Appraisal_001Hoscn
Appraisal & Consulfing, Inc.
March 7, 201 I
RE: SUMMARY APPRAISAL REPORT OF THE 3.58 ACRES OF VACANT LAND LOCATED
AT 1620 AND 1660 ARBORETUM BOULEVARD IN CHANHASSEN, MINNESOTA
Dear Mr. Simich
As requested by you, we are providing you with a summary appraisal ofthe above-referenced property
to arrive at a reliable estimate of the market value ofthe fee simple interest in the subject property.
The following Summary Appraisal Report presents the findings, analyses and conclusions of this
appraisal. Summary as interpreted by Hosch Appraisal & Consulting, lnc. includes not only all of the
information detailed within this report and our individual project file, but also additional market and
supporting information located within our office. This appraisal report has been written for the intended
use of SouthWest Transit and the Mirmesota Departrnent of Transportation (Mn/DOT) for purposes of
SouthWest Transit's potential purchase ofthe subject property from Mn/DOT to clearthe title and allow
for independent development and,/or sale ofthe parcel.
lly'e are aware ,hat lhe subject ptoperly has vatious title encumbrances that limit its use. Following
direction from our client, and pre-approval from Mn/DOT through correspondence wilh Mr. Keith
McMunay on February 14,2011 and telephone contact with Mr. John Mascart on February 15,
2011, the subjecl pruperty's fee simple interest has been appraised under the hypothetical condilion
that no encumbrances exis.
The depth ofdiscussion contained in this report is specific to the needs ofthis client and for the intended
use only. Hosch Appraisal & Consulting, Inc. is not responsible for the unauthorized or improper use
ofthis report. We have made a complete inspection ofthe subject property and have fully identified the
real estate in our written report. Additional supporting information may also be supplied within the
Addenda of this report.
After careful consideration of the many factors influencing value, it is our opinion that the subject
property has an estimated market value, as of February 10,201l, of
SEVEN HIJNDRED EIGHTY THOUSAND DOLLARS --.- S78O,OOO
lll72 Zealand Avenue North
Minneapolis, MN 55316
Phone 612/331-16EE Fs 763/20E-1670
www- ho s c hap p r a i s a l - c o m
Mr. [.en Simich
CEO
SouthWest Transit
13500 Technology Drive
Eden Prairie, MN 55344
SUMMARY APPRAISAL REPORT
3.58 Acres of Vacant I-and
I 620 and 1660 Arboretum Boulevard
Chanhassen, Minnesota
February 10, 201 I
HACI l0l8-01
Copyright O 2005 by Hosch Appraisal & Consulting, Inc- All ghts reserved.
Mr. Len Simich
March 7, 201 1
Page Two
This appraisal does not include personal property, equipment, fixtures, or intangible items that are not
real property nor does this appraisal take into consideration any going concem value created by either
the bulng or selling party.
It is our opinion that a reasonable exposure time of up to 12 months is appropriate for the subject
property at our estimated market value. Please refer to the Reasonable Exposure Time section ofthis
appraisal for details.
This report is written with the intent of meeting the reporting requirements of the Uniform Standards
of Professional Appraisal Practice, 2010-201 I Edition (effective January l, 2010). This appraisal has
also been prepared in conformity with the requirements ofthe Code ofProfessional Ethics & Standards
ofProfessional Appraisal Practice of the Appraisal Institute.
The undersigned appraiser certifies that he has personally inspected the site, investigated information
believed to be pertinent to the valuation ofthe property, and to the best ofhis knowledge and beliefthe
statements and opinions expressed herein are correct and reasonable, subject to the limiting conditions
set forth herein.
Very tuly yours,
HOSCH APPRAISAL & CONSULTING, INC.
Certified to this 7th day
of March, 201I
Stephen T. Hosch, MAI
President
Certifred General Real Property Appraiser
Minnesota License i14002903
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I certiry that, to the best ofmy knowledge and belief:
The reported analyses, opinions, and conclusions are limited only by the reported assumptions aod limiting
conditions, and are my personal, unbiased professional analyses, opinions, and conclusions.
I have no present or prospective interest iD the property that is the subject of this reporl, and I have no personal
interesl or bias with respect to the p.rties involved.
My compeDsation is not contingent upon the reporting ofa predetermined value o.directioD in value that favors the
cause of the client, the amount of lhe value estimate, the attainment of a stipulated result, or the occurrence of a
subsequent event.
I performed this.ppraisal in conformity with the Uniform Standards ofProfessional Appraisal Practice that were
approved and published by the Appraisal Sta[dards Board ofThe Appraisal Foundation in 20 t0 effective January
I , 201 0. I acknowledge that an estimate of a reasonable time for exposure in lhe open matket is a condition in the
definition ofmarket value and the estimate I have developed is consistent with the market.
The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity
with the requirements of the Code of Professional Ethics & Standards of Professional Appraisal Practice of the
Appraisal Institute, which include the Uniform Standards of Professional Apptaisal Practice.
7. I have made a persooal inspeclion ofthe site thai is the subject ofthis report.
No one provided significant professional assistance to the person(s) signing this report
As of the dare of this report, Stephen T. Hosch has completed lhe .equirem€nts under the continuing educaliorl
program of the Appraisal Institute.
This appraisal assignment was not based on a requested mi'limum valuatioD or specific valuation for approval of
a loan. Appraisal fees are in no way conlingent upon values concluded by the appraisal frrm.
Hosch Appraisal& Consulting, Inc. and/orthe appraisersofthe subject p.operly have previously prepared appmisal
reports of numerous vacant land parcels in various stages of development throughout the state of Minnesota.
Therefore, I have the knowledge and experience to meet the competency provision of the Uniform Standards of
Professiodal Appraisal Practice of the Appraisal Foundation.
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12 The use of this report is subject to the rcquirements of the Appraisal lnstitute relating to review by its duly
aulhorized representatives. The appraiser will not disclose the coDtents ofthe appraisal repod except as provided
for irl the Uniform Standards ofProfessional Appraisal Practice.
Stephen T. Hosch, MAI
Certified General Real Property Appraiser
MN License #4002903
Copyritht e 2005 by Hos.h App6i!!l & Corsuhing, lnc. All ri8hls rercncd
CERTIFICATION
I have taken irlto consideration the factors that have an impact on value irl my development ofthe estimate ofmarket
value in lhe appraisal report. I have not k[owingly withheld any significant information from the appraisal report
and I believe, to the best ofmy kDowledge, that all statements and information in the appraisal report are true and
correct.
I
The value estimates and conclusions in the appraisal are made subject to these assumptions and
conditions:
This rpprris.l report h.s beer wrltteD for the lt|teltded use ofSouthWe3t Tr.nsit !Dd Mr/DOT fo] purpotcs
of Soulh\ est Trrnsit's potcntl.l porch.se oftbe subjcct property from MD/DOT to clerr tbe title atrd rllow
for irdepeDdent development .Dd/or srle of the parcel. Possession of this report, or a copy thereof, does not
carry with it the right ofpublication (either in whole or in part), nor may it be used for any purpose other than lhe
one stated in the Letter ofTransmiual and the Purpose ofthe Report, without the express, written consent ofthe
appraiser and client. Authorized copies of this report will be signed in blue ink by the appraiser(s). Unsigned copies
or copies not signed in blue ink should be considered incomplete. All unauthorized or incomplete copies of this
report should also be coasidered gglBlgllllql and as such, must be returned, in their entirety, to Hosch Appraisal
& Consulting. Inc.
This property is appraised in fee simple, assumiag responsible owlership and management, unless othenrise
indicated. This appraisal recognizes that available financing is . major consideralior by typical purchasers of
income-producing real estate in the market, and the appraisal assumes availability of financing to responsible and
sufficiently substantial pu.chasers of the propefly ir amounts similar to those indicated or implied in this r€port-
w. dr. dNrar. rhal lhe sabjrcl properE has eotious title.ncun bronccs thot limit its as.. Following direction ltori
osr clienr, ond pr.-opprovalfron Ma/DOT thtough cofiespond.Dce with Mr. Kcith McLl,ony on Februory 11,
2011 ond tel.phone conroct trith Mr. .rohn Mqscati on February 15, 201I, the subject proper|,ts iee sidple
intetest has b..d appraised tndd lhe hypoth.rical condirion tha, no encurnbtanc.s exisr.
Hosch Appraisal & Co[sultiog, [nc. ald/or its employees are not qualified to render expert opinions regarding
structural issues, water damage, eDvironmenlal assessmenls (such as mold), engineeritrg/mechanical issues, ADA
and/or building code compliance, latrd planniflg, architectural expertise or soil conditions. If requested, Hosch
Appraisal & Consulting, Inc. will recommend qualified experts in these ficlds to assist the clielt and/or the appraisal
Process.
The property has been appraised as free and clear ofall indebtedness, under rcsponsible ownership and good
managemetrt ulless otherwise set forth in the appraisal.
No title search has becn made, and the reader should consult arl app.opriate attorney or title insurance company for
accurate owneBhip data. Unless title problems are specifically brought to our attention, Hosch Appraisal &
Consuhing, Inc. assumes that th€ title is good a,ld marketable and therefore, will not render any opinions about the
title.
The information contained in this report is not guara[teed, but il has been gathered fiom reliable sources- The
appraiser cerlifies that, to the best of his/her knowledge and belief, the statements, informatiol, and materials
contained in the appnisal are correct.
No responsibility is assumed for matters which are legal in nature. [t is assumed (without survey) that the
improvements are located within th€ legally described property arld that the buildings comply wilh all ordinances
except as noted. The furnished legal descriptioD is assumed to b€ correct. It is assumed that the utilization ofthe
land and improvements is within lhe boundaries or property lines of the property described and that there is no
encroachmelt or trcspass unless noted in the reporl.
No analysis of soil colditions was required and none has been made. Unless specifically brought to our attention,
all value estimates io this report assume stable soil, and that any necessary soil corections are to be made at the
seller's expense.
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CONTINGENT AND LIMITING CONDITIONS
t0.
II A plal map or sile survey may have been provided in this report to assist the reader in visualizinS the general locatio[
and boundaries of the property. We have made no survey ol the property aod assume no responsibility for its
accuracy. We may have provided a sketch in the appraisal leport to show approximate dimensions of aly
improveme'lts to assisl the reader ofthe report in visualizing them and understanding our determination oftheir size.
Surveys, plans and sketches provided may rlot be complele or drawn exactly to scale.
l2 The market value herein assigned is based on conditions which were applicable at the time the property was
inspected and may vary at a later dale.
Hosch Appraisal & Consulting, lnc. employees shall not be required to prepare for or appear in court or befo.e any
board or govemmental body by reasoo ofthe complelioo ofthis assignmeDt without pre-determined arrangements
and agreements.
t4 Information in the appraisal relating to comparable market data is more fully docume[ted in the confidenlial file in
the oflice ofthe appraiser. All studies and field notes will be secured in our files for future reference.
t5 The distribution ofthe total valuation in this report between land and improvements applies only uDder the reporled
highest and best use of the property. The allocations of value for land and improvements must not be used in
conjunction with any other appraisal and are invalid ifso used.
Il is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless a
nonconformity has been stated, defined, and considered in the appraisal report. It is assumed that there is full
compliance with all applicable federal, state, and local environmental regulations and laws unless noncomplialce
is stated, defined, and considered in the appraisal report. It is assumed that all required licenses, certificates of
occupancy, consents, or other legislative or administrative authority from any local, state, or national govemmeDt
or privale entity or orgaDizatioD have been or can be obtained or renewed for any use on which the value estimate
contained in this reporl is based.
l7 We have noted irl the appraisal report any adverse conditions (such as, but not limited to, hazardous wastes, toxic
substances, etc.) observed during the inspection oflhe subject properly (or lear[ed o0 during lhe rlormal r€search
involved in performing the appraisal. Unless otherwise stated in the appraisal report, we have no knowledge ofany
hidden or unapparent conditions of the property or adverse environmental conditions (including the presence of
hazardous wastes, toxic substances, etc.) that would make the prcperly more or less valuable, and have assumed that
lhere are no such conditions. We make tro guarantees or warranties. express or implied, regarding the co[dition ol
the property. (Hosch Appraisal & Consulting, Inc. will not be responsible for aoy engineerirg or testing that might
be required to discover whether such conditions exist.) Because we are not experts ilr lhe field of environmental
hazards, the appraisal report must rol be colsidered as an environmental assessment ofthe property-
t8.The clienl agrces that Hosch Appraisal & Consulting, hc. does [ot by performing the services reodered, assume,
abridge, abrogate, or underlake to discharge any duty ofclient to any other entity.
l9 Any use ofthe appraisal report, by the client, is conditioDed upon payment of all fees in accordatrce with the agreed
tetms,
Contingent and Limiting Conditions - Continued
Estimates herein are based on the present status of the national business economy and the current purchasing power
of the dollar. The forecasts, projections, or operatillg eslimates contained herein are based upon current market
conditions, anticipated sho.t-term supp ly and demand factors, and a continued stable economy. These forecasts are.
therefore, subject to changes in future conditions.
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Contingent and Limiting Conditions - Continued
20.In consideration for performing the services rendered al the fee charged, Hosch Appraisal & Consultitrg, Inc.
expressly liEits its liability to five (5) times the amount of the fee paid or $50,000, whichever is less. Hosch
Appraisal & Consulting, Inc. expressly disclaims liability as an insurer or guaratrtor. Any persons seeking greater
protection from loss or damage thart is provided for herein, should obtsin appropriate insurance. The clielt shall
indemlify and hold harmless the appraisal firm atrd its employees, against all claims by any third party or any
judgemeot for loss or dam.ge relating to the perforDance or [on-performance ofany services by Hosch Appraisal
& Consulting, IDc.
2t Unless specifically brought to the appraiser's attention, we will assume that thcre are no hidden or unexpected
conditions ofthe lsset to be appraised that would adversely affect or etrhrnce the value.
In the future, ifHosch Appraisal & Consultirg,Inc. is compelled toproduc€ documents or Iestifywith regard to work
performed, the client shall reimburse us for all costs and expenses incurred.
21.In the event of a dispute involving interpretation o. application of this aSreement, the parties agree that this
agreemeni shall be governed under tie laws ofthe State of Minnesota.
24 The couclusion ofvalue reached by Hosch Appraisal & Consulting,Inc. is based upon the assumptioD that there are
no hidden or unappateot conditions ofthe property that might have an impact upon buildsbility. ltisrecommended
thatdue diligence be conducted through the local building department ormuricipality to investigate buildabiliry and
whether the property is suitable for development into its highest and best use. Hoscb Appraisal & Consulting, Inc.
makes no representatioos, guarantees or warranties.
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Type of Property
[,ocation:
Zoning:
Date oflnspection:
Effective Date of Appraisal
Date ofthe Report:
Property Rights Appraised:
Land Size:
Final Value Estimate:
Vacant Land
1620 and 1660 Arboretum Boulevard, Chanhassen,
Minnesota
Rl& Rural Residential (Guided High Density
Residential - 8- 16 Units per acre)
February 10, 2011
February 10, 201 I
March 7,201I
Fee Simple Interest
3.58 acres (per owner)
$780,000*
Reasonable Exposure Time Up to 12 months
SUMMARY OF SALIENT DATA
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We are awore that the subjec, properU has tarious title encurnbranc.s tha, lirnit its use. FolloNriag direction
lrom our clieat, aad pre-approtol from ML/DOT ,hto,rgh cofiespondence with ML Neirh McMunay on
February 11, 201 I and telephole conttct teith Mt. Johd Moscafi on Februaty 15, 201I, the stbjec, p.operv's
Iee sirnple inrerest has been appraiscd under lhe hypotherical condition that no encuD.brunces exist.
TABLE OF CONTENTS
Item
Letter of Transmittal
Page No.
Contingent and Limiting Conditions.
Summary of Salient Data.
Certification.
City Analysis
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I.,
2
2
2
3
4
4
5
8
Location Map.
Purpose ofthe Appraisal. . . . .
Intended Use ofthe Appraisal.
htended Use(s) ofthe Appraisal.
Scope ofthe Appraisal.
Property Rights Appraised.
Definition of Market Value
Dates of Importance.
Regional Analysis - Twin Cities Metropolitan Area.
Neighborhood Analysis.26
28
28
kgal Description.
Owner of Record.
Real Estate Taxes and Special Assessments Analysis ..29
Zoning.
Flood Hazard Information.
Propcrty H
Subject Site Description.
Subject Photographs.. . . . . .
Highest and Best Use.
The Valuation Process.
Sales Comparison Approach to Value
Reasonable Exposure Time.
Qualifications of the Appraisers.
ADDENDA
2030 Comprehensive Plan Excerpts.
Comparable land Sales.
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35
36
39
43
46
49
58
59
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A-5
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** J
I
Sho.el
I Crod g
S.Or
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GENERAL LOCATION MAP
IHACI l0l8{l.wpd Hosch lppftiral.t Cortu irg,lrc-
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.Wtile g€a, Beach
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S: Paul
The purpose of this report is to arrive at a reliable estimate ofthe market value ofthe real estate for
the use of our client, Southwest Transit.
INTENDED USE OF THE APPRAISAL
The intended use ofthe appraisal is for SouthWest Transit's potential purchase ofthe subject
property fiom Mn/DOT to clear the title and allow for independent development and/or sale of the
parcel.
The intended users ofthe appraisal are SouthWest Transit (our client) and the Minnesota
Department of Transportation (MI/DOT).
SCOPE OFTHE APPRAISAL
This appraisal analysis has not been limited in scope, and was based upon the generally accepted
appraisal practices in order to comply with current USPAP Standards. Within this valuation
analysis, we have completed the following functions and procedures. (Additional details of our
research are included throughout the iollowing pages ofthis report.)
- Made an inspection of the subject property;
- Reviewed background documents provided by our client that describe the physical attributes
of the subject property;
- lf e are aware thal the subject properly has various title encumbrances that limit i* use.
Following direction from our client, and pre-approval from Mn/DOT thtough
correspondence with Mr. Keith McMurray on February 14, 20II and telephone contact
with Mn John Mascari on February 15,2011, the subject propery's fee simple interest has
been appraked under lhe hypothetical condition that no encumbrances exist
- Reviewed the City of Chanhassen Zoning Ordinance and Comprehensive land Use Plan;
- Interviewed a planning official at the City of Chanhassen to confirm future residential
development density maximums as well as the availability of municipal water and sanitary
sewer to the subject property which would allow for immediate development ofthe subject
property as market conditions warrant;
- Familiarized ourselves with the neighborhood and analyzed the surrounding property trends;
HACI l0l8-01.*pd Ilotc, /lpproital & Cott\hidg,In.2
PURPOSE OF THE APPRAISAL
INTENDED USER(S) OF THE APPRAISAL
- Considered and reviewed the historical market, taking into account stability and/or changes;
- Based upon our market research and analysis, we have completed the highest and best use
analysis for the subject property;
- Researched comparable land sales and analyzed their applicability to the subject, as a means
of estimating the market value via the sales comparison approach to value; and
- Developed an opinion of reasonable exposure time for the subject property to effect a sale at
our estimated market value.
Sources utilized to obtain this information include information contained in our office files,
information provided by our client and discussions with other real estate experts, including broken,
buyers, sellers, developers and other appraisers.
A fee simple estate implies absolute ownership unencumbered by any other interest or
estate, subject only to the limitations imposed by the govemmental powers of taxation,
eminent domain, police power, and escheat.
3HACI l0l6-0l.*pd Iosch ,'tppra itdl & Contuhirg,lnc
Scope of the Aporaisal - Continued
PROPERTY RIGHTS APPRAISED
The subject real estate will be appraised by estimating the market value ofthe fee simple interest of
the real estate (subject to easements). For use in this report, the market value of the fee simple
interest in the real estate is subject to the following definition contained on Page 78 ofThe
Dictionary of Real Estate Appraisal. Fifth Edition:
Market value as utilized in this appraisal report conforms to the following definitions obtained from
Page 122 ofThe Dictionarv ofReal Estate Appraisal, Fifth Edition, published by the Appraisal
Institute.
The most probable price that the specified property interest should sell for in a competitive
market after a reasonable exposure time, as of a specified date, in cash, or in terms
equivalent to cash, under all conditions requisite to a fair sale, with the buyer and seller
each acting prudently, knowledgeably, and for self-interest, and assuming that neither is
under duress.
The corresponding definition, as defined on Page A-75 in the Uniform Standards ofProfcssional
Appraisal Practice,2010 - 20ll Edition, has been agreed upon by agencies that regulate federal
financial institutions in the United States and is provided below.
The most probable price which a property should bring in a competitive and open market
under all conditions requisite to a fair sale, the buyer and seller each acting prudently and
knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this
definition is the consummation ofa sale as ofa specified date and the passing of title fiom
seller to buyer under conditions whereby:
I . buyer and seller are typically motivated;
2. both parties are well informed or well advised and acting in what they consider their
own best interests;
3. a reasonable time is allowed for exposure in the open market;
4. payment is made in terms of cash in U.S. dollars or in terms of financial arrangements
comparable thereto; and
5. the price represents the normal consideration for the property sold unaffected by
special or creative financing or sales concessions granted by anyone associated with
the sale.
We have developed an opinion ofreasonable exposure time within this appraisal. Please refer to
that section of the report for details.
The market value for the subj ect real estate is estimated as of February I 0, 20 I 1 . The date of
inspection was also February 10,201l. The date ofthe report is March 7, 201l.
HAC I l0l E-01.*pd
DEFINITION OF MART(ET VALUE
DATES OF IN1PORTANCE
4Hotch ,lpp.oital tl Co.tvlti,A, lnc.
Minneapolis/St. Paul is the geographic center of the Upper Midwest as well as the center for the
region's business, finance, and industry. The Twin Cities'economy is characterized by diversity,
stability, and long-term upward growth trends, ensured by the large number of major industries with
long-term commitments to the area. The vital nature of the metropolitan area's economy is shown
by its stable demographic and economic growth, corporate diversity, and its ample transportation
systems.
There are a number of specific definitions of the Twin Cities. Initially, the Twin Cities meant
Minneapolis and St. Paul. As the cities grew and the subwbs expanded, the term more often
referred to the central cities and their suburbs without any specific boundaries in mind. The many
different geographic definitions have originated from a variety ofplaces and serve many purposes.
One ofthe most often used definitions is Region 11, the legislatively defined area of the
Metropolitan Council authority which includes the seven counties of Anoka, Carver, Dakota,
Hennepin, Ramsey, Scott, and Washington. The Council was created in 1967 to plan for growth and
coordinate the delivery ofregional systems. The other two most widely used definitions are the I l-
County Area used by the Departrnent of Employment and Economic Development and the 13-
County MSA as defined by the Office of Management and Budget (OMB) and used primarily by the
U.S. Census Bureau.
Govemment
Each incorporated community within the Twin Cities Metropolitan Area (TCMA) has its own unil of
government, but comprehensive planning in the TCMA is controlled by the Metropolitan Council,
an agency set up for the orderly management of the 7-County area in the areas ofland use planning,
sanitary sewer, and waste control. The council carries out the process through intemal agencies
under its control. The primary function is to control random development by the counties and to
coordinate activities to minimize waste and duplication.
The Twin Cities has been combined into Metropolitan Statistical Areas (MSAs), which are
groupings ofwhole counties meeting various criteria related to the population size ofthe central
cities, contiguity of development, density, and commuting links. MSAs have been defined after
each census since 1950 by the Oflice ofManagement and Budget (OMB). These areas are intended
for statistical analysis only, although they are widely used for various administrative purposes with
financial ramifications. The l3-County Metropolitan Statistical Area is defined as Anoka, Dakota,
Hennepin, Ramsey, Washington, Carver, Chisago, Scott, Wright, St. Croix (WI) and Isanti Counties,
with Sherburne and Pierce (WT) Counties the last to be added in 1992.
5HACI l0l8-0l.wpd Hosch Approisal & Consrbi,e. lnc
R.E,GIONAL ANALYSIS - TWIN CITIES METROPOLITAN AREA
Population
Resional Analvsis - Twin Cities Metrooolitan Area - Continued
Population - Continued
Io 2000, the Minneapolis/St. Paul MSA had the 15th largest population among the nation's urban
areas. The 2000 U.S. Census shows the Twin Cities' l3-county metropolitan population at
2,968,766,a 16.90% increase over the 1990 census. Population growth ofthe area is expected to
continue through 20 I 0, increasing by 19 .l% over the 2000 census. Overall, although the central
cities are still growing in population, the following two charts show a steady, outward flow of the
population growth moving from the central cities toward the suburbs. A chart showing lO-year
population statistics including projections for 2Ol0 and 2020 is shown below'
7. Chroge
1990 -
2000
70 Ch.rge
2010 -
2020ArcaI9EOr 990 2000
Projected
2020
Projected
20t0
7 Couty Total.
City of Minneapolis
City ofSt. Paul
2,288,721
368,383
272,235
2,642,056
382,618
287,t5t
3,064,502
405,300
305,0m
346,,443
425,800
320,000
ll
t5.4%
3.90/o
5.5%
t3.oo/.
5.1%
4.9%
1,985,873
370,95r
210,230
Atroka
Carver
Chisago
Dakota
Hentrpitr
Isanti
Ransey
Scott
Sherbume
Washiogton
WriSht
Picrce, WI
St. Croi4 WI
195,998
37,M6
25,717
194279
t,4tt
23,&0
459,7W
43,1U
29,908
I13,571
58,681
31,149
$24
243,641
47,915
30,521
275,227
t,03243t
25,92t
485,765
57,U6
41,945
145,896
68,710
32,765
50251
298,0U
70,205
4 r, t0l
355,904
I,l16200
3t 287
5l 1,035
89J98
aAtT
201,130
89,986
36,804
63,1t5
22.3%
46.50/o
34.70/o
29.3%
8.to/o
20.70/o
5.2%
54.7%
53.6%
31.9%
3t.v/o
t2.3vo
25.60/0
360,600
I l0,7,lO
59,160
423,040
t,223,990
45,080
547,630
140,570
l0l,570
257,932
136,130
4l,695
87,t23
416,090
163,830
75,630
484,-t20
1,326,140
5't,720
569,840
t82,620
134,360
318,603
181,240
47,00E
| | 3,154
15.4%
4't.y/o
27.gyr
t4.60/0
8.40/.
28.V/o
4.tvo
29.y/o
32.30/.
23.5%
33.t%
t2.7%
29.9%
t3 County TOTALS 2,198,190 2,538,834 2,968,166 16.9/0 3,535,260 4,071,555 15.2%
6HAC I l01E-0l.wpd It ot.h,1 pptoitcl ll ContuhirA, lnc
POPULATION TRENDS
MINNEAFOLIS/ST. PAUL MSA. 19EO TO 2O2O
Source: Mimesotr Department ofAdmioistratioD, WI D€psrtD€nt ofAdminisFation, MeEopolitatr Councit - D€ccmber 31, 2009t 7 Couty arEa hcludes: ADok4 Carver, Dakot4 Heonepin, Ramsey,Scott atld Washington Counties
Reflecting the nationwide trend of fewer people forming a household, the number ofhouseholds in
the l3-County metropolitan area grew faster than the population between 1990 and 2000. The
number ofhouseholds surpassed the one million mark, expanding by 18.47o between 1990 and 2000.
Continued growth is expected, as the total number ofhouseholds by 2010 in the l3-County area is
estimated at |,382,378, a21.6%o increase since 2000. The following chart provides figures on
historical and projected household trends in the Twin Cities metropolitan area.
7o Ch.rge
2010 -
202019801990/\rea 2000
7o Change
1990 - 2000
Projected
20r 0
Projected
2120
7 County Total'
City of Minneapolis
City of St. Paul
l3 County Arca
15.30/"
5.4%
5.8%
875,504
t60,682
I t0,249
1,o2t,454
162,352
tt2,l@
t.212,|9
t72,700
120,000
I,397,949
182,000
127,000
721,444
161,858
106,223
Anoka
Carver
Chisago
Dakota
Hemepin
lsanti
RaDsey
Scott
Sherbume
Washitrgton
wnght
Pierce, WI
St. Croix, wI
60,716
r2,01|
8,147
a,081
365,536
7,503
170,505
13,501
8,971
15,088
18,426
N/A
N/A
82,437
16,601
10,55 t
98,293
419,060
8,8t0
190,500
19,367
13,643
49,246
23,0t3
I l,0l I
t7,638
106J28
24,356
t4,454
l3l,l5l
456,129
fi,235
201,236
30,692
21,58 t
7t,462
3l,465
13,015
23,4tO
29.to/o
46.70/o
37.V/o
33.40/o
a.80/o
27.50/r
5.60/.
58.50/o
58.20/.
45.lyo
36.7o/o
18.20/o
32-7%
159,380
62,680
28,850
191,750
558,505
21,830
23t,7 tO
70,340
48,1 l0
t23,5U
64,530
17,797
43,517
t9.70/o
50.v/o
12.svo
18.4%
t0.20/.
to.a%
5.7%
36.4yo
15.6%
26.\vo
34.4%
t5.v/.
32.V/.
13 County TOTALS 764,691 960,170 1,136,615 ra.4% t382,378 t,622,583 11.4%
7HACI l0lE-01.wpd Hotch Apptdkol It Consu ing,Inc
Regional Analvsis - Twin Cities Metropolitan Area - Continued
Household Trends
NUMBER OF HOUSEHOLDS
MINNEAPOLIS/ST. PAUL MSA - I9EO TO 2O2O
l6.1vo
t.o%
1.70/o
133,120
41,780
2t,710
162,010
s07,020
16,690
219,160
51,580
35,470
97,449
48,000
15,359
12,910
Sourc€: Minnesota DeparhrEnt ofAdministration, WI Department ofAdminisE8tio4 Mehopolit8n Coutrcil - December 31, 2009* 7 County arca i[cludcs: Anok8, Carver, Drkota,HeDrEpin, Ramsey, Scott atrd W&shiDgtoD Couties
Regional Analysis - Twin Cities Metrooolitan Area - Continued
Urban Devclopment
Urban development in the 7-County metropolitan area consumed nearly 221 square miles of
vacanVagricultural land between 1990 and 2000. The trend has continued through 2005, as another
88 square miles ofundeveloped land was used. Between 1990 and 2000, land used for commercial
development increased the fastest at 34olo. Residential usage increased by 22.47o, industrial usage
by 17.5%, public and recreational usage by 25.3o/o, and highway usageby 23.5%.
There were an estimated 1,047 square miles of land (excluding open bodies of water) within the
2000 Metropolitan Urban Service Area (MUSA), a subset of the 7-County metropolitan area. In
1990, there were 815.9 square miles (excluding water) within MUSA, which equates to a 28.3yo
growth of the area through 2000. Although the MUSA had not expanded through 2005 , 17 .4o/o of its
undeveloped land was consumed. Land use trends for the 7-County area and within MUSA are
shown in the chart below.
After an attempt to create a development plan in 2002, the Metropolitan Council devised a
comprehensive framework that will help guide regional growth over the next 30 years. The
Regional Development Framework was adopted in January 20M, with revisions and updates made
each year since. Map copies of the 2030 Framework Planning Areas, the 2010 and 2020 MUSA, as
well as the Comprehensive Plan Composite, are provided on the following pages.
8
2000
M USA
t990
MUSA
2005
Iol.livt
% C h.nt.
1990 - 2000
Ioll| MUSA Iot.I MUSA
% Ch.lte
2000 - 2005
TOTAI MUSA
3lE-5
34.0
60.0
122.5
25.2
170.6
37.5
11.8
244.3
t2-1
rll.5
17.6
71.3
r81.5
33.2
576.0
50.4
t7.9
106-l
to-o
27.5
10.o.L
21.8%
14.2"h
31.1%
22.1%
31.O%
17j%
25-3./.
23j%
455.0
52.3
11-7
t98.0
36.a
619-7
55-9
90.6
337.2
u.3
5.4%
9.9
o.5%
9.1%
9-5%
1.6&
lo.9%
3.1%
to.2%
l0.t%
27A-a
95.1
t,942.O
114.7
t,721.5
193.7
I4.3%
20.4%
-t 1.4%
to.9,/.
210.1
95_4
1,631.4
194.0
-t7 -1y.
o.3./.
-5.t./.
0.2.n
M.jor 4-Lan.
Hirhwsys
(lncludtns v. a,ds,
891.6 2,9t5.1 |,l42.l 2,975.6 27.7% O.O%0.0%l.l42.l 2,975.1 0_0%
HACI l0l8-0l.vpd llotch App,ailol ll Consuhing, Irc.
LAND USE
7 COUNTY METROPOLITAI\ AREA.l99O TO 2ll05
235-6
74.7
Soure: Metropolihtr Council as ofJune 2008
Anoka, Carver, Dakot|, Hemepin, Rafi$€y, Scon* 7 County rrea ircludes:and Washington Counties
203O Fromework
Planning Areas
O
Ap'Piolcd Ja l'ry l,l- loo.r
PLoioS AlE A,tldd D.c.d6 ?006
Geogl'rphlc Plallnlrrg AIeas A d d I I lo n a I I n f o I'm r ll otr
Ut'ban Phlnhl Araas
I oo"lopiog a'*
Dctcloped Al:a
Rural Plrnolnt Araas
Rtu?l Ccnr.r
! ee.a,r"".r
Diveni6ed Rwal
Ru?l Re'i&trti.l
V///Zl Pa;alr,t xanxat_ Rcs.rc Algs
Catd.. T6rdi.l d g.tl-d a!B)
SOIrRCE: l&ro DlR it @r!ari6in rk l&llFliE! coail
! n gi-,"rro,t
@ PTE EGd Rcsioual P.!k
/./-/./-//,/U.tropollt.tt Councll
7z 'j,z
?
-4
*r
9HACI I0lE-Ol.wpd
NOTE: Plcase Ef.r to dre cornlrclEosi!'e Plao! Co,ryosi?c rrEp or rta Retrioflal sl.slerns rnap6 for dra l,rosl
reccnt infomlatiqr. These nraps are arailable 6t dre M.nopolitan Corurcil Data Ceotetr (65 f) 6O2-f t4O.
N
,/'2 r-?..
L
{t?_ i... -
'/ 1A
4&
------ R.rnDl Trdl
-..r
Trusir 2025 Co|Iilof
--.-
PriDcipd Aicrn
qpco tr/d.r
Itot.h,lpprd4ol ll C o"tthirA, Inc.
2O1O and2o20
Metropolitan
Urban Service Area
I ro,o.re
!o.s!:o.r^Iao.rlo.rr-*r! reo rrse n".ro--3'-0
! roo rre ro.es-, s*.'r
f urr-nre I
tr
5-€
d-
_ t--
II:
HACt l0l8-l)1.*pd Ilotch .lppdital & Conslbi^A, Inc l0
Twln Ctlta! atropollt n Ar..
ltrir<..".*- ( *r
-=--
t-
l
I
--r-l l
+7
;
Comprehensive Plans
Composite
As of January 2(XX, Urban Ssn icc
Arcas are not linal for communitics
O
-
.rrltrlFgtr C.rnc
NOTE: Thii riDp ir noa a hSll dcutrE l.. Thc Mdropolit'n Urb.. S.rvicc Arcs. (MUSA) rllown a.E conpilcd &rrm ctch conrrrrniq/,
corprthcn3ir. pl.n. k dr.y nor irrludc.ll lmendrrt t3 ro ch coq.ehcBivc plon. Thir rl.p rhows !r!al of "Undcrigndcd MUSA"
for"d in sorrE corffrMiiica. An.8rr.{ upon .c.crgc wirhin thclc urar arc lo bc !d&d to thc 2020 MUSA 8rd vill bc rpd.tc{ by dlc
cor rDnity on an annu.l b.si!. Fo( cr&r MUSA infomuliro. plcas€ cart ct OE cornnE|nity.
2020 MUSA
Undcsignatcd MUSA
2O4O Urban Reserve
Pcrmancnt Agriculturc
Pcrmancnt Rural
Rural Rcsidential
HACl l0lE-0l.wpd Itotch lpp.obdl & Consthing, In.ll
q--
[_J
r
..x+.-..t.tP
LJ
I
fl
t a
o
FI
wattcn in bluc.
The Twin Cities is the center of the Upper Midwest's transportation network and includes barges,
trucking, rail, and air transportation. Due to its strategic location at the head ofthe Mississippi
River, the Twin Cities is the home ofa number of barge lines and served by many barge carriers.
The Twin Cities comprises the nation's seventh largest wholesale distribution center and the third
largest trucking distribution center, with over 100 first-class carriers. Additionally, there are several
trunk line railroads with thousands of miles ofrail trackage.
Numerous national, intemational and regional airlines sewe passengers from the Twin Cities
Intemational Airport in Richfreld, along with other smaller airports in the area. Eagan was home to
Northwest Airlines, the sixth largest carrier in the nation. In April 2008, the airline began the
process of merging with the third largest carrier, Delta Airlines of Atlanta, Georgia. The merger will
be complete in 2010, as the Northwest brand was officially retired on January 31, 2010.
The Twin Cities is criss-crossed by an interconnecting system of major interstate freeways,
consisting of approximately 15,000 miles of streets and highways, in the 7-County area. State and
federal funds go toward improving highway infrastructure each year, with numerous projects
recently lirnded through the American Recovery and Reinvestment Act. Interstate Highway #35 is
slated for many projects throughout the cities, with a major project to increase traffic capacity at the
intersection of State Highway #62. In addition, State Highway #610 will be extended west to
connect with Interstate Highway #94 in the northwest suburbs, which is scheduled to be completed
by July 201 l.
Metro Transit, a division of the Metropolitan Council, offers an integrated network of buses and
Eains as well as providing resources for those who carpool, vanpool, walk or bike. Metro Transit is
one ofthe country's largest transit systems, with I l8 bus routes providing !'ansportation to
approximately 69 million riders arurually.
Metro Transit also operates Minnesota's first light rail line, the Hiawatha Line Light Rail, which
opened in December 2004. The l2-mile line connects three of the Twin Cities' most popular
destinations: downtown Minneapolis, the Minneapolis/St. Paul lnternational Airport, and the Mall
of America. The number of riders on the light rail line has slowly increased since 2004. There were
10.2 million riders in 2008, which was 12.3% higher than the number ofriders in 2007.
In an effort to ease traffrc congestion between St. Cloud atrd Minneapolis, Mero Transit also opened
the Northstar Commuter Line in November of 2009. Construction of the new line began in
September of 2007 and the project cost a total of $3 l7 million. The line currently runs 40 miles
from Big lake to downtown Minneapolis along U.S. Highway #10, with a second proposed phase
extending the line further north to St. Cloud and Rice. The railway is projected to carry 3,400
weekday riders during 2010 and possibly 5,900 weekday riders by 2030.
HACI l0l8-0l.epd Hosch Apptoisal al Contuhin& lnc t2
Regional Analvsis - Twin Cities Metropolitan Area - Continued
Transportation
Resional Analvsis -Twin Cities Metropolitan Area - Continued
Comorate Diversitv
One of the most impressive aspects of the Minneapolis/St. Paul economy is its diversity. The Twin
Cities has many major industries, including electronics, machinery and instrument manufacturing,
food processing, and graphic arts. This area is the nation's largest producer of mainfiame computers
and related equipment and is the world's largest grain trading center. Eighteen Fortune 500
companies have located their headquarters in the Twin Cities Area, along with Hormel Foods, which
is located 100 miles south olthe Twin Cities in Austin, Minnesota. Seven of the 18 Twin Cities
companies are ranked in the top 500 worldwide, while 13 additional companies rank within the top
1,000. A list of those Fortune 500 companies and their 2009 rankings is located below.
Strte
R!nk Comprny
u.s.
R.n k
Clobsl
Ran k
Revenues(l millions)
Profits
($ mtllions)City
2,97'7.0IUnitedHealth Group 2t 1l 81.186.0Minnetonka
Minneapolis 28 r00 64.948.0 2.2t4.02
44,048.0 593.0SupervaluEden Prairie 5t t69l
Richfield 56 t67 40.023.0 I,407.0.1
803.0CHSInver Grove 12 257 72,161.55
St. Paul 95 25,269.0 3,460.063M
t9.229.0 2,946.07U.S. Bancorp Minneapolis 129
General M ills r93 I 3,652. I t,294.18
9 Medtronic Minneapolis 196 13,515.0 2,231.0
224 t2,039.3 159.6l0Land O'Lakes Arden Hills
lt Xcel Energy 242 I I,203.2 645.6
l2 M osaic Plymouth 276 9,812.6 2,082.8
300 8,578.6 359.2
t4 Ameriprise Financial Minneapolis 348 1 ,t 49.0 (38.0)
l5 Hormel Foods Austin 373 6,754.9
l6 Ecolab St. Paul 401 .14tt.l
l1 Thrivent Financial for Lutherans Minneapolis 409 6,060.6 (329.7)
t8 PepsiAmericas Mi,lneapolis 478 4,931 .2 226.4
t9 Nash-Finch Minneapolis 492 36.2
HACll0lE-1)l-wpd Hosch,lpptdital lI Cons ting, Lc t3
FORTUNE 5OO COMPAIIIES
Target
Best Buy
351
483
Minneapo)is
Minneapolis
I3 C.H. Robinson Worldwide Eden Prairie
2 85.5
6,t37.5
4,703.7
Source: FORTUNE, May 2009
Regional - Twin Cities Metropolitan Area -Continued
Finance
The Twin Cities is the financial capital of the Upper Midwest, which includes Minnesota, westem
Wisconsin, upper Michigan, northem Iowa, North Dakota, South Dakota, and eastern Montana.
Located in the Twin Cities are the headquarters of U.S. Bancorp and the Midwest headquarters of
Wells Fargo & Co., two of the largest bank holding companies in the United States. Two Fortune
500 life insurance companies, Thrivent Financial and Travelers Companies, are also located in the
Twin Cities.
Income
According to data collected and published by the market research company Sales and Marketing
Management (SMM), the Twin Cities is an affluent metropolitan area. 2000 median household
effective buying income (roughly equal to disposable after-tax income) is estimated at $50,028 for
the l3-County metropolitan area. 2005 estimates show EBI down from 2000 levels. This is
primarily due to measurable reductions in both Hennepin and Ramsey Counties that host the highest
combined percentage of households in the metro area. Income estimates by SMM for the
metropolitan area appear in the table below.
County 1990 2000 2 00s
Anola
Ca er
Chisrgo
Dakota
Hennepin
Isatrti
Ramsey
Scott
Sherbume
Washitrgton
wrigbt
Piercc, WI
St. Croix, Wl
Metro Area
Staic of Miooesot
$50,969
$51,939
s36,349
$s8,793
950,003
$41,383
$42,732
$56,250
$46,144
$56,222
$45,509
$42,4s9
$50,071
$50,028r'
$41,098
$50,290
$57,039
$46,629
$53,1l5
s46,648
$45,435
$4 |,137
s51,228
$49,641
$56,373
$48,364
$44,421
$4'1,713
$47,687..
$42,930
$22,822
s22,20t
N/A
$2l,E8l
$23,737
N/A
$22,788
$22,1l l
N/A
$23,301
N/A
N/A
N/A
$22,788
$20,089
$35,012
$34,414
$28,272
$38,637
$32,7 46
$26,3r9
$31,145
$32,320
N/A
$45,247
$28,954
N/A
$32,356
$33,773.
s26,848
45.60/0
50.9%
28.50/o
52j%
52.7%
57.2%
37 .20/o
7 4.00/o
24.30/.
57.20/o
54_8%
48.to/o
53.to/o
* I I -County Minneapolis-St. Paul metro area defined by Sales & Marketing Managernenttt l3-County Minneapolis-St. Paul me&o area defined by Sales & Ma*eting Management
HACI l0lE-01.*pd llosch Apptdisdl & Consuhing. Inc t4
MEDIAN HOUSEHOLD EFFECTIVE BUYING INCOME
7. Chrnge
1990-2000l9t0
Source: Survey ofBuying Powcr, 1981, 1991, 2001, 2m5
Sales and Ma*etiog MaDageEEtrt
Resional Analvsis - Twin Cities Metropolitan Area - Continued
Employment
Nonagricultural employment in the region has grown substantially through 2000. In recent years,
both Hennepin and Ramsey Counties have decreased slightly in employment. Total employment in
the metropolitan area was approximately 1,350,058 in 1990 and 1,705,454 in 2000, increasing
26.3% withn this time period and showing the same growth of 26.3%o from 1980 to 1990. The most
current estimates show that total employment increased more slowly , by 2O .3V;o between 2000 and
2010. Job growth is expected to fall to 13% between 2010 and 2020. Employment details for the
Metropolitan Area from 1980 through 2000, including 2010 and 2020 projections, are presented in
the table below.
7" Change
1990-2000
Forecasted
20r 0
Forccssted
2020
Y. Change
2000-201019902000CountY1980
Anoka
Calvet
Chisago
Dakota
HeDn€pin
Isaati
Rrmsey
Scott
Sierbume
Washinglon
WriCht
Pierce, WI
SL Cmix, WI
57,806
9,426
5,878
6l,675
600,978
5,376
269,314
13,2t9
6,000
27,190
I I,432
N/A
N/A
76,783
t6,974
8,364
102,089
132,796
6,8't3
294,304
18,525
9,946
4t,|2
t7,536
8,293
t6,463
l0E,9l2
28,751
12,667
153,375
814,707
9,167
333,065
34,689
19,087
67,037
28,851
9,290
25,856
41.80/r
69.40/o
5t-4%
s0.2%
t9.4%
33.40/.
13.2%
E7.30/.
9t.v/r
63.to/o
64.50/.
t2.V/o
57.to/"
124,1
40,500
33,940
186,070
950,800
26AOO
371,820
49,200
59,330
81,720
79,2t0
N/A
14.6%
40.9%
167.90/o
21.3%
8.7v.
t88.0%
lt.60/r
4t.80/.
2t0.8%
30.9%
174.5%
-100.00/"
-100.0%
l4l,820
52,090
42,390
209,(N0
1,039,300
32,530
404,0m
58,280
76,800
I I 1,560
102,160
N/A
N/A
1,068,894 1,150,058 t,705,454 26.3% 2,009,780* 20.3%. 2,270,060'TOTALS
r I I County metro area totals only
HACI l0l8-0l.wpd llosch Apptoisol ll Co,stltia& lnc l5
MINNEAPOLrc/ST. PAUL METROPOLITAI{ AREA EMPLOYMENT
1980 TO 2020
Source: Mirtresota DepartlDent ofAdministration Jaauary l, 2008;
Metropolitan Council Regionol Dewlopmeat Franeworl, revised December 31, 2009
artd workoet.wiscomin.gov
Regional Analysis - Twin Cities Metropolitan Area - Continued
Emplovment - Continued
Over 87,700jobs were lost between 2008 and 2009, a decrease of 5.8% within the l3-County
Metropolitan Area. A7.2%io deqease in the Trade, Transpodation & Utilities industry, as well as
substantial losses in the Manufacturing and Professional & Business Services industries, contributed
to the employment slump in the area. Due to the general economic downtum, employment
decreases were experienced in all other sectors as well. However, the second largest sector,
Educational & Health Services, expanded by 3.3%. The following table gives the employment
breakdown by industry classification and shows the diversity in the regional economy.
2008
Number
Employed
200!)
Number
EmployedIndustry Change Change
V" ol
Totrl
Y" ol
Tol.l
Natrral Resources & Mining
Constmction
Maoufacturing
Trade, Tmnsporrarion & Utilities
Infonmtion
Finaacial Activities
ProG$ional & Bushess S€rvic€s
Educational & H€alth S€rvic€s
Irisue & Hospitality
Oiter S€rvicss
0.30/"
3.9%
t3.tvo
2t.y/o
2.5yo
9.to/.
17.50/o
t6.60/0
I t.0/r
3.y/o
4,996
58,83t
t 98,439
331,780
3E,553
137,938
265,325
251,008
t66,155
59,690
4,865
47,829
t77A@
308,M5
29,937
134,081
244,9t3
259,375
t6t 492
57,060
o.3yo
3.40/o
t2.50/.
21.6%
2.to/o
9.4%
17.2%
t8.2%
|.3%
4.0%
(l3l)
( l 1,002)
(21,030)
(23,735\
(8,616)
(3,857)
(20,4t2)
8,367
(4,663)
(2,630)
-2.60/0
-ta.7r/o
-t0.60/0
-7.20/.
-22.30/.
-2.8/o
-7;lo/o
3.3o/o
-2.80/o
4.40/o
1,512,715 loo.ov. 1,425,006 100.0%TOTALS (87,709) -s.Av.
Number Employed - As ofthe end ofQuarter 2 of2008 and 2009
l3-County Area: Anoka, Carver, Chisago, DakoIa, Hennepin, Isadti, Ramsey, Scott, Sherbume,
Washington, and Wrighl Cou[ties in Minnesota; Pie.ce and St. Croix Counties io Wisconsin
HACI I0l8-01.wpd Ilotch ,lpprait.l tl ConsthirA, Inc l6
EMPLOYMENT BY INDUSTRY CLASSIFICATION
MIIINEAPOLIS/ST. PAUL METROPOLITAN AREA ANNUAL AVERAGES
Sourcca: MiDGota Drparhqlt of Eqloyncot ed Ec@oDic Drvelo@t (wwwd€edstste-El.u!)
atld worloetwiscoosi!.gov
A diversified economic base has helped this area weather hard economic times better than many
other parts of the United States. The unemployment rate of the Twin Cities SMSA has steadily
increased to since 2001 to around 7% cunently, but is still well under the l07o national
unemployment rate.
In summary, the Minneapolis/St. Paul SMSA is strong economically due to its diversified economic
base. This base begins with 19 of the Fortune 500 companies having headquarters in the region.
Having a number of well-established companies has kept unemployment rates considerably lower
than the average for the United States.
Minnesota has developed excellent primary and secondary educational systems which rank among
the nation's highest in percentage ofgraduating high school seniors. Minnesota also has
consistently been in the top I 0 states in percentage of population with college degrees. There are I 5
colleges and universities in the Twin Cities metropolitan area, including the University of Minnesota
with just over 5l,000 students.
Cultural facilities include several dozen theaters, including the famous Tyrone Guthrie Theater, a
science museum, two art museums, the historical Orpheum and State Theaters, the well-known
Minnesota Symphony Orchestra, and the Ordway Music Theater.
Rccreational
There is a wide range ofrecreational opportunities in the Twin Cities, ranging from professional
spectator sports to individual leisure sports. Within the metropolitan area is a vast array of lakes,
marinas, camping areas, public and private golf courses, and county parks. In addition, there are ski
resorts, riding stables, tennis courts, and skating rinks. The Twin Cities is also home to Como Zoo
in St. Paul, the Minnesota Zoo in Apple Valley and both Valleyfair amusement park and Canterbury
Park in Shakopee.
The Minnesota Vikings (football) and Minnesota Twins (baseball) play in the Hubert H. Humphrey
Metrodome, and the Minnesota Timberwolves (basketball) play in the Target Center, both located in
downtown Minneapolis. In addition, the Minnesota Wild, a National Hockey kague fianchise,
began its inaugural season in September 2000 at the Xcel Energy Center in downtown St. Paul.
There has been ongoing discussions and attempts by the Vikings to construct a new stadium as their
lease at the Metrodome expires in 201l. The Vikings will be working with elected officials during
the current legislative session to explore funding for a retractable roof stadium in eastem downtown
Minneapolis. In May 2006, the Twins secured a deal to locate a new open air stadium near the
Target Center in Minneapolis, began construction in 2007 and hosted their first game in April of
2010.
HAC I l0l E-0l.wpd llotch,lppraitol & CoBultinq, It.t7
Regional Analvsis - Twin Cities Metropolitan Area - Continued
Emplovment - Continued
Culturc and Education
The subject property is located within the city ofchanhassen, which lies approximately l7 miles
southwest ofMinneapolis in Carver County. Chanhassen was incorporated as a village in 1896 and
has evolved into a large Twin Cities suburb. The city offers a blend of rural and suburban living and
is home to atkactions such as the Minnesota landscape Arboretum and the Chanhassen Dinner
Theater.
Chanhassen is well connected to the meao area, via tbree major highways and several county roads.
State Highway #7 runs east/west along the northem border ofChanhassen. State Highway #5 runs
easUwest tkough the center ofChanhassen, along with State Highway #212 which provides a major
east/west route through the southem portion of Chanhassen. All of the State Highways connect
Chanhassen to Interstate Highway 1494, four miles east of the city boundaries. In addition to these
major highways, State Highway #41 extends nortl/south tkough Chanhassen, connecting State
Highway #7 to U.S. Highway #169, approximately six miles south of the city boundaries. With
many major highways and county roads, traveling within the city or commuting to the nearby Twin
Cities and surrounding suburbs is fairly easy and convenient.
HACI l0l8-01.*pd Hot.h rlpp.abol & Consultiaa,Inc 18
CITY ANALYSIS
Citv Analvsis - Continued
Population Characteristics
Chanhassen, being an outer-ring suburb, experienced rapid population expansion in the 1980's.
Major growth continued between 1990 and 2000, as the population of Chanhassen nearly doubled,
increasing by 73.2o/o, from I1,732 to 20,321. The trend is expected to slow as the city is estimated
to grow by only 3,300 new residents through 2009. Neighboring cities such as Carver, Shakopee,
Victoria, and Waconia have also experienced major growth, each expanding by over 707o between
1990 and 2000. The chart below shows population growth trends for Chanhassen and its
surrounding communities since 1970.
1980 19901970 2 000
Chatrhassen
Ca er
Chaska
Dahlgren Trvp
Eden PBirie
Laketowtr Twp
Shakopee
Victoria
waconia
Carver County
7-County Metro Area
Miolesots
4,879
669
4,352
I,t47
6,938
I,750
6,87 6
850
2,445
28,33t
I,874,6t2
3,806,103
6,359
642
8,346
1,225
t6,263
2,421
9,94t
t,425
2,638
!7,046
1,985,873
4,O7 5,970
tt,732
744
l1,339
1,296
39,31I
2,232
tt,139
2,354
1,498
47,915
2,2a8,721
4,37 5,O99
20,32t
1,266
t7,449
1,453
54,901
2,331
20,568
4,O25
6,814
70,205
2,642,0s6
4,919,479
73.2yo
70.2vo
53.9yo
t2.to/o
39_10/o
4.4%
7 5.20/o
7 t .oo/o
94.8%
46j%
15.4o/o
t2.40/o
23,629
3,024
24,t't1
1,544
62,536
2,143
34,691
6,727
l0,l E3
9t,228
2,881,812
5,300,942
HACI lOl t-01-wpd llosch Appditol ll Consulnry. lnc-l9
POPULATION GROWTH. I97O TO 2OO9
70 Chatrge Estimste
1990-2000 2009
Source: Datanet
Citv Analvsis - Continued
Household Characteristics
The number of households in Chanhassen grew by 72.2%o between 1990 and 2000. Since the
population had grown slightly more than the number ofhouseholds, this suggests a trend toward
larger household sizes. [n most ofChanhassen's neighbors, however, the population had grown at a
slower pace than the number ofhouseholds, indicating a general trend toward smaller household
sizes. The following table depicts the growth in households for census years 1980 to 2000,
including 2009 estimates.
7o Chlnge
1990-2000
Estim.te
2009198019902 000
Chanhasserr
Carver
Chasta
Dahlgen Twp
Eden Pr.irie
Lakctown Tx,p
Shakopee
Victoria
Waconis
Csrver CouBty
7-Coutrty Metro Area
Minnesota
2,07 5
218
3,006
331
5,3E3
52t
3,226
427
988
12,01 I
72t,444
t,445,222
4,016
262
4,2t2
394
t4,447
601
4,t63
756
1,401
16,601
875,504
t,647,853
6,914
458
6,t04
479
20,457
637
't,540
t,367
2,56E
24,356
|,o2t,454
I,895,127
8,2E5
I,104
8,895
509
24,300
650
12,589
2,373
3,986
32,861
I,138,512
2,108,843
HACI l0lE-0l.wpd 20
HOUSEHOLD GROWTH. 19tO TO 2OO9
72.2%
74.8%
44.9yo
2t.6%
4t .6%
6.0%
8t.to/o
80.E%
83j%
46.7%
16.7%
| 5 .00/o
Source: DATANET
Hot.l.lpproital tl Co8uhing. Inc.
Citv Analvsis - Continued
Household Income
Median household income in Chanhassen gew 6l .9% to $84,2 I 5 between 1990 and 2000. Income
growth is strong within the surrounding cities, ranging from 54.3oh to 88.4%o, suggesting a thriving
local economy. In addition, income of the cities in the area are well above the $47,1 I I median
household income in Minnesota, indicating an abundance of high-paflng jobs and a well-educated
workforce. Median household income information for Chanhassen and its surrounding communities
is shown in the following table.
7o Change
1990-200019902 000
Chanhassen
Carver
Chaska
Dahlgren T\vp
Eden Prairie
Laketorrd Twp
Shakopee
Victoria
waconia
Carvea County
Mintresota
$52,01I
$40,831
$34,235
$40,962
$52,956
$47,067
$3 ?,78 3
$48,973
$29,56t
$39,188
$30,909
$84,215
$65,083
$60,325
$63,224
$78,128
$75,000
$59,1 3 7
s86,772
$55,705
$65,540
$47,1 I I
6t .9%
59.4%
76.2vo
54.3Vo
47 .9%
59.30/o
56.s%
77 .2%
88.4%
67 .20/o
52.4%
HACI l0l E{l -wpd Ilotch ,lppra ilal ll Cortrhina. lnc 2l
MEDIAN HOUSEHOLD INCOME - T99O TO 2OOO
Source: U.S. CeDsus; DATANET
The city of Chanhassen offers a wide variety ofbusinesses and services which provide employment
opportunities to the residents. Many large companies have been attracted to Chanhassen, partly due
to its close proximity to the Twin Cities, along with access to several major highways. Emerson
Process Management/Rosemount Inc. and Super Value are the top two employers in the city, with
1,600 and 1,061 employees, respectively. All of the remaining companies on the list employ
hundreds ofworkers and offer diversity, helping to maintain Chanhassen's strong economic base.
Major employers in the city are shown in the chart below.
E mDlovcr Products/Services E mDlovees
Totalizitrg Fluid Meter & Countiog Device Mfg.
Corporale, Subsidiary & Regioml Managitrg Oflices
Adve.tisitrg Material Distributio[ Svcs.
Supermartets & Other Grocery (exc. Cotrvenience) Stores
Commercial Bakeries
Response Marketi[g Services - Matrufacturing Division
Theater Compatries & Dinner Theaters
Zoos & Botanical Gardens
Supermarkets & Other Grocery Stores
Other General Me.chandise Stores
I,600
I,051
847
528
475
360
300
230
t90
147
123fg.All Other Misc. Wood Prod. M
HACI l0l8-0l.wpd flotch,lpproital & Cowthidt, lic.22
Citv Analvsis - Continued
Economic Base
MAJOR EMPLOYERS IN CHANHASSEN
Emcrsoa Process/Rosemount Inc.
Lifctime Fitoess
IWCO Dircct
Supervalu Foods
General Mills
RR Domclley
Chanhassen Diuer Thea&cs
Minlesota Landscspe Arboretum
Byerly's
Trrget
ABC/Lyman LuEber
Source: Chanhassen Comprehensive Annual Fioatrcisl Report, 2009
Chanhassen has experienced a l. I o% increase in private sector covered employment between 2007
and 2009 according to data provided from the Minnesota Department of Employment and Economic
Development. The city's largest sectot Manufacturing, decreased by 4.1% in that time period.
Trade, Transportation & Utilities also experienced a.4o% loss. The Professional and Business
Services sector experienced the largest increase of 36.2Y;'.
Covered employment includes only those workers whose employers contribute to the state
unemployment insurance fund and is estimated to include 98% of all workers. The following table
shows the changes in employment for 2005, 2007, and 2O09, by private-sector industry classification
for Chanhassen.
9/o Chrnge
2007 -2009200720092 005Industry
Natural Resources and Mining
Coostruction
Manufacturing
Trade, Transportation & Utilities
Information
Firanci.l Activities
Professional and Business Services
Education and Health Services
Leisure and Hospitality
0ther Services
74
415
4,044
1,990
205
458
9El
358
t,246
601
1t
3't6
3,757
2,070
228
454
897
555
lI87
403
65
393
1,604
2,06t
I6l
416
t,222
532
1,559
400
-8.50/.
4.50/o
4.t%
-0.4%
-29.4%
-8.40/o
36.20/o
-4.1%
4.8o/o
-o.70/o
r 0,41l t.tyo10,372 10.298Total
HACI l0lE-0l.spd 23
Citv Analvsis - Continued
Economic Base - Continucd
CHANHASSEN PRIVATE SECTOR COVERED EMPLOYMENT
2005 TO 2009
Source: Minlesota Department ofEmployment and Economic Development
osch App.airal & Conrulnng, Inc-
Citv Analysis - Continued
Summarv
Chanhassen is a growing, economically stable outer-ring suburb. Situated in northeast Carver
County, the city is conveniently located with easy access to the Twin Cities. The city is steadily
expanding in population and the number of households. Median household income is also on the
rise, with the help ofan ample supply ofjobs within the city. Chanhassen's location, infrastructure,
employment opportunities, quality healthcare and education, along with many scenic parks and lakes
have been major factors in attracting many new residents and businesses to the city each year.
HACI l0l8-0l.wpd Hot.i App.ouol /, Co|sthirt,Idc.24
tatt tt
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II
CITY OF
CHANHASSEN
Basemap
t City H.ll
o Fue Stetion
/.., Priv.le Ro.d
N Proposed R/W
z, Vrated Road
JNot e Through Skeet
56
CITY MAP
llltl!tril!lr rltl.lr
HAC I l0l8{l-wpd Hotch lpprobol It Co,tulti"s.lnc 25
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NEIGHBORHOOD ANALYSIS
The subject neighborhood generally consists of a growing area located along the north side of State
Highway #5 in north-central Chanhassen. General neighborhood boundaries are highlighted on the
map provided on the following page and described as follows:
North
South
East
West
Lake Lucy Road
State Highway #5
County Road #17 (Powers Boulevard)
County Road #l l7 (Galpin Boulevard)
Access to the neighborhood is convenient from State Highway #5 (east/west) to Audubon Road, as
this is a signalized intersection at the center of the neighborhood. A north fiontage road along State
Highway #5 (West 78th Street) also provides convenient access to nearby properties. The overall
access to the subject neighborhood was improved from the recent upgrade of State Highway #5 a
few years ago which resulted in the new frontage road and intenection improvements being
completed to the level of finish seen to&y.
Land uses in the subject neighborhood include a mix ofsingle- and multi-family residential uses
toward the northern portion ofthe neighborhood generally surrounding Lake Lucy and within the
southwest comer, vacant rural residential land and land guided for more intense uses such as
medium-density and high-density residential southwest of Lake Ar:n and north of West 78th Street,
and two large parks (Lake Ann Park and Greenwood Shores Park) that occupy most ofthe southeast
portion of the neighborhood. Commercial uses providing for shopping and daily services are
conveniently located across Powers Boulevard within the northeast and southeast quadrants of State
Highway #5 and Powers Boulevard.
The subject neighborhood is clearly in the growth stage of its life cycle, with strong historical
demand for residential acreage up until the downturn in the residential market in late 2007leaiy
2008 which stalled most single-family residential construction. This strong demand had resulted in
significant annual increases in developable land values prior to a correction evidenced by softening
land prices with the exception of some sectors. Although the physical infrastmcture is in place
within the immediate neighborhood to accommodate additional development, we only expect build-
to-suit or special-purpose development in the near future with a return to speculative development to
be years away. Such conditions should allow for a stabilizing effect on the subject's value within the
near future and allow for slow increases thereafter.
HACI l0l E{l.vpd otch.lpp,aitol lL Contrltina, lnc 26
w 6Jd Sr
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P.*
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cold,hr&d
Carver
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F
1
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erltd ' Ur.D,t
NEIGHBORHOOD BOUNDARY MAP
HACI l0l E-Ol.wpd Ilotch Apprcitol l, ContfiinA. Inc-27
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Subject
That part of Tracts A and B described below:
Tract A.That part of the Southeast Quarter of the Southeast Quarter of Section 10, Township I 16
North, Range 23 West, Carver County, Minnesola, described as follows: Beginning at a
point on the south line ofsaid Southeast Quarter ofthe Southeast Quarter, distant 195.0
feet west of the southeast corner thereof; thence west along said south line a distance of
361.00 feet; thence northerly parallel to the east line ofsaid Southeast Quarter of the
Southeast Quarter a distance of593.20 feet; thence deflecting to the right at an angle of
62 degrees 00 minutes 00 seconds a distance of 150 feet, more or less, to the center line
of creek; thence easterly along said centerline ofthe creek to its intersection with a line
drawn northerly and parallel with said east line from the point of beginning; thence
southerly along said parallel line to the point ofbeginning;
Tract B That part of the Southeast Quarter of the Southeast Quarter ofSection 10, Township I 16
North, Range 23 West, Carver County, Minnesota, described as follows: Beginning at a
point on the south line of said Southeast Quarter ofthe Southeast Quarter distant 195.0
feet west of the southeast comer thereof; thence northerly parallel with the east line of
said Southeast Quarter ofthe Southeast Quarter to its intersection with the center line of
the creek; thence easterly along said center line of the creek to its intersection with the
east line of said Southeast Quarter of the Southeast Quarter; thence southerly along said
east line to the southeast comer of said Southeast Quarter of the Southeast Quarter;
thence west along said south line to the point ofbeginning;
which lies northerly of the northerly boundary of Minnesota Department of Transportation Right of
Way Plat Numbered 10-09 as the same is on file and of record in the office of the County Recorder
in and for said county:
According to public records, the subject property is owned by Southwest Metro Transit
Commission. No sale of the subject property has occurred within three years of the date of
valuation.
HACI l0lt{l-wpd llosc^ ,pproital tl co.svhing, lnc 28
LEGAL DESCRIMION
The following legal description was provided to us by our client:
containing 3.58 acres, more or less.
OWNER OF RECORI)
REAL ESTATE TAXES ANI} SPECIAL ASSESSMENTS ANALYSIS
Real estate taxes in Minnesota are payable either in one lump-sum payment or can be paid in two
installments which are due on May I 5 and October I 5 . The annual real estate tax charge is based on
the assessor's estimated market value as of January 2 of the prior year. The following sections will
provide current real estate taxes and assessor's estimated market value(s) for the subject property
which we have identified by property identification number (PID).
The subject parcel is cunently tax exempl The most recent assessorts estimated market value
information dates bach to January 2, 2006. At that time, the following information was on
record:
Real Estate Tax Data (Payable 201l)
It is our opinion that the most recent subject's assessor's estimated market value falls below what we
have observed in the marketplace based on recent prices of similar properties.
Special Assessment Information
There are no special assessments levied to the subject property as ofthe date ofvaluation.
PID Base Tax Specials Total Tax
25-0t01000
25-0101t00
s0.00
$0.00
$0.00
$0.00
$0.00
$0.00
PID Land Value Building Value Total Value
25-0101000
25-010 t 100
st6l.l00
$363,900
$163,r 00
$363,100
s0
s0
gACt l0l8-0l.wpd Hdch lpp.oitol ll CoBuhing, la.29
Assessor's Estimated Market Value (As of Januarv 2. 2006)
Resl Estate Tax Data (Payable 20l l)
Assessorrs f,stimated Msrket Vslue
(Payable 2007)
ZONING
The subject property is located within the RR, Rural Residential District in the city ofChanhassen.
The purpose of the RR District is to provide for single-family residential subdivisions intended for
large lot developments. The district has a minimum lot size of 2.5 acres, with a requirement that one
unit per l0-acre gross density shall be maintained for proposed lots outside the approved
Metropolitan Service Area in effect at the time of a proposed development.
More importantly, according to Chanhassen's 2030 Land Use Plan, the subject property is guided
Residential High Density (net density of 8-16 units per acre).
Currently, the subject property conforms to the above district requirements as it is vacant land.
Additionally, we assume that the cunent guiding will exist into the foreseeable future, and at this
time no major changes are anticipated for the subject propertyrs area. Although the property is
currently zoned RR, it is likely that any proposed development plans would have to be consistent
with the Land Use Plan in order to obtain project approvals.
Zoning and comprehensive land use plan maps for the subject property are provided on the
following two pages, with additional documentation ofthe current zoning and guiding provided in
the Addenda of this appraisal report.
HACI l0lE-0l.epd Ilos.h.lpp.aisol r'l Co8thi,a, Lc 30
A B c
I
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llrt I
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I ll rl t | | t r l, !r rr r r
1
I
2
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lllttlltl!lt
City of
Chanhassen
Zoning Map
-----'Il-4
oor-or*,oahq,OE,--.-,d'.-..:! r:.i..-",r*:
3..-Hh3E-t-.rrhEra!.Hbo-l-hna u.*hrho..'h
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ah.\,-.....*har.B,&no-,od.c.-Lr
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llttlrr l!ll!!r
ZONING MAP
HAC l l0l S-01-wpd llos.h ,t ppro isol & Co,rthi,a,Inc 3l
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fl enn umr.ororlc.hr. raa{hrF'] !Em{, td GrarvtI -ar i, - a 'rr..tA -rE nn,Er--E
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COMPREHENSIVE LAND USE PLAN MAP
HACI l0l E{l.wpd 32
,
2
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$
_ EE-
Il osch lpprditol lL C ont.hinA, lrc.
FLOOD HAZARD INFORi}{ATION
According to the Flood Hazards Map, the subject property is located in Zone C, which is an area of
minimal flooding. This information is found on Community-Panel Number 27005100058, dated
July 2, 1979.
HACI l0lE-0l.wpd Ilosct,lpptoital & Corttkiat, lnc 33
Praparad !or:
Hosch A0r.isd E Consudtry LLC
1620 Arto.etum Bl''d
Chanhassen MN 553'17.9a16
InterFlood
wlyw.rnterrlood.<om . r -8OO'252 6631
ID
955
NM'3
2 THIE
ZONE C
A
Nt c
RM 5-
A
ZONE C FLOOOSCAPE
Fbodrhadsl@
faT hllta.
2700sr00056
lndtva tltc
Jut 2. 1979
lPt
,rg-
-'P'
?|t* '
:oatc at ti Yxts atEA ts ror. llalaow Io Sxow ro tca(t aio oot:,.ot Exc!ao txrutol.ra3 0lfrrfarrr
:I)
ZONE C
Po-r$ t tlr-ftr-rlri '' FLQoc
FLOOD HAZARD MAP
HACI l0l t-0l.wpd Itos.t ,lpp.oital tl Co8lhina, lrc 34
:t(l
Subiect
zorraE c
1
PROPERTY HISTORY
The subject property is owned by Southwest Metro Transit Commission. The property. We are not
aware ofany salcs ofthe subject property which have occurred in the last three years.
HACI l0l84l.wpd Itosch Appnisol & Consultirt,lnc.35
The subject site consists ofa 3.5S-acre (155,945 square foot) slightly irregular-shaped parcel of
vacanl land located along the north side of West 78th Street at Audubon Road, just north ofa
sigrralized intersection with State Highway #5.
West 78th Street is a twolane, paved roadway with concrete curbing and a median with city water
and sanitary sewer trunk lines in place with adequate capacity to accommodate future development
consisting with current guiding.
The subject parcel has rolling topography. The site's highest elevation is at a knob located within the
west central portion before sloping down to the north and east. Soils are assumed stable and free of
contamination.
Land features are noted as follows:
Accessibility:
Number of lanes Each Direction:
Street Surface:
Sidewalk:
Curb and Gutter:
Location within MUSA Line?
Water:
Sanitary Sewer:
Storm Sewer:
Gas:
Electricity:
Vacant Land Guided Residential High Density
West 78th Street
kke Ann Park
Vacant land Guided Residential High Density
Good via West 78th Sreet
One
Bituminous
Bituminous tail along south boundary
ConcIete
Yes
Municipal service available
Municipal service available
Municipal service available
Center Point
Xcel Enerry
HACI l0l8-0l.wpd 36
SUBJECT SITE DESCRIPTION
Bounded By:
North:
South:
East:
West:
Hosch lpproisol & Contultint,Iac.
Subiect Site Description - Continued
Telephone:
Approximate Shape:
Topography:
Soils:
Landscaping/Vegetation :
Observed Easements or Restrictions:
Total Estimated Land Area:
Quest or Sprint
Slightly irregular
Rolling
Assumed sound and stable
Natural grasses with clusters ofconiferous
trees and backdrop ofdeciduous trees around
northem and east boundaries
Typical utility easements (power pole at
southwest comer). Please refer to the legal
description ofrecord for specific details ofany
other possible easements or restriclions. We
are ateare lhat the subject properly has
various title encurnbrances that limit its use.
Following direction from our client, and pre-
approval from Mty'DOT through
correspondence with Mr, Keith McMurray on
February 14, 201I and telephone contact
with Mr. John Mascari on February 15,
201I, the subjecl properly's fee simple
interest has been appraised under the
hypothetical condition that no encumbrances
exist.
3.58 acres (155,945 square feet)
HAC I I0l E-0l.wpd fiosch rtpproital & ConsultizA, Iac 37
\
6
PLAT MAP
HACI l0l8-0l.wpd Ilotch App.aitdl t Contultitt, Inc-38
Acrial View ofthe Subject Property
HACI l0l E-0l.wpd 39
SUBJECT PHOTOGRAPHS
Northeasterly view from southwest comer along frail
:l
t
,iilt
*1
ti
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Ilotch Appraital & Contuhing, Inc
Southerly view of sipalized intersection of Highway #5 & Audubon Road - subject in foreground
I II
HACll0l34l wpd 40
Subiect Photographs - Continued
r-5-:=I.llP-...-
v ls
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Facing north from southwest corner olparcel
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Hotch lpp.oital & CoBulnn& lac.
Northwesterly view from southeast comer
Central portion ofsite facing northwest
HACI l0l E-Ol.wpd 4t
Subiect Photographs - Continued
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Hotch App.oitol & ContrltidA, Inc.
Northerly view ofproperty along east boundary
HACI IOlE-0l.wpd 42
Subiect Photosraphs - Continued
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llorch Apptoirol & Cowrhing,lnc.
HIGHE ST AND BEST USE
The highest and best use of the subject real estate as it will be regarded in this appraisal report will
conform to the following definition found on Page277 ofThe Appraisal ofReal Estate. l3th Edirion:
Highest and best use is the reasonably probable and legal use ofvacant land or an
improved property that is physically possible, appropriately supported and financially
feasible and that results in the highest value.
In order to determine the highest and best use ofthe subjecl prcperty, a three-step process is
followed, which we have defined as follows:
The highest and best use of the site as though vacant is determined. Three options are
available to owners ofvacant sites: (l) leaving the property vacant; (2) holding the site fora
future use, or; (3) developing the site. The recommended option must be legally permissible,
physically possible, financially feasible, and maximally productive.
Ifdevelopment is concluded as the highest and best use of the site as though vacant, the
second step would be to determine the ideal improvement. The ideal improvement would
reflect state-of-the-art design techniques, legal conformance, and provide the highest value.
Ifthe property is currently improved, the final step would be to determine the highest and best
use of the property as improved. A comparison is made between the existing improvement
and the ideal improvement in order to identifu differences. To modift the existing
improvements for any differences from the ideal, one ofthe following five options should be
recommended to the owner:
Leave the property in its current state
Remodel
Renovate
Convert
Demolish to clear the site for redevelopment
The recommended option must be legally permissible, physically possible, financially
feasible, and maximally productive.
3
A.
B.
C.
D.
E.
HACI l0l8-01.*pd otch Appruisal & ConsuhinA, Lc
I
2.
43
Step I : Hiehest and Best Use of the Site as Thoueh Vacant
Leeal Permissibility
The subject property is located within the RR, Rural Residential District in the city ofChanhassen.
The purpose of the RR District is to provide for single-family residential suMivisions intended for
large lot developments. The district has a minimum lot size of 2.5 acres, with a requirement that one
unit per lO-acre gross density shall be maintained for proposed lots outside the approved
Metropolitan Service Area in effect at the time of a proposed development.
More importantly, according to Chanhassen's 2030 Land Use Plan, the subject property is guided
Residential High Density (net density of 8- 16 uoits per acre).
Cunently, the subject property conforms to the above district requirements as it is vacant land.
Additionally, we assume that the cunent guiding will exist into the foreseeable future, and at this
time no major changes are anticipated for the subject property's area. Although the property is
currently zoned RR, it is likely that any proposed development plans would have to be consistent
with the Land Use Plan in order to obtain project approvals.
Thus, based on this information, the subject property could be used for a variety ofhigh-density
residential uses, at varying densities.
The subject site is 3.58 acres in size with rolling topography and assumed stable soils. Utilities are at
the site, the property has public street access along West 78th Street (paved with concrete curbs, a
median and storm sewer). The property is also adjacent to Lake Ann Park
Thus, physically, the subject parcel is ripe for development to a density consistent with its current
guiding. The subject property could either be developed as an independent parcel, or assembled with
adjacent parcels and developed in conjunction with one another.
HACt l0l64l.wpd Hotch ,lpprot ol ,/l CoBrbina, hc 44
Highest and Best Use Analvsis - Continued
Phvsical Possibilitv
Hishest and Best Use Analysis - Continued
Stcp l: Highest and Best Use ofthe Site as Though Vacant - Continued
Financial Feasibility
The subject neighborhood is still growing with room for additional development as ofthe date of
valuation. The location is desirable for high-density development given its visibility from Highway
#5, good access, neighboring t-ake Ann Park and a bituminous trail fronting the southem boundary of
the site. Demand for well-positioned high-density residential parcels for independent living, assisted
living and specialty care senior living is still in place, although at a slower pace than observed prior
to the downturn in the overall residential market due to softer overall market conditions. It is
anticipated that development of the subject property will occur cautiously in phases with either a
build-to-suit project in mind or significant pre-leasing secured before breaking ground.
Maximum Productivi
Based on our research within the local market, it is our opinion that future development ofthe subject
site into a build+o-suit high-density residential project (with potential for a senior housing element)
provides the highest return to the land. This future use creates the highest value for the subject
property while meeting the test ofbeing legally permissible, physically possible, and financially
feasible. The reasons for our opinion are as follows:
l. Compatibility ofthe proposed use with Chanhassen's comprehensive land use plan and
surrounding land uses.
2. Extension ofutilities and paved streets has occurred resulting in development being physically
possible as of the date ofvaluation.
Suitability ofthe shape, topography, and location ofthe site.
Close proximity to a growing economic and population base.
Convenient accessibility ofthe site via major highways and thoroughfares.
High-density residential development (with potential for a senior housing element) provides the
highest dollar return on the land.
Step 2: Description ofthe Ideal Improvement
It is our opinion that the ideal improvement for the subject site would be development ofa build-to-
suit high-density residential project (with potential for a senior housing element), maximizing
allowable density on the parcel based on the comprehensive land use plan which is in place as ofthe
date ofvaluation. This would result in possible densities ofup to 16 units per acre, with a variety of
unit styles.
2
3
4
5
HACI l0l8-0l.wpd Hosch,tppruilol & Conslltidg, lnc 45
THE VALUATION PROCESS
The valuation process contains many facets. A wide variety of data, including the previously
discussed Regional Analysis, City Analysis, Neighborhood Analysis, Subject Site Description,
Subject knprovements Description, and Highest and Best Use analysis, is compiled and utilized to
value the property based upon three methods ofvaluation which are referred to as "approaches".
These approaches to value are briefly described as follows:
Cost Approach
ln the cost approach, an estimated reproduction or replacement cost of the building and land
improvements as of the date of valuation is developed together with an estimate of the losses in value
that have taken place due to wear and tear, design and plan, or neighborhood influences. To the
depreciated building cost estimate, the estimated value of the land is added. The total represents the
value indicated by the cost approach.
Sales Comparison Approach
In the sales comparison approach, the subject property is compared to similar properties that have
been sold or for which listing prices or offering figures are known. Data for generally comparable
properties is used, and comparisons are made to demonstrate a probable price at which the subject
property would be sold if oflered on the market.
In the income capitalization approach, the rental income to the property is shown with deductions for
vacancy and collection loss and expenses. The prospective net operating income of the property is
estimated. To support this estimate, operating statements for previous years and comparable
properties may be reviewed, along with available operating cost estimates. An applicable
capitalization method and appropriate capitalization rates are developed and used in computations
that lead to an indication ofvalue.
Other methods may also be applied, such as a gross rent multiplier, which reveals the relationship
between gross rental income and the sale price of a given income-producing property. Gross rent
multipliers are extracted from comparable sales and analyzed, with a reconciled gross rent multiplier
applied to the subject's gross rent to render an indication of market value.
Hotch Apptukal & Conulting, 1,.46
lncome Capitalization Approach
HACI l0lt-0l.epd
The Valuation Process - Continued
Inherent within the previous three approaches to value are some basic appraisal principles, which
include anticipation, balance, change, extemalities, substitution, and also supply and demand. These
principles are briefly described below. (The
Estate, l3th Edition, pages 35-43.)
se definitions are derived fiom The Aooraisal of Real
Anticipation: The perception that value is created by the expectation ofbenefits to be derived in
the future.
Balance: The principle that real property value is created and sustained \yhen contrasting,
opposing, or interacting elements are in a state of equilibrium.
Qlgggg: The result ofthe cause and effect relationship among the forces that itrfluerce real
property value.
Externalities: The principle that economies outside a property have a positive effect on its yalue
while diseconomies outside a property have a negative effect upon its value.
Substitution: The appraisal principle that states that when several similar or commensurate
commodities, goods, or services are available, the one with the lowest price will attract the greatest
demand and widest distribution. This is the primary principle upon which the cost and sales
comparison approaches are based.
Supply and Demand: In economic theory, the principle that states that the price of a commodity,
good, or service varies directly, but not necessarily proportionately, with demand, and inversely,
but not necessarily proportiorately, with supply. In a real estate appraisal context, the principle of
supply and demand states that the price ofreal property varies directly, but not n€cessarily
proportionately, with demand and inversely, but not necessarily proportionately, with supply.
An appraisal is composed ofa number of integrated, intenelated, and inseparable procedures that
have a common objective -- a condensed, reliable estimate of value. Although the three approaches
are seldom completely independent, it is important to note that in certain cases, greater emphasis is
placed on a particular approach. The reasons for this are as varied as the properties themselves, and
each appraisal must be addressed individually. The appraiser discusses the strengths and weaknesses
ofeach ofthe approaches to value, and concludes to a final value which reflects the most applicable
approaches.
HACI l0l E-0l.wpd Uot.h Apptoitol ll Consthing. ln.47
Explanation of the Reconciliation Process
There are six different methods for the appraiser to analyze the value ofa site, including sales
comparison, allocation, extraction, subdivision development, land residual, and ground rent
capitalization. Depending upon the type of land to be appraised and the existing market
conditions, one or more ofthese methods may be applicable for the valuation process.
Typically, the most reliable way to estimate land value is by sales comparison. However, when
few sales are available, or when the value indications produced through sales comparison need
substantiation, other procedures may be used to value land.
Summary
In this case, the subject property consists ofa 3.58-acre parcel. After reviewing the pertinent
information within our office and having various discussions with real estate experts, we have
completed the sales comparison approach to value in the analysis ofthe subject property.
HACI I0lE-0l.vpd Ilotch Apptoisal ll Contrhing,lnc 48
The Valuation Process - Continued
In the valuation of land, one must consider that the supply of land is relatively stable. In addition,
land has value because it has a specific use and is in demand. Appraisal principles which are inherent
in the valuation of land and land value include anticipation, supply and demand, substitution, and
balance. These principles basically indicate that a prudent investor when purchasing a site considers
not only the site itself, but also the existing market, competition and potential uses for the future.
The sales comparison approach to value is defined as:
The process ofderiving a value indication for the subj€ct property by comparing market information for similar
p.operties with the property being appraised, idertirying appropriate units ofcomparison, and making qualitative
comparisotrs rvith or quantitative adjuslments to the sale p ces (or unil pric€s, as appropriate) ofthe comparable
properties based on relevant, market-derived elements ofcomparison. (The Dictionary of Real Estate ADDraisal.
Fifth Edition, Page 175.)
The major premise within this approach is that the market value ofthe subject property is directly
related to the prices of comparable, competitive properties. Furthermore, this valuation method not
only assumes that both buyer and seller are fully informed about the property, but also that both have
general knowledge ofthe market for that type of property and that the property has been exposed in
the open market for a reasonable time.
The comparable market data which is submitted in this report, in our opinion, suggests that the best
unit of comparison for the subject real estate should be sale price per square foot with a "check on
value" considering price per potential housing unit.
The application of this unit ofcomparison produces an estimate ofvalue for a property by comparing
it with similar properties of the same t)?e and class which have sold recently in the same or
competing areas. The analyical processes utilized in determining the degree of comparability
between two properties involves judgment as to their similarity with respect to many value facton
such as location, date of sale, physical characteristics, and terms of sale. The sale price ofthose
properties deemed most comparable tends to set the value range for the subject property. Further
consideration ofthe comparative data indicates a figure representing the value ofthe subject
property, that is, the probable price at which it could be sold by a willing seller to a willing buyer as
ofthe date ofthe appraisal. The data involved in the application ofthis process concems these
comparable properties as well as the subject property, and this data will vary with the type of
property. Four categories of data, however, are basic and apply regardless of the type of property.
They are:
l. Sales prices of comparable properties.
2. Conditions influencing each sale.
3. Location ofeach property.
4. Description of each comparable property.
HACI l0l E-0l.wpd llot.h lpptunol & ContuhirA,lnc 49
SALES COMPARISON APPROACH TO VALUE
Based upon the previously discussed highest and best use analysis of the subject property,
comparable property sales with similar highest and best uses were gathered and analyzed from the
area. We believe these comparable sales best represent the subject property with respect to location,
size, intended use, and other major characteristics.
Research revealed a number of land transactions in the area available for comparison to the subject
real estate. Property sales we regard as most pertinent for estimating the subject's value are
summarized in the fact chart below. Additional facts and comments pertaining to these sales are
located in the Addenda ofthis report.
Intended
Use
(Detrsity)
S.le
Price
Per Sq. Ft.Locstiorl Zoning
Srle
No.
Sale
Date
Size
(Sq. Ft.)
r 0/10
8/ l0
12t08
4 /08
t/08
I
2
3
4
5 o
PUD 46,436 $18.52
PUD 115.432 522.74
RR-B-I 365,382 $4.65
R-5 149,4t0 $6.36
185,r 30 $4.59
Senior Housing
53 t0 t6th st. w
St. Louis Park, MN
5300 Woodhill Rd.
Minnetonka, MN
3100 Chestnut St. N
Chaska, MN
120 Apa ment
Units
(t t2.5'l
Units/Acre)
Senior Housing
62+ Units
(23.4+
Units/Acre)
875 Wayzata Blvd.
O.ono, MN
925 Airport Rd.
Waconia, MN
48 Apartment
utrits (13.99
Units/Acre)
58 Apartment Uoits
( 13.65 Units/Acre)
HACI l01E{l.wpd otch,4 pprabol lL CoB/hina. In..50
Sales Comparison Approach to Value - Continued
COMPARABLE LAND SALES FACT CHART
RR 155,9452ltt
(drte of
vslue)
High Density Resideutisl
Development
(8-16 Uoit Acrc)
Sub- 1620 atrd 1660 Arboretuo Blvd.jcct CharhasEstr, MN
2
Sales Comparison ADproach to Value - Continued
Characteristic differences between a comparable sale and the subject might require adjustments to
increase the reliableness of a given sale as an indicator of value for the subject. Elements of
comparison which may warrant adjustments include real property rights, financing, conditions of
sale, buyer expenditures immediately after purchase, market conditions (time), and various physical
characteristics, such as location, zoning, development stage, size, shape, topography/soils and others.
An explanation of adjustrnents, a comparable sales location map, and a chart demonstrating our
adjustment analysis follow.
Property Rights Conveved - This adjustrnent compensates for differences between the property
rights conveyed within each of the sales and the subject's property rights being appraised.
Because fee simple property rights were conveyed within all of the sales, and the subject land is
to be appraised in fee simple, no measurable adjustments were required for property rights
conveyed.
Financing - The financing adjustment considers any favorable or unfavorable financing present
within the sales that may have affected the purchase price paid. There is a general tendency for
buyers to pay higher prices for below-market financing and lower prices for above-market
financing. All sales involving financing at above- or below-market terms are adjusted to reflect
a cash-equivalent price. Each of the comparable land sales cited is an arrn's length transaction
involving either cash payment, cash-equivalent financing, or contract lerms which offset
otherwise non-market financing.
3. Conditions ofSale - considers various t)?es of extenuating circumstances such as buyer or
seller motivations and opinions at the time of sale, which may have impacted the sale price. No
unusual motivations or conditions are known to have impacted any ofthe comparable sales
analyzed; hence, no adjustmenls were made to the sales for conditions ofsale.
4. Buyer ExDenditures Immediately After Purchase - This adjustment compensates for any
expenditures required by the buyer to clear the site for development. Such expenses may be
related to environmental, legal, demolition, and other issues associated with a purchased
property. An informed buyer would discount the asking price by the amount of the anticipated
expenditure if an equally desirable property without additional expenses was available at the
same asking price. Sale # I had $ 175,000 in soil corrections required that were known by the
buyer as ofthe date ofpurchase. Since the subject property has stable soils suitable for
development, Sale #l was adjusted upward for its inferior soils that required significant buyer
costs immediately after purchase. No other buyer expenditures were necessary.
HACI | 016-0l.wpd Bch Apprubal & Cons t,t,lnc 5t
I
Adiustments
5
Adiustments - Continucd
Market Conditions (Time) - is included within the adjustrnent process for the purposes of
considering any changes within the market (either positive, negative or stable) due to the
passage of time and differences in buyers'/sellers' attitudes toward the real estate market in
general between the dates of the comparable sales and the date of valuation. Demand for well-
positioned vacant land parcels has slowed since 2007, as evidenced by recent sale activity and
stalled development; however, multi-family sites with potential for senior housing elements
have maintained their positions although the environment for obtaining project financing has
gotten more diflicult. Given these circumstances, and the subject's location, zoning/guiding that
would be conducive to multi-family development with potential for senior housing, we have
made no measurable adjustments to the comparable sales between January 2008 and the
February 201 I date ofvaluation for market conditions.
6. PhysicalCharacteristics
Location - A location adjustment considers differences in surrounding land uses between a
comparable and the subject, and their positions relative to paths of development, traffic
counts, views, area amenities, and other situate characteristics. The subject site is in a
growing area of Chanhassen adjacent to a large desirable local park. Sales #l and #2 are
in-fill redevelopment sites located in areas ofhigher population density closer to area
amenities and received downward adjustments overall. Sale #3 is located in a less-
traveled area adjacent to the Luce Line trail that also backs up to new Highway #12.
Overall, Sale #3 is viewed as slightly inferior to the subject due to less visibility and more
circuitous access. Sale #4 is located in an area of lower population density on the edge of
Waconia in a growing area, requiring an upward adjustment. Sale #5 is located along
Highway ti4l in a vibrant commercial area of Chaska that also backs up to Lake Jonathan.
Sale #5 is viewed as slightly superior to the subject overall and required a slight
downward adjustment.
Zonine - Potential land uses and performance requirements are often dictated by local
zoning codes and are legal limitations on development opporhmities. ln this section, we
have focused more on guiding than current zoning, as most area property is sold based on
the end use of the property. The subject property is guided for high-density residential
(ranging from 8 to 16 units per acre according to Chanhassen), which is not considered
high-density residential according to our market research. The comparable sales range in
density between approximately 13.65 and I 12.57 units per acre. As the number of
housing units per acre increases, the more one can pay per acre ns higher density results in
more dollars in finished housing. This relationship is clearly shown by reviewing the
prices paid per square foot for Sales #l and #2 which generated I 12.57 units per acre and
23.4+ units per acre, respectively. Sales #1 and #2 required significant downward
adjustments to account for their superior zoning, while the remaining sales were viewed as
similar to the subject in zoning/guiding as of their dates of sale.
uotch Appruisol /! Co,suling, Inc 52
Sales Comparison Approach to Value - Continued
HACI l0lt-01.*pd
Adiustments - Continued
6. Physical Characteristics - Continued
Development Staqe -There is a continuum in the development ofland, which begins at
the raw stage and ends at the hnished retail stage at which the site is ready for
construction ofan improvement. The majority of sales occurring in the marketplace are
either large raw acreage sales or sales of finished sites. In the early stages of
development, the owner/developer spends time planning and engineering the property to
obtain concept plan, preliminary plat, and then final plat approvals prior to even breaking
ground. As the property moves closer to its finished retail stage, the level of risk and cost
associated with developing such a property decrease and a potential buyer is, therefore,
willing to pay more. This adjustment also compares the availability and status ofutilities
between the comparable sales as oftheir dates ofsale and the subject site when valued.
Availability of common utilities such as water, sewer, electricity, natural gas, and
communications cable impacts the price a buyer will pay for land. Parcels lacking one of
these services will typically be discounted to compensate for attaining the service or a
suitable replacement.
The subject is located on a newly constructed paved roadway with all municipal trunk
utilities available. All five sales were similar as of the dates of sale and did not require
any measurable adjustments.
Size - This adjustment is important particularly when significant differences arise in size
between the subject and a comparable sale. The general tendency of the market is to pay
higher unit prices for smaller parcels than for larger ones. This is because ttre larger the
property's size, the longer it will take to develop and sell off the finished product. The
buyer/developer needs to build in a minimum return on the initial investment over the
projected sell-offperiod, recognizing that return ofthe initial investment will be generated
over the absorption period, which is often years after the raw acreage was purchased.
Since size does impact price in this market sector, we have recogpized differences in size
between the comparable sales and the subject. Sales #l and #2 werc smaller than the
subject and required downward adjustments, while Sales #3 and #5 were larger than the
subject and required upward adjustments. Sale ll4 was similar in size to the subject and
did not require adjustment.
Shape - considers the suitability of a parcel's shape compared with the subject. The
market tends to pay more for rectangular-shaped parcels than inegular-shaped parcels of
similar size. This is because oftentimes irregular-shaped parcels are more difficult and
costlier to develop. The subject property consists of a rectangular-shaped parcel which
will be easy to lay out for development. Sales # I , #2 arLd #4 share similar shapes and did
not require adjustment, while Sales #3 and #5 are irregular in shape and required upward
adjustments.
Hosch lpproisol & Cons*ins. lnc 53
Sales Comparison Approach to Value - Continued
tlAC I l0l8-0l.wpd
Sales Comparison Approach to Value - Continued
Adiustments - Continued
Toposaphv/Soils - adjusts for differences between the topogaphy/soils of the
comparable sales in comparison to the subject. Severe slopes and poor soils can mandate
ineffrcient land plans and increase development costs compared to level parcels with
stable soils. Raw land parcels that possess additional acreage that may not necessarily be
buildable for housing generally sell at a premium on a per acre ofusable land area basis.
All other things equal, sites with additional open space acreage oftentimes provide an
amenity for the upland areas to be developed and may allow for some density shifting.
The subject property has rolling topography and assumed stable soils, which is similar to
all of the sales from a development standpoint. Sale #5's location adjacent to [-ake
Jonathan has already been taken into account in the previous location adjustment.
Therefore, no adjustments were necessary.
Other - considers any other differences between a comparable sale and the subject that the
appraiser believes would influence value that are not applicable to a previous category.
No measurable other adjustrnents were identified nor required when comparing the
comparable sales to the subject.
HACI l0l8-01.epd Hosch App.aitol ll CoE ul.idt.lrc 54
6. Phvsical Characteristics - Continued
',I \
4
o
-
COMPARABLE LAND SALES MAP
HACI l0lE{Lwpd Hosch Appraitol & Co8thirg,lac 55
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Before adjustments for differences, the aforementioned sales indicate a range ol$4.59 per square foot
to $22.74 per square foot for the subject land. After adjustments, these sales indicate a range of$3.34
to $7.39 per square foot, with an average of$5.51 per square foot. All ofthe sales have
characteristics in common with the subject property and contributed to a value indication after
completing the adjustment process. Sales #3 and #5 are viewed as most comparable to the subject
property and received more weight, with Sale #5 viewed as most comparable even though it is the
oldest sale of the five and one could argue that it closed during a stronger market environment. The
adjusted prices ofSales #3 and #5 are $5.35 and $4.48 per square foot, respectively, and average
$4.92 per square foot. We have placed less weight on Sale #l and #2 since they required sigrificanl
downward adjustment even though they closed within six months ofthe date ofvaluation and show
that there is still demand for well-positioned multi-family residential parcels.
155,945 square feet @ $5.OO/square foot s779,725
Rounded to:
$780,000*
This land value estimate assumes that all future development costs are paid in full by the buyer of
the subject land,. We are aware that the subiect pruperty has various title encurnbrances that
limit its use. Following direction from our client, and pre-approval from Mn/DOT through
correspondence with Mr. Keith McMuway on February 14, 201I and telephone contact n'ith
Mr. John Mascari on February 15, 2011, the subject propefi's lee simple interesl has been
appraised under the hypothetical condition lhal no encumbra ces exist
HACI l0l E4l.wpd Ilosct,lpproisol & Consulnrt. llc 57
Sales Comparison Approach to Value - Continued
Adiustments - Continued
Therefore, after reconciling the adjustment process, it is our opinion that the subject land has a
market value of approximately $5.00 per square foot "as is".
REASONABLE EXPOSURE TIME
Exposure time can be defined as the estimated length of time the property interest being appraised
would have been offered oo the market prior to the hypothetical consummation ofa sale at market
value on the effective date of the appraisal; a retrospective opinion based on an analysis ofpast
events assuming a competitive and open market. Reasonable exposure time can differ from actual
exposure time. For example, a property may have been exposed at $ 1,000,000 for two years, which
informed market participants considered unreasonable. Then the owner lowered the price to
$900,000 and began receiving offers, resulting in a transaction at $800,000 six months later.
Although the actual exposure time was 2.5 years, the reasonable exposue time at a value range of
$800,000 to $900,000 would be six months.
We have researched exposure time for properties similar to the subject property by reviewing
information gathered through sales verification and having discussions with various market
participants (such as brokers, buyers, sellers, etc.).
After reviewing the national and local data, and having discussions with participants in the
marketplace, it is our opinion that a reasonable exposure time for the subject property at our
estimated market value would be up to 12 months.
HACI l0l8-0l.wpd Ilosch lpprabol & Co^srbins,Inc 58
QUALIFICATTONS OF STEPHEN T. HOSCH, MAr
Bom and raised io Columbia Heights, Minnesola, aod gradualed from Columbia Heights High School. Attended St, Cloud SIare
University and graduated with a Bachelor of Science degree in Real Estat€ with an emphasis in appraisal.
Successfully completed numerous real eslate appraisal courses offered by the Appraisal lnstitute, as well as attended several seminars
covering specialized appraisal topics, some of*hich are highlighted below:
Annual IREM - 2010 Annual Forecast January 2010
Annual RERC - Irdustry Forecasl: 2009 January 2009
4' Annual Minnesota Land Development Conference - May 200E
l0'h Annual Real Estate Trends Seminar - May 2008
Atrnual RERc-lndustry Forccast: 2OO7 ln vry 2007
Eminent Domain - November 2006
Land Development & Redevelopment Conference May 2006
Annual RERClndustry Forecast: 2006 - January 2006
22"d Aonual Real Estate Institute - November 2004
Mortgage Foreclosures in Mil[esota March 2004
Real Estate Outlook for 2004 - December 2003
Legal Issues in Valuation March 2003
Member Institute ofBusiness Appraisers (lBA)
Member - Minnesota Shopping Cenler Association (MSCA)
Hosch Appraisal & Consulting, lnc., Minneapolis, Minnesota
Presidelt, February 2005 - present
Duties and Responsibilities: Prepare professional valuations and market analysis ofreal estate, businesses and intaogible property
rights. Real estate assiglmells involve nufierous types ofcommercial, multiple family, industrial, and special purpose properties
as well as land subdivisions, bulk acreage and proposed developmenls. Business valuatior aod consulling assignments have
included both operating and holdillg companies. The specific purposes ofthese assignments have included highest and best use
studies, mortgage financing, condemnation, lax abatemetrt proceedings, feasibility analysis, investme,lt counseling, potetrtial sales
and purchases, lease and .ental aDalys€s, bankruptcy proceedings, charitable donations, intemal malagemena decisions, special
assessment appeals, gift tax, and allocation ofpurchase price. Court experience involves testirying at commissioner hearings,
depositions and trials, preparation of affidavits, and providing Iitigation support. Qualified as a cou.t-appoinled commissioner in
Wright County.
Shenehon Company, Minneapolis, Minnesota
Senior Vice President - Director ofReal Estate, November 2003 - ,anuary 2005; Shareholder
Senior Vice President - Co-Director ofReal Estate, September 2002 - November 2003; Shareholder
Vice President Co-Direcior ofReal Estate, April 2001 September 2002; Sharehotder
Appraiser/Analyst from June l99l to Ma.ch 2001
59
BiograDhical Dsta and Education
ProfessioIlal Qualifications or Associatiorls
Certified General Real Property Appraiser
Licensed Appraiser State ofMinnesota, License #4002903, Expires August 31,201I
Member Appraisal Ilstitute (MAI) Holding MAI Designation
The MAI membership designation is held by appraisers who are experienced in the valuatioD and evaluation of commercial,
industrial, residential and other types ofproperties, and who advise clients on real estate ioveslment decisions. MAI members
are the preferred choice among lawyers to serve as expert witnesses in trials, hearings, and othet litigation matters.
The Appraisal Institute conducts a mandatory program of continuing education for its designated membe.s and also requires
that they comply with the requirements ofthe Code ofProfessional Ethics & Standards ofProfessional ApPraisal Practice of the
Appraisal Institute. MAI's and RM's who meet the minimum standards ofthis program are awarded periodic educational
certification. I am currently certified under the Appraisal Institute education program through December 3 I, 201 I .
Professional ExDericnce
QUALIFICATIONS OF STEPHEN T. HOSCH, MAI - CONTINUED
"Appraisal Issues in Litigation," vrrlous Mhne.polis Law FirEs, December 2007
"Creative Opportunities in the Current Real Estate Market," v.luatior viewpolnt' SEmmer 2004
"Business Components and the Valuation ofReal Estate," Valurtion Viewpoilt, Winter 2004
"Challenging Issues in Commercial and I[dustrial Valuation," Com6ercial Rerl Estrtc FiDrrcing Cotrfcrerce, M.rch 13,2002
"Malket valuation & Appraisals," MiDnerot. ComEercial Assochtion of Rerltors, Jmurr! 22,2002
"Fundamentals ofSpecial Assessmenls in Appraisal," Veluetiotr Vietpoirt, Sprirg 1999
"A Perspective otr Subdivision Appmisal," v.lurtio! viewpolrr, witrtcr 1997
Larkin Hoffinan Daly & Litrdgren
Levatrder, Gillen & Miller, P.A.
Lindquist & Vennum
Malke$on Gilliland Martin LLP
McGrann Shea Andersor! Camival Skaughn & Lamb
Merchants Batrk, N.A.
Messerli & Kramer P.A.
Metropolitro Airpons Commissior (MAC)
Mtrnesota Department of Transportation (M DOT)
Minnesota Department of Natural Resources (DNR)
Minnwest Bank
Moss & Ba.nett
MPCA
Nonh Hav€r Ciurch
Olympic Steel, Inc.
Oppenheimer Donnelly & WolffLLP
Osceola Medical Center
Pace Realty Advisors, LLC
Petercon, Peterson & Associates, PLC
Pinn.cle Comfi ercial Capital
Pipesto[e Couoty
Rosemouat National Bank
Roseville Area Schools
Sovereign Bank
Speedway SuperAmerica
State Bank ofHamel
Steams B.nk
The Busitress Bank
Three Rivers Park Dishict
URS Co.poration
U.S. Bark
Vic's Crane & Heavy Haul
Village Bank
Warchol Law Office
Wells Fsrgo/RETECHS
Wilcy Enterprises
60
Author/Co-Author or Guest SDeaker of:
Partial Cli€nt List
Accent Homes
Allied Wastc Industries
Allina Hospitals & Clinics
Ames Construction
Aochor Bank
BPK&Z
Best & Flanagan, LLP
Brcmer Bank
Briggs aad Morgao
Boundary Waters Bank
Builders Development & Finance
Capmark Finance, Inc.
City of Ardetr Hills
City ofEagaD
City ofFargo
City ofNew Hope
City ofOsseo
City of Shoreview
City of Victoria
Dennis P.operties
Fabyanske, Westra & Hart
Falco[ National Bank
Fargo Public School District No. I
Fredrikson & Byron P.A.
Garith Anderson Trucking
Geneva ManageItrent Services
Gopher Resources
Gregerson, Rosow, Johlrsoll & Nilal, Ltd.
Grossman Investments, LLC
Hajek & Beauclaire, LLC
Harstad Development
Herlnepio Couaty
Henson & Efron
Hinshaw & Culbertsotr LLP
Home Federal Savings Bank
James M. Neilsoa, Attomey at Law
ADDENDA
2O3O COMPREHENSIVE PLAN EXCERPTS
2.5.' RESIDENTIAL - MEDIUM DENSITY
Thc mcdium &nsity dcsignation is inrcndcd to rccommodarc muldplc units ioduding duplcxcs,
townhouscs and lowcr dcnsity rpenmcns, or condominiums. A nct dcnsity nngc of 4.0 - g.O
units F acrc is covcrcd by this catcgory wirh an cxpcctcd dcnsiry of6.0 units pcr acrc. Thc zoning
optioos in rhc mcdium dcnsiry lud ur includc R{ (Mixcd Low Dcnsicy), RLM (Rcsidcnrizt
I-orv and Mcdium dcnsiry), (Mixcd Mcdium Dcnsiry Rcsidcntid) and PUD-R (Planncd Unitcd
Dcvclopmcrrr-Rcsidcntirl). Mcdium dcnsity is vicwcd as rnnsitiond usc bctwceo low dcnsity end
commcrcid, officc or high dcnsity arvas.
2,'..I RESIDENTIAI HIGH DENSITY
Thc high dcnsity cztegory includcr unirs with a dcnsity nngc of8-16 unirs Jrcr acrc accommodating
apanmcno and condominium unis. Mthin this catcgory, an avcngc dcnsiry of I O urtits Fr
acrc is uscd for land ur prolcctirons, Thc zoning options in thc high dcnsity lend uscs includc R-8
(Mixcd Mcdium Dcnsiqv), R-I2 and R-16 (High Dcnsiry Rcsidcntial), and PUD-R (Planoed Unitcd
Dcvdopmcnr-Rcsidcnrid). High dcosiry is lotd on major transporrarion corridors rhat include
rnnrit, commcrcial ccatcrs and cmploymcnt ccntcrs.
2.0 - ttDU$Tnm LiltD uu
In thc las l0 ycars, thc Ciry has addcd ovc 3.2 million squ.rrc fcct ofcommcrcial and industrial usc.
Thc City enricipatcs ro eccclcrrtc industriel dcvtlopmcnt wirh rhc complcrion of Highrvey 212. Thc
Ciry has historielly sccn rhc &rdopmcrrr ofolhcc/indurtrid rypcs urs. Thc Ciry has reduccd thc
officc/indusnial land usc and crtatcd mort officc guifing in rhc 2030 y'an. Thc appropriare zoniog
6r this land urc includcs IOP (lndusrial Officc Ert) and PUD (Pbnncd Unir Dardopmcnt-
Offcc/lndutrid).
2.? - C0Hlncilt [A]tD [sl
Thc Ciry has neinoincd r long-standing policy ofdirccting commqcid doElop.ncnt ioto rhc
Ccntnl Busincsr Disrrict- Chanhasscn hisoricdly hel and meintains an activc busincss communiry.
\$fidr rhc consrruction of Highwey 3 t 2, drc Ciry rcught thc opponudry ro ic-craminc commcrcial
opponunitio ousidc ofthc downtown corc. Thc City, in panncrship wirh rhc Chembcr of
Comrncrcc, cootracrcd rhc lvlcComb Goup, Ltd. m study thc Cityi rrtail oppomrnitio. Thc
srudy found that thc Ciry could suppon a potenrial rcgional mall md continuc ro havc a hcalthy
downtown busincss dinric. Thc City cootractcd with SRF Conrulting Group to &vdop differcnt
commscid sccntix. Thc City will bc rwising thc commcrcial land urc and zoning dis:ricts to
pmvidc 6r dditiond commcrcid adiaccot to thc do,vn:own end for a rcgiond mell/li@c ccntcr.
Thc pcrccntqc ofcommcrcial lend usc hru doubhd in thc 203O plan. Following arc thc ocw
zoning dinricrs. Thc City zooing ordinaooc lr.ill bc emcndcd to crcetc thc dcvclopmcnt standards for
thcsc disrrics.
l i lilmlsl Citl of Cbonhawt .2030 Comprkwiw Phn
A-l
2.T'3 COMPREHENSIVE PI.IIN ZONING MAP INCONSISTENCT
Rcgardless ofa propeny's land use designation, propertics not scrvcd by utban scrvices shall not
be rczoncd to a zoning category consistent with the land use designation until slch dme a5 urban
services arc eveilablc. Currcnt zoning ofa parcd with a lcss-inrcnsivc land use dcsignation may
rcmain. Intcosi6cetion of lrnd uscs maf only beppcn rvi& thc provision of urban scrviccs.
2.T3.4 MAXMUM USE OF AII.OWABLE DENSITY
Bascd on thc Ciryt housing goals and panicipation in tlrc Livable Communitics Acr, thc City has
thc right to dcny any projecr that does not mcct thc minimum densiry dlowed in thc land usc
designation. Rcasoos for denid include deviarion Fom Cit/ requiremcn$, or off-scning the goals
ofthe Ciry. Additiondly, dre Ciry may provide for a densiry bonus 6t thc ptovisioo ofafordable
housrog.
2.I{ MUSASIAGING
Thc City will bc fully devdop.d b,2020. It is antic.ipated drat in6ll and rcdc"dopment will takc
placc becwcen 2020 and 2030. Thc lift sation planned approximatdy in thc year 2010 will serve rhc
rcst ofthc dcvclopment aca in &e Gry. A revised phzsing plan is bcing poposod in orrdcr to providc
cnough devdopable land for dre consrruction ofdrir lift station. Bccausc ofthc number oflargc lot
suMivisions in thc soudrcm ponion of thc Gty, rhe phasing plan will bc modificd to 2010 and 2015.
2.t5 - Goil$&P0ilCIlS
l. Goa4 Achicvc a mixnrrc of dwelopmenr which will assurc a high qudiry of lifr and r rdiablc tar
basc.
Pohcies
. Dcvelop and maintain the Ciryt land usc plan so it is udlized as a fundamcntd tool for
directing the communiryi growth.
. Rccognizing some uses pay their way in tcrms of rhc properry taxes thcy gcncratc and some
uses do not. Chanhassen will *rive for a mirrurc ofdcvdopment whidt wil assuc irs
Goancial u,ell being.
. Dcvclopment will be encouraged widin rhe MUSA linc and at thc samc timc Chaohassen
will plan thc reasonablc and orderly erpansion ofthe MUSA line to mcct its nccd for
addiriond dev€lopable [end.
. Encourage low dcnsity residential developmcnt in apprcpriatc arcas ofthc communiry in a
manncr thar rei-oforces thc characrer and integrity of cxistlng singlc-Emily ncighborhoo&
whilc promodng dr esablishment of ncw ncighborhoods of similar qudity.
Thc plan should seek to establish sufficicnt land ro providc for a full rangc ofhousiog
opportunitics. Thcsc opponunities rcqufur thar adcquatc land be dcsignatcd for mcdium and
highicnsity land uses- The City will scek to discouragc the convcrsion of thcsc acas to lovrcr
CiE of Cbartassca . 2030 Comprcbcrstuc Plzt HilISI I 2.r3
A-2
dcnsirT uscs to cnsurc that drc goal ofhousing divcrsity cao bc mct regaodlcs,s oftcmporary
markct fuctuations.
. Chanhassen will cootinuc to cncouragc thc location ofcommcrcial uscs in the ccntral
busincss district. Commercial devclopmcnt outsidc thc centrel busincss district and its fringc
should complcmcnt rhe C-entral Busincss Disrrict.
. The Cit), will eocouragc th< devclopmcnt ofneighborhood scrvicc centcrs whcrc appropriatc,
Thesc may be dwcloped as a part ofa mired-use devclopmcnt or a PUD. Dcvelopmcnt of
uaplanned and srip commercid cenrcrs shdl bc discoungcd.
. Planncd industrid and o6cc devclopmcnt will bc encouragcd as a mcans ofstengthening rax
base gromh and crcating new employmcnt opportunirics. lt is bclievcd drat planncd growth
can and should bc dcsigned to rninimizc environmental neighborhood and tra6c impact.
.'IheCitywillscekoppomrnitiescoprovidetransitionsbetwecndifretentuscsofdilfrtcnt
rypes; the morc incompatibic to thc neithboring uses, thc morc imponznt th€ tr osition
zone. For o<amplc, natuml features may provide good transitions berwten incompatiblc
uses or uses ofmoderare intensity. Thc land Usc Plan also sceks the establishmcnt ofbufcr
yatds which represent arcas ofincreascd sctback wherc a dcvclopcr will be rcquircd to install
landscaping and berming to oIGr improved scpaiation ofincornpatible uses.
. Dcvclopment should be phased in accordancc with the abiliry oftlre Ciry to providc services.
Devclopmcnt should occur :n arcas wherc scrvices are arailablc bcforc ertending scrvices to
new ereas.
Development should be planned to provide adeguate ioternal strcet linlagcJ. 'lhe land use
shoutd also scek to dircct growth in a manner that makcs rhc most efficicnt use ofthe arca's
highway rystcm. Devclopment should be planncd to avoid running high treffic volumes and/
ot nonresideotial rtafic through r€sidcndd neighborhoods.
The Land Use Plan will be urilized o frcilitate the Cicyt efforts to anticipate futurc necds flor
open space, oads, garlo, rhools, utilities, ctc., and makc adcquatc provGion for them prior
to the time they are nceded.
. Areas outside drc MUSA shall be prescwed as an agricultura.l zone or used to suppon very
low dcnsity developmcnr. k is thc Ciry's policy ro eosurc rhat this area is not prematurcly
developed, The Ciry will discouragc thc erpznsion or consrrucdon of commcrcid and
industrial facilities in this arca.
l:rgc lot subdivisions that do not havc City scwcr or water shall bc allowcd to rcmain as is
without requiring urban scrviccs cveo when thty arc in thc MUSA arca, until thc maiority of
thc rcsideots want/requcst to change their usc. The smdlest lot allowcd in Ihcse suMivisioos
is two and one-halfacres. I:rger lots may be subdividcd if thc lots meer the minimum 2
acrc rcquircment and a suireble location is ardlablc for scptic and weJl.
2 . ll I lli0 lxl Ciry ofChanhascr. 20j0 Comprchcasittc Phn
A-3
. Thc City will maintarn a comprehcnsivc and ugto-dae sct ofordinanccs to cnsurc that
dwclopment is consisrcnr wirh thc plen whilc rcsulting in high qudiry scnsitively designcd
proiects. Ordinanccs should bc rcvicwcd and modificd as ncccssary to improvc lrcrformance
standards for ncw devclopment to cnsure thac they incorporate high quality design, landscape,
ctc Thc PUD Ondioance should dso be rcviewed for simiiar rc-asons.
. The City will scek to work with othcr jurisdictioos to combine rcsources including citie;
counrics, Sourh'We$ Metro Tiznsit, thc school distri<rs and the Starc to coordioate and
collaboratc on mutual intcreso such as a library, public works, collective 'nastc, arts council,
taansit sitc, rEcreation, ctc.
City ofChanharca . 20j0 Comprchcnsiuc Phn LrllD [s[ | 2.r5
A-4
COMPARABLE LAND SALES
Information Source:
Location:
Legal Description:
Date of Sale:
Buyer:
Seller:
Zo t:.g:
Utilities:
Topography and Soil
Visibility and Access
Trackage:
Size:
Sale Price:
Unpaid Specials:
Total Price:
Remarks:
Comparable Sale #l
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Buyer/Public Records
5310 l6th Street West, St. Louis Park, MN
Lot 3, Block l, The Shops at West End, Hennepin County, MN
October 4, 2010
WEA, LLC
Duke Realty Limited Partnership
PUD
All municipal services available
Generally level
Good
None
46,436 square feet, or I .07 acres
$860,000
s0.00
$860,000 ($ 18.52 per square foot)
Arm's leagth and non-distressed sale at undisclosed terms.
Property required $ 175,000 in buyer soil correction costs known
at the tim€ ofsale. Price equals $8,625 per dwelling unit. A
hotel was originally planDed for this site; however, it will now be
developed into a six-story, 12o-unit market rate projecl kBowD as
"West End Apartments".
Public Records, Buyer's Attomey
5300 Woodhill Road, Minnetonka, MN
Lot 2, Block l, Glen Haveu Shopping Center
August 24,2010
Glen Lake Senior Housing, LLC
Christopher Bollis
PUD
Municipal services available
Rolliug, with slope up toward northwest
Good from Woodhill Road and secondarily from Excelsior Blvd
None
I15,432 square feet, or 2.65 acres
$2,625,000
$0
52,625,00O ($22-74 per square foot)
Buyer intends to facilitate development of 62+ units ofsenior
housing (assisted and independent living) known as "The
Glenn", which will open Fall 201 l. This is an in-fill site that
was formerly part ofthe adjacent shopping center that was
partially demolished and parceled off for re-sale.
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Information Source:
Location:
Legal Description:
Date of Sale:
Buyer:
Seller:
Zoning:
Utilities:
Topography and Soil:
Visibility and Access:
Trackage:
Size:
Sale Price:
Unpaid Specials:
Total Price:
Remarks:
ComDarable Land Sale #2
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Information Source:
Location:
Legal Description:
Date of Sale:
Buyer:
Seller:
Zo\ingl
urilities:
Topography and Soil
Visibility and Access
Trackage:
Size:
Sale Price:
Unpaid Specials
Total Price:
Remarks:
Public Records
E75 Wayzata Boulevard, Orono, MN
Lengthy; retained in appraiser's work file
December 31,2008
Community Livirg Pannership, LLC
875 WBW, LLC
RR-B-I
Municipal services available
Rotting with berm up to Luce Line trail, assumed stable
Good from Wayzata Boulevard (now secondary to new Highway
#12 which ruus behind the property)
Formerly trackage adjacent to north boundary now Luce Line
trail (pedestrian/bike trail)
365,382 square feet, or E.39 acres
$ I,700,000
None
$1,700,000 ($4.65 per square foot)
Planned use is senior housing; however, no development has yet
taken place.
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Comparable Lend Sale #3
Buyer/Public Records
925 Airport Road, Waconia, MN
Lot l, Block Q, Interlaken 3rd Addition
April 17, 2008
Interlaken Place, LP
Waconia Group, LLC
R5
AII municipal services available
Hilly/rolling, assumed stable
Good via Airport Road
None
149,410 square feet, or 3.43 acres
$949,991
s0
$949,991 ($6.36 per square foot)
Buyer constructed a 3-story,48-unit apartmert building with
underground parking known as "Interlaken Place Apartments".
Located on edge ofdeveloping area in southem waconia.
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Information Source:
Location:
Legal Description:
Date of Sale:
Buyer:
Seller:
ZoriiDg:
Utilities:
Topography and Soil:
Visibility and Access;
Trackage:
Size:
Sale Price:
Unpaid Specials:
Total Price:
Remarks:
Com Darable Land Sale #4
Information Source:
Location:
Legal Description:
Date of Sale:
Buyer:
Seller:
Zorlir:.gl
Utilities:
Topography and Soil
Visibility and Access
Trackage:
Size:
Sale Price:
Unpaid Specials:
Total Price:
Remarks:
Comparable Land Sale #5
Seller
3100 Chestnut Sheet North, Chaska, MN
Lot l, Block 2, Highland Shores ofChaska 2nd Addition
January 23, 200E
Komovich Development Company, Inc.
K. Hovnanian at Highlaod Shores, LLC
O, Open Development
All municipal services available
Level to gently sloping downward to west toward Lake Jonathan,
assumed stable
Good via Chestnut Street (Highway 4l)
None
185,130 square feet, or 4.25 acres
$850,000
None
S850,000 (S4.59 per square foot)
This site was originally intended to be developed with for-sale
condominiums. A 58-unit apartment complex with three atrd
four story buildings with underground parking is under
construction known as "Highland Shores Apartments".
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