of the subject.

East Peoria is located in Tazewell County in Central Illinois. East Peoria is on the eastern side of the Illinois River, directly across the river from Peoria, which is the center of the Peoria-Pekin MSA. The population of East Peoria was 23,402 in the year 2010. The category of manufacturing accounts for 20.5% of the jobs in the East Peoria market. Other major employment categories include education, health, and social services (17.1%) and retail services (14.2%). Retail in the area is provided by Kohl’s, which is located approximately three miles south of the subject. Most of the retail businesses located in East Peoria are along the Camp Street corridor, approximately three miles west of the subject. During the past ten years, development has occurred along the riverfront with the arrival of Super Wal-Mart, Lowe’s, several nationally franchised restaurants, and multiple smaller strip retail centers. An Embassy Suites hotel opened in January, 2008, and has been well-received by the market. A Bass Pro Store opened in Fall, 2011. Another major economic force within the city is the presence of the Paradice Casino, owned by Boyd gaming. Revenue from gaming has allowed other development to occur within the city. One of the biggest municipal additions has been the EastSide Center, a facility offering a football stadium with state-of –the-art track surrounding the field. A modern indoor workout facility is adjacent, with many basketball and volleyball courts as well as weight- training equipment. Splashdown, a large water park is another part of EastSide. There are many baseball and softball fields. The overall facility is one of the finest in the state, as evidenced by the number of state grade and high school championships hosted. During the spring, summer, and fall, there are many youth tournaments hosted, and this generates a great deal of restaurant and hotel revenue for the city. Another municipal sponsorship is The Festival of Lights, which occurs during the holiday period between Thanksgiving and New Year’s. The city has several large areas of lit floats and displays that attract tourist activities from the entire Midwestern United States. Again, the restaurant and hotel businesses benefit from the activity. East Peoria has undergone this municipal transformation due to the loss of many manufacturing opportunities that disappeared during the economic downturn of the 1980’s. Caterpillar Tractor, the world’s largest heavy equipment builder, had many of their manufacturing and assembly 28 plants located in East Peoria, but the early 1980’s saw blue-collar employment at Caterpillar go from over 20,000 down to approximately 7,000. Several square blocks of downtown East Peoria have been leveled as Caterpillar removes much of its manufacturing capacity. This area is under development, with construction scheduled to begin in late 2012.

State routes 116, 29, 24, and 8 also pass through the city. St. Francis and Methodist Hospitals, the two largest medical facilities in Greater Peoria, are located a short distance from East Peoria, via I-74. The Greater Peoria Regional Airport is approximately ten miles from East Peoria.

The subject is also easily accessible from the City of Peoria. Routes 24 and 150 pass near the subject. The two highways cross the Illinois River on the the McCluggage Bridge. The McCluggage Bridge leads directly to War Memorial Drive, also known as U.S. Route 150. This serves as the major access to Peoria from the city of Washington, as well as Germantown Hills and Metamora. Illinois Central College, the public community college, is approximately 1 mile northeast of the subject.

US CENSUS DATA: PEORIA CITY DATA

The City of Peoria is located in the East central portion of the County of Peoria.

Population: 115,000

Government: City Manager, Mayor and Council who serve 4 year terms.

Services: 220 full-time policemen and 195 full-time fire fighters to serve the community. Water is supplied by Illinois American Water Company; Peoria Sanitary District maintains sanitary sewer system and sanitary system treatment plant

Median Household Income: $26,074

Hospitals: Methodist Medical Center, St. Francis Hospital, and Proctor Hospital. All three have trauma centers, cardiac centers, and intensive care units. St. Francis contains the Children’s Hospital of Illinois and Methodist houses the St. Jude Midwest Affiliate.

Public Use Facilities: The City of Peoria boasts a large public library, with numerous neighborhood branch facilities, a museum and planetarium, a park district overseeing a zoo, several swimming pools, and ice arena, the Peoria Players theater group and Corn Stock Theater, both housed in park district facilities. There is also an active historic preservation group.

Transportation: the Greater Peoria Airport Authority serves Peoria, with commercial flights into and out of the airport daily. The Greater Peoria Mass Transit District serves as basic citywide transportation, with an elderly and disabled transport service available to the public. Interstate 74, as well as several state highways serve Peoria.

Industry: The potential growth of Peoria is good. Caterpillar Tractor Company is one of the areas largest employers, with other industries including Archer Daniel’s Midland and

Komatsu Company having facilities in the city. Many other industries are located in or near the City of Peoria.

Financial Institutions: There are numerous national banks, savings and loans and credit unions located in Peoria.

Communications: Communication facilities include a daily local newspaper and a several local radio stations. Peoria television reception is good and TCI Cablevision of Central Illinois offers television reception from nationwide. Peoria has a large public school district with four high schools and thirty-one grade schools. Illinois Central Junior College maintains two campus locations within the city, and Bradley University is located near the downtown area.

NEIGHBORHOOD ECONOMIC FACTORS:

Due to the current economy and low demand for large residential development, demand for land such as the subject will be low. The national recession beginning in 2008 was closely linked to residential mortgages and loose credit associated with residential housing, resulting in tightened credit with low new housing. The recession increased unemployment and provided record levels of foreclosure that will have serious effects on new housing for many years. An interim use of agricultural production would seem likely, although the soil quality is not highly productive and re-development to maximize agricultural usage would require significant investment in time and labor. Much of the land has not been in production for many years.

More detailed demographic data related to the area surrounding the subject property is provided on the following pages.

SITE DESCRIPTION

LOT DIMENSIONS AND SITE AREA:

The primary subject site is irregular in shape and is reported as 111.08 acres, MOL, according to public records. Survey records are not clear, but minor differences in site area would not significantly alter the indications and opinions of value developed within this report. The following table provides the parcels comprising the subject property, along with the area:

PARCEL AREA

01-01-25-210-008 2.1 acres 01-01-25-210-010 66.31 01-01-25-303-009 0.32 01-01-25-303-010 1.34 01-01-25-303-011 1.50 01-01-25-400-009 36.3 02-02-30-300-001 3.21 TOTAL: 111.08

A plat map of the subject site is provided on the following page:

PLAT MAP FOR SUBJECT PROPERTY (Source: Sidwell Maps)

SITE TOPOGRAPHY:

The site ranges from level to rolling. The south and east borders slope downward from the primary elevation. Maximum elevation change is estimated as 90 feet.

UTILITIES AND STREETS:

Electricity, gas, water, and sewer are available along Washington Road. The preliminary plat provides locations for street development within the subject site, and would provide the path for utility development to any individual lots created. No final plat has been recorded.

PRELIMINARY PLAT FOR SUBJECT SITE

(Source: Tazewell County Recorder’s Office)

ZONING:

The definition of zoning is:

The public regulation of the character and extent of real estate use through police power; accomplished by establishing districts or areas with uniform restrictions relating to improvements; structural height, area, and bulk; density of population; and other aspects of the use and development of private property.

(Taken from The Dictionary of Real Estate Appraisal , 5th Edition, 2010 by The Appraisal Institute.)

Zoning for the subject property includes B-3; General Business, R-2; Residential, and R-4; Multifamily Residential, according to information provided by the City of East Peoria.

A zoning map is provided on the following page.

ZONING MAP FOR AREA SURROUNDING SUBJECT PROPERTY

(Source: East Peoria GIS) 38

FEMA FLOOD DATA:

According to FEMA flood map Number 1708150175B, dated August 1, 1980, the subject property is located in Flood Zone C.

HIGHEST AND BEST USE:

Highest and best use refers to the appraisal principle that states that real property should be placed into the use which would provide maximum valuation. This also includes determination of the site usage as if vacant and capable of being developed into the use that provides the highest value to the land. When alternative uses exist for an improved site that exceeds the value of the presently-improved site, the appraiser must decide whether demolition and re-development costs justify the removal of the improvements. The four criteria that must be met in consideration of highest and best use are legal permissibility, physical possibility, financial feasibility, and maximum productivity.

Highest and best use as though vacant: Legal permissibility test

The subject is zoned B-3, General Business, R-2; Residential, R-4; Multifamily Residential. These classifications allow broad usage including commercial and residential usage.

Highest and best use as though vacant: Physical possibility test

There are no physical limitations to development of the subject site other than shape, size, and topography.

Highest and best use as though vacant: Financial feasibility test

The neighborhood section of this report has provided information relative to the subject neighborhood indicating that commercial and residential usage is in close proximity to the subject. Analysis of the Tazewell County records provided information of similar parcels that have sold for similar development.

Highest and best use as though vacant: Maximum productivity test

The subject site is approximately 111.08 acres. Sites with this size are routinely used for development purposes, typically as commercial and residential sites. Due to current economic circumstances that have significant effect on demand for the development, the current agricultural usage should be maintained until the market is ready to accept the subject property at its highest and best use.

APPROACHES TO VALUE:

Most appraisal assignments involve use of three basic approaches, each used to provide an indication of value that is then reconciled to allow formation of a well-supported opinion of value. The three basic approaches are:

1) The Cost Approach: This method provides a summation of values associated with vacant land associated with the subject site, and depreciated replacement cost of any improvements. Replacement cost is defined as:

The replacement cost of a building is estimated as cost to construct, at current prices as of the effective date of the appraisal, a building with utility equivalent to the building being appraised, using modern materials and current standards, design, and layout.

(As provided by The Dictionary of Real Estate Appraisal , 5th Edition, published by The Appraisal Institute, 2010)

Depreciation includes any loss in value from original replacement cost and includes physical depreciated, which includes deferred maintenance and physical depreciation through depletion of components, as well as functional obsolescence, which are those features of inadequacy or superadequacy built into the subject, as well as external obsolescence, those items outside the subject resulting in loss of subject value.

2) The Sales Comparison Approach, also known as the Market Data Approach: This technique is based upon evaluation of the subject property and comparing it to other recently sold properties and others offered for sale. Since no two properties are identical, adjustments must be made for the differences. The true basis for the approach is the principle of substitution, which states that buyers will gravitate towards alternative investments with lower prices if utility of the two assets being compared are the same. 3) The Income Approach: This technique is based on the principle of anticipation, which provides that an investor will pay cash or its equivalent for an asset capable of providing a return of capital. This return may consist of return on the capital, as well as a return of the original investment. The income approach may involve the capitalization of anticipated returns forward or may involve a discounting mechanism when returns are distributed unevenly or over shorter time frames than indicated by capitalization, which assumes an income stream to perpetuity.

An appraisal assignment may include any or all of the above approaches. The appraiser uses all of those approaches believed capable of providing a credible indication of subject value.

LAND VALUATION

The highest and best use analysis performed in a prior section of this report indicates that the subject exists as unimproved. Therefore, land valuation is presented in the following sections of the report, within the approaches to value.

COST APPROACH TO VALUE

Essentially, the Cost Approach is a method by which the value of a property is derived by estimating the reproduction cost new of improvements, less accrued depreciation for physical deterioration, functional obsolescence, and economic obsolescence. To this figure is then added the estimated value of the land for a total indicated value by the Cost Approach. The Cost Approach to estimating value can be broken down into a number of steps, as outlined by John D. O’Flaherty in an article entitled, “An Appraiser’s Dilemma: The Cost Approach to Value,” which appears in the January-February 1969 issue of The Real Estate Appraiser, pages 5-15.

STEPS IN THE COST APPROACH TO VALUE

1. Estimate value of the site as if vacant and available to be put to its highest and best use; 2. Estimate reproduction cost new of improvements; 3. Estimate all elements of accrued depreciation; 4. Subtract total accrued depreciation from reproduction cost new of improvements. Results will be an estimate of the depreciated reproduction cost of improvements, or the contribution of improvements to the value of the property; 5. Add estimated depreciated present worth of site improvements; 6. Add total present worth of all improvements to estimated site value: 7. Round the figure obtained in Step 6 to an appropriate level. This represents the estimate of value of the subject property by the Cost Approach. The principle of substitution is an important basic fundamental to the Cost Approach, in that no man is justified in paying more for a property than the amount it would cost him to acquire a site and construct a building of equal desirability and utility, without undue delay. Consequently, reproduction cost new, before any subtractions for depreciation from any type, plus land value, tends to set the upper limit of value.

The cost approach was considered but not utilized because the subject exists as unimproved land. The sole contribution to subject value is the land, which does not depreciate and therefore has no cost basis different from the value developed in other sections of this report.

SALES COMPARISON APPROACH:

The Sales Comparison Approach is also known as the Market Data Approach, Market Approach, or Comparison Approach, and can be defined as follows:

The approach in appraisal analysis which is based on the proposition that an informed purchaser would pay no more for a property than the cost to him of acquiring an existing property with the same utility. This approach is applicable when an active market provides sufficient quantities of reliable data, which can be verified from authoritative sources. The Direct Sales Comparison Approach is relative unreliable in an inactive market or in estimating the value of properties for which no real comparable sales data are available. It is also questionable when sales data cannot be verified with principals to the transaction.

This approach to value is based upon the principal of substitution which affirms that when a property is replaceable in the market, a prudent person will pay no more to purchase a property than it would cost to acquire a similar substitute property. This approach is simply a method whereby other similar properties, which have sold, are compared to the subject. Further, this approach considers the actions of typical people in the marketplace. In applying this approach, we try to get an indication of what typical buyers are paying and what typical sellers are asking for properties at the time of the appraisal.

There are essentially five steps in this approach, as follows: (1) Seek out similar properties for which pertinent sales, listings, offerings, and/or rental data are available; (2) Qualify the prices as to terms, motivating forces, and bona fide nature; (3) Compares each of the comparable properties important attributes with the corresponding ones of the property being appraised, under the general division of time, location and physical characteristics; (4) Consider all the dissimilarities in terms of their probably effect upon the sales price; (5) Formulates an opinion of relative value of the property being appraised as compared with the price of each similar property.

The highest and best use section of this report has provided analysis that leads to the conclusion that the highest and best use for the subject is as a site made ready for development into a commercial site. Following are the comparables that best serve as substitutes for the subject.

The following characteristics of the subject property were considered in reaching an indication of subject land value: Area: 111.08 acres Location of Site: East Peoria (Average) Shape of Site: Irregular Topography of Site: Level to rolling

There have been very few sales since 2008 related to sites suitable for development as a subdivision. The national recession that began in late 2007 has drastically changed the market for the sites, due to a very poor residential development climate based on increased unemployment and tight credit. Housing is not expected to make a recovery until late 2012-2013 at the earliest, due to an extremely large inventory of foreclosures competing for market share. 43

Comparable Sale 1:

Parcel 05-05-10-104-001, Pinecrest Drive, East Peoria, IL. The comparable property sold in August, 2012 for $418,000. The tract is located between East Peoria and Morton. The total area is 52.27 acres. The topography was partially level, with the rear half sloping and wooded.

Sale Date: August, 2012 Sale Price: $418,000 Grantor: H.E. Hagemann Grantee: LSI Properties LLC Area: 52.27 acres $/acre $7,997 Location: Average Topography: Level and rolling Character: Partially Wooded

Comparable Sale 2:

208 S. 7 th Street, Morton, IL. The comparable property sold in January, 2012 for $840,000. The area of the comparable sale was 119.98 acres. The topography was level.

Sale Date: January, 2012 Sale Price: $840,000 Grantor: Kenneth Ummel Grantee: Richard Young Area: 119.98 acres $/s.f.: $7,001 Location: Average Topography: Level Character: Agricultural Amenities:: Average

Comparable Sale 3:

Parcel 08-03-400-008, Route 91, Dunlap, IL. This property is a 78.84 acre tract that sold in December, 2012. The sale price was $810,500. It is agricultural with long-term development potential. The sale provides an indication of $10,280 per acre. Dunlap is a superior location in comparison to the subject property.

Sale Date: December, 2012 Sale Price: $810,500 Grantor: Richmond Trust Grantee: Gary Pullen Area: 78.84 acres $/s.f.: $10,280 Location: Good Topography: Level Character: Agricultural

Comparable Sale 4:

7116 Grange Hall Road, Dunlap, IL. This property is a 40.00 acre tract that sold in February, 2012. The sale price was $375,000. It is agricultural with low development potential. The sale provides an indication of $9,375 per acre.

Sale Date: February, 2012 Sale Price: $375,000 Grantor: Burt Charles Family Trust Grantee: Carolee Unsicker Area: 40.0 acres $/s.f.: $9,375 Location: Good Topography: Level Character: Agricultural

The following table provides the comparative process:

Subject Sale 1 Sale 2 Sale 3 Sale 4

Sale Price NA $418,000 840,000 810,500 375,000 Sale Date NA 08/12 01/12 12/12 02/12 Area 111.08acres 52.27 119.98 78.84 40.0 $/acre NA 7,997 7,001 10,280 9,375 Location Average Average Average Good Good Topography Gentle roll Gentle roll Level Level Level Character Limited woods Ltd. Woods Agricultural Agricultural Agricultural

Rationale for Adjustment:

When utilizing the sales comparison approach and the principle of substitution, it is necessary that consideration be given to adjusting the comparable properties to account for difference between them and the subject, thereby creating better substitutes for the subject comparison. The following adjustments were considered:

Property rights: All sales appear to be fee simple, requiring no adjustment.

Financing: All sales appear to have occurred with cash or equivalency considerations, indicating no adjustment required.

Conditions of Sale: All sales are considered arms-length and indicative of market value, with no adjustment indicated for conditions of sale.

Expenditures after Sale: No adjustment necessary.

Marketing Conditions: True agricultural land has been rising rapidly. Development land has lost value. No adjustment necessary.

Location: Adjustment of 15% for differences in location.

Physical Characteristics:

Topography: No adjustment necessary.

Character: No adjustment indicated.

Adjustments: $7,997 7,001 10,280 9,375

Property rights 0% 0% 0% 0% Financing 0% 0% 0% 0% Conditions of Sale 0% 0% 0% 0% Expenditures After Sale 0% 0% 0% 0% Marketing Conditions 0% 0% 0% 0% Location 0% 0% -20% -20% Physical Topography 0% 0% 0% 0% Character 0% 0% 0% 0% Adjusted Sales Price 7,997 7,001 8,224 7,500

The mean adjusted sales price is $7,681 per acre. Based on this analysis, the indication of subject value is $7,700 per acre. Therefore:

$7,700 per acre X 111.08 acres = $855,316; rounded to $855,000.

The indication of subject market value as of January 13, 2014 is $855,000 derived from the sales comparison. 46

INCOME APPROACH:

This technique is based on the principle of anticipation, which provides that an investor will pay cash or its equivalent for an asset capable of providing a return of capital. This return may consist of return on the capital, as well as a return of the original investment. The income approach may involve the capitalization of anticipated returns forward or may involve a discounting mechanism when returns are distributed unevenly or over shorter time frames than indicated by capitalization, which assumes an income stream to perpetuity.

Discounting may be defined as:

A procedure used to convert periodic incomes, cash flows, and reversions into present value; based on the assumption that benefits received in the future are worth less than the same benefits received now.

(Taken from The Appraisal of Real Estate , 13th Edition, 2008; published by The Appraisal Institute.)

The income approach was considered for use within this assignment. There is no market data related to potential income and rate for land parcels similar in size to the subject. The income approach does not provide a credible indication of subject value. The use of the income approach was considered but not pursued within this assignment.

RECONCILIATION:

Reconciliation is the final step in the process of accumulating together all the data and value indications that were developed in earlier sections of this appraisal, and coordinating them together into an appropriate final conclusion of value to conform to the results of the data analysis. In actual practice, reconciliation is a continuous step, which is carried out throughout each section of the report. The purpose of this appraisal is to estimate the market value of the subject property as of January 14, 2014, assuming fee simple ownership. In solving these appraisal problems, the appraiser should analyze the estimated highest and best use of the subject property, which was developed earlier in this report to be usage as a site for subdivision development. This estimate of highest and best use provides the basis on which the appraiser can substantiate and finalize his findings into an opinion of value conclusion for the subject property. Generally, the cost approach tends to establish the upper limit of value when estimating the market value of a property. Accrued depreciation is somewhat of a subjective judgment, which should be based upon sound appraisal experience by the appraiser. The credibility of the Cost Approach decreases with increased age and other forms of obsolescence presented by the subject. In this case, the subject has no improvements, so total value may best be estimated through use of other approaches. The sales comparison approach was able to provide a credible indication of value. The income approach was considered but not pursued based on a lack of market information related to possible income and rates for properties similar to the subject.

COMMENTS AND CONDITIONS OF APPRAISAL:

No warranty is expressed or implied. All of the data presented herein is believed to be accurate. The appraiser is not a surveyor or environmental inspector. The appraisal does not guarantee that the subject property is free of defects or environmental problems.

FINAL OPINION OF VALUE:

All three approaches to value have been considered in this report. As stated earlier, the Cost and Income Approaches were considered but not appropriate for this assignment. The Sales Comparison, or Market Data, Approach, provides the only credible indication of value at the date of valuation.

Therefore, the market value for the subject property as of January 13, 2014 is

EIGHT HUNDRED FIFTY FIVE THOUSAND DOLLARS ($855,000.00).

Respectfully submitted,

Anthony J. Corelis Paul K. Knight Associate Real Estate Trainee Appraiser Certified General Real Estate Appraiser License # 557.005830 License # 553.001741 Expires: 9/30/2015 Expires: 09/30/2015 48

ADDENDUM

LETTER OF ENGAGEMENT AND QUALIFICATIONS OF APPRAISER

APPRAISER QUALIFICATIONS

PAUL K. KNIGHT-

1975-1977 Attended Bradley University, Peoria, IL. Undergraduate major: Chemistry

1977-1980 Attended Southern Illinois University-Edwardsville School of Dental Medicine, Alton, IL. Graduated June, 1980

1980-2005 Established and operated general dental practice, Metamora, IL. During that time, gained experience in business development, employee relationships, physical facility management (both leased space and new facility development), and familiarity with business valuation and brokerage.

1981-present. Privately invested in real estate in various forms and capacities. During that time, have owned and managed single-family, multi-family, office, and retail facilities. Experienced in residential and commercial leasing, construction supervision, investment rehabilitation, and tenant management.

FORMAL REAL ESTATE EDUCATION January, 2004 Appraisal Principles 110 (39 hours) Classroom and examination presented by the Chicago Chapter of the Appraisal Institute, Chicago, IL

January-February, 2004 Appraisal Procedures 120 (39 hours) Classroom and examination provided by the Chicago Chapter of the Appraisal Institute, Chicago, IL

February, 2004 National USPAP Course 410 (15 hours) Classroom and examination presented by the Chicago Chapter of the Appraisal Institute, Chicago, IL

March 24, 2004 Successfully passed the State of Illinois Associate Real Estate Appraiser’s examination, Office of Banks and Real Estate, State of Illinois.

May, 2005 Basic Income Capitalization 310 (39 hours) Classroom and examination provided by the Chicago Chapter of the Appraisal Institute, Chicago, IL

July, 2005 Attended the summer meeting of the Appraisal Institute, Seattle, Washington. Participated in the program “An Overview of the Lodging Industry” and “Valuation of Wineries” (7 hours).

September-October, 2005 Market Analysis and Highest and Best Use 530 (39 hours) Classroom and examination provided by the Chicago Chapter of the Appraisal Institute, Chicago, IL

October, 2005 Real Estate Statistics, Finance, and Valuation Modeling (15 hours) Classroom and examination provided by the Northern Ohio Chapter of the Appraisal Institute, Cleveland, Ohio

May, 2006 Advanced Income Capitalization (40 hours) Classroom and examination provided by Columbus Chapter of the Appraisal Institute, Columbus, Ohio 53

June, 2006 General Applications (39 hours) Classroom and examination provided by Chicago Chapter of the Appraisal Institute, Chicago, IL

November, 2006 Advanced Sales and Cost Approach (40 hours) Classroom and examination provided by Chicago Chapter of the Appraisal Institute, Chicago, IL

January, 2007 Advanced Applications (40 hours) Classroom and examination provided by Chicago Chapter of the Aprraisal Institute, Chicago, IL

April, 2007 Advanced Report Writing (40 hours) Classroom and examination provided by Chicago Chapter of the Appraisal Institute, Chicago, IL

September, 2008 Valuation of Conservation Easements (34 hours) Classroom and examination provided by American Society of Appraisers, Appraisal Institute, and American Society of Farm Managers and Rural Appraisers, Lexington, KY.

RELATED EDUCATION

June-July, 2004 Machinery and Technical Specialties Machinery & Equipment 201OL. (30 hours) Online education and proctored examination provided by the American Society of Appraisers, Washington, D.C.

August-September, 2004 Machinery and Technical Specialties Machinery & Equipment 202OL (30 hours) Online education and proctored examination provided by the American Society of Appraisers, Washington, D.C.

September-October, 2004 Machinery and Technical Specialties Machinery and Equipment Valuation 203 (30 hours) Classroom and examination provided by the American Society of Appraisers, Philadelphia, PA.

December 2004 Machinery and Technical Specialties Machinery and Equipment Valuation 204 (30 hours) Classroom and examination provided by the American Society of Appraisers, Manhattan Beach, California.

March 2005 Appraisal Report Writing ALL 215 (30 hours) Classroom and examination provided by the American Society of Appraisers, in conjunction with the American Society of Farm Managers and Rural Appraisers, Lisle, IL.

PROFESSIONAL MEMBERSHIP

2004-present. Associate membership in the Appraisal Institute

2004-present. Candidate membership in the American Society of Appraisers

PROFESSIONAL EXPERIENCE

April 2004-present. Part-time residential real estate appraisal experience with Castle, Inc., Lester R. Knight, owner.

April 2005-December, 2006. Part-time commercial real estate appraisal experience with R. Dennis Tompkins, owner, Tompkins Appraisals and the Appraisal Academy.

December, 2006. Successfully passed the examination for Certified General Real Estate Appraiser for State of Illinois.

January, 2007. Formed Midwest Valuation Group, LLC. with R. Dennis Tompkins, performed duties of primary lead appraiser..

January, 2008. Formed Professional Valuation Technology, LLC as sole member.

BUSINESS EXPERIENCE

Paul Knight was engaged in the practice of dentistry from 1980 through 2007.

APPRAISER QUALIFICATIONS

ANTHONY J. CORELIS

2003-2004: Graduated Black Hawk College, Moline, IL.

2005-2008: Graduated from Eastern Illinois University, Charleston, IL and received his Bachelor’s in History

2008: Worked with Midwest Sustainable Energy Contractor’s Inc. helping organize information and worked on an energy audit for Exelon’s nuclear power plant in Cordova, IL

2009-2012: Worked at Community Care Inc., Eldridge, IA. Anthony assisted people with mental illness too live in the community.

FORMAL REAL ESTATE EDUCATION

June, 2012 Basic Appraisal Procedures (30 hours) Classroom and examination provided by Illinois Appraisal Education Inc., Addison, IL

June 2012 Basic Appraisal Principles (30 hours) Classroom and examination provided by Illinois Appraisal Education Inc., Addison, IL

June-July 2012 National Uniform USPAP Course (15 hours) Classrom and examination provided by Illinois Appraisal Education Inc., Addison, IL

PROFESSIONAL EXPERIENCE

August 2012-present Full-time real estate appraisal experience with Paul Knight at Professional Valuation Technology, East Peoria, IL