Market Study & Valuation Report Prepared
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MARKET STUDY & VALUATION REPORT Expansion of Bloomingdale Quarry Bloomingdale Borough Passaic County, New Jersey PREPARED FOR Borough of Bloomingdale c/o Fred Semrau, Esq. Dorsey & Semrau, LLC 714 Main Street Boonton, NJ 07005 OTTEAU GROUP VALUATION | RESEARCH | CONSULTING | BROKERAGE New York Office New Jersey Office 140 Broadway, 46th Floor 15 Brunswick Woods Drive Manhattan, NY 10005 East Brunswick, NJ 08816 Tel: 800-458-7161 Fax: 800-273-3295 www.otteau.com February 11, 2016 Borough of Bloomingdale c/o Fred Semrau, Esq. Dorsey & Semrau, LLC 714 Main Street Boonton, NJ 07005 RE: Proposed Expansion of Bloomingdale Quarry Bloomingdale Borough Passaic County, New Jersey Dear Mr. Semrau: In accordance with your request, I submit our market study & valuation report regarding the above referenced property. The purpose of our study is to develop the following opinions with regard to the proposed expansion of the existing quarry boundaries to include a 180.1-acre parcel of land commonly known as the ‘Meer Tract’: To determine whether the proximity of residential homes to an active quarry operation results in any diminution of property value. To determine whether the proposed development of inclusionary multi-family housing on a 32-acre portion of the ‘Meer Tract’, to include both market-rate and affordable dwellings, is a viable use of the property that will fill a need in the local and regional submarket area. To provide a valuation for the Meer Tract, pursuant to the following scenarios: o The market value of the 32-acre portion which is approved for multi-family development based assuming that municipal approval of the quarry expansion has been granted and that site excavation and preparation work to facilitate residential development has been completed. o The market value of the entire 180.1-acre parcel assuming that quarry expansion is not is not permitted and that site excavation and preparation work to facilitate the approved multi-family development has not been completed. I have inspected the subject site and investigated economic, demographic and real estate market factors that are relevant to the purpose and intended use of our study. This market study report summarizes the various processes employed in developing our conclusions, the relevant data which formed the basis of our analyses, various exhibit documents upon which we have relied and any assumptions upon which our conclusions have been based. Respectfully submitted, Jeffrey G. Otteau, President, New Jersey Certified General Real Estate Appraiser, #42RG00094100 New York Certified General Real Estate Appraiser, #46000045325 Pennsylvania Certified General Real Estate Appraiser, #GA003481 Delaware Certified General Real Estate Appraiser, #X1-0000419 National Association of Independent Fee Appraisers, IFA Designation #2377 JGO/td OTTEAU GROUP VALUATION | RESEARCH | CONSULTING | BROKERAGE Table of Contents PART I - INTRODUCTION .......................................................................................................... 1 Executive Summary .................................................................................................................... 1 Subject Property Location........................................................................................................... 3 Date of the Study & Valuation .................................................................................................... 4 Identification of Property ............................................................................................................ 4 Purpose & Intended Use of the Study & Valuation .................................................................... 4 Intended User of the Study ......................................................................................................... 5 Scope of Work ............................................................................................................................ 5 Competency Provision ................................................................................................................ 8 Ownership & History of Property ............................................................................................... 8 Tax and Assessment Analysis ..................................................................................................... 9 PART II – FACTUAL DESCRIPTIONS ..................................................................................... 11 Area Analysis ............................................................................................................................ 11 Neighborhood Analysis ............................................................................................................ 17 Land Use Regulations ............................................................................................................... 18 Site Analysis ............................................................................................................................. 21 PART III – ECONOMICS & DEMOGRAPHICS ....................................................................... 24 Economic Factors...................................................................................................................... 24 Demographic Factors ................................................................................................................ 30 PART IV – QUARRY’S EFFECT ON HOME PRICES ............................................................. 35 Paired Sales Analysis Technique .............................................................................................. 35 Paired Sales Conclusion ............................................................................................................ 46 PART V – MULTI-FAMILY DEVELOPMENT VIABILITY ................................................... 47 Housing Demand Analysis ....................................................................................................... 47 Affordable Housing Need ......................................................................................................... 55 PART VI – VALUATION ANALYSIS ....................................................................................... 63 Highest & Best Use ................................................................................................................... 63 Sales Comparison Approach ..................................................................................................... 65 Valuation Scenario 1 ................................................................................................................. 65 Valuation Scenario 2 ................................................................................................................. 76 Reasonable Exposure Time ....................................................................................................... 86 Reasonable Marketing Time ..................................................................................................... 87 PART VII -ADDENDUM ............................................................................................................ 88 Assumptions, Limitations & Hypothetical Conditions ............................................................. 88 Certification .............................................................................................................................. 91 OTTEAU GROUP VALUATION | RESEARCH | CONSULTING | BROKERAGE Glossary of Definitions ............................................................................................................. 92 Professional Qualifications ....................................................................................................... 96 Demographic Analysis .............................................................................................................. 98 OTTEAU GROUP VALUATION | RESEARCH | CONSULTING | BROKERAGE 1 PART I - INTRODUCTION Executive Summary Date of Study Report: February 11, 2016 Effective Date of Study: October 1, 2015 Location: Existing Quarry 260 Acres Block 5105, Lot 84 Bloomingdale Borough Passaic County, NJ Meer Tract 180.1 Acres Block 5105, Lot 14 Bloomingdale Borough Passaic County, NJ Current Zoning: Existing Quarry M-1-Q, Quarry Meer Tract AH, Affordable Housing Present Use: Existing Quarry Quarry operation which produces asphalt, crushed stone and recycles materials Meer Tract Vacant Land with approvals in place for the development of 360 multi-family dwellings (288 Market-Rate & 72 Affordable-Rate) Conclusions: 1. The existence of an operating quarry does not cause any diminution in value to homes which border, or are located near to, that quarry. Therefore, the expansion of the existing Bloomingdale Quarry operations would not cause any reduction in property values for nearby homes. 2. The development of the Meer Tract as an inclusionary project with a set-aside for affordabel housing, or with off-site contributions towards affordable housing, is a beneficial use of the property that will fill a need in the local and regional submarket area. Such development is strongly supported by current and projected housing demand and household income levels. At the present time, such development would likely be in the form of rental apartments due to a combination of factors, primary of which is recent declines in the homeownership rate coupled with the scarcity of financing for condominium developmenjt projects. Based upon current approvals,