NYE COUNTY AGENDA INFORMATION FORM Action J Presentation II Presentation & Action Department: County Manager Agenda Date: Category: Regular Agenda Item May 4, 2010 Contact: Pam Webster Phone: Continued from meeting of: Return to: Location: Phone: I Action requested: (Include what, with whom, when, where, why, how much ($)and terms) Discussion, deliberation, and possible decision to set a date, time and location for a Public Hearing on the on the fair market value of the Old Nye County Courthouse, Assessor’s Parcel Number 008-311-01 located in Tonopah, Nevada. An appraisal of the subject property was conducted by American Real Estate Appraisal and the market value of the subject property is estimated to be $1,100,000.00.
Complete description of requested action: (Include, if applicable, background, impact, long-term commitment, existing county policy, future goals, obtained by competitive bid, accountability measures)
NRS 244.2795 requires the Board of County Commissioners to obtain two independent appraisals of the real property before selling or leasing it. If the Board of County Commissioners holds a public hearing on the matter of the fair market value of the real property, one independent appraisal of the real property is sufficient before selling or leasing it.
Staff recommends setting a date, time, and location for May 17, 2010 at 10:35 a.m. in Pahrump, Nevada.
Any information provided after the agenda is published or during the meeting of the Commissioners will require you to provide 20 copies: one for each Commissioner, one for the Clerk, one for the District Attorney, one for the Public and two for the County Manager. Contracts or documents requiring signature must be submitted with three original copies.
Expenditure Impact by FY(s): (Provide detail on Financial Form)
lxiNo financial impact Routing & Approval (Sign & Date) 1. Dept Date 6. Date 2. Date 7 p Date
3 Date 8. Legal Date
4. Date 9. Finance Date
5. Date io.County Manager Date Board of County Commissioners Action Approved J Disapproved J Amendedas follows:
Clerk of the Board Date
iTEM CHAPTER 244 - COUNTIES: GOVERNMENT
COUNTY PROPERTY
NRS 244.2795 Sale or lease of certain real property: Appraisal required; qualifications and selection of appraisers; disclosure statements; interest of appraiser or related person in property or adjoining property prohibited; effect of sale or lease in violation of section. 1. Except as otherwise provided in NRS 244.189, 244.276, 244.279, 244.2825, 244.2835, 244.284, 244.287, 244,290, 278.479 to 278.4965, inclusive, and subsection 3 of NRS 496.080, except as otherwise required by federal law, except as otherwise required pursuant to a cooperative agreement entered into pursuant to NRS 277.050 or 277.053 or an interlocal agreement in existence on or before October 1, 2004, except if the board of county commissioners is entering into a joint development agreement for real property owned by the county to which the board of county commissioners is a party, except for a lease of residential property with a term of 1 year or less, except for the sale or lease of real property to a public utility, as defined in NRS 704.020, to be used for a public purpose, except for the sale or lease of real property to the State or another governmental entity and except for the sale or lease of real property larger than 1 acre which is approved by the voters at a primary or general election or special election, the board of county commissioners shall, when offering any real property for sale or lease: (a) Except as otherwise provided in this paragraph, obtain two independent appraisals of the real property before selling or leasing it. If the board of county commissioners holds a public hearing on the matter of the fair market value of the real property, one independent appraisal of the real property is sufficient before selling or leasing it. The appraisal or appraisals, as applicable, must have been prepared not more than 6 months before the date on which the real property is offered for sale or lease. (b) Select the one independent appraiser or two independent appraisers, as applicable, from the list of appraisers established pursuant to subsection 2. (c) Verify the qualifications of each appraiser selected pursuant to paragraph (b). The determination of the board of county commissioners as to the qualifications of the appraiser is conclusive. 2. The board of county commissioners shall adopt by ordinance the procedures for creating or amending a list of appraisers qualified to conduct appraisals of real property offered for sale or lease by the board. The list must: (a) Contain the names of all persons qualified to act as a general appraiser in the same county as the real property that may be appraised; and (b) Be organized at random and rotated from time to time. 3. An appraiser chosen pursuant to subsection 1 must provide a disclosure statement which includes, without limitation, all sources of income that may constitute a conflict of interest and any relationship with the real property owner or the owner of an adjoining real property. 4. An appraiser shall not perform an appraisal on any real property for sale or lease by the board of county commissioners if the appraiser or a person related to the appraiser within the first degree of consanguinity or affinity has an interest in the real property or an adjoining property. 5. If real property is sold or leased in violation of the provisions of this section: (a) The sale or lease is void; and (b) Any change to an ordinance or law governing the zoning or use of the real property is void if the change takes place within 5 years after the date of the void sale or lease. (Added to NRS by 2005, 1457; A 2005, 2671, 2680; 2007. 2827) I B. KENT REAL OLD ASSESSORS VOLLMER, NYE NYE ESTATE American TONOPAH, COUNTY COUNTY Las 6441 PRESENTED TONOPAH, PREPARED DECEMBER 101 PARCEL Vegas, CERTIFIED Crystal RADAR Real ASOF APPRAISAL COURTHOUSE ADMINISTRATION NEVADA OF Nevada Estate NUMBER Dew NEVADA 9, ROAD GENERAL 2009 Appraisal Drive 89118 BY TO 89049 008-311-01 AND REPORT APPRAISER JAIL Office B. /\mericarii K 0 r,t (702) B. TëSummaAppraisa1 Sincerely, and report. Subject This “Limiting leading containing the analysis appraisal report County Tnactuciance Standards Dear Nye Tonoriah, April V 0 — Kent intended in 876-7799 Radar transmittal County In,e Judy 15, this Volimer to As to is Courthouse process r, 2010 Conditions” the Nevada the Rule retained summary such 57 Road C 0 use Administration opinion Assumptions pages, with rtified 2 letter ONE it as to 2(B) presents 89049 in indicated your develop report, further Subject and is our of which of G 000 MILLION followed value. Rortis the file Jail, only the and describing the to below. are Uniform r The market Located repairs
Limiting Rea Your opinion summary 6441 I considered by Appr intended ethoJ the We attention Crystal Standards value needed ONE the certification a of at Conditions are discussions subject value usual discussion not of Dew to HUNDRED is the responsible bring of I directed Dr. $1,100,000 008-311-01, for Supportingdocurnentation property subject Prof med included of this Las
of Estate the contained the the a RE: APN: Vegas, type to Summary building property, appraisal and d’q the for herein, of Tonopah, THOUSAND unauthorized containing 008-311-01 “General NV assignment in reasoning Tonopah, Old into hrs as and 89118 and Nye of a report the lease-able to Underlying December Nye Co the NV the -and summary and concerning use Courthouse reasoning bdity, is information 89049 analyses specific have of
DOLLARS Appraisa condition. this 9, Assumptions” been 2009 appraisal Nevada. D 091 report. summary and the to forth that & your contained included was data-reasoning Jail pertinent were acated un4iIf. estimated needs report appraisal D.Voii,ner,SRPA,SRA used and in Old Fax in data and the in my (702) Nye to the for files and be: — 876-1787 CERTIFICATION I certify that, to the best of our knowledge and belief:
— the statements of fact contained in this report are true and correct.
S the reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are our personal, unbiased professional analyses, opinions, and conclusions.
I have no present or prospective intresti the property that is the subec1QIthjs ieport, and I. have no personal interest or bi w1hes&f thc parties involved. r my engagement in this ass1gnmeit sot contingerItupon developmg ig
S my the development or reporting of a predetermined value or direction in of the client, the amount of the value opinion, the J attainrnèntQf a stipulated result, or the occurrence ola ut directly related to the jntended use ofthi appraisal _. S my anâlyss, opinions, and prepared, in / conforniit witb the Uniform Standards- Practice. S I have made a personal inspection of the property that i tI subject of this report S no one provided significant professional assistance to the persons signing this report. S The undersigned appraiser currently hold appropriate state certifications allowing the performance of real estate appraisals in connection with federally related transactions in the state in which the subject property is located.
Sincerely,
B. Kent Volimer
Office (702) 876-7799 6441 Crystal Dew Dr. Las Vegas, NV 89118 Fax (702) 876-1787 4 CLIENT Nye County Administration Judy Dodge 101 Radar Road Tonopah, NV 89049
APPRAISER B. Kent Volimer Certified General Appraiser Certification No. A.00ll1-CG, State of NV
SUBJECT Vacated Old Nye County Courthouse and Jail APN: 008-311-01 Tonopah, NV 89049
PURPOSE OF THE APPRAISAL The purpose of this appraisal was to estimate the market value of the fee simple estate of the subject property. (See Definition in Addendum for market value.)
INTENDED USE OF REPORT For the sole purpose of estimating a market value for potential property use decisions.
INTEREST VALUED Fee simple. (See Definition in Addendum.)
American Real Estate Appraisal Old Nyc (ounty Courthouse & Jail. APN ltO-3 1-tIl Tonopah. NV 200912(3254
EFFECTIVE DATE OF VALUE
December 9, 2009
DATE OF INSPECTION
December 9, 2009
DATE OF PREPARATION
April 15, 2010
APPRAISAL DEVELOPMENT AND REPORTING PROCESS
This Summary Appraisal Report is a brief recapitulation of the data, analyses, and conclusions arising from the research performed during the course of this assignment; supporting documentation has been retained in file.
SCOPE OF WORK The appraiser is required to identify the scope of work sufficient to produce credible assignment results that are supported to the degree necessary for the intended use of the assignment. It is important that both the appraiser and the client fully understand the scope of work to ensure that it is appropriate for the intended use of the assignment. This requires that the appraiser must identify the problem to be solved, determine the scope of work necessary to develop credible assignment results and to disclose the scope of work in the report. It is the intent of this assignment that all appropriate data regarded to be pertinent to the development of this appraisal be collected, confirmed and reported in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP) in conformity with the intended use of the assignment.
.Iinerican Real Estate zIppraisal Old Ny Coun (nurthoijs & Iii. APi flO-3 I 1-01. rnop1h. v The Scope of Work sufficient to produce credible appraisal assignment results for the subject property is described as follows:
1. The basic problem(s) to be solved associated with achieving credible appraisal assignment results are identified as: (1) Produce an opinion of market value supported by an analysis of comparable market data; (2) The highest and best use of the comparable sales will focus on Commercial Uses.
2. An inspection of the subject land is required for this assignment.
3. Discussions between the client and appraiser resulted in agreement that the appropriate report type for this assignment is a Summary Appraisal Report in a narrative report format.
4. The appraisal client and any other intended users, intended use of the appraiser’sopinions and conclusions, type and definition of value, effective date of the appraiser’sopinions and conclusions and subject of the assignment and its relevant characteristics are described in detail elsewhere in this report.
5. Client agency or special legal instructions involving extraordinary assumptions provided to the appraiser are described as The Subject Property will be valued as repaired, in adequate condition to allowably lease the property to prospective tenants.
6. Property inspection contact: Judy Dodge. Complete interior and exterior inspection of improvements will be conducted.
7. Municipal contacts consisted of Nyc County Assessors Office; Nyc County Planning Department.
8. A Sales Comparison Approach to overall property value will be completed. Improved property sales for old municipal buildings similar to the subject could not be found, and common indicators of value will be derived from data that would be reflective of the subject property.
9. An Income Capitalization Approach to Value will be completed for this assignment.
.4,,,erican Real E.ctate1ppraisal Od Ny ( ount Qourtl,ous & au.APN I -fl I Fonopafl. NV 2009120254
10. A Cost Approach to Value will NOT be completed for this assignment.
11. This assignment requires a summary description of the improvements.
12. This assignment requires a summary description of the land.
13. Comparable sales have been obtained from in-house appraiser data files, confirmation with buyers and sellers, public property records, assessor’soffice, real estate brokers, data sources available to REALTORS, and data sharing with outside real estate professionals.
14. Appropriate research will be conducted pertaining to current market conditions relating to the specific market demand for the subject property. The geographic area to be searched for market data generally will be limited to Nye County and surrounding counties, within a past time span of about three years, with the type of market data focused upon Commercial building property types.
The opinion of value conclusion for the subject real estate involves a reconciliation of the previous indications of value which are regarded to meaningfully contribute to this appraisal assignment. The valuation analyses are described in detail elsewhere in this report together with a statement explaining the exclusion of any of the three traditional valuation methods. Consideration of these valuation analyses along with professional judgement forms the basis for an opinion of value.
I1nerican Real Estate Appraisal Od Ny Couty Courthouse & \P>: OO-3 -C. 1onopnh. NV 2009120254
TONOPAH HISTORY Tonopah Springs, later the site of one of the richest booms in the West, was an Indian campground for many years, long before Jim Butler spent a chilly night here. A number of stories exist as to how Butler discovered the ore. The most popular version is that Butle?s mule wandered away and when Butler found the ornery critter, he noticed an outcropping that appeared to be heavily laced with silver. Butler took a number of samples. The date was May 19, 1900. This quiet start belied the actual importance of the discovery. Butler firmly believed he had discovered an important silver deposit but he had trouble convincing the assayer he visited in nearby Kiondike. The assayer told him the samples were worthless, consisting mainly of iron, and he threw them into the back of his tent.
Butler was still convinced that his find was genuine. On his way back to his Monitor Valley ranch, he stopped at Tonopah Springs once more to gather samples. Back at his ranch, Butler put the samples on his windowsill. Not too much time passed before Tasker Oddie, later to be governor of Nevada, stopped at the ranch and spied the ore samples. He offered to pay for another assay and Butler agreed to this. Butler, in turn, offered Oddie a quarter interest of the assay. Oddie heartily agreed. He took the ore samples to William Gayhart, an Austin assayer, and offered Gayhart a quarter interest in his quarter. Gayhart found the assay ran as high as $600 a ton. When Oddie was notified of the value of the samples, he immediately sent an Indian runner to Butler’sranch to alert him of the rich find. Butler did not react rapidly. He stayed at his ranch to complete the hay harvest and did not even bother to file claims on the lode site!
News of the discovery traveled to Klondike and soon, scores of eager prospectors were searching around Tonopah Springs, to no avail, for Butler’slode. Butler finally went to Belmont, and on August 27, 1900,
he and his wife filed on eight claims near the springs. Six of these - Desert Queen, Burro, Valley View,
Silver Top, Buckboard, and Mizpah - turned into some of the biggest producers the state has ever had.
Work was begun on the Mizpah mine in October 1900, and a camp called Butler formed nearby. On Christmas Day, 1900, 14 men were living in the camp including Butler and Tasker Oddie, Nye County’s new District Attorney. Butler decided to lease out all of his claims for one year, from December 1900,to December 1901. Soon, the cry of “Jim, how about a lease?” was heard throughout the bustling camp. Oddie and Butler were partners, receiving a 25% royalty on all gold and silver mined from the Butler claims.
.4,nerican Real Estate Appraisal cHd Nyc C ounty Cnur1houc & Jaii.. APN (JO-3 I Tnopah. N V 2009120254
The town of Butler began to grow by leaps and bounds. By January 1901,there were 40 men in the camp. The first stagecoach, coming from Sodaville, arrived in Butler on March 24, 1901, with seven passengers. It was a two day trip, with an overnight stay at Crow Springs. The camp consisted of seven shacks, a number of tents and a population of 60. Within weeks, the population had grown to 250. A post office (Willie Sinclair, postmaster), named Butler, opened at the booming camp on April 10, 1901. It was not until March 3, 1905,that the post office changed its name to Tonopah.
By the summer of 1901, Butler was beginning to make its mark on Nevada’s silver production figures. The mines around the town produced almost $750,000 in gold and silver in 1901, and for the next 40 years, the Tonopah mines were consistent producers. The town now had six saloons, restaurants, assay offices, lodging houses, a number of doctors, lawyers and a rapidly swelling population of 650. The first wedding took place on November 14 when Harry Stimler and Eleanor Whitford were married.
A newspaper came to the town on June 15, 1901, when W. W. Booth, who had published a paper in Belmont, set up the Tonopah Bonanza. The first issue had this greeting: “With this issue, the Tonopah Bonanza glides down the typographical ways and into the sea ofjournalism. Whether its voyage will be a calm and prosperous one, time along will tell. The Bonanza will at all times act as a free lance, giving credit whenever merited and censure when called for. Our policy in politics will be for the best of the country. That the paper will meet with public favor or condemnation is left to the opinion of the reader and advertiser. We have done our best and sincerely hope it will meet with your approval.” The paper listed Butler as its place of publication until March 1905. Booth took over the postmaster duties from Sinclair and served until 1905.
1902 was also very prosperous for the booming town. Jim Butler had sold out the claims, which were all consolidated and gave birth to a new company, the Tonopah Mining Company. It was incorporated in Delaware, with stock listed on both the Philadelphia and San Francisco exchanges. The company, with J.H. Whiteman as president, controlled 160 acres of mineral-bearing ground around the Tonopah district. The company also had holdings in the Tonopah-Goldfield Railroad and controlled mining companies in Colorado, Canada, California and Nicaragua. The mine workings at Tonopah consisted of three deep shafts with more than 46 miles of lateral workings. The deepest of the three shafts was 1,500’. The ore mined at the site was shipped to Millers, where it was treated in a 100-stamp mill. This facility was used by the company’smines until suitable treatment facilities were built at Tonopah.
American Real Estate Appraisal Old Ny County (ourthousc & (10-3 11-01, Tonou. N V The Tonopah-Belmont Mining Company was also formed in 1902. The company was based in New
Jersey and had C.A. Heller as president. The company’sproperty, 11 claims covering more than 160 acres, was on the east side of the property owned by the Tonopah Mining Company. There were two deep vertical shafts, 1,200’and 1,700’,with workings covering almost 39 miles. The company also had to ship its ore to Millers until 1912, when its own 60-stamp mill was built at Tonopah. The mill had a capacity of 500 tons. During its years of activity, 1912-1923, it was regarded as one of the country’sbest equipped and most efficient silver cyanide mills.
These two mining companies were the mainstays that provided the financial boost to push Tonopah to prominence during 1902. There were some dark days for Tonopah that year. A month-long epidemic plagued the town. Before it had passed, 50 of Tonopah’sresidents had died. By the end of 1902, the town had recovered and the population stood at more than 3,000. The booming town supported more than 30 saloons, a few churches, a school, two newspapers and numerous other business establishments.
Stages from all over the state began to arrive in Tonopah. One was held up on the outskirts of town. It was Tonopah’sonly stage robbery. Wyatt Earp was a resident of Tonopah from 1902 to 1904, running the Northern Saloon and helping out the law every once in a while.
Any fear of Tonopah being just another quick boom, destined to collapse, vanished in late 1902 and early 1903. Substantial new ore deposits were located deep in a number of the already active mines, including the Montana-Tonopah, Desert Queen, North Star and Tonopah Extension. The huge volume of ore being mined in Tonopah’srich mines led to shipping problems, for the only mills at that time were in Millers. It was decided to build a narrow gauge railroad and construction began in late 1903. The 60-mile long railroad connected Tonopah with the Carson and Colorado branch of the Southern Pacific Railroad at the Sodavillejunction. The railroad was officially opened on July 25, 1904, followed by three days of jubilant celebration. In 1905, the railroad was enlarged to standard gauge. When the rails were extended to Goldfield in the fall of 1905, the railroad was organized and named the Tonopah and Goldfield Railroad.
In May 1905, Tonopah became the county seat in place of almost empty Belmont. The town continued
to grow. John Brock dominated most of the mine ownership in Tonopah. In addition to controlling a number of prosperous mining companies, he also was acting president of the Bullfrog-Goldfield Railroad, and the Tonopah and Goldfield Railroad.
,4inerican Real Estate Appraisal Old Nyc Cointy Cc,uithosc & JiH. i\P\ OO-3l 1-O. Tnoph, NV Two major mining companies achieved prominence in Tonopah during the next few years. The Tonopah Extension Mining Company was formed in Arizona and had its main offices in New York City. The company controlled almost 700 acres of mineral-bearing ground in the Tonopah district, most on the west side of the Tonopah Mining Company’sproperty. The company had three major shafts with about
33 miles of lateral work. The three mines - the No. 2, Victor, and McKane - were all more than 1,500’ deep. The deepest, the Victor, was almost 2,200’.The company built a 30-stamp cyanide mill in 1910, which was later enlarged to 50 stamps.
The second major new company was the West End Consolidated Mining Company, incorporated in Arizona. West End controlled 185 acres on the southwest side of the Tonopah Mining Company’s property. The company also controlled the Halifax-Tonopah Mining Company and leased land from Jim Butler. There were three main shafts on the company’sproperty, the deepest more than 1,400’.The company built a cyanide mill in 1911 that had a daily capacity of more than 200 tons. In addition to these four big companies, there were close to 20 other well-established mining companies active in the district during the l9lOs and the 1920s.
By 1907, Tonopah had become a regular city, with modern hotels, electric and water companies, five banks, schools and hundreds of other buildings. Newspapers began to play a larger role in the town, and a number of rivalries arose. The best known of these rivalries was between the Tonopah Sun and the Tonopah Daily Bonanza. The Sun had begun in 1904 as a weekly but was changed to a daily on January 10, 1905. The Daily Bonanza was run by W. W. Booth, who also ran the weekly Tonopah Bonanza, which had folded on Christmas Day, 1909. Booth’sdaily began publication on October 24, 1906, and soon the two papers were fighting tooth and nail. During this same period, three other weeklies were being published.
The Mizpah Hotel, the landmark of present Tonopah, was completed in 1908 and opened with great fanfare on November 17. More than $200,000 was spent on the hotel, which boasted baths, steam heat and crude elevators. Not all was glitter in Tonopah, however. A fire in May 1908, destroyed an entire block of the business district with a loss of $150,000, and another fire in June 1909 burned the roundhouse and machine shops of the Tonopah and Goldfield Railroad, also a loss of$150,000.
A,,,erican Real Estale 4ppraisa! (Hd Nyc (outty Courthouse & JaiL APN: OOtI3 I iO I Toaopah, N V However, February 28, 1911, is the darkest day in the town’sbright history. A mysterious fire, small but smoky, broke out at the bottom of the 1,200’shaft of the Belmont mine at seven in the morning. A number of men had already gone below before the seriousness of the situation was realized. The fumes were extremely toxic. Calls to the hoist operator came in slowly at first but soon became frantic. Although many men were brought to safety, 17 men perished in the mine. All died from the choking fumes, not the fire. A number of the dead had actually made it to the hoist lift but were so weakened that they fell out of the cage to their deaths at the bottom of the shaft. Actual damage to the shaft was only $5,000. The cause of the deadly fire was a candle left on a pile of dry timber by a careless night watchman. This was the only major mining accident in the Tonopah mines. The Belmont mine was soon reopened. It produced $38 million in silver and gold before another fire in 1939 closed the mine for good.
W. W. Booth remained a controversial figure as Tonopah continued to progress. In 1916, he was brought to court on a libel suit after accusing a district attorney of being dishonest, among other things. He lost the case and was sentenced to six months in the countyjail. The other newspaper editors were outraged, and their voices were heard. Booth was released after serving only a month and was
eventually pardoned. Booth’sDaily Bonanza came upon hard times during the 1920s. On November 16, 1929, the paper was sold to Frank Garside, who had been in charge of the Tonopah Daily Times since
its origin on December 1, 1915. Garside consolidated the two papers into the Tonopah Times-Bonanza. Booth soon left Tonopah and moved to Hawthorne, becoming editor of the Hawthorne News. The Tonopah Times-Bonanza was a daily until April 2, 1943, when it was changed to a weekly, as it is today.
Tonopah’smines maintained very high yearly production until the Depression brought a slowdown. Mine production from 1900 to 1921, the peak years, was almost $121 million. The biggest single year
was 1913,when almost $10 million in gold, silver, copper and lead was mined. By World War II, only four major mining companies were operating. A huge fire in October 1942 destroyed the Tonopah Extension mill and property, and spread to a nearby hotel, causing $100,000 in damage. At the end of the war, even these companies had left. The final blow came in 1947 when the Tonopah and Goldfield Railroad folded and its rails were torn up.
American Real Estate Appraisal Od Ny CoDnty Courthouse & taiL APN I - I Tnopah. N V 2009120254
Not much mining activity has taken place in Tonopah since then. In 1968, Howard Hughes and his Summa Corporation bought 100 claims in Tonopah, including the Mizpah, Silver Top, and Desert Queen mines. Hopes for a mining revival soon faded after core samples and nothing more were taken. A few of the old mines were re-timbered but never reopened. As of now, total production from the Tonopah district is just more than $150 million, a figure few other places could boast.
Tonopah is still the county seat of Nye County and has a population of around 3,000. During recent times, the town’sproximity to the Nellis Air Force Bombing and Gunnery Range supported many of the town’sbusinesses. Many military personnel lived in the motels while working at the missile test range. Also, a nearby part of the test range was home for the super-secret Stealth fighters and bombers. Long before the military acimowledged the plane’s existence, residents of Tonopah were constantly treated to fly-overs from the plane that didn’texist. However, the Stealth base has been relocated to New Mexico, and other cutbacks have drastically reduced the military’simpact on the town.
Tonopah is still a vibrant town, however. Tourism now plays a large part in the local economy. Many buildings still remain from the boom era, including the Mizpah Hotel, completely renovated during the
late 1970s. Other points of interest include the Nye County Courthouse, built in 1905 at a cost of $55,000 on land donated by Jim Butler; the old Tonopah Public Library, built in 1912 and now the oldest active library in Nevada; St. Mark’sEpiscopal Church, built in 1906 and one of the better known landmarks in Tonopah; and the ruins of the old 500-ton Belmont mill, on the east side of Mt. Oddie. An extremely interesting place to visit is the Tonopah Historic Mining Park. The mines, formerly owned by Howard Hughes’Summa Corporation and donated by Echo Bay Mining Company, and a walking tour of the mining complex has been organized.
./hnerican Real Estate Appraisal Od Nyc County (ourthounc & JaiL APX Ot)8-311-fll. Tonopuh N\ ____
2009120254
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American Real Estate Appraisal Old N3c Counl’ Courthouse & Jail. ARN 1)08-Il -0 I. [osopah. NV 15
CITY MAP
American Real Estate Appraisal Od Nyc (ount’ & ,Ii1. APN 008—311—1)1Tonoph, N’v 2009120254 6
NEIGHBORHOOD MAP
American Real Estate Appraisal Od Nyc County Courthouse & Jsd.APN: 008-31 1—0 Tonopah. N\’ 2009120254
SITE DESCRIPTION
The subject property is comprised of 1parcel of land and has a reported site area of 2.01 acres. The parcel lacks direct street frontage and is provided access via two “lanes” off McCullogh Avenue (also known as Frankee Street) and a lane off Main Street (US 95). This parcel is raised significantly from these two street frontages. The topography of this parcel is elevated with up slope towards the north and east. The building pad and paved parking is generally flat. Access lanes are asphalt paved.
The property is not subject to zoning ordinances. Zoning ordinances are not in place in Tonopah.
Appraiser was not furnished with a preliminary title report. The immediate area appears to be served by water, sewer, power, and telephone.
IMPROVEMENT DESCRIPTION The subject property is improved with a Commercial building which was originally built in 1905 as the
Nye County Courthouse. . This original structure is of stone construction. The jail was reportedly added in 1907, and the actual cells are a portion of the brig from a Navy ship.
Additions have been incorporated into the building, and are of generally masonry construction, and include additional office areas, police offices and inmate admitting. The 2nd level served as the courtroom, law library and offices. These additions were reportedly done in 1967 and 1976.
The building reportedly has 17,283 square feet of main level area, and 5,400 square feet of 2’”level area. This equates to a gross building area of 22,683 square feet. The building has a small basement that serves to house the heating boiler, which is reportedly not in operation. The basement area appears
to be about 10’x 17’with exterior access only.
The property has reportedly been vacated for a number of years, with portions recently leased to office uses. At the time of inspection, the property was 100% vacant. Overall condition of the property is noted to be fair to average, with minor deferred maintenance needed.
Additional onsite buildings at the northeast end of the site are not included in this valuation.
Ai,ierican Real Estate Appraisal Od Ny (;oun Coinhous & JaiL AP flfl-3I 1-01 Tonopah, NV 2009120254 LEGAL DESCRIPTION APN: 008-311-01
Legal Deecription far Parcel if OO-311-O1
SecIl Town! L098Deipton j Ranq A T2&3NR42E82135THATPORTIONOFTHEMCCULLOCH 2.010 [ PTNTLODEMININGCLMS0O9&THEGOODENOUGH [ PTNTLODEMININGCLMSI2098MOREPRTCLR [ [____ LYASFOLL(YWS:BEGFORTHEDSCRPTIONOFTHE [ I_____ COURTHOUSEGRNDSATCOI1 ITHENWCORWHENCECOF1 [ I____ OFTHEGOODENOUGH&MCCULLOCHPTNTLD [— MININGCLAIMSREARS8564 2fF 519.54’DISTANT& THSOIOFT3NR42ES3BEARSS61 13’1 IF____I____I____ 928’DISTANT,THENCENil)09’lOW — 399.22’TOCOR#2THENCE83836’50’W193.98’TO — CORPTHENCE84736’05”E120.91’ TOCO1,THENCE —
S33O1’OO’E,72.01’TOCOR#,THENCE — [_____ 81244’15’E,94.30’TOCO,THENCE N41&Y39’E. — O38’ TOCOR#7,THENCES 7300’DO’E,15311’TO IF____ COR,THENCENIT0(700’E,113.31’
TOCOR#1,THEPLACEOFREG&CONTAINING2.01IAC
MOREORLESSOFTHE8W114SF114SE114OFT3NR42E r 5a5.
OWNERSHIP HISTORY According to the public records, the subject property is owned by the Nye County Commissioners.
The property has not transferred ownership in the past three years. The property is not currently publically listed for sale.
American Real Estate Appraisal O!d Ny Count’. Courthouse & isO. 008-3! —0 Tonopah. 8V 2009120254 19 IMPROVEMENT DRAWING
79 Office Oflice Offioc ReslRm Dffi Reuni
office ReitRin Dfllca
Reczpt Dfllca Qffite Holding aren Otfici
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Vault Office RaRm Psc’t Ott Office ReetRm
offlcc vault nUt
I HaIIwey q OFfice 3 r ti Office c)ffice Office office Office
47’ L.!.J
OmmeitE
2aR AREA CALCULATIONSSUMMARV flUILDhl4CARFA RREAKDOWPI On. Daslp.m NtEtzt Sikdtaii A1 Pint Plooc L7233. 0 173. 0 Pint Ploc Pft Raolo.ed Entry 132.0 332.0 34.0 x 4.0 204,0 B Careg. 900.) 490.3 ±31.) z 05.0 4500.0 I.Q r e.o 5.) r 130.0 440.0 33.0 z 30.0 2440.0 75.) r 24.0 1550.0 £&0 z 47.0 540.0 51.0 z 75.0 4275,0
Ni BUILDt4&a. (rande 8 ften,s m.rd.d IT
American Real Estate Appraisal Old Nyc (ount Courthouse & Jail. APS OO83l 11)1, Truapals, NV ______
20 IMPROVEMENT DRAWING
7E
flth otric. Library 2nd Level
c*urt Room
Office
011k. Stelrc
mett:
tr: 1 NEA CALCULATiONS SUMMARY BUILDNG AREA BREAKDOM1 C DpIIn OThA I150.0 x S70 25500 310 x 75.0 2550.0
N. BUILtlOk.a (ramd.c 64W 2bnie und.d) S4O
American Real Estate Appraisal Oki Nyo County Courtbousc & kilL APN: OOtt-31 1-OL Tonopak. NJ’ 21 EXPOSURE TIME
Reasonable exposure time is one of a series of conditions in most market value definitions. Exposure time is always presumed to precede the effective date of the appraisal. A definition of exposure time can be as follows: The estimated length of time the property interest is being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective estimate based upon an analysis of past events assuming a competitive and open market.
Exposure time is different for various types of real estate and under various market conditions. It is noted that the overall concept of reasonable exposure encompasses not only adequate, sufficient and reasonable time but also adequate, sufficient and reasonable effort. This appraisal focuses on the time
component. The estimated exposure time for the subject is between 6 and 12 months.
The estimate of the exposure time for the subject property is based on typical lengths of time for marketing properties in the area found through general data and sales data verification, as well as interviews with agents and other market participants.
MARKETING TIME Marketing time is an estimate of the amount of time it takes to sell a property interest at the estimated market value during the period after the effective date indicated by the appraisal. An estimate of marketing time is not intended to be a prediction of a date of sale. It is not correct to assume that the value as of the effective date of appraisal remains static during a marketing period. Additionally, market factors external to this appraisal report were considered with a reasonable marketing time for the subject
property estimated to be between 6 to 12 months.
4i,ierican Real Estate Appraisal Od Nyc Coin (ourthou & Ini.AP\ ()O-3I -OL fnopch. NV HIGHEST AND BEST USE
The highest and best use definition is included at the end of the report in the Important Definitions section. The physical characteristics of the land such as size, shape, location, and topography have been considered. In addition, the analysis has included the surrounding developments, existing zoning, access to major transportation routes, availability of utilities, current trends, and demand for property of this type in the real estate market.
The land value is based on the premise of the highest and best use “as though vacant”. There are four tests which are taken into consideration in developing an opinion of highest and best use. These four tests include an examination of those uses that are physically possible, legally permissible, financially feasible, and maximally productive. Each criterion is considered cumulatively and provides the best analysis for the highest and best use of the land. The following is the highest and best use of the subject site “as though vacant”.
Physically Possible Size, shape, area, soils, and topography affect the uses to which a site may be physically developed. The utility of a parcel may depend on its frontage and depth. Irregularly shaped parcels may cost more to develop and, when developed, may have less utility than a rectangular parcel.
The subject site is irregularly shaped, containing approximately 2.01 acres. The site size reflects good development potential.
The parcel is of sufficient size for a variety of uses including commercial, residential, multifamily, or special use properties such as a small church. A review of the neighborhood indicated building coverage ratios for commercial properties ranging from less than 10% to 35%. Based on an inspection of the land and the site description as outlined in this report, there are no known physical restraints which inhibit development of the site.
American Real Estate Appraisal Old Nyo County Courthouse & Jail. APN: 008-3 -01, Tonopah. NV 2009120253
Legally Permissible After considering those uses that are physically possible, the uses that are legally permissible were considered.
Based on the fact that zoning ordinances do not encumber the subject property, all uses are potentially legal.
Financially Feasible The next analysis involves consideration of those uses that have been determined to be physically possible and legally permissible to determine which are financially feasible. As outlined under Legally Permissible, the site could be used for all uses. The trend of the subject neighborhood has been toward development of commercial uses.
A physical inspection of the surrounding areas indicates a low vacancy rate in the area, and very few residential facilities under constmction. Demand for residential facilities such as the subject is limited in the area.
The moderate demand for commercial support facilities in this area indicates the financially feasible use of the subject land would be for commercial uses.
Maximally Productive The appraiser has considered from among the uses outlined above, those uses which would return the highest net present value to the land over the long term. Therefore, commercial use was considered to provide an adequate return to the land.
Highest and Best Use “As Vacant” The highest and best use of the subject land “as though vacant’would be for commercial development. Such development would conform to the trend of the neighborhood, meet typical building coverage ratios exhibited by neighboring properties, and represent the highest and best use of the land. This new development can take place in the next 2-5 years due to the depressed economy.
American Real Estate /ippraisal Old Nyc (ouri Courthouse & Jail. APS: OO3 Il-I)!. Tonopah. NV 24
Highest and Best Use “As Improved” The property was analyzed based on its present improvements which are for commercial uses. A review of the existing improvements are able to lend themselves to the commercial uses described. After a review of the highest and best use “as though vacant,” the use of the subject as improved is compatible with that use. Therefore, the highest and best use of the subject property “as though vacant” and “as improved” are consistent.
SUMMARY OF ANALYSIS AND VALUATION
Following is a summary of the information analyzed, the appraisal procedures followed, and the reasoning that supports the analyses, opinions, and conclusions
COST APPROACH The Cost Approach to value is one of the three approaches to value utilized in the analysis and evaluation portion of this appraisal report. The Cost Approach can be an accurate utilization of the principle of substitution if the improvements are new or nearly new. The principle of substitution is based on the proposition that the informed purchaser will pay no more for the property than the cost of producing a substitute property, with the same utility as the subject property. Due to the unique nature of the construction of this property, as well as the older age, the Cost Approach will not be analyzed in this report. This approach is not considered to provide a reliable value indicator for this property.
DIRECT SALES COMPARISON ANALYSIS The Sales Comparison Approach, traditionally, is an appraisal procedure in which the market value estimate is predicated upon prices paid in actual market transactions and current listings, with the former fixing the lower limit of value in a static or advancing market (price-wise), and fixing the higher limit of value in a declining market; and the latter fixing the higher limit in any market. The Sales Comparison Approach is a process of analyzing sales of similar recently-sold properties in order to derive at an indication of the most probable sale price of the property being appraised. The overall reliability of this technique is dependent upon: (a) the availability of comparable sales data, (b) the verification of that
sales data, (c - the degree of comparability or extent of adjustments necessary for time differences and other miscellaneous characteristics, and (d) the absence of non-typical conditions affecting the sale price.
Anierican Real Estate Appraisal CHd Ny County Courthousc & APN (}O-3 oH. Tonopah, NV The appraiser considered commercial property sales that have occurred in the Tonopah area. There were sales of buildings that were used for retailloffice purposes. It was the appraiser’sopinion that the buildings that have sold would give an indication of the general value of buildings and did make an analysis based on this premise. It was the opinion of the appraiser that it would be possible to make a direct comparison of these sales to the subject property, the appraiser was able to determine an indicated sale price per square foot of building area for each of the sales. The following pages describe sales that were considered for general indication of market value, and the pertinent information is extracted from each sales description and used in the analysis which is located after the sales descriptions.
IMPROVED PROPERTY COMPS
SUBJECT SALE #1 SALE #2
Location Old Tonopah SWC Main & Oddie Main Street Courthouse APN: 008-136-10 APN: 008-136-04 Tonopah Tonopah Tonopah
Sales Price $N/A $150,000 $150,000
Date of Sale Current 8/23/2007 3/12/2007
GBA (SF) 22,683 3,104 4,200
Price/SF GBA $0.00 $48.32 $35.71
LISTING #3 LISTING #4
Address 315 Erie-Main Street 135 N. Main Street Tonopah Tonopah
Sales Price $99,000 $275,000
Transaction Listing Listing
GBA (SF) 3,572 4,065
Price/SF GRA $27.72 $67.65
American Real Estate Appraisal Od Ny County Courthouse& Jail. APN ((08-3! (-0!. Tonopab. NV 2009120254 26 IMPROVED COMPS PHOTOGRAPHS
Comparable 1
Comparable 2
/1inerican Real Estate Appraisal Oid Nyc County Courthoue & Icc. APN: O0S-3 I -01. Tonopah, NV 2009120254 27 IMPROVED COMPS PHOTOGRAPHS
Comparable Listing 3
Comparable Listing 4
American Real Estate Appraisal Oki Nye ( ounty (ourthotoc & .ta .APN OOX-3 I-t) Tonopah. .\‘v 2OO9[2O25
Comps 1 and 2 are the most recent transactions available, with indicators at $35.71 to $48.32 per square
foot of building area. Listings 3 and 4 have indicators ranging from $27.72 to $67.65 per SF GBA. Property value will be reconciled to $50.00/SF.
22,683 SF x $50.00/SF $1,134,150
Indicated Value via the Sales Comparison Approach $1,135,000
Subject to repairs needed to bring the building into a lease-able condition.
M,,erican Real Estate 4ppraisal 0 id Nye Coumy (rurthoue ía N 008—511 —0 Toaopah. N V 2OO9 INCOME APPROACH The Income Approach tests the economic soundness of an investment property. The value is based on the economic rental income derived from the property over its economic life. The Income Approach is a method of estimating the present worth of income to be derived from the property in the future. The value of the property is computed by a mathematical process known as “capitalization”. After an analysis of the current rental information available to the appraiser for similar type buildings and uses, the appraiser was able to establish an accurate estimate of current rental income attributable to the calculations for the subject property as per the Income Approach. Rent comparables analyzed were in the market area of the subject.
The subject property was vacant at the time of inspection.
The office and retail market in Tonopah has been historically a moderately active market.
Lease comps are retained in the appraiser’s files. Market rent for the subject building is estimated at $0.50/SF.
4nierican Real Estate Appraisal Oki Nyc Coun Courthoue & Jail. APN 1)08-3 I -0 Tonopah. N V 30 EXPENSES A survey of the commercial retail and office market in the Tonopah area indicate a vacancy rate of approximately 10%. These figures may vary slightly as a stabilized annual vacancy rate. Investors are customarily projecting a 10%vacancy factor when analyzing potential commercial purchases. A 10% vacancy figure will be used.
Expenses typically paid by the lessee include electrical power. All other expenses are typically paid by the lessor. The would include additional utilities, security, insurance, and misc maintenance, management, reserves and property taxes.
Discounted Cash Flow Analysis The discounted cash flow techniques are investment criteria that evaluate alternative cash flows and adjust the value of the cash flows according to timing as well as magnitude,based on the mechanics of the time value of money. By utilizing a discounted cash flow analysis in estimating a present value for the subject property, each cash flow or net operating income must be discounted to present value, and then all present values are totaled to obtain the total value of the income to the real property interest being appraised.
In this analysis, the appraiser has also estimated a future value or sale price at the end of ten years and has then discounted this future value into a present value. The discount rate selected in utilizing the discounted cash flow analysis for this appraisal report was a higher rate than that of the capitalization rate, and is also a higher rate than that of the interest rate. The discount rate utilized by the appraiser took into consideration the interest rate being charged to the borrower, along with additional risk rate information. The discount utilized by the appraiser within this analysis was estimated to be approximately 11%.
In utilizing the cash flow analysis, the appraiser has calculated a ten-year projection period and has prepared an Income and Expense Schedule to arrive at a net operating income for each of the projection periods. In addition to estimating a new operating income for the projection periods, the appraiser also estimated the actual cash flow before tax for each of the projection periods.
Please refer to the following pages for the Discounted Cash Flow Analysis.
American Real Estate Appraisal ()d Nyc CouiLy Courthoisc & Jail. APN fl()?-Sl MI Fo’opah. NV 2009120254
Stabilized Market Income Schedule
REFERENCE ND: 2009120234 PRCPERTY: Old Tonopafi Courthouse ANALYSIS DATE: 04-07-10
Income Item Grow Income Income Unit of Units Per Year Pr Unit Measure
Office Building 22,683 136,098 6.00 SF Total Units 22,683
TotalIncome $136,098 Vacancy/Credit L -13,610 Effective OrossI $122,488
Stabilized Market hwonie Statemnit
REFERENCENO: 2009120254 PROPERTY; Old Tonopah Courthouse ANALYSIS DATE: 04-07-10
Amount % oIGross Gross Income
Total Income $136,098 100.00% Vacancy I Credit Loss -13.610 -10.00% Effective Gross Income $122,488 90.00%
Op iruting
Management 6,124 4.50% All Other Expenses 16,332 12.00%
Reserve
Reserves 2,722 2.00% Total Expenses $25,178 18.50%
NETINCOME $97,310 71.50%
CAPITAIIZA nON
Stable Net Income Divided by Capitaliztion Rate = Value $97,310 0.089834 $1,083,217
American Real Estate Appraisal old Sye County Courthouse & .Ini!. APIS: OO83 I -0! Tonopuh. NV 2009120254 32
Advanced Mortgage Equity Calculation
REFERENCE NO: 2009120254 PROPERTY: Old Tonopah Courthouse ANALYSISDAlE: 04-07-10
Input Variables
Projected Eoldin Period 10Years Loin Ratio 1 70.00% Interest Rae 700% LoaiTenn 30 Years Balloon Payment in Year 10 Investor Equity Portion 30.00% RequiredlnvestorYield (IRR) 11.000% Grum4hRate in Value per Year 0.000% Growth Rate in Net Income per Year 0.000% Soft Costs in Addition to Equity 3.000% SeElin Expenses: Tenuinal Year 3.000%
CALCULATION
Loan 1x Constint (.70000 ,c0.079836) 0.0558854 Equx RequiredYield (.30000x 0.110000) 0.0330000 0.0888854 LESS Credit for Equity Build-up
RATIO x%PMD OFFx SINKiNG FUN]) Balloon in Year 10 -00059391 Balloon 1 70.00 0.0000 0.059801 0.0000000
BASIC RATE 0.0829463
ADD Amortization of Soft Costs (300 s 0.16980) 0.0050940 0.0880403
ADD Depreciation Factor 0.0017940
CAP RAThAT STABLE OPERATION 0.0898343
OVERALL RAU - ROUNDED TO 8.98%
American Real Estate Appraisal Old Nyc County Courthouse & Jail. APN: 008-311-01 Tonopah. NV JOJ 31J) 4 33
MuItI-Yezr TilanlE Statmnit
R22E2Z ND: 2366123234 flDPflTr: O1dTrpt Oaw&cmuf ncnrsis n*n ui-w-to
flaL ]tL Iat Tha flaL Thai- laD- I. Yr 10 Tnt 11 04-2316 04—2311 lI4—2012 04-2613 01-2614 04-2023 04-2016 04-2017 04-2316 04—2329 64-6
OffictEuUdi 11LL. ]30S2L J.JI2L 1JE_ 1J6.L9L. I&. 2L.DS_ i.a. UI.L. 13L1L ia._ T’zaL1’zw 136.08 136,098 136,00 t36,1308 t3,i9B 134.09* 136,098 136.00€ 136.08 136,098 136,0% Vat IOnth TM. -J3.AJL U41L 1341fl. ,fl610 13.61L awn- awn- L1343& ,,I3 ]3,.61n- E,,iiva Cit.. 122496 122,406 122462 lflaa t22463 l224 122A 1flA 122406 122,406 122,423
6,134 6,134 6,124 6424 5,134 6,124 6,t24 6,124 6,134 6,134 6.124 Ai1Otherhjatse. 26,332 16.332 16,332 16,332 16,332 16.332 16332 26,332 16,332 26.332 16,332 ann Rrtn. Zn Zn flL Z23L Zn Zn Zn Zn Zn Zn TtaiEap.cim 23,270 23,270 23.176 23,223 23,223 23.170 23.176 25,176 23,270 23.270 33.270
NEFINCCOLE 07,110 07,110 97,316 97,310 07,310 97,310 97,326 67,326 97,310 97,120 67,110
VartciPat’ntnot 10.0% 10.0% 1OCt06 l0.O lftOO% tO.0% 10.0% 10006 tO%4 104)0% 10.0% E4ecnRslio 18.0% 110% 110% 150% 1150% 1833% l1% 1*500) 1*50% 1*50% 18.0% Grawth k.it iii Nit In’eaac WA WA WA WA WA NA 11(6, MA. WA WA WA
American Real Estate Appraisal Old Nyc Loamy Courthouse & Jail. APN’ 0101-311-01, Tosopah. NV 2009120254 34
ftnIed th Fluw Anitydi REFERENVENO:2000120234 WOFflTY: 044 TQcqab Cowtac AWALYSISfl 0407-30 bdiaIvthia $1101,217 Liiil*air 00% TIi,ISI EqiA 314 9.ftC.A3.00% ToW lawaint $137,4C lint. flnJ lint lat lint laL Yal. Yat lint Y 10 114.2010 01.2011 04.2(112 04-2012 04-2034 04-2015 01.2016 01.2017 01.2018 044019
Nttnooa 97,310 97,210 97,210 97,310 97,310 97,210 97,310 97,310 97,310 97,310
WcrrnFqcc -32,814 -52.277 4115*0 -51,029 50,333 -49017 -48327 -47391 -47,073 46,100 1taAiaot6gu ia 421L 4ML 2421 S132 10&1L bila 12.13L -flL 465.109 Cit 3kw 36.774 36,774 36374 36,774 36774 36774 36,774 36,774 *774 412.819
10.29%. 10.29% 1029% 1029% 1029% 1039% 1029% 1029% 1029% .171.74% 1DPcS CovcmgcRto 141 141 141 161 141 1.61 151 161 141 0.14 Kena — Mrcas e en iu i. Thiin9ilc 1141*3,217 OilsCaa 3,00% -32,417 Lelcrn 9 Rnamio flps%721 ISn.I flr m Yr HAh.Pei.d Trdthlbndmi..tn CiA 3kw 36,774 36,774 36774 26,774 35,774 36724 36,774 36,774 36,774 413,flg kzvaiio 1$)M721 INTERNALRATEOF MElVIN 11.000%
Prap Vn d Cit flciri aq alPha Maid 1101(1*6 Cit 3kw 36,774 36,274 36374 36,774 36374 36374 36,774 36.774 36.774 412399 Pxrcráos 1Ak5fL721 Psn Yduc 00(11101 0R11 0731191 065R731 0 3451 0S311 (L48168 0.432927 fl290125 0352115 Prnaitvdoa 32,130 W,847 26$ 24324 21$34 19g1 17,713 15,957 14,376 132,343
P Vof CAM1LCW8 1317.462rreziaiatea 1nitdhvaef 3337,462,b8114apron vthr of51,0*3317
American Real Estate Appraisal otu Nyc County Courthouse & .Ini. APN 008-31 1-01. Tonopnh. NV 2009120254 35
Yield RangeAnalysis
IIEFERENCENO: 2009120254 PROPERTY; Old Tonopah Courthouse ANALYSIS DATTh 04-07-10
Input Varichies
ProjededHaldingP lflYears Loan Ratio 1 70.00% Interest Rate 7.00% LoaaTexm SflYears Balloon Payment in Year Investor Equity Porti 3&00% Yield Range Analyzed alUt) 8000% to 14.000% Growth Rate in Value per Year (1000% Growth Rate in Net Income per Year 0.000% Soft Coals in Additi 3.000% Selling Expenses: Tenninai Year 3.000%
SelateJ Indicated Required 1) IRR Value Equity -
8.00% 1,222,923 403,565 1.42 1,197,142 395,057 145 9.00% 1372,442 386,906 1.49 1,148,758 379,090 1.52 1(100% 1,126,030 371,590 155 10.50% 1,104,201 364,387 1.58
11410% 1,083,217 357,462 1.61
11.50% 1,063,029 350,799 1.64 12M0% 1,043,594 344,386 167 12.50% 1,024,869 338,207 1.70 13.00% 1,006,818 332,250 1.73 1150% 989,403 326,503 176 14.00% 972,591 320,955 1.79
/Imerwan Real Estate Appraisal IHd Nyc (ountv Courthouse & Jail. APN: 008-31 -0 I Tonoysh, NV 2009120254 36
ftxif of Yleki on Equity
DEFERENCENO: 2009120234 PROPERTY: OldTortojt Consthmise ANALYSIS DATE:04-07-10
Rtquired Rate of Return 11.000% Holdir,gPeriod 10 Years
OdØnalkqmlty PSio Value Ei1y 0.30000 $1,083 .217 $324,965 Soft Cofl 0.03000 $1,083,217 32497 TnitiJ Cash Investhient $357,462
Terminal Equity RemIt Value $1,083,217 LnBalanvo 0 SaleExpenses -32,497 Net R.evezsicn $1,050,721 PROOF PoesentValue Factor Pzesent Year Cash Flow 11.000% Valuc
1 36,774.02 419009009 33,12935 2 36,774.02 0.8116224 29,846.62 3 36,774.02 0.7311913 26,888.84 4 36,774.02 0.6587309 24224.18 5 36,774.02 0.5934513 21,223.59 6 36,774.02 0.5346408 19,660.89 7 36,774.02 0.4816584 17,71152 2 36,774.02 0.4339265 15,957.22 9 36,774.02 0.3909247 14,375.87 10 -613,898.62 0.3521244 -216,20153 Net Reversion 1,050,720.75 0.3521844 370047.50 Preaent Value of Cash Flows 357,461.42 Initial Cash bvesfrnent -357,461.72 Net Piteent Value -0.30
Value indicated via the Income Approach is $1,083,217,
Rounded to
$1,080,000
Subject to repairs needed to bring the building into a lease-able condition.
,4tnerican Real Estate ‘ippraisal OW Nyc Cuun!y Courthouse & lI. APN 008311.01. Tonupah. NV 2009120254 37 RECONCILIATION OF APPRAISAL, CONCLUSIONS The valuation analyses have previously been described in detail in this report, and the following market values are indicated for the 100% undivided interest in the fee simple estate property rights for the subject real estate as of the December 9, 2009 effective date of value:
INCOME APPROACH $1,080,000
DIRECT SALES COMPARISON APPROACH $1,135,000
The Direct Sales Comparison Approach to Value indication of value considering comparable land sales is based on the principle of substitution that assumes a prudent purchaser will not pay more for a specific property than for an equally desirable and available substitute property. Consequently, the Sales Comparison Approach to Value provides a good indication of value for a vacant land property when adequate and similar market data is available for review by the appraiser. It is estimated that the available market data, as it has been considered for this report, is similar enough to the subject property to be worthy of consideration.
The Income Approach to value is a most indicative method of valuation for income producing properties. The market evidence indicated rates and discounts for the analysis and the estimated net operating income was substantiated with market rents. The subject property is an income-producing property for either an investor or a user. Both must consider the cost of ownership by comparison with alternative investments. Thus, it must be subjected to extensive economic analysis before a decision for leasing as opposed to buying is made. This approach is also helpful in that it does include rental projections. All indicated projections are supported by area rental data. This approach to value is given strong consideration in the valuation with support being lent by the conclusions derived in the other analysis.
4i,ierican Real Estate Appraisal Od Nyc County Courthowc & iat. AP OO-3 I I-)I foopah. NV 2009 1202 FINAL RECONCILIATION AND CONCLUSION OF VALUE
Subject to the Assumptions and Limiting Conditions included herein, and to the information contained in my files and in this summary report, the current market value of the subject property, as of December 9, 2009, was estimated to be:
ONE MILLION ONE HUNDRED THOUSAND DOLLARS $1,100,000 Subject to repairs needed to bring the building into a lease-able condition.
If you have any further questions regarding this appraisal report, or if I can be of any further assistance to you, please do not hesitate to contact me. Thank you for this opportunity to be of service to you.
Sincerely,
B. Kent Volimer
American Real Estate 4ppraisai Ohl Nyc Counly Courthouse & iaI. APu flOhS I 1-OL Tonopah. NV 4inerican OO9 120254
Real
E,tate 4ppraisa!
ADDENDUM ‘y (oun’ (ourthouse & InH. AP’s OO-It-OI. roioph. \\ 39 ?OO91O2 40 SUBJECT PHOTOGRAPHS
FRONT VIEW
American Real Estate Appraisal Oh] Nyc County Couithouse & Jail. APN: (lO-3I I—tN ronopah. NV 2009120254 41
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REAR VIEW
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REAR VIEW
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American Real Estate 4ppraLcai Old Nyc C.cathy Courthouse & Jail. APN 008—3 1—0I Jouopah. N V 43 SUBJECT PHOTOGRAPHS
VIEW FROM 2 LEVEL OFFICES OF TONOPAH
ONSITE VIEW
American Real Estate Appraisal 0 a Nyc C oIInl Cnurthousc & iI. A PN 008—3! 1-0 Tonoph. N V 2009120254 45 SUBJECT PHOTOGRAPHS
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ONSITE VIEW
American Real Estate Appraisal Od Nyc Counl Courthouse & Jail. APN: OO-3 I I-Ol Tonopah. NV 2009120254 46 SUBJECT PHOTOGRAPHS
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FRONT DOOR CONSTRUCTION
STREET SCENE
American Real Estate Appraisal ()ld Count Courthouse & Jail. APX: OO83 I -01. Tonopah, NV 47 SUBJECT PHOTOGRAPHS
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American Real Estate Appraisal Oki Ny Couru ( ious & Jail. AP\: (1OS_31l—)l Tnopah. NV 2009120254 4X SUBJECT PHOTOGRAPHS
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Ainerican Real Estate Appraisal Ok.1 Nyc County Courthouse & laO. APN 008-3! -0 Tonopnh, N V 2009120254 SUBJECT PHOTOGRAPHS
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American Real Estate Appraisal Old Nyc County Coui’1houe & Jail r\PN’ 00-% 11-01, Tonopah. NV 2009120254
ASSUMPTIONS AND LIMITING CONDITIONS This is a summary appraisal report which is intended to comply with all of the reporting requirements set forth under Standard Rule 2-2 (b) of the Uniform Standards of Professional Appraisal Practice for a summary appraisal report. As such, it does not include discussions of the data, reasoning, and analysis that were used in the appraisal process to develop the opinion of value. Supporting documentation concerning the data, reasoning, and analysis is retained in the office file.
General Underlying Assumptions Legal Matters: The legal description used in this report is assumed to be correct, but it may not necessarily have been confirmed by survey. No responsibility is assumed in connection with a survey or for encroachments or overlapping or other discrepancies that might be revealed thereby. Any sketches included in the report are only for the purpose of aiding the reader in visualizing the property and are not necessarily a result of a survey.
No responsibility is assumed for an opinion of legal nature, such as to ownership of the property or condition of title.
The appraisers assume the title to the property to be marketable; that, unless stated to the contrary, the property is appraised as an unencumbered fee which is not used in violation of acceptable ordinances, statutes, or other governmental regulations.
Unapparent Conditions The appraisers assume that there are no hidden or unapparent conditions of the property, subsoil, or structures which would render it more or less valuable than otherwise comparable and property. The appraisers are not experts in determining the presence or absence of hazardous substance, defined as all hazardous or toxic materials, waste, pollutants or contaminants (including, but not limited to, asbestos, PCB, UFFI, or other raw materials or chemicals) used in construction or otherwise present on the property. The appraisers assume no responsibility for the studies or analysis which would be required to conclude the presence or absence of such substances or for loss as a result of the presence of such substances. The client is urged to retain an expert in this field, if desired. The value estimate is based on the assumption that the subject property is not so affected.
4,,ierican Real Estate 4ppraisal (Hd Nyc Coun Courthouse & Jail. APN: (l0i-3 1-0! Tonopah NV Information and Data
The information and data, supplied to the appraisers by others and considered in the valuation, is from sources believed to be reliable, but no further responsibility is assumed for its accuracy. All mortgages, liens, encumbrances, and servitudes have been disregarded unless so specified within the appraisal report. The subject property is appraised as though under responsible ownership and competent management.
Zoning and Licenses It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless a nonconforming use has been stated, defined, and considered in the valuation.
It is assumed that the subject property complies with all applicable federal, state, and local environmental regulations and laws unless noncompliance is stated, defined, and considered in the valuation.
It is assumed that the information relating to the location of or existence of public utilities that has been obtained through a verbal inquiry from the appropriate utility authority, or has been ascertained from visual evidence, is correct. No warranty has been made regarding the exact location or capacities of public utility systems.
It is assumed that all licenses, consents, or other legislative or administrative authority from 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 estimate contained in the valuation report is based.
General Limiting Conditions The appraisers will not be required to give testimony or appear in court because of having made the appraisal with reference to the subject property in question unless arrangements have been previously made.
Possession of the report does not carry with it the right of publication. Out-of-context quoting from or partial reprinting of this appraisal report is not authorized. Further, neither all nor any part of this appraisal report shall be disseminated to the general public by the use of media for public communication without the prior written consent of the appraiser signing this appraisal report.
American Real Estate Appraisal (Hd Nyc Couity (,urthouc & JaiL ARN: OO-3 I I-)I Toaopah. NV The authentic copies of this report are signed in blue digital ink on a colorized eagle watermark. Any copy that does not have blue digital ink signature on pages with the colorized eagle watermark is unauthorized and may have been altered, and is considered invalid.
Disclosure of the contents of this report is governed by the By-Laws and Regulations of the State of Nevada. Neither all nor any part of the contents of this report (especially any conclusions as to value, the identity of the appraisers or the firm with which they are connected, or any reference to an appraisal group or to a designation) shall be disseminated to the public through advertising media, public relations media, news media, sales media, or any other public means of communication without the prior written consent and approval of the author.
The distribution of the total valuation in this report, between land and improvements, is applicable only as a part of the whole property. The land value opinion, or the separate value opinion of the improvements, must not be used in conjunction with any other appraisal or estimate and is invalid if so used.
No environmental impact studies were either requested or made in conjunction with this appraisal report. The appraisers, thereby, reserve the right to alter, amend, revise, or rescind any of the value opinions based upon any subsequent environmental impact studies, research, or investigation.
The Americans with Disabilities Act (ADA”) became effective January 26, 1992. The appraisers have not made a specific compliance survey and analysis of this property to determine whether or not it is in conformity with the various detailed requirements of the ADA. It is possible that a compliance survey of the property, together with a detailed analysis of the requirements of the ADA, could reveal that the property is not in compliance with one or more of the requirements of the Act. If so, this fact could have a negative effect upon the value of the property. Since the appraisers have no direct evidence relating to this issue, possible noncompliance with the requirements of ADA in estimating the value of the property has not been considered.
An appraisal related to an estate in land that is less than the whole fee simple estate applies only to the fractional interest involved. The value of this fractional interest plus the value of all other fractional interests may or may not equal the value of the entire fee simple estate considered as a whole.
.4,,ierican Retil Estate Appraisal Od County Courthouse & Jail. APN (lOti-3 -01 Jonopth. NV 2009120254
The appraisal report related to a geographical portion of a larger parcel is applied only to such geographical portion and should not be considered as applying with equal validity to other portions of the larger parcel or tract. The value for such geographical portions plus the value opinion of all other geographical portions may or may not equal the value of the entire parcel or tract considered as an entity.
This appraisal is subject to any proposed improvements or additions being completed as set forth in the plans, specifications, and representations referred to in the report, and all work being performed in a good and workmanlike manner. The appraisal is further subject to the proposed improvements or additions being constructed in accordance with the regulations of the local, county, and state authorities. The plans, specifications, and representations referred to are an integral part of the appraisal report when new construction or new additions, renovations, refurbishing, or remodeling applies.
Important Definitions are attached.
American Real Estate Appraisal Od Nyc County (ourthouc & ThU. APN I Tonoph. NV 54 IMPORTANT DEFINITIONS
Definition of Market Value: 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:
1. buyer and seller are typically motivated; 2. both parties are well-informed or well-advised, and acting in what they consider their own best interests; 3. a reasonable time is allowed for exposure in the open market; 4. payment is made in terms of cash in U.s. dollars or in terms of financial arrangements comparable thereto; and 5. the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.
Market Value Comments: The factors of utility, scarcity, desire and effective purchasing power are apparent in the definition. The implication that buyer and seller are working under equal pressure is seldom completely true, although typical motivation for each does imply a reasonable balance for a market value transaction.
Market prices do not necessarily follow all of these concepts and are often affected by salesmanship and the urgency and need of the buyer and/or seller. The central difference between market price and market value lies in the premise of knowledge and willingness both of which are contemplated in market value, but maybe not in market price. Stated differently, at any given moment of time, market value denotes what a property is actually worth under certain specified conditions, while market price denotes what it actually sold for.
Probability of Value Change: The market value of the property appraised in the report is estimated as of the aforementioned date. Constantly changing economic, social, political and physical conditions have varying effects upon real property values. Even after the passage of a relatively short period of time, property values may change substantially and require a review of the appraisal and recertification.
.4inerican Real Estate Appraisal Od Ny County Courthouse & iaiL AP OOX-3I I-i) I, Tonoph. NV 200 20254
Definition of Fee Simple Estate or Interest: Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat. (The Dictionary of Real Estate Appraisal, 3rd Edition, by Appraisal Institute, 1993.)
Definition of Leased Fee Estate: An ownership interest held by a landlord with the rights of use and occupancy conveyed by lease to others. The rights of the lessor (the leased fee owner) and the leased fee are specified by contract terms contained within the lease. (The Dictionary of Real Estate Appraisal, 3rd Edition, by Appraisal Institute, 1993.)
Definition of Leasehold Interest or Position: The most important obligation associated with the rights to the use and occupancy of a leasehold interest is the payment of rent. Contract rent is the actual rental income specified in a lease. Rent is commonly paid by the tenant to the lessor according to a specified schedule. A leasehold interest usually has value when contract rent is less than market rent. Market rent is the rental income that a property would most probably command in the open market. Most negotiated leases reflect contract rent equal to market rent.
When market rent exceeds contract rent, the leasehold interest may have value, assuming that the lease term is long enough to be marketable and the lease allows for subletting or assignment. When contract rent exceeds market level, the leasehold may have a negative value. (The Appraisal of Real Estate, Eleventh Edition, Appraisal Institute, 1996.) Marketability is a key issue that must be addressed. In other words, would another tenant be found to pay an equal rent? Is the property marketable for the same use at a similar rental?
Definition of Leasehold Estate: The interest held by the lessee (the tenant or renter) through a lease conveying the rights of use and occupancy for a stated term under certain conditions.
The definition of leasehold estate was taken from the Dictionary of Real Estate Appraisal, 3rd ed., published by the Appraisal Institute, 1993.
A,,ierican Real Estate Appraisal (Hd Nyc C ounty (‘outthousc & Jail. APN: 008-3 1-01 Tonopah. NV 2009120254
Definition of Highest and Best Use: The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum profitability. (The Dictionary of Real Estate Appraisal 3rd ed., by Appraisal Institute. 1993)
The defmition immediately preceding applies specifically to the highest and best use of land andlor property. It is to be recognized that in cases where a site has existing improvements on it, the highest and best use may very well be concluded to be different from the existing use. The existing use will continue, however, unless and until land value in its highest and best use exceeds the total value of the property in its existing use.
Also implied, is that the estimation of highest and best use results from judgment and analytical skill, i.e., that the use concluded from analysis represents an opinion, not a fact to be found. In appraisal practice, the concept of highest and best use represents the foundation on which market value rests. In the context of most probable selling price (market value), another appropriate term to reflect highest and best use would be most probable use. In the context of investment value, an alternative term would be most profitable use.
The highest and best use of both land as though vacant and property as improved must meet four criteria. The highest and best use must be 1) physically possible, 2) legally permissible, 3) financially feasible, and 4) maximally productive. These criteria are usually considered sequentially; a use may be physically possible, but this is irrelevant if it is feasiblely impossible or legally prohibited. Only when there is a reasonable possibility that one of the prior, unacceptable conditions can be changed is it appropriate to proceed with the analysis. If, for example, current zoning does not permit a potential highest and best use, but there is a possibility that the zoning can be changed, the proposed use can be considered on that basis. A full analysis may be included in the report when the conclusions are based on techniques applied to identif’ the highest and best use among two or more potential uses. (The Appraisal of Real Estate, Eleventh Edition by Appraisal Institute, 1996)
4,,ierican Real Estate Appraisal Od Nyc CtintyCourthouc & JiiL APN OO&-31 Tonopah. ‘V APPRAISER QUALIFICATIONS STATEMENT
Name: B. Kent Voilmer License: Nevada Certified General #11 l-CG Company: American Real Estate Appraisal Address: 6441 Crystal Dew Drive, Las Vegas, NV 89118 Phone #: (702) 876-7799 Fax #: (702) 876-1787 EMPLOYMENT HISTORY Name Duties From To % Appraising
American Real Estate & Residential Appraiser 1977 1983 100% Appraisal
Sun State Appraisals Residential Appraiser 1978 1978 100%
Monge Appraisal Service Residential Appraiser 1980 1981 100%
Bank of America Urban Commercial Appraiser 1983 1985 100% Investment Appraisal
Eagle Appraisal Residential and Commercial 1985 1986 100% Appraiser
American Real Estate Owner / Residential & Commercial 1986 Present 100% Appraisal Appraiser AFFILIATIONS
Past Education Chairman - Las Vegas Chapter of the Appraisal Institute
Member * Greater Las Vegas Board of Realtors Member - Class A: Foundation of Real Estate Appraisers
COURSES AND SEMINARS
1978 - Residential Valuation 1 and 2, RE Appraisal Principles A and B, Capitalization AIREA 1987 Theory & Techniques A and B, Depreciation Analysis, 1984 Marshal Swift Cost Valuation Marshall Swift 1984 Analyst Courses Real Est Investments: Intro to Cash Flow & Risk Analysis SREA Market & Marketability Analysis: Quantative Techniques Investment Feasibility Analysis 1995 The FHA Appraisal Dept of HUD
1995 - Ethics - USPAP Advisory Opinions, Residential Inspection, Market Extractions, Nevada Appraisal School 1999 Review Appraising, Fair Lending, Cost and Market Approaches, 2001 Property Flipping and Predatory Lending Las Vegas Board of Realtors
2002 - USPAP Updates, Narrative Report Writing, Business Valuation, Income IREAS 2007 Capitalization II, Various Additional Seminars and Courses 2003 Writing the Narrative Appraisal Report Lincoln Graduate Center 1989- Review Appraising, Market Extractions, Case Studies in Valuation, Narrative Appraisal Institute Current Report Writing, NV Appraisal Statutes, Standards of Professional Practice A and B, Complex Properties, FIRREA Overview, ADA, Cash Equivalency, DCF Seminar, Blueprints and Specs, Analyzing Operating Expenses, Detrimental Conditions, Hotel/Motel Valuation, Various additional Seminars and Courses. USPAP Updates
ADDITIONAL INFORMATION
Expert Witness District Court - Las Vegas, Nevada
Commercial, Land and Residential Appraisal Experience in many counties throughout Nevada
Statement of Qualifications - B. Kent Volimer