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Kenwood Storage Building Appraisal -I Ii I-I I-I I-I I] I] -, IJ IJ I] I~ I] .J IJ '"I I-I i 1-1 IJ I I-I .-' I IJ 'j,. -.::,:~,..)..' ',.,.' THE SIMMONS COMPANY REAL ESTATE APPRAISAL AND CONSULTING 3202 Kimball Avenue Manhattan, Kansas 66503 Telephone No. (785) 539-6531 Fax No. (785) 539-1433 430 Beechwood Road Salina, Kansas 67401 (785) 825-9090 July 31, 2006 Mr. Ken Kennedy U.S.D. 305 1511 East Gypsum Avenue Salina, KS 67401 Re: . Appraisal for the Building Only Located at 505 Kenwood Park, Salina, Kansas 67401. (No additional value is given for the land that the building is located on, and for any personal property items (furniture, fixtures, and equiprnent). Dear Mr. Kennedy: As requested, we have developed an opinion of market value for the building only of the property referred to above. "Market value" is defined in the attached docurnents in the Objective of the Appraisal section. Every effort has been made to conforrn to the Uniform Standards of Professional Appraisal Practice. The property description and valuation analysis are rnore fully described in the attached appraisal report. The Client and Intended User of this appraisal is Officials with U.S.D. 305. The Appraisers do not authorize, and are not responsible for, use of this appraisal by any party other than the Client. However, the Appraisers permit U.S.D. 305 sharing the appraisal with the City of Salina and Saline County officials, who are also users of the subject building, for the purpose of the stated intended use only. The intended use of this appraisal is for assisting the Client with internal decision making for a possible future sale price of the subject building, and any other use is prohibited. This appraisal is subject to the underlying assumptions, extraordinary assumptions, and limiting conditions set forth in this report. The Appraisers make no representations, guarantees, or warranties. The opinion of market value for the subject building only, as of July 20, 2006, subject to the extraordinary assumptions and hypothetical conditions set forth, is: ONE HUNDRED FORTY THOUSAND DOLLARS ($140,000) Through an Interlocal Cooperation Agreement. the subject building is jointly used by three governmental units, who are U.S.D. 305, City of Salina, and Saline County, and is located on land owned by the City of Salina. However, the appraisal is based upon the hypothetical condition that the subject property is encurnbered by fee simple interest. which in-fact, it is not. The 5imrrlGrt'J COnlDany UI I' In] I-I 1"/ I] -'J 1- ._\ IJ I] I] I] I] "'J IJ IJ 1-' 1-' IJ II 1-' , IJ Cover Letter Page 2 The scope of work in this appraisal is customized for the intended use. This appraisal and report may be inappropriate for other uses and jeopardize the user. Therefore, regardless of the means of possession of this report, this appraisal may not be used or relied on for any use except the stated use. The Appraisers, Appraisers' firms, and related parties assume no obligation, liability, or accountability for any other use. The interest appraised is the hypothetical fee simple interest, which is defined in the body of this report. The purpose of this appraisal is to develop an "as-is" opinion of market value for the subject building only, and the function is for analyzing financial considerations. The intended use of this appraisal is for the sole purpose of assisting the Client with intemal decision making for a possible future sale price of the subject property, and any other use is prohibited. The above stated opinion of market value does not include the contributing value of any fumiture, fixtures, and equipment. The property is appraised in the "as-is" condition, and . there are no known major deferred maintenance items. The estimated reasonable marketing time for the subject property is one year, which assumes professional and aggressive marketing. This is a summary report that should be read in its entirety, including all attachments, addendums, and cover pages. You are specifically referred to sections entitled Environmental Hazards and ADA (Americans with Disabilities Act) identified in this report. Respectfully Submitted, ~~ Fletcher Simmons, MAl Certified General Appraiser State of Kansas Cert. No. G-94 Jeff Holgerson Licensed Appraiser State of Kansas License No. L-1357 FS/JH/jmd Th8 Simmons Cornpany -I I' I-I I-I '--1 II -I II I I- I] I] IJ I] ~I I] IJ .1 IJ IJ I I' I 1-' II APPRAISAL OF THE BUILDING ONLY LOCATED AT: 505 Kenwood Park Salina, KS 67401 Effective Date of Appraisal - July 20, 2006 By Fletcher Simmons, MAl Cert No_ G-94 Jeff Holgerson Licensed Appraiser License No, L-1357 The- 8!rnrnons COfnpany --I II II .-1 .-, --I I -.\ I " -I I- I] I] 1:1 I] I] 1.1 1.1 1.1 1.1 1.1 1.1 TABLE OF CONTENTS Transmittal Letter Title Page Table of Contents INTENDED USER ................................................. 1 FUNCTION/lNTENDED USE OF THE APPRAISAL . . . . . . . . . . . . . . . . . . . . . .. 1 COMPETENCY STATEMENT. . . . . . . . . . . . . . . . : . . . . . . . . . . . . . . . . . . . . . .. 1 OBJECTIVE OF THE APPRAISAL. . . . ... ..... .... ... .... .. . . . ........ 2 ESTIMATED MARKET EXPOSURE TIME..... . ....... .... .. . . . . ..... .. 3 EFFECTIVE DATE OF APPRAISAL. . ........ . . ...... ....... . . . ....... 3 HYPOTHETICAL PROPERTY RIGHTS APPRAISED ..................... 4 SCOPE OF WORK ... . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . 4 IDENTIFICATION OF PROPERTY. . . ........ ....... .. ......... ....... 6 LEGAL DESCRIPTION ............................................. 6 EASEMENTS, ENCROACHMENTS, ZONING-CODE COMPLIANCE. . . . . . . .. 7 THE AMERICANS WITH DISABILITIES ACT ("ADA") ..................... 7 STRUCTURAL AND MECHANICAL INFORMATION. . . . . . . . . . . . . . . . . . . . .. 8 ENVIRONMENTAL HAZARDS ....................................... 9 SOURCE FOR SQUARE FOOTAGE (SIZE) . . . . . . . . . . . . . . . . . . . . . . . . . . .. 10 SALES HISTORY AND OWNERSHIP OF THE SUBJECT PROPERTY. . . ... 10 AREA DESCRIPTION ............................................. 11 NEIGHBORHOOD DESCRIPTION. . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . .. 17 SITE DESCRIPTION .............................................. 18 FLOOD MAP .................................................... 19 AERIAL MAP .................................................... 20 DESCRIPTION OF IMPROVEMENTS ................................ 21 SUBJECT PHOTOGRAPHS ........................................ 23 HIGHEST AND BEST USE ......................................... 24 SALES COMPARISON APPROACH. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 25 INCOME APPROACH ............................................. 46 COST APPROACH ............................................... 46 RECONCILIATION. . . . ... . . .. . ... . ... . ..... . ..... . . ...... .. . .. . .. . 49 REASONABLE MARKETING TIME. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 50 Underlying Assumptions, Extraordinary Assumptions, Hypothetical Conditions, and Limiting Conditions Qualifications of the Appraisers Appraisers' Certificate Addendum The Smrnons Company -I II --I I, II 11 II IJ -j 1_' I] .\ 1- -j I I] I I, I IJ 1.1 I IJ 1.1 1.1 I IJ II INTENDED USER The Client of this appraisal is the entity in which the letter of transmittal is addressed. The intended user is that entity. The Appraisers do not authorize and are not responsible for use of this appraisal by any party other than the Client. FUNCTION/INTENDED USE OF THE APPRAISAL The function/intended use of the appraisal is for the sole purpose of assisting the Client with intemal decision making for a possible future sale price of the subject building. Any other use is prohibited. The acceptance of this assignment, by the Appraisers, 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. COMPETENCY STATEMENT Fletcher Simmons, MAl and Jeff Holgerson, hereby acknowledge that they have the appropriate education and experience to complete the assignment in a competent manner. The reader is referred to the Appraisers' statements of qualifications in the addendum of this report. The Simroons Company 1 I i Ii I-I --I II I-I I 1- IJ "! 1\ '-I IJ r-I , I IJ I] IJ OBJECTIVE OF THE APPRAISAL The objective of the appraisal is to provide an opinion of marketvalue for the subject building as of July 20, 2006, Pursuant to Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), and as defined on page 210 of the current USPAP, Market value is defined as: "The most probable price in terms of money 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, knowledgeably and assuming the price is not affected by undue stimulus," Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: a, buyer and seller are typically motivated; b, both parties are well informed or well advised; and each acting in what he considers his own best interest; c, a reasonable time is allowed for exposure in the open market; d_ payment is made in terms of cash in U_S, dollars or in terms of financial arrangements comparable thereto; and e, 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_ I IJ 1-' I 1-' I 1-' I I' I I-- I IJ The Simmons Company 2 I I) C~I I -I I ~I I '-I II I I .1 I II :~I I. .1 II .1 il II II IJ IJ .1 IJ ESTIMATED MARKET EXPOSURE TIME The market exposure time is presumed to precede the effective date of the appraisal. Exposure time may be defined as follows: The estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective estimate based upon an analysis of past events assuming a competitive and open market, as quoted by Uniform Standards of Professional Appraisal Practice, The Appraisal Foundation, USA, 2001, P. 83. Exposure time is a function of price, time, and use. It must be noted that the concept of reasonable exposure time encompasses not only adequate, sufficient, and reasonable time, but adequate, sufficient, and reasonable effort The estimated exposure time presented herein is based on analysis of the following factors: * statistical information about days on market * information gathered through sales verification * interviews with market participants * anticipated changes in market conditions Based on the data presented in this report, and the fact that the market value estimated herein is representative of a price based on current acceptable returns indicated by market participants, we are of the opinion that the reasonable exposure time for each parcel of the subject property in its present use would be approximately 9 to 12 months. EFFECTIVE DATE OF APPRAISAL The effective date of the appraisal is defined as the date at which the analyses and opinions in an appraisal apply. According to the intended use of this appraisal, a current effective date is used for the subject, which is July 20, 2006. The effective date of the appraisal establishes the context for the value opinion. The Slrnrnons Conipany 3 -I II ~I II '-1 I --I I '-I I II -I I 'I I .:1 ;'"1 I- II I] IJ IJ IJ 1-' 1-' IJ I IJ HYPOTHETICAL PROPERTY RIGHTS APPRAISED The hypothetical property rights appraised are the fee simple interest, which can be defined as an absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat. SCOPE OF WORK. The Client of the this report is an official with a bank, which offers mortgage lending, and officials with that lender are considering issuing a mortgage loan using the subject property as collateral. The problem to be solved by the Appraisers is to arrive at an opinion of value, which in-turn, provides a credible appraisal for the intended users to rely on in internal decision making for a possible future sale price of the subject building. The scope of work for this appraisal is to draw market conclusions as of the effective date of the appraisal, and to consider all approaches to value, unless otherwise stated, in order to develop an opinion of market value for the real estate of the subject property, as defined herein, at its highest and best use. The data researched and the type and extent of the analysis, along with the detail of this appraisal report, is commensurate with the size, complexity, and type of property appraised. General Information: >-. The Client of this appraisal is U .S.D. #305. The Appraisers do not authorize and are not responsible for use of this appraisal by any party other than the Client. However, the Appraisers do permit U.S.D. #305 sharing the appraisal with the City of Salina, and Saline County, who are also users of the Subject building, for the purpose of the stated intended use only. >- The intended use of this appraisal is for assisting the Client with internal decision making for a possible future sale price of the subject building, and any other use is prohibited. >- The scope of work in this appraisal is customized for the intended use. This appraisal and report may be inappropriate for other uses and jeopardize the user. Therefore, regardless of the means of possession of this report,Jhis appraisal may not be used or relied on for any use except the stated use. The Appraisers, Appraiser's firms, and related parties assume no obligation, liability, or accountability for any other use. Please contact our office to have an appraisal customized for your needs. >- Every effort has been made to conform to the Uniform Standards of Professional Appraisal Practice. >- Much of the scope of work is discussed throughout this appraisal. Therefore, the Client of this report should refer to the specific section(s) for more detailed information. This information is not limited to the body of this appraisal, but also includes all attachments, addendums, and cover pages. Ths Sirnrnons CDrnpany 4 I I eel I '-I I ~I II -, I IJ .' .1 I] .] I] IJ J I I IJ IJ IJ IJ .J I II Scope of Work (Cant.) Subiect Data: >- Viewed and photographed the subject building on July 20, 2006. >- Viewed the Interlocal Cooperation Agreement that was obtained from the Register of Deeds Office. >- Viewed the aerial of the subject that was provided by the Client of this appraisal. >- Obtained Inventory Contents Sheet of the subject from the County Appraiser's Office. >- Verified subject zoning from City of Salina zoning book, and further discussed with John Burger, Associate Planner with the City of Salina. Market Data: >- Drove through the subject neighborhood noting types of properties, conditions of properties, neighborhood boundaries, and characteristics of neighborhood. >- Verified infonnation pertaining to comparables from at least two of the following sources: deeds, MLS, county records, REALTORS, SVQ's, buyers, sellers, builders, property owners, Appraiser's personal files, other credible appraisers, and exterior drive-by. Analvsis: >- Developed an estimated exposure time for the proposed subject property. >- The appraisal problem did not warrant an intensive highest and best use study. Therefore, given the nature of the subject real estate, the conclusion of highest and best use is based upon logic and observed evidence. >- Performed a direct sales comparison analysis for the subject building only. The sales of more than 6 warehouse type properties were considered before narrowing it down to the 3 most similar. In order to do provide an opinion of value for the subject building only, the opinion of site value for each comparable was extracted out from its total sales price on its date of sale. The results of this provide an opinion of value for the improvements only for the comparable at its date of sale. After the opinion of value for the improvements only is determined for the comparables, they are then compared to the subject building. In conclusion, based upon the sales comparison approach from market data, the "as-is" opinion of value for the subject building only, as of July 20, 2006, subject to the extraordinary assumptions and hypothetical conditions set forth, is determined. >- Considered the income approach, but determined that the income approach does not provide a credible opinion of value for the subject building, and it is not considered applicable. >- Performed a cost approach for the subject building only. An opinion of the cost new of the subject building was performed by using the Marshall Valuation Service, a nationally- recognized cost service, with adjustments for local factors. The age/life method is used to estimate the physical depreciation and an adjustment for functional depreciation is applied. In conclusion, based upon the cost approach, the "as-is" opinion of value for the subject building only, as of July 20, 2006, subject to the extraordinary assumptions and hypothetical conditions set forth, is determined. >- Considered all three approaches to value, but eliminated the income approach because it does not provide a credible opinion of value.' >- Reconciled the opinion of values to arrive at a final opinion of market value for the subject building only. >- Developed a reasonable marketing time for the subject building only, which assumes professional and aggressive marketing. >- Reported data, analysis, and conclusions in the attached Summary Appraisal Report. The Simmons Cmnpany 5 ~I Ii -l I -I I -I I -I I I I PI I 'j 1- IJ .] I] 1-' II II IJ 1-' IJ IJ 1-' IDENTIFICATION OF PROPERTY The subject of this appraisal is a pre-engineered steel frame metal building built on a concrete slab foundation, The building is currently being used for warehouse storage purposes for the City of Salina, Saline County, and U.S.D. 305. The building is located on a parcel located at 505 Kenwood Park, that is located just south of the southern parking lot for the City of Salina Bicentennial Center. However, at the request of the Client, only an opinion of market value for the building is desired. Therefore, no additional value is given for the land that the building is located on, and for any personal property items (furniture, fixtures, and equipment). According to assessment records, the building contains a total 10,800 building square feet and was built in 1984. The building was originally built new for the purpose of providing warehouse storage for the City of Salina and Saline County, and for providing locker room facilities for North Junior High for U.S.D. 305. Therefore, approximately the west 1/3 of the building has two separate minimally finished locker room facilities, with one formerly being used for the home team locker room, and one formerly being used as the visiting team locker room. However, it is believed that with the construction of the new middle school, this portion of the building has only been used for storage purposes. Located above the locker room portion of the building, is a mezzanine that is used for additional storage in the building. The warehouse portion of the building is a large open storage area that has two overhead doors, two separate exterior doors, skylights, electrical installed in conduit, insulated walls and ceilings, hanging fluorescent lights and no heating or central air-conditioning. LEGAL DESCRIPTION At the request of the Client, only an opinion of market value for the building IS desired. Therefore, providing a legal description for the tract of land that the building is located on is not part of the scope of this appraisal. The- Simmons Compan:/ 6 -1 I -, I '-I I "J I '-1 I 1.1 .] II I] I] 1.:1 '1 I_I .] ...1 1.1 .J I 1-' I I-I I 1.1 EASEMENTSI ENCROACHMENTSI ZONING-CODE COMPLIANCE No Certificate of Title was provided to the Appraisers. Completing abstract or title research are not a part of the scope of this assignment and should be completed by professionals with expertise in these areas. Unless otherwise noted, standard utility and right of way easements are insignificant to value. However, a current locational or boundary survey, which was unavailable to the Appraisers, may reveal encroachments, easements, zoning violations, flood zone issues, or other matters of interest that could warrant modification of the appraised value. Statements regarding zoning compliance are intended only in the most general sense. FEMA determines the Flood Zone by a visual inspection, but this is not guaranteed. Flood maps often lack sufficient detail to enable accurate determinations on the part of the Appraisers. Because the Appraisers are not surveyors, they make no guarantees, express or implied, regarding the FEMA Flood determination. Zoning and building ordinances vary significantly from on municipality to another, and can be extremely detailed. The scope of this report does not include a comparison of every potentially significant characteristic of the subject property's site and improvements relative to zoning, building ordinances, and codes. It is therefore not known to the Appraisers if the building improvements have been built to code, or are in code compliance. THE AMERICANS WITH DISABILITIES ACT ("ADA") The Americans with Disabilities Act ("ADA") became effective January 26, 1992. have not made specific compliance survey and analysis of this property to determine whether or not it is in conformity with the various detailed requirements of the ADA. It is possible that a compliance survey of the property, together with a detailed analysis of the requirements of the ADA, could reveal that the property is not in compliance with one or more of the requirements of the Act. If so, this fact could have a negative effect upon the value of the property. Since the Appraisers have no direct evidence relating to this issue, we did not consider possible non-compliance with the requirements of ADA in estimating the value of the property. The Simrnons. Company 7 --I I -I I -I I- i) .1 .] .J .] .] .] .] .] .] IJ I 1_' .-' .-' IJ I .- STRUCTURAL AND MECHANICAL INFORMATION It should be noted that the Appraisers do not have the appropriate knowledge or education in regard to structural and mechanical matters. The routine site visit by the Appraisers of the subject property and any improvements is for the sole purpose of developing an opinion of market value for the real estate of the subject property. Unless stated otherwise, it is the Appraisers' conclusion that the general condition of the improvements are consistent with its age and era of construction. The Appraisers have not viewed the surfaces of any improvements that are not readily accessible or visible from grade during a walk-through site visit. The site visit by the Appraisers is not intended to be a full property inspection of the type intended to reveal defects in l mechanical systems, structural integrity, roofing, siding, other property components, foundation settlement, basement moisture problems, asbestos, wood destroying (or other) insects, radon gas, lead base paint, mold, or any other toxin and/or environmental issues. Unless otherwise noted, the Appraisers assume the various elements that constitute the subject property are fundamentally sound and in working order. Therefore, crawlspaces, attics, roofs, etc. have not been accessed. Mechanical, electrical, and plumbing systems were not evaluated other than the overall surface appearance of these items as related to the age of the improvements. The Client is invited and encouraged to employ qualified experts to inspect and address any area of concern. If any adverse conditions are discovered, the Appraisers should be notified, as the Appraisers reserve the right to change any opinion of value conclusions. It is noted that in April of 2006, a hail storm did considerable damage to the city of Salina. As a result, many of the roofs of both the residential and commercial properties were damaged. Therefore, the condition of the roof covering is unknown to the Appraisers, and the Appraisers are not qualified to determine the remaining economic life or the estimated age of the roof. Professional inspections are recommended, and the Client is invited and encouraged to employ qualified experts to inspect and address any area of concern. The Simrnons Company 8 ..., .1 ../ .1 ,./ .1 .:1 .'1 1;1 i I I .i I ,I .' I ,I ,I ,I ,I ,I ENVIRONMENTAL HAZARDS A July 1, 2005 Salina Journal newspaper article indicated that there is an underground plume of petroleum and solvent contamination from the Schilling Air Force Base. It is 50 to 75 feet below the ground surface and covers much of the Salina Airport Industrial Area. The article further indicates that the plume appears to be moving northeast into a residential area, roughly a mile from city wells located in Salina's downtown area. Currently, City Officials and officials with the Corps of Engineers are studying the situation. In addition, according to a October 15, 2005 Salina Journal newspaper article, "a recently discovered plume of intensely contaminated groundwater, apparently the result of a grain fumigant spill 35 years ago, is moving across Salina's north-central business district and is now within a couple hundred yards of a city well." The plume originated from a site located at 501 North Santa Fe Avenue, a lot that was once used as a staging area for a company that fumigated area grain elevators. Currently, the Kansas Department of Health and Environment is working on the problem. Unless otherwise stated in this report, the existence of hazardous material, which mayor may not be present on the property, was not observed by the Appraisers. The Appraisers have no knowledge of the existence of such materials on or in the property. The Appraisers, however, are not qualified to detect such substances. The presence of substances such as asbestos, urea-formaldehyde foam insulation, or other potentially hazardous materials may affect the value of the property. This includes substances in both buildings and soil, including subsoils. No responsibility is assumed for any such conditions, or for any expertise or eng;neeri~g knowledge required to discover them. The Client is urged to retain an expert in this field, if desired. Therefore, the opinions of value are predicated on the extraordinary assumption that there are no environmental hazards on or in the property that would cause a loss in value, that the subject property has an adequate supply of safe drinking water, and that the subject property has no vapor intrusion. If any adverse conditions are discovered, the Appraisers should be notified, as the Appraisers reserve the right to change any opinion of value conclusions. Because. the Appraisers are not experts in the field of environmental hazards, this appraisal report must not be considered as an environmental assessment of the subject property. Thf~ Simmons Cornpany 9 I . I II 'I II SOURCE FOR SQUARE FOOTAGE (SIZE) I .' I II .] I .\ .' I .1 I' II I .1 II .1 I .. .1 II It is common practice for real estate appraisers in the geographical area to utilize county assessment records (ICS-Inventory Contents Sheets) for building improvement and land size. For the most part, County personnel spend significant time measuring and compiling size data, and this data is regularly updated when changes occur (through building permit notification). Therefore, the benefit of using this data provides efficiencies of time and also is helpful when access to properties (particularly comparable sales) is not readily available. Users of this report should understand that assessment records are most likely utilized in this appraisal for estimating the size of building improvements and land, not only for comparable sales, but also for the subject property. Therefore, when assessment records are utilized for estimating the size of building improvements and land, it is based upon the extraordinary assumption that the measurements are accurate. SALES HISTORY AND OWNERSHIP OF THE SUBJECT PROPERTY The building was originally built new in 1984 for the purpose of providing warehouse storage for the City of Salina and Saline County, and for providing locker room facilities for North Junior High for U.S.D. #305. There have been no sales of the subject building since it was originally built. The subject property has not been listed for sale on the open market, and there are no known pending sales contracts for the subject property. However, the intended use of this appraisal is for the sole purpose of assisting the Client with internal decision making for a possible future sale, price of the subject property. The Simmons Company 10 .1 .'-1 .' I .' I .' I .:1 .'1 .1 .: I .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 AREA DESCRIPTION Salina is the county seat of Saline County and is located in north-central Kansas, approximately 80 miles south of the Nebraska border and 173 miles west of the Missouri border. The city has a population of approximately 46,000, with a county population of approximately 54,000. It is located at the Interchange of Interstate 70 and Interstate 135. This provides east/west access and north/south access for various industries. Officials with the Schilling Air Force Base announced the closing of that facility in the mid-1960's. The Salina population was slightly more than 40,000 at that time. In 1967, when the full effect of the closure had taken place, the population had declined to nearly 37,000. For the next 24 years, growth was extremely flat, with only a 10 percent total increase. The 2000 Census stated that Salina had a population of 45,679, which is 3,376 more residents since the 1990 Census. That's an average annual growth rate of eight-tenths of 1 percent. Community leaders are hopeful that by the 2010 Federal Census, Salina will have a population of 50,000, which would elevate Salina to be considered a "metropolitan area", a designation that brings with it a host of benefits. Retail/Commercial Development This sector has increased significantly in recent years. In 1989, retail sales in Salina equaled $408.3 million. This was a 44 percent increase over the previous five years. By the end of 1995, sales increased to $751 million, an increase of 84 percent in six years. The Mid-State Mall was constructed in 1971, and,a regional shopping center named the Central Mall was constructed in 1986, which are both located on the South Ninth Street Corridor. Four other major facilities are located along the South Ninth Street Corridor, which include Wal-Mart SuperCenter, Sam's Club, Target, and Lowe's. The downtown business district, like many in the Midwest, suffered when suburban shopping areas were established. Like many downtowns, it has now become more important as a financial, office, entertainment, and service center, with less reliance on retail business. The former Fox Theatre was remodeled and turned into the Watson- Stiefel Theatre for the Performing Arts in 2003. The downtown area has rebounded nicely and has had some recent revitalization. The Sirnmons Cornpany 11 .1 .-1 .'-/ .1 .'1 .' .ul .' .1 .' .1 .' .1 .1 .1 .1 ..\ .1 .1 Area Description (Cont.) There are numerous neighborhood centers, which comprise approximately 1.5 million square feet of retail space. It is estimated that the average overall occupancy rate of the nine retail areas in the city are from 87 to 94 percent. Industrial Development There are essentially three industrial areas within the city. The South Industrial Areas at the south edge of the city, along the east side of South Ninth Street. Part of this area is located in the city limits, and part of it is located in the county. Major employers include Philips Lighting Company, which is the World's Largest Manufacturer of Fluorescent Lamps. It is located on a 70-acre site, and employs 543. Philips Lighting completed a $50 million dollar expansion in 1997, and an $18 million dollar furnace project in 2004. Exide Corporation is also located in the South Industrial area, which is the largest battery production facility in the world. It employs 820 people, and produces 40,000 batteries per day. Another tenant in this area is Crestwood, Inc., cabinet manufacturers, which in 1996, constructed a facility that has approximately 169,000 square feet of building area. In 2005, Crestwood, Inc. expanded its facility to have a total of approximately 242,000 square feet of building area. The Salina Municipal Airport Industrial Center is located along the east side of the airport, west of 1-135, in the extreme southwest quadrant of the City. Salina's largest employer, Tony's Pizza, is located in this area and employs about 1850 people. In addition to Tony's PiZza, additional residents at the Airport Industrial Center include Raytheon Aircraft Company, Eldorado National, Ovation Cabinetry, Power Ad, Salina Vortex, the Kansas Army National Guard, Salina Area Technical School, and the campus of Kansas State University-Salina. This Industrial Center contains approximately 4,000 acres, of which 600 are available for industrial and commercial development. The center is home to 70 businesses, employing 4,500, and generating more than $100,000,000 in payroll. In the late 1990's and early 2000's, the infrastructure and support services for this area were greatly improved. The airport contains a main runway of more than 12,300 feet, and another 4,300-foot runway that was constructed in 2003. In the late 1990's and The Simmons Cornpany 12 .-1 .-1 1'-' .'1 .' I .1 .1 .1 .1 II I' I' II .' .1 I' .1 .1 II Area Description (Cont.) early 2000's, the infrastructure and support services for this area were greatly improved. New construction in the area includes a new $5 million dollar 115,000 square foot building for Salina Vortex. The building is projected to be completed in 2006, and will be constructed on a 16-acre site at the corner.of Water Well Road and Centennial Road. The airport contains a main runway of more than 12,300 feet, and another 4,300-foot runway that was constructed in 2003. In February of 2005, the Salina Municipal Airport received national and international media attention because pilot Steve Fossett successfully completed a solo flight around the world, without stopping or refueling, in the GlobalFlyer aircraft from the Salina Municipal Airport. Salina Municipal Airport was chosen for this historic event because of its location, its facilities, and its 12,300 foot runway. In the northeast quadrant of the City, there are several small areas of industrial development, which, for the most part, consist of small manufacturing and warehouse properties. However, Great Plains Manufacturing is located in one of the areas, manufacturing Farm machinery and landscaping equipment. They have a second facility several miles south of Salina and employ approximately 800. Another tenant in North Salina is A-Plus Galvanizing, a metal galvanizing plant that has the largest hot-dip galvanizing tank in the world. Lodging Facilities There are about 28 motel facilities, offering approximately 2,000 rooms. The Best Inn, with 35 units, was completed in 2003, and the Country Inn and Suites, with 72 units, opened in 2000. The Candlewood Suites opened the summer of 1999, with 69 rooms. The Hampton Inn, completed in mid-1998, has 70 rooms. The Holiday Inn Express, containing 93 rooms, including one and two-bedroom suites, along with a meeting room for 50, was completed in 1997. In 1985, a 192-room Holiday Inn/Holidome was constructed, and it was remodeled in 2003. The Holiday Inn, Candlewood Suites, Red Coach Inn, and Ramada Inn offer significant meeting and banquet facilities.. Also, a new The Siinmons. CornDany 13 II I I II 1'1 1:1 II I] II II II II II II I I II I I II II II Area Description (Cont.) Courtyard by Marriott was completed in December of 2005, which has 80 rooms, and a meeting space for up to 350 people. Housing/Building Summary Many new residential subdivisions have been established in recent years. The following summary is of building permit activity for new single-family and multi-tenant construction from 1995 through June of 2005. Year Single-Family Attached Multi-Family TOTAL Sinale-Familv 1995 100 35 0 135 1996 I 105 40 199 344 1997 87 . 28 8 123 1998 80 36 158 274 1999 82 28 6 116 2000 88 34 0 122 2001 71 16 72 159 2002 74 13 0 87 2003 91 17 0 108 2004 88 18 48 154 2005 67 18 109 194 Education The school system consists of eight public grade schools, two public middle schools, two public senior high schools and an alternative school for middle and high school students. In 2003, the public school system completed approximately a $99 million dollar consolidation and renovation of the public schools. Six private schools The Simmons Compar\)l 14 .1 .1 ~I . .1 I . .1 .-1 .1 II II .1 I' .1 .1 .' . I .1 .' II ; Area Description (Cont.) operate in Salina, with two providing high school classes, three offering middle school classes, and four are for elementary school students. Kansas Wesleyan is a four-year liberal arts college, with an enrollment of approximately 800. Brown Mackie College has an enrollment of approximately 325 students and offers two-year associate degrees. Salina Area Technical School has an enrollment of approximately 375 students and has full and part-time courses. Kansas State University of Salina-College of Technology has an enrollment of 1,100. It is a satellite campus of Kansas State University at Manhattan, Kansas. Programs include Aeronautical Engineering, Civil Engineering, Electrical Engineering, Mechanical Engineering, and Computer Science Technology. Healthcare Salina continues to be a regional healthcare center. In the mid 1990's, two hospitals were consolidated into one hospital called the Salina Regional Health Center. This consolidation helped pave the way for growth in the healthcare industry in Salina. The Salina Regional Health Center has had a heart surgery program since 1999. The Salina Surgical Hospital, an inpatient and outpatient facility, opened in 1999. In the early 2000's, the hospital expanded and remodeled its inpatient surgery facility, added the Salina Medical Arts Building, and a five-level parking garage. In October of 2004, a new 37,000 square foot, $10.8 million dollar comprehensive cancer center was completed. In addition, a new Hospice of Salina was completed in 2006. Salina Regional Health Center in February 2006 began construction on a new $62 million dollar six-story patient bed tower and renovation project, with a tentative completion date of December 2007 for the new tower. The new tower will allow all patients to have larger private rooms, and will allow Salina Regional to consolidate all of its services to one centralized location on the Santa Fe Campus. The project will add about 240,000 square feet of building area to the hospital. The community also is served by 17 medical clinics, 12 private~practice offices, 11 chiropractic clinics, and about 150 doctors, surgeons, and dentists. The Sirnrnons Cornpan}f 15 .1 -I . -, . 'I . .'1 .1 .:-1 .1 , I . .'1 .1 'I . .1 .1 .' .-' ..1 .1 .' Area Description (Cont.) Arts, Cultural Events, Entertainment Salina offers a wealth of performing arts and cultural events, The Bicentennial Center has a 7,200 seat arena and 41,000 square feet of exhibition space that offers a variety of entertainment. The Rolling Hills Zoo is home to 80 species of animals that are housed in naturalistic settings. Other offerings include the Salina Symphony, Salina Community Theatre, Salina Art Center, Salina Art Cinema, Watson-Stiefel Theatre for the Performing Arts, and the Smoky Hill River Festival. Salina also offers 26 parks, five museums and galleries, 80 restaurants, and more than 200 civic clubs and organizations. Summary The city enjoys a north-central location in the state, at the intersection of two interstates. Salina has become increasingly important as a retail, healthcare, cultural, and entertainment center for north-central Kansas. Five major manufacturers that employ over 500 people are located in Salina. According to the June 2005 Chamber of Commerce Report, a report for the fiscal year 2004 published by Kansas State University showed that Saline County ranked fourth out of the state's 105 counties in county trade pull-factor. A pull factor is a measure of the relative strength of a county's retail business community. A pull factor greater than 1.00 means the county is attracting more business than it is losing, and vice versa for counties with pull factors below 1.00. In addition, according to a survey of 294 urban areas across the United States, Salina's cost of living is below the national average. Salina's cost of living composite index for the first quarter of 2005 was 83.7 percent, with the national average being 100 percent. The survey included the cost of grocery items, housing, utilities, transportation, healthcare, and miscellaneous items. In conclusion, the City of Salina has had growth in both housing developments and in business-related developments. It is believed that these trends will continue, and that growth and economic development will continue to increase in Salina. The ;:,)irnrnons Company 16 -I . I . I . .~I .:1 'I . .'1 .' I .,1 .' I .1 II I I .1 .1 .J .J .1 .1 NEIGHBORHOOD DESCRIPTION The subject neighborhood is located in the middle portion of the city. The boundaries appear to be The Old Smoky Hill River Channel on the west, Iron Avenue on the North, Crawford Street on the South, Ohio Street on the east. The neighborhood is approximately 1 mile on the north and south, by 3/4 mile on the east and west. The main traffic artery on the north and south is Ohio Street, which is a four-lane road that has a center tuming lane. The main traffic arteries that run east and west through the neighborhood are Crawford Street on the south, and Iron Avenue on the north. Crawford Street is a four-lane road, Iron Avenue is a wide two-lane road. The neighborhood consists of a general mix of properties, with an estimated 40 percent being residential-related, 30 percent being commercial related, and 30 percent being City of Salina or Saline County properties. The residential-related properties are scattered throughout the neighborhood, but the largest portion of them is located in the northem part. The single-family properties are primarily older in age, approximately 40 to 100 years old. In addition, there have been very few newer residential properties built in the neighborhood in the last 20 years. Located in the middle portion of the neighborhood, is Kenwood Park. Located in the park, is the Bicentennial Center, which is an approximately 7,200 seat arena, with 41,000 square feet of exhibition space used for a variety of entertainment. Located to the north of this, is the City of Salina Municipal Swimming Pool, and to the east, is the Saline County Expo Center. Located to the south of Kenwood Park, is a popular YMCA that has been recently updated. To the east of this, between the YMCA and Ohio Street, are three streets of professional offices. Located around the perimeter of the neighborhood, on Crawford Street, Iron Avenue, and Ohio Street, are mostly restaurants, car sales properties, and general retail properties. In summary, the neighborhood is comprised of a wide range of land uses, which most appear to be compatible, with no apparent unusual conditions. The neighborhood is primarily made up of smaller commercial and professional office properties, residential properties, and properties being City or County-improved recreational-type properties and parks. The neighborhood is an older established one that is considered to be stable, and supply and demand are in balance. ThR Simmons Cornpany 17 i . .1 I . I . I . .:1 .] .: I .: I .: I .' I .: I , j I .' .1 .-' . I . I . J SITE DESCRIPTION At the request of the Client, only an opinion of market value for the building is desired. Therefore, providing a detailed description for the tract of land that the building is located on is not part of the scope of this appraisal. However, a few important features of the site that the building is located on are analyzed because they may affect the building at its current location. The scope of this appraisal does not call for the Appraisers to provide a flood determination for the subject site. However, the subject building is located in an area that mayor may not be located in a FEMA Flood Zone A or Floodway Fringe. The Appraisers do not know the FEMA flood determination and have not been provided a survey for the land that the subject building is located on. However, if it is determined that the subject building is located in a type of FEMA Flood Zone A or Floodway Fringe, the subject building will be considered to be a legal. nonconforming grandfathered use. This is important to note because if more than 50% of the structure is damaged, it will be required that the structure be built to conforming regulations, which means that the improvements will not be allowed to be rebuilt unless the site is brought to accepted FEMA floodplain levels. Additionally, the property will be required to be built to a legal conforming use for its zoning, meaning a legal use in the C-3 zoning. This is officially explained in more detail in Section 42-578 letter (c) and in Section 42-579 letter (d) of the Subdivision and Zoning Regulations by the City of Salina. FEMA determines the Flood Zone by a visual inspection, but this is not guaranteed. Flood maps often lack sufficient detail to enable accurate determinations on the part of the Appraisers. Because the Appraisers are not surveyors, they make no guarantees, expressed or implied, regarding the FEMA Flood determination. The subject building is located on a parcel of land that is partially located in R-1 (Single-Family Residential District), and C-3 (Shopping Center District). Therefore, according to John Burger who is an Associate Planner for the City of Salina, the subject property is governed by the more restrictive zoning, which is the C-3 zoning. Located north of the subject, is a parking lot, and farther north, is the Bicentennial Center. West of the subject, is a recreational walking and jogging track, south, is a parking lot, and east, are Saline County Expo Center buildings. Tho Swnn10ns Cornpany 18 I . .-, I . .' .:1 .1 ..--1 I . .' I I . .'1 .'1 .,1 .'1 .1 .1 .' .' .1 " ~ " g ~ ~ ~ "" ::,. '" . ~ ~ ~ !;< < i '" ~ u ~ ~ . ;;l u r z < Q ~ "" , 2 '" = x ~ 0 :e;!; ~ ~ 1l!l::5 < -= ....<i g] ~ ::;m m~ :EO =0 ZO ~ ~- ~m ZO ",,0 ~~ >- ~ % = '" ~ u ~<D ~~ ""~ =- ~..; :!:~ ~~ ~~ ~m ~~ ,', & ; !J~ E i'lZb g ~~ ~ .,.<"o".l: ~:~g~ ~t:~i!s ~ :l: ~",;)l ~!H~ ]"0' w;Hll u~'~u: 1j.;~~~ s~ ~ 'S ~ a6d~ ~ r- "I'\." ii~~~~ fi:u.";"i:i" S ~:~.' It :'l:'~ 1".;; ~ ~~~~8 ~:.{.g "," ~.:; c ~ E d ~E ~ ~ ~~~l ! lId 0IJI1lT1Ul1Sl:7)Il'!-'CllIY 19 1'1 1'1 "I II 1'1 II I 1\ 1,1 II II II II II I 1\ II I] II .J I' ,I ((It~ .....111 IlliU, I:::' 1.,Ufilf_lclll\" 20 I II 1'-1 I' I II '-I I I II I] I II I: I IHI ! I I 1'1 1'1 IJ II I 1-' 1-' II II DESCRIPTION OF IMPROVEMENTS The subject of this appraisal is a pre-engineered steel frame metal building built on a concrete slab foundation. The building is currently being used for warehouse storage purposes for the City of Salina, Saline County, and U.S.D. 305. According to assessment records, the building contains a total 10,800 building square feet and was built in 1984. The exterior of the building is metal with a slightly pitched metal roof, and the exterior building height is 16 feet. The west side of the building has a small amount of brick veneer with three separate keyed doors, and the exterior of the building has small mounted exterior lights. The building was originally built new for the purpose of providing warehouse storage for the City of Salina and Saline County, and for providing locker room facilities for North Junior High for U.S.D. 305. Therefore, approximately the west 1/3 of the building has two separate minimally-finished locker room facilities, with one formerly being used for the home team locker room, and one formerly being used as the visiting team locker room. The locker room floor covering is concrete, with floor drains. The interior walls are concrete block, and the ceiling is concrete. The interior consists of metal doors, metal door trim, hanging fluorescent lights, and electrical installed in conduit. However, it is believed that with the construction of the new middle school, this portion of the building has only been used for storage purposes. Located above the locker room portion of the building, is a mezzanine that is used for additional storage in the building. The mezzanine storage area has concrete flooring, insulated ceilings and walls, hanging open lighting, and no heating or air-conditioning. The ceiling height is approximately just under 6 feet tall on the perimeter, to a peak height of approximately 7 feet tall in the center. The mezzanine area is only accessible on approximately the western 1/3 of the building. The warehouse portion of the building is a large open storage area that has two overhead doors, two separate exterior doors, skylights, electrical installed in conduit, insulated walls and ceilings, hanging fluorescent lights, and no heating or central air- conditioning. The warehouse portion of the building constitutes approximately 2/3 of the total building area, which is currently being used for storage purposes for the City of Salina and Saline County. The ~jirnrnons Company 21 .-1 .1 .1 ..1 . .1 .1 II II .1 I ..1 .:1 I;J I I' ..1 .1 .1 .1 II .1 Description of Improvements (Cont.) The property is appraised in the "as-is" condition, and there were no known major deferred maintenance items observed at the time of the site visil. Unless otherwise noted, the Appraisers assume that the various elements that constitute the subject property are fundamentally sound and in working order. The condition of the roof covering is unknown to the Appraisers, and the Appraisers are not qualified to determine the remaining economic life or the estimated age of the roof. Professional and environmental inspections are recommended, and the Client is invited and encouraged to employ qualified experts to inspect and address any area of concern. The Appraisers are not aware of any adverse conditions. If any additional adverse conditions are discovered, the Appraisers should be notified, as the Appraisers reserve the right to change any opinion of value conclusion. In summary, the subject improvements were designed for a combination of warehouse storage use, and locker room use. They are not so specific that the design would limit them from being converted into different types of general warehouse storage use. Based upon the neighborhood, the. style of buildings, and the age of the improvements, the building improvements are considered to be of average overall quality, and in average overall condition. The improvements are considered to be consistent with surrounding land uses and the subject site location. The Simmons CornpClny 22 I I II I I II 1:-1 II 1-1 'I I 1:1 1'1 Iii .: I .' I .' .1 II II 1'/ IJ SUBJECT PHOTOGRAPHS East Side Of Subject Building West Side Of Subject Building ... Interior Of Locker Room Interior Of Locker Room Mezzanine Area Interior Of Warehouse Area The Sirnrnons COifjf!any 23 .-1 I' IHI 1'1 .1 HI I II .1 I: I Iii Ii I I: I .' I I' II II IJ II II HIGHEST AND BEST USE The highest and best use is the reasonably probable and legal use that will support the highest present value as of the effective date of the appraisal. The use must be physically possible, legally permissible, appropriately supported, financially feasible, and maximally productive. As Thouqh Vacant At the request cif the Client, only an opinion of market value for the building is desired. Therefore, providing a detailed description of the highest and best use for the tract of land as though vacant is not part of the scope of this appraisal. Generally, the estimated highest and best use of the property, as though vacant, is for a use allowed in the current zoning that is compatible with surrounding and nearby land uses. Located north of the subject, is a parking lot, and farther north, is the Bicentennial Center. West of the subject is a recreational walking and jogging track, south is a parking lot, and east are Saline County Expo Center buildings. Generally, the highest and best use, as though vacant, would consist of a use that is complimentary to supporting the govemmental land and buildings in the surrounding areas. As Thouqh Improved The subject improvements contain 10,800 total building square feet. The size of this building is considered to be at the lower end of the medium sized facilities, which fits a category required by users. Generally, properties of this type are in average demand in the marketplace. The building was originally built new for the purpose of providing warehouse storage for the City of Salina and Saline County, and for providing locker room facilities for North Junior High for U.S.D. 305. However, it is believed that with the construction of the new middle school, the locker room' portion of the building has only been used for storage purposes, Additionally, located above the locker room portion of the building, is a mezzanine area that provides additional good usable storage area. In conclusion, the estimated highest and best use of the property, as though improved, is for continued warehouse storage use. The Sirnrl10ns Cornp<1ny 24 I~I II '-I . 1'1 I-I I . .'1 II .1 ." 1'1 .: I .' I .1 .1 .J .,1 .1 .' SALES COMPARISON APPROACH The sales comparison approach is a method of estimating value where the subject property is compared with sales of similarly-improved properties. It is noted that the subject building is located on a large tract of land that is owned by the City of Salina. However, at the request of the Client, only an opinion of market value for the building is desired. In order to do this, the Appraisers extracted out the opinion of land value from the comparable sales that were used in the sales comparison approach in this appraisal. The improved comparables are individually described and outlined elsewhere in this section, along with a comparable sales grid which outlines adjustments for dissimilarities. However, the following is a brief summary. Three properties that are classified as prefab processing warehouse properties that have sold in the last two years in Salina are used for this analysis. Improved Comparable Sale No.1 is located at 668 North Ohio Street and sold in 2005. Improved Comparable Sale No.2 is located at 913 York Street and sold in 2004. Improved Comparable Sale No. 3 is located at 304 East Pacific Avenue and sold in 2006. In order to provide an opinion of value for the subject building only, the opinion of site value for each comparable must be extracted out from its total sales price on its date of sale. The results of this provide an opinion of value for the improvements only for the comparable at its date of sale. The opinion of site value for the com parables is valued by comparing it with similar tracts of land that have sold recently. The land comparable sales that are used to derive the opinion of site value for each improved comparable are individually described and outlined elsewhere in this section. The comparables were first adjusted for time of sale. Generally, commercial real estate in the central Kansas market has appreciated at approximately a 3 percent rate, on an annualized basis. After the time of sale adjustment, the sites were then each compared on a price per square foot basis for location, size, features/physical condition, and excess land. The following, is a summary of the indications and conclusions. The Sinlf"flOnS Company 25 I-I 1'1 .-/ 1"1 .' I ./ I~I Iii .;1 Ii I 1'1 .11 .:1 .'/ .: I .' I' I' II IMPROVED SALE NO. 1 Property Identification Record .10 Property Type Property Name Address Tax 10 1117 Industrial, Light Industrial Precision Electrical Contractors 668 N. Ohio Street, Salina, Saline County, Kansas 67401 085.093-07-0-20-03-020.00-0-01 Sale Data Grantor Grantee Sale Date Deed Book/Page Property Rights Marketing Time Conditions of Sale Financing Verification Michael Lamone Precision Electrical Contractors, LLC October 4, 2005 11151748 Fee Simple DOM-74 Valid Sale New loan from a financial institution Jeff Holgerson; Other sources: SVQ, ICS, Drive-by, Fletcher Simmons The Simrnons Company 26 .1 .1 .1 .1 .'1 .1 .] .1 .:1 .:1 .'1 .i I .1 .iJ .' I .1 .1 .1 .1 IMPROVED SALE NO, 1 (Cont.) Sale Data (Cont.) Sale Price $238,000 Land Data Land Size Front Footage Zoning Topography Utilities Dimensions Shape Landscaping Fencing Flood Info 1,157 Acres or 50,400 SF 240 ft 1-2 Basically level City of Salina 240' X 210' Approximately rectangular Minimal Chain link FEMA Zone B General Phvsical Data Building Type Gross SF Area Breakdown Single tenant 18,600 Finished office Warehouse 1,584 dated finish 17,016 Construction Type Roof Type Foundation HVAC Sprinklers Stories Floor Height Pre-engineered steel Metal Concrete slab Partial None 1 14,15 Indicators , Sale Price/Gross SF Floor Area Ratio Land to Building Ratio $12,80 0,37 2,71:1 Remarks Property is located on the east side of North Ohio Street, at the corner of North Ohio Street and Prospect Street. There are two ingress/egress points to North Ohio Street, and one to Prospect Street. The land-to- building ratio is 2,71, which is considered adequate, but at the lower end of the acceptable range, Therefore, there is no excess land, Building was constructed in 1972, with additions in 1974 and 1988, The 1,584 square feet of office finish are dated, but functional. The office finish is heated and cooled, According to the former owner of the subject property, the building was leased for $3,500 per month, plus the tenant paid real estate taxes and insurance costs, The lease ended in April of 2005, and it was the previous owner's opinion that the lease was negotiated at a slightly lower rate because the tenant had also agreed to lease a property on North Seventh Street during the early years of the lease for $1 ,000 per month, which, in his opinion, was above-market rent. nie Simmons Company 27 I I 'I I 'I . I-I I I II 1-1 II .;1 IJ I COMPARABLE SALES GRID FOR 668 N. OHIO STREET SUBJECT LAND LAND LAND SITE COMP#1 COMP#2 COMP #3 Estimated Address _ 668 N. E. 925 N.Ohio Front North E.North Salina Salina Salina Salina Adjusted Price $40,00 $45,411 $87,560 Estimated Total Size (5. F.) 50,400 28,532 34,608 65,340 Price Per Square Foot $1.4 $1.31 $1.3' Sale Date Mar{} FelrD: Apr-QL Zoning 1-2 I, I- I, Adiustments: Time (Date of Sale) 0% 0% 3% Indicated Value $1.4C $1.31 $1.3 Location 20% 20% 20% Size -10% -10% 0% Features/Physical Condition 0% 0% 0% Excess Land . O'/' 0% 0% Net Adjustments ('/~ 10% 10% 20% Net Adjustments ($) $0.1' $0.1 $0.21 Indications: Sale Price/Gross SF $1.", $1.4< $1.6( Subject Indicated Values: Sale Price/Gross SF $77,616 $72,576 $83,664 Based upon the sales oomparison approach from market data, the "as-is" opinion of value for the subject tract (as though vacant) as of October 4, 2005, is (rounded): (Effective date of valuation is the sale date of the improved subject property) $78,000 Sale Price of 668 N. Ohio Street IMth improvements on October 4, 2005: Extracted site value on October 4, 2005: $238,000 ( - ) $78.000 II II .1 II Opinion of value for the improvements only for 668 N. Ohio Street on October 4, 2005: $160,000 The Simmons COrrlDa('lY 28 I . nl . .1 .'1 .' I .' I .:-1 .'1 .,1 .' I .'-1 .:1 .1 .' . 1 .1 .1 .1 .1 LAND SALE NO. 1 Property Identification Record ID Property Type Property Name Address Tax ID 1102 Industrial Vacant industrial lot North Front Street, Salina, Saline County, Kansas 67401 085-081-12-0-10-07 -004,00-0 Sale Data Grantor Grantee Sale Date Deed Book/Page Property Rights Financing Verification Salina Iron & Metal Company Brad Murray Rentals, LLC March 17, 2005 1100/1309 Fee Simple Cash Jeff Holgerson; Other sources: SVQ, ICS, Exterior drive-by Sale Price $40,000 Land Data Zoning Topography Utilities Dimensions Shape Landscaping Flood Info 1-3, Heavy Industrial Level Public 75'x290'130'x140'x139' Irregular Turf Zone B Land Size Information Gross Land Size Front Footage ' 0,655 Acres or 28.532 SF 75ft Indicators Sale Price/Gross Acre Sale Price/Gross SF Sale Price/Front Foot $61,069 $1.40 $533 Remarks Property is located Y, block north of East North Street on the east side of North Front Street. It is located between railroad tracks, and between the large Salina Regional Health Center warehouse and Premier Pneumatics, The planned use of the site is not known at this time, SVQ states that the sale involved no special factors, that the property was made available to other potential purchasers, and that there are no facts which would cause this sale to be a non-arm's-Iength/non-market value transaction. The Simmons CornpGny 29 I . ..1 '1 . .1 .1 ...1 .] .' I .' I .'-1 LAND SALE NO.2 Property Identification Record 10 Property Type Property Name Address Tax 10 1101 Industrial, Light Industrial Pavers Inc. East North Street, Salina, Saline County, Kansas 67401 085-081-12-0-10-05-006.02-0-01 Sale Data Grantor Grantee Sale Date Deed Book/Page Property Rights Financing Verification stan ion Wholesale Electric Company, Inc. Pavers, Inc. February 9, 2005 1098/432 Fee Simple Cash Jeff Holgerson; Other sources: ICS, SVQ, Exterior drive-by Sale Price $45,411 Land Data Zoning Topography Utilities Shape Landscaping Parking Fencing Flood Info 1-2 Level Public Irregular Turf/ minimal trees None None Zone B Land Size Information Gross Land Size Front Footage 0.794 Acres or 34,608 SF 239 ft Indicators Sale Price/Gross Acre Sale Price/Gross SF Sale Price/Front Foot $57,157 $1.31 $190 Remarks Property is located Y, block west of Ohio Street on East North Street It is located just west of the new Hoff Machine that was built in 2004/2005. Property backs up to the railroad tracks that are believed to be vacated with the completion of the North Ohio Street overpass project Property currently has no existing improvements, and the planned use of the site is not known at this time. However, the grantee of the site owns the business on the north side of the tracks, and it is assumed that it will be for expansion of his existing property. The Sirnrnons Company 30 .'j .-1 .1 II I'j 1'1 ) I-I I II .: I I,J I"j .1 .1 .' I II II II II ! Ii LAND SALE NO.3 Property Identification Record 10 Property Type Property Name Address location 467 Industrial, Light Industrial Hoff Machine and Welding Site 925 East North Street, Salina, Saline County, Kansas 67401 Address is Approx. Sale Data Grantor Grantee Sale Date Deed Book/Page Property Rights Verification Stanion Wholesale Electric Company Hoff Machine and Welding Inc. April 26, 2004 1076-1455 Fee Lee Hoff; County Records; Confirmed by Fletcher Simmons Sale Price $87,563 land Data Zoning Topography Utilities 1-2, Heavy Industrial Level City Land Size Information Gross land Size 1.500 Acres or 65,340 SF Indicators Sale Price/Gross Acre Sale Price/Gross SF $58,375 $1.34 Remarks This site was separated from the extreme west side of the existing Stanion Electric property. It is located about 500 feet west of the corner of North Street and the North Ohio Street intersection. it will be utilized for the relocation of Hoff Machine and Welding facility, It is level and located along the north side of North Street. The Simmons Cornpany 31 -I . .'1 .' I .1 .:'-1 ,.1 ,] .' I ,: I .:'1 .' I .:1 .,) .1 .1 .J , I . .1 .1 IMPROVED SALE NO.2 Property Identification Record ID Property Type Property Name Address Location Tax ID 739 Industrial, Warehouse Warehouse Property 913 York Street, Salina, Saline County, Kansas 67401 Off of North Ohio Street 0850811201003001.000 Sale Data Grantor Grantee Sale Date Deed Book/Page Property Rights Financing Sale History. Verification R.C. of Salina Carl David & Susan Kay Rose August 6, 2004 1085-855 Fee Labelle Bank 07-16-94 for $90,000 County Records; Simmons Co 2004-240; Confirmed by Jeff Holgerson Sale Price Downward Adjustment Adjusted Price $137,500 $34,000 Excess Land $103,500 Land Data land Size Zoning Topography Utilities 1,610 Acres or 70,132 SF 1-2, Industrial Park District Level City General Phvsical Data Building Name Warehouse The Sirmnons Company 32 -I II I I '1 I II .1 .1 .'-1 .,1 .: I II .'\ 'j .' I I II .1 .-1 .J .J .-1 .' IMPROVED SALE NO. 2 (Con!.) Building Type Gross SF Construction Type Roof Type Foundation Electrical HVAC Stories Year Built Condition Single tenant 4,000 Steel Frame Steel Concrete in conduit Hanging gas 1 1989 Average Indicators Sale Price/Gross SF Floor Area Ratio land to Building Ratio $25.88 Adjusted 0.06 17.53:1 Remarks I n addition to the above stated information, this property has 1 acre of excess land that could be separated and sold off. The excess land is located adjacent east of the building and has frontage along the north side of York Street. The building has good usability, with 432 square feet of average office space and two restrooms, and has central HVAC. The warehouse is fully insulated (walls and ceiling) skylights and hanging gas-fired heat. There is one large overhead door. The Sir-nrnons COfnDCHW 33 .1 .1 .1 .'1 .:-\ .1 .J .' .,'1 .'1 .: I ., I ., I .1 .1 .1 .i .1 .1 COMPARABLE SALES GRID FOR 913 YORK STREET SUBJECT LAND LAND LAND SITE COOP#! COOP #2 COOP #3 EstilTEted Address . 913 N. E. 925 York Front North E. North Salina Salina Salina Salina Mjusted Price $40,00( $45,411 $87,56, EstilTEted Total Size (S. F.) 113,903 28,532 34,608 65,340 Price Per Square Foot $1.4 $1.31 $1.34 Sale Date Mar-o Feb-OE Apr-04 Zoning 1.2 I- I- 1-< Adjustments: Time (Date of Sale) .3% _3'1. 0% Indicated Value $1.3t $1.2 $1.3' Location 0% 0"1. 0% Size -30"1. -30"1. -20'1. FeaturesJPhysical Conditioo 0% 0"1. 0'1. Excess Land -20% -20% .20'1. Net Adjustments (%) _50'1. -50% -400/0 Net Adjustments ($) ($0.68 ($0.64) ($0.54 Indications: Sale Price/Gross SF $0.68 $0.62 $OBC Subjecllndicated Values: Sale Price/Gross SF $77,454 $71,759 $91,122 Based upon the sales comparison approach from market data, the "as-is" opinion of value for the subject tract (as though vacant) as of August 6, 2004, is (rounded): (Effective date of vauation is the sale date of the irrproved subject property) $78, CXXl Sale Price of 913 York Street with improvements on August 6, 2004: Extracted site value on August 6, 2004: $137,500 ( - ) $78, CXXl Opnioo of value for the irrprovements only for 913 York Street on October 4, 2005: $59,500 Till':' Simmons Conipany 34 -I . i .1 'I . .-, 'I . I . .'1 .'1 .:1 .'1 .:1 .:) .'1 .' .1 .-' .'1 .1 .) LAND SALE NO. 1 Property Identification Record I D Property Type Property Name Address . Tax ID 1102 Industrial Vacant industrial lot North Front Street, Salina, Saline County, Kansas 67401 085-081-12-0-10-07-004.00-0 Sale Data Grantor Grantee Sale Date Deed Book/Page Property Rights Financing Verification Salina Iron & Metal Company Brad Murray Rentals, LLC March 17, 2005 1100/1309 Fee Simple Cash Jeff Holgerson; Other sources: SVQ, ICS, Exterior drive-by Sale Price $40,000 Land Data Zoning Topography Utilities Dimensions Shape Landscaping Flood Info 1-3, Heavy Industrial Level Public 75'x290'130'x140'x139' Irregular Turf Zone B Land Size Information Gross Land Size Front Footage 0.655 Acres or 28,532 SF 75ft Indicators Sale Price/Gross Acre Sale Price/Gross SF Sale Price/Front Foot $61,069 $1.40 $533 Remarks Property is located Y, block north of East North Street on the east side of North Front Street. It is located between railroad tracks, and between the large Salina Regional Health Center warehouse and Premier Pneumatics. The planned use of the site is not known at this time. SVQ states that the sale involved no special factors, that the property was made available to other potential purchasers, and that there are no . facts which would cause this sale to be a non-arm's-Iength/non-market value transaction. The Simmons Compnny 35 I . .1 .'1 ."1 , I I .:1 .'J .,1 .,J .:1 .' I .'1 ." .' I .' .'1 ..1 .1 .J LAND SALE NO. 2 Property Identification Record ID Property Type Property Name Address T ax'lD 1101 Industrial, Light Industrial Pavers Inc. East North Street, Salina, Saline County, Kansas 67401 085-081-12-0-10-05-006.02-0-01 Sale Data Grantor Grantee Sale Date Deed Book/Page Property Rights Financing Verification Stanion Wholesale Electric Company, Inc. Pavers, Inc. February g, 2005 1098/432 Fee Simple Cash Jeff Holgerson; Other sources: ICS, SVQ, Exterior drive-by Sale Price $45,411 Land Data Zoning Topography Utilities Shape Landscaping Parking Fencing Flood Info 1-2 Level Public Irregular Turf/ minimal trees None None Zone B Land Size Information Gross Land Size Front Footage 0.794 Acres or 34,608 SF 239 ft Indicators Sale Price/Gross Acre Sale. Price/Gross SF Sale Price/Front Foot $57,157 $1.31 $190 Remarks Property is located Yz block west of Ohio Street on East North Street It is located just west of the new Hoff Machine that was built in 2004/2005. Property backs up to the railroad tracks that are believed to be vacated with the completion of the North Ohio Street overpass project Property currently has no existing improvements, and the planned use of the site is not known at this time. However, the grantee of the site owns the business on the north side of the tracks, and it is assumed that it will be for expansion of his existing property. The ~Jir(jrnons COfTipany 36 I . I I 'I . 1../ i I . 1'1 .-1 1'-1 1:1 .: I .'1 .: I .1 .J .1 II IJ .1 .' LAND SALE NO. 3 Property Identification Record ID Property Type Property Name Address location 467 Industrial, Light Industrial Hoff Machine and Welding Site 925 East North Street, Salina, Saline County, Kansas 67401 Address is Approx. Sale Data Grantor Grantee Sale Date Deed Book/Page Property Rights Verification Stanion Wholesale Electric Company Hoff Machine and Welding Inc. April 26, 2004 1076-1455 Fee lee Hoff; County Records; Confirmed by Fletcher Simmons Sale Price $87,563 land Data Zoning Topography Utilities 1-2, Heavy Industrial Level City land Size Information Gross land Size 1.500 Acres or 65,340 SF Indicators Sale Price/Gross Acre Sale Price/Gross SF $58,375 $1.34 Remarks This site was separated from the extreme west side of the existing Stanion Electric property. It is located about 500 feet west of the corner of North Street and the North Ohio Street intersection. It will be utilized for the relocation of Hoff Machine and Welding facility. It is level and located along the north side of North Street. The Simmons Company 37 II II . I . 'I . .' I .1 .] .: I .'1 . ::1 'I . .~ I , I . .'1 .1 .1 .,1 .1 .1 IMPROVED SALE NO. 3 Propertv Identification Record ID Property Type Property Name Address Tax ID 56 Warehouse, Warehouse Leister 304 East Pacific Avenue, Salina, Saline County, Kansas 67401 085-081-12-0-20-03-002-00-0-01 Sale Data Grantor Grantee Sale Date Deed Book/Page Property Rights Conditions of Sale Financing Verification Fastenal Company Randy & Amber Leister March 2, 2006 1124490 Fee,Simple Assumed at market Cash Jeff Holgerson; Other sources: Assessment records, SVQ, Exterior Drive-by The Simmons CornpallY 38 I I .-/ 'I . I . .'1 .1 .J .,1 .' I .'1 .: I .' I .' I .1 .1 .1 .1 .-1 .1 IMPROVED SALE NO. 3 (Cont.) Sale Data (Cont.) Sale Price $138,000 Land Data Land Size Front Footage Zoning Topography Utilities Dimensions Shape Landscaping Rail Service Flood Info 0.717 Acres or 31,250 SF 375 ft Total Frontage: 125 ft E. Pacific Avenue; 250 It N. 4th Street C-6 Generally level City of Salina 125' x 250' Approximately rectangular Minimal None FEMA Zone B General Phvsical Data Building Name Building Type Gross SF Construction Type Roof Type Foundation HVAC Sprinklers Stories Floor Height Leister Single tenant 7,950 Pre-engineered steel Metal Concrete slab Multi-use sales area None 1 12,16 Indicators Sale Price/Gross SF Floor Area Ratio Land to Building Ratio Site Value to BuildingValue $17.36 0.25 3.93:1 1:2.54 Remarks Property is located at the southeast corner of East Pacific Avenue and North 4th Street. The building was previously used by the a distributor of industrial and construction supplies. The property consists of two buildings that are adjacent to each other. One pre-engineered steel building was built in 1971, has one overhead door, 12 feet exterior wall height, 2,338 square feet of warehouse space, and 1,862 square feet of multi-use sales space. The warehouse space has unit heaters, and multi-sales space has hot air heating and central air conditioning. The second pre-engineered steel building was built in 1996, has 3,750 building area, 16 feet exterior wall height, overhead door, and unit heaters. SVQ states that the sale involved no special factors, that the property was made available to other potential purchasers, the sale involved no personal property, the sale did not include an existing business, that the property was not rented or leased at the time of sale, and that there are no facts which would cause this sale to be a non-arms length/non- market value transaction. Extracted opinion of site value at date of sale (03102106): Opinion of value of building only at date of sale (03/02106: Ratio of site value to building value: 1 :2.54 $39,000 $99,000 The Simmons Company 39 I I IWI .'1 I'" I] I' I] I' I .:/ .1 I 1'1 .' I .' I .1 I . .' I .1 .1 .1 COMPARABLE SALES GRID FOR 304 E. PACIFIC AVENUE SUBJECf LAND LAND LAND SITE COMP #1 COMP#2 COMPI/3 Estimated Address 304 E. 700N. Clarki 500S. Pacific Santa Fe Holida' Clark Salina Salina Salina Salina Adjusted Price $22,OOC $35,OOC $36,00 Estimated Total Size (S. F.) 31,250 12,500 34,833 47,520 Price Per Square Foot $1.7 $1.OC $0.7 Sale Date Jan-O< Dec,04 May.O Zoning (;,6 (;. (;.~ (;. Adiustments: Tirre (Date of Sale) 60/. 30/. 30/. Indicated Value $1.8 $1.0, $0.7 Lcx::ation iff< 200/. 200/. Size .300/. 00/. 200/. Features/Physical Condition 00/. 00/. 00/. Excess Land 00/. 00/. 00/. Net Adjustments ('!o) .300/. 200/. 400/. Net Adjustments ($) ($0.$ $0.21 $0.31 Indications: Sale Price/Gross SF $1.31 $1.2 $1.0c Subject Indicated Values: Sale Price/Gross SF $40,938 $38,750 $34,063 Based ufXln the sales corrparison approach from marl<et data, the "as-is" opinion of value for the subject tract (as though vacant) as of March 2, 206, is (rounded): (Effective date of valuation is the sale dale of the improved subject property) $39,000 Sale Price of 304 E. Padfic Avenue w!h improverrents on Maid) 2, 2006: Extracted site value on March 2, 2006: $138,000 ( . ) $39,000 Opinion of value for the improvements only for 304 E Padfic on March 2, 2006: $99,000 The ~3imrnons Cmnnany 40 .1 .' I .' .'-1 .'1 , I . ..1 .'1 .:1 .: I .: I : I .' .' I .1 I: , 1,1 ..1 ..1 I' LAND SALE NO. 1 Propertv Identification Record ID Property Type Address Location TaxlD 544 Commercial 700 North Santa Fe Avenue, Salina, Saline County, Kansas 67401 North Salina 085-081-12-0-20-12-0-20-12-009.00-0-01 Sale Data Grantor Grantee Sale Date Financing Verification Ronald Diehl D. Wayne & Norma Montgomery January 26, 2004 Cash Jeff Holgerson; Other sources: ICS, SVQ, Drive-by, MLS; Confirmed by Jeff Holgerson Sale Price $22,000 Land Data Zoning Topography Utilities Dimensions Shape Commercial C-5 Level Public 125' x 100' Approximately rectangular Land Size Information Gross Land Size Front Footage 0.287 Acres or 12,500 SF 125 It Indicators Sale Price/Gross Acre Sale Price/Gross SF Sale Price/Front Foot $76,666 $1.76 $176 Remarks This is a corner lot located on the east side of Norlh Santa Fe Avenue, just north of Grand Avenue. According to MLS, it was listed for sale al $27,000 and had 77 Days on Market. Property also has a metal building for storage that adds little, if any, value. Site has been improved with a new metal building that appears to be a storage warehouse. The Simmons Company 41 1'1 .'j .1 1"1 .' I II I] .:1 .:1 III II I: I .' I 1'1 I'j 1..1 II I' I' LAND SALE NO. 2 Propertv Identification Record 10 Property Type Property Name Address Tax 10 1232 Commercial Victory Baptist Church Site SW corner of Clark/Holiday, Salina, Saline County, Kansas 67401 085-086-14-0-30-03-004.08-0-01 Sale Data Grantor Grantee Sale Date Deed Book/Page Property Rights Marketing Time Financing Verification Emil W. Loebbert Victory Baptist Church December 10, 2004 1094/0711 Fee Simple 123 DOM Cash Jeff Holgerson Sale Price $35,000 Land Data Zoning Topography Utilities Shape Landscaping Rail Service Fencing Flood Info C-5, Commercial C-5 Basically level City of Salina Reverse L -shaped Turf None None Zone B Land Size Information Gross Land Size Front Footage 0.800 Acres or 34,833 SF 210 It Indicators Sale Price/Gross Acre Sale Price/Gross SF Sale Price/Front Foot $43,769 $1.00 $167 Remarks This tract of land is located approximately 1 block east of Broadway Boulevard, and 1 block south of South Street. It is also located on the southwest corner of South Clark Street and Holiday Street. The site has access to City of Salina water and sewer. According to MLS, the property was listed for sale on 8/12/2004 and closed for sale on 12/13/2004. Therefore, this sale had a 123 DOM (Days on Market). The site was originally listed for $68,000, but this was for approximately 1.42 acres. Therefore, only part of the site actually sold for $35,000. SVQ states that the buyer is a religious association, that the property was made available to other potential purchasers, and that there are no facts which would cause this sale to be a "non- arm's-length" (non-market value) transaction The Sirnrnons COII1Pnny 42 ".1 j I .1 Ii 1.1 LAND SALE NO.3 Property Identification Record ID Property Type Property Name Address Tax ID 1231 Commercial Vacant C-5 site 500 S. Clark Street, Salina, Saline County, Kansas 67401 085-086-14-0-30-03-004.05-0-01 i l' I: i Sale Data Grantor Grantee Sale Date Deed Book/Page Property Rights Financing Verification Clifford & Deanna Clark Gile Enterprises, Inc. May 3, 2005 1103/0919 Fee Simple Cash Jeff Holgerson; Other sources: Site visit, ICS Sheet, SVQ . Sale Price $36,000 Land Data Zoning Topography Utilities Shape Landscaping Rail Service Fencing Flood Info C-5, Commercial C-5 Basically level City of Salina Approximately rectangular Turf None None Zone B I ,1 Land Size Information Gross Land Size Front Footage 1.091 Acres or 47,520 SF 240 It , I , ..J Indicators Sale Price/Gross Acre Sale Price/Gross SF Sale Price/Front Foot $33,000 $0.76 $150 :1 1,1 II I' I Ii .1 II Remarks This tract of land is located approximately 1 block east of Broadway Boulevard, and 1.5 biocks south of South Street. it is also located on the west side of South Clark Street, and adjacent to the east side of the Village Inn on Broadway. The site has access to City of Salina water and sewer. The site also sold May of 2000 for $42,600, according to the County Appraiser's Office. According to MLS, the site was listed for sale for approximately 290 days in June of 2003. The site was originally listed for $49,000, and then lowered to $41,000, but did not close for sale. The tract was then relisted for sale in January of 2005 for $38,000, and then closed for sale in May of 2005 for $36,000. Therefore, the relisted sale had a 97 DaM (Days on Market). It is not known for certain, but it is believed that the site will be improved with large sized storage units in the future. SVQ states that the sale involved no special factors, that the property was made available to other potential purchasers, and that there are no facts which would cause this sale to be a "non- arm's-length" (non-market value) transaction ThE~ Simmons Company 43 .1 .1 -'I . -I . '.1 . .1 'I .1 .'1 .'1 .'1 .1 .' I .' I .' I .' I .1 .' .1 .1 Sales Comparison Approach (Cont.) After the opinion of value, for the improvements only, for the com parables at its date of sale are determined, they are then compared to the subject building. The sales have been adjusted 3 percent, per year, to reflect the passing of time since each occurred. This is due to general commercial sales data, which indicates the sale prices for commercial properties located in the Midwest have appreciated at rates which vary between 2 and 5 percent, per year, over recent years, due to factors not related to demand and supply in the marketplace. It is estimated this appreciation is largely due to inflationary pressures in the general economy. After the time of sale adjustment, the properties were each compared to the subject building on a price per square foot basis for age/condition, size, quality/features, and basement. It is noted that no adjustment is considered for location and site size because this has already been considered in the site value for the comparables. Therefore, the sales grid compares the comparable buildings only to the subject building only. The basis for the age/condition comparisons is because older properties are subject to a larger amount of physical depreciation as they grow older, which is estimated to represent a reduction of market value. The effective age of the improvements is considered based upon an estimated physical and economic life-expectancy taken from life-expectancy guidelines from the Marshall Valuation Service. Improved Comparable Sale NO.1 and No. 3 have an adjustment for this because they are considered to be in inferior overall condition compared to the subject. Next, an adjustment is made for building size. Size adjustments are based upon a trend for smaller improvements to typically sell for a higher price per square foot than larger ones, with all other factors being equal. Next, adjustments for . quality/features are made to the comparables. Comparable Sale No.3 has an adjustment for this because it has 1,862 square feet of multi-use sales area that has heating and central air-conditioning, and its warehouse area is reported to be heated. In all, Comparable Sale NO.3 is considered to have more desired market features compared to the subject. It is recognized that Improved Comparable Sale NO.1 has 1,584 square feet of finished office space, but this area is reported to be dated. Additionally, Improved Comparable NO.2 has 432 square feet of average finished office space with heat and central air-conditioning. In conclusion, no adjustments are made to Improved Comparable The Simrnons C~orrj!Jany 44 .1 .1 .' I .:1 .'1 .1 .'1 .: I .:1 .1 .' I .' I .' .1 .1 .1 .1 .1 .1 Sales Comparison Approach (Cont.) Sale NO.1 and NO.2 for their quality/features because they are estimated to be equal in . value to that of the subject. Lastly, no adjustment is made to the comparables for basements because they are all built on slab foundations, as is the subject building. In summary, the range of the adjusted indications is between $12.45 and $13.40. Therefore, an indication of approximately slightly above $12.85 per square foot is bracketed by market data. In conclusion, based upon the sales comparison approach from market data, the "as-is" opinion of value for the subject building only, as of July 20, 2006, subject to the extraordinary assumptions and hypothetical conditions set forth, is (rounded): $139,000. IMPROVED COMPARABLE SALES GRID SUBJECT COMPo #1 COMPo #2 COMPo #3 505 668 913 304 E. Kewood N. Ohio York Pacjfic Salina Salina Salina Salina Adjusted Price (w/o Land) $160,000 $59,500 $99.000 Size - Above Ground 10,800 18,600 4,000 7.950 Price /SF Above Ground $8.60 $14.88 $12.45 Sale Dale 10/2005 08/2004 03/2006 Age at time of sale 33,31,17 15 35,10 Site Size 0 0 0 0 Land to Building Ratio 0.00 0.00 0,00 0.00 Basement SF 0 0 0 0 ADJUSTMENTS Time of Sale 3% 6% 0% Adjusted Indication $8.86 $15.77 $12.45 Age I Condition 30% 0% 15% Size - SF Above Ground 15% -15% 0% Quality I Features 0% 0% -15% Basement 0% 0% 0% Net Adjustments (%) 45% -15% 0% Net Adjustments ($) $3.99 -$2.37 $0.00 Indications (S.F.) $12.85 $13.40 $12.45 Indicated Value $138,780 $144,720 $134,460 Based upon the sales comparison approach from market data, the "as~is" opinion of value for the subject building only, as of July 20,2006, subject to the extraordinary assumptions and hypothetical conditions set forth, is (rounded): M~;.~lj~~l~H~:Q,[i The Simmons COninany 45 .1 .PI .1 .'-1 .' I .' I .' I .1 .:1 .il .' I I .1 , I I, .1 I' I II II .1 II INCOME APPROACH The income approach is a method of estimating value where the gross potential income, less necessary operating expenses, is converted into an investment amount. However, the size of the subject building is not typically one purchased by an investor. Rather, the size of the subject building is one that is typically an owner-occupied property. This is validated by the sales of the three improved com parables that were used in the sales comparison approach of this appraisal, where all of the sales are believed to be purchased for owner-occupied reasons. Therefore, the income approach does not provide a credible opinion of value for the subject building, and it is not considered applicable. COST APPROACH The cost approach is a method of estimating value where the cost to replace the improvements, less accrued depreciation, is added to the site value. It should be understood that there is a distinct difference between replacement cost and reproduction cost. This cost approach has been based on the replacement cost which can be defined as, the cost to construct, at current prices, a building with utility equivalent to the building being appraised, using modern materials and current standards, design and layout. This can be distinctively different than the reproduction cost which is the estimated cost to construct an exact replica of the buildings being appraised. The replacement cost estimates are taken from the Marshall Valuation Service, a nationally-recognized cost service, with adjustments for local factors. Replacement cost figures used in the cost approach are for valuation purposes only given the intended use of this appraisal. These figures should not be used for insurance purposes. The definition of market value in this appraisal is not likely to be consistent with definitions of "insurable value." Additionally, deducting the opinion of site value from the opinion of value for the real estate is not a reliable method for determining a value for insurance purposes. Accrued depreciation may consist of three types of loss in value including physical deterioration (loss in value to the major structure and deferred maintenance); functional obsolescence (loss in value due to inadequate design or loss of utility); and external The Simmons Cornpany 46 I II nl I I I 1'1 1'1 II 1'1 .1 I, I 1'1 1'1 .' .J II II II II .1 II Cost Approach (Cont.) depreciation (caused by forces outside the property itself such as location or changing economic conditions). Physical depreciation is estimated by the age-life method. The estimated effective age of the subject property is 15 years. The total physical life of 37.5 years is taken from life-expectancy guidelines from the Marshall Valuation Service, Section 97. This is computed by averaging the average cost rating of 40 years and the 35 years for the low cost rating (40 + 35 / 2 = 37.5). Therefore, physical depreciation is estimated to be approximately 40 percent (15/37.5=40%). The improvements were designed specifically for the current occupants and have an average design for this type of property. However, the use of the locker room facility is no longer valid, and is used for storage purposes only. Therefore, the subject building suffers from a functional loss in value. Meaning, if the subject building was to be rebuilt as of today for warehouse storage use, the locker room facility area would not be rebuilt. Accordingly, a 10% adjustment is made for the functional depreciation of the subject building. Lastly, no adjustment for external depreciation is made because the improvements have an average location for this type of property and are not affected by external depreciation. After consideration of all three forms of depreciation, the estimated replacement cost of the building only is projected. In conclusion, based upon the cost approach, the "as-is" opinion of value for the subject building only, as of July 20, 2006, subject to the extraordinary assumptions and hypothetical conditions set forth, is (rounded): $147,000. The Simrnons Cornpany 47 "\ I I I -, I .1 .' I .1 II 1"1 .:1 .1 , I . II .J II .1 .' I .-' .1 .1 Cost Approach (Cont.) COST APPROACH - Marshall & Swift Valuation Section 14. PaQe 26. Class S. (AveraQe of Low Cost RatinQ & AveraQe RatinQI Building Base Cost (SF) 10,800 $24"77 $267,516 Current Cost Multiplier Local Cost Multiplier Story Height Multiplier Area Multiplier Adjusted Base Cost (S.F.) x x x x 1.01 0"89 1.041 1.03 $257,839 $257,839 Additional Improvements: Estimated Mezzanine Storage 3,000 $12.26 $36,780 Total $36,780 $36.780 $294,619 Replacement Cost New Depreciation: Physical Functional External Total Depreciation 15/37.5=40% 40% 10% 0% 50% $147,310 $147.310 Indicated cost new of building only, less depreciation is: Based upon the cost approach, the "as.is" opinion of value for the subject building only, as of July 20, 2006, subject to the extraordinary assumptions and hypothetical conditions set forth, is (rounded): $147,310 $147,000 48 The Simmons Company \ I 1'/ 1'-' , I I I I I' I 1'1 'I .' I .'1 I: I 1'1 1,1 .1 , , I II .1 I' II .1 RECONCILIATION Three approaches to value were considered in determining the final opinion of value for the subject The income approach was considered, but eliminated, because it was determined by the Appraisers that it does not provide a credible opinion of value for the subject The sales comparison approach is used, and is considered a good indicator of value because it is based upon current trends in the marketplace. The cost approach is used and is considered a reliable method on properties that do not suffer from a large amount of physical depreciation because it reflects current construction costs for the area. In summary, the opinions of value for the subject building only are $139,000 by the improved sales comparison approach, and $147,000 by the cost approach. Both the sales comparison approach and cost approach are reasonably supportive of each other. However, the cost approach is typically at the high end of the range for properties like the subject that have been built specifically for users. In addition, due to the difficulty of identifying and estimating all forms of accrued depreciation, including functional depreciation due to the subject's former locker room, least reliance was placed on the cost approach to value. Therefore, most emphasis is placed upon the sales comparison approach because there is a good supply of market data for this type property. In conclusion, the opinion of market value for the subject building only, as of July 20, 2006, subject to the extraordinary assumptions and hypothetical conditions set forth, is (rounded): ONE HUNDRED FORTY THOUSAND DOLLARS ($140,000) Through an Interlocal Cooperation Agreement, the subject building is jointly used by three governmental units, who are U.SD. 305, City of Salina, and Saline County, and is located on land owned by the City of Salina. However, the appraisal is based upon the hypothetical condition that the subject property is encumbered by fee simple interest, which, in-fact, it is not The Simrnons Company 49 I . I . , I . .: I .p j I . , I . .1 .:1 .: I 1"1 , . II .' I ..1 ...1 ..1 .1 .1 REASONABLE MARKETING TIME This appraisal has been compiled based on a reasonable marketing time of one year, which. assumes professional and aggressive marketing. In addition, reasonable marketing time is based upon the extraordinary assumption that the subject property has not been changed or altered in a negative manner that would alter the opinions of value. This is supported by marketing time of the comparable sales, and it is supported by current occupancy rates and stabilized market conditions. For example, there is not an abundance of vacancies or listings for sale in the subject property category. The Simmons Company 50 PI . I . -I . .'1 .' I ." .:1 .' I .:1 .' I .'1 .' I .' .., .-' .-1 I . .1 .1 UNDERLYING ASSUMPTIONS, EXTRAORDINARY ASSUMPTIONS, HYPOTHETICAL CONDITIONS AND LIMITING CONDITIONS The Appraisers assume: That any legal descriptions furnished are correct; 'That the title to the property is good; That there are no encumbrances or defects of title other than those mentioned in this report; That the property is free and clear of all liens; That the property will be managed efficiently and maintained properly; That any plans furnished are correct. This report is submitted subject to the following limiting conditions: That no survey of the property has been made by your Appraisers and no liability is assumed on matters of a legal character affecting the property, such. as title defects, overlapping boundaries, zoning issues, easements, etc. Any sketches in this report are included to assist the reader in visualizing the property. The distribution of the total valuation between land and buildings applies only under the existing program of utilization. The separate valuations for land and buildings must not be used in conjunction with any other appraisal and are invalid if so used. All data used in this report has been obtained from sources believed to be reliable and has been verified in every possible instance. The accuracy of the data cannot be guaranteed, however. Testimony or attendance in court is not required by reason of this appraisal, with reference to the property in question, unless arrangements have previously been made therefore. Neither all nor any part of the contents of this report shall be disseminated to the public through advertising media, public relations media, news media, sales media or any other public means of communication, without the prior written consent and approval of the author. If the appraised property is a proposed project, the appraisal is subject to an inspection upon completion. When assessment records are utilized for estimating the size of building improvements and land, it is based upon the extraordinary assumption that the measurements are accurate. The Appraisers are not surveyors, they make no guarantees, "fXP.!i~.s.s~t;g I9fmpany implied, regarding the FEMA Flood determination. PI . .1 .'1 .,J .1 .' I .' I .1 .: I ..1 .1 .1 .1 .1 .1 ..1 II .1 II UNDERLYING ASSUMPTIONS, EXTRAORDINARY ASSUMPTIONS, HYPOTHETICAL CONDITIONS AND LIMITING CONDITIONS (Cont.) If the appraisal performed for the subject property develops a prospective opinion of value, the market conditions for this appraisal are based upon the date that the prospective opinion of values are made from. Therefore, the Appraisers cannot be held responsible for unforeseeable events that alter market conditions prior to the effective date of a prospective opinion of value appraisal. Reasonable marketing time is based upon professional and aggressive marketing, and based upon the extraordinary assumption that the subject property has not been changed or altered in a negative manner that would alter the opinions of value. The opinions' of value are predicated on the extraordinary assumption that the subject property has an adequate supply of safe drinking water, and that the subject property has no vapor intrusion. The opinions of value are predicated on the extraordinary assumption that there are no environmental hazards 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. Because the Appraisers are not experts in the field of environmental hazards, this appraisal report must not be considered as an environmental assessment of the subject property. In addition, the Client is urged to retain an expert in this field, if desired. It should be noted that the Appraisers do not have the appropriate knowledge or education in regard to structural and mechanical matters. Unless otherwise noted, the Appraisers assume the various elements that constitute the subject property are fundamentally sound and in working order. It is not known the to the Appraisers if the building improvements have been built to code, or are in code compliance. Through an Interlocal Cooperation Agreement, the subject building is jointly used by three governmental units, who are U.S.D. #305, City of Salina, and Saline County, and is located on land owned by the City of Salina. However, the appraisal is based upon the hypothetical condition that the subject property is encumbered by fee simple interest, which in fact it is not. The Appraisers make no representations, guarantees or warranties. The Simrnons Company II " ml I '""/ .1 .1 .:1 .'1 .'1 .' I .,1 .' I .' I I .' I .' .1 .1 .1 .1 .1 .1 QUALIFICATIONS OF FLETCHER SIMMONS, MAl EMPLOYMENT: Formed The Simmons Company October 1988. President and owner since that time. Engaged full-time in fee appraising of Real Estate. Full-time fee appraising from May 1978 through September 1988, with David Craig and Company. Established Manhattan, Kansas office March 1983. Established Salina, Kansas office February 1995. State of Kansas, Property Valuation Department, State Office Building, Topeka, Kansas, August 1974-1978. STATE APPOINTMENTS AND LICENSE/CERTIFICATION: 1995 appointment for a three-year term on the Kansas Real Estate Appraisal Board. Reappointed to a second three-year term in 1998, serving as Chairman Certified as a General Real Property Appraiser, State of Kansas, as of July 1, 1991. Certificate No. G-94 EXPERIENCE: Full-time since May, 1978. Properties include commercial, industrial, agricultural, residential and many types of special-purpose properties. Area covered is the Midwest, and experience includes appraising in condemnation matters. ORGANIZATIONS: MAl member of the Appraisal Institute #6951. EDUCATION: BS Degree in Business, Emporia State University 1973. Successfully completed the following courses and examinations by the American Institute of Real Estate Appraisers: R. E. Principles & Valuation Procedures (I-A) Capitalization Theory & Techniques (I-B) Case Studies in R. E. Valuation Valuation Analysis & Report Writing (Old II) Intro. to R. E. Investment Analysis (Old 6) Residential Vaiuation (8) Standards of Professional Practice (SPP) Comprehensive Examination REPRESENTATIVE CLIENTS: A list will be furnished upon request. The Sirnrnons COrTifJnl'lY ~I I II I II I 1'1 II .1 II 1:1 1'1 II I 1,\ . , i II II II II 1\ II II QUALIFICATIONS OF JEFF HOLGERSON EMPLOYMENT: Formed Real Estate Appraisal Services June 1998. President and owner since that time. Engaged full-time in fee appraising of real estate. Full-time fee appraising from June 1998 through January 2000, with John Heline and Company. Commercial mentorship . November 2003 to present through Fletcher Simmons of The Simmons Company. EXPERIENCE: Full-time since June 1998. Primary focus was single-family residential and 2-4 family properties. Started commercial mentorship November 2003. Current primary focus is commercial, industrial, and multiple-family properties in central and north-central Kansas. STATE LICENSE AND CERTIFICATION: Licensed Appraiser, State of Kansas, License No. L-1357. ORGANIZATIONS: Appraisal Institute Residential Associate Member and Salina Board of Realtors member. EDUCATION: BS Degree in Business, University of Kansas 1990. Successfully completed the following courses and examinations. Sales Comparison Approach and Valuation of Partial Interests The Basics of Appraisal Real Estate Analysis Cost and Income Approach Uniform Standards of Professional Standards and Ethics Report Writing for Residential Properties Marshall & Swift Residential Cost Manual Standards of Professional Practice, Part A Residential Case Study Supporting Sales Comparison Grid Adjustments Valuation of Detrimental Conditions Appraisal Consulting Advanced Residential Form & Narrative Report Writing Business Practices & Ethics Intro to Income Capitalization Basic Income Capitalization REPRESENTATIVE CLIENTS: A list will be furnished upon request. The Simmons CornpCiny -I .1 I . , I . .' I .:1 .' I .'1 .'1 .,1 .il , I . .; I .' I .'1 .,1 .1 .1 .1 .1 APPRAISERS' CERTIFICATE We hereby certify that, to the best of our knowledge and belief: the statements of fact contained in this report are true and correct; the reported analyses, opinions and conclusions are limited only by the reported assumptions and limiting conditions, and are our personal, impartial, and unbiased professional analyses, opinions, and conclusions; We have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved; We have no bias with respect to the property that Is the subject of this report or the parties involved with the assignment. our engagement in this assignment was not contingent upon developing or reporting predetermined results; our compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors that cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal; the reported analyses, opinions and conclusions were developed, and this has been prepared, in conformity with the requirements of the Appraisal Institute's Code of Professional Ethics and Standards of Professional Appraisal Practice, which include the Uniform Standards of Professional Appraisal Practice, the use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives; as of the date of this report, Fletcher Simmons has completed the requirements of the continuing education program of the Appraisal Institute; no one provided significant real property appraisal assistance to the person signing this report, except those specifically indicated, one of us, or both, as indicated ,below, has made a personal inspection of the propertythat is the subject of this report; the reported analyses, opinions and conclusions were completed by Jeff Holgerson and revie ed by Fletcher Simmons, MAl.; , ~~ Fletcher Simmons Certified General Appraiser State of Kansas Cert, No Gft4 _ Did kI1Id Not Inspect Jeff Holgerson Licensed Appraiser State of Kansas License No, L-1357 L Did _ Did Not Inspect 7-3/~Ob Date The Simmons COfYI[Jany --I .1 .' .' I .' I 'I . .-1 .: I .,1 .'1 .:-1 .il .' I .'1 .1 .' .' I I ..1 .1 ",. ~Y'" 2lm~,~~~~ t.~!~~ BOCk~ ~~;~ INJ'El!UX1\L lXOPERATICN F<JRmlmr 'n>is Int:erlocal- Coopetat:ia1 hJrement pursuant to t:h<> rnt:erlocal- ~ti.on. Act, K~S.A.. 12-2901 to U-2907, i.nclusive, as ~, \'lilde' ani entered into, this ~ day of Januaty. 1963, by ani bebr<eU tre CI1"t CE' SALINl\, ~.:refette:i to as, the "City't- CXXNlY <E' SALINEr ~ tlOforce:l to <Ii' tIE "camty", ani U.S.D. .305, ~ refex:n:d to as- tl:e ".Scb::xll:)listrict" I ~:: WHEREAS, K.S.A. 1991 SUfp. U-29a4 authcrlzes local- ~tal units to Jrake tIE noot efficient use of their l""""" by enaJillnr:r tl'm to COC>I?"l"'te with other govez:rme1bll u:ili:s <It tre ba!J.s of l!ll1:1Jal lidvantilge , ani t:heJ:eby- to provide :=vices in tre lIlilIIIler tlat will best 5etVe the. needs of the o:mronity in the IlXlSt efficient. ani eo:rt1aldcaI. """"""', and, ' 1IllEIlEAS, tlle Cl:ml)"i ani the City ea<;h. neecl. a- stmage Wil.dJ.!g an:!. the Sd=1 District needs l<lcker roau faciJ.ities for !brth. J\JnlOI: H41h' ani, WHEREAS. tIE parties i=et:o are of the q>ini.aJ. that: the o:nst:i:1>;t;ic ani ~tion of <<Ie Wil.dJ.!g for said storage ard 1Dc:ker= facilities '-'>ll.d'l:ellDre ecDllIllical to' = ard ~I:e than. _ sepotate facilities for these'rm:roses: ani, ' mi 'I1lEllEFooE, it ~ I'ereby ~'by ardbetween the cl.ty, camty , ani the SClx>ol. District as folWws,' (11. ~: 1l1e [lUIlX>S<: of this aqroorent in to provide for tlle ' ~. """"'t:el1ance ani ~t:ia1 of a wildir>r ta be located. in ' KeIII<xxl. PaI:k. en land _ by tIE City and. to be jointly used bytlle ' i:hrt!<> <J=Il'EPtal units wtrJ are tIE parties ta this ~t. (2). OOration, 'll1io aqreerent shall """"""'" en the fOlJlla!. adoptim of this agreeJl'nt by all parties iuxi its approval b'f the At:t;Otney Ge1leral. of the State of Kansas am. shall D:::iO.ti.nue iildefinitely until teDninated as rereinaft:er provj<lsd. 131. Termination, In tl1a f<VEht tlat any of the pai;;i"$ hereto desire to WJ.thiraw fran part.i.cipatial aM temci.nate this agrement, then: (al . party desiring to witlrlraw shall notify the other parties hereto in writing of its intention to witixlraw by giving written notice to the other parties on or' l:efore June 30th of any }'Eat iuxi indicating that it intends to wit.irlra1N f:cttn said agreeuent on De:a11lter 31st of "tl1:a sane yem:. Ibl. Wil:hin thirty days after receiving notice of S1.lcl1 inteiltion to witlrlraw, each of the parl;ies to this agree:rent shall 5electone appraiser and said appraisers shall Within }O day~ agree: up;:m the fair market value of said sb::uCture. I . I . .1 .' I .'1 .-1 .' I .: I .:1 .:-1 .:1 .,'1 .' I I . I . .1 .J .-1 .1 " M:!:Bo"d" ii.-'I.rv (e). _'~ nerI:enl to this a'J"""ll"l't shall. - have the ogtion to pJ<Chase fron the withlrawinq - the withJrawing nanberls inte.reSt in said structw:e at, its fair market value as de.term.iPed. by the ab:::ve appra.15erS. ;,.... >.,',>" -,'';.\;$: 1.." " (d). In the event that noi,ther of the-renaininJ' _select to p.m;hase the withlrawinq !ffllIber's interest in said structure prior to ~ 31st of said year, t:l1en the said b.lilding shall. be so14 at public auctiDn allO the ~ div.iJjed aID:n3 the parties hereto in the sane prop:rticn as :the cost of the st:ruct:url< was paiJl for boi the parties. (4). Mninistratim: 'Jl1e operatim, aani.nLst=ticn aa: ~'of the storage fXlrb.<:n of the buDding sJ1all be under the admlnistraticn of the CitY. ~tion of the :L:x;ker =' porticn of the struct:Ure shall. be ' " UIder the supervision of the Sdnol District. :rhe City aQd COuntY shall. ' share equally in the utilizaticn of t:he storage porticn-of the building. '!be City Manager of -th2 City of Salina, 01aiman of the Boatd of COI,mty Cc:trr.I.issicriel::s and ~terV;lent.. of USDI3QS shall be :respoosible far resolving all issues related to this agre61alt. (51. Cbnst:rQction of Iluilding: Plans aQd sp<cifications for tm" storage [XlctlJ:ln of the tuililing nust be ~ boi tol:l\. the -CWnty and City. plans allO "p""W""1ons for the locker = shall. be ~ by the SclJOO1 Dist:r~ _ Plans and sp<cifications for the exterior design of the 00ilJiinj shall.l:e .~ by all parties. (6). Cl:lst'cf =truction: IlUilding, shall.1:e advertised and bids recti_for the~. 'Il1e cO$!; of constroctim of said build- ing- shall be paid 00 the fc1k><in<) resin: (.) . 'Il1e oo$!; of the storage t:uiJdinq shall be shared equally between the County aQd the City. The locker = facilll:ies to the storage 00ilJiinj shall be bid as an extra allO the CDst of this extra item for the locker = shall. be paid boi the Scl=1 DiStrict. (7). Repaip; alii Malntenance: The repairs, naintenance alld operational elIpE:nSes for the storage p:>rtion of the 00i.l.dinq shall.l:e shared equally between the City and theCoonty.Rep:tirs, maintenan<:<> and operational ~ for the lllcker rron facillty shall. be paid entirely boi the Scl=1 District. jlepaiIs aQd naint=mce to the extetior of the b.lilding shall be shared by all parties based cnthe amount of square footage ,each oe<:UpieS in the building. (8) . utilities: Separate utilitieS shall. be fuInished for' the storage area am thf:, J.!)::ker rocm.utilities for the stol:age area 5hal1 be share! jointly between the City and CoUnty. utilities for the locI<er ""'" shall be paid entirely boi the ScOOol Dist:rict. (9) . rnsur""",,: :!he cost of instirance for the pmnises shall. be shared boi the parties based on square footage Cccupied by eaCh party. (10). Approval by Attorney General: This agreerrent shall be in full force and effect fmn and after ,t;s adoJ!tion by the respective govemrental todies, approvErl by the Attorney General of the State of Kansas. - , -I . .1 , I . 'I . .'1 .1 .: I .'1 .;1 .:1 .' I , I .' I .'1 I . .1 .1 .1 .' .1 .:.. , ~~!'CBOC'W~ 41-3 IN wrrnESS W!lERl;lJF, the partie!! have !>=unto ~ " =lutioo' , , awrovin:r this &Jl"""l'l'l:. and autl>:lrWnr its =tlnn by their respective representatives on the Pay and ~ tits!: aixlve written. = (F SMJNA '~4.4-, Mayer "., .......... cmmx DE' SALINE. I,J- . A?proved this .....!......- duy of Harch, 1903. J 'U-/',' "---, "-J-- ',"/ '. L /~ "L..;." /. -~- naber-I; T. Stephan .l\ttOl7ncy ~el\eral of Kan~qs HATE OF ".tll~~ \ I )' )IU:O. FoR /ll:CllNU toUtH';' OF ~\.I"E I~l tIIW(Of'FI(EAT /1;113,\ lYcl.Ql;l:. Dte 9 1985 MID (JULY :::x' . 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