Request for Partial Conversion Support Materials

City of East Lansing Bailey Community Center Protecting Michigan’s Future Bond Fund Grant #BF89-373

Introduction

In 1990, the City of East Lansing entered into an agreement with the Michigan Department of Natural Resources to accept a Protecting Michigan’s Future Bond Fund Grant in the amount of $69,000 to replace existing windows on the Bailey Community Center (Grant #BF89-373)1. The Community Center had been constructed in 1922 as an East Lansing Public School and had been used for that purpose until the 1980’s, at which time it became a City of East Lansing public facility. The building has been used as a Community Center since then.

The Bailey Community Center is located at 300 Bailey Street, East Lansing, MI. The Community Center and surrounding parking lots comprise the southern 1/3 of Bailey Park. The Park is 3.77 acres, with 1.58 acres being dedicated to the Community Center and parking lots2. The entire Park was encumbered in the Bond Fund Project Agreement.

Concerns with the physical condition of the Community Center and the cost to continue operation of a Childcare Facility in this location prompted the City of East Lansing to pursue a Building Assessment in late 2014. The purpose of the assessment was to gain a comprehensive understanding of the existing condition of the Center and the actions needed to allow continuation of the current Center uses. The main body of the report can be found in Attachment C.

The Building Assessment identified a wide range of building needs and deficiencies. Of primary concern was the finding that the Bailey Community Center did not meet fire safety code as it related to fire suppression and emergency egress lighting. It was the determination of the City’s Building Official that the Community Center should be closed until such time as those corrections could be made.

The Opinion of Probable Cost included in the Building Assessment valued the cost of improvements required by code at approximately $240,000. When the estimated costs of these improvements are coupled with the costs of improvements that are necessary to allow existing Center uses to continue, the cost of needed improvements reaches over $475,0003. The City of East Lansing is not in a position to fund these required improvements so therefore it was the decision of City Council to close of the Community Center.

Description of Conversion

The City of East Lansing intends to convert the Bailey Community Center and surrounding parking lots from public use to limited private use, for the purpose of renovating the Center into a senior housing development. The conversion area is approximately 1.6 acres in size and includes the building and the parking lots, entrances, and hard surface play area that surround the building. Additionally, a number of trees will be removed, as will a public four-person swing-set and small multi-use play structure.

1 See Attachment A, Protection Michigan’s Future Bond Fund Grant #BF89-373 Project Agreement 2 See Attachment B, 2015 City of East Lansing Park, Recreation, Open Space and Greenways Plan, Pgs 160-161 3 Author’s Note: there has been extensive discussion surrounding the need for some of the improvements stated in the plan, as well as their estimate of probable cost. For the purposes of this document, the information is presented as it is found in the Facility Assessment Report.

1 The property included in the conversion has been leased to the Capital Area Housing Partnership (CAHP), who will be responsible for the renovation and management of the proposed senior housing development and for the site improvements necessary to support the housing development4. The lease is contingent on approval of the conversion by the Michigan Department of Natural Resources.

The conversion will remove a swing-set and small multi-use play structure from service. It will also remove a deteriorated asphalt surface and will convert the fully public Community Center building into a limited private use. Since the Community Center has been in City ownership, it has housed art, dance, fencing, ceramics and other general recreation programs, and has provided a space for the City of East Lansing Early Childcare Program.

CAHP has committed to dedicating $25,000 for the replacement of the play features that are scheduled to be removed. CAHP will also mitigate the trees removed in their final landscape plan for the site. The majority of general recreation programs have been transferred to the East Lansing Hannah Community Center, which is less than a mile away at 819 Abbot Road. The ceramics program could not be relocated to Hannah without investing in renovation of an existing space so the City of East Lansing is pursing grant funds to relocate the ceramics program.

Additionally, CAHP’s renovation plans for the interior of the Bailey Center include several public meeting and use spaces, and they have committed to pursue a private partner to provide a day care program in the completed facility.

Description of Proposed Mitigation Property

As mitigation for the conversion of the Bailey Center, the City of East Lansing is proposing to dedicate the property at the northeast corner of Albert Avenue and Abbot Road, as a park. A comparison of the two properties is shown below:

Item Bailey Center Mitigation Property Size +/- 1.6 acres 0.216 acres Value $ 195,000 $ 376,000 Location 300 Bailey St Albert Ave & Abbot Rd Current Site Cover Building, asphalt Concrete, lawn, landscape beds

Located within the boundaries of the East Lansing Downtown Development Authority and the Downtown Management Board, this property is listed with the Michigan Economic Development Corporation (MEDC) as one of East Lansing’s “Redevelopment Ready” Sites5. As late as 2014, a local development company was exploring options for redeveloping this property as part of a development project. Currently the property is being used as a community space but is not designated as a park. The City would propose to remove this property from the redevelopment ready site list and dedicate it as a public park, subject to the encumbrances currently assigned to the Bailey Center.

Alternatives to the Proposed Conversion

Two primary alternatives to conversion were considered: 1. Perform the improvements needed to continue to operate the Bailey Community Center for public use. 2. Close the Community Center but take not further action.

4 Attachment D: Lease of Bailey Community Center 5 Attachment E: October 17, 2014, City of East Lansing Memorandum, Redevelopment Ready Sites list, Pgs. Site Location Map, Mitigation Property pages, Bailey Community Center pages 2 The option to perform the necessary improvements to keep the Center open was evaluated over the course of several months. Additional discussions and inspections were conducted to identify options to reduce the cost of the improvements, and additional funding and revenue streams were researched and evaluated. The City of East Lansing determined that it is not possible to reduce the cost of the improvements enough to bring them within a range that could be funded with additional identified revenue.

The option to close the Community Center but take no further action was vehemently opposed by the neighborhood. While it was raised as an option, it was never considered a viable one due to this opposition.

Existing and Proposed Conversion Site Plans

A property survey and existing topographic survey, as well as a proposed site plan for the Bailey Center are provided in Attachment F and G, respectively.

Location Map and Site Plan for the Mitigation Property

A location map and existing site plan for the Mitigation Property are provided in Attachment H and I, respectively. A legal description of site is provided in Attachment J. No new improvements are proposed for this site at this time.

Comparison of Recreation Usefulness

The conversion area is approximately 1.6 acres in size and includes a Community Center, parking lots and entrances, an asphalt surface on the north side of the building, a four-person swing-set and a small multi- use play structure. Attachment K contains photographs of the site conditions. The Community Center has housed art, dance, fencing, ceramics and other general recreation programs, and has provided a space for the City of East Lansing Early Childcare Program.

The mitigation property is 0.216 acres in size and is currently used as a public community space. It is bisected by a concrete and brick walkway that encircles a fountain and is lined with landscape beds and benches. There is a Peace Pole in one of the landscape beds. The space is used as a location for activities during various East Lansing festivals, including the Folk and Art Festivals.

Mitigation Property Compliance with Recreation Plan

Because of its size, the mitigation property would be classified as a mini-park. The 2015 City of East Lansing Park, Recreation, Open Space and Greenways Plan indicates that there is a deficit of mini-parks in the City of East Lansing: the NRPA standard is 0.25 mini-parks per 1,000 residents; the City of East Lansing has 0.13 mini-parks per 1,000 residents6. In addition, the Plan Park Service Area Analysis indicates that there is a deficit of mini-parks in the area of the City were the mitigation property is located7. Attachment L shows how the mitigation property will begin to fill the deficit for this area.

Due Care Information

As mentioned above, the proposed mitigation property is owned by the City of East Lansing as a redevelopment ready site. It has been owned by the City since 19838. Attachment N provides a history of

6 2015 City of East Lansing Park, Recreation, Open Space and Greenways Plan, pgs 49-50 7 2015 City of East Lansing Park, Recreation, Open Space and Greenways Plan, pgs 46-48 8 Attachment M: Property Deed 3 the property which contains no evidence of any commercial or industrial uses. We believe no further evaluation of the property is necessary.

Appraisals

An appraisal of the Bailey Community Center was conducted by Valbridge Property Advisors in July, 2015. The Appraisal Report is found in Attachment O.

An appraisal was not conducted for the mitigation property however David Lee, East Lansing City Assessor provided the attached valuation of the parcel, Attachment P.

Public Review

On Saturday, September 19, and Sunday, September 20, the City formally advertised in the Lansing State Journal and the East Lansing Towne Courier respectively, the intent to convert the Bailey Community Center into limited public use. The advertisement, Attachment Q, made materials about the proposed conversion and propose mitigation available to the public, and announced an October 20, Public Hearing to be held at the East Lansing City Council Meeting.

Prior to that time, the proposed change in use of the Community Center had been discussed at an assortment of public meetings and hearings including, but not limited to: 1. June 3, and September 2, 2015 Park and Recreation Advisory Commission meetings 2. August 12 and August 26, 2015 Planning Commission Meetings 3. March 24, May 26, June 2, July 7, August 4, September 8, and September 15, 2015 City Council Meetings

The proposed mitigation site was not identified before the Public Hearing advertisement.

City Contacts

Questions regarding this report and the information contained there-in can be directed to the following individuals:

Timothy M. McCaffrey, Director of Parks and Recreation, 517-319-6867, [email protected] Wendy Wilmers Longpre, Asst. Dir. of Parks & Rec., 517-319-6940, [email protected]

Attachments

Attachment A: Protecting Michigan’s Future Bond Fund Grant #BF89-373 Project Agreement Attachment B: 2015 City of East Lansing Park, Recreation, Open Space and Greenways Plan, pgs 160- 161 Attachment C: City of East Lansing Bailey Community Center Facility Assessment Report, pgs 1-17 Attachment D: Lease of Bailey Community Center Attachment E: City of East Lansing Memorandum, Redevelopment Ready Sites List Attachment F: Bailey Center Property and Topographic Survey Attachment G: Bailey Center Proposed Site Plan Attachment H: Mitigation Property Location Map Attachment I: Mitigation Property Existing Site Plan Attachment J: Mitigation Property Legal Description Attachment K: Conversion site photographs Attachment L: Park Service Area Map Attachment M: Mitigation Property Deed

4 Attachment N: Historic Use of NE Corner of Albert and Abbot Attachment O: Bailey Community Center Appraisal Report Attachment P: Mitigation Property Valuation Attachment Q: Public Hearing Notice, Bailey Community Center Conversion

East Lansing Parks & Recreation

APPENDIX FOUR

Bailey Park

300 Bailey Street Inventory

Size: 3.77 Acres Parking Lot X Type: Community Park Soccer Field/Mul -Purpose Field X Playground X Tot Lot X Linden W Picnic Tables X Benches 7

Bailey Park is situated in the heart of the downtown Bailey Park Bailey neighborhood. There are open lawn areas for 2.19 Acres soccer and other uses, and play structures of various

d kinds to accommodate children from 2 to 12 years of age. o

o A four foot high chain link fence surrounds it on three w

g sides, with the Bailey Community Center to the south.

Bailey

n lli

o The mixture of sun and shade is well balanced in this C park.

A por on of the South half of Bailey Park contains an Bailey Bldg assortment of asphalt paved areas that are in poor 1.58 Acres condi on and arranged haphazardly. There are play structures set up in three dis nct loca ons speci cally for di erent age groups. The separa on is for good purpose, though it makes it di cult for parental supervision.

Ann Bailey Park provides the outdoor play space for the City of East Lansing childcare and summer camp programs. It is heavily used in this capacity making its maintenance and ADA Assessment upkeep of paramount importance. The State of Michigan day care licensing requires that all playgrounds used by Rank: licensed programs meet playground safety standards.

Key Issues: CLARIFICATION: Due to ques ons raised regarding the Bailey Park boundaries, the site map on this page was changed a er the 2015 Plan was adopted by City Council. The site map now shows the full park boundary with the green space and developed space clearly marked.

160 Appendix APPENDIX FOUR

Assessment Grant History

• Open lawn areas are in good condi on and por ons None are used for soccer prac ce • Play structures are in four loca ons throughout the park and are showing wear from age and extensive use by childcare program • Playground safety surfacing is wood chips • Chain link fence surrounding the park is in fair condi on, gates are in fair to poor condi on • Assortment of asphalt paved areas are haphazardly located and sized, and are in poor condi on • Two picnic tables and one bench are metal powder coated, three benches have wood slat seats and back • The parking lot is in very poor condi on • The dumpster enclosure is in poor condi on

Needs and Opportuni es

• Conduct a playground safety assessment and develop an implementa on plan • Remove and replace asphalt surfacing to be er serve the park needs • Replace chain link fenching and gates • Replace wood benches with metal ones or replace wood slats with recycled lumber slats. • Replace dumpster enclosure

161 City of East Lansing Bailey Community Center Facility Assessment Report

December 9, 2014 6240 W. MT. HOPE LANSING, MICHIGAN 48917 517.323.0577 City of East Lansing Bailey Community Center Facility Assessment Report

TABLE OF CONTENTS

EXECUTIVE SUMMARY 1

OBSERVATIONS 2 Architectural Building Systems Site Amenities

ANALYSIS 7 Architectural Building Systems Site Amenities

RECOMMENDATIONS 11 Architectural Building Systems Site Amenities

OPINION OF PROBABLE COST 14 Minimum/Immediate Items Recommended Future Items

APPENDICES 16 Appendix A - Building Floor Plans Appendix B - Code Summary Appendix C - Photographic Documentation Appendix D - Building Improvements Appendix E - Prior Assessment Reports

!"#$## City of East Lansing Bailey Community Center - Facility Assessment

EXECUTIVE SUMMARY

The City of East Lansing requested an assessment of its current operations at the Bailey Community Center, located at 300 Bailey Street, in order to determine the impact of continued ownership and operation of the facility by the City.

A team of architectural and engineering professionals, consisting of MAYOTTEgroup Architects and Clark %"&'!()"*+'5"#)+#)+''[')+"7!)#+$8#) of the facility. The team reviewed the program descriptions provided by the City to determine the necessary building code and licensing rule requirements applicable to the current and future functions occuring within the building.

:7'+$'[)$";'#+')$$""+$"$7 <+")#7"$;#'!)#+")[##))"$"7)) bring the building and its uses into compliance with the health, safety and welfare requirements of the occupants.

The anticipated costs of the improvements were developed and summarized in two groupings, minimum/ immediate items and future recommended items.

The professional team would like to thank representatives from the City of East Lansing for their input and assistance in completing this assessment.

1 !"#$## City of East Lansing Bailey Community Center - Facility Assessment

OBSERVATIONS

ARCHITECTURAL

Building Description

Building Layout

%$"'$"="!";$;#'!#"+#)#$'$R%$["\"; $"'&+')'7"8'![7;"%$!+#'+) "'#)$+"'7'@N##'"#)#$#'+"###+!$ '"'7'H")$)#';"7)##&$["\"'7'

%$ #) \" ; $ &+') # ; $" #'" # &!R ' " ' ##+#!'")<"'+"#%$$")\")+;#'"#M resource room and girl’s gang toilet room.

A single-story wing added to the original building extends a corridor from the gymanasium to the east and consists of classroom spaces, toilet rooms and a small kitchen.

Multiple entrances to the building exist on the west facade and at the far east end of the single story wing. A handicap-accessible entrance is located on the south side of the original building. This entrance provides immediate access to an elevator serving the three-story portion of the facility. An additional exterior entrance provides access to the playground on the north side of the east wing.

Exterior Envelope

The original school building exterior consists of masonry veneer with stone accents. Miscellaneous masonry repair work has occurred throughout the years. Operable, insulated double-hung windows of assorted sizes provide daylight to most occupied spaces. The exterior doors were replaced in 2009 to provide insluated, weather stripped doors and frames. An exterior stair provides emergency egress from the north end of the $")\"

The east wing addition is constructed of masonry veneer walls with large window openings spanning the north and south facades of the classroom spaces. These windows are an aluminum framed system with ')"&')$'"#)''[''$+"$"=K+"";$ frame. Exit doors from the classrooms are original insulated steel doors. The exterior doors at the east and north entrances were replaced in 2009 to provide insluated, weather stripped doors and frames.

The original roof systems were replaced in the last six years with a built-up roof system.

Refer to Appendix C for exterior photographs.

Interior Finishes

Q'"[$$"+$+$;#'!#'+)"WW$#"")")";$$"="!&+') resilient tile in the east wing corridor, ceramic tile and terazzo in toilet rooms, resilient tile and carpet in #$')#"#'"#'!)\"$!+))#+))"''"#" in multi-purpose classrooms.

'' [$ " ")'! ) ##" "! ) '"$ #"# ' ' rooms.

Most occupied rooms have suspended acoustical panel ceiling systems. Similarly, corridors throughout $&+')$7+))#'@$#)\"$8#'"#$7$"' direct adhered ceiling tiles. Above ceiling conditions were not investigated in all spaces, however, based on spot observations it is reasonable to assume the direct adhered tiles are also still in place in numerous locations throughout the building.

(;"Z)85;""")#+$#);[$$

2 !"#$## City of East Lansing Bailey Community Center - Facility Assessment

Program Uses

Child Care Program

%$""##+$";$["\")$!+%$""$$") \""''#);"+&+"#+""'!##+)

Current Licensing Capacity (100 children)

Infant First Floor 1 room 12 children Toddler First Floor 2 rooms 24 children Pre-K First Floor 1 room 25 children Third Floor 2 rooms 39 children

_'8;$""$&)#+)&!"'#$["\"_"=`#$')" ))'"$"$);$$")\"%$+')#"$"+!;"#); "$["\"(7+')&#"!$[")$")\"##)$ %$ [" \" "7 +') "K+" 8) #'" $ $ )<# " "#@$$")\"$8""""$"$;#;$&+')+'))& #')"7)["=")8")

Security improvements are desired to provide additional access control and segregation of the child care function from the public community-use spaces in the building. Unauthorized access to the east wing is currently prevented by an expandable metal gate spanning across the corridor at the administrative end of the building and the use of a keypad on the door from the gymnasium to the corridor. One of the rooms on $$")\"'K+)$j!)

Community Uses

%$;#'!#;8;#+!=+#@$["\"#"#+)$'" level utilizes an adjacent space for two kilns. The gymnasium is used for recreational programs and occassional public functions outside of regular child care hours, most prominently as a polling location on Election Day.

%$ #) \" ''! +) ;" #+! #" ;+ %)# +) ) +'=+" meeting room occupy the existing classroom spaces.

*+!#$"$$")\"$$#$')#"""%$+$#'"#" designated as an art studio and meeting room. One of the child care spaces doubles as a yoga space after child care hours of operation. Summer camp programming utilizes the north classrooms.

(;"Z)8Z;"\"'''+"$8)';++"+;#

BUILDING SYSTEMS

Mechanical

Central Heating System

Both the original wing and the East wing of the Bailey Community Center are served by a central boiler '%)#'|+"$=[")&'""7)|#$;$$&+') These boilers were installed in 1994 and are currently functioning properly. According to building personnel, boiler performance and maintenance has improved with the recent addition of automatic blowdowns on the boilers. Steam from the boilers is piped to one steam-to-hot water tube bundle that sends out hydronic heating water to the east wing, while the remaining steam is sent out to the original wing.

Steam condensate return is captured and re-introduced into the system via a Shippensburg Pump Co. condensate receiver and pump.

3 !"#$## City of East Lansing Bailey Community Center - Facility Assessment

$"')7"+""$)7#H7"'"$+"\" $7"'#="")"@$"";$&+')+'W#7'[+&") )#7#"$"''%$")\"#'";+"$"+=''$='!;#' unit connected to the building steam system.

Q"$5$!)"#$")#&;#7'[+&")) thru-wall heating-only fan coil units. Entrance locations feature hydronic convectors, with the eastern-most entrance served by a ceiling-recessed convector.

Airside HVAC Systems

In the original wing, the building was originally designed to be served by a large steam coil in a pressurized plenum. The building’s central fan unit would then distribute up through the various supply air chases, then be ducted to the rooms via wall-mounted supply grilles. Return air utilizes chases and above-corridor return plenums to return air back to the basement fan room. This fan and steam coil have been de-commissioned during the building life cycle, with the coil abandoned in place, and the fan removed during a previous renovation; thus, aside from rooms with thru-wall fan coil units, the original wing is not mechanically ventilated, and relies on natural ventilation through the windows. Many of the studio spaces on the second ) $") \" ;+" ) " #)" $ # #'~ $7"$ '' of window air conditioners renders those windows inoperable, driving the ventilation demand to other windows in the spaces.

%$!+"7)&!)'"$)'+'#)$#)\" This unit does not have an option for air conditioning. The air handler uses the mechanical room as a mixing plenum, with a pneumatically-controlled outside air damper through the west wall, and a pneumatically- #"'')"+"")"##)$#)\"#"")""+"'+H7"'#;" this unit have been replaced recently, including fan motor and steam traps. The unit is functioning properly.

The restrooms in the original wing are served by thru-wall light commercial-grade exhaust fans. These fans draw the restroom make-up air from the corridor, either under or through the restroom entrance.

$5$"#"'Z*!5#$#'$"";$&+')K+) with thru-wall heating-only fan coil units that provide the mechanical ventilation. Recent renovations have added mini-split heat pump air conditioners to many spaces, consisting of roof-mounted condensing units and wall-mounted fan coil units in the classrooms. Each fan coil unit is equipped with a condensate pump that assists with properly removing condensate extracted from the airstream during a cooling cycle. Spaces without fan coil units rely on window air conditioners for cooling.

In the facility’s kitchen in the East wing, there is a commercial-grade kitchen exhaust hood serving a 4-burner range and oven. The exhaust from this hood is routed upward to a roof-mounted exhaust fan. %$j#$$)K+)$["+"!

With the exception of the mini-split heat pump systems, which use a low-voltage electrical control system dedicated to each individual installation, the building is pneumatically controlled. A recently replaced control air compressor is located in the Mechanical Room and is functioning properly.

Plumbing Systems

The facility is connected to the City of East Lansing for sanitary sewer, storm drainage, and domestic water. |$$"');$&+')""7)&!'$#"#'=")=[")" heater located in the boiler room. The domestic water heater is a 40-gallon Bradford White unit that is also served by a recently added hot water return pump to assist with water circulation.

$"';$&+')""'##[+")7'&'!#@$ #)\"$"'"R"")+8""$))#)R"" @$$")\"$"R"")+8"R"""

In the east wing, there are single-stall restrooms located between classrooms, with one labeled “men’s” and ORP_+&'#""$["\""''=''""'#)"$`#$ between the original wing and the east wing.

4 !"#$## City of East Lansing Bailey Community Center - Facility Assessment

Electrical

Utility Information

The existing electrical distribution system consists of three utility service entrances.

Service #1 is a 100A, 480V/277, 3Ph, 4W system that provides power only for the boiler and the elevator. No other equipment in the building appears to be served from this location.

Service #2 is a 400A, 240V/120, 1Ph, 3W system that provides all remaining power in the building. The main disconnect provides power to a trough that then is tapped at various locations by one 100A panelboard, one 150A panelboard, and two 200A disconnects that serve panelboards located in the Mechanical Room.

H"7#O')P';;!"7#$+)"7$["'"!&+'!" serve some lighting.

The existing wiring in the facility ranges from cloth insulation to modern thermoplastic insulation. It is noted that no equipment grounding conductors are used in this facility. The facility is depending on raceway as the sole source to provide a safety fault path in case of a short circuit. While still code compliant today, "#));$)[##)'"'')#"&

Lighting

%$ 8 '$ $"+$+ $ ;#'! ' '' \+"# H 5 [8+" " & +);"8""'$;$[8+")$&+')+'W\+"#%'$#$" #)"))"'!N#7#"))"5'$@##+#!"$7& placed throughout the facility in corridors, classrooms, toilets, etc. This places the facility in compliance with current energy codes for control for interior lighting.

The current sleeping/resting areas for children do not appear to have adequate “soft lighting” allowing caregivers to assess children. This could be provided with a lamp or revise the lighting in the space to be dimmable.

%$<")[##$$8'$)'$"#!"'$%$"" &'"#!"'$$"+$+$;#'!;$8R8R'$"M" #"")"$7&"!#j)'+;O&+!P[8+");$#'" appear to have any egress lighting on battery. None of the exterior exits have any egress lighting on &"!%$"""$#$")[#8#'!$#+""&+')#)

General Power

All but one electrical panelboard throughout the facility do not have code compliant working clearances required by the National Electrical Code (NEC). In some instances this could be resolved by moving ;+"+" $" +') "K+" [# ""j ; $!)"# H#[# ;" '' & provided below.

%$""[##)7'7'7$'&")))"&+$"+$+$;#'! H#[#;"''&"7))&'

%$")"&<")[##$"'"##'$"+$+$;#'!7" detailed inspection was not part of this scope, IE opening all panelboards, wiring devices, etc. It would be recommended that in all childcare areas, tamper proof receptacles be installed. This would eliminate "'#'##$#$#&"7)&!)+')"'#)%$""''")[## which will be noted later.

Fire Alarm Sytems

%$ ;#'! "7)) $ +' ) +# +"7) [" '" ! #'# $ #+""&+')#)%$"""$"'$'!)[###+[#$7" all classroom and child care spaces are adequately covered.

5 !"#$## City of East Lansing Bailey Community Center - Facility Assessment

SITE AMENITIES

Parking

HM)7""j"7))'#$)+$);$&+')Z'' ')"j"\j$"#)"7$8)$&+')"#$ facade. A larger parking lot sits just south of the east wing, providing access to the east entrance to the #$')#")##"'#))<#$ZZ#'"#$+$);$ original building.

Concrete sidewalks run along the surrounding streets and connect the two parking areas alongside the building.

Playground/Greenspace

The north half of the property is comprised of a large greenspace used by the neighborhood and assorted play areas used by the child care program. The playground spaces are a mixture of asphalt paved areas )'!"+#+"+""+))&!'"))[&"

Refer to Appendix C for photographs of the site.

6 !"#$## City of East Lansing Bailey Community Center - Facility Assessment

ANALYSIS

When the facility was taken over by the City of East Lansing from the East Lansing Public School system in the R$+;$&+'))[)&!$|+')*)#$);"5)+#'#& of Assembly and Institutional uses. This change in occupancy should have triggered an evaluation of the ;#'!)")[##"')';;!#;$&+')#"+#)! It is not apparent that such an evaluation was completed.

Child care licensing requires inspection of the facility at the time of license renewal. These inspections have ##+"")"+'"&))&!$'#N#'$7"''!&")) timely fashion. These and other building improvements performed by the City during its ownership of the facility are documented in Appendix D.

With the goal of continued operation of the facility and its programs on a long-term basis, the directive for this report was to evaluate the building components and systems based on current Building Code and Child Care Licensing Rules. A synopsis of the major code and licensing rules requirements can be found in Appendix B.

See Appendix C for photos referenced in the following comments.

ARCHITECTURAL

The existing roof over both portions of the building is supported by unprotected structural steel framing members. Per code requirements, if the building remains unsprinkled, this structure will need to be "#)$["="7#Z

Similarly, a number of existing doors opening onto the corridors throughout the facility lack the appropriate ["="7"#"'#+")"'W""")'8#"")" walls. If the building were equipped with a sprinkler system throughout, these openings could remain in their current condition. If not, all unprotected openings will need to be replaced with rated assemblies. (Img A8)

Q"$#$')#"""##+!$$")\"#)"K+"$&+')&;+''!"j')")" to provide a compliant path to the rated interior exit stair enclosures via the corridor.

Corridors, interior exit stairways and exit doors are appropriately sized to support the occupant load of $;#'!%$+'W)$["\""$#$')#";"$+&'## appropriate method of providing separation as it could cause confusion in the event of an emergency. (Img A9)

Z$#+")!&"K+")$';;$;#'!$7"$##;"'#[$ is not included as a part of this report. Items, such as the direct adhered ceiling tiles, that do not meet \")"K+""K+"")Z

%$K+!;'+&[8+"#'#$#+""#)&)$##+');$ ;#'!7")K++&";ZZ#'[8+"""7))#[#''!$$") \"$"'R'"Z

%$'[''''')$8"")!$"+"#;"'j (Img A12)

BUILDING SYSTEMS

Mechanical

!#;K+$&+')"""$);$"+;+'"7#';"ZH(Z5 +)'#[#''!$&'"#)"#7")$$"+='';#'+&'|#+ data for equipment installation of many items is unavailable, an assumption is being made that a majority of the equipment was installed circa-1994 during the boiler installation, as this was likely a part of a larger construction project to the building.

7 !"#$## City of East Lansing Bailey Community Center - Facility Assessment

Equipment Year Installed (approx. age) ZH(Z5H"7#;!" Boilers 1994 (2 0 years) 25-30 Boiler burners 1994 (20 years) 21 Condensate Receiver (assumed 20 years) 15 "$#7"" +)!" Fan Coil Units (assumed 20 years) 20 !+Z: +)!" = Pneumatic Compressor (less than 5 years) 20 Pneumatic actuators (assumed 20 years) 20 Source: ASHRAE 1999 Applications Handbook, Chapter 35, Table 3

%$#="")"$"';$&+')$'''M#7""$)7# have exhibited problems with becoming too hot. Makeshift covers have been installed around them, which reduces the likelihood for hot surface contact with occupants of the building, and also reduces the overall $M#7;$K+

During building investigations, certain perimeter heating devices appeared to be without a source of capacity control and were operating “wild,” reportedly overheating various spaces and wasting energy. One instance in particular is in the northwest building entrance into the original wing of the building near the gymnasium.

Many sections of steam and condensate piping were without pipe insulation, including many steam traps. While this is not necessarily required from a system operation standpoint, the addition of insulation would ensure heat is added where it is needed, and energy is conserved where possible. Insulated heating piping also prevents touch hazards from building occupants. (Img M2)

Portions of the steam condensate return piping are direct-buried under the building slab to other areas of the building. Certain sections of this piping have failed, and bypass piping has been installed that abandons the existing condensate piping in place. The nature of active condensate piping below-slab has proven )N#+';"#M""'!'#'''j""+'"'!#$!

The air handling unit that serves the gymnasium is an area of concern for several reasons. The pneumatic actuators on the outside air and return air dampers have failed, causing the return air damper to be open constantly. The return air connection directly to the corridor return air plenum does not have any safety damper devices installed, which is a violation of the Michigan Mechanical Code, Sections 601.2.1 and 607, that require dampers to be installed where ducts (or louvers) penetrate rated partitions. Without safety )"$!j)"["+')$7+&)$;"#$$" #'+)7"$;$"''');"$["\"$#)\"

The kitchen exhaust hood is acceptable in its current state. (Img M4)

In the original wing, only a few spaces have mechanical ventilation. The Michigan Mechanical Code allows for spaces to be naturally ventilated through operable windows if the operable (“free”) section square feet of $)K+'"";$"K+";|)\"')['))<"! of the spaces are in compliance with the code, with the exceptions being spaces without direct access to )$["\")$$")\"%$H;#$R";+H"7# their document “Licensing Rules for Child Care Centers” lists a provision to keep space temperatures under 82 degrees Fahrenheit.

On the thru-wall fan coil units throughout the building, pneumatic actuators that regulate outside air ventilation have been problematic, with many actuators requiring frequent calibration, or actuators have ;')'$"'))$)+M#7))K+7'

Plumbing Systems

$#$#'(\")"$7&&!))+&+')=+)&'#j;$\")" traps with sediment from boiler blowdowns, as well as general dirt and debris. This issue can be problematic during routine maintenance of the boilers, as well as in an emergency event that would result in a large volume of water being released into the room.

8 !"#$## City of East Lansing Bailey Community Center - Facility Assessment

_'+&[8+"##'#'#"##)+#$!$$!"7'; current plumbing codes. For example, a wash tub in the Mechanical Room is indirectly draining to the sanitary system via a makeshift sediment collector in lieu of an approved sediment interceptor device.

$#)\"R""$+"'"##)$""7#+#$!$ &$+"'"\+$)$7"$[8+"R\+$7'7")%$7';$#$ _'+&*)H#$"K+"''[8+"&K+)$"\+$)7# (Img M6)

There is also a drinking fountain that has been installed such that the drain from the drinking fountain is connected to a rain conductor riser. During the winter months, the rain conductor riser can freeze, "7"")";"$)"j;+"#&#j""+$"+$$[8+"R )"&#j$&"''$\"%$'7';$#$_'+&*) Section 1104.2.

! ; $ '+& [8+" #+") " +)) $+$ $! " & "j ")" ('#;$'+&[8+"""+"#=N#)''=\"#') urinals) has the potential to provide operational and energy/resource savings.

Electrical

Mechanical Rm: Panelboard labeled as “2A” does not have the code required minimum 36” clear in front of it. This could be resolved by removing/relocating the hydronic piping or by relocating the panelboard. (Img E1)

Mechanical Rm Service Entrance #1: The 480V panelboard has hydronic piping installed above the meter enclosure within 6’ of the top of the panelboard. This could be resolved by removing/relocating the hydronic piping or by relocating the panelboard. All other panelboards have furniture placed in front of them which should be moved at least 36” away. (Img E2)

Mechanical Rm Splice Box: There are numerous code violations within this splice box. 1. There appear to branch circuits from one panelboard utilizing the neutral conductors from $"'&")%$7';$5*)["$#j$W") 2. There appear to be abandoned and/or live conductors uninsulated in this splice box. 3. There are no bonding bushings or conductors installed on this splice box. 4. The new conduit installed as part of the generator installation does not appear to have solid connection to the splice box and may not be providing an adequate fault path. 5. Too many conductors are utilizing the raceway for the generator installation and have not been derated. `#j+$7&['')''+#$$W") 7. This splice box in and of itself could be salvaged, however, rewiring of the branch circuits to comply with code is highly recommended. (Img E3)

Mechanical Rm 200A disconnect: This disconnect has been tapped twice with non-compliant lugs. Multiple #)+#"$7&'#)+)"#"&';'+")["$W")%$Z serves an adjacent panelboard and should be removed and/or provided with code compliant lugs. There '"&8;#")'++#)+#"$+')&7"[)$$'+"') to receive both aluminum and copper. (Img E4)

Mechanical Rm Service #3: This service is no longer needed and could be removed. It was historically used to provide “life safety” lighting. The existing lighting still being served from this location could be $;)"'&")%$8#"#+&"j"'&')["'"$+')&"7)%$ \8&'#&'$$$)"&;$"+)!)$";"#) 7'Z'';$#&'$+')&"'#)$$"#)+)""$"+)!\8&' cable. (Img E5)

Mechanical Rm Service #2: We were unable to open the existing main disconnect during our observation. Subsequent investigaion determined that the facility has no grounding electrode system required by the NEC. (Img E6)

9 !"#$## City of East Lansing Bailey Community Center - Facility Assessment

Mechanical Rm All Equipment: All the electrical distribution equipment in this room has hydronic and/or water piping located within 6’ above the equipment. This should be relocated. (Img E7)

Mechanical Rm Cond Pump Control: The junction box at this location has exposed wiring. This should be repaired. (Img E8)

Panel PG001 located outside of Kitchen%$'&")$&)[)&!)""7'; the UL listing. Also, furniture has been placed in front of this panelboard and should be moved. The only repair available for this panel is to replace the cover and to route the conduit properly. (Img E9)

Kitchen: There were 3 receptacles in the kitchen which were not GFCI protected per the NEC. (Img E10)

: There isn’t a code violation with having a panelboard installed in the #'"$7"$"")[#$""#))%$'&") '')\+$$$'')$";"8$&'!;"%$'&")$+') $"&+)\+$"""'')"+)5

: There is a junction box missing a coverplate exposing wires. This should have a coverplate installed. (Img E12)

SITE AMENITIES

Parking

Vehicle capacity appears to meet zoning requirements. Parking striping is faded.

The entrance drive and parking areas have been patched and sealed through the years as cracks developed. This condition will continue as a maintenance issue unless a more comprehensive replacement of pavement is undertaken. (Img S1 through S6)

The concrete sidewalk at the building is generally in good condition with only minor surface irregularities at some joint locations.

Playground/Greenspace

The greenspace and most of the vegetation appear to be in good condition. (Img S9)

%$$''!"+)"$7[#)""$!"7'#"#j HHH

Refer to Appendix E for a recent evaluation of the existing playground equipment performed by an outside consultant.

10 !"#$## City of East Lansing Bailey Community Center - Facility Assessment

RECOMMENDATIONS

Based on the age of the building, it is highly recommended that a consultant be hired to perform a hazardous material survey throughout the entire facility. Such an analysis is outside the scope of the professional R"7#$";"$#;'[)$#;))"#)) ;++""7#&)[)$

ARCHITECTURAL

If the building remains unsprinkled, a series of items require attention. The roof structure will need to be "7))$=$+"["="7";!"!=')[""["$#"+# ;["="7#'!%$'#;#$;$!)N#+'8;#'! and would be disruptive to the operation of the facility during installation. Corridor door and wall opening components will need to be removed and replaced with appropriately rated door and wall assemblies. Existing exposed ceilings with direct adhered ceiling tiles will need to be protected with application of a intumescent coating.

%$'';["+"!$"+$+$&+')+')'$)j$ above improvements and would allow the respective building elements to remain in their current condition. Z'#)"K+""j'$;#'!;"$#$')#"""##+!$$")\" this course of action seems more prudent.

;$#$')#""""8)$"$#'"$$")\"$8"""" will need to be fully enclosed to protect users from the outdoor environment. This stair enclosure will need to be heated and equipped with emergency lighting. Openings in the existing north exterior wall of building '')&['')"7)$"K+")["=")")")

The addition of access control hardware at the entrance to the east wing and the construction of a wall with ##=#"''))"$);$["\"#"")")<#$!+)'" ''))"$"$);$$")\"#"")"''#"#+")"&$#$') care and community-use areas of the building.

%"7"!N##!$$'['''$8"")!$+') be securely refastened to the framing system. An appropriate sealant should be installed around the perimeter of each panel to provide an airtight seal.

%''$$")\""'R'"$+')&#&)ZZ#'''

BUILDING SYSTEMS

Mechanical

Summary

Through investigations of the facility, it is determined that the building has been well maintained, as many systems are in operational order. With that said, there are areas of improvement that are of a critical nature, as well as recommended prescriptive updates to be made to the mechanical and plumbing systems. Many of the recommended, but not critical, mechanical and plumbing updates can be considered “standalone” options; meaning, it will not be necessary to fund all of the recommended updates at once, allowing the development of a multi-phase program for updates to occur over a period of a few years.

Critical Mechanical Systems Updates

The system of greatest concern is the air handling unit that serves the gymnasium. Safety dampers should &'')$!+#$#&["j)"$"+"")"$#$'' "7$;[""j$#"")"'+))''#$#'"'')\" "$+')&""'!')$["=")#+'j'!"$)<# stairwell or corridor ceiling cavities. Lastly, this system’s pneumatic actuators on the return air and the outside air dampers should be replaced and the pneumatic controller checked to ensure proper ventilation rates.

11 !"#$## City of East Lansing Bailey Community Center - Facility Assessment

Recommended Non-Critical Mechanical Systems Updates

Control valves on perimeter heating units that are “running wild” should be checked and/or replaced, and pneumatic thermostats be installed to regulate heat output from the equipment.

Concerning the below-slab condensate return piping, the new insulated piping should be re-routed to and from the condensate receiver to avoid condensate piping that is inaccessible for inspection and maintenance.

The actuators on the thru-wall fan coil units should be repaired or replaced and openings checked as soon as possible to prevent unwanted entry of both excessive outside air, as well as insects, birds, or other nesting wildlife.

The spaces that are lacking for ventilation are of particular concern. It is possible for those spaces to be included with associated adjacent spaces that have natural ventilation and become compliant, but it would require the removal of barriers between those spaces and the fresh air. That would mean one of two possible scenarios:

(7''")"$M#)+'7$+';&+');" the building’s main corridor). _"7)";")";";##'$$$")&[;#$8""# "7)""#$"\)"#$

Another non-critical mechanical system update to consider is a building-wide conversion from steam !$!)"#$!!)"#!+')'$###) with steam traps and other equipment that is necessary in a steam system, including steam-to-hot water converters.

$"'"'#;$#="")"$+))'="['$!)"#" ;$)'7"!!"""'[+&+')M#7'!$ those spaces, as well as reduce space intrusion into the studios by the large-scale heaters.

%$"+$+$&+')''+'+')$'$;#'!7"!)M#7'! deliver heat (and cold) where it is desired.

While many of the spaces in the original wing are cooled by window air conditioners, it is recommended that the facility consider implementing a more comprehensive air conditioning solution, similar to what was used in the east wing. A potential solution would be to utilize a Variable Refrigerant Flow (VRF) system, which allows multiple fan coil units to be served by a single condensing unit. This type of system also '';"+'+$)#'$#$#''&&'M#7'!#"' $"'#) $' '' & ##) #"' ! Z (Q !$ &[ "')"!N##!$"+$')$")''="+7''$#") to a conventional air handling unit, which requires air duct distribution space in the building. Since a VRF !7'7''"'7'!'')"7"!'';!""##"[#) for an installation. Also, removal of the window air conditioners will improve natural ventilation in exterior spaces, as well as improve visibility for building occupants and overall building aesthetics. This type of #$#'!$[#"<#)#~$7"\8&'!''$"#)" +'=!"$'$$["$''$<";""+#+"#)"7) cooling for various spaces, and subsequent phases extending cooling service to remaining spaces.

Plumbing System Updates

$#$#'("#))$$8'+)\")"&8#7)"7) )"'#)$\"j$)&"M#7'!)"";"$#'' as capture sediment build-up and prevent further blockages in the sanitary piping.

%$ "7# j $ #$#' ( $+') & )[) +#$ $ $ #7' ) interceptor.

"+'+&[8+"$;#'!$+')&"=)#$7#)#'#&'!$ #)\"R""+"')$)"j;+$##)$"#)+#"

12 !"#$## City of East Lansing Bailey Community Center - Facility Assessment

Electrical

When observing this facility through the lens of its age, it has been well maintained and had several additions j#)#'%$""$7"[##))[##$"#$ egress lighting that should be addressed; as well as some poor workmanship on past electrical work. The working clearance requirement for all panelboards should be addressed at a minimum with respect to the ;+"+"%$$!)"##'"#+#&+M+'<""<##+""j;$ electrical system.

With the knowledge that there are no equipment grounding conductors in the facility, it is highly recommended that a fault loop impedance test be conducted at a minimum in the child care areas. An equipment grounding conductor should be provided.

Z$"##'$#$')#""'!"K+"$&O##&'P'#""+N# at this time. It is recommended, however, that the receptacles in all child care areas be replaced with tamper resistant receptacles to remove the human element of the plastic inserts. No power strips were observed being used, but if they are they must be of the surge protector type and must not be connected to another power strip.

SITE AMENITIES

Parking

The asphalt parking areas should be completely resurfaced and restriped.

Sections of sidewalk should be replaced as necessary to prevent trip hazards, especially on the path from the handicap parking to the ADA entrance.

Playground

The asphalt playground areas should be completely resurfaced.

The recommendations made in the playground equipment assessment should be implemented. Refer to Appendix E for prioritization of items.

13 !"#$## City of East Lansing Bailey Community Center - Facility Assessment

OPINION OF PROBABLE COST

MINIMUM/IMMEDIATE ITEMS

ARCHITECTURAL OPTION A OPTION B Hazardous Materials Building Survey $ 5,500 $ 5,500 (Note: The cost implications resulting from the findings of this survey are unknown) New Fire Suppression System $ 130,000 Spray Applied Fireproofing on existing roof structure $ 150,000 20-minute Fire Rated Door Assemblies and 1-hour rated wall infill at corridors $ 45,000 Intumescent coating on exposed direct adhered ceiling tiles on 2nd floor $ 15,000 Enclose exterior stair from 3rd floor to grade $ 120,000 $ 120,000 Convert child care room on 1st floor to Infant room $ 5,000 $ 5,000 New Security Control walls and doors on 1st & 3rd floors $ 5,600 $ 5,600 Add keypad at east wing exterior entrance $ 3,000 $ 3,000 Convert existing 3rd floor toilet stalls and lavatory to ADA compliant $ 7,700 $ 7,700 Refasten and Seal existing metal infill panels @ east wing window system $ 36,000 $ 36,000

ELECTRICAL Emergency lighting - Interior (150 "bug eye" fixtures throughout) $ 30,000 $ 30,000 Emergency lighting - Exterior (12 egress doors) $ 5,000 $ 5,000 Repair Splice Box in Mechanical Room $ 15,000 $ 15,000 Provide new panelboard cover in first floor corridor and repair conduit/wire route$ 1,500 $ 1,500 Provide GFCI receptacles in kitchen $ 500 $ 500 Cover/close exposed wiring at various locations on 1st floor $ 300 $ 300 Provide grounding electrode system per NEC $ 3,500 $ 3,500

MECHANICAL Gymnasium AHU Safety and Control Upgrades $ 10,000 $ 10,000 Re-pipe of first floor drinking fountain $ 6,000 $ 6,000

SITE AMENITIES Resurface asphalt playground and parking lots $ 91,245 $ 91,245 Replace park gates $ 1,000 $ 1,000

TOTAL $ 476,845 $ 556,845

14 !"#$## City of East Lansing Bailey Community Center - Facility Assessment

RECOMMENDED FUTURE ITEMS

ARCHITECTURAL OPTION A OPTION B Aesthetic upgrades to interior finishes Not Included

ELECTRICAL Provide tamper resistant receptacles at all childcare areas (40) $ 4,000 $ 4,000 Provide proper NEC clearances at all panelboards $ 50,000 $ 50,000 Repair disconnect in Mechanical Room and properly tap conductors $ 6,500 $ 6,500 Cover/close exposed wiring at various locations on 2nd and 3rd floor $ 200 $ 200 Provide trim ring for third floor panel/relocate switch/thermostat $ 5,000 $ 5,000 Provide earth fault loop impedance testing of all wiring devices in facility. $ 5,000 $ 5,000 Make any necessary repairs to provide adequate fault path. (Budget number) $ 10,000 $ 10,000

MECHANICAL Perimeter heating, fan coil control devices $ 10,000 $ 10,000 Condensate Return Piping Revisions $ 10,000 $ 10,000 Ventilation for interior zones $ 25,000 $ 25,000 Floor Drains in Mechanical Room $ 10,000 $ 10,000 Service Sink in Mechanical Room $ 10,000 $ 10,000 Re-pipe of urinal fixtures in non-compliance $ 4,000 $ 4,000 Piping insulation $ 10,000 $ 10,000 Convert steam heating to hydronic heating $ 90,000 Variable Refrigerant Flow (VRF) A/C system in original wing $ 500,000

SITE AMENITIES Resurface Infant/Toddler playground with poured-in-place product $ 20,000 $ 20,000 Install shading device at Infant/Toddler playground $ 10,000 $ 10,000 Tree trimming/removal $ 500 $ 500

TOTAL $ 280,200 $ 690,200

15 !"#$##

Engineers & Surveyors ͟

PLANNING AND COMMUNITY DEVELOPMENT Quality Services for a Quality Community

MEMORANDUM

TO: Brownfield Redevelopment Authority

FROM: Lori Mullins, Community & Economic Development Administrator

DATE: October 17, 2014

SUBJECT: Redevelopment Ready Sites list

City of East Lansing PLANNING AND COMMUNITY DEVELOPMENT 410 Abbot Road As part of the Redevelopment Ready Communities program, the City is asked to develop a East Lansing, MI 48823 ’ list of redevelopment ready sites and place that information on the City s website. Staff (517) 319-6930 had prepared a list last fall and discussed that with the BRA. The MEDC has now asked www.cityofeastlansing.com that we finalize that list and prioritize it, therefore staff is bringing the revised list back to

the BRA and asking for any further input before it is finalized and posted. Attached is the current draft list.

Redevelopment Opportunities in East Lansing

City of East Lansing http://www.cityofeastlansing.com/development/ Redevelopment Opportunities in East Lansing

PROPERTY: Downtown Corner

ADDRESS: Corner of Abbot Road and Albert Avenue

LOCATION: Downtown East Lansing

POTENTIAL 0.216 acres FOOTPRINT:

POTENTIAL High density mixed-use USE:

OWNER: City of East Lansing

SITE STATUS:

The site is currently a vacant space owned by the City of East Lansing. It is located in the heart of downtown East Lansing, close to the East Lansing City Hall, the Michigan State University campus, and numerous downtown businesses. The site is located within the boundaries of the East Lansing Downtown Development Authority and Downtown Management Board. DTN Management Company is currently under a pre-development agreement with the City of East Lansing and is exploring redevelopment options for the Park District, located right across from this space.

City of East Lansing http://www.cityofeastlansing.com/development/ Redevelopment Opportunities in East Lansing

Property Information

Community Vision: City of East Lansing 2006 Comprehensive Plan, which is in process to be updated (http://www.cityofeastlansing.com/comprehensiveplan); East Lansing Downtown Development Authority’s Downtown Housing Policy. These documents envision more housing options in downtown East Lansing, including housing for young professionals, empty nesters, and seniors. High density, mixed-use projects are appropriate uses at this location. Retail or cultural uses are encouraged on the first floor, with office and residential uses on the upper floors to promote the vibrancy of the downtown.

Zoning: C - Community Facilities

Parcel# 33-20-02-18-136-015

Property owner: City of East Lansing

Current uses: vacant space

Property tax assessment information: 2013 SEV Value: $0.00.

Environmental and/or contamination conditions: NA

Traffic studies: Annual Average Daily Traffic (AADT) was 7,976 on Albert Avenue (2010); two- way count was 7,692 in 2010 on Albert Avenue (Tri-County Regional Planning Commission's Traffic Count Database System, http://www.tri-co.org/gis.htm).

Existing building condition report: NA, the existing sculpture needs to be relocated.

Market analysis/ demographic data: CBRE Consumer Behavior Analytics 2013, Market Snapshot, Target Housing Market Analysis, Broad Art Museum Economic Impact Study, 2013 Economic Indicators Report (http://www.cityofeastlansing.com/development).

For more information and resources, contact:

Lori Mullins, Community & Economic Development Administrator Planning, Building and Development (517) 319-6887 [email protected]

City of East Lansing http://www.cityofeastlansing.com/development/ Redevelopment Opportunities in East Lansing

PROPERTY: Bailey Community Center

ADDRESS: 300 Bailey Street

LOCATION: East Lansing

POTENTIAL 1.80 acres FOOTPRINT:

POTENTIAL Residential USE:

OWNER: City of East Lansing

SITE STATUS:

The Bailey Community Center is located on the southern edge of the Bailey neighborhood, just north of E. Grand River Avenue and downtown East Lansing. It is a multi-story structure that was constructed in 1922 as an East Lansing Public School. The City of East Lansing accepted the building as a City facility in the 1980’s. A series of renovations were conducted over time to accommodate the City’s childcare program and other recreational programs. The Bailey Community Center has four stories and 30,000 square foot in size.

City of East Lansing http://www.cityofeastlansing.com/development/ Redevelopment Opportunities in East Lansing

Property Information

Community Vision: City of East Lansing 2006 Comprehensive Plan, which is in process to be updated (http://www.cityofeastlansing.com/comprehensiveplan). This document envisions more housing options in the residential areas north of downtown, including owner-occupied single- family homes, to attract and retain families with children. Residential projects or a mixture of appropriate public and private uses are desirable at this location. The City and the neighborhood are committed to maintain the existing public open space portion of the site.

Zoning: C - Community Facilities

Parcel# 33-20-02-18-177-001

Property owner: City of East Lansing

Current uses: Bailey Community Center, a day care and other recreational programs.

Property tax assessment information: 2013 SEV Value: $0.00.

Environmental and/or contamination conditions: NA

Traffic studies: Two-way count was 1,513 on Bailey Street and 1,848 on Ann Street in 2004 (Tri-County Regional Planning Commission's Traffic Count Database System, http://www.tri- co.org/gis.htm).

Existing building condition report: NA.

Market analysis/ demographic data: 2013 Economic Indicators Report (http://www.cityofeastlansing.com/development).

For more information and resources, contact:

Lori Mullins, Community & Economic Development Administrator Planning, Building and Development (517) 319-6887 [email protected]

City of East Lansing http://www.cityofeastlansing.com/development/

BF 89 - 373 MITIGATION PROPERTY LOCATION MAP

I - 69

I - 96 Clinton

East !

I 96 I496 Lansing

! U

Eaton S - !

7 ! I - 9 I 96

6 ! !

! Ingham 9 6 -

I !

Marshall ! Forest Rosewood

! Elizabeth Dorothy

Oakhill Sunset !

Clifton

! Sunrise

MAC

Grove Bailey

Park Hillside Charles

Evergreen !

ABBOT

Center

! Linden Butterfield

Valley ! Oak Sycamore +^

Hillcrest

Delta

Beal College Ann

Elm MICHIGAN Louis Albert Delta Division Beal GRAND RIVER E Circle

CircleW Circle

BF#89-373 Conversion Proposed Mitigation Property Park at the Corner of Albert Street and Abbot Road

Tot Play Structure

Detail of condition of Overview structure Four-person Swing-set on Collingwood

Detail of condition of condition of Overview main components and joints Pavement

Overview and details M

STATE COOLIDGE

WEST

LAKE LANSING

R M-78

US127¨¦§

B N

O D

W A NA G

I A G SA H

BURCHAM

GRAND RIVER

A P

AN HIG MIC

ZOO KALAMA G RA ND RIV ER

Legend I496 ¨¦§ NEIGHBORHOOD PARKS MINI PARKS OR PLAY LOTS

TROWBRIDGE COMMUNITY PARKS QUARTER MILE BUFFER - ALBERT/ABBOT SERVICE QUARTER MILE BUFFER

HALFR MILE BUFFER

HALFD MILE BUFFER

1A MILE BUFFER

N CITY BOUNDARY

S I SCHOOLS

R MOUNT HOPE A RAILROAD

Appraisal Report

Bailey Community Center 300 Bailey Street East Lansing, Ingham County, Michigan 48823

Report Date: July 21, 2015

FOR: City of East Lansing Ms. Wendy Wilmer Longpre Assistant Director 300 Bailey Street East Lansing MI 48823

Valbridge Property Advisors | The Oetzel-Hartman Group 2127 University Park Drive, Suite 390 Okemos, Michigan 48864

517 336-0001 phone Valbridge File Number: 517 336-0009 fax MI01-15-0088 valbridge.com

July 21, 2015

Ms. Wendy Wilmer Longpre, Assistant Director City of East Lansing 300 Bailey Street East Lansing, MI 48823

RE: Appraisal Report 300 Bailey Street East Lansing, Ingham County, Michigan 48823

Dear Ms. Wilmer Longpre:

In accordance with your request, I have prepared an appraisal of the above-referenced property. This appraisal report sets forth the pertinent data gathered, the techniques employed, and the reasoning leading to my value opinions.

The subject property, as referenced above, is bounded by Bailey Street to the west, Ann Street to the South and Collingwood Drive to the East. The subject is a portion of Assessor’s Parcel Number (APN) 33-20-02-18-177-001. The site measures approximately 274.68 feet on Bailey Street, 305.49 feet on Ann Street and 226.00 feet on Collingwood Drive. Subject property contains 70,567 net square feet or 1.62 net acres. Subject currently is improved with a former three story school building. I have been requested by my client to assume subject property is vacant without site or building improvements.

I developed my analyses, opinions, and conclusions and prepared this report in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP) of the Appraisal Foundation; the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute; and the requirements of our client as I understand them.

The City of East Lansing is the client in this assignment. The intended user of this report is the City of East Lansing. The intended use is for internal decision making purposes for a possible sale and/or lease of the property. This appraisal is not intended for any other use. The value opinions reported herein are subject to the definitions, assumptions and limiting conditions, and certification contained in this report.

The acceptance of this appraisal assignment and the completion of the appraisal report submitted herewith are contingent on the following extraordinary assumptions and/or hypothetical conditions, if any, which may have impacted the assignment results: Extraordinary Assumptions:  I have assumed that the zoning of subject property, including the allowed uses, will not change from what is reported in the zoning section of this report upon the sale of the property. Lack of use of this extraordinary assumption might affect the assignment results. Hypothetical Conditions:  None. However, while not a hypothetical condition, it should be brought to the reader’s attention that the property is improved, but the subject of the appraisal report is just the land. The property is currently improved with a three story former school building, parking, sidewalks and related site improvements. I have been asked by my client to value the land only.

Based on the analysis contained in the following report, my value conclusions involving the subject property are summarized as follows:

Value Conclusions As Is Value Type Market Value Property Rights Appraised Fee Simple Effective Date of Value July 1, 2015 Value Conclusion $195,000 $2.81 psf

This letter of transmittal is not considered valid if separated from this report and must be accompanied by all sections of this report, as outlined in the table of contents, in order for the value opinions set forth above to be valid.

Respectfully submitted,

VALBRIDGE PROPERTY ADVISORS | THE OETZEL – HARTMAN GROUP

James T. Hartman, MAI, SGA, AI-GRS Certified General Real Estate Appraiser State of Michigan, License # 1201005950 [email protected]

JTH:RWM/paw File #MI01-15-0088

Table of Contents

Cover Page Letter of Transmittal Table of Contents ...... 1 Summary of Salient Facts ...... 2 Aerial and Front Views ...... 3 Location Map ...... 4 Introduction ...... 5 Scope of Work ...... 8 Regional and Market Area Analysis...... 10 Region and Area Data ...... 13 City and Neighborhood Analysis ...... 21 Site Description ...... 25 Assessment and Tax Data ...... 31 Highest and Best Use Analysis ...... 32 Appraisal Methodology ...... 33 Land Valuation ...... 34 General Assumptions and Limiting Conditions ...... 51 Certification ...... 58 Addenda ...... 60 Glossary ...... 61 Photographs of Subject Property ...... 67 Qualifications of Appraisers ...... 75

Summary of Salient Facts

Summary of Salient Facts Property Identification Property Name Bailey Community Center Property Address 300 Bailey Street East Lansing, Ingham County, Michigan, 48823 Latitude & Longitude 42.73565, -84.476044 Census Tract 39.02 Assessor's Parcel Number 33-20-02-18-177-001 (portion of) Property Owner City of East Lansing Zoning C FEMA Flood Map No. 26065C0151D Flood Zone X or C Land Area 1.593 acres Valuation Opinions Highest & Best Use - As Vacant School Use Reasonable Exposure Time 12 Months Reasonable Marketing Time 12 months

Value Indications Approach to Value As Is Sales Comparison $195,000

Value Conclusions As Is Value Type Market Value Property Rights Appraised Fee Simple Effective Date of Value July 1, 2015 Value Conclusion $195,000 $2.81 psf

Extraordinary Assumptions:  I have assumed that the zoning of subject property, including the allowed uses, will not change from what is reported in the zoning section of this report upon the sale of the property.

Hypothetical Conditions:  None. However, while not a hypothetical condition, it should be brought to the reader’s attention that the property is improved, but the subject of the appraisal report is just the land. The property is currently improved with a three story former school building, parking, sidewalks and related site improvements. I have been asked by my client to value the land only.

Aerial and Front Views

AERIAL VIEW

FRONT VIEW

Location Map

Introduction

Client and Intended Users of the Appraisal The client in this assignment is the City of East Lansing and the intended user of this report is the City of East Lansing and no others.

Intended Use of the Appraisal The intended use of this report is for internal decision making purposes for a possible sale/lease of the property. This appraisal is not intended for any other use.

Real Estate Identification The subject property is located at 300 Bailey Street, East Lansing, Ingham County, Michigan 48823. The subject property is a portion of Assessor Parcel Number 33-20-02-18-177-001. Subject property contains 70,567 net square feet or 1.62 net acres. Subject currently is improved with a former three story school building. I have been requested by my client to value the land only. No consideration is given to the building and site improvements.

Legal Description The proposed legal description as contained in the survey is:

A copy of the survey is contained later in this report.

Use of Real Estate as of the Effective Date of Value As of the effective date of the appraisal, the subject is a former public school building used by the City of East Lansing as a day care center and other public uses.

Use of Real Estate as of the Date of this Report Same as above.

Ownership of the Property According to the Assessment records, title to the subject property is vested in the City of East Lansing.

History of the Property Ownership of the subject property has not changed within the past three years.

Listings/Offers/Contracts The subject is not currently listed for sale or under contract for sale.

Type and Definition of Value The purpose of this appraisal is to develop an opinion of market value of the subject property.

MARKET VALUE: As defined in the Agencies’ appraisal regulations, the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

. buyer and seller are typically motivated;

. both parties are well informed or well advised, and acting in what they consider their own best interests;

. a reasonable time is allowed for exposure in the open market;

. payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and

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

(source: Federal Register / Vol. 75, No. 237 / Friday, December 10, 2010 / Notices, Interagency Appraisal and Evaluation Guidelines, Appendix D – Glossary of Terms, Page 77472)

The estimate of the market value of real property in its current physical condition, use, and zoning as of the appraisal’s effective date. Unless stated otherwise, the indicated market value in this report is “As Is”.

Please refer to the Glossary in the Addenda section for additional definitions of terms used in this report.

Valuation Scenarios, Property Rights Appraised, and Effective Dates of Value Per the scope of our assignment I developed opinions of value for the subject property under the following scenario of value:

Valuation Scenario Effective Date of Value As Is Fee Simple Market Value July 1, 2015

I completed an appraisal inspection of the subject property on July 1, 2015.

Date of Report The date of this report is July 21, 2015, which is the same as the date of the letter of transmittal.

List of Items Requested but Not Provided  None

Assumptions and Conditions of the Appraisal The acceptance of this appraisal assignment and the completion of the appraisal report submitted herewith are contingent on the following extraordinary assumptions and/or hypothetical conditions which may have impacted the assignment results:

Extraordinary Assumptions  I have assumed that the zoning of subject property, including the allowed uses, will not change from what is reported in the zoning section of this report upon the sale of the property.

Hypothetical Conditions  None. However, while not a hypothetical condition, it should be brought to the reader’s attention that the property is improved, but the subject of the appraisal report is just the land. The property is currently improved with a three story former school building, parking, sidewalks and related site improvements. I have been asked by my client to value the land only.

Scope of Work

The scope of work includes all steps taken in the development of the appraisal. These include 1) the extent to which the subject property is identified, 2) the extent to which the subject property is inspected, 3) the type and extent of data researched, 4) the type and extent of analysis applied, and the type of appraisal report prepared. These items are discussed as follows:

Extent to Which the Property Was Identified

Legal Characteristics The subject was legally identified with the survey provided and assessment records.

Economic Characteristics Economic characteristics of the subject property were compared to properties with similar locational and physical characteristics.

Physical Characteristics The subject was physically identified and subject was last inspected on July 1, 2015, photographs were taken at the time of the inspection.

Extent to Which the Property Was Inspected I inspected the subject on July 1, 2015, photographs were taken at the time of inspection. I did not perform physical measurement of the improvements; rather, I relied upon the survey provided.

Type and Extent of Data Researched I researched and analyzed: 1) market area data, 2) property-specific market data, 3) zoning and land- use data, and 4) current data on comparable listings and sales in the competitive market area. I also interviewed people familiar with the subject market/property type, including Wendy Wilmers Longpre, the Assistant Director Parks, Recreation & Arts and Darcy Schmidt the Planning and Zoning Administrator.

Personal Property/FF&E Unless otherwise stated in the report, all furniture, fixtures, and equipment (FF&E) or any other personal property has been excluded from my analysis.

Type and Extent of Analysis Applied As previously noted, I have been asked to not value the building and site improvements on subject property; therefore, there are no improvements on the subject site that contribute to an overall value that exceeds the land value. I observed surrounding land use trends, the condition of the improvements, demand for the subject property, and relevant legal limitations in concluding a highest and best use. I then valued the subject based on the highest and best use conclusion, relying on the Sales Comparison Approach. The Cost and Income approaches were not used because I have been instructed by my client not to value the building and site improvements.

Appraisal Report Type This is an Appraisal Report as defined by the Uniform Standards of Professional Appraisal Practice under Standards Rule 2-2a. Please see the Scope of Work for a description of the level of research completed.

Appraisal Conformity I developed my analyses, opinions, and conclusions and prepared this report in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP) of the Appraisal Foundation; the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute; and the requirements of our client as we understand them.

Regional and Market Area Analysis

The purpose of this section is to briefly define those elements of physical description that influence the appraised property's value and assist the reader in visualizing the property and its relationship to the area. This is accomplished by a combination of exhibits and narrative description.

Maps Locating Subject Property Region and Area Data Neighborhood Data Site Description Description of Improvements Real Estate Property Taxes and Assessments Market Analysis

Region and Area Data

Any valuation of real property involves an analysis of the historic and forecasted economic conditions in which the property is located. The following is a discussion of the location and transportation characteristics, demographic and economic conditions, and development trends for the Greater Lansing Area.

DEFINITION & LOCATION: The subject property is located in the Lansing-East Lansing Metropolitan Statistical Area (MSA), whose urban core is the Lansing urbanized area, and component counties are Clinton, Eaton and Ingham. The cities of Lansing, East Lansing, Charlotte, Grand Ledge, Mason, Dewitt and St. Johns, and Townships of Bath, Delhi, Delta, DeWitt, Meridian, and Williamston are the most populated areas within the Lansing-East Lansing MSA.

The Lansing-East Lansing MSA is centrally located in the southern portion of Michigan’s Lower Peninsula, placing it within 90 minutes of 90 percent of Michigan’s population, and within a four hour driving time of the following urban centers:

Chicago 217 miles Southwest Grand Rapids 69 miles West Cleveland 236 miles Southeast Indianapolis 255 miles South Columbus 260 miles Southeast Toronto 330 miles East Detroit 96 miles Southeast

POPULATION: The table below provides the population for the Lansing-East Lansing MSA, and component counties of Clinton, Eaton, and Ingham.

POPULATION Clinton County Eaton County Ingham County Lansing MSA State of Michigan Year Number Change Number Change Number Change Number Change Number Change

2000 64,753 103,655 279,320 447,728 9,938,444 2010 75,382 1.64% 107,759 0.40% 280,895 0.06% 464,036 0.36% 9,883,640 -0.06% 2015 76,962 1.05% 108,186 0.20% 281,016 0.02% 466,164 0.23% 9,870,786 -0.07% 2020 79,117 0.56% 108,941 0.14% 282,756 0.12% 470,814 0.20% 9,944,000 0.15% Source: STDBonline.com

INCOME: The table below provides historical and forecasted average household income data for the Lansing-East Lansing MSA, and component counties of Clinton, Eaton, and Ingham.

AVERAGE HOUSEHOLD INCOME Annual Change 2000 2010 2015 2020 2000 to 2015 to Municipality Census Census Estimate Forecast 2015 2020

State of Michigan $57,400 n/a $66,492 $76,300 1.1% 3.0% Lansing Area MSA $55,361 n/a $65,109 $74,500 1.3% 2.9% Clinton County $62,287 n/a $79,035 $90,129 1.9% 2.8% Eaton County $57,189 n/a $66,466 $75,741 1.2% 2.8% Ingham County $53,170 n/a $60,882 $69,767 1.0% 2.9%

Source: STDBonline.com

The average household income for all of the above geographies are expected to increase at a faster rate of growth than past historical rates experienced during the preceding decade.

EMPLOYMENT ECONOMIC BASE ANALYSIS: Lansing became the capital of the State of Michigan by an act of the legislature in 1847. Michigan State University, located in East Lansing, was founded in 1855 and was the first land grant college in the nation. In the first part of the century, Lansing pioneered the REO cars, Durant, Fisher Body, Oldsmobile, and Motor Wheel. These plants have become part of the General Motors Industrial Complex that today places Lansing as a leading city in the automotive manufacturing industry.

Michigan’s employment peaked in June of 2000 and experienced a continuous declining trend throughout the past decade. The following table summarizes the job losses/gains in total employment and manufacturing employment over the 14½ +/- year period from June 2000 through 2014.

STATE OF MICHIGAN EMPLOYMENT

Total Non-Farm Annual Job Manufacturing Annual Mfg. Job Year Employment Loss/Gain Employment Loss/Gain

Jun-00 4,744,900 911,200 2000 4,676,400 (68,500) 896,699 (14,501) 2001 4,563,700 (112,700) 821,200 (75,499) 2002 4,486,900 (76,800) 761,400 (59,800) 2003 4,415,900 (71,000) 717,500 (43,900) 2004 4,399,000 (16,900) 698,300 (19,200) 2005 4,389,700 (9,300) 677,500 (20,800) 2006 4,326,500 (63,200) 648,200 (29,300) 2007 4,267,800 (58,700) 617,300 (30,900) 2008 4,162,100 (105,700) 572,000 (45,300) 2009 3,870,500 (291,600) 463,100 (108,900) 2010 3,863,300 (7,200) 473,900 10,800 2011 3,951,800 88,500 509,700 35,800 2012 4,033,300 81,500 537,600 27,900 2013 4,104,500 71,200 555,100 17,500 2014 4,138,200 33,700 566,700 11,600 Total Job Loss (640,400) (356,100) % Decline over 14 1/2 +/- years (13.5%) (39.1%) Source: Michigan Labor Market Info ~ www.milmi.org Unless noted, employment numbers are annualized

Based on the 2014 year-end employment levels, the continuing recovery in manufacturing has helped to turn overall non-farm employment in the state to a net gain after a decade of continual losses. Over the last 4 years the state has added 274,900 jobs. According to Robert Dye, Chief Economist at Comerica Bank, “Going forward, we anticipate only limited gains from auto production driving the Michigan economy in 2015. However, we expect to see more improvement in housing markets, both in terms of residential construction and also in terms of house price gains in 2015 and Labor market conditions will continue to improve in 2015, providing a broadening base of support for the Michigan economy.”

The top 30 employers in the Greater Lansing area are listed in the following table. The list was obtained from the Lansing Regional Chamber of Commerce.

GREATER LANSING MSA PRIMARY EMPLOYERS

# Employer Product/Service Employees

1 State of Michigan Government 14,355 2 Michigan State University Education 11,218 3 Sparrow Health System Medical 7,400 4 General Motors Automotive 6,000 5 Lansing Community College Education 3,180 6 Ingham Regional Medical Center Medical 2,500 7 Lansing Public Schools Education 2,106 8Meijer Retail 2,000 9 Auto-Owners Insurance Insurance 1,500 10 Peckham Rehab. & Mfg. 1,400 11 Jackson National Life Insurance Insurance 1,393 12 Ingham County Government 1,258 13 City of Lansing Government 1,240 14 US Postal Service Government 1,200 15 Wal-Mart Retail 1,185 16 Dart Containers Manufacturer 1,144 17 Community Mental Health Mental Health 863 18 John Henry Company Printing 750 19 Quality Dairy Retail 730 20 Lansing Board of Water & Light Utility 712 21 Electronic Data Systems Corp Data Processing 660 22 Michigan Farm Bureau Insurance 650 23 Holt Public Schools Education 643 24 City of East Lansing Government 634 25 Grand Ledge Public Schools Education 630 26 SBC Ameritech Utility 625 27 Farm Bureau Insurance 625 28 Accident Fund of Michigan Insurance 549 29 Blue Cross/Blue Shield of MI Insurance 525 30 Consumers Energy Utility 520 Source: Lansing Regional Chamber of Commerce 2010 www.lansingchamber.org

The presence of the State Government and Michigan State University provides the greater Lansing area with an economic diversification unlike any other Michigan community of similar size. The State of Michigan employs 14,355 people in the Greater Lansing area. For a number of years, the State has been consolidating its offices in Lansing. The State of Michigan is a high wage employer that has a high degree of stability.

Michigan State University reported a fall 2014 enrollment of 50,085 students, an increase of 8,962 students since the fall of 2000 (www.reg.msu.edu). Michigan State University is another stable high- wage employer that brings young and educated consumers to the area. Sparrow Health Systems, a local hospital operator, is the third largest employer replacing GM which had been the area’s third major employer for a number of years.

General Motors recently dropped to the fourth major employer for area residents, resulting from its most recent major consolidation/re-alignment of operations which included the closing of the GM Lansing Car Assembly Verlinden Avenue plant, Craft Center and Metal Center in 2006/2007. Upon the closing of these three plants, GM opened its new Lansing Delta Township Assembly Plant consisting of three buildings covering 3.4 million square feet, and representing an investment of more than $1.1 billion dollars. The construction and start of production at this new Delta Township GM facility also spurred new construction and employment in the Delta Township area by suppliers positioning operations in support of the plant. GM has continued to expand in the area, as they are expanding the Delta Township Assembly plant, building a new logistics center at the Grand River Assembly plant, and building a new stamping plant is planned.

Many small to medium sized companies are also a strong contributor in trade, distribution, office and medical activities within the Greater Lansing area. The geographic location of the City of Lansing, when combined with its excellent north/south and east/west expressway systems, places the Lansing market within 90-minutes of 90% of the state's population. This has undoubtedly influenced the area into developing as a retail, wholesale and distribution center. Lansing’s proximity to the state government and Michigan State University has increased the attractiveness of the area as an office, research, and medical center.

UNEMPLOYMENT RATES: Lansing’s employment is typically much better than the State average. This is primarily due to the presence of the State of Michigan and Michigan State University, which provides a large employment base that is not as susceptible to typical economic downturns. The unemployment rate for Greater Lansing area has recently increased, coinciding with the national economic recession and on-going structural changes occurring in Michigan’s automotive/manufacturing sectors. During much of the 1990s and 2000s, the annual average was typically 4%, fluctuating between 3% and 6% primarily due to temporary work adjustments at the General Motors Lansing Automotive Division.

The National Bureau of Economic Research (“NBER”) determines the start and end dates of a recession. The NBER determined the most recent recession started in December 2007 and lasted until June 2009. The 2007 to 2009 recession is the longest in the post WWII period. When determining the end of a recession, the NBER committee is not concluding that economic conditions since June 2009 have been favorable or that the economy has returned to operating at normal capacity. Rather, the NBER committee only determines that the recession ended and a recovery began in that month. Prior to this most recent recession the United States had experienced an expansion that lasted 73 months, from November 2001 to December 2007. The previous expansion of the 1990’s lasted 120 months. The 2001 – 2007 expansion saw unemployment rates generally increasing in the State of Michigan from 3.7% in 2000 to 7.1% in 2007. However, the financial crisis and ensuing 2007 to 2009 recession saw annual unemployment rates balloon to 13.4% in 2009, but have gradually improved 7.2% annual unemployment rate in 2014.

The following table summarizes the unemployment rates for the United States, State of Michigan, Lansing-East Lansing MSA, and Counties of Ingham, Clinton, and Eaton for the years 2000 through 2014. Unemployment rates are year-end averages.

UNEMPLOYMENT RATES United State of Lansing Ingham Eaton Clinton Year States Michigan MSA County County County 20004.0%3.7%2.9%2.9%2.8%2.6% 20014.7%5.2%3.7%3.8%3.6%3.3% 20025.8%6.2%4.4%4.6%4.1%3.9% 20036.0%7.1%5.3%5.6%4.9%4.7% 20045.5%7.1%5.9%6.2%5.3%5.3% 20055.1%6.8%5.9%6.3%5.4%5.2% 20064.6%6.9%5.8%6.2%5.2%5.2% 20074.6%7.1%5.7%6.1%5.1%5.4% 20085.8%8.3%6.7%7.0%6.2%5.9% 2009 9.3% 13.4% 10.6% 11.1% 10.1% 9.2% 2010 9.6% 12.7% 10.0% 10.6% 9.2% 8.6% 2011 8.9% 10.3% 8.1% 8.7% 7.3% 6.9% 20128.1%9.1%7.3%7.4%7.4%6.7% 20137.4%8.8%7.4%7.5%7.5%6.9% 20146.2%7.2%5.8%5.9%6.0%5.3% Unless noted, rates are annual amounts Source: U.S. Dept of Labor BLS

The Lansing-East Lansing MSA’s unemployment rate through the early 2000’s generally was 1% to 2% below the national average, but starting in 2004 as various structural changes were occurring tended to be somewhat higher than the indicated national average. Recent data does appear to indicate, however, the area is returning to its historic trend, with local unemployment rates lower than the national average. The MSA has also consistently been 1% to 2% below the state of Michigan average. While peak unemployment statewide occurred in January 2010 at 14.4%, peak unemployment levels for the Lansing MSA occurred earlier in July of 2009 at 11.9%. The most recent unemployment levels are shown above, reflecting a continued decline in unemployment levels both at the statewide and local economy level.

The job losses and out migration of state residents during the first decade of the 21st Century had resulted in all real estate markets coming under varying degrees of stress. During this period all sectors of the real estate market experienced value declines. The single family residential home market experienced substantial levels of foreclosures, with other sectors experiencing increased foreclosure activity. Over the intervening years the markets have adjusted; however, financing, is at much higher lending standards when compared to the period leading up to the 2008 crash. The current expectations are for job growth to continue at a modest pace in 2015.

The amount of job losses experienced within the State has had a dramatic impact on all economic activity. The decline in market share by the Big Three and resulting reduction/restructuring that has occurred has had a negative impact on the State’s economy. However, post restructuring the Big Three have streamlined operations and appear to be finally gaining ground, supported by leaner operating structures and renegotiated labor union contracts with the UAW. With the structural changes which have taken place in the state of Michigan’s economy, future commercial and residential development is anticipated to progress at a slower pace than what has occurred in the recent past. Developers have not been speculating within the market given the economic climate and are only acquiring sites when a contract is secured. It is likely the subject’s market will continue to develop but at a pace far slower than what has occurred in the recent past.

SUMMARY/CONCLUSION: After many years of steady population growth, the Lansing MSA began in 2005 to show declining population, but average household income has continued to grow at modest levels; these characteristics are forecasted to continue at a moderated rate.

The employment characteristics for the Greater Lansing area are unlike any other Michigan Community. The presence of the State of Michigan governmental offices, Michigan State University, Sparrow and McLaren Greater Lansing Hospitals, and General Motors Corporation provide a diverse relatively stable employment base. The unemployment rate is cyclical, primarily due to the automotive industry; however, the large governmental service employment base tends to moderate the cyclical nature of the automotive industry. The labor base and unemployment rate is forecasted to remain relatively stable, excepting increased unemployment during typical recession periods.

A number of new projects have been recently completed within the downtown area including Accident Fund’s $182 million redevelopment of the BWL Ottawa Street Station Power Plant into their new corporate headquarters, Eyde Company’s redevelopment of the former Knapp’s Center, along with various mixed-use developments under various stages of planning/development including the proposed Ball Park North and Market Place development on the site of the City Market and City Garage.

The office, industrial, and retail markets are experiencing higher vacancies and lower demand than has been experienced in the recent past. The Greater Lansing area has seen a gradual improvement in unemployment since manufacturing employment spurred the turn in 2010. The expectation is for some continued improvement during 2015. Demand and growth is forecasted to remain in a moderate state in the office, retail, and industrial markets.

City and Neighborhood Analysis

NEIGHBORHOOD MAP

Overview Subject is located in the City of East Lansing in Ingham County. As presented in the table on the following page, the city’s population as of 2010 was 48,579 (this excludes the student population). The City of East Lansing is the home to Michigan State University, the principal employer in East Lansing and the second largest employer in the Lansing MSA. The City of East Lansing is adjacent to the City of Lansing, and is the State Capital of Michigan. The largest employer in the City of Lansing is the State of Michigan. The residents of the City of East Lansing are primarily employed by Michigan State University. Secondarily, the City of East Lansing acts as a bedroom community to employers located in the City of Lansing, Meridian Township, and Aliedon Township.

Neighborhood Location and Boundaries The subject neighborhood is located in the East Lansing Public Schools section of East Lansing. The area is urban in nature. The neighborhood is bounded by Burcham Drive to the north, North Hagadorn Road to the east, East Grand River Avenue to the south, and Abbot Road to the west.

Demographics The following table depicts the area demographics in the City of East Lansing:

Neighborhood Demographics Radius East Lansing Population Summary 2000 Population 47,614 2010 Population 48,579 2015 Population 49,602 2020 Population Estimate 50,430 Annual % Change (2015 - 2020) 0.3%

Household Summary 2000 Households 14,598 % Owner Occupied 31.3% % Renter Occupied 62.7% 2010 Households 14,774

% Owner Occupied % Renter Occupied 2015 Households 15,260 % Owner Occupied 29.9% % Renter Occupied 63.5% 2020 Households Estimate 15,614 % Owner Occupied 29.1% % Renter Occupied 63.9% Annual % Change (2015 - 2020) 0.5%

Income Summary 2015 Median Household Income $30,357 2020 Median Household Income Estimate $35,843 Annual % Change 3.4%

2015 Per Capita Income $21,019 2020 Per Capita Income Estimate $23,539 Annual % Change 2.3%

Source: Site-to-Do-Business (STDB Online)

Transportation Routes Major travel and commuter routes within the area of the subject include Ann Street, Bailey Street and Collingwood Drive. Within the immediate area of the subject, transportation access helps define the character of its development. Major transportation routes in the larger area include Grand River Avenue to the South, Burcham Street to the North, Abbott Road to the West, and Hagadorn Road to the East. Access to the area is considered good.

Conclusions Overall, the subject neighborhood is in the stability stage of its life cycle.

Site Description

Subject property is bounded by Bailey Street to the West, Ann Street to the South and Collingwood Street to the East.. The characteristics of the site are summarized as follows:

Site Characteristics Location: Subject property is bounded by Bailey Street to the West, Ann Street to the South and Collingwood Street to the East, City of East Lansing, Ingham County, Michigan.. Gross Land Area: 1.62 acres or 70,567 SF Usable Land Area: 1.62 acres or 70,567 SF Usable Land %: 100.0% Shape: Mostly Rectangular Average Depth: 250.34 feet Topography: Level, at grade Drainage: Adequate Grade: At street grade Utilities: Public water and sewer, natural gas and electricity. Off-Site Improvements: N/A Interior or Corner: Double Corner Signalized Intersection: No traffic signal at, or near, the site Excess Land: None Surplus Land: None

Street Frontage / Access Frontage Road Primary Secondary Bailey Street and Collingwood Street Name: Ann Street Street Street Type: Residential Residential Frontage (Linear Ft.): 305.49 274.68 Number of Curb Cuts: 3 1 on Baily Street Traffic Count (Cars/Day): N/A N/A

Additional Access Alley Access: No Water or Port Access: No Rail Access: No

Flood Zone Data Flood Map Panel/Number: 26065C0151D Flood Map Date: 08-16-2011 Flood Zone: X or C Area of minimal flood hazard, usually depicted on FIRMs as above the 500-year flood level. Zone C may have ponding and local drainage problems that don't warrant a detailed study or designation as base floodplain. Zone X is the area determined to be outside the 500-year flood and protected by levee from 100- year flood. Site Area in Flood: None

Other Site Conditions Soil Type: Assumed to be stable. No soil report of the subject has been made available or reviewed; however, it is assumed that the soil is of sufficient load-bearing capacity to support the existing structure. No evidence to the contrary is known.

Environmental Issues: The reader of this report is cautioned that the appraiser is not a qualified environmental inspector. I recommend that any user obtain an environmental audit of the entire property to ascertain its status relative to these items. I have assumed that no hazardous substance, past, present, or future exists on subject property that would affect subject's marketability or market value. I reserve the right to re-evaluate the value conclusions reported herein should such negative factors be discovered.

Easements/Encroachments: None

Earthquake Zone: None

Wetlands Classification: None

Adjacent Land Uses North: City of East Lansing public park. South: Residential neighborhood. East: Residential neighborhood. West: Residential neighborhood.

Site Ratings Access: Average, subject is located in a residential neighborhood. Visibility: Average

Zoning Designation Zoning Jurisdiction: City of East Lansing Zoning Classification: C, Community Facilities General Plan Designation: Community Facilities District, C Permitted Uses: Public, private or parochial schools, publicly owned parks and recreation areas, municipal or private cemeteries, publicly owned and occupied buildings, buildings owned and occupied by a municipal utility and public hospitals.

The zoning description is being amended to add: Publicly owned buildings that are publicly occupied or that are partially or fully privately leased for business or residential uses that meet specific needs of the community and residents of East Lansing.

Zoning Comments: The current zoning classification contains certain restrictions regarding permitted uses; minimum lot size; yard setbacks; maximum building area; maximum building height; parking; etc. Improvements on the site would need to either 1-) meet these zoning requirements, 2-) be granted a variance by the local zoning authority for areas that do not conform, or 3-) be considered a legal non-conforming use due to the improvements having been built prior to the establishment of the local zoning guidelines.

The zoning on subject property is very restrictive limiting development to only one economic use that being a school use. If the zoning would allow developments similar to those of the adjoining property the property value would be significantly different then appraised. The restrictive nature of the zoning has resulted in a greatly diminished value for the property.

Analysis/Comments on Site The site is suitable for a school use as allowed by the zoning based upon the width, depth, and shape. Access and visibility are adequate. The zoning is restrictive limiting an economic development/use of the property.

SITE SURVEY

FLOOD MAP

ZONING MAP

Assessment and Tax Data

Property assessments are initially established by the local assessor and are intended to reflect 50% of the “true cash value” (also known as market value) of the property on the tax day, December 31, of each year. The local assessment is then subject to equalization, which results in the property’s State Equalized Value (S. E. V.).

To determine the current year’s capped value, the assessor is required to multiply the prior year’s capped assessment by the CPI increase (inflation rate multiplier with a maximum of 5%) plus the value of any additions or losses to the improvements that occurred during the period. The lesser of the S. E. V. and capped assessed value is the current year’s taxable value for that property. When a transfer of ownership occurs, the next year’s taxable value is generally based on the S.E.V. that had been calculated annually. The actual sale price must not be the sole basis of the new S.E.V. for that property.

Each property assessed for real estate tax purposes in the State of Michigan has a S.E.V., capped value, and a taxable value. Generally, the capped value is lower, reflecting long-term ownership. The S.E.V. is to represent 50% of true cash value. Real property taxes are determined on the basis of a tax rate per thousand dollars of S.E.V. (assessed value). This appraisal has used the S.E.V. (assessed value) for calculating the real estate taxes.

Subject is a publicly owned property and is not subject to property taxes.

Highest and Best Use Analysis

The Highest and Best Use of a property is the use that is legally permissible, physically possible, and financially feasible which results in the highest value. An opinion of the highest and best use results from consideration of the criteria noted above under the market conditions or likely conditions as of the effective date of value. Determination of highest and best use results from the judgment and analytical skills of the appraiser. It represents an opinion, not a fact. In appraisal practice, the concept of highest and best use represents the premise upon which value is based.

Analysis of Highest and Best Use As If Vacant In determining the highest and best use of the property as if vacant, I examine the potential for: 1) near term development, 2) a subdivision of the site, 3) an assemblage of the site with other land, or 4) holding the land as an investment. Legally Permissible The subject site is zoned C, Community Facilities which controls the general nature of permissible uses but is appropriate for the location and physical elements of the subject, providing for a consistency of use with the general neighborhood. The location of the subject is appropriate for the uses allowed, as noted previously, and a change in zoning is unlikely. There are no known easements, encroachments, or covenants or other use restrictions that would unduly limit or impede development. However, the zoning of subject property is highly restrictive and severely limits the development of subject property. Physically Possible The physical attributes allow for a number of potential uses. Elements such as size, shape, availability of utilities, known hazards (flood, environmental, etc.), and other potential influences are described in the Site Description and have been considered. There are no items of a physical nature that would materially limit appropriate and likely development. Financially Feasible The probable use of the site for school development conforms to the pattern of land use in the market area. A review of published rental and occupancy rates suggest that the supply of school properties within the market is in balance and demand is sufficient to support construction costs of a school property that would ensure timely absorption of additional inventory in this market. Therefore, near-term speculative development of the subject site is considered financially feasible for a school development. Maximally Productive Among the financially feasible uses, the use that results in the highest value (the maximally productive use) is the highest and best use. Considering these factors, the maximally productive use as though vacant is for a school use. Conclusion of Highest and Best Use As If Vacant The conclusion of the highest and best use as if vacant is for a school use.

Most Probable Buyer/User As of the date of value, the most probable buyer of the subject property is an investor and the most probable user would be a local tenant.

Appraisal Methodology

Three Approaches to Value There are three traditional approaches typically available to develop indications of real property value: the cost, sales comparison, and income capitalization approaches.

Cost Approach The cost approach is based upon the principle that a prudent purchaser would pay no more for a property than the cost to purchase a similar site and construct similar improvements without undue delay, producing a property of equal desirability and utility. This approach is particularly applicable when the improvements being appraised are relatively new or proposed, or when the improvements are so specialized that there are too few comparable sales to develop a credible Sales Comparison Approach analysis.

Sales Comparison Approach In the sales comparison approach, the appraiser analyzes sales and listings of similar properties, adjusting for differences between the subject property and the comparable properties. This method can be useful for valuing general purpose properties or vacant land. For improved properties, it is particularly applicable when there is an active sales market for the property type being appraised – either by owner-users or investors.

Income Capitalization Approach The income capitalization approach is based on the principle that a prudent investor will pay no more for the property than he or she would for another investment of similar risk and cash flow characteristics. The income capitalization approach is widely used and relied upon in appraising income-producing properties, especially those for which there is an active investment sales market.

Subject Valuation As stated within the Scope of Work, I have relied upon the Sales Comparison Approach. If an approach has been omitted, the reason for that exclusion is also stated within the Scope of Work.

Land Valuation

Methodology Land is most often valued using the Sales Comparison Approach. This approach is based on the premise that a buyer would pay no more for a specific property than the cost of obtaining a property with the same utility. In the sales comparison approach, the opinion of market value is based on closed sales, listings and pending sales of properties similar to the subject property, using the most relevant units of comparison. The comparative analysis focuses on the difference between the comparable sales and the subject property using all appropriate elements of comparison.

A systematic procedure for applying the sales comparison approach includes the following steps: (1) researching and verifying transactional data, (2) selecting relevant units of comparison, (3) analyzing and adjusting the comparable sales for differences in various elements of comparison, and (4) reconciling the adjusted sales into a value indication for the subject site.

Unit of Comparison The unit of comparison depends on land use economics and how buyers and sellers use the property. The unit of comparison in this analysis is per usable sq. ft.

Elements of Comparison Elements of comparison are the characteristics or attributes of properties and transactions that cause the prices of real estate to vary. The main elements of comparison that are considered in sales comparison analysis are as follows: (1) real property rights conveyed, (2) financing terms, (3) conditions of sale, (4) expenditures made immediately after purchase, (5) market conditions, (6) location and (7) physical characteristics.

Comparable Sales Data A search of data sources and public records, a field survey, interviews with knowledgeable real estate professionals in the area, and a review of our internal database were conducted to obtain and verify comparable sales and listings of vacant land properties.

I used four sales in my analysis, these sales are judged to be the most comparable in developing an indication of the market value of the subject property. My research did not find any comparable sales of school properties of the size of subject property.

The following table summarizes each of the land sale comparables and is followed by a map displaying the location of each comparable in relation to the subject. Summary sheets detailing each comparable follow the location map.

Land Sales Summary Land Date Usable Sale Price Per Per Sale No. of Sale Sq. Ft. Location Actual Sq. Ft. Front Foot 1 July-10 442,408 10622 68th Avenue Allendale Township, Michigan $165,000 $0.37 $1,650.00 2 February-09 710,671 3300 Express Court City of Lansing, Michigan $700,000 $0.98 $5,785.12 3 August-08 2,587,054 5219 100th Street, SE Caledonia Township, Michigan $750,000 $0.29 $937.50 4 January-08 3,441,240 7101 Pierce Street Allendale Township, Michigan $1,400,000 $0.41 $1,060.61

COMPARABLE SALES MAP

The above Sales Comparable Map shows subject and Comparables 1 through 4. Comparables 1 & 4 are adjacent to each other. The following map shows the location of comparables 1 and 4.

LAND COMPARABLE 1

Aerial view from Ottawa County GIS. Property Identification Property/Sale ID 3005905/20657 Property Type Commercial Address 10622 68th Avenue City, State Zip Allendale Township, Michigan County Ottawa Tax ID 70-09-27-400-033

Transaction Data Sale Date 07-13-2010 Financing Cash to Seller Sale Status Closed Conditions of Sale See Comments Grantor Lewis A. and Ann L. Van Recording Number 20100027119 Farowe Sale Price $165,000 Grantee Allendale Public School Adjusted Price $165,000 Property Rights Fee Simple

Property Description Usable Acres 10.15629 Topography Level Usable SF 442,408 Zoning Description R-1, Low Density One- Front Feet 100.00 Family Residential Shape Irregular

Indicators $/Usable Acre $16,246 $/FF $1,650.00 $/Usable SF $.37

Remarks X The sale is considered non-arm's length because the buyer (Allendale Public School) is the adjacent property owner to the north and 'has always been interested in this property for future development of the school property' according to the confirmation source.

LAND COMPARABLE 2

Northwesterly view of developed site taken from Express Court. Property Identification Property/Sale ID 1008585/10112 Property Type Commercial Property Name Lansing Charter Academy Address 3300 Express Court City, State Zip City of Lansing, Michigan County Ingham Tax ID 33-01-01-29-376-112 & 122

Transaction Data Sale Date 02-06-2009 Financing Cash to Seller Sale Status Closed Conditions of Sale Arms Length Grantor George F. Eyde & Louis J. Deed Book/Page 3339/813 Eyde Recording Number 2009-013670 Grantee Charter Development Sale Price $700,000 Company, LLC Adjusted Price $700,000 Property Rights Fee Simple

Property Description Usable Acres 16.31476 Shape Irregular Usable SF 710,671 Topography Level Front Feet 121.00 Zoning Description H - Light Industrial Corner/Interior Corner

Indicators $/Usable Acre $42,906 $/FF $5,785.12 $/Usable SF $.98

Verification Confirmed With B Taylor CBRE & City of Lansing Assessing Confirmed By CEL Confirmation Date 05-13-2010

Remarks X Site was acquired for development of a new charter school. A new 45,000 sq. ft. facility was constructed immediately following acquisition, and provides for individual art and music classrooms, a comprehensive media center, gymnasium and designated parent area. The surrounding campus contains a large outdoor recreation area, playground paved play area, staff/visitor parking, and surrounding landscaping. The Lansing Charter Academy is a new charter school which opened its doors to new students at the start of the 2009/2010 school year, and is chartered by Bay Mills Community College. Initial enrollment is for K-5 and a maximum capacity of 480 students, with an additional graded added in subsequent years through 8th grade. Total enrollment is anticipated to be 700 +/- students. The school is operated by National Heritage Academies, which operates the Windemere Park Charter Academy on Lansing's West side. Sale included the grantor conveying the right to make three (3) divisions under the Land Division Act.

Northerly view from Holmes Road taken down the provided Express Court frontage.

LAND COMPARABLE 3

Aerial View Property Identification Property/Sale ID 3005133/20120 Property Type Commercial Address 5219 100th Street, SE City, State Zip Caledonia Township, Michigan County Kent Tax ID 41-23-30-400-015

Transaction Data Sale Date 08-27-2008 Financing Cash to Seller Sale Status Closed Conditions of Sale Arms Length Grantor Meadow Bloom, LLC Recording Number 200809110081952 Grantee Caledonia Commnity Sale Price $750,000 Schools Adjusted Price $750,000 Property Rights Fee Simple

Property Description Usable Acres 59.39059 Topography Rolling Usable SF 2,587,054 Use Designation MDR, Medium Density Front Feet 800.00 Residential Corner/Interior Interior Zoning Description A, Agricultural Shape Irregular

Indicators $/Usable Acre $12,628 $/FF $937.50 $/Usable SF $.29

Verification Confirmed With Gary Delgar Confirmed By MAT 1859-9 Confirmation Date 01-28-2009

LAND COMPARABLE 4

Aerial View Property Identification Property/Sale ID 3005111/20106 Property Type Commercial Address 7101 Pierce Street City, State Zip Allendale Township, Michigan County Ottawa Tax ID 70-09-27-300-001

Transaction Data Sale Date 01-03-2008 Financing Cash to Seller Sale Status Closed Conditions of Sale Arms Length Grantor Kathryn J. Meyer Deed Book/Page 5571/803 Declaration of Trust Sale Price $1,400,000 Grantee Allendale Public School Adjusted Price $1,400,000 Property Rights Fee Simple

Property Description Usable Acres 79.00000 Topography Level Usable SF 3,441,240 Use Designation LDR, Low Density Front Feet 1,320.00 Residential Corner/Interior Interior Zoning Description AG, Agriculture Shape Rectangular

Indicators $/Usable Acre $17,722 $/Usable SF $.41 $/FF $1,060.61

Verification Confirmed With Gary Torneau Confirmed By MAT 1866-9 Confirmation Date 01-15-2009

Land Sales Comparison Analysis All of the sales are analyzed, and adjustments are made for differences in the various elements of comparison, including real property rights, financing terms, conditions of sale, expenditures made immediately after purchase, market conditions, location, size, and other relevant factors. If the comparable sale is considered superior to the subject, I applied a negative adjustment to the comparable. A positive adjustment to the comparable is applied if it is considered inferior to the subject. A summary of the elements of comparison follows.

Transaction Adjustments Transaction adjustments include 1) real property rights conveyed, 2) financing terms, 3) conditions of sale and 4) expenditures made immediately after purchase. These items are applied prior to the application of the market conditions and property adjustments, and are discussed as follows:

Real Property Rights Conveyed Real property rights conveyed influence sale prices and must be considered when analyzing a sale comparable. The sale comparables all reflect the fee simple interest as well as the subject, with no adjustments required.

Financing Terms The transaction price of one property may differ from that of an identical property due to different financial arrangements. Sales involving financing terms that are not at or near market terms require adjustments for cash equivalency to reflect typical market terms. A cash equivalency procedure discounts the atypical mortgage terms to provide an indication of value at cash equivalent terms. All of the comparable sales involved typical market terms by which the sellers received cash or its equivalent and the buyers paid cash or tendered typical down payments and obtained conventional financing at market terms for the balance. Therefore, no adjustments for this category were required.

Conditions of Sale When the conditions of sale are atypical, the result may be a price that is higher or lower than that of a normal transaction. Adjustments for conditions of sale usually reflect the motivations of either a buyer or a seller who is under duress to complete the transaction. Another more typical condition of sale involves the downward adjustment required to a comparable property’s for-sale listing price, which usually reflects the upper limit of value.

A review of the land sales did not indicate any condition of sale adjustments to be warranted for atypical conditions or for sale listings. While sale 1 was purchased by an adjacent owner an adjustment was not warranted.

Expenditures Made Immediately After Purchase A knowledgeable buyer considers expenditures that will have to be made upon purchase of a property because these costs affect the price the buyer agrees to pay. Such expenditures may include: (1) costs to demolish and remove any portion of the improvements, (2) costs to petition for a zoning change, and/or (3) costs to remediate environmental contamination.

The relevant figure is not the actual cost incurred, but the cost that was anticipated by both the buyer and seller. Unless the sales involved expenditures anticipated upon the purchase date, no adjustments to the comparable sales are required for this element of comparison.

The parties to these transactions did not anticipate expenditures were required immediately after purchase; therefore, no adjustments were warranted.

Market Conditions Adjustment Market conditions change over time as a result of inflation, deflation, fluctuations in supply and demand and other factors. Changing market conditions creates the need for adjustments to sale comparables that represent transactions during periods of dissimilar market conditions.

Market Conditions Market conditions change over time as a result of inflation, deflation, fluctuations in supply and demand and other factors. Changing market conditions creates the need for adjustments to sale comparables that represent transactions during periods of dissimilar market conditions.

Discussions with market participants indicate the vacant land market started to improve in 2011, with several recent sales implying higher values. Further, most markets have begun to experience growth in rental rates and positive absorption, increasing demand for vacant land. As such, we have applied an annual upward adjustment of 1.00% to the sale comparables starting January 1, 2011.

For the period prior to January 1, 2011 I have applied an annual downward adjustment of -5.00% to reflect the market downturn experienced as a result of the credit crises.

Property Adjustments Property adjustments are usually expressed quantitatively as percentages that reflect the increase or decrease in value attributable to the various characteristics of the property. In some instances, however, qualitative adjustments are used. These adjustments are based on locational and physical characteristics and are applied after the application of transaction and market conditions adjustments.

The following is a narration of the property adjustments made to each of the sale comparables. The discussion will analyze each adjustment category deemed applicable to the subject property.

Location Location adjustments may be required when the locational characteristics of a comparable property are different from those of the subject property. These include, but are not limited to, general neighborhood characteristics, freeway accessibility, street exposure, corner versus interior lot location, neighboring properties, view amenities, and other factors.

The subject property is located along Ann Street, Bailey Street and Collingwood Drive in a residential neighborhood with good access and average visibility. Comparables 1, 2 and 4 are adjusted upward 10% , while comparable 3 is adjusted upward 20%.

Shape/Depth The subject site consists of a rectangular-shaped tract. Comparable 4 is considered similar to subject and not adjusted. Comparables 1, 2 and 3 are irregular in shape and adjusted upward +5% each.

Corner Exposure Tracts with major street influence tend to bring higher prices than otherwise comparable secondary street locations. Additionally, tracts featuring corner influence typically command higher prices in the market place, as opposed to interior locations. For retail users, the hard corner of an intersection may be marketed to a fairly large pool of small users (e.g. service stations, fast food restaurants, etc.) for sale.

The subject site has a double corner location. The comparables do not have corner locations and are adjusted upward +5% each.

Zoning The highest and best use of sale comparables should be very similar to the subject property. When comparables with the same zoning as the subject are lacking or scarce, parcels with slightly different zoning, but a highest and use similar to that of the subject may be used as comparables. These comparables may have to be adjusted for differences in utility if the market supports such adjustment.

Subject site is zoned Community Facilities. The Community Facilities zoning only allows one economic use, that of a school use. I researched the immediate market area and could not find sales similar to subject. Therefore, I expanded my search and found four sales in other communities in southern Michigan. These sales were purchased for school development/use. These sales, however, were significantly larger then subject property, I have discussed the size difference in the following conclusion section.

Summary of Adjustments Based on the preceding analysis, I have summarized adjustments to the sale comparables on the following adjustment grid. These quantitative adjustments are based on my market research, best judgment, and experience in the appraisal of similar properties.

Land Sales Adjustment Grid 1234 Subject Sale # 1 Sale # 2 Sale # 3 Sale # 4 Sale ID 20657 10112 20120 20106 Date of Value & Sale July 1, 2015 July-10 February-09 August-08 January-08 Unadjusted Sale Price $165,000 $700,000 $750,000 $1,400,000 Usable Square Feet 70,567 442,408 710,671 2,587,054 3,441,240 Unadjusted Sale Price per Usable Sq. Ft. $0.37 $0.98 $0.29 $0.41 Transactional Adjustments FALSE FALSE FALSE FALSE Property Rights Conveyed Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Adjustment ---- Adjusted Sale Price $0.37 $0.98 $0.29 $0.41 FALSE FALSE FALSE FALSE Financing Terms Cash to Seller Cash to Seller Cash to Seller Cash to Seller Cash to Seller Adjustment ---- Adjusted Sale Price $0.37 $0.98 $0.29 $0.41 FALSE FALSE FALSE FALSE Conditions of Sale See Comments Arms Length Arms Length Arms Length Adjustment ---- Adjusted Sale Price $0.37 $0.98 $0.29 $0.41 FALSE FALSE FALSE FALSE Expenditures after Sale Adjustment 0.0% 0.0% 0.0% 0.0% Adjusted Sale Price $0.37 $0.98 $0.29 $0.41 Market Conditions Adjustments Elapsed Time from Date of Value 4.97 years 6.40 years 6.85 years 7.50 years Market Trend Through January-11 -2.4% -9.5% -11.7% -15.0% Subsequent Trend Ending July-15 4.5% 4.5% 4.5% 4.5% Adjusted Sale Price $0.38FALSE $0.93FALSE $0.27FALSE $0.36FALSE Physical Adjustments Location 300 Bailey Street 10622 68th Avenue 3300 Express Court 5219 100th Street, 7101 Pierce Street SE Adjustment 10.0% 10.0% 20.0% 10.0% FALSE FALSE FALSE FALSE Shape/Depth Rectangular Irregular Irregular Irregular Rectangular Adjustment 5.0% 5.0% 5.0% - FALSE FALSE FALSE FALSE Corner Exposure Double Corner Interior Corner Interior Interior Adjustment 5.0% 5.0% 5.0% 5.0% FALSE FALSE FALSE FALSE Zoning C Adjustment ---- FALSE FALSE FALSE FALSE Net Physical Adjustment 20.0% 20.0% 30.0% 15.0% Adjusted Sale Price per Usable Sq. Ft. $0.46 $1.12 $0.35 $0.42

Conclusion From the market data available, four land sales in competitive market areas which were most comparable to the subject were selected. The unadjusted sale prices for the comparable sales ranged from $0.29 to $0.93 per usable sq. ft. These comparables are significantly larger then subject property. Following is a discussion of the size adjustment.

Size The size adjustment identifies variances in the physical size of the comparables and the subject. Typically, the larger a parcel, the lower the sale price per unit. This inverse relationship is due, in part, to the principle of “economies of scale.”

Subject property consists of 1.62 net acres (70,567 net square feet), and 1.62 acres (70,567 square feet) of useable land area. The comparable vacant land sales range in size from 10.15 acres or 442,408 square feet to 79.0 acres or 3,441,240 square feet and required size adjustments. The four sales are less then desirable comparables based upon size alone, but are the only sales of school properties that I could locate. To analyze these sales I considered 23 school properties contained within my data base. The sale dates of these properties range from 1995 to 2010. I have not adjusted the sale prices for time, location, or other factors. The following graph presents the 23 sales:

The above graph demonstrates the inverse relationship between site size and price per foot. The larger the parcel size the lower the price per square foot By way of example, a larger parcel containing 60 to 80 acres would approximate a sale price of $10,000 per acre or $0.23 per square foot, whereas a 20 to 40 acre parcel would approximate a sale price of $20,000 per acre or $0.46 per square foot, and a 10 acre parcel would approximate a sale price of $40,000 per acre or $0.92 per square foot. For small sales ranging from 3 to 5 acres the chart would approximate a sale price of $70,000 per acre or $1.60 per square foot. As previously noted, subject property contains 1.62 acres.

Based upon the above chart subject property would most likely sell for more than $1.60 per square foot.

I adjusted the comparable sales based on pertinent elements of comparison as discussed earlier and summarized the adjustments in the preceding adjustment grid. Furthermore, I have considered the size difference between the subject property and the comparable properties. I have also considered the sale of three single-family residential properties located within the City of East Lansing.

RESIDENTIAL SALES Address Date of Sale Sale Price Lot Size (Sq. Ft.) Price Per Sq. Ft. 109 Whittier Dr. E. Lansing 5/29/2014 $50,000 12,197 $4.10 935 Whittier Dr., E. Lansing 3/13/2014 $50,000 11,761 $4.25 University, E. Lansing 5/28/2010 $70,000 11,761 $5.95 Average $4.77

The three sales ranged from 0.27 to 0.28 acres or 11,761 to 12,196 net square feet. Permitted uses under residentially zoned R-1 and R-2 properties include school uses. The three sales sold for $4.10, $4.25 and $5.95 per square foot, or an average of $4.77 per square foot.

The final adjusted sale prices reflected a range from $1.60 to $4.77 per usable sq. ft. I believe it is reasonable that subject property would sell for a price between $1.60 and $4.77 per square foot. Extrapolating a sale price based upon 1.62 net acres or 70,567 net square feet and the price range previously indicated results in a value of $3.65 per square foot. Many of these sales, however, do not have zoning that is as restrictive as subject property and a value lower than indicated from these sales is reasonable.

Based on the adjusted prices, I have concluded to a unit value for the subject property of $2.75 per usable square feet. This indicates a market value of $195,000.

Based on this analysis, the land value indication is summarized as follows:

Land Value Indication

Indicated Reasonable Value Range 70,567 square feet x $2.50 psf = $176,418 70,567 square feet x $3.00 psf = $211,702 Market Value Opinion (Rounded) 70,567 square feet x $2.75 psf = $195,000

General Assumptions and Limiting Conditions

This appraisal is subject to the following limiting conditions:

1. The legal description – if furnished to us – is assumed to be correct.

2. No responsibility is assumed for legal matters, questions of survey or title, soil or subsoil conditions, engineering, availability or capacity of utilities, or other similar technical matters. The appraisal does not constitute a survey of the property appraised. All existing liens and encumbrances have been disregarded and the property is appraised as though free and clear, under responsible ownership and competent management unless otherwise noted.

3. Unless otherwise noted, the appraisal will value the property as though free of contamination. Valbridge Property Advisors | The Oetzel-Hartman Group will conduct no hazardous materials or contamination inspection of any kind. It is recommended that the client hire an expert if the presence of hazardous materials or contamination poses any concern.

4. The stamps and/or consideration placed on deeds used to indicate sales are in correct relationship to the actual dollar amount of the transaction.

5. Unless otherwise noted, it is assumed there are no encroachments, zoning violations or restrictions existing in the subject property.

6. The appraiser is not required to give testimony or attendance in court by reason of this appraisal, unless previous arrangements have been made.

7. Unless expressly specified in the engagement letter, the fee for this appraisal does not include the attendance or giving of testimony by Appraiser at any court, regulatory, or other proceedings, or any conferences or other work in preparation for such proceeding. If any partner or employee of Valbridge Property Advisors | The Oetzel-Hartman Group is asked or required to appear and/or testify at any deposition, trial, or other proceeding about the preparation, conclusions or any other aspect of this assignment, client shall compensate Appraiser for the time spent by the partner or employee in appearing and/or testifying and in preparing to testify according to the Appraiser’s then current hourly rate plus reimbursement of expenses.

8. The values for land and/or improvements, as contained in this report, are constituent parts of the total value reported and neither is (or are) to be used in making a summation appraisal of a combination of values created by another appraiser. Either is invalidated if so used.

9. The dates of value to which the opinions expressed in this report apply are set forth in this report. We assume no responsibility for economic or physical factors occurring at some point at a later date, which may affect the opinions stated herein. The forecasts, projections, or operating estimates contained herein are based on current market conditions and anticipated short-term supply and demand factors and are subject to change with future conditions.

10. The sketches, maps, plats and exhibits in this report are included to assist the reader in visualizing the property. The appraiser has made no survey of the property and assumed no responsibility in connection with such matters.

11. The information, estimates and opinions, which were obtained from sources outside of this office, are considered reliable. However, no liability for them can be assumed by the appraiser.

12. Possession of this report, or a copy thereof, does not carry with it the right of publication. Neither all, nor any part of the content of the report, or copy thereof (including conclusions as to property value, the identity of the appraisers, professional designations, reference to any professional appraisal organization or the firm with which the appraisers are connected), shall be disseminated to the public through advertising, public relations, news, sales, or other media without prior written consent and approval.

13. No claim is intended to be expressed for matters of expertise that would require specialized investigation or knowledge beyond that ordinarily employed by real estate appraisers. We claim no expertise in areas such as, but not limited to, legal, survey, structural, environmental, pest control, mechanical, etc.

14. This appraisal was prepared for the sole and exclusive use of the client for the function outlined herein. Any party who is not the client or intended user identified in the appraisal or engagement letter is not entitled to rely upon the contents of the appraisal without express written consent of Valbridge Property Advisors | The Oetzel-Hartman Group and Client. The Client shall not include partners, affiliates, or relatives of the party addressed herein. The appraiser assumes no obligation, liability or accountability to any third party.

15. Distribution of this report is at the sole discretion of the client, but third-parties not listed as an intended user on the face of the appraisal or the engagement letter may not rely upon the contents of the appraisal. In no event shall client give a third-party a partial copy of the appraisal report. We will make no distribution of the report without the specific direction of the client.

16. This appraisal shall be used only for the function outlined herein, unless expressly authorized by Valbridge Property Advisors | The Oetzel-Hartman Group.

17. This appraisal shall be considered in its entirety. No part thereof shall be used separately or out of context.

18. Unless otherwise noted in the body of this report, this appraisal assumes that the subject property does not fall within the areas where mandatory flood insurance is effective. Unless otherwise noted, we have not completed nor have we contracted to have completed an investigation to identify and/or quantify the presence of non-tidal wetland conditions on the subject property. Because the appraiser is not a surveyor, he or she makes no guarantees, express or implied, regarding this determination.

19. The flood maps are not site specific. We are not qualified to confirm the location of the subject property in relation to flood hazard areas based on the FEMA Flood Insurance Rate Maps or other surveying techniques. It is recommended that the client obtain a confirmation of the subject’s flood zone classification from a licensed surveyor.

20. If the appraisal is for mortgage loan purposes 1) we assume satisfactory completion of improvements if construction is not complete, 2) no consideration has been given for rent loss during rent-up unless noted in the body of this report, and 3) occupancy at levels consistent with our “Income and Expense Projection” are anticipated.

21. It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or structures which would render it more or less valuable. No responsibility is assumed for such conditions or for engineering which may be required to discover them.

22. Our inspection included an observation of the land and improvements thereon only. It was not possible to observe conditions beneath the soil or hidden structural components within the improvements. We inspected the buildings involved, and reported damage (if any) by termites, dry rot, wet rot, or other infestations as a matter of information, and no guarantee of the amount or degree of damage (if any) is implied. Condition of heating, cooling, ventilation, electrical and plumbing equipment is considered to be commensurate with the condition of the balance of the improvements unless otherwise stated. Should the client have concerns in these areas, it is the client’s responsibility to order the appropriate inspections. The appraiser does not have the skill or expertise to make such inspections and assumes no responsibility for these items.

23. This appraisal does not guarantee compliance with building code and life safety code requirements of the local jurisdiction. It is assumed that all required licenses, consents, certificates of occupancy or other legislative or administrative authority from any local, state or national governmental or private entity or organization have been or can be obtained or renewed for any use on which the value conclusion contained in this report is based unless specifically stated to the contrary.

24. When possible, we have relied upon building measurements provided by the client, owner, or associated agents of these parties. In the absence of a detailed rent roll, reliable public records, or “as-built” plans provided to us, we have relied upon our own measurements of the subject improvements. We follow typical appraisal industry methods; however, we recognize that some factors may limit our ability to obtain accurate measurements including, but not limited to, property access on the day of inspection, basements, fenced/gated areas, grade elevations, greenery/shrubbery, uneven surfaces, multiple story structures, obtuse or acute wall angles, immobile obstructions, etc. Professional building area measurements of the quality, level of detail, or accuracy of professional measurement services are beyond the scope of this appraisal assignment.

25. We have attempted to reconcile sources of data discovered or provided during the appraisal process, including assessment department data. Ultimately, the measurements that are deemed by us to be the most accurate and/or reliable are used within this report. While the measurements and any accompanying sketches are considered to be reasonably accurate and reliable, we cannot guarantee their accuracy. Should the client desire a greater level of measuring detail, they are urged to retain the measurement services of a qualified professional (space planner, architect or building engineer). We reserve the right to use an alternative source of building size and amend the analysis, narrative and concluded values (at additional cost) should this alternative measurement source reflect or reveal substantial differences with the measurements used within the report.

26. In the absence of being provided with a detailed land survey, we have used assessment department data to ascertain the physical dimensions and acreage of the property. Should a survey prove this information to be inaccurate, we reserve the right to amend this appraisal (at additional cost) if substantial differences are discovered.

27. If only preliminary plans and specifications were available for use in the preparation of this appraisal, then this appraisal is subject to a review of the final plans and specifications when available (at additional cost) and we reserve the right to amend this appraisal if substantial differences are discovered.

28. Unless otherwise stated in this report, the value conclusion is predicated on the assumption that the property is free of contamination, environmental impairment or hazardous materials. Unless otherwise stated, the existence of hazardous material was not observed by the appraiser and the appraiser has no knowledge of the existence of such materials on or in the property. The appraiser, however, is not qualified to detect such substances. The presence of substances such as asbestos, urea-formaldehyde foam insulation, or other potentially hazardous materials may affect the value of the property. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required for discovery. The client is urged to retain an expert in this field, if desired.

29. The Americans with Disabilities Act (“ADA”) became effective January 26, 1992. We have not made a specific compliance survey of the property to determine if it is in conformity with the various requirements of the ADA. It is possible that a compliance survey of the property, together with an analysis of the requirements of the ADA, could reveal that the property is not in compliance with one or more of the requirements of the Act. If so, this could have a negative effect on the value of the property. Since we have no direct evidence relating to this issue, we did not consider possible noncompliance with the requirements of ADA in developing an opinion of value.

30. This appraisal applies to the land and building improvements only. The value of trade fixtures, furnishings, and other equipment, or subsurface rights (minerals, gas, and oil) were not considered in this appraisal unless specifically stated to the contrary.

31. No changes in any federal, state or local laws, regulations or codes (including, without limitation, the Internal Revenue Code) are anticipated, unless specifically stated to the contrary.

32. Any income and expense estimates contained in the appraisal report are used only for the purpose of estimating value and do not constitute prediction of future operating results. Furthermore, it is inevitable that some assumptions will not materialize and that unanticipated events may occur that will likely affect actual performance.

33. Any estimate of insurable value, if included within the scope of work and presented herein, is based upon figures developed consistent with industry practices. However, actual local and regional construction costs may vary significantly from our estimate and individual insurance policies and underwriters have varied specifications, exclusions, and non-insurable items. As such, we strongly recommend that the Client obtain estimates from professionals experienced in establishing insurance coverage. This analysis should not be relied upon to determine insurance coverage and we make no warranties regarding the accuracy of this estimate.

34. The data gathered in the course of this assignment (except data furnished by the Client) shall remain the property of the Appraiser. The appraiser will not violate the confidential nature of the appraiser-client relationship by improperly disclosing any confidential information furnished to the appraiser. Notwithstanding the foregoing, the Appraiser is authorized by the client to disclose all or any portion of the appraisal and related appraisal data to appropriate representatives of the Appraisal Institute if such disclosure is required to enable the appraiser to comply with the Bylaws and Regulations of such Institute now or hereafter in effect.

35. You and Valbridge Property Advisors | The Oetzel-Hartman Group both agree that any dispute over matters in excess of $5,000 will be submitted for resolution by arbitration. This includes fee disputes and any claim of malpractice. The arbitrator shall be mutually selected. If Valbridge Property Advisors | The Oetzel-Hartman Group and the client cannot agree on the arbitrator, the presiding head of the Local County Mediation & Arbitration panel shall select the arbitrator. Such arbitration shall be binding and final. In agreeing to arbitration, we both acknowledge that, by agreeing to binding arbitration, each of us is giving up the right to have the dispute decided in a court of law before a judge or jury. In the event that the client, or any other party, makes a claim against The Oetzel-Hartman Group or any of its employees in connections with or in any way relating to this assignment, the maximum damages recoverable by such claimant shall be the amount actually received by Valbridge Property Advisors | The Oetzel-Hartman Group for this assignment, and under no circumstances shall any claim for consequential damages be made.

36. Valbridge Property Advisors | The Oetzel-Hartman Group shall have no obligation, liability, or accountability to any third party. Any party who is not the “client” or intended user identified on the face of the appraisal or in the engagement letter is not entitled to rely upon the contents of the appraisal without the express written consent of Valbridge Property Advisors | The Oetzel-Hartman Group. “Client” shall not include partners, affiliates, or relatives of the party named in the engagement letter. Client shall hold Valbridge Property Advisors | The Oetzel-Hartman Group and its employees harmless in the event of any lawsuit brought by any third party, lender, partner, or part-owner in any form of ownership or any other party as a result of this assignment. The client also agrees that in case of lawsuit arising from or in any way involving these appraisal services, client will hold Valbridge Property Advisors | The Oetzel-Hartman Group harmless from and against any liability, loss, cost, or expense incurred or suffered by Valbridge Property Advisors | The Oetzel-Hartman Group in such action, regardless of its outcome.

37. The Valbridge Property Advisors office responsible for the preparation of this report is independently owned and operated by The Oetzel-Hartman Group. Neither Valbridge Property Advisors, Inc., nor any of its affiliates has been engaged to provide this report. Valbridge Property Advisors, Inc. does not provide valuation services, and has taken no part in the preparation of this report.

38. If any claim is filed against any of Valbridge Property Advisors, Inc., a Florida Corporation, its affiliates, officers or employees, or the firm providing this report, in connection with, or in any way arising out of, or relating to, this report, or the engagement of the firm providing this report, then (1) under no circumstances shall such claimant be entitled to consequential, special or other damages, except only for direct compensatory damages, and (2) the maximum amount of such compensatory damages recoverable by such claimant shall be the amount actually received by the firm engaged to provide this report.

39. This report and any associated work files may be subject to evaluation by Valbridge Property Advisors, Inc., or its affiliates, for quality control purposes.

40. Acceptance and/or use of this appraisal report constitutes acceptance of the foregoing general assumptions and limiting conditions.

Certification

In Michigan, appraisers are required to be licensed/certified and are regulated by the Michigan Department of Licensing and Regulatory Affairs, P.O. Box 30018, Lansing, Michigan 48909. James T. Hartman, MAI, SGA, AI-GRS is currently licensed as a Certified General Real Estate Appraiser with the State of Michigan, Number 1201005950. Mr. Hartman is also licensed in the State of Indiana, the State of Ohio, and the State of Illinois.

James T. Hartman, MAI, SGA, AI-GRS is a member of the Society of Golf Appraisers (SGA). The Society of Golf Appraisers is an organization of real estate appraisers and consultants specializing in the valuation, market analysis, and feasibility analysis of golf courses and golf related properties.

The undersigned does hereby certify that to the best of my knowledge and belief:

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

- The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, 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 not performed any services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment.

- 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 is not contingent upon developing or reporting predetermined results.

- My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event related to the intended use of this appraisal.

- My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.

- As of the date of this report, James T. Hartman, MAI, SGA, AI-GRS has completed the continuing education program for Designated Members of the Appraisal Institute.

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

- A thorough research project whose objective has been the discovery, confirmation, inspection, and analysis of data pertinent to this valuation situation has been completed.

- Robert W. McLean, limited real estate appraiser with the State of Michigan, License Number 1201068700, provided significant real property appraisal assistance to the person signing this certification. Mr. McLean assisted in the property inspection, neighborhood analysis and description, research and verification of comparable sales, approaches to value, and final reconciliation.

- The reported analyses, opinion, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics & Standards of Professional Appraisal Practice of the Appraisal Institute and the Uniform Standards of Professional Appraisal Practice.

- The appraiser signing this report is competent to complete the assignment. The appraiser has the knowledge and experience to complete the assignment competently or has disclosed the lack of knowledge and/or experience to the client, taken all steps necessary or appropriate to complete the assignment competently and has described in the report the lack of knowledge and/or experience and the steps taken to complete the assignment competently.

- The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.

This appraisal is not to be used by the addressee or any recipient as a part of a presentation of a real estate syndicate.

A real estate syndicate means a general or limited partnership, joint venture, unincorporated association or similar organization formed for the purpose of, and engaged in, investment for gain from an interest in real property, including but not limited to, a sale, exchange, trade or development of real property, on behalf of others, or, which is required to be registered with the United States Securities and Exchange Commission or any state regulatory agency, which regulates investments made as a public offering.

James T. Hartman, MAI, SGA, AI-GRS Certified General Real Estate Appraiser State of Michigan, License # 1201005950 [email protected]

Addenda

Glossary Subject Photos Qualifications Information on Valbridge Property Advisors Office Locations

Glossary

Definitions are taken from the Dictionary of Real Estate Appraisal, 5th Edition (Dictionary), the Uniform Standards of Professional Appraisal Practice (USPAP) and Building Owners and Managers Association International (BOMA).

Absolute Net Lease Building Rentable Area A lease in which the tenant pays all expenses including The sum of all floor rentable areas. Floor rentable area is the structural maintenance, building reserves, and management; result of subtracting from the gross measured area of a often a long-term lease to a credit tenant. (Dictionary) floor the major vertical penetrations on that same floor. It is generally fixed for the life of the building and is rarely Additional Rent affected by changes in corridor size or configuration. Any amounts due under a lease that is in addition to base (BOMA) rent. Most common form is operating expense increases. (Dictionary) Certificate of Occupancy (COO) A statement issued by a local government verifying that a Amortization newly constructed building is in compliance with all codes The process of retiring a debt or recovering a capital and may be occupied. investment, typically though scheduled, systematic repayment of the principal; a program of periodic Common Area (Public) Factor contributions to a sinking fund or debt retirement fund. In a lease, the common area (public) factor is the multiplier (Dictionary) to a tenant’s useable space that accounts for the tenant’s proportionate share of the common area (restrooms, As Is Market Value elevator lobby, mechanical rooms, etc.). The public factor is The estimate of the market value of real property in its usually expressed as a percentage and ranges from a low of current physical condition, use, and zoning as of the 5 percent for a full tenant to as high as 15 percent or more appraisal date. (Dictionary) for a multi-tenant floor. Subtracting one (1) from the Base (Shell) Building quotient of the rentable area divided by the useable area The existing shell condition of a building prior to the yields the load (public) factor. At times confused with the installation of tenant improvements. This condition varies “loss factor” which is the total rentable area of the full floor from building to building, landlord to landlord, and less the useable area divided by the rentable area. (BOMA) generally involves the level of finish above the ceiling grid. Common Area Maintenance (CAM) (Dictionary) The expense of operating and maintaining common areas; Base Rent may or may not include management charges and usually The minimum rent stipulated in a lease. (Dictionary) does not include capital expenditures on tenant improvements or other improvements to the property. Base Year The year on which escalation clauses in a lease are based. CAM can be a line-item expense for a group of items that (Dictionary) can include maintenance of the parking lot and landscaped areas and sometimes the exterior walls of the buildings. Building Common Area CAM can refer to all operating expenses. The areas of the building that provide services to building tenants but which are not included in the rentable area of CAM can refer to the reimbursement by the tenant to the any specific tenant. These areas may include, but shall not landlord for all expenses reimbursable under the lease. be limited to, main and auxiliary lobbies, atrium spaces at Sometimes reimbursements have what is called an the level of the finished floor, concierge areas or security administrative load. An example would be a 15 percent desks, conference rooms, lounges or vending areas food addition to total operating expenses, which are then prorated service facilities, health or fitness centers, daycare facilities, among tenants. The administrative load, also called an locker or shower facilities, mail rooms, fire control rooms, administrative and marketing fee, can be a substitute for or fully enclosed courtyards outside the exterior walls, and an addition to a management fee. (Dictionary) building core and service areas such as fully enclosed mechanical or equipment rooms. Specifically excluded from building common areas are; floor common areas, parking spaces, portions of loading docks outside the building line, and major vertical penetrations. (BOMA)

Condominium  The buyer is typically motivated; A form of ownership in which each owner possesses the  Both parties are acting in what they consider to be their exclusive right to use and occupy an allotted unit plus an best interests; undivided interest in common areas.  An adequate marketing effort will be made during the exposure time specified by the client; A multiunit structure, or a unit within such a structure, with  Payment will be made in cash in U.S. dollars or in terms a condominium form of ownership. (Dictionary) of financial arrangements comparable thereto; and  The price represents the normal consideration for the Conservation Easement property sold, unaffected by special or creative An interest in real property restricting future land use to financing or sales concessions granted by anyone preservation, conservation, wildlife habitat, or some associated with the sale. (Dictionary) combination of those uses. A conservation easement may permit farming, timber harvesting, or other uses of a rural Easement nature to continue, subject to the easement. In some The right to use another’s land for a stated purpose. locations, a conservation easement may be referred to as a (Dictionary) conservation restriction. (Dictionary) EIFS Contributory Value Exterior Insulation Finishing System. This is a type of exterior The change in the value of a property as a whole, whether wall cladding system. Sometimes referred to as dry-vit. positive or negative, resulting from the addition or deletion Effective Date of a property component. Also called deprival value in some The date at which the analyses, opinions, and advice in an countries. (Dictionary) appraisal, review, or consulting service apply. 2) In a lease Debt Coverage Ratio (DCR) document, the date upon which the lease goes into effect. The ratio of net operating income to annual debt service (Dictionary) (DCR = NOI/Im), which measures the relative ability to a Effective Gross Income (EGI) property to meet its debt service out of net operating The anticipated income from all operations of the real income. Also called Debt Service Coverage Ratio (DSCR). A property after an allowance is made for vacancy and larger DCR indicates a greater ability for a property to collection losses and an addition is made for any other withstand a downturn in revenue, providing an improved income. (Dictionary) safety margin for a lender. (Dictionary) Effective Rent Deed Restriction The rental rate net of financial concessions such as periods A provision written into a deed that limits the use of land. of no rent during the lease term and above- or below- Deed restrictions usually remain in effect when title passes market tenant improvements (TIs). (Dictionary) to subsequent owners. (Dictionary) EPDM Depreciation Ethylene Diene Monomer Rubber. A type of synthetic 1) In appraising, the loss in a property value from any rubber typically used for roof coverings. (Dictionary) cause; the difference between the cost of an improvement on the effective date of the appraisal Escalation Clause and the market value of the improvement on the A clause in an agreement that provides for the adjustment same date. 2) In accounting, an allowance made of a price or rent based on some event or index. e.g., a against the loss in value of an asset for a defined provision to increase rent if operating expenses increase; purpose and computed using a specified method. also called an expense recovery clause or stop clause. (Dictionary) (Dictionary)

Disposition Value Estoppel Certificate The most probable price that a specified interest in real A statement of material factors or conditions of which property is likely to bring under the following conditions: another person can rely because it cannot be denied at a  Consummation of a sale within a exposure time later date. In real estate, a buyer of rental property typically specified by the client; requests estoppel certificates from existing tenants.  The property is subjected to market conditions Sometimes referred to as an estoppel letter. (Dictionary) prevailing as of the date of valuation;  Both the buyer and seller are acting prudently and Excess Land knowledgeably; Land that is not needed to serve or support the existing  The seller is under compulsion to sell; improvement. The highest and best use of the excess land

© 2015 VALBRIDGE PROPERTY ADVISORS | The Oetzel-Hartman Group Page 62 BAILEY COMMUNITY CENTER ADDENDA may or may not be the same as the highest and best use of Gross Measured Area the improved parcel. Excess land may have the potential to The total area of a building enclosed by the dominant be sold separately and is valued separately. (Dictionary) portion (the portion of the inside finished surface of the permanent outer building wall which is 50 percent or more Expense Stop of the vertical floor-to-ceiling dimension, at the given point A clause in a lease that limits the landlord’s expense being measured as one moves horizontally along the wall), obligation, which results in the lessee paying any operating excluding parking areas and loading docks (or portions of expenses above a stated level or amount. (Dictionary) the same) outside the building line. It is generally not used Exposure Time for leasing purposes and is calculated on a floor by floor 1) The time a property remains on the market. 2) The basis. (BOMA) estimated length of time the property interest being Gross Up Method appraised would have been offered on the market prior to A method of calculating variable operating expense in the hypothetical consummation of a sale at market value on income-producing properties when less than 100 percent the effective date of the appraisal; a retrospective estimate occupancy is assumed. The gross up method approximates based on an analysis of past events assuming a competitive the actual expense of providing services to the rentable area and open market. (Dictionary) of a building given a specified rate of occupancy. Extraordinary Assumption (Dictionary) An assumption, directly related to a specific assignment, Gross Retail Sellout which, if found to be false, could alter the appraiser’s The sum of the appraised values of the individual units in a opinions or conclusions. Extraordinary assumptions subdivision, as if all of the units were completed and presume as fact otherwise uncertain information about available for retail sale, as of the date of the appraisal. The physical, legal, or economic characteristics of the subject sum of the retail sales includes an allowance for lot property; or about conditions external to the property such premiums, if applicable, but excludes all allowances for as market conditions or trends; or about the integrity of carrying costs. (Dictionary) data used in an analysis. (Dictionary) Ground Lease Fee Simple Estate A lease that grants the right to use and occupy land. Absolute ownership unencumbered by any other interest or Improvements made by the ground lessee typically revert to estate, subject only to the limitations imposed by the the ground lessor at the end of the lease term. (Dictionary) governmental powers of taxation, eminent domain, police power, and escheat. (Dictionary) Ground Rent Floor Common Area The rent paid for the right to use and occupy land according to the terms of a ground lease; the portion of the total rent Areas on a floor such as washrooms, janitorial closets, allocated to the underlying land. (Dictionary) electrical rooms, telephone rooms, mechanical rooms, elevator lobbies, and public corridors which are available HVAC primarily for the use of tenants on that floor. (BOMA) Heating, ventilation, air conditioning. A general term encompassing any system designed to heat and cool a Full Service (Gross) Lease building in its entirety. A lease in which the landlord receives stipulated rent and is obligated to pay all of the property’s operating and fixed Highest and Best Use expenses; also called a full service lease. (Dictionary) The reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately Going Concern Value supported, financially feasible, and that results in the  The market value of all the tangible and intangible highest value. The four criteria the highest and best use assets of an established and operating business with an must meet are 1) legal permissibility, 2) physical possibility, indefinite life, as if sold in aggregate; more accurately 3) financial feasibility, and 4) maximally profitability. termed the market value of the going concern. Alternatively, the probable use of land or improved –specific  The value of an operating business enterprise. Goodwill with respect to the user and timing of the use–that is may be separately measured but is an integral adequately supported and results in the highest present component of going-concern value when it exists and value. (Dictionary) is recognizable. (Dictionary) Hypothetical Condition Gross Building Area That which is contrary to what exists but is supposed for the The total constructed area of a building. It is generally not purpose of analysis. Hypothetical conditions assume used for leasing purposes (BOMA)

© 2015 VALBRIDGE PROPERTY ADVISORS | The Oetzel-Hartman Group Page 63 BAILEY COMMUNITY CENTER ADDENDA conditions contrary to known facts about physical, legal, or economic characteristics of the subject property; or about Liquidation Value conditions external to the property, such as market The most probable price that a specified interest in real property should bring under the following conditions: conditions or trends; or about the integrity of data used in an analysis. (Dictionary)  Consummation of a sale within a short period.  The property is subjected to market conditions Industrial Gross Lease prevailing as of the date of valuation. A lease of industrial property in which the landlord and  Both the buyer and seller are acting prudently and tenant share expenses. The landlord receives stipulated rent knowledgeably. and is obligated to pay certain operating expenses, often  The seller is under extreme compulsion to sell. structural maintenance, insurance and real estate taxes as  The buyer is typically motivated. specified in the lease. There are significant regional and  Both parties are acting in what they consider to be their local differences in the use of this term. (Dictionary) best interests. Insurable Value  A normal marketing effort is not possible due to the A type of value for insurance purposes. (Dictionary) brief exposure time. (Typically this includes replacement cost less basement  Payment will be made in cash in U.S. dollars or in terms excavation, foundation, underground piping and architect’s of financial arrangements comparable thereto. fees).  The price represents the normal consideration for the property sold, unaffected by special or creative Investment Value financing or sales concessions granted by anyone The value of a property interest to a particular investor or associated with the sale. (Dictionary) class of investors based on the investor’s specific requirements. Investment value may be different from Loan to Value Ratio (LTV) market value because it depends on a set of investment The amount of money borrowed in relation to the total criteria that are not necessarily typical of the market. market value of a property. Expressed as a percentage of (Dictionary) the loan amount divided by the property value. (Dictionary)

Just Compensation Major Vertical Penetrations In condemnation, the amount of loss for which a property Stairs, elevator shafts, flues, pipe shafts, vertical ducts, and owner is compensated when his or her property is taken. the like, and their enclosing walls. Atria, lightwells and Just compensation should put the owner in as good a similar penetrations above the finished floor are included in position as he or she would be if the property had not been this definition. Not included, however, are vertical taken. (Dictionary) penetrations built for the private use of a tenant occupying office areas on more than one floor. Structural columns, Leased Fee Interest openings for vertical electric cable or telephone distribution, A freehold (ownership interest) where the possessory and openings for plumbing lines are not considered to be interest has been granted to another party by creation of a major vertical penetrations. (BOMA) contractual landlord-tenant relationship (i.e., a lease). (Dictionary) Market Rent The most probable rent that a property should bring in a Leasehold Interest competitive and open market reflecting all conditions and The tenant’s possessory interest created by a lease. restrictions of the lease agreement including permitted (Dictionary) uses, use restrictions, expense obligations; term, concessions, renewal and purchase options and tenant Lessee (Tenant) improvements (TIs). (Dictionary) One who has the right to occupancy and use of the property of another for a period of time according to a Market Value lease agreement. (Dictionary) The most probable price which a property should bring in a competitive and open market under all conditions requisite Lessor (Landlord) to a fair sale, the buyer and seller each acting prudently and One who conveys the rights of occupancy and use to others knowledgeably, and assuming the price is not affected by under a lease agreement. (Dictionary) 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: a. Buyer and seller are typically motivated;

© 2015 VALBRIDGE PROPERTY ADVISORS | The Oetzel-Hartman Group Page 64 BAILEY COMMUNITY CENTER ADDENDA b. Both parties are well informed or well advised, and Operating Expense Ratio acting in what they consider their own best interests; The ratio of total operating expenses to effective gross c. A reasonable time is allowed for exposure in the open income (TOE/EGI); the complement of the net income ratio, market; i.e., OER = 1 – NIR (Dictionary) d. Payment is made in terms of cash in United States dollars or in terms of financial arrangements Option comparable thereto; and A legal contract, typically purchased for a stated e. The price represents the normal consideration for the consideration, that permits but does not require the holder property sold unaffected by special or creative of the option (known as the optionee) to buy, sell, or lease financing or sales concessions granted by anyone real property for a stipulated period of time in accordance associated with the sale. with specified terms; a unilateral right to exercise a privilege. (Dictionary) Market Value As If Complete Market value as if complete means the market value of the Partial Interest property with all proposed construction, conversion or Divided or undivided rights in real estate that represent less rehabilitation hypothetically completed or under other than the whole (a fractional interest). (Dictionary) specified hypothetical conditions as of the date of the Pass Through appraisal. With regard to properties wherein anticipated A tenant’s portion of operating expenses that may be market conditions indicate that stabilized occupancy is not composed of common area maintenance (CAM), real estate likely as of the date of completion, this estimate of value taxes, property insurance, and any other expenses shall reflect the market value of the property as if complete determined in the lease agreement to be paid by the and prepared for occupancy by tenants. tenant. (Dictionary) Market Value As If Stabilized Potential Gross Income (PGI) Market value as if stabilized means the market value of the The total income attributable to real property at full property at a current point and time when all improvements occupancy before vacancy and operating expenses are have been physically constructed and the property has been deducted. (Dictionary) leased to its optimum level of long term occupancy. Prospective Future Value Upon Completion Marketing Time Market value “upon completion” is a prospective future An opinion of the amount of time it might take to sell a real value estimate of a property at a point in time when all of its or personal property interest at the concluded market value improvements are fully completed. It assumes all proposed level during the period immediately after the effective date construction, conversion, or rehabilitation is hypothetically of the appraisal. Marketing time differs from exposure time, complete as of a future date when such effort is projected which is always presumed to precede the effective date of to occur. The projected completion date and the value an appraisal. (Advisory Opinion 7 of the Standards Board of estimate must reflect the market value of the property in its the Appraisal Foundation and Statement on Appraisal projected condition, i.e., completely vacant or partially Standards No. 6, “Reasonable Exposure Time in Real occupied. The cash flow must reflect lease-up costs, Property and Personal Property Market Value Opinions” required tenant improvements and leasing commissions on address the determination of reasonable exposure and all areas not leased and occupied. marketing time). (Dictionary) Prospective Future Value Upon Stabilization Master Lease Market value “upon stabilization” is a prospective future A lease in which the fee owner leases a part or the entire value estimate of a property at a point in time when property to a single entity (the master lease) in return for a stabilized occupancy has been achieved. The projected stipulated rent. The master lessee then leases the property stabilization date and the value estimate must reflect the to multiple tenants. (Dictionary) absorption period required to achieve stabilization. In Modified Gross Lease addition, the cash flows must reflect lease-up costs, A lease in which the landlord receives stipulated rent and is required tenant improvements and leasing commissions on obligated to pay some, but not all, of the property’s all unleased areas. operating and fixed expenses. Since assignment of expenses Replacement Cost varies among modified gross leases, expense responsibility The estimated cost to construct, at current prices as of the must always be specified. In some markets, a modified gross effective appraisal date, a substitute for the building being lease may be called a double net lease, net net lease, partial appraised, using modern materials and current standards, net lease, or semi-gross lease. (Dictionary) design, and layout. (Dictionary)

Reproduction Cost Substantial Completion The estimated cost to construct, at current prices as of the Generally used in reference to the construction of tenant effective date of the appraisal, an exact duplicate or replica improvements (TIs). The tenant’s premises are typically of the building being appraised, using the same materials, deemed to be substantially completed when all of the TIs construction standards, design, layout, and quality of for the premises have been completed in accordance with workmanship and embodying all of the deficiencies, super- the plans and specifications previously approved by the adequacies, and obsolescence of the subject building. tenant. Sometimes used to define the commencement date (Dictionary) of a lease. Retrospective Value Opinion Surplus Land A value opinion effective as of a specified historical date. Land that is not currently needed to support the existing The term does not define a type of value. Instead, it improvement but cannot be separated from the property identifies a value opinion as being effective at some specific and sold off. Surplus land does not have an independent prior date. Value as of a historical date is frequently sought highest and best use and may or may not contribute value in connection with property tax appeals, damage models, to the improved parcel. (Dictionary) lease renegotiation, deficiency judgments, estate tax, and condemnation. Inclusion of the type of value with this term Triple Net (Net Net Net) Lease is appropriate, e.g., “retrospective market value opinion.” A lease in which the tenant assumes all expenses (fixed and (Dictionary) variable) of operating a property except that the landlord is responsible for structural maintenance, building reserves, Sandwich Leasehold Estate and management. Also called NNN, triple net lease, or fully The interest held by the original lessee when the property is net lease. (Dictionary) subleased to another party; a type of leasehold estate.

(Dictionary) (The market definition of a triple net lease varies; in some Sublease cases tenants pay for items such as roof repairs, parking lot An agreement in which the lessee (i.e., the tenant) leases repairs, and other similar items.) part or all of the property to another party and thereby Usable Area becomes a lessor. (Dictionary) The measured area of an office area, store area or building Subordination common area on a floor. The total of all the usable areas or A contractual arrangement in which a party with a claim to a floor shall equal floor usable area of that same floor. The certain assets agrees to make his or her claim junior, or amount of floor usable area can vary over the life of a subordinate, to the claims of another party. (Dictionary) building as corridors expand and contract and as floors are remodeled. (BOMA)

Value-in-Use The value of a property assuming a specific use, which may or may not be the property’s highest and best use on the effective date of the appraisal. Value in use may or may not be equal to market value but is different conceptually. (Dictionary)

Photographs of Subject Property

View looking south on Collingwood Drive.

View looking west on Ann Street.

View looking north On Collingwood Drive.

View looking east on Ann Street.

View looking north on Bailey Street.

View of property looking west.

View of property looking north along east property line.

View of property looking north.

View of property looking north along west property line

. View of property looking east along approximate north property line.

Qualifications of Appraisers

James T. Hartman, MAI, SGA, AI-GRS

Senior Managing Director Valbridge Property Advisors | The Oetzel-Hartman Group

Education:

Bachelor of Arts Degree College of Business Financial Administration Michigan State University, East Lansing, MI

License:

In Michigan, appraisers are required to be licensed/certified and are regulated by the Michigan Department of Licensing and Regulatory Affairs, P.O. Box 30018, Lansing, Michigan 48909. James T. Hartman is currently licensed as a Certified General Real Estate Appraiser with the State of Michigan, License #1201005950, with the State of Indiana, License #CG40600034, with the State of Ohio, License #2007005970, and with the State of Illinois, License #553.002225.

Real Estate Appraisal Curriculum, Appraisal Institute:

Classes: Basic Valuation Real Estate Appraisal Principles Residential Valuation Standards of Professional Practice, Part A Standards of Professional Practice, Part B Standards of Professional Practice, Part C Income Capitalization, Part A Income Capitalization, Part B Case Studies in Real Estate Valuation Report Writing and Valuation Analysis Highest & Best Use and market Analysis Business Practices and Ethics 7-Hour National USPAP Update Course Valuation of Conservation Easements Fundamentals of Separating Real Property, Personal Property, and Intangible Business Assets Review Theory - General

Seminars: Demonstration Appraisal Report Writing Regulation of Financial Information Sharing & Information Brokering REITS and the Role of the Real Estate Professional Partial Interest Valuation - Divided Appraisal Symposium – Real Estate Underwriting Still Standing – The US Real Estate Market Michigan Appraising Licensing Law and Rules Appraisal Consulting: A Solutions Approach for Professionals Scope of Work: Expanding your Range of Services

Seminars: (continued) Supervising Appraisal Trainees Land Valuation Adjustments Workshop Analyzing Distressed Real Estate Market Analysis and the Site to Do Business Valuation & Litigations Services SIG Kick-Off – SIG2006 Fair Housing Introduction to International Valuation Standards Environmental Solutions for Commercial RE Transactions Spotlight on USPAP: Common Errors and Issues Michigan Economy 2009 Appraising Convenience Stores Michigan Economy 2010 Spotlight on USPAP – Appraisal Review Analyzing Distressed Real Estate Spotlight on USPAP: Agreement for Services-Instructions Loss Prevention program for Real Estate Appraisers Liability Issues for Appraisers Performing Litigation & Other Non-Lender Work Small Hotel/Motel Valuation

Other Seminars/Courses:

Historic Preservation Conference: Incentives for Historic Preservation in Detroit - IPED Michigan Tax Tribunal Contemporary Issues – Oakland University LEED for New Construction and Major Renovations Technical Review Workshop - USGBC Understanding the Impact of the Interagency Appraisal and Evaluation Guidelines for Appraisers and Lenders

Appraisal Assignments:

Performed a variety of appraisal assignments including appraisals of vacant land, subdivisions, industrial buildings, hotels, golf courses, resorts, shopping centers, manufactured home parks, elderly care facilities, condominium construction and conversion, restaurants, and office buildings.

Counseling Services:

Economic feasibility and market studies for golf courses, hotels, apartments, multi-tenant office buildings, multi-tenant shopping centers and elderly care facilities.

Professional Recognition:

2000-1 Advisory Board, West Michigan Branch, Great Lakes Chapter, Appraisal Institute 2001 Awarded MAI designation by the Appraisal Institute 2002 Vice-Chair, West Michigan Branch, Great Lakes Chapter, Appraisal Institute 2002 Public Relations Committee, Great Lakes Chapter, Appraisal Institute 2002 General Comprehensive Exam Subcommittee, Standard Setting Panel, Appraisal Institute 2003 Chair, West Michigan Branch, Great Lakes Chapter, Appraisal Institute 2003 Region III Representative Alternate, Great Lakes Chapter, Appraisal Institute 2004 Director, Great Lakes Chapter, Appraisal Institute 2004-14 General Comprehensive Exam Subcommittee, Appraisal Institute 2004 Real Estate Appraiser Exam Content Expert, Bureau of Commercial Services Department of Labor & Economic Growth, State of Michigan 2006 Secretary, Great Lakes Chapter, Appraisal Institute 2007 Treasurer, Great Lakes Chapter, Appraisal Institute 2008 Awarded SGA designation from The Society of Golf Appraisers 2008 Vice President, Great Lakes Chapter, Appraisal Institute 2008-9 Region III Representative, Great Lakes Chapter, Appraisal Institute 2009 President, Great Lakes Chapter, Appraisal Institute 2009-10 Vice Chairman, General Comprehensive Exam Panel, Appraisal Institute 2009 Awarded MRICS designation from the Royal Institution of Chartered Surveyors 2010 Past President (Board of Directors) Great Lakes Chapter, Appraisal Institute 2010 Region III Representative, Great Lakes Chapter, Appraisal Institute 2011-14 Chairman, General Comprehensive Exam Panel, Appraisal Institute 2014 Secretary, The Society of Golf Appraisers 2014 Awarded AI-GRS designation from Appraisal Institute 2014 Member, State of Michigan Board of Real Estate Appraisers

Robert W. McLean

Appraiser Valbridge Property Advisors | The Oetzel-Hartman Group

Education:

The George Washington University Bachelors of Business Administration

License:

Real Estate Appraisal Curriculum, Appraisal Institute:

C 1999 Appraisal Procedures 1999 Standards of Professional Practice, Part A 1999 Basic Income Capitalization 1999 Apartment Appraisal; Concepts and Applications 1999 General Applications 1999 Advanced Income Capitalization 2000 Highest and Best Use and Market Analysis 2000 Advanced Sales Comparison Approach and Cost Approach 2002 Standards of Professional Appraisal Practice, Part B 2003 Report Writing and Valuation Analysis 2003 Advanced Applications 2005 7-Hour National USPAP Update Course 2008 7-Hour National USPAP Update Course 2009 Real Estate Finance Statistics and Valuation Modeling 2009 Basic Appraisal Principles 2009 Litigation Appraising: Specialized Topics and Applications 2010 Business Practices and Ethics 2010 7-Hour National USPAP Update Course 2012 Fundamentals of Separating Real, Personal Property, and Intangible Business Assets

Seminars: 2002 Feasibility Analysis, Market Value and Investment Timing: 2002 Effective Appraisal Writing 2003 Evaluating Commercial Construction 2003 Uniform Appraisal Standards for Federal Land Acquisitions 2004 Land Valuation Adjustment Procedures 2004 Land Valuation Assignments 2005 Real Estate Finance, Value and Investment Performance 2005 Analyzing Distressed Real Estate 2005 Subdivision Valuation: A Comprehensive Guide to Valuing Improved Subdivisions 2006 Analyzing Commercial Lease Clauses: Implications for Property Value and Marketability 2006 Understanding and Testing DCF Valuation Models 2007 Appraising High-Value and Historic Homes 2007 The Road Less Traveled: Special Purpose Properties 2007 Small Hotel/Motel Valuation: Appraising the Limited-Service Lodging Facility Appraising Waterfront and Lakeshore Property 2009 Michigan Economy 2009 2011 Michigan Tax Tribunal Overview 2011 Appraising Convenience Stores 2012 Analyzing Distressed Market Conditions in Michigan

Other Seminars/Courses:

Introduction to Business Valuation – American Society of Appraisers The Income Approach – American Society of Appraisers

Professional Affiliations:

Appraisal Institute Candidate Member

Types of Assignments:

Ad Valorem Tax Appeals Leasehold and Leased Fee Analysis Apartments Multi-Family Housing Office Buildings (multi-lease) Regional and Local Shopping Centers Central Business District Prope Rental Analysis & Feasibility Studies Commercial Buildings Residential Properties (HUD, FNMA) Congregate Care Facilities Sale or Purchase Decisions Estate Valuation Sale and Leaseback Situations Fractional Interest Site Analysis Special Purpose Properties Hospitals Hotels Vacant Land Industrial Buildings Warehouse

\\\

ASSESSING DEPARTMENT Quality Services for a Quality Community

MEMORANDUM

TO: Tim Dempsey, Director of Planning, Building, and Development

FROM: David C. Lee, City Assessor

DATE: September 17, 2015

SUBJECT: Parcel 33-20-02-18-136-015

City of East Lansing ASSESSING DEPARTMENT You have inquired what the assessed value of parcel 33-20-02-18-136-015 would be as it 410 Abbot Road currently sits undeveloped if it were taxable. This is a vacant parcel on the northeast corner East Lansing, MI 48823 of Abbot Road and Albert Avenue. This parcel is owned by the City of East Lansing and is (517) 319-6880 www.cityofeastlansing.com currently used as a park.

Assuming there are no restrictions on the use of this parcel and it could be developed, I

would consider its highest and best use to be as vacant land, a future commercial development site. The parcel is 94 feet by 100 feet, or 9,400 square feet. For 2015, we

used a rate of $40 per square foot to value land in this area. Based on that rate, we would have valued this parcel at $376,000; the assessed value would have been $188,000.

If you have any questions or need additional information, please let me know.

C: Mary L. Haskell, Finance Director

City of East Lansing Public Hearing Notice Bailey Community Center Conversion

Notice is hereby given that the East Lansing City Council will be holding a Public Hearing during the Tuesday, October 20, 2015 Regular Meeting for the purpose of accepting comments on the proposed conversion of Bailey Community Center from public use to limited private use and on the designation of the property on the northeast corner of Albert Avenue and Abbot Road as a park. The Bailey Community Center is currently restricted for public use in perpetuity due to the receipt of a Michigan Recreation Bond Fund grant. In order to lease the property and convert all or part to other than public use, a replacement property of equal or greater value must be designated to mitigate the loss of the grant assisted property. The conversion is for the purpose of renovating the Community Center into a senior housing development. The conversion will be mitigated by the property at the northeast corner of Albert Avenue and Abbot Road which will be thereafter held in perpetuity for public use. The meeting will be held at 7:00 p.m. in Courtroom 2, East Lansing City Hall, 410 Abbott Road, East Lansing, MI. Materials are available for review at East Lansing City Hall, Office of the Director of Parks and Recreation, 410 Abbot Road and at East Lansing Hannah Community Center, 819 Abbot Road, or on the City of East Lansing’s website: www.cityofeastlansing.com. Questions regarding this notice or the materials may be directed to Timothy McCaffrey, 517-319-6867 or Wendy Wilmers-Longpre, 517-319-6940.

Marie Wicks City Clerk

Publish: Towne Courier Sunday, September 20, 2015

Lansing State Journal Saturday, September 19, 2015

1 Affidavit, please