[Picture of building-Artist Conception]
Evergreen Gardens of St. George
220 S. 1200 East Street
St. George, Utah 84770
for
Emprise Bank
P.O. Box 400
Hays, Kansas 67601-0400
by
Keith D. Callison, SRA
Keith Callison and Associates
800 S. Broadway, #700
Wichita, Kansas 67211
Date of Value
April 7, 1997
April 21, 1997
Mr. Randy Walker, Sr. Vice Pres.
Emprise Bank
P.O. Box 400
Hays, Kansas 67601-0400
Mr. Walker,
Pursuant to a request by Mr. Robert A. Brooks for an appraisal of the
market value of: The proposed site 220 S. 1200 East Street, St. George,
Utah, and proposed improvements to be known as Evergreen Gardens of St.
George, I hand you herewith a report which describes my method of approach
and contains data gathered in the investigation.
Based on analysis of the information gathered and contained in this
report, most weight is given to the Income Approach, with an indicated
value of $3,266,500.00. This value is discounted, as the project is
proposed construction, with no income at the present time.
Development and construction time is estimated at 6 months, and
lease-up should take no more than 18 months, at which time the income and
expenses should stabilize.
Considering 24 months for construction and lease-up, and an interest
rate of 11%, a future worth of $3,266,500.00 is discounted to a present
worth of $2,650,000.00.
The present value, as of April 7, 1997, for the proposed site and
proposed improvements is:
$2,650,000.00
Two Million Six Hundred Fifty Thousand Dollars
This value is expected to increase to $3,266,500.00 upon completion of
construction and lease-up, at time of stabilized occupancy, without
considering any increase in rents or expenses.
Respectfully Submitted,
/S/ Keith D. Callison
Keith D. Callison, SRA
Kansas Certified General Appraiser, #G-590
Utah State-Certified General Appraiser, #CG00051719
Table of Contents
Summary of Salient Facts and Conclusions 4
Certification of Value 5
Contingent and Limiting Conditions 6
The Appraisal Process 8
Purpose of Appraisal 9
Date of Valuation 9
Definition of Market Value 10
Property Rights Appraised 11
Long-Term-Care Industry Outlook 12
Public Information and Taxes 17
Legal Description 18
Tax Data 19
Statement of Ownership 20
Area/City Data 21
Subject Neighborhood Description 26
Description of the Subject Site 26
Zoning 27
Highest and Best Use 28
The Cost Approach to Value 29
The Income Approach to Value 41
The Direct Sales Comparison Approach 50
Correlation and Final Estimate to Value 66
Addendum:
Qualifications of the Appraiser
Certifications
Page 3
Summary of Salient Facts and Conclusions:
Location: In east St. George, Utah, east of I-15
and south of St. George Blvd.
Address: 220 S. 1200 East Street St. George,
Utah 84770
Owner of Record: Robert A. Brooks 646 Edgewater Rd.
Wichita, Kansas 67230
Construction Type: One story stone and frame
construction on slab, vinyl siding,
composition roof, insulated glass
windows, forced air heating & cooling
Building: One story Assisted Living Facility,
22811 sq. ft., with 35 units, center
courtyard, entry, living room, dining
room, kitchen, library, activity room,
and offices, covered porches, and 28
parking spaces.
Land Area: 87111.29 sq. ft. (1.99 acres)
Land/Building Ratio: 3.82/1.0
Present Use: Vacant land
Proposed Assisted Living Facility
Highest and Best Use: Multiple Family Residential
Present Zoning: R-3
Value of Site: $200,350.00
Date of Value: April 7, 1997
Value From Cost Approach: $2,759,200.00
Value From Income Approach: $3,266,500.00
Value From Sales
Comparison Approach: $2,874,200.00
Final Estimate/Market Value:$2,650,000.00
Page 4
[Map of St George indicating subject property]
Certification of Value:
I Certify that, to the best of my knowledge and belief,
1. the statements of fact contained in this report are true and
correct.
2. the reported analyses, opinions, and conclusions are limited only
by the reported assumptions and limiting conditions, and are my personal,
unbiased, professional analyses, opinions, and conclusions.
3. I have no present or prospective interest in the property that is
the subject of this report, and I have no personal interest or bias with
respect to the parties involved.
4. my compensation is not contingent upon the reporting of a
predetermined value or direction in value that favors the cause of the
client, the amount of the value estimate, the attainment of a stipulated
result, or the occurrence of a subsequent event.
5. my analyses, opinions, and conclusions were developed, and this
report has been prepared, in conformity with the requirements of the Code
of Professional Ethics and the Standards of the Appraisal Institute and
Uniform Standards of Professional Appraisal Practice.
6. the undersigned hereby acknowledges that he has the appropriate
education and experience to complete the assignment in a competent
manner. Please see Qualifications of Appraiser in the addenda to this
report for additional information.
7. the use of this report is subject to the requirements of the
Appraisal Institute relating to review by its duly authorized
representatives.
8. I am currently certified under the continuing education program of the
Appraisal Institute.
9. I have made a personal inspection of the property that is the
subject of this report.
10. no one provided significant professional assistance to the person
signing this report.
11. my value conclusion, as well as any other opinion expressed herein are
not based on a requested minimum value, a specific value or approval of
a loan.
12. I am certified by the State of Kansas as a Certified General Real
Property Appraiser - #G-590, expiration date 6-30-97; and by the
State of Utah as a State-Certified General Appraiser #CG00051719,
expiration date 01-31-99.
/S/ Keith D. Callison Date: 4-21-97
------------------------
Keith D. Callison, SRA
page 5
Contingent and Limiting Conditions
This Appraisal Report and Valuation contained herein are expressly
subject to the following assumptions and/or conditions:
1. The title to the property is marketable, and the legal description
furnished me is assumed to be correct, and was verified by the appraiser
from records of Washington County, Utah.
2. No responsibility is assumed for matters of law or legal
interpretation.
3. To the best of the appraiser's knowledge and belief, the
statements and opinions contained in this report are supportable. The
factual data has been compiled by the appraiser from sources deemed
reliable, but no responsibility is assumed for its accuracy.
4. This appraisal represents the opinions of the appraiser based upon his
experience and assumes that all national, state, county, and city laws,
ordinances, and restrictions have been complied with.
5. No physical analysis of the building or equipment has been made by a
structural or mechanical engineer, and the conclusions as to condition
are based on the appraiser's observation only. It is assumed that there
are no hidden defects or biohazards.
6. It is assumed that there are no adverse subsurface conditions,
particularly those relating to soil bearing capacity.
7. Unless otherwise stated in this report, the existence of hazardous
material, which may or may not be present on the property, was not observed by
the appraiser. 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,
ureaformaldehyde foam insulation, or other potentially hazardous materials
may affect the value of the property. The value estimate is predicated on
the assumption that there is no such material on or in the property that
would cause a loss in value. No responsibility is assumed for any such
conditions, or for any expertise or engineering knowledge required to
discover them. The client is urged to retain an expert in this field,
if desired.
Page 6
8. The appraisal is to be considered in its entirety and use of only
a portion thereof will render the appraisal invalid.
9. Possession of this report or a copy thereof does not carry with it
the right of publication, nor may it be used for any purpose by anyone
other than the client without the previous written consent of the
appraiser, and then only with proper qualifications.
10. This original report is on buff colored paper and signed with blue ink.
The appraiser is not to be held responsible or liable for any copies
other than the original.
11. This appraisal is not to be considered as a feasibility study.
12. Neither all nor any part of the contents of this report shall be
conveyed to the public through advertising, public relations, new sales, or
other media without the written consent and approval of the author,
particularly as to valuation conclusions, and the identity of the appraiser or
firm with which he is connected or any reference to the Appraisal
Institute or the SRA designation.
13. It is understood that compensation for the appraisal services is
in no way contingent upon the value reported and is dependent only upon the
delivery of this report.
14. The appraiser shall not be required to give testimony or appear in
court by reason of this appraisal, unless prior arrangements have been
made.
15. The liability of Keith Callison and Associates for errors and
omissions, if any, in this report is limited to the amount of its compensation
for the work performed in this assignment.
16. The Americans with Disabilities Act (ADA) became effective January 26,
1992. I 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 I have no
direct evidence relating to this issue, I did not consider possible
noncompliance with the requirements of ADA in estimating the value of the
property.
17. Acceptance of and/or use of the appraisal report constitutes acceptance
of the foregoing general assumptions and general limiting conditions.
Page 7
The Appraisal Process:
An appraisal is a defensible estimate of value. The appraisal is an
unbiased estimate of the nature, quality, value, or utility of an interest
in, or aspect of, identified real estate and related personality.
An appraisal report is a report of the results of an appraisal which
begins with the definition of an appraisal problem and leads to a specific
conclusion using reasoning and relevant descriptive data.
The approaches to value are systematic procedures used to derive value
indications in real property. The methods of approaches used in this
appraisal are the following: The Cost Approach, The Income Capitalization
Approach, and The Direct Comparison Approach. If one or more of the
approaches are not used, a statement will be made to explain the reasons
why the approach was not used. The methods of each approach will be
discussed at the beginning of the appropriate section of this report.
Page 8
Purpose of an Appraisal:
The stated scope of an appraisal assignment, i.e. , to estimate a
defined value of any real property interest, or to conduct an evaluation
study pertaining to real property decisions.
The purpose of this appraisal is to estimate the market value of the
described property and improvements, as of April 7, 1997.
Function of an Appraisal:
The function of the appraisal is the reason for which the appraisal is
made or is intended to be used. It relates to the character of the
decision to be based on the appraisal. For example: price at which to buy
or sell, amount of mortgage to be made.
The function of this appraisal is to establish a reasonable value for
the subject property, as it may be used as security for mortgage financing.
Date of Appraisal:
The conclusions of value contained within this report reflect the
appraiser's opinion, as of April 7, 1997.
Page 9
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, knowledgeable, and assuming the price is not
affected by undue stimulus. Implicit in this definition is the
consummation of a sale as of a specified date and the passing of title from
seller to buyer under conditions whereby:
1. buyer and seller are typically motivated;
2. both parties are well informed or well advised, and each acting
in what he considers his own best interest;
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;
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.
Adjustments to the comparables must be made for special or creative
financing or sales concessions. No adjustments are necessary for those
costs which are normally paid by sellers as a result of tradition or law in a
market area; these costs are readily identifiable since the seller pays
these costs in virtually all sales transactions. Special or creative
financing adjustments can be made to the comparable property by comparisons to
financing terms offered by a third party institutional lender that is
not already involved in the property or transaction. Any adjustment should not
be calculated on a mechanical dollar for dollar cost of the financing
or concession, but the dollar amount of any adjustment should approximate
the market's reaction to the financing or concessions based on the appraiser's
judgment.
Page 10
Property Rights Appraised:
Property rights consist of ownership, legal estate, economic
benefits, and financial components. Ownership may be held by an
individual, a partnership, or a corporation, and undivided
ownership rights may belong to two or more parties in tenancies.
Legal estate and economic benefits refer to the disposition of the
rights to property use and occupancy as well as the income
generated from rent or percentage of profits. The financial
components of a property consist of the equity and mortgage funds
that secure it. The equity and mortgage components of property may
be further divided into leased fee and leasehold interests or into
land and building portions.
A fee simple estate represents absolute ownership
unencumbered by any other interest or estate, and subject only to
the powers of government. Ownership of a fee simple estate can be
retained, sold, bestowed, or bequeathed. A life estate is created
by a will or deed of conveyance, which assigns life tenancy and
provides for the property to be bequeathed when the life tenant
dies.
This appraisal is predicated on as to the fact that the owner
of record holds Fee Simple Estate, except for the recorded
easements, which are included on the replat. No other encumbrances
are known.
Page 11
Long-Term-Care Industry Outlook
During 1990 the elderly aged sixty-five years and over comprised 13.3%
of the total United States population, as compared to 11.3% as of the 1980
census report. Furthermore, the sixty-five and over portion of the
population is forecasted to increase 11% to 14.1% of the total population
by the end of this year. Currently, the fastest growing segment of the
country's population is the eighty-five and older group with an expected
increase from 3.0 million in 1990 to 4.4 million by the year 2000.
Approximately 24% of the population over eighty-five reside in long-term
care facilities. National population statistics and forecasts are provided on
the following table.
UNITED STATES POPULATION STATISTICS
(Thousands)
Percent Change
1980 1990 1995 1980-1990 1990-1995
Total U.S. 226546 249958 260788 10.3% 4.3%
65 years+ 25549 33184 36828 29.9% 11.0%
Percent/Total U.S 11.3% 13.3% 14.1%
75 years + 9969 14257 16935 43.0% 18.8%
Percent/Total U.S. 4.4% 5.7% 6.5%
(Source: Donnelley Demographics)
A factor which has contributed to growth in demand for elderly care is
the increased life expectancy of the population. As the average life
expectancy for both men and women continues to increase, as illustrated on
the following table, the probability of an elderly person requiring some
form of healthcare service also increases.
Men Women
At birth At age 65 At birth At age 65
1930 58.0 11.4 61.4 12.9
1940 60.9 11.9 65.3 13.4
1950 65.3 12.8 70.9 15.1
1960 66.6 12.9 73.2 15.9
1970 67.1 13.1 74.8 17.1
1980 69.9 14.0 77.5 18.4
1990 72.3 15.1 79.9 19.9
2000 est. 73.4 15.7 81.1 20.8
(Source: United States Bureau of the Census)
Page 12
While most major healthcare providers will benefit from the graying of
America, the nursing home industry will be the chief beneficiary.
The United States nursing home industry included a total of
approximately 17,500 facilitieswith over 1.7 million beds in 1993. The
National Center for Health Statistics estimates that the number of beds
will rise to 2.2 million by the year 2000. The number of elderly needing
care is expected to increase from an estimated nursing home population in
1993 of slightly more than 1.5 million elderly to 2.2 million by the year
2000, 2.6 million by the year 2010 and 3.0 million by the year 2020. The
average occupancy rate in the industry was approximately 95% in 1992.
Total nursing home expenditures in 1994 equaled an estimated $85.5
billion, representing a 12.5% increase from 1993 expenditures which totaled
approximately $76 billion. Nursing home expenditures are expected to
continue to exhibit higher than inflationary growth rates due to the
forecasted increases in needy elderly. The following table exhibits
nursing home and national healthcare expenditures since 1980.
NURSING HOME EXPENDITURES AS A PERCENTAGE OF
NATIONAL HEALTHCARE EXPENDITURES
Year Nursing Home National Healthcare Nursing Home/
($ billions) ($ billions) National Healthcare
1980 $20.0 $249.1 8.00%
1985 34.1 420.1 8.05
1986 36.7 454.8 8.07%
1987 39.7 494.1 7.84%
1988 42.8 546.1 7.84%
1989 47.7 604.3 7.89%
1990 53.3 675.0 7.90%
1991 59.8 751.8 7.95%
1992 67.3 840.4 8.01%
1993 76.0 942.5 8.06%
1994 85.5 1,060.5 8.06%
(Source: Health Care Financing Administration, FCFA)
Medicaid days represent over 70% of the total patient mix in nursing
homes. State and federal Medicaid outlays totaled $94.5 billion in 1991,
$118.2 billion in 1992, $140.3 billion in 1993 and an estimated $161.9
billion in 1994.
Page 13
In response to the growing levels of elderly needing care as well as
the resulting increased costs, many states have developed methods of
controlling the growth of these expenditures. One method implemented by
many states is a moratorium on new nursing home construction. This policy
results in an increased demand for existing facilities.
A number of efforts have been made to reduce the strain on both state
budgets and the nursing home industry. These efforts vary from state to
state. A number of states have tested the development of a prospective
payment system (PPS) for reimbursing their nursing facilities, analogous to the
one currently in place for hospitals, where payment levels are based on debility
with separate payments for special services and therapy. The
Omnibus Budget Reconciliation Act (OBRA) of 1993 included a directive to
the U.S. Department of Health and Human Services to develop, by October 1,
1995, a Medicare prospective payment system for nursing facilities based on a
case mix model. Currently, several states including Kansas, Maine,
Mississippi and South Dakota are all participating in the Health Care
Financing Administration supervised joint Medicare and Medicaid case-mix
demonstration project. (More than twenty other states operate under some
form of a case-mix reimbursement system, including Delaware, Vermont,
Alaska, Colorado, Virginia, Kentucky, North Dakota, Nebraska, Montana, New
Jersey, Illinois, Ohio, West Virginia, Maryland, and Minnesota, among
others.)
Some states are looking into managed care techniques such as Medicaid
waivers and the implementation of a competitive bidding process for gaining
admissions. The Medicaid waiver would reduce costs by diverting Medicaid
nursing home funding to less costly services. States that are currently
looking into these options include Kansas, Michigan, Arizona, Texas,
Maryland, Maine, New Jersey, Washington, and California.
Many states continue to use the Boren Amendment in relation to Medicaid
reimbursement. "The Boren Amendment requires state Medicaid programs to
set reasonable and adequate payment rates for effectively and economically
operated facilities so they can meet federal and state standards in the
provision of care. This amendment, enacted in 1980, was originally
intended to affirm states' privileges to pursue cost containment in setting
nursing home payment rates. In recent years, however, it has become the
basis for lawsuits challenging some states' methodologies of payment
rates." (From "The Guide to the Nursing Home Industry", 1994, HCIA, Inc.,
and Arthur Andersen & Company)
page 14
In order to limit the risk associated with the uncertain future of
institutional nursing home care, many providers have begun to diversify
into other areas of healthcare such as home healthcare, assisted living,
and specialty care. Providers see expansion into home and community based
care as a way to avoid being adversely affected by provisions for these
services found in many healthcare reform proposals. Providers also view
home care as a favorable add-on service because it allows the facility to
continue generating revenue from post-acute discharged patients rather than
turning the patient over to another provider. Approximately 4% of all
nursing homes offer home care services. Assisted living services are also
viewed as a favorable add-on to services since they are strictly funded
with private payers and, therefore, typically have a higher profitability
level than nursing homes. Currently, approximately 22% of all nursing
facilities offer assisted living services. Many providers also see
subacute care as a favorable addition to services. Subacute patients
represent patients with complex medical and rehabilitation needs which do
not require the intensive care offered in a hospital setting. Nursing home
subacute rates are often one-third to one half the amount of hospital
rates, which has made this alternative popular among managed care
providers. Currently, 10% of the nation's nursing homes provide some type
of subacute care. (From "The Guide to the Nursing Home Industry", 1994,
HCIA, Inc., and Arthur Andersen & Company). Subacute units require a
significant capital investment and a higher level of expertise than a
typical nursing unit. These entry barriers have reduced growth in this
segment.
Also, in response to the uncertainty as to the future of healthcare and
public healthcare funding, many providers are consolidating in order to
expand their networking capabilities with managed care providers. During
1993 alone, acquisitions occurred among twenty-three of the nation's
twenty-five largest nursing home chains. One of the biggest deals of 1994
occurred in January, when Sun Healthcare Group Systems purchased Mediplex
Group, a company specializing in subacute care, for $320 million. Since
only 34% of the market is controlled by nursing home chains, the merger
activity should continue in the immediate future.
As indicated, healthcare facilities currently derive most of their
revenue from government sources such as Medicaid, Medicare and the Veterans
Administration, and from private sources such as personal funds and
insurance programs. The Medicaid program, which accounts for over 45% of
the United States nursing home revenues, typically pays rates significantly
lower than Medicare or private rates.
page 15
Medicaid covers the skilled or intermediate nursing home costs of
qualified low income residents for an unlimited period. Medicare only pays part
of the skilled nursing home costs incurred by qualified residents
during a limited period. In addition, nursing homes must meet strict
federal guidelines in order to qualify as Medicare certified for
reimbursement. Therefore, fewer nursing home patients qualify for Medicare
coverage relative to Medicaid. However, nursing homes that attract a
higher percentage of Medicare or private pay patients typically have higher
operating margins than similar facilities with a higher Medicaid census.
Competition is increasing among nursing homes for the Medicare and
private pay patients. For example, many nursing homes have been developing new
services such as multiple levels of care, retirement facilities,
Alzheimer's and ventilator programs and other specialized services for
niche markets. In addition, as acute care hospitals have experienced lower
reimbursement levels and declining occupancy rates, many have expanded into
skilled nursing services to boost revenues.
Although nursing facilities benefit from increasing demand and changes
in Medicare reimbursement, widespread healthcare inflation concerns will
keep downward pressure on nursing home revenues. Federal, state and local
governments, along with insurance companies and other third party payers,
are continually seeking ways to contain healthcare expenditures. The focus on
acute care cost containment is spreading to all types of healthcare
facilities.
Conclusion:
Although the healthcare industry, as a whole, has experienced good
growth over the past several years, projections for future growth have been
tempered.
An estimated thirty-eight million Americans have no health insurance
coverage at all, with children accounting for 36% of this total.
Currently, as many as another fifty million Americans are believed to have
inadequate coverage. The percentage of total healthcare costs of the
United States gross national product (GNP) continually increases every year and
it is estimated that it will consume 28% of the GNP by the year 2010.
Costly regulations and limited reimbursement from Medicaid have
squeezed industry profits. In an effort to remain profitable, many
providers have diversified into medical specialty units, which tends to be
more profitable than typical nursing care. In any case, the elderly care
segment of the healthcare industry continues to evolve in response to
dynamic social and economic influences.
page 16
Public Information and Taxes:
Real estate in Washington County is subject to a general tax which is
referred to as the ad valorem property tax. The property tax is based upon the
value of the property, which is used as a tax base when all property
values in the county are totaled.
The amount of property tax due on a property is determined by
multiplying the assessed value by a mill levy rate (per $1,000 of assessed
value) which is established for each taxing district. The tax is
established on the basis of the assessed value of the property on January
lst of each year.
Special assessments for streets, sewers, sidewalks, utilities, etc.,
which are installed by the municipality, may be assessed against the
property as a special assessment tax. Normally, the owner has the right of
prepayment, or the special tax may be allocated over a fifteen year period,
allowing for a small annual payment with interest on the balance due.
page 17
Legal Description:
A tract of land located in the northeast quarter (NE/4) of Section 29,
Township 42 South, Range 15 West, Salt Lake Base and Meridian, more
particularly described as follows:
Beginning at a point which lies North 0 degrees 41 minutes 53
seconds East 250.52 feet along the Center Section line from the
Center of Section 29, Township 42 South, Range 15 West, Salt Lake
Base and Meridian, and running thence North 0 degrees 41 minutes
53 seconds East 239.25 feet to a point on the Southerly Right of
Way line of 200 South Street, said point being also on a curve to
the right, the radius point of which bears South 40 degrees 04
minutes 43 seconds East 35.36 feet distant; thence Northeasterly
along said Right of Way and the arc of said curve through a
central angle of 41 degrees 40 minutes 17 seconds, a distance of
25.72 feet to the point of tangency; thence South 88 degrees 24
minutes 46 seconds East 309.92 feet along said Right of Way to the
point of a 20.00 foot radius curve to the right; thence
Southeasterly along said Right of Way and the arc of said curve
through a central angle of 90 degrees 00 minutes 00 seconds, a
distance of 31.42 feet to the point of tangency, said point being
also on the Westerly Right of Way of 1200 East Street; thence
South I degree 35 minutes 34 seconds West 228.17 feet along said
Westerly Right of Way; thence North 88 degrees 24 minutes 26
seconds West 349.69 feet to the point of beginning, City of St.
George, Washington County, Utah.
Containing 87111.29 sq. ft. (1.99 acres), more or less.
page 18
[St George, Washington County, Utah Plat of Subject Property Book 13 page
20-E]
18a
Tax Data:
Account #0315393
Serial #SG-1739-A-8-A
Assessed Value: 295005
1996 Tax Rate: 11.406 mills
1996 Taxes: $3,364.83
page 19
Statement of Current Ownership:
The appraiser has inspected and researched the public records in the
county courthouse. The public records indicate that the property legally
described rests with the following, considered to be the owner of said
property.
Robert A. Brooks
646 Edgewater Road
Wichita, Kansas 67230
History of Property Ownership:
Grantor: Larkin-Gifford Developments, LLC
Grantee: Robert A. Brooks
Deed: WD Bk 1063, Pg 794
Date: 12-27-96
Grantor: Ribelaca Future, LC
Grantee: Larkin-Gifford Developments, LLC
Deed: WD Bk 1063, Pg 784
Date: 12-27-96
page 20
[Warranty Deed of Subject Property]
20a
City/County Data:
Location/History:
St. George is located in the far southwest part of Utah in one of the
state's nine travel regions. It is known for its colorful geology and
unique history which have played major roles in giving "Color Country" its
special charm, and its name. The landscape is striking with mountains
climbing to over 12,000 feet, timbered plateaus, rugged and colorful
canyons, turquoise-blue lakes and reservoirs, and cactus-covered deserts.
The clean air, peaceful Old West lifestyle, and the openness of the western
landscape add to the Color Country experience, any time of the year.
Year round recreational opportunities are limitless in Color Country!
You can take in an exciting western rodeo, experience the thrill of
mountain biking past sweeping vistas or hiking into the backcountry where
you'll feel certain that you're the first human ever to set foot on the
land--and you may well be. Play a round of golf any time of the year, feel the
cold mist of powdery snow as you ski down a Mountainside, reel in that
rainbow trout, or just relax and take in the sights. There are plenty of
them.
The history of Color Country is as diverse and colorful as the land it
occupies. The names of the towns and rivers reflect the melting pot of
various religious beliefs and cultures. The land-so beautiful and yet so
rugged--was among the last to be explored in the nation's lower 48 states.
The earliest known occupants of the area were the Anasazi Indians,
until 1300 A.D. The Paiute Indians were the next major occupants of the
area. Many of the towns and areas in southwestern Utah have Paiute names.
Seeking religious freedom, Mormon leader Brigham Young led a group of
followers westward from Illinois to Utah in 1847. They arrived in the
Great Salt Lake Valley on July 24. Today Pioneer Day is annually
celebrated throughout the state.
As more Mormon pioneers came west and settled in the Great Salt Lake
Valley, Brigham Young sent explorers southward to scout for new settlement
locations. St. George, the largest of the settlements, was founded in 1861 and
became Brigham Young's winter home. A temple was built, and today is
the oldest Mormon temple in the world still in use.
Since it was founded more than 130 years ago, St. George has been built on a
distinct tradition of community pride. The City is actively involved
in maintaining and building on this tradition, and as the City continues to
grow, the citizens are committed to help maintain that unique spirit of
community pride.
page 21
Climate:
The climate in St. George is semi-arid with two separate rainfall
seasons in the early spring and late summer. These two seasons average
about 8 inches of annual precipitation. Although average maximum
temperatures for the summer months are between 95 and 101 degrees
Fahrenheit, the low humidity makes these temperatures agreeable.
The Southern Utah climate features bright sunshine, low annual
precipitation, clean air and a wide daily temperature range. Another
attractive feature is mild winters and infrequent traces of
snowfall which rarely stay on the ground more than a day.
Population:
Year St. George Washington County
1990 28,000 51,900
1992 32,725 55,000
1994 38,950 63,400
1995 42,000 68,500
Employment:
Major employers (150 or more employees) in Washington County:
Washington County School District
Dixie Regional Medical Center
Dixie College
St. George City
Wal-Mart
Lin's Marketplace
Skywest Airlines
RMC Foods
J & J Mill & Lumber
Andrus Trucking
St. George Ford/Lincoln
McDonalds
Human Resources, Inc.
Washington County
1994 Unemployment rate: 3.2%
page 22
Municipal Services:
The local government is a Council/Manager, with a mayor and five
elected council members and an appointed city manager.
Community Services:
Financial Institutions:
Number of banks: 10
Number of savings & loans: 2
Health Care:
Hospital: 1 (137 beds)
Clinics: 6
Medical Personnel:
MD(s) 69
Dentist(s) 47
DC(s) 7
DO(s) 1
DPM(S) 6
DVM(S) 6
Religious Institutions:
Protestant Churches: 18
Catholic Church: 1
Education Facilities:
Public Schools No.
Elementary 15
Middle School 4
High School 5
Alternative H.S. 1
Private Schools
Elementary 4
Middle/High School 1
Higher Education
Dixie College Avg. quarterly enrollment 4,000
page 23
Housing:
The Washington County Board of Realtors reports the average home,
consisting of three bedrooms and two baths (approximately 1500 square feet)
sells for $110,000.00. The annual property tax on such a home is about
$1,100.00.
Recreational Facilities:
Type of facility:
Public tennis court(s)
Public swimming pool(s)
Public park(s)
Public golf course(s)
Country Club available: Yes
Nearest public access to lake or river: 12 miles
Activities allowed:
Fishing, boating, camping, and touring.
Convention/Lodging Facilities:
Motels: 34 (2310 rooms)
Media:
There is a daily newspaper, 7 radio stations, regular TV channels
received, and cable channels available.
Transportation:
Highways:
Interstate (N-S) I-15/0 miles
Interstate (E) I-70/125 miles
US/State (E) U-9/7 miles;US-89/58 miles
State (NW) U-18/0 miles
Air:
Public airport: Aero West & Sky West/The Delta
Connection; as well as charter service
page 24
Utilities:
Electric Service: St. George City; Utah Power
Natural Gas: Mountain Fuel Supply
Water: St. George City
Sanitation: St. George City
Telephone: U.S. West Communications
State and Local Taxes:
Sales tax rate of 5.875 on all purchases.
Conclusion:
St. George is the economic center of south Utah and provides
retail/service support to a large metropolitan area, including a broad area
around St. George and extending into Arizona and Nevada. The location,
with mountains on all sides, and a mild climate that is very conducive to
golf, tennis, and other types of outdoor recreational facilities, is very
attractive to senior adults. This has stimulated a positive trend in
virtually all property values, and active construction is evident for
almost all property types throughout the city.
page 25
Character of the Neighborhood:
The subject neighborhood, located in east St. George, is bounded by
Interstate I-15 on the west and north, the Rim Rock Wash on the east, and the
Virgin River on the south.
This is a mixed neighborhood, but predominantly residential use, with homes
in the $80,000.00 to $400,000.00 price range, as well as condominiums and
apartments. Shopping areas, offices, restaurants and banks are located along
the north and south of the neighborhood. Churches, schools, and parks are
located in the neighborhood.
This has been a very homogeneous, fast growing neighborhood.
Character of the Site:
The subject site is located east of I-15, south of St. George Boulevard,
and west of River Road, on the southwest corner of E. 200 South Street and S.
1200 East Street.
The subject is to be known as 220 S. 1200 East Street, St. George, Utah
84770.
The property size is: 228.17 x 349.69 x 239.25 x 25.61 x
253.34 x 31.42 = 87111.29 sq. ft., more or less (1.99 acres).
A minimum of a 25 foot front setback (front yard), and 10 foot
rear and side yard setbacks are to be provided.
The site is fairly flat, with drainage to the southeast.
All public utilities (water, gas, electricity, and sanitary sewer) are
available to the site, as well as telephone and cable TV.
The site is in Zone C (areas of minimal flooding), FIRM Panel #490177 0018
D, dated August 19, 1987.
The site has condominiums and patio homes to the east, and apartments and
condominiums to the south. The property between the site and I-15 is vacant, as
well as the property to the northeast across 1200 East Street.
The property across 200 South Street is commercial use.
The subject site is very well suited for the proposed improvements (35
units Assisted Living) , with good access and very good view, as well as being
homogeneous with the neighborhood.
page 26
[Enlarged Street Map of St George indicating the subject property]
26a
Zoning:
The present zoning of the subject site is "R-3", Multiple
Family Residential Zone. This zoning is to provide appropriate
locations where medium to high density residential neighborhoods on
lots of not less than 6000 square feet may be established,
maintained and protected. The regulations also permit the
establishment of, with proper controls, the public and semi-public
uses such as churches, schools, libraries, parks and playgrounds,
etc., which serve the requirements of families. The regulations
are intended to prohibit those uses that would be harmful to a
medium to high density residential neighborhood.
Permitted uses:
1. Single Family Dwellings
2. Multiple Family Dwellings
3. Household pets.
4. Horticulture and gardening for personal use.
5. Accessory uses and buildings.
6. Residential facility for the elderly.
7. Residential facility for the handicapped.
page 27
City of St. George
Zoning Ordinance
Printed October 1996
27a
CONTENTS PAGE
Chapter 1: General Provisions ......................... 1-1
Chapter 2: Board of Adjustment ........................ 2-1
Chapter 3: Supplementary and Qualifying Regulations ... 3-1
Chapter 4: Nonconforming Buildings and Uses ........... 4-1
Chapter 5: Walls, Fences and Hedges ................... 5-1
Chapter 6: Off-Street Parking Requirements ............ 6-1
Chapter 7: Motor Vehicle Access and Loading ........... 7-1
Chapter 8: Conditional Uses ........................... 8-1
Chapter 9: Design Standards for Single and
Two-Family Dwellings Outside a MH Zone .... 9-1
Chapter 10: Construction Subject to Geologic, Flood or
Other Natural Hazards ..................... 10-1
Chapter 1OA: Hillside Development ...................... 1OA-1
Chapter 11: Zones ...................................... 11-1
Chapter 12: Open Space Zone ............................ 12-1
Chapter 13: Residential Estates Zone ................... 13-1
Chapter 14: Single Family Residential Zone ............. 14-1
Chapter 15: Multiple Family Residential Zone ........... 15-1
Chapter 16: Mobile Home Zone ........................... 16-1
Chapter 17: Planned Development Zone ................... 17-1
Chapter 18: Administrative & Professional Office Zone .. 18-1
Chapter 19: Commercial Zone ............................ 19-1
Chapter 20: Manufacturing Zone ......................... 20-1
Chapter 21: Agriculture Zone ........................... 21-1
Chapter 22: Mining & Grazing Zone ...................... 22-1
Chapter 23: Landmark Sites ............................. 23-1
Chapter 23A: Historic District ......................... 23A-1
Chapter 24: Definitions ................................ 24-1
Chapter 25: Miscellaneous .............................. 25-1
27b
Chapter Fifteen
MULTIPLE FAMILY RESIDENTIAL ZONES
Page
15-1 Purpose .......................................... 15-1
15-2 Permitted Uses ................................... 15-1
15-3 Conditional Uses ................................. 15-3
15-4 Height Regulations ............................... 15-3
15-5 Density Regulations .............................. 15-3
15-6 Area, Width and Yard Requirements ................ 15-4
15-7 Modifying Regulations ............................ 15-4
Chapter 15-A
RESORT OVERLAY ZONE
Page
15A-1 Purpose ......................................... 15A-1
15A-2 Establishment of Resort Overlay Zones ........... 15A-1
15A-3 Qualifying Criteria ............................. 15A-2
15A-4 Existing Resort Areas ........................... 15A-2
27c
Chapter 15. MULTIPLE FAMILY RESIDENTIAL ZONES
R-2, R-3, R-4
15-1 Purpose:
To provide appropriate locations where medium to high density residential
neighborhoods on lots of not less than 6,000 sq. ft. may be established,
maintained and protected. the regulations also permit the establishment of, with
proper controls,the public and semi-public uses such as churches, schools,
libraries, parks and playgrounds, etc., which serve the requirements of
families. The regulations are intended to prohibit those uses that would be
harmful to a medium to high density residential neighborhood.
15-2 Permitted Uses:
1. Single Family Dwellings
2. Multiple Family Dwellings - all new construction required unless
otherwise approved by the Commission. (Townhouses or condominiums - minimum
project - 4 units).
3. Household pets
4. Horticulture and gardening for personal use.
5. Accessory uses and buildings
6. Residential facility for the elderly providing it meets the
following criteria:
a. conforms to all applicable building, safety, zoning, and health
ordinances applicable to similar dwellings;
b. is capable of use as a residential facility for elderly persons
without structural or landscaping alterations that would change
the structure's residential character;
c. is not located within three-quarters mile of another residential
facility for elderly persons or residential facility for handicapped persons;
d. is not being occupied by any person being treated for alcoholism
or drug abuse;
e. placement is on a strictly voluntary basis and not a part of, or
in lieu of, confinement, rehabilitation, or treatment in a correctional
facility;
15-1
27d
f. is occupied on a 24 hour-per-day basis by eight or fewer elderly
persons in a family-type arrangement;
g. is not operated as a business as defined in 5-1-3, St. George
City Code, provided that any fee charged for food or for actual and necessary
costs of operation and maintenance of the facility shall not by themselves
cause it to be considered a business; and
h. is owned by one of the residents or by an immediate family
member of one of the residents, or is a facility for which the title has been
placed in trust for a resident.
7. Residential facility for handicapped persons provided it meets the
following criteria:
a. meets all municipal building, safety and health ordinances
applicable to similar dwellings;
b. provides assurance through the operator that the residents of
the facility will be properly supervised on a 24 hour basis;
c. is capable of use as a residential facility for handicapped
persons without structural or landscaping alterations that would change the
structure's residential character;
d. is not located within three-quarters mile of another residential
facility for handicapped persons;
e. is not occupied by any person being treated for alcoholism or
drug abuse;
f. is not occupied by any person who is violent;
g. is on a strictly voluntary basis and not a part of, or in lieu
of, confinement, rehabilitation, or treatment in a correctional facility;
h. is occupied on a 24 hour-per-day basis by eight or fewer
handicapped persons in a family-type arrangement under the supervision of a
house family member or manager; and
i. is operated by or under contract with the Utah Department of
Human Services.
15-2
27e
8. Home occupations as defined herein and prescribed in the City of St.
George Home Occupation Ordinance.
15-3 Conditional Uses:
1. Church
2. School
3. Park or playground
4. Public utilities and facilities.
5. Child nursery as defined herein. The dwelling shall be the permanent
residence of the operator. The use may be conducted only within a single family
dwelling located within the multiple family zone. No multiple family dwelling
may be approved for a child nursery. Parking shall be as required by the
Planning Commission. All other requirements of the zone shall be complied with.
6. Rest homes or convalescent hospitals.
7. Other uses approved by the Planning Commission as being in harmony
with the intent of the zone and similar in nature to the above listed uses.
15-4 Height Regulations - No main building shall be erected to a height greater
than 35 feet or two and one-half stories, whichever is lesser, and no accessory
building shall be erected to a Height greater than one story or IS feet unless
recommended by the Planning Commission and approved by the City Council as a
conditional use permit (see Section 3-14 for restrictions).
15-5 Density Regulations - A lot size minimum of 6,000 sq. ft. shall be required
for any single family dwelling or the first unit of a multiple family
development. Additional units may be added according to the following schedule
(in sq. ft.):
Units R-2 R-3 R-4
lst unit 6,000 6,000 6,000
2nd unit* 2,000 2,000 2,000
3rd & 4th units* see note* 2,700/unit** 2,000/unit
Additional units* see note* 3,200/unit 1,700/unit
*Except that there shall be 6,000 sq. ft. for each detached single
family dwelling. Also, 8,000 sq. ft. shall be required for each
two-family dwelling in the R-2 Zone.
**Lots approved and recorded as of the effective date (12-16-93) of
this amendment may qualify for up to a four-plex dwelling structure
provided the lot size is at least 12,800 sq. ft. in area.
15-3
27f
Density may be further limited by off-street parking requirements and by open
space requirements. (see 15-7.7 and 15-7.11)
15-6 Area, Width and Yard Requirements:
Zone Area Minimum Lot Width Minimum Minimum Yard Setbacks
Front Side Rear
R-2 6,000 sq ft 65' 25' 10' 10'
R-3 6,000 sq ft 70' 25' 10' 10'
R-4 6,000 sq ft 70' 25' 10' 10'
15-7 Modifying Regulations:
1. The side and rear yard setback on a street side yard shall be the same
as for a front yard setback. (Setback requirement is 25' from any public
street).
2. Private garages and accessory buildings located to the rear and at
least 10 feet away from the main dwelling may be built to the property line
provided that (1) the roof shall not project across the property line , (2)
storm water runoff from the building shall not run onto adjacent property, and
(3) all corner lots shall maintain 25 feet on the street side. Detached private
garages and accessory buildings shall not exceed 1,000 sq. ft. in size unless a
larger building is approved by the Planning Commission.
3. A "zero" side yard setback may be used for all two family
lots in a planned subdivision or development. In such cases, the
opposite side yard shall not be less than a combination of the side
yards otherwise required.
4. Any fractional amount of square footage left over in
calculating density may not be considered toward an additional dwelling unit
unless the full required amount of land is available.
5. In areas where the front yard setback on adjacent property is less than
25', new construction may be constructed at the lesser front yard setback
requirements; however, in a case where the lesser setbacks of the adjacent
properties on either side are different, the setback shall be a distance that is
halfway between the distance of the other two setbacks; or in a case where
one of the setbacks is greater than 25', the setback shall be a distance that is
halfway between the distance of the lesser adjacent setback and 25'; but in no
case shall the setback be less than 20'.
6. In the R-2 zone, no multiple family dwelling shall contain more than
two dwelling units per building.
7. A minimum of 30 of the lot area shall be maintained in open green space
or landscaped area and at least 70% of the front setback area shall be
maintained as landscaped area.
15-4
27g
8. Multi-family dwellings which are 2 or more storied above grade in
height and which are adjacent to a single-family zone shall maintain a 25'
setback adjacent to the single-family zone boundary, and a 20' setback adjacent
to other residential zones, including the PD Planned Development Residential
Zone.
9. Front yard setback from private streets shall be 8 feet minimum from
back of curb for any main building, and shall be 18 feet minimum from back of
curb for garages or carports for projects started after April 4, 1991, except
that an 8 foot setback is allowed from a private street in the area bounded by
I-15 on the east and south, Bluff Street on the west, and the Red Hill on the
north. In addition the Planning Commission may allow an 81 front setback on
hillside developments where it is determined that adequate off-street parking is
provided and the reduced setback will reduce the overall amount of hillside
excavation. Projects which have received preliminary plat approval prior to
April 4, 1991 and have less than an 18' front setback off a private street may
complete the project according to the preliminary plat.
10. In group dwellings, no two buildings may be located closer together
than 10 feet for one story buildings, 15 feet for 2 story buildings, and 20 feet
for 2 1/2 story buildings.
11. In developments with 5 or more units, there shall be provided useable
recreation or playground areas outside of the front yard setback, with a total
minimum area of 1,000 sq. ft. for 5 units and an additional 200 sq. ft. for each
unit over 5 units. The average width and length of each useable recreation or
playground area shall not be less than 20 feet or as approved by the Planning
Commission. At least 50% or the useable area shall be in the form of open
playground or green space.
12. Except for the required street side yard setback of 25', a lot which i
s developed with only one single family dwelling may have side yard setbacks of
8' and 10'.
13. A multi-family development with a density of 12 dwelling units/acre or
more shall have access via collector, or arterial roads, or via local access
roads (50 ft. minimum right-of-way) which are not part of a single family
subdivision, including mobile home subdivisions.
Any multi-family development with a density of 12 dwelling units/acre or
more and having more than 20 dwelling units in the project or a phase thereof
shall be considered a conditional use and subject to the provisions of Chapter
8, if the only access roads are via local neighborhood streets (with 50 feet or
less right-of-way) through a single family subdivision, including mobile home
subdivisions.
If a collector or arterial road (60' or more right-of-way) will be
completed and available for use at the time of occupancy as
15-5
27h
determined by the City Engineer, then the multi-family development shall be
considered a permitted use rather than a conditional use.
14. A multi-family development with a density of 12 d.u./acre or more and
having 20 or more total dwelling units shall be subject to design review
approval by the City Council. The City Council after hearing the recommendation
of the Planning Commission may approve, approve with conditions, or deny the
proposed design plan for such multi-family developments. Applicants shall
submit a site plan and elevation drawings showing the project's overall design
plan including landscaping and proposed building exteriors. The Planning
Commission and City Council shall review the design plans to determine whether
the proposed development will be compatible with the character of adjacent and
surrounding developments, and whether aesthetically the development is
harmonious with the character of the neighborhood in terms of style, materials
and colors.
15-6
27i
Highest and Best Use:
1. The reasonable and probable use that supports the highest present
value of vacant land or improved property, as defined, as of the date of
appraisal.
2. The reasonably probable and legal use of land or sites as though
vacant, found to be physically possible, appropriately supported, financially
feasible, and that results in the highest present land value.
3. The most profitable use.
4. Implied in these definitions is that the determination of highest and
best use takes into account the contribution of a specific use to the community
and community development goals, as well as the benefits of that use to
individual property owners. Hence, in certain situations, the highest and best
use of land may be for parks, greenbelts, preservation, conservation, wildlife
habitats, and the like.
Conclusion:
The proposed use of the subject site is a legal use.
The size of the subject site and the location makes it physically
permissible for the proposed use as an Assisted Living Facility.
The present zoning of the subject site, "R-3", permits residential use.
The most financially feasible and profitable use is the proposed use as an
Assisted Living Facility.
page 28
The Cost Approach:
The cost approach is a set of procedures in which an appraiser derives a
value indication by estimating the current cost to reproduce the existing
structures, deducting for all accrued depreciation in the property, and adding
the estimated land value.
page 29
Land Sales:
[Picture of Property]
#1 Address: W side of 1200 East, between 200 South & 300 South
Legal Description: Beg at pt in N R/W Ln 300 South St being
N 0*43'13" W alg C/S/L 2546.86 ft fm S/4 cor Sec 29 T42S
R15W; Th S 89*51'16" E alg sd N R/W Ln 325.20 ft to pt
curv; Th lft 31.42 ft alg arc cur rad bear 20 ft ctrl
ang 90* to pt on W R/W Ln 1200 East St; Th N 0*08'44" E
alg sd W R/W Ln 508 ft to pt curv; Th lft 31.42 ft alg
arc cur rad 20 ft ctrl ang 90* to pt on S R/W Ln 200
South St; Th N 89*51'l6" W alg sd S R/W Ln 309.92 ft
to pt curv; Th lft 25.61 ft alg arc cur rad 35.36 ft ctrl
ang 41*30'16" to C/S/L; Th S 0*43'13" E alg C/S/L 539.18
ft to N R/W Ln 300 South St & POB.
Grantor: Ribelaca Future, LC
Grantee: Larkin-Gifford Developments, LLC
Date of Sale: 12-27-96 Sale Price: $400,000.00
Deed: WD Bk 1063, Pg 784 Site Area: 191228.4 Sq. ft.
Conditions: Cash at closing
Zoning: R-3 Unit Price: $2.091/SF
Utilities: All available
Tax Key: SG-1739-A-8-A
Remarks: Vacant land at the time of sale. Sale was confirmed
with Art Barney.
page 30
[Picture of Property]
#2 Address: SW cor of 200 South & 1200 East
Legal Description: Beg at a pt which lies N 0*41'53" E 250.52
ft alg the C/S/L frm the Cntr of Sec 29, T42S, Rl5W, Salt Lake Base
& Meridian, and rnng thnc N 0*41'53" E 239.25 ft to a pt on the Sly
R/W Ln of 200 South St, sd pt bng also on a curv to the rght, the
rad pt of which bears S 40*04'43" E 35.36 ft distant; Th NEly alg sd
R/W and the arc of sd curv through a cntrl ang of 41*40'17" a
distance of 25.72 ft to the pt of tangency; Th S 88*24'46" E 309.92
ft alg sd R/W to the pt of a 20 ft rad curv to the rght; Th SEly alg
sd R/W and the arc of sd curv through a cntrl ang of 90*00'00", a
dist of 31.42 ft to the pt of tangency, sd pt bng also on the Wly
R/W of 120 0 East St; Th S 1*35'34" W 228.17 ft alg sd Wly R/W; Th
N 88*24'26" W 349.69 ft to the pt of beg.
Grantor: Larkin-Gifford Developments, LLC
Grantee: Robert A. Brooks
Date of Sale: 12-27-96 Sale Price: $200,000.00
Deed: WD Bk 1063, Pg 794 Site Area: 87111.29 Sq. ft.
Conditions: Cash at closing
Zoning: R-3 Unit Price: $2.295/SF
Utilities: All available
Tax Key: SG-1739-A-8-B
Remarks: Vacant land at the time of sale. Subject property.
page 31
[Picture of Property]
#3 Address: 1100 East & 400 South
Legal Description: That portion of Blk 36,
Plat "B", St. George City Survey, lying east of Interstate 15.
Grantor: The W. Brown Hail Family Living Trust
Grantee: Lornakids 1983, Ltd.
Date of Sale: 12-2-96 Sale Price: $115,000.00
Deed: WD Bk 1056, Pg 531 Site Area: 57499.2 Sq. ft.
Conditions: Cash at closing
Zoning: R-3 Unit Price: $2.00/SF
Utilities: All available
Tax Key: SG-1016-A
Remarks: Vacant land at the time of sale. Apartments are under
construction.
page 32
[Picture of property]
#4 Address: 400 East & Sunland Dr.
Legal Description: Adams property in Southern Oaks Estates;
Parcel in Phase 1A; containing .273 acres.
Grantor: Terry Gubser Ward
Grantee: Spectra-Valley Development Corp.
Date of Sale: 1-30-96 Sale Price: $35,000.00
Deed: WD Bk 971, Pg 248 Site Area: 11891.88 Sq. ft.
Conditions: Cash at closing
Zoning: R-3 Unit Price: $2.94/SF
Utilities: All available
Tax Key:_ SG-5-2-31-1203
Remarks: Vacant land at the time of sale.
page 33
[Picture of Property]
#5 Address: NW corner of W. Sunset Blvd. & 2100 West
Legal Description: West part of: Beg on W Ln Dixie Downs Rd
at Pt S 89*13'27" W 40 ft fm NE cor Sec 22, T42S, R16W & Th S
0*56'37" E alg W Ln 572.57 ft; Th alg arc 50 ft rad cur rgt
85.75 ft(Ch bear S 48*11'41" W 75.62 ft) to N R/W Ln Sunset
Blvd; Th NWly alg arc 1860 ft rad cur rgt 390.50 ft (Ch bear N
76*40'15" W 389.78 ft) ; Th N 70*39'23" W alg N R/W Ln 923.79
ft to W Ln NE/4 NE/4 Sec 22, Th N Th N 0*56'35" W alg Ln 209.50
ft to EC/L; Th N 89*13'27" E 1301.41 ft alg SEC/L to POB. Less
Ely 8.57 acres.
Grantor: Church of Jesus Christ of Latter-Day Saints
Grantee: Mountain American Credit Union
Date of Sale: 1-6-97 Sale Price: $335,000.00
Deed: WD Site Area: 75620.16 Sq. ft.
Conditions: Cash at closing
Zoning: C-3 Unit Price: $4.43/SF
Utilities: All available
Tax Key: SG-6-2-22-1100
Remarks: Vacant land at the time of sale.
page 34
Listing: (Comp #6)
[Picture of property]
#1 Address: NE corner of 2100 West & Sunset Blvd.
Legal Description: East part of: Beg on W Ln Dixie Downs Rd
at Pt S 89*13'27" W 40 ft fm NE cor Sec 22, T42S, R16W & Th S
0*56'37" E alg W Ln 572.57 ft; Th alg arc 50 ft rad cur rgt 85.75
ft (Ch bear S48*11'41" W 75.62 ft) to N R/W Ln Sunset Blvd; Th
NWly alg arc 1860 ft radcur rgt 390.50 ft (Ch bear N 76*40'15"
W 389.78 ft);Th N 70*39'23" W alg NR/W Ln 923.79 ft to W Ln NE/4
NE/4 Sec 2; Th N 0*56'35" W alg Ln 209.50 ft to SEC/L;
Th N 89*13'27" E 1301.41 ft alg SEC/L 2 POB. Less Ely 8.57 acres.
Grantor: Church of Jesus Christ of Latter-Day Saints
Grantee:
Date of Sale: For Sale Asking Price: $589,000.00
Deed: Site Area: 107070.48 Sq. ft.
Conditions:
Zoning: C-3 Unit Price: $5.501/SF
Utilities: All available
Tax Key: SG-6-2-22-1100
Remarks: Vacant land.
page 35
Summary:
Subject Sale #1 Sale #2 Sale #3 Sale #4 Sale #5 #6 Listing
Sale Date 12-27-96 12-27-96 12-2-96 1-30-96 1-6-97
Sale Price $400,000 $200,000 $115,000 $35,000 $335,000
Asking Price $589,000
Site Area(SF) 87111.29 191228.4 87111.29 57499.2 11891.88 75620.16 107070.48
Zoning R-3 R-3 R-3 R-3 R-3 C-3 C-3
Utilities All All All All All All All
Unit Price $2.09 $2.29 $2.00 $2.94 $4.43 $5.50
Adjustments:
Zoning - 45% - 45%
Location
Total Adj. -0- -0- -0- -0- -1.99 -2.48
Ind.Unit Price $2.09 $2.29 $2.00 $2.94 $2.44 $3.02
The sales give an indicated value range of $2.00 to $3.02 per square
foot.
Most weight is given to Sales #1, #2, and #3.
Adjustment is made for zoning.
Sale #2 is the sale of the subject property.
Conclusion:
With consideration given to the zoning, location, and utilities, the
indicated adjusted unit value is $2.30 per square foot.
The indicated value of the site is:
87111.29 Sq. ft. x $2.30 = $200,355.96
round to $200,350.00
page 37
[Map indicating the Compared Properties 1-6]
page 37a
Description of Improvements:
The proposed improvement is a one story frame, stone veneer front, with
vinyl siding, slab floor, asphalt shingle roof, designed for 35 Assisted Living
Units.
There are: Fifteen Studio Units, Seventeen One Bedroom Units, and Three Two
Bedroom Units, all with kitchenettes.
Other rooms: Entry, Living Room, Dining Room, Kitchen, Pantry, Library,
Salon, Activity Room, Conference Room, Office, Reception Area, Medicine Room,
Wellness Room, Residential Laundry, Facility Laundry, Central Bath, Smoke
Lounge, and Lounge.
Exterior: Porches, Courtyard, and patios.
There is wood floor, carpet, vinyl and resilient flooring, painted walls,
oak wood doors, aluminum insulated windows, woodburning fireplace, oak millwork,
communication system, fire sprinkler system, and key-pad security door system.
Asphalt drive, parking area with 28 marked parking spaces, and landscaping
with sprinkler system.
Assisted Living Units:
Studio Unit (15) 324 Sq. Ft.
One Bedroom Unit (17) 380 Sq. Ft.
Two Bedroom Unit (3) 627 Sq. Ft.
Total Units Sq. Ft 13201 Sq. Ft.
Accessory Rooms:
Entry 100 Sq. Ft.
Living Room 396 Sq. Ft.
Dining Room 1083 Sq. Ft.
Kitchen/Pantry 542 Sq. Ft.
Library 183 Sq. Ft.
Activity Room 219 Sq. Ft.
Salon 150 Sq. Ft.
Conference Room 166 Sq. Ft.
Office/Reception/Med. Rm. 468 Sq. Ft.
Wellness Room 273 Sq. Ft.
Residential Laundry 74 Sq. Ft.
Facility Laundry 162 Sq. Ft.
Smoke Lounge 139 Sq. Ft.
Lounge 396 Sq. Ft.
Central Bath 155 Sq. Ft.
Sun Room 454 Sq. Ft.
Mechanical & Storage 126 Sq. Ft.
Misc. & Corridors 4524 Sq. Ft.
Total Actual Building Area 22811 Sq. Ft.
page 38
[Floor plan for a typical unit type A' with patio.]
38a
[Floor plan of a typical unit type A' without patio]
38b
[Floor plan of typical unit Type B']
38c
[Floor plan of typical unit type C']
38d
[Orientation plan of the entire building]
38e
[Floor plan of the entire building]
38f
[Exterior Elevation plan]
38g
[Preliminary Site Plan]
38h
Cost Approach:
Reproduction Cost-New of Improvements
(Using Marshall and Swift Cost Handbook)
Building Cost-New 22811 Sq. Ft. $1,710,825.00
Porches, Courtyard, Patio 39,740.00
Equipment 145,000.00
Reproduction Cost-New $1,895,565.00
Depreciation:
Physical -0-
Functional -0-
Economic -0-
Total Depreciated Value of Improvements $1,895,565.00
Site Improvements:
Driveway and Parking Area 275,500.00
Landscaping 50,000.00
Site 200,350.00
Developer Fee 100,000.00
Construction Overhead 237,800.00
Indicated Total Cost $2,759,215.00
round to $2,759,200.00
page 39
Conclusion:
The indicated value of land and improvements is $2,759,200.00.
This is: Per Unit (35) $78,834.28
Per Sq. ft. of Building $120.95
From April 1996, Assisted Living Development Cost Survey by
Capital Valuation Group.
Total Dev. Cost/Sq Ft Total Dev. Cost/Unit
Northeast 128.00 $95,300.00
Southeast 118.00 79,600.00
North Central 138.00 95,900.00
South Central 105.00 71,600.00
West 107.00 89,400.00
Average $119.00 $84,200.00
The subject property is in the West Region.
The indicated value of subject property per Unit is $78,834.28, or 6.37% below
the national average.
The indicated value of subject property per Square Foot of building is $120.95,
or 1.64% above the national average.
The indicated value of the land and improvements by the Cost Approach is:
$2,759,200.00
page 40
Income Approach:
Income capitalization approach: A set of procedures in which an appraiser
derives a value indication for income-producing property by converting
anticipated benefits into property value. This conversion is accomplished
either by; 1) capitalizing a single year's income expectancy or an annual
average of several year's income expectancies at a market-derived capitalization
rate or a capitalization rate that reflects a specified income pattern, return
on investment, and change in the value of the investment; or 2) discounting the
annual cash flows for the holding period and the reversion at a specified yield
rate.
page 41
The City of St. George has 11 Care Facilities:
Retirement Homes:
The Meadows Retirement Community 89 Beds
950 S. 400 East
Mesa Manor Apartments 12
28 S. 900 East
Assisted Living Facilities:
Ann's Private Care 8
712 E. 600 South
Behavioral Medicine N/A
Dixie Regional Medical Center
544 S. 400 East
Durham Care Assisted Living 5
1239 W. 4200 North
Nursing Homes:
Brookside Private Care N/A
Vermillion
Color Country Care Center 5
233 S. 100 East
Porter's Nursing Home 53
126 W. 200 North
Red Cliffs Regional 124
1745 E. 280 North
Rosecrest Manor N/A
48 W. 700 South
St. George Care & Rehabilitation Center 159
1032 E. 100 South
Proposed Care Facility:
Retirement apartment (60 beds) and a second phase of (30 beds)
Assisted Living Units, is proposed for the old Dixie Downs.
page 42
Rents in St. George are $875.00 to $2,500.00 per month.
Behavioral Medicine: $1,850.00 to $2,500.00/month
Dixie Regional Medical Center
Ann's Private Care: $1,450.00 to $1,650.00/month
Rosecrest Manor: $875.00 per month (apartment)
The Meadows Retirement Community: $1,870.00 to $1,890.00/month
Assisted Living Units
Sterling House at Broadmoor, Colorado Springs, Colorado, has 37 Assisted Living
Units, opened in September 1996, and has been 97% or more occupied for the past
three months.
Average unit rents:
Studio $1,860.00 per month
One Bedroom 2,130.00 " "
Deluxe One Bedroom 2,360.00 " "
Spouse 800.00 " "
Community Fee (one-time) 2,000.00
Average expenses per month:
Employees $24,000.00
Administrative 1,580.00
Maintenance & Supply 1,580.00
Utilities, Taxes & Insurance 5,730.00
Dietary 4,973.00
Repair/Replacement Reserve 797.00
Marketing 2,390.00
Management & Royalty 7,968.00
Total Monthly Expenses $49,018.00
Average expenses are 61.50% of monthly income.
page 43
Typical rents from Sterling House Facilities in Kansas:
Sterling House at Tallgrass
8600 E. 21st St. North, Wichita, KS
Lessor: Sterling House of Wichita LLC
Lessee: Various
Date of Lease: Various Annual Rent: $466,800.00 Avg.
Term: Month-to-month Site Dimensions: Rectangular
Deposit: $500.00 entry fee Site Area: 83911 Sq. ft.
Zoning: AA, w/CUP Improvement Area: 16010 Sq. ft.
Utilities: All available Lessee Pays: Rent only
Key No.: C-49529 Rent/SF/Mo.: Various
No. of Units: 26 Land/Bldg.Ratio: 5.24/1
Occupancy: 98% Built: 1993; Opened 10-93
Remarks: Typically, units are occupied by singles. Currently, one unit is
occupied by a couple.
Type Rent/Mo. (1 Person) Sq. ft.
1-2-3 Levels of Service
Studio $1,295.00 $1,545.00 $1,795.00 294
1 Bedroom 1,495.00 1,745.00 1,995.00 319
1 Bedroom 1,695.00 1,945.00 2,195.00 360
Extra Person 375.00 625.00 875.00
Expenses average 65% of monthly income.
Services Available:
Utilities paid Van service
Medical assistance Personal (bathing; dressing)
24 hour staff 3 meals per day
Houskeeping & laundry weekly Central tenant laundry
Secure premises
Description:
One story brick/stone and frame construction on slab, composition roof,
insulated glass windows, forced air heating and cooling, center courtyard,
entry, living room, dining room, kitchen, library, activity room, and offices.
26 unit Assested Living Facility.
page 44
Sterling House of Derby
1709 Walnut Grove, Derby, KS
Lessor: Master's Assoc., LLC
Lessee: Various
Date of Lease: Various Annual Rent: $537,000.00
Term: Month-to-month Site Dimensions: Rectangular
Deposit: $500.00 entry fee Site Area: 134412 Sq. ft.
Zoning: Multiple Family Improvement Area: 16010 Sq. ft.
Utilities: All available Lessee Pays: Rent only
Key No.: RO-DY-5227 Rent/SF/Mo.: Various
No. of Units: 26 Land/Bldg.Ratio: 8.39/1
Occupancy: 98% Built: 1993; Opened 4-94
Remarks: Currently all single occupants.
Type Rent/Mo. Sq. ft.
Studio $1,450.00 300
1 Bedroom 1,650.00 320
Deluxe 1 Bedroom 1,800.00 360
Spouse 575.00
Expenses average 61% of monthly income.
Services Available:
Utilities paid Personal (bathing; dressing)
Medical assistance 3 meals per day
24 hour staff Central tenant laundry
Housekeeping & laundry weekly Secure premises
Description:
One story brick/stone and frame construction on slab, composition roof,
insulated glass windows, forced air heating and cooling, center courtyard,
entry, living room, dining room, kitchen, library, activity room, and offices.
26 unit Assisted Living Facility.
page 45
Sterling House of Hays
1800 27th St. East, Hays, KS
Lessor: Master's Assoc. LLC
Lessee: Various
Date of Lease: Various Annual Rent: $670,800.00
Term: Month-to-month Site Dimensions: Rectangular
Deposit: $500.00 entry fee Site Area: 94500 Sq. ft.
Zoning: Multi-Family Improvements: 18467 Sq. ft.
Utilities: All available Lessee Pays: Rent only
Key No.: NA Rent/SF/Mo.: Various
No. of Units: 33 Land/Bldg.Ratio: 5.11/1
Occupancy: 91% Built: 1995; Opened 6-95
Remarks: Currently all single occupants.
Type Rent/Mo. Sq. ft.
Studio $1,400.00 300
1 Bedroom 1,550.00 320
Deluxe 1 Bedroom 1,750.00 360
Spouse 375.00
Expenses average 55% to 60% of monthly income.
Services Available:
Utilities paid Personal (bathing; dressing)
Medical assistance 3 meals per day
24 hour staff Central tenant laundry
Housekeeping & laundry weekly Secure premises
Description:
One story brick/stone and frame construction on slab, composition roof,
insulated glass windows, forced air heating and cooling, center courtyard,
entry, living room, dining room, kitchen, library, activity room, and offices.
33 unit Assisted Living Facility.
page 46
Conclusion:
With the strong demand for Health Care in St. George, projected rents are
based on available rents in St. George, and similar units in Colorado and
Kansas.
There appears to be a good growing need for Assisted Living Facilities, and
the proposed rents and services are in line with other facilities.
Proposed Rents:
The subject is a proposed one-story courtyard style building, with 35
assisted living units: (15) Studio Units, (17) One Bedroom Units, and (3) Two
Bedroom Units.
The proposed rents and expenses are based on similar Assisted Living
Facilities.
Proposed rents for subject:
Unit Sq. ft. Per Month, Each Per Month
Studio 324 $1,875.00 (15) $28,125.00
One Bedroom 380 2,155.00 (17) 36,635.00
Two Bedroom 618 3,550.00 (3) 10,650.00
Spouse 1,200.00 (est.3) 3,600.00
Community Fee $2,000.00 (one time)
Total estimated potential income per month: $79,010.00
The Community Fee is not included in the potential income per month, as
this is a one-time entry fee.
Estimated potential income per year is $948,120.00.
page 47
Monthly Expenses (estimated):
Employees $22,515.00
Administrative, Office Expense 2,252.00
Maint/Repair & Replacement Reserve 2,252.00
Utilities, Taxes & Insurance 7,508.00
Dietary 5,254.00
Marketing 2,252.00
Management 3,004.00
Total Monthly Expenses $45,037.00
Total estimated expenses per year is: $540,444.00
Services Available to Tenants:
Utilities paid Personal (bathing; dressing)
Medical assistance 3 meals per day
24 hour staff Central tenant laundry
Housekeeping & laundry weekly Secure premises
page 48
Annual Income ($79,010.00/Mo.) $ 948,120.00
Vacancy 5.10% $ 48,360.00
Adjusted Income 899,760.00
Expenses (estimated) 540,444.00
Net Income $ 359,316.00
Using a 11% Capitalization Rate $3,266,509.09
round to $3,266,500.00
Residual Cap Rate:
From Appraisal Institute Research Department, National Market Indicators:
Fourth Quarter 1996, a 9% to 12% Capitalization Rate range is indicated.
Overall Cap Rate:
From sales in the Direct Sales Comparison Approach, there is an indicated
Capitalization Rate range of 9.42% to 12.43%.
Conclusion:
Rents and expenses are based on the subject property at stabilized
occupancy (should be between 6 and 12 months of opening of facility), after any
discounts for rent-up.
The indicated Capitalization Rate, from average National Residual Cap Rate
and Direct Sales Comparison Overall Cap Rate, is 11%.
The indicated market value from the Income Approach is:
$3,266,500.00
page 49
The Direct Sales Comparison Approach:
The direct sales comparison approach to value is a set of procedures in
which an appraiser derives a value indication by comparing the property being
appraised to similar properties that have been sold recently, applying
appropriate units of comparison, and making adjustments, based on the elements
of comparison, to the sale price of the comparables.
The "Direct Comparison" technique is normally considered to be the most
desirable method of valuation, since other people can relate to comparisons.
However, the validity and accuracy of this method depends upon an adequate
supply of sales of similar properties, and upon the ability to confirm and
analyze the available information.
The proper, and normal procedure, for the valuation of a site is by the
direct comparison of sales of similar size, zoning, access, and utility to the
subject area. Since most sales will not be identical, some adjustment will need
to be made to reflect what the sales would have sold for had they been the same
size, etc., in the current market place.
page 50
Picture not available
# 1 Address: Wind Chime of Walnut Creek
2175 Ygnacio Valley Road, Walnut Creek, Calif.
Legal Description: Parcels A, B, & C as shown on the Parcel Map MS 808-83,filed
9-10-85, in Book 118 of Parcel Maps, Page 15, Contra Costa County Records.
Grantor: Wind Chime Group, LLC
Grantee: Sunrise Assisted Living
Date of Sale: 2-25-97 Sale Price: $8,400,000.00
Deed: WD Site Area: 85400 Sq. ft.
Conditions: Cash at closing Bldg. Area: 42800 Sq. ft.
Zoning: PD Land/Bldg.Ratio: 3.99/1.0
Utilities: All No. of Units: 73
Year Built: Under constr. Unit Price(Bldg): $196.26/SF
Tax Key: NA Unit Price(Unit): $115,068.49
Occupancy: NA
Remarks: A two-story wood frame building with concrete tile roof, under
construction, 73 units, 87 beds. The facility offers two basic floor plans; a
small studio, 275 sq. ft.; and a large studio; 350 sq. ft.
page 51
Picture not available
#2 Address: Highland Hills Alterna Care
1501 Baldy Avenue, Pocatello, Idaho
Legal Description: NA
Grantor: Alterna Care, Inc.
Grantee: Emeritus Corporation
Date of Sale: 9-31-96 Sale Price: $3,250,000.00
Deed: WD Site Area: NA
Conditions: Cash to seller Bldg. Area: 28126 Sq. ft.
Zoning: NA Land/Bldg.Ratio: NA
Utilities: All No. of Units: 49
Year Built: 1991 Unit Price (Bldg): $115.55/SF
Tax Key: NA Unit Price(Unit): $66,326.53
Occupancy: NA
Remarks: A two-story wood frame building. This is part of a package
purchase of two facilities. The other is a 50-unit facility in Washington. The
price allocation is based upon contributory value for each facility from an
appraisal.
Page 52
1501 Baldy Avenue, Pocatello, Idaho
Income Data:
Potential Gross income: NA
Vacancy: NA
Effective Gross Income: $810,784.00
Operating Expenses: 503,802.00 (62.1%)
Net Operating Incmoe: $306,982.00
(Buyer projected increase to) $361,242.00
Consideration:
Price: $3,250,000.00
Terms of Sale: Cash to seller
Cash Equivalent Price: $3,250,000.00
Economic Indicators:
Price Per Unit: $66,326.53
Price Per Sq. Ft.: $115.55
Gross Income Multiplier: 4.01
Overall Capitalization Rate: 9.45% (actual)
11.12% (buyer projection)
page 53
Picture not available
#3 Address: Ridge Wind Residence
4080 Hawthorne Rd., Chubbuck, Idaho
Legal Description: NA
Grantor: Ridge Wind, LLC
Grantee: Emeritus Corporation
Date of Sale: 2-96 Sale Price: $4,550,000.00
Deed: WD Site Area: NA
Conditions: Cash to seller Bldg. Area: 48865 Sq. ft.
Zoning: NA Land/Bldg.Ratio: NA
Utilities: All No. of Units: 80
Year Built: 1995 Unit Price(Bldg): $93.11/SF
Tax Key: NA Unit Price(Unit): $56,875.00
Occupancy: NA
Remarks: A one-story wood frame structure with brick, stucco and wood
exterior, 80 units (licensed for 109 beds).
Page 54
4080 Hawthorne Rd., Chubbuck, Idaho
Income Data:
Potential Gross Income: $1,536,000.00
Vacancy: 76,800.00 (5%)
Effective Gross Income: 1,459,200.00
Operating Expenses: 899,900.00 (61.7%)
Net Operating Incme: $559,300.00
Consideration:
Price: $4,400,000.00
Plus $150,000 absorption costs
Terms of Sale: Cash to seller
Cash Equivalent Price: $4,550,000.00
Economic Indicators:
Price Per Unit: $56,875.00
Price Per Sq. Ft.: $93.11
Gross Incmoe Multiplier: 3.12 (EGIM)
Overall Capitalization Rate: 12.29%
page 55
[Picture of Sterling House at Tallgrass]
#4 Address: Sterling House at Tallgrass
8600 E. 21st, Wichita, Kansas
Legal Description: Lot 1, Summerfield 2nd Add.
Grantor: Sterling House Corporation
Grantee: Meditrust of Kansas, Inc.
Date of Sale: 3-29-96 Sale Price: $1,426,900.00
Deed: SWD Site Area: 83911 Sq. ft.
Conditions: Cash at closing Bldg. Area: 16010 Sq. ft.
Zoning: CUP Tallgrass Land/Bldg.Ratio: 5.24/1.0
Community Plan No. of Units: 26
Utilities: All Unit Price(Bldg): $89.12/SF
Year Built: 1993 Unit Price(Unit): $54,880.77
Tax Key: C-49529
Occupancy: 98%
Remarks: A one-story Assisted Living Facility. Typically,
units are occupied by singles. Monthly rents range from $1,295.00 to $1,945.00.
page 56
8600 E. 21st, Wichita, Kansas
Income Data: (Average)
Potential Gross Income: $494,340.00
Vacancy: 9,887.00
Effective Gross Income: 484,453.00
Operating Expenses: 321,321.00
Net Operating Income: $163,132.00
Consideration:
Price: $1,426,900.00
Terms of Sale: Cash to seller
Cash Equivalent Price: $1,426,900.00
Economic Indicators:
Price Per Unit: $54,880.77
Price Per Sq. Ft.: $89.12
Gross Incme Multiplier: 2.95
Overall Capitalization Rate: 11.43%
page 57
[Picture of Sterling House at Derby]
#5 Address: Sterling House at Derby
1709 Walnut Grove, Derby, Kansas
Legal Description: Lot 4, exc beg SW cor Lot 5, W 15', N 52',
E 15', S 52' to beg, Blk 1, Tanglewood Second Add.
Grantor: Masters Associates
Grantee: Meditrust of Kansas, Inc.
Date of Sale: 3-29-96 Sale Price: $1,631,500.00
Deed: SWD Site Area: 104413.32 Sq. ft.
Conditions: Cash at closing Bldg. Area: 16010 Sq. ft.
Zoning:_ R-3 Land/Bldg.Ratio: 6.52/1.0
Utilities: All No. of Units: 26
Year Built: 1994 Unit Price(Bldg): $101.90/SF
Tax Key: RO-DY-05227 Unit Price(Unit): $62,750.00
Occupancy: 100%
Remarks: A one-story Assisted Living Facility. Typically,
units are occupied by singles. Monthly rents range from
$1,295.00 to $1,945.00.
page 58
1709 Walnut Grove, Derby, Kansas
Income Data: (Average)
Potential Gross Income: $494,340.00
Vacancy: 19,774.00
Effective Gross Income: 474,566.00
Operating Expenses: 321,321.00
Net Operating Income: $153,245.00
Consideration:
Price: $1,631,500.00
Terms of Sale: Cash to seller
Cash Equivalent Price: $1,631,500.00
Economic Indicators:
Price Per Unit: $62,750.00
Price Per Sq. Ft.: $101.90
Gross Income Multiplier: 3.44
Overall Capitalization Rate: 9.40%
page 59
[Picture of Sterling House at Wellington]
#6 Address: Sterling House at Wellington
500 N. Plum St., Wellington, Kansas
Legal Description: E 260' of Outlot 11, North West Add.
Grantor: Wellington Partners, LLC
Grantee: Meditrust of Kansas, Inc.
Date of Sale: 3-29-96 Sale Price: $1,631,500.00
Deed: SWD Site Area: 85800 Sq. ft.
Conditions: Cash at closing Bldg. Area: 16010 Sq. ft.
Zoning: R-3 Land/Bldg.Ratio: 5.35/1.0
Utilities: All No. of Units: 26
Year Built: 1994 Unit Price(Bldg): $101.90/SF
Tax Key: NA Unit Price(Unit): $62,750.00
Occupancy: 100%
Remarks: A one-story Assisted Living Facility. Typically,
units are occupied by singles. Monthly rents range from $1,295.00 to $1,945.00.
page 60
500 N. Plum St., Wellington, Kansas
Income Data: (Average)
Potential Gross Income: $494,340.00
Vacancy: 4,943.00
Effective Gross Income: 489,397.00
Operating Expenses: 321,321.00
Net Operating Income: $168,076.00
Consideration:
Price: $1,631,500.00
Terms of Sale: Cash to seller
Cash Equivalent Price: $1,631,500.00
Economic Indicators:
Price Per Unit: $62,750.00
Price Per Sq. Ft.: $101.90
Gross Income Multiplier: 3.33
Overall Capitalization Rate: 10.30%
page 61
[Picture of Sterling House at Hays]
#7 Address: Sterling House at Hays
1800 E. 27th St., Hays, Kansas
Legal description: Beg SE cor, S27-Tl3S-Rl8W, W 1305.63', N 50' to pt
of property beg, W 350', N 270', E 350', S 270' to beg.
Grantor: Hays Partners, LLC
Grantee: Meditrust of Kansas, Inc.
Date of Sale: 3-29-96 Sale Price: $2,070,750.00
Deed: SWD Site Area: 94500 Sq. ft.
Conditions: Cash at closing Bldg. Area: 18467 Sq. ft.
Zoning: R-4 Land/Bldg.Ratio: 5.11/1.0
Utilities: All No. of Units: 33
Year Built: 1995 Unit Price(Bldg): $112.13/SF
Tax Key: NA Unit Price(Unit): $62,750.00
Occupancy: 100%
Remarks: A one-story Assisted Living Facility. Typically,
units are occupied by singles. Monthly rents range from $1,400.00 to
$1,750.00.
page 62
1800 E. 27th St., Hays, Kansas
Income Data: (Average)
Potential Gross Income: $615,120.00
Vacancy: 6,151.00
Effective Gross Income: 608,969.00
Operating Expenses: 399,828.00
Net Operating Income: $209,141.00
Consideration:
Price: $2,070,750.00
Terms of Sale: Cash to seller
Cash Equivalent Price: $2,070,750.00
Economic Indicators:
Price Per Unit: $62,750.00
Price Per Sq. Ft.: 112.13
Gross Income Multiplier: 3.40
Overall Capitalization Rate: 10.09%
page 63
Summary:
Subject Sale #1 Sale #2 Sale #3 Sale #4 Sale #5
Date of Sale 2-25-97 9-31-96 2-96 3-29-96 3-29-96
Sale Price $8,400,000 $3,250,000 $4,550,000 $1,426,900 $1,631,500
No. of Units 35 73 49 80 26 26
Bldg. Area 22811 42800 28126 48865 16010 16010
Year Built Proposed Under Const 1991 1995 1993 1994
Price/Unit $115,068.49 $66,326.53 $56,675.00 $54,880.77 $62,750.00
Price/Sq. ft. $196.26 $115.55 $93.11 $89.12 $101.90
Adjustments:
Yr Blt (Age) + 24% +8% +16% +.12%
Location - 29% - 15% -15%
Total Adj - 56.92 + 10.40 -6.52 +14.26 + 12.23
Ind.Price/SF $139.34 $125.95 $86.59 $103.38 $114.13
Summary:
Sale #6 Sale #7
Date of Sale 3-29-96 3-29-96
Sale Price $1,631,500 $2,070,750
No. of Units 26 33
Bldg. Area 16010 18467
Year Built 1994 1995
Price/Unit $62,750.00 $62,750.00
Price/Sq. ft. $101.90 $112.13
Adjustments:
Yr Blt (Age) +12% +8%
Location
Total Adj +12.23 +8.97
Ind.Price/SF $114.13 $121.10
The indicated price per square foot of building has a range of $86.59 to
$139.34.
Adjustments are made for: age of the improvement (year built), and location
(in higher cost areas).
Conclusion:
The indicated value of the subject site and improvements is: $2,874,200.00.
From National Investment statistics; Investors are very interested in
investing or buying Assisted Living Facilities, though many sales are below
market rate due to poor management or other problems.
page 65
Map of midwest and southwest United States Indicating comparable properties
Correlation and value Conclusion
The final reconciliation is the application of the process of evaluating
alternative conclusions and selecting from the indications of value derived from
each of the approaches utilized in the appraisal problem to arrive at a final
estimate of value. The appraiser weighs the relative significance,
applicability, and defensibility of the indication of value derived from each
approach, and places most weight and reliance on the one which in his
professional judgement, best approximates the value being sought in the
appraisal. The appraiser reconciles the facts, trends, and observations
developed in his analyses, and reviews their conclusions and the probable
validity and reliability of those conclusions.
The highest and best use of the site is residential. With the present
"R-3" zoning, Multiple Family Residential, the site is well suited for an
Assisted Living Facility.
The comparable land sales indicate a value for the site, as if vacant, of
$200,350.00. The estimated cost of development and construction of the
improvements, less any depreciation, is $2,558,850.00.
The proposed rents and expenses are supported by other Assisted Living
Facilities. The Net Potential Income is capitalized at 11% to indicate a value
of $3,266,500.00.
The Direct Sales Comparison Approach, using sales of other Assisted Living
Facilities, indicates a value of $2,874,200.00.
The indications of value for the subject site and improvements by the three
approaches are as follows:
Cost Approach $2,759,200.00
Income Approach 3,266,500.00
Direct Comparison Approach 2,874,200.00
page 66
The Cost Approach is an estimate of the current cost of reproduction of the
improvements, less accrued depreciation, plus the site value. It is dependent
on the price of a replacement providing the same utility as the subject. It
necessitates accurate forecasting of the consideration which would be given by
the buyer in the market place to the physical deterioration, functional
obsolescence, and economic deficiencies of the subject property, if any.
In this report, the cost approach is based on Marshall and Swift valuation
service.
The Income Approach is an analysis which converts anticipated benefits to
be derived from the ownership of property into a value estimated, with
consideration given to the gross income, expense, net income, vacancy rate, and
capitalization. This is a set of procedures in which an appraiser derives a
value indication for income-producing property by converting anticipated
benefits into property value. This conversion is accomplished
either by 1) capitalizing a single year's income expectancy or an annual average
of several years income expectancies at a market-derived capitalization rate or
a capitalization rate that reflects a specified income pattern, return on
investment, and change in the value of the investment; or 2) discounting the
annual cash flows for the holding period and the reversion at a specified yield
rate.
In this report, the proposed income and expenses are supported by other
Assisted Living Facilities, and capitalized to reflect value.
The Direct Comparison Approach is dependent upon the accurate forecasting
of what a property will bring at some time in the near future by considering
sales which have occurred in the past. It is a well-known fact that two buyers
may not want to pay the same price for the same property. It is therefore
difficult to predict, within a few - hundred dollars, what property may bring in
the open market by using sales of other properties which have occurred in the
past, unless the sales are recent.
In this report, the sales considered are similar Assisted Living Facilities
in California, Idaho, and Kansas.
page 67
With consideration given to construction time and lease-up time, the
value indicated by the Income Approach is discounted.
Development time is estimated at 6 months. Construction time is
estimated at 6 months. Lease-up time is estimated at 3-to-9 months, or 12
months to stabilized occupancy.
Allowing 24 months, and investment money at 11% interest, $3,266,500.00
future value equals $2,651,164.67 present value, rounded to $2,650,000.00.
The market value of the subject proposed site, with all utilities and
improvements, as of April 7, 1997, is:
$2,650,000.00
This value is expected to increase to $3,266,500.00, with completion of
construction and lease-up, at time of stabilized occupancy, without
considering any increase in rents or expenses.
/S/ Keith D. Callison
- -------------------------------
Keith D. Callison, SRA
Kansas Certificate #G-590
Utah Certificate #CG00051719
page 68
[Picture]
Subject, Looking Southwest From Northeast Corner
[Picture]
Subject, Looking Northwest From Southeast Corner
[Picture]
S. 1200 East Street, Looking North
[Picture]
S. 1200 East Street, Looking South
[Picture]
Subject, Looking Northeast From Southwest Corner
[Picture]
E. 200 South Street, Looking East
Qualifications:
I have been a full time Real Estate Appraiser since August 1974, doing
residential, some multi-family, light commercial, and condemnation assignments.
Education:
1994 San Diego, California, Appraisal Institute, Appraisal Review -Income
Properties
1994 Columbus, Ohio, Appraisal Institute, Standards of Professional
Practice
1989 University of Colorado, American Institute of Real Estate Appraisers,
Capitalization Theory & Tech, Part A
1989 County Appraisers Eligibility Examination (K.S.A. 19-432)
1988 Omaha, NB, AIREA, Standards of Professional Practice
1975 Oklahoma University, AIREA, Course 8
1974 College of St. Thomas, MN, AIREA, Course 1-A
Designation:
1986 RM (Residential Member), American Institute of Real Estate Appraisers,
#2072; exchanged to SRA, 1992, Appraisal Institute
Certification:
1992 Kansas Certified General Real Property Appraiser - #G-590
1994 Oklahoma Certified General Appraiser - #11366
1994 Colorado Certified General Appraiser - #CG40000352
1996 Nebraska Certified General Appraiser - #CG 960187
1996 Iowa Certified General Appraiser - #510348128
1997 Utah State-Certified General Appraiser - #CGO0051719
Member:
Appraisal Institute
Member: Residential Appraisal Reports Subcommittee National Candidate
Guidance Committee
Wichita Board of Realtors
National Association of Realtors
Background:
General contractor for 15 years, building single family, multi-family, and
light commercial buildings. Planning, designing, building, and selling.
Licensed Real Estate Broker in the State of Kansas since 1969.
Appraisal Assignments For:
Central Bank & Trust, Fidelity State Bank, Garden City
Hutchinson First National Bank of Anthony
Central National Bank, Guaranty Bank & Trust Co.,
Lawrence & Topeka Oklahoma City, OK
Church Loans, Amarillo, TX INTRUST Bank
District Court, Division 9 MMR Investment Bankers, Wichita
Emprise Bank Prairie State Bank
Equitable Relocation, Inc. Resolution Trust Corp.
Norwest Bank, Omaha, NB World Savings & Loan Assn.
KEITH D. CALLISON, SRA P.O. Box 343
Wichita, Kansas 67201
Work:(316) 262-2193
Home:(316) 686-1060
SUMMARY OF QUALIFICATIONS
* over 35 years experience in real estate/construction industry, including
over 20 current years as an independent appraiser.
* Appraisal expertise encompasses single and multi-family residential,
light commercial and condemnation assignments, working with banks, savings and
loans, and/or private companies in the Midwest.
* Knowledgeable of current government lending regulations and real estate
sales procedures, in addition to an indepth understanding of the construction
trade, as a result of experience as a general contractor and licensed real
estate agent. Also knowledgeable on electronic computers, and with appraisal
files, and comparable sales.
* As a result of broad background, specialized appraisal training and
experience is enhanced; capable of perceiving quality and unusual aspects in the
evaluation of property or development plans.
PROFESSIONAL EXPERIENCE
KEITH D. CALLISON, SRA
Wichita, Kansas
1974 - Present
REAL ESTATE APPRAISER
Manage and promote appraisal services, working in cooperation or
support of lending institutions, under all governmental regulatory agency
guidelines (e.g., Resolution Trust Corporation, Veterans Administration, Federal
Housing Authority, Federal Home Loan Mortgage Corporation, Federal National
Mortgage Association, and local housing authorities, etc.) based in Midwest.
Have provided construction appraisals on new building sites, working
with lenders on commercial projects at various phases of completion, to ensure
that quality methods/materials and specifications were maintained.
Designated a Residential Member (RM), through the American Institute
of Real Estate Appraisers in 1986, exchanged to SRA, Appraisal Institute, 1992.
Review Appraiser for Property Value Division, State of Kansas for
1989 Reappraisal.
1992-1996 Specialized in Assisted Living Facilities.
Page 2 Keith D. Callison, SRA
DeBoer & Associates
Wichita, Kansas
1971 - 1973
CONSTRUCTION COORDINATOR/INSPECTOR
Was involved during period of rapid growth in Wichita apartment
building.
SELF-EMPLOYMENT
Winfield, Kansas
1956 - 1971
INDEPENDENT CONTRACTOR - Custom Homes
Completed requirements for Real Estate Sales License during this
time. Designed and built over 300 custom homes.
EDUCATION/TRAINING
AMERICAN INSTITUTE OF REAL ESTATE APPRAISERS
- Currently maintain required Continuing Education Units in professional
field.
- Appraisal Review - Income Properties, 1994
- Standards of Professional Practice Course, 1994
- Capitalization Theory & Techniques "A", 1989
University of Colorado; Boulder, CO.
- Course #8, 1975
Oklahoma University
- Course 1-A, 1974
College of St. Thomas; Minneapolis, MN.
KANSAS COUNTY APPRAISERS ELIGIBILITY EXAMINATION
- (K.S.A. 19-432), 1989
WICHITA STATE UNIVERSITY
Wichita, Kansas
Completed three semesters toward Architectural Engineering, 1956-1957.
Page 3 Keith D. Callison, SRA
DESIGNATION
1986, Designated RM (Residential Member) - #2072
AMERICAN INSTITUE OF REAL ESTATE APPRAISERS
Exchanged to SRA, APPRAISAL INSTITUTE, 1992
CERTIFICATION
1992, KS Certified General Real Property Appraiser - #G-590
1994, OK Certified General Appraiser - #11366
1994, CO Certified General Appraiser - #CG40000352
1996, NE Certified General Appraiser - #CG 960187
1996, IA Certified General Appraiser - #510348128
1997, UT St-Certified General Appraiser - #CGO0051719
LICENSE
1969, Kansas Real Estate Broker License - EB558
PROFESSIONAL MEMBERSHIPS
American Institute of Real Estate Appraisers, 1975 - 1991
Appraisal Institute, 1992 - Present
National Residential Appraisal Reports Subcommittee
1989 - Present
Regional Ethics and Counseling Panel, 1989 - Present
National Relations Committee (1992-1996)
Wichita Board of Realtors, 1974 - Present
National Association of Realtors, 1974 - Present
[Facsimile of State of Kansas Real Estate Appraisal Board Certificate for
certified General Real Property Appraiser]
[Facsimile of State of Oklahoma Real Estate Appraisal Board Certificate for
certified General Real Property Appraiser]
[Fascimile of State of Colorado Real Estate Appraisal Board Certificate for
certified General Real Property Appraiser]
[Facsimile of State of Nebraska Real Estate Appraisal Board Certificate for
certified General Real Property Appraiser]
[Facsimile of State of Iowa Real Estate Appraisal Board Certificate for
certified General Real Property Appraiser]
[Facsimile of State of Utah Real Estate Appraisal Board Certificate for
certified General Real Property Appraiser]