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Appraisal 1-7-05 Mr. Todd Simning Property Located At: Outlot A of Pinehurst Chanhassen, Minnesota File #: 5103 AN APPRAISAL REPORT OF Three Vacant Residential Lots LOCA TED AT Outlot A of Pinehurst Chanhassen, MN AS OF January 7, 2005 FOR Mr. Todd Simning Plowshares Development, LLC 1851 Lake Drive West, Suite 550 Chanhassen, MN 55317 Phone: 952-361-0832 BY Orion Appraisals, Ine. Thea J. Krammer, Appraiser January 19, 2005 Mr. Todd Simning Plowshares Development, LLC 1851 Lake Drive West, Suite 550 Chanhassen, Minnesota 55317 Commercial & Industrial Machinery & Equipment Appraisal Specialists RE: Address: Outlot A of Pinehurst General Description: Three Vacant Residential Lots Dear Mr. Simning: Pursuant to your request, we have prepared a Self-Contained Land appraisal of the above referenced property providing an opinion of the market value "as platted ready for sale" for the purpose of corporate planning. The opinion of value as stated in this report is predicated upon the definition of market value contained herein. Implicit in the definition of market value is that payment is made in cash or its equivalency. The equivalency of cash is conventional financing at bank/institutional rates. The subject property is appraised based upon cash or equivalent financing. The property rights appraised consist of title in fee simple estate. As a result of our investigation we have formed the opinion that the value of the subject property "as platted ready for sale" as of January 7,2005 and based on a marketing period of one year, is: LOT 15: LOT 16: LOT 17: TWO HUNDRED NINETY THOUSAND DOLLARS THREE HUNDRED FIFTY THOUSAND DOLLARS THREE HUNDRED FORTY THOUSAND DOLLARS TOTAL: $290,000 $350,000 $340,000 $980,000 The undersigned certifies that he has personally inspected the subject property and that this appraisal is made subject to certain limiting conditions and assumptions as hereinafter expressed. Facts and information contained herein were obtained from sources that we considered reliable and are true to the best of our knowledge and belief. This appraisal also complies with USP AP and FIRREA standards. The following report describes our methods of approach, contains data gathered in our investigation, and demonstrates our analysis in arriving at our opinion of market value for the subject property. Respectfully submitted, Orion Apprai , Inc. T eo. . Certi d eral Real Property Appraiser License #4003373 ORION APPRAISALS, INC 3495 Willow Lake Blvd. . Suite 100 . St. Paul, MN 55110 (651) 636-1339 · Fax (651) 636-2133 · (800) 274-9677 · www.orionappraisals.com SALIENT FACTS AND CONCLUSIONS GENERAL DESCRIPTION: Three vacant residential lots LOCATION: Outlot A of Pinehurst, Chanhassen, Minnesota PID #: The subject is too new to have its own PID. It is currently a small portion of PID# 25-5590020 PROPERTY OWNER: Nancy Mancino LAND SIZE: LOT 15: 32,093 sf, .73 acres LOT 16: 49,617 sf, 1. 14 acres LOT 17: 45,568 sf, 1.05 acres TOT AL: 127,278 sf, 2.92 acres ZONING: Current: RR - Rural Residential Proposed: SFR - Single Family Residential ASSESSOR'S MARKET VALUE: Too new REAL EST A TE TAX LEVY: Too new APPRAISER'S OPINION OF MARKET VALUE: "AS PLATTED READY FOR SALE" LOT 15: $290,000 LOT 16: $350,000 LOT 17: $340.000 TOTAL: $980,000 DATE OF VALUATION: January 7, 2005 APPRAISER: Thea. J. Krammer, MSA Certified General Real Property Appraiser 3 TABLE OF CONTENTS SALIENT FACTS AND CONCLUSIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 3 TABLE OF CONTENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 4 ASSUMPTIONS AND LIMITING CONDITIONS ...................................... 5 PURPOSE OF THE APPRAISAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 MARKET VALUE DEFINED ................................................... 15 PROPERTY DESCRIPTION .................................................... 16 REAL ESTATE TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 HISTORY ................................................................ 16 ZONING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 ZONING MAP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 METRO AREA DESCRIPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 DISCUSSION OF THE CITY/AREA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 DISCUSSION OF NEIGHBORHOOD .............................................. 27 NEIGHBORHOOD MAP ...................................................... 28 AREA MAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 DESCRIPTION OF THE SITE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31 PRELIMINARY PLAT MAP WITHOUT PLATTED SITES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 PRELIMINARY PLAT MAP WITH PLATTED SITES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34 FLOOD PLAIN MAP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35 HIGHEST AND BEST USE DEFINITION .................... . . . . . . . . . . . . . . . . . . . . . . . 36 DISCUSSION OF SUPPLY AND DEMAND ......................................... 38 LAND VALUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 CERTIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51 ADD END A ............................................................ 52 QUALIFICATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 4 ASSUMPTIONS AND LIMITING CONDITIONS The certification of the Appraiser appearing in this appraisal report is subject to the following conditions and to such specific and limiting conditions as are set forth by the Appraiser in the report: 1. The Appraiser assumes no responsibility for matters of a legal nature affecting the property appraised or the title thereto, nor does the Appraiser render any opinion as to the title, which is assumed to be marketable. The property is appraised as though under responsible ownership and management. Existing liens or encumbrances have been disregarded, and the property has been appraised as though free and clear of existing indebtedness, unless otherwise stated in the report. No easement search has been made or noted except as may be described in this report. 2. Any sketch in this report is included to assist the reader in visualizing the property, and the Appraiser assumes no responsibility for its accuracy. The Appraiser has made no survey of the property. The legal description used in this report is assumed to be correct. 3. The Appraiser assumes that there are no hidden or unapparent conditions of the property, subsoil, or structures which would render it more or less valuable. No soil tests were either requested or made in conjunction with this appraisal, and the Appraiser assumes no responsibility for such conditions or for engineering which might be required to discover such factors. 4. Information, estimates and opinions furnished to the Appraiser and contained in this report were obtained from sources considered reliable and believed to be true and correct. However, responsibility for accuracy of such items is not assumed by the Appraiser. 5. Disclosure by the Appraiser of the contents of this appraisal report is subject to review in accordance with the by-laws and regulations of the professional appraisal organizations with which the Appraiser is affiliated. 6. On all appraisals involving proposed construction, the appraisal report and value conclusions are contingent upon completion of the proposed improvements in accordance with the plans and specifications submitted to the Appraiser for review. As per USP AP Standards 1-4.h; the appraiser must examine plans & specs or equivalent, the anticipated completion time frame and estimated costs of the project. The date of this value is based on a current date and the appraisal is of a property with proposed improvements anticipated to be complete on the current date, this value opinion is developed on the basis of a "Hypothetical Condition - That which is contrary to what exists but is supposed for the purpose of the analysis" . 7. The Appraiser is not required to appear in court or give testimony by reason of completion of this assignment without predetermined arrangements and agreements. 5 8. The market value herein assigned is based on conditions which are applicable as of the date of the appraised value. This market value may be the same but also may vary at a later date due to changing market conditions. It is the Appraiser's opinion that the subject property would sell in an appropriate time period should it be offered on the open real estate market at this time at about the appraised value subject to the appraisal assumptions; but a guarantee of such sale is not implied or warranted. 9. Neither all nor any part of the contents of this report, especially any conclusions as to value, the identity of the Appraiser or the firm with which he is associated, or any reference to the Appraisal Institute shall be disseminated to the public through advertising media, public relations or news media, sales media, or any other public means of communication without the prior written consent and approval of the Appraiser. 10. This appraisal report and its contents must be regarded as a whole and any excerpts from this appraisal cannot be used separately and if used separately, invalidates this appraisal. 11. It is assumed that there is full compliance with all applicable federal, state and local environmental regulations and laws unless in compliance is stated, defined and considered in the appraisal report. 12. It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless a non-conformity has been stated, defined and considered in the appraisal report. 13. It is assumed that all required licenses, consents or other legislative or administrative authority from any local, state or national governmental or private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is based. 14. It is assumed that the utilization of the land is within the boundaries or property lines of the property described and that there is no encroachment or trespass unless noted within the report. 15. No environmental impact studies were either requested or made in conjunction with this appraisal, and the Appraiser hereby reserves the right to alter, amend, revise or rescind any of the value opinions based upon any subsequent environmental impact studies, research or investigation. 16. Although their existence was not observed, hazardous materials, toxic waste or other potential environmental concerns may have an effect on the value of the property. The appraiser is not qualified to detect such influences. 17. This appraiser assumes the site to be free of any and all environmental concerns. 6 18. If the attached appraisal report considers an analysis of existing lease data, this analysis is restricted to the lease terms as provided to the appraiser and not on our review of lease documents. Any review of lease data is also restricted to only economic considerations and not legal provisions or restrictions. 19. The Americans with Disabilities Act ("ADA") became effective January 26,1992. I (we) have not made a specific compliance survey and analysis of this property to determine whether or not it is in conformity with the various detailed requirements of the ADA. It is possible that a compliance survey of the property, together with a detailed analysis of the requirements of the ADA, could reveal that the property is not in compliance with one or more of the requirements of the Act. If so, this fact could have a negative effect upon the value of the property. Since I (we) have no direct evidence relating to this issue, I (we) did not consider possible non-compliance with the requirements of ADA in estimating the value of the property. 20. The date of value in this assignment is after September 11, 2001, the date of the terrorist attacks in New York City and Washington, D.C. These attacks, and the events that have ensued, have impacted the U.S. economy in a variety of ways. In analyzing market conditions in this appraisal assignment, the appraiser has applied the best available means to measure the effect of these attacks and ensuing events. 21. We are disclosing that we are familiar with and have experience in this area and property type. 22. We have been asked to perform this appraisal under the "Hypothetical Condition" that the subject parcels are platted site pads ready to be built upon. This is contrary to what currently exists because the subject is currently unplatted raw land. 23. Acceptance of and/or use of this appraisal report constitutes acceptance of the foregoing general assumptions and general limiting conditions. After the report is complete and delivered, the scope of this assignment is finished. Orion Appraisals, Inc. is available for additional consultation or evaluation work, billed at an hourly rate. 24. This is a Self-Contained Land appraisal and is intended to comply with the Financial Institution Reform, Recovery and Enforcement Act of 1989 (FIRREA) Title XI Regulations and the Uniform Standards of Professional Appraisal Practice (USPAP) of the Appraisal Foundation reporting requirements under Standards 1 & 2 excluding standards 1-4 (b) which calls for the Cost and Income approaches. These approaches are non- contributory to this value estimate since no improvements are on the subject property. 7 I' HAMPTON etropolitan Location m.n ~ Cö I ~ 8 ,. , I ~~ I "'() o ~ "f, <) UTtor au TLO T 2ND- B ADD. ( Photograph Views) PHOTOGRAPHS OF SUBffiCTPROPERTY Subject looking north from west central portion. Subject looking east from west central portion. 10 PHOTOGRAPHS OF SUBJECT PROPERTY Subject looking south :tram west central portion. Subject looking north :tram Lake Lucy Road. 11 PHOTOGRAPHS OF SUBJECT PROPERTY View of private drive looking west. Street scene looking south along Brenden Court. 12 PURPOSE OF THE APPRAISAL The purpose of this appraisal is to provide an opinion of the market value "as platted ready for sale" for the subject property described herein with an effective date of January 7, 2005. The date of the report which indicates the time frame from which all market assumptions were drawn is also January 7, 2005. The estimate of market value is predicated upon the definition of market value contained herein. ESTIMATE OF PROPERTY EXPOSURE TIME Exposure time is defined as the estimated length of time the property being appraised would have been exposed on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective estimate based upon an analysis of past events assuming an open and competitive market. The previous exposure time relating to the value estimate herein has been estimated at six months. This is based on historical sales of vacant residential land throughout the Chanhassen area. INTENDED USE OF THE REPORT Pursuant to the request of Mr. Todd Simning of Plowshares Development LLC, our client, we will provide an opinion of the market value so that this appraisal may be used only for corporate planning. This report is for the sole and exclusive use of the client and their assignees for the above stated purposes. No other use or users of this report are intended by the appraiser. Written authorization must be received from the client before releasing the report to any other party. SCOPE OF THE APPRAISAL The subject of this appraisal is vacant land consisting of three parcels that will be appraised utilizing the Direct Sales Comparison Approach only. This is aSelf-Contained Land Appraisal and is intended to comply with the USP AP reporting requirements under Standards 1 & 2 excluding Standard 1-4(b) which calls for the Cost and Income approaches. These approaches are non-contributory to this value estimate since no improvements are on the subject property. The FIRREA statement list may be found in the addenda. The subject property is appraised under the "Hypothetical Condition" that the parcels are finished lots which are ready to be built upon. The subject property located at Outlot A of Pinehurst was inspected on January 7, 2005. The photographs of the subject included in this report were taken on the date of inspection. The buyer, Mr. Simning was not on the premises at the time of inspection. The site size was calculated by the appraiser after review of surveys and conversations with the project manager Mr. Nathan Fransen. We have considered easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, or other items of similar nature. These items have been reflected in the appraised market value. 13 PROPERTY RIGHTS APPRAISED The subject property was appraised as title in fee simple estate, as a whole, unencumbered, and subject to the contingent and limiting conditions outlined herein. APPRAISAL PROCESS There are three basic valuation methodologies that may be used by appraisers in the estimation of Market Value. They are: the Cost Approach, the Direct Sales Comparison Approach and the Income Approach (if an investment property). These three approaches analyze data from the market to develop an independent opinion of value for the subject. The Cost Approach is based on the premise that the informed purchaser would pay no more than the cost of producing a substitute property with the same or similar utility as the subject property. It is particularly applicable when the property being appraised involves relatively new improvements which represent the highest and best use of the land. The Direct Sales Comparison Approach has as its premise a comparison of the subject property with others of a similar design, utility and use that have sold in the recent past. To indicate a value for the property, adjustments are made to the comparables for differences with the subject. This approach is most applicable when an active market provides sufficient quantities of reliable data and is unreliable in an inactive market. The Income Approach is the procedure in appraisal analysis which converts anticipated benefits (dollars and amenities) to be derived from the ownership into an opinion of value. The Income Approach which is widely applied in income-producing properties anticipates future income and lor reversions and discounts this to a present value through the capitalization process. Normally, these three approaches will each indicate a different value. The final step for the appraiser is to analyze the strengths and weaknesses of each approach and correlate a final opinion of value. This is a land appraisal. The omission of the Cost Approach and Income Approach are customary and complies with USP AP regulations. 14 MARKET VALUE DEFINED The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: 1. buyer and seller are typically motivated; 2. both parties are well informed or well advised, and acting in what they consider their best interest; 3. a reasonable time is allowed for exposure in the open market; 4. payment is made in terms of cash in United States 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. PROPERTY RIGHTS APPRAISED The property rights appraised are of the exceptions. Fee simple is defined as follows: Fee Simple Estate subject to title report Absolute ownership unencumbered by any other interest or estate subject only to the four powers of government. 15 PROPERTY DESCRIPTION The subject property consists of a site containing three vacant residential lots containing a total of 127,278 square feet or 2.92 acres and is located at Outlot A of Pinehurst, Chanhassen, Minnesota. PROPERTY IDENTIFICATION NUMBER AND LEGAL DESCRIPTION The subject property is too new and does not yet have a parcel identification number. It is currently a small portion of PID number 25-5590020. The proposed legal description is as follows: Outlot A of Pinehurst, Carver County, Minnesota CENSUS TRACT 0905.02 REAL EST A TE TAXES The subject is too new and has not yet been assigned real estate taxes. HISTORY The subject is Outlot A of a new subdivision called Pinehurst. The land on which the subdivision is to be constructed consists of23.5 acres and is currently owned by Nancy Mancino. There is a signed purchase agreement dated June 1, 2004 with a purchase price of $6,000,000 and a close date of February 16, 2005. The subject has not sold within the previous five years. ZONING The subject property is currently zoned RR, Rural Residential under the zoning ordinance administered by the City of Chanhassen. However, in the near future it is to be changed to RSF, Single Family Residential District. See the Addenda for the zoning ordinance. DISCUSSION OF ZONING Purpose and Intent of Zoning: The intent of the RR district is to provide for single family residential subdivisions intended for large lot develoments. The intent of the RSF district is to provide for single family residential subdivisions. Permitted Uses: Permitted uses include single family dwellings, open space, and antennas. Conclusion: The subject currently conforms to the existing zoning regulations. When the zoning change takes place, the subject will conform to the RSF zoning regulations. 16 ""''-- { w~",.. or City of Chanhassen Zoning Map RR - Rural Residential District RSF - Single Family Residential District R4 - Mixed Low Density Residential District R 12 - High Density Residential District PUDR - Planned Unit DevelJResidential District PUD - Planned Unit Devel. District A2 - Agricultural Preservation District CBD - Central Business District BH - Highway and Business District BG - General Business District BF ' Fringe Business District BN - Neighborhood Business District lOP - Industrial Office Park District 01 - Office & Industrial District NE - Natural Environment Lake RD - Recreational Development Lake " " \ i /' METRO AREA DESCRIPTION The subject property is located in the Twin Cities Metropolitan Area (TCMA). The core of the TCMA consists of the original seven counties located in the east central region of the state of Minnesota and includes the counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott and Washington, 137 cities and 50 Townships encompassing 3,000 square miles. The major urban cities, Minneapolis and St. Paul, are located in Hennepin and Ramsey Counties respectively. Officially the TCMA now also includes Wright, Chisago, Isanti and Sherburne Counties in Minnesota and St. Croix and Pierce Counties in Wisconsin, bringing the TCMA to a total of 13 counties. Statistics for Pierce and St. Croix Counties have not yet been included in metro data compilations available to us, and are therefore not included in the figures presented herein. The TCMA ranks as the 9th fastest growing large metropolitan area in the U. S. for the period 1990 to 2000, among the metro areas that have a population greater than two million persons. In addition, Minneapolis & St. Paul ranked 15th in largest metropolitan areas in the U.S. according to the 2000 U.S. Census. The metro area's economic base is strong and diverse with no dependency on any single employment industry. Minnesota's seasonally adjusted unemployment rate for May 2004 dropped to 4.3 % from the 4.7 % figure of March 2004, a full 1. 3 % lower than the national average of 5.6 %. The State's Department of Employment and Economic Development reported all regions are predicted to gain jobs over the next six years. Although these indicators provide a tangible signal that a local economic recovery has begun, current projections indicate a full recovery of the jobs lost over the past three years is not expected until the second quarter of 2005. Widespread optimism exists on the part of Twin Cities manufacturing and technology service firms regarding the potential for growth and expansion over the coming year. The new housing market remained strong with the 4,205 new permits in October, 2004, a similar number to the 4,252 new permits in October, 2003. Landlords of office buildings are experiencing a positive benefit from the strong new housing market. 2004 has shaped up to be a year of solid economic expansion for the Twin Cities. Demand is returning for office and industrial space. Renter demand for apartments will return as the economy adds jobs and consumer spending has been the keystone of this economic recovery. The TCMA is home to 19 Fortune 500 companies. These companies represent diverse industries and have generated high paying jobs, provided generous philanthropic support and community leadership, and incubated countless entrepreneurial spin-offs. The number of people employed in Minnesota is expected to increase 15.7% from 1998 to 3.2 million in 2008. Unemployment for the Twin Cities eleven county metropolitan area has experienced consistently lower annual unemployment rates than both Minnesota and the U.S. The chart on the following page shows historical unemployment for the Minneapolis-St. Paul area, Minnesota and the United States. 18 ANNUAL AVERAGE UNEMPLOYMENT TCMA, MINNESOTA AND UNITED STATES Area L 1995 2000 2001 2002 2003 2004 TCMA 2.9% 2.6% 3.2% 4.3% 4.8% 4.2% Minnesota 3.7% 3.3% 3.7% 4.4% 5.0% 4.5% U.S. 5.6% 4.0% 4.7% 5.8% 6.0% 5.4% Minnesota, with a graduation rate nearly 18% higher than the national rate, consistently ranks among the top states in the nation. In 2000, 91 % of Minnesotans aged 25 and older had a high school degree, the third highest rate in the nation. There are fifty-six colleges and universities in the Twin Cities Metropolitan Area, including the University of Minnesota (U of M). The U of M enrolls approximately 60,000 full-time students per year. The population estimate in the seven county metro area in 2003 was 2,740,985, which rose 19.8 % from 1990 figures. MINNEAPOLIS/ST. PAUL POPULATION CHANGES 1990-2003 SEVEN 1990 2000 2003 est. % of Change % of Change COUNTIES Population Population Population 1990 - 2000 1990 - 2003 Anoka 243,641 298,084 313,197 22.0% 29.0% Carver 47,915 70,205 78,444 47.0% 64.0% Dakota 275,227 355,904 375,642 29.0% 37.0% Hennepin 1,032,431 1,116,206 1,139,837 8.0% 10.0% Ramsey 485,765 511,035 515,274 5.0% 6.0% Scott 57,846 89,498 105,196 55.0% 82.0% Washington 145,896 201,130 213,395 38.0% 46.0% TOTALS 2,288,721 2,642,062 2,740,985 15.4% 19.8% Although Hennepin and Ramsey Counties experienced a lower percentage increase in population than the outlying counties, the central cities have seen an increase in population. Suburban growth reflects an overall metro population growth, not a move away from the inner cities, which are closer to capacity than developing suburbs. The trend is expected to continue because the central cities and inner ring of the metropolitan area are highly developed. The Twin Cities are the center for the Upper Midwest's transportation network which includes barge, truck, rail and air transportation. The Twin Cities are the home of six barge lines and are served by over 72 barge carriers. The Twin Cities comprise the nation's seventh largest trucking distribution center with over 100 first class carriers. Minnesota businesses have easy access to over 1.7 million businesses and more than 63 million customers within a 500 mile radius of the Twin Cities. The Twin Cities has opened its first light rail system which connects the CBD of Minneapolis with Fort Snelling, the Minneapolis International Airport and the Mall of America. 19 OFFICE MARKET Sustained recovery in the TCMA commercial office market began in earnest in the first half of2004, evidenced by a market-wide return to positive absorption and declining vacancy in most submarkets. Vacancy rates which peaked at 18.2% in 2003 dipped slightly to 17.6% in 2004. Although rental rates declined slightly during the first half of 2004, signs are pointing to the start of a multi-year recovery in the Twin Cities office market. The following lists the office market vacancies among all TCMA sectors as of first half 2004 based on the July, 2004 edition of the United Properties Outlook: Minneapolis CBD - 20.2%; Northeast - 12.9%; Northwest - 19.5%; South/Airport - 15.3%; Southwest - 16.4%; St. Paul CBD - 25.5%; West - 13.9% Vacancy declined in five of the seven TCMA submarkets during the first half, including the hard hit St. Paul CDB and the large Southwest submarket. The St. Paul CBD saw improvements on all fronts during the first half of 2004 with a positive absorption of 43,897 SF and a decline in vacancy to 25.5 % from 28.2 %. Demand for Class A office space was strongest, including two significant new leases at the Class A Wells Fargo Place. MDEED will be leaving 390 North Robert St. for 150,000 SF of Class A space at the First National Bank building, resulting in 120,000 SF of net absorption in the year end statistics, however they will not occupy the new space until year end. The Southwest submarket regained some lost ground, with vacancy declining to 16.4 % from 17 %. A 47,735 SF gain in positive absorption reinforced the view that the submarket is on the road to recovery, however more work needs to be done to reduce the space surplus, much of which is on the market due to corporate campus consolidations by Best Buy, Wells Fargo and ADC Telecommunications. Another half year of positive absorption, as projected by United Properties, is needed to convince landlords that the recovery is sustainable. New office development remains in check throughout most of the TCMA. A small stream of new product came online in modest amounts in space-constrained areas such as Woodbury and Lake Elmo in the East Metro area and Maple Grove in the West submarket. Even in the face of improving market conditions, developers continue to exercise restraint. Only 250,000 SF of new multi-tenant space, scattered among six different suburban projects ranging in size from 17,885 SF to 72,000 SF, are currently underway, with the majority being pre-leased. Another 500,000 SF or more of positive absorption in the TCMA is within reach within the next six months, resulting in as much as 750,000 to 1 million SF of real growth in occupancy for the year. Landlords will still need to be aggressive in their pursuit of tenants, as the renewed demand will be just sufficient enough to create a frenzy of competition for tenants. 20 INDUSTRIAL MARKET The TCMA industrial market is still recuperating from weak demand during the past several years. Although the economy is exhibiting signs of recovery including job growth, cautious optimism is still the catchphrase. Companies are starting to feel more optimistic despite the fact that vacancy has been rising since 2000 when the manufacturing industry began to weaken and many local jobs were cut, directly impacting industrial real estate. In a survey of more than 160 TCMA manufacturing and technology companies released in March, a large majority said they were likely to make new investments in 2005 in employment, capital equipment and new or expanded facilities. The July 2004 United Properties Outlook summarizes the TCMA industrial market below: INDUSTRIAL MARKET VACANCY OVERVIEW - as of July, 2004 Total # of SF SF % 2003 First Half 2004 Sub-Market Buildings Existing Vacant Vacant Absorption Absorption Northeast 338 28,031,601 4,199,077 15.0% (173,746) 220,931 Northwest 266 22,871,188 2,615,566 11.4% 510,428 (69,213) Southeast 170 14,110,413 2,633,470 18.7% (59,810) 222,219 Southwest 254 21,229,792 4,118,202 19.4% (208,961) (55,744) Total TCMA 1028 86,242,994 13,566,315 15.7% 67,911 318,193 The Northwest submarket is in recovery and it could boast a 10% vacancy this year, down from 11. 4 % . The Northeast's vacancy increased slightly to 15 % even though it saw nearly 221,000 SF of positive absorption. This is a result of 440,000 SF of vacant space being added to the submarket. Half of all of this submarket's vacancies are in the Midway district of St. Paul. The Southeast and Southwest struggle with vacancies of 18.7 % and 19.4 % respectively, however, there are positive signs. Southeast office warehouse (typically 7,000 + SF, 16' - 24' clear ceiling height, 120' - 160' bay depth and 10% - 40% office or showroom) absorbed 213,625 SF while Southwest office showroom (typically 3,000 + SF, 12' - 16' clear ceiling height, 80' - 120' bay depth and 25% - 75% office or showroom) vacancies dropped to 12.2% from 13.9%. Bulk warehouse (typically 20,000 + SF, 20' + clear ceiling height, 160' - 200' bay depth and 0 % - 10% office or showroom) vacancies are 20.6 % and much of the empty space is a result of downsizing. There are 9.87 million SF of bulk space available in the TCMA. Some of the obsolete product will be torn down or repositioned while other buildings will either be purchased by the users or split off to smaller tenants. Big tenants are looking for bulk space, which will eventually be absorbed. 21 Industrial zoned land is becoming scarce. Some cities that historically accepted traditional industrial development now want higher-finish, higher-image, or higher-density commercial development, forcing industrial developers to look elsewhere. Also, housing developers are acquiring land once designated for industrial development and are able to pay two to three times the price. These factors are making it increasingly difficult for industrial developers to find land. The increasing costs of building materials, especially steel, will force a higher adjustment in future rental rates. Currently, rates are flat and landlords continue enticing tenants with concessions. This must change in order to justify the cost of new construction. A slow, controlled recovery is likely to continue. Much of the recovery will come from growing small and mid-size companies and the expansion of the medical device/bio-tech industry. The TCMA will see speculative development in select markets. Rates will remain flat, but concessions will begin to taper off. The bulk warehouse market will continue to face challenges as big users start taking down spaces. The vacancy rates will likely decrease dramatically. There are also opportunities available for conversion or redevelopment. The prices of steel and other building materials will continue to negatively impact industrial development and force rental rates up. The lack of industrial-zoned land will continue to plague developers. A slowdown may begin in the sale of single-user buildings as fewer properties come on the market, forcing more activity in the multi-tenant leasing market. RET AIL MARKET The Twin Cities retail market continued to flourish in 2004. Retail landlords in the TCMA are faring even better than their counterparts nationally, with a metrowide vacancy rate of 5.2 % well below the national rate of 7 %. Retail follows housing growth, and housing development is still very strong in the Twin Cities. Lifestyle centers and grocery anchored neighborhood centers are driving the retail market. Population growth continues to fuel the retail development in the outer ring suburbs. Grocery operators methodically followed the TCMA residential growth in 2004 while repositioning existing stores with expansion and remodeling. While growth is continuing for traditional grocery chains large and small, much of the new growth in grocery is coming from the Super Centers such as SuperTarget, Wal-Mart, Sam's Club and Costco. It is estimated that 16% of grocery purchases will be made in super-center concepts by 2006. 22 New development appears to be the number one opportunity in 2005. Several new retail concepts entered the market in 2004, including IKEA, CVS Pharmacy, Aldi and Lowe's. Opportunities also lie in redevelopment of existing sites or creating a multi-tenant center from a former big box or single tenant type use. With Frank's Nursery and Crafts', Kmart's, Snyders' and Paper Warehouse's bankruptcy issues, several leases were rejected and landlords were left with large vacant spaces to fill, creating opportunities as well as challenges to fill these spaces. Every five to seven years, retailers must reinvent themselves to maintain interest from shoppers. Renovations and updating continue to be the survival strategy for retail centers, along with adding theme restaurants and movie theaters. An example is the 160,000 square foot Target store which opened on Nicollet Mall in Downtown Minneapolis in 2001. With shopping on two levels, customers enjoy using the vermaport (cart escalator). The store is 1/3 larger than an average Target store. Local regional malls continue to make big changes to remain fresh. Burnsville Center invested in changing the tone of the common areas and making the space more family friendly. Brookdale Mall has completed its reformatting and has attracted new tenants while losing one of their anchors, JC Penney. Rosedale Mall is planning a three part renovation/expansion pending Roseville City Council approval. The plan includes renovation of the former Mervin's store space, a two-story addition for retail shops and restaurants and a two-story theater with 14 screens. RETAIL MARKET OVERVIEW - as of July, 2004 TOTAL # NET 2003 1ST HALF 2004 CATEGORY OF RENTABLE SF VACANT % ABSORPTION ABSORPTION BUILDINGS AREA VACANT RATE RATE Community 84 22,259,153 737,773 3.3% 1,038,016 436,407 Minneapolis 15 1,733,907 197,177 11.4% (3,079) 22,446 CDB Neighborhood 253 15,921,252 1,290,615 8.1 % 519,450 227,179 Outlet Mall 3 788,440 63,609 8.1 % 78,740 (14,580) Regional 9 11,629,012 415,451 3.6% (37,659) (148,708) Specialty 13 1,369,037 58,684 4.3% 354,463 44,542 St. Paul CBD 7 273,650 62,909 23.0% (11,793) 0 Total 384 53,974,451 2,826,218 5.2% 1,938,138 567,286 Retail will continue to follow residential development in urban and suburban markets. Though less construction is coming on line this year due to the two year construction cycle, the pipeline is looking strong for 2005. The outer ring, high growth development will continue as the population increases. The de-maIling, in-fill trend ofthe inner city as well as the big box discount stores will keep the development moving. The grocery and mass merchandise retail categories will dictate the success of the Twin Cities retail market. 23 MULTI-FAMILY HOUSING MARKET Twin Cities metropolitan area population growth is projected to increase by another one million people -- boosting the area's total population to four million by 2030. New household growth will be strongest in the central cities and developing suburbs. In fact, the Metropolitan Council's long-term forecast indicates the Twin Cities needs 17,000 new housing units per year through 2030 to meet demand. Multi-family vacancies were at the highest level in 10 years at the end of 2003 with a rate of 7.6 %. The rate decreased to 7.1 % by the second quarter, 2004, but the physical vacancy only tells part of the story; it doesn't reflect free rent and other concessions offered by landlords. Meanwhile, average rates have remained flat over the past eight quarters, and that's not even reflecting concessions. According to GV A Marquette, 30 of the study's 54 submarkets actually experienced declining rents over the last year. Concessions of one to two months of free rent on a 12 to 13-month lease are still typical among communities with excess vacancy. Vacancies are significantly higher than average for newer apartment buildings. For properties less than five years old, vacancies exceed 17 % in some studies. In some cases, landlords of new luxury properties are offering two or three months of free rent on a twelve month lease, forcing landlords of older properties across the metro to offer the same concessions. Low interest rates and new construction have led to increased home ownership, which has driven apartment vacancies higher. Job growth, which impacts apartment demand to a lesser degree, was flat in the TCMA for months. Now it's starting to make a comeback, and that's offsetting the impact of new construction and low interest rates. Vacancies could dip slightly in the next six to 12 months as job growth continues and fewer new developments come on line. An estimated 2,600 apartment units are now under construction for delivery in late 2004 and early 2005. However, there are few new construction projects in the future pipeline. Interest rates are climbing with no signs yet of a slowdown in home buying. If rates continue to rise, they could take some would-be buyers off the market. Concessions will likely continue across the market, particularly in newer projects. Future apartment demand is expected to come from the Echo Boomers, born between the late 1970's and the early 1990's. Between 2003 and 2008 this group is expected to grow by 12,000 people in the TCMA. Many rental properties throughout the TCMA are being removed from the rental market and converted into condominiums. This trend will likely continue in the near future. 24 SUMMARY OF THE TCMA TRENDS Our strong economy and business sector has helped Minnesota enjoy a high standard of living as reflected in high home ownership rates, great medical services, low crime rates and excellent education. The low interest rates of the last couple of years are a critical, and of ten- understated element of why the most recent recession did not have the impact on landlords and developers that the debacle of the early 1990's. Fortunately for almost everyone, record low interest rates provided lenders with the ability to match falling property cash flows with reduced debt payments. Improving fundamentals in the office and industrial markets in particular may attract more attention from institutional investors. Suburban office properties are likely to remain more in demand than those in the Minneapolis and St. Paul CBD' s where leasing trends remain more uncertain. Overall vacancy rates in both the office and industrial markets are trending down, while the supply of product remains stable. Capital will remain plentiful, as the market for commercial real estate is nowhere near satiated. Investors continue to see the commercial real estate market as an attractive asset class, as opposed to the perceived risks of other investments such as corporate stocks and bonds. Sources: Towle Report, United Properties Outlook, Welsh Market Update, NAIOP Report, GVA Marquette Advisory's Apartment Trends, Metropolitan Council, US Bureau of Census, The Business Journal, Minnesota Real Estate Journal, Minnesota Trade & Economic Development, Star Tribune, Northeast Midwest Institute, Minnesota Department of Employment and Economic Development (MDEED), MSCA Retail Real Estate Report and Price Waterhouse Coopers Emerging Trends in Real Estate. Rev. 12/04 25 MINNESOTA ECONOMICS REPORT Period Current Previous One Two Twin Cities reported period period year ago years ago Consumer Price Index 1st half. '04 186.6 183.6 181.7 179.3 Mortgage rate (Avg. 3CJ.yr conventional) November 5.73% 5.72% 5.93% 6.07% Housing permits. total (13-wunty) November 1.986 2.995 2,158 1.842 Total nonfarm employment (1000s) November 1. 763.6 1.755.9 1.748.6 1.742.6 Total employment (1000s) November 1.808.1 1.803.3 1.760.0 1.768.4 Manufacturing employment (1000s) November 209.4 210.4 204.2 208.9 Service-providing employment (1000s) November 1,468.1 1,456.7 1,447.8 1,449.2 Trade. transport and utilities employment (1000s) November 274.7 268.3 276.9 276.4 Construction employment (1000s) November 85.6 88.2 84.8 83.9 Government employment (1000s) November 238.3 236 237.1 246.7 Trans., warehouse, utilities employment (1000s) November 67.8 67.6 66.9 67.2 Financial activities employment (1000s) November 139.7 139.3 139.7 137.4 Number employed (1000s) November 69.3 73.9 82 70 Unemployment rate November 3.7% 3.9% 4.4% 4.0% Weekly hours, manufacturing November 40.7 41.2 41.8 40.8 Hourly earnings, manufacturing November $17.73 $17.57 $16.87 $16.27 Minnesota Total nonfarm employment (1000s) November 2.708.6 2.708.3 2,682.0 2,682.6 Total employment (1000s) November 2.836,6 2.834.1 2.777.0 2.784.1 Manufacturing employment (1000s) November 349.1 352.4 342.7 351.3 ----------- Service-providing employment (1000s) November 2.209.1 2,202.4 2.196.0 Trade, transport. and utilities employment (1000s) November 442.8 434.7 440 438.3 Construction employment (1000s) November 135 141.1 131.4 128.7 Government employment (1000s) November 408 403 408.4 418.2 Mining employment (1000s) November 5.6 5.8 5.5 6.6 warehouse. utilities employment (1000s) November 93.1 93.2 93.1 95.9 Finance activites employment (1000s) November 176 176.4 177.8 173.7 Number unemployed November 125.3 128 149.6 130.5 Unemployment November 4.2% 4.3% 5.1% 4.5% Weekly hours, manufacturing November 40.3 40.8 41.8 40.6 Housing permits. total November 2.945 4,205 2.997 2.513 Housing permits, single-family November 2.254 2,921 2.200 1,936 Housing permits. 2-4 units November 101 192 198 147 Housing permits. 5,plus units November 48 57 26 29 State unemployment insurance payments (millions) $33.5 $43.9 $55.8 $49.4 Sales taxes. gross receipts (millions) March '03 $273 $307.7 $276.5 $276.3 Individual income taxes (millions) March '03 $452 $407.5 $441.4 $454.8 United States Consumer Price Index November 191 190.9 184.5 181.3 Total retail sales (billions) November 344.4 344 321.2 300 permits, total November 151.399 167.854 127.189 124,513 Consumer revolving credit outstanding (billions) October 788.9 787.7 757.5 738.6 Total civilian employment November 148.3 147.9 147.2 142.7 Unemployment rate. November 5.4% 5.5% 5.9% 6.0% Unemployment rate, year November 16.6% 17.2% 15.5% 16.8% Unemployment rate. females November 4.8% 4.8% 5.1% 5.6% Unemployment rate, males November 4.9% 4.9% 5.7% 5.7% Prime rate November 5.0% 4.75% 4.0% 4.25% Money supply (Ml. billions) November $1:362.7 $1,345.9 $1.283.4 $1,204.5 Money supply (M2. billions) November $6.381.9 $6,348.9 $6,065.9 $5.767.2 Gross domestic product (billions) 3rd qtr.. '04 $11..814.9 $11.657.5 $11,11.6.7 $10,546.5 'Numbers are seasonally adjusted MINNEAPOLIS STAR & TRIBUNE JANUARY 3, 2005 DISCUSSION OF THE CITY/AREA The subject property is located at Outlot A of Pinehurst in Chahassen, Minnesota. Chanhassen is a growing suburban community located 21 miles southwest of Minneapolis. It is surrounded by the communities of Shorewood and Excelsior to the north, Eden Prairie to the east, Shakopee to the south, and Chaska and Victoria to the west. Access to the City is good. It is bisected north and south by State Highway 41, and east and west by State Highway 5. US Highway 169 is located 5 miles east along with Interstate 494 which is 4 miles east. The Minneapolis/St. Paul International Airport is located about 11 miles east of the City. The 2003 estimated population of Chanhassen was 21,600, up 6% from the 2000 census when the population totaled 20,321. Major employers in the City include Rosemount Inc., Instant Web Companies, Super Value Headquarters, General Mills, and Entegris. The City is provided with electrical power services from Xcel Energy Company. Natural gas service is provided by Minnegasco. Recreational amenities available to residents include boat rentals, tennis courts, ballfields, hockey rinks, picnic shelters, 23 parks with 4 miles of trails, 7 lakes, and numerous youth and adult programs and sports. DISCUSSION OF NEIGHBORHOOD The subject is three vacant residential parcels of land located at Outlot A of Pinehurst in an area of mainly residential uses to the north, south, east, and west. The neighborhood could be described as the city limits of Chanhassen to the north, Galpin Boulevard to the east, Long Acres Drive to the south, and State Highway 41 to the west. The neighborhood is currently in the growth phase of its life cycle which is evidenced by new construction to the east and a median housing stock of three years. The subject is located within Census Tract 0905.02. The total population in this tract is 1,340 with a total of 377 families and a total of 383 households. The 2004 estimated median family income for this tract is $146,017 which is considered the upper level. Access to the subject is good with State Highway 41 less than one half mile west. State Highway 7 is located less than one mile north and State Highway 5 is located one and one half miles south. The subject is best accessed from north and south by State Highway 41 and County Road 117, and from east and west by State Highway 5 and State Highway 7. Overall, the subject fits well within its neighborhood. 27 NEIGHBORHOOD MAP C ...J m iñ :i: '" ~ " ::. © 2000 by Rand McNally & Company. All rights reserved. AREA MAP o o :I: ~ .. GHT@1984-1997ETAKINC. © 2000 by Rand McNally & Company. All rights reserved. LOCATION: AREA: SHAPE: BOUNDARIES: FRONT AGE TO DEPTH RATIO: LAND TO BUILDING RATIO: EASEMENTS: ENCROACHMENTS: STREET IMPROVEMENTS: UTILITIES: PARKING: FLOOD DATA: MUSA: VISIBILITY: DESCRIPTION OF THE SITE Outlot A of Pinehurst, Chanhassen, Minnesota 127,278 Square Feet = 2.92 Acres Irregular Irregular See plat map Irregular - See plat map Not applicable Presumed typical utility easements. N one noted. Paving: Curbs: Walks: Alley: Bituminous Concrete Concrete None Electric: Gas: Sewer: Water: Storm: Excel Energy Company Minnegasco City City City Not applicable FEMA Zone C, minimal flood hazard Map number: 2700510005, Map date: 07/02/1979 Located within current MUSA area. City water and sewer are stubbed to the western boundary of the subject. Average 31 TOPOGRAPHY (Physical Characteristics): SOILS: ENVIRONMENT AL FACTORS: The site is currently sloping to the center of the site on all sides creating a small ravine-like topography. At the bottom of the ravine there is a narrow wetland area which runs north and south for nearly the entire length of the site. The site is heavily wooded with single family residences at the western boundary. Access to the subject is available at the western boundary from a private drive which runs east from Brenden Court. The subject would make a good location for three wooded residential lots . We were not provided with soil tests in conjunction with this report. Consequently we are assuming that the subsoil is sufficient to sustain existing or proposed improvements. We have not been provided with environmental assessment reports of the subject site. We are not aware of any environmental concerns that may affect the value of the subject property. 32 Page 1 of 1 Prepared for: Orion Appraisals, Inc. Ii ~v (/ /1 ,I ¡ I 6620 GALPIN BLVD EXCELSIOR, MN 55331 ~ .£ORPOIIArL ~MI1S wwwJnterfloo(:Lcom. 1. -800- 252-6633 Ii 11 ,[.1 ¡ ¡ 11 I 11_ ZONE C ZONE C 0' Powered by Flood $( 877.77.FLOOO www.floodsouroe.c( © 1 999-2002 FloodSource Corp. U.S. Patents Pending. All rights reserved. For more information, please e-mail info@f1ood HIGHEST AND BEST USE DEFINITION The following definition of Highest and Best Use is taken from Real Estate Appraisal Terminology, Byrl N. Boyce, Cambridge, M.A.: Ballinger, 1984, p.127. That reasonable and probable use that will support the highest present value, as defined as of the effective date of the appraisal. Alternatively, that use, from among reasonably probable and legal alternative uses, found to be physically possible, appropriately supported, financially feasible, and which results in highest land value. The definition.. . applies specifically to the highest and best use of land. It is to be recognized that in cases where a site has existing improvements on it, the highest and best use may very well be determined to be different from the existing use. The existing use will continue, however, unless and until land value in its highest and best use exceeds the total value of the property in its existing use. The four tests of Highest and Best Use are those outlined above, i.e. physically possible, legally permissible, financially feasible, and maximally productive. Highest and Best Use for the subject property is examined on an "as vacant" and "as improved" basis. The criteria for the Highest and Best Use for the subject are set forth in The Appraisal of Real Estate, Twelfth Edition, Appraisal Institute, 2001, p.p. 305-327. The following tests must be met in estimating the Highest and Best Use of a vacant parcel: there must be a profitable demand for such use and it must return to the land the highest net return for the longest period of time. These tests have been applied to the subject site and are discussed as follows. AS THOUGH VACANT Physically Possible - One of the first constraints imposed on the possible use of a site, as if vacant, is dictated by its physical characteristics. Size, shape, area and terrain affect the uses for which a site may be developed. Utility of a parcel may depend on its frontage and depth. Consideration must also be made of its potential use rather than its actual use. The maximum use of the land must be determined. As noted in the "Site Data" section of this report, the site contains 127,278 square feet or 2.92 acres. The topography of the site is sloped. All public utilities are available. As of the date of the inspection, the subject site was unimproved. Land uses surrounding the site consist of mainly residential. In summary, the sites physical characteristics, in terms of size, shape and topography permit its current use. The surrounding neighborhood suggests residential uses would be the most compatible with the subject. 36 Legally Permissible - We have considered the uses which are permitted by public and private restrictions of the site. The effect of zoning and the uses allowed by current zoning, or the reasonable probability that a change in zoning could or would be effective within a reasonably probable period of time must also be considered. The subject property is currently zoned RR, Rural Residential with a planned change to SFR, Single Family Residential according to the City of Chanhassen. Uses permitted under these zoning classifications are detailed under the zoning ordinances shown in the Addenda. Financially Feasible - After satisfying the first two tests, and considering the potential uses possible based on the physical and legal limitations of the site, the uses must be analyzed to determine if they are indeed financially feasible. Maximally Productive - Of the financially feasible uses, the use that produces the highest price or value consistent with the rate of return warranted by the market is the Highest and Best Use. CONCLUSION Highest and Best Use, as if Vacant - Based on the preceding analysis and considering the demand in the market, the Highest and Best Use of the subject property is for residential development. Note: A complete highest and best use analysis was not prepared since it is beyond the scope of the appraisal assignment. A complete analysis would include a feasibility study which would thoroughly illustrate area demographics, legal conformity and surrounding land uses, neighborhood growth, and physical capabilities. 37 DISCUSSION OF SUPPLY AND DEMAND Since 1980, the city of Chanhassen has had steady population growth of roughly 700 new residents per year. The city projects the population to continue to increase at a rate of 30 % for every 10 year period for the next 20 years. This likely will translate into strong demand for housing in the city. As of April 2000, Chanhassen was 50% developed indicating there is adequate supply of vacant land for residential development. According to 2004 MLS data, sale prices in 2004 exceeded list prices on average by 58.26% further indicating strong demand for single family housing in the area. The subject is vacant land suited for residential development. It has a good location in the northwest portion of the city of Chanhassen. Upon inspection of the subject's neighborhood I saw numerous signs for the sale of vacant land and homes. Given the previous information and personal inspection of the neighborhood, I presume the supply and demand for the subject property to be at or near equilibrium. 38 LAND VALUE The indicated value for the subject land is $980,000 total. In arriving at the market value of the subject site, we have relied entirely upon the sales and offerings of vacant land. Sales and/or offerings are considered to best reflect the thinking of the typical buyer in the marketplace. This approach, which is referred to as the Direct Sales Comparison Approach, employs dependable sales data available for properties that are truly competitive with the subject property including the terms and conditions of the transactions. It should be realized that there is a wide spectrum of buyer and user motivations and purposes in the real estate field. A comparison has been made on the basis of the subject property having a Highest and Best Use if vacant for development similar to that of most of the comparable properties. In establishing a basis for value, the major characteristics of a site that require analysis include: 1. Physical characteristics: size, shape, dimensions, topography, drainage, etc. 2. Zoning and other public controls: use restrictions, structural restrictions, setback requirements, height limitations, and on-site parking requirements. 3. Location: access, transit, highways, visibility, utilities, capacities, corner influence, costs, and characteristics of surrounding property. 4. Availability: prices of comparable property, financing terms. Precise and specific factual information can be obtained concerning most of the above factors. Some require further analysis. It is in terms of this analysis that standards of what is appropriate, and acceptable, must be developed. The following land sales are considered to provide the best indication of value for the subject property assumed to be vacant. 39 I I I I I /7 J ~ :::...--=1 I I I I I r - --.!!?. - --, r -- - JL2_ - -, '---'@---11 lB' .illL=j' .' tj' '=:-11: ' _,, 1 1 . I 61' 7 8 . I ~i I. 15.120 sf " 15,120 Sf.... 16,485 s, I I I'I I, I II , I I , , /1" L___,12--_J L__-Ti2---...J L---7iJ----.J"> , 17 1~ ~:r ---+-- , .:: ;. ¡ - - ...1<8.....- """"" - 1 - - 1 22,728 sf n nC)/íì¡"\ C- VUI \IU\JL /'\ Ie-' 71)n 14 + ì---~T---I----ì------_ I I I lion vv v I I I I I ¡r- I ICI,n I I I r - - - .!!?. - - - 1 I r "'~. 1: +--- L____ 112---.J ~ I _...J 48 N87°12'20"W --- - õiJn.'ÇT 8 / 47.500 \ / ~ \ /1 \. '" 317 ) -¡-. 0Tf - T.Y06:'O' / \ "- / I / . I m!¡¡ 'ì ^ In ¡ n n I 'Tn A I Í'-I- _ Exlatk1g Wetiand (\)1>.. ')1 I'):: "- IV U ¡-I U U I I V I V "- '-- Wetiand Buff... Edge (PP'}l, ¡: / I . "=Wetiand Buffer Setbac< (\ , ~ / - I ~ r\ r- I (, . / ,IAlnnn, ) , " ,-:;:--_ -.J "'~ --- -- ",i:> - ',þ..';J'o --- t)"óo -- ~ --- ~ ---- 'TC" 10 ,\ nn/TlnA nUUI IIVI v I I r-¡I"\ I 1 nCI\Jr7 \/ I IAlnnnCJ/nf'C- vv VVUI \IU\JL I Ir-, V L: L .-, I I J ~r71 --------------- '" ¡ \ -1 -----Ï7J'-----J --' 16 e 2004 Westwood Prolessional Services. Inc. /- ---... /' "- ( / / ---- - OIjILOI.1t /'~ / ---- '- \ /" /" --'\ f.-i?,':--,'~ L':;¿ c> r-A \ .-' 1\ L: I V \,)¡C;)O \ ~ \ \ "'- j c':¡ ß ~Š ~ LJ_ ~ J. ~~~ '-' -J::.C , - .., ( <- q...LIJ .rCJ::: -S C[.j '~ t J _". > <- 'C) ~ -r::. - -- C':¡ c':¡ : "C J J :.---£::5 J Cl~ : If]\ \ " /' ,/ NOTE: The lot dlmens[ons and areas on this pIon are approxImate. Refer to the Final Plat and supporting data for exact lot dimensions on, areas. )t 180' 20' 60' O· OEVEl.OPéR: Plowshares Development, LLC. Nathan Franzen 1851 Lake Drive West Suite 550 Chanhassen. MN. 55317 Phone: (952) 361-0832 Fax: (952) 361-0833 Contacts: Nathan Franzen PLANNER/ENGlNEER/SURI£YOR: Westwood Professional S9rvices, Inc. 7599 Anagram Drive Eden Pralrl", MN. 55344 Phone: (952) 937-5150 Fax: (952) 937-5822 Con tact: Chris Moehrl NOT FOR CONSTRUCTION T~ Legal Description<from Title Co1DDÙtment) Mancino Parcel Lot Two (2), Block One(1), OLD SLOCUM TREE FARM, according to the plat thereof on file or of record In the office of the County Recorder. Carver County. Minnesota. ANO Ronning _ Parcel Lòt One· (1). Block One (1). OLD SLOCUM TREE FARM, according to the plat thereof on file or of recoord in the office of the County Recorder. Carver County. Minnesota. Data) I TypìcalL~(V aries) Str~et >- Drainage & Utl/lty Easemen - Lot Dimension ~Lot Number· --- Approx. Lot :Area -Setback Dimension 10_ . -- I· 1'~'''O~::±~:... -l'l" -_ ,'I ";p _ _.J', g~i ___'?"J Dlmt¡nslon-/ at Setback 27.62% ac. Rural RSF Low Density, Residential 4,2!J± ac. 4.14:1: ac. 43 Street· dimensions· listed referencebaci< of curb. A"- strel1ts:->to ,have ,curb and _gutter -QS-pIJf Dralnage â,nd utility :easements ,shah by the City; - - - - -- -- TotoJ Sit. AreQ Existing Zoning Proposed Zoning Proþosed Lönd Use Street O.dl'<!atlon Outlots Total Proposed Lots Overall SIttio.tJslty (Gross) 90 ft. (100 ft. on Private Rd.) /25 ft. 15.000 sq.ft. 19,525:1: sq.ft. 30 ft. 10 ft. 30 ft. 16.5 ft. 40 ft. 60 ft. 31 ft. Back-to-Bock 60 ft. Rod/45.5 ft. Curb 20' from e/c Data - Average Lot Area - Front Yard Setback ~'J_ Yard Setback Yard Setback md Bu ffer :ture Setback from Bvffer Width I Width dfJ-sac ROW osed Setback to Private road Zoning Stondards (Minimums) - Lot Width @ Setback /" Development - Lot Oepth - Lot Area - ..n....'" - Rear t-- '" (,J ::¡: "- ¡;; $ <3 g N "- ~ ~ 0> ~ " ..; o .... "- "- <t )g ~ OJ /' OJ . " /' <t )g ~ N <: "-" C-t3 20041064?PFQ1.DWG Sheet: S OF 11 Preliminary Plat Pate: 09/17/04 Pinehurst 0I.anhassen, MInnesota LLC. Prepared for. Plowshares Development, 1851 Lake Drive West, Suite 550 ChaalwaeD, Minntiota 55311 ~a:.ø:.r:-..-:~~~~ I BmIIoGc 1UIIkr the kw'ot .. .. .,........ ~(J:(~ ~~=~--(DMt)- CrtJs Mono ~ 11/05/04 '- No. westwood Professional Services, Inc. 7599 Amigram Drive Eden Prairie, MN S5344 Phone: 952-1137-5150 Fa>r. 952-937-582:1 ". I I I I I '" 2004 Westwood --.J -x-x-x-x-x_x_x_x_x --.... ./ "" Inc. Services, Professional nt §I 4 5 ::-- J 1/\ Ir-¡ \/ A nnITlfÌ^! 0r7IVL..L.1 nL/VIIIVI v . x= =;r-: - :t= =¡--=-~--='x= r-------f, 0' ., =:l'! 8 I I: , " I I /1- L--______J Tn----r---1----1------- I , , II nl"C I . r------- I !u L___ ' --__..J r--------, 10', J I 6 "I , I , ,I I I , I I I L________J r-------_, itJ'5"'I 1 1 I , I 1 , 1 , 1 L-______.:..-..l /----~T I \ / ~ \ (/ \. ') , -------____ ~ f ---------,.--,--, --+-- " - / \ ~'---- I \, , / ¡""I x---,-~~ 0^ln , nnfTfÌ^1 1'--., F' ..:--- " L- I ~ L/ /' L/ L/ I I V I V I - -¡----¡ I ~ I I B X-X_x ~...J~ J In V L/ Þ I ) / -1--- * -------... - '- -- ,- - I , I ¡--------- :i - - ---j--.---- I, I :II:l ' ' l~L~j I /¡ ::';C)Ïì -' 1\ L/ \ -:-./ CJ -> "'- C) Cì ...-Ej íj- :t') NOTE: The lot dimensions and areas on this plan are approximate. Refer to the Anal Plat and supporting data for exact lot dlm8flslons an. areas. X Ir-'f",1 IIC' 7L':'/\7r7 I 0 f r 1 AlfÌfÌ n elf n 1" e- n VVL/f \IL/\?L A!fÌfÌnC! DEVE1.OPER: Plowshares Development, LLC. Nathan Franzen 1851 Lak" DrlVtt West Suite 550 Chanhass,,", MN. 55317 Phone: (952) 351-0832 Fax: (952) 351-D8JJ Contacts: Nathan Franzen I I I 1 , I / - - - - -/ ---------- ( I I I ,x_x_ x-x-x-x_x_x_x pg Typic~ ,Lot (Varies) - . - --- - street Legal'Description(from Title ,Commitment) Mancino Parcel 27.8:l:1: tJC. Rural RSF Low Density. Residential Total SIte Area Existing Zon;ng Proposed Zoning Proposed Land Use (100 ft. on Private Rd.) sq.ft. PLANNER/ENGlNEER/SUR\¡f'YOR: Westwood Profess/enol Services, Inc. 7599 Anagram Dr/v" Ed,," Pralri", MN. 55344 Phone: ,(952) 937-5150 Fox: (952) 937-5822 Contact: Chris Maehrl Lot Two (2), Block One(I), OLD SLOCUM TREE FARM, according to the plat thereof on file or of record In the, office of the County Recorder, Carver County. Minnesota. AND the Drainage and utility easements shall by th" City. 0' 60' 120' 1SO' NOT, FOR CONSTRUCTION C-IJ 20041064CNP01.DWG l Date: 01/06/05 Shoet 1 OF >- Drainage ðç Utility Easement Data) - Lot Dimension ~Lot Number - Approx. Lot' Area - Setback Dimension - Front Yard Setback - Side Yard Setback - Rear Yard Setback - Wetland Buffer - Structure Setback from Bu fler - ROW Width - Road Width 10_ -- , 1S,OOO~ S.'. ,I .......--- 'rL . - ' - . - Jf 51 g g_...51 L_.__~-..;_·_____J è -2L- ~ (No ScOle} 90 ft. 125 ft. 15.0CO 30 ft. 10 ft. 30 ft. 16.5 ft. 40 ft. 50 ft. 31 ft. Back- to-Back 60 ft. Rad./45.5 ft. 20' from B/C Zoning Standards (Minimums) - Lot Width @ Setback - Lot Depth - Lot Area to Ronning Parcel Lot One (1), Block One (1), OW SLOCUM TREEFARM, according plat thereof on fllear of recoord In the office of the County Recorder, Carver County. _Minnesota. ~-g 90. Ü')- 0 r- g-------~, I . _ " '" 'iSI IT' f-------9o.oc;-=-;"..::+1 'ï. _....-r .....tl t~~ Dlmen-slon-- - I at Setback /ats/ac. Street dimensions listed reference back of curb. All streets to have curb and gutter as p"r 'City standards. be provided as required 46 1.87:1: Preliminary Plat Sketch Plan Pinehurst l"hA"1?A~ Mhutesota Data \ Development LLC. Prepued lor: .. " . Plowshares Development, 1851 Lake Drive WfItt. S1Üte 550 0Ianh.usen, MIDne80ta 55817 Curb - ~ IW:~ _wr::r-~~-=vrioa I ...... ..........."'......01-..-., CnII- DoIoo 11/05/04 J.IoooH No. Total Proposed Lots Oveal/SIt.. Dl!fIII/ty (Gross) to Private road - Cul-de-sac ROW - Proposed Setback Westwood Professional Services,lnc. 7599 Anagram Drive Eden Prairie, MN 55344 Phone: 952-937-5150 Fax: 952-937-58U '" COMPARABLE LAND SALES MAP COMPARABLE 1 1790 Lucy Ridge Court Chanhassen, MN Rd 't:I > ãi e .. ~ o .... IvyRd Yuma Dr © 2000 by Rand McNally & Company. All rights reserved. LAND COMPARABLE #1 ADDRESS CITY COUNTY MAP INDEX PROXIMITY TO THE SUBJECT ZONING LEGAL/PID # SIZE SITE DATA STREET SURFACE BUYER SELLER SOURCE SALE PRICE DATE OF SALE FINANCING PRICE PER SQUARE FOOT REMARKS 1790 Lucy Ridge Court Chanhassen Carver 445-A2 Yz mile SFR, Single Family Residential Unavailable, too new 22,080 Square Feet Buildable finished lot Bituminous Unavailable Noeker Development Noeker Development $279,900 March 5, 2004 Unavailable, presumed market $12.68 Buildable finished lot now improved with a single family house. Site is lightly treed and enjoys a wetland view. 41 LAND COMPARABLE #2 ADDRESS CITY COUNTY MAP INDEX PROXIMITY TO THE SUBJECT ZONING LEGAL/PID # SIZE SITE DATA STREET SURF ACE BUYER SELLER SOURCE SALE PRICE DATE OF SALE FINANCING PRICE PER SQUARE FOOT REMARKS 6900 Lucy Ridge Lane Chanhassen Carver 445-A2 Y2 mile SFR, Single Family Residential Unavailable, too new 22,651 Square Feet Buildable finished lot Bituminous Unavailable Noeker Development Noeker Development $289,900 March 5, 2004 Unavailable, presumed market $12.80 Buildable finished lot with heavily wooded rear. 42 LAND COMPARABLE #3 ADDRESS 19XXX Manor Road CITY Shorewood COUNTY Hennepin MAP INDEX 418-B4 PROXIMITY TO THE SUBJECT 3 miles ZONING Single Family Residential LEGAL/PID # Unavailable, too new SIZE 43,560 Square Feet SITE DATA Buildable finished lot STREET SURFACE Bituminous BUYER Unavailable SELLER Unavailable SOURCE Appraiser Files SALE PRICE $299,000 DATE OF SALE May 14,2004 FINANCING Market PRICE PER SQUARE FOOT $6,86 REMARKS Buildable finished lot with a single family house under construction. The site enjoys wooded views on all sides. 43 LAND COMPARABLE #4 ADDRESS CITY COUNTY MAP INDEX PROXIMITY TO THE SUBJECT ZONING LEGAL/PID # SIZE SITE DATA STREET SURFACE BUYER SELLER SOURCE SALE PRICE DATE OF SALE FINANCING PRICE PER SQUARE FOOT REMARKS XXXX Spencer Lane Shorewood Hennepin 418-B4 3 miles Single Family Residential Unavailable, too new 47,916 Square Feet Buildable finished lot Bituminous Unavailable Unavailable Appraiser Files $279,000 September 15,2004 Cash $5,82 Buildable finished lot with sewer. Buyer needs to install their own well. Site enjoys medium tree cover. 44 LAND SALES SUMMARY Following is a summary of the land sales data utilized in the valuation of the subject site. COMP LOCATION SALE SALE SIZE PRICE # DATE ZONING PRICE (SQ.FT.) (SQ.FT.) 1 1790 Lucy Ridge Court 03/2004 SFR $279,900 22,080 $12.68 Chanhassen, MN 2 6900 Lucy Ridge Lane 03/2004 SFR $289,900 22,651 $12.80 Chanhassen, MN 3 19XXX Manor Road OS/2004 SFR $299,000 43,560 $6.86 Shorewood, MN 4 XXXX Spencer Lane 09/2004 SFR $279,000 47,916 $5.82 Shorewood, MN UNADJUSTED AVERAGE: $9.54 ADJUSTMENT ANALYSIS The sales comparison approach requires adjusting and analyzing comparables to derive an opinion of value for the subject. The various sale prices are adjusted after identifying relevant adjustment factors and after quantifying the effect of a difference between the comparable and subject. Before any adjustment can be identified or quantified, a sale must be sufficiently comparable to the subject. Even if sufficiently comparable, a determination must be made as to the adequacy of information collected concerning a sale. The most appropriate use for an adjustment grid and pairing sales for specific dollar or percentage adjustments is for simple properties where relatively few adjustments explain differences in value. Vacant land, simple retail, some industrial, and residential properties fall into this category. The following are generally accepted adjustment categories. The first four categories real property rights conveyed, financing, conditions of sale, and market conditions are cumulative. Normally a sale should be adjusted for the cumulative adjustments before the remaining adjustments (location, physical, and other) are applied. Location, physical characteristics and other adjustments are additive, and may be made in any order. 1. Real property rights conveyed - The real property rights conveyed is the first adjustment because the appraisal of the subject property rights can only be compared to similar property rights. All comparable sales are of fee simple interests, so no adjustments were necessary. 2. Financing - A financing adjustment is actually a specific motivation adjustment and often is not capable of being accurately derived from a mathematical discounting process. The most reliable financing adjustment is from paired sales but such detailed data is generally not available from sales information. None of the comparables required adjustment for financing since they are all cash or at market financing terms (financing data was not available on Comparables 1 & 2). 45 3. Conditions of sale (motivation) - The first three adjustments, including conditions of sale are applied before the market conditions adjustment. This is because the motivation of the parties in the transaction to agree on the price paid was at the time of sale. As with property rights conveyed, a motivation other than that assumed in the value definition may require discarding a sale from consideration. 4. Market conditions (time) - A time adjustment is a market conditions adjustment because it is changes in the marketplace, and not the passage of time, that causes prices to change (the principle of change). A time adjustment is a cumulative adjustment within the sales comparison approach that requires a mathematical computation. All sales adjusted at a rate of 3 % per year for market conditions. 5. Location - A location adjustment is an additive adjustment, while the previous four adjustments are cumulative. Tracts of similar highest and best use should be compared. Because this adjustment is considered to be additive, it is netted out with physical and other adjustments. All the comparable sales were considered to have single family residential purposes as their highest and best use. Adjustments were, however, made for location when appropriate. 6. Physical differences - The adjustment process is an attempt to account for significant adjustment factors between comparables and the subject. The comparables are adjusted to the subject to make them like the subject. Therefore, if the comparable has a feature that is better than that found in the subject, a downward adjustment is applied. If the feature is worse than that in the subject, or nonexistent in the comparable, an upward adjustment is applied. Thephysical differences that exist between the comparables and the subject are adjusted to indicate a reasonable value conclusion for the property being appraised. The primary adjustment for this category was size, and each comparable was adjusted as we deemed appropriate. 7. Other (e.g. income characteristics) - The other adjustment category is a catch-all for relevant adjustments that cannot be categorized in the previous adjustments. An adjustment to Comparable 4 was made for not having water at the time of sale. 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I]) ro ¡:: I]) I]) ;> ~ 0"0 {¡ § "0 .¡:: I]) d ·È CIJ:.a .,...., "0 ~ro "@ ~ ~~ U ~ .,...., I])"'¡:: S ~ ...... 00 ¡g s . -:'> I]) "0 .~ < I]) I]) ~ .;3.;3 ¡:: ...... .~ ~ 00 ..- S I]) I])"'¡:: .~ ~ I]) ;..... ;..... ;::Jc.8 c.8 I]) ......,.0 00 00 tS~ I]) I]) S ,..¡::...... ...... 00 ;..... ;::J c.8;.a> 00 ro ...... I]) ¡:: b.J) I]) ro Bd 00 I]) ;::J U . -:'> [) .,:;j "0 p., I]) <I]);"::: ,..¡:: p., I]) ...... p., ...... b.J) ro Zo.s ¡:: b~ .& ,.0 ...... I]) ..- ;> s~ 0\ ~ .......;.....; µ.,µ., && Vl Vl ;..... ;..... I]) I]) p.,p., \D "'1" t;"': r---r--- V} V} ~ § 'õ :.a p., 1]):'9 ~~ "0"0 I]) I]) ...... ...... 00 00 ;::J ;::J ;.a>;.a> « .....; ~ 0< Vl ;..... I]) p.,.....; lr)µ" t- . . 0< OOVl V} ;..... o I]) ...... p., NO ..- \D \D t- V} V} I]) I]) b.J) b.J)~ § ~ ~< "0"0 I]) I]) ...... ...... 00 00 ;::J ;::J ;.a>;.a> « ANALYSIS OF LAND SALES The subject property was compared to the preceding four comparable land sales in the Chanhassen and Shorewood areas. Note: All of the following land comparables were adjusted upward 3 % per year from the time of sale for current market conditions. Also, all sales adjusted at a rate of 1 % for every 1,000 square feet difference when compared to the subject. Comparable Sale #1: 1790 Lucy Ridge Court, Chanhassen, MN is a buildable finished lot located one 1/2mile east of the subject. It has 22,080 square feet with light tree cover and a wetland view. This sale is located in an area of new upscale homes where real estate prices are slightly higher, therefore a downward adjustment was made for location. This comparable sold in March of 2004 for $279,900 or $12.68 per square foot. Comparable Sale #2: 6900 Lucy Ridge Lane, Chanhassen, MN is a buildable finished lot located one 1/2 mile east ofthe subject. It has 22,651 square feet with heavy tree cover at the rear of the site. This sale is located in an area of new upscale homes where real estate prices are slightly higher, therefore a downward adjustment was made for location. This comparable sold in March of 2004 for $289,900 or $12.80 per square foot. Comparable Sale #3: 19XXX Manor Road, Shorewood, MN is a buildable finished lot located three miles northeast of the subject. It has 43,560 square feet with medium to heavy tree cover throughout the site. This comparable sold in May of 2004 for $299,000 or $6.86 per square foot. Comparable Sale #4: XXXX Spencer Lane, Shorewood, MN is a buildable finished lot located three miles northeast of the subject. It has 47,916 square feet with medium tree cover throughout the site. Comparable 4 was sold without water installed, therefore an upward adjustment of 2 % was made. This comparable sold in September of 2004 for $279,000 or $5.82 per square foot. The subject site has been valued as if vacant. It was compared to the four land sales listed above. All comparables give a good indication of current market attitude toward the subject property. Therefore, a value per square foot near the average for each lot will provide a good indication of market value. LOT INDICATED VALUE INDICATED VALUE ROUNDED LOT 15 $9.00/SF X 32,093 SF $288,837 $290,000 LOT 16 $7.00/SF X 49,617 SF = $347,319 $350,000 LOT 17 $7.50/SF X 45,568 SF = $341,760 $340,000 TOTAL $980,000 50 CERTIFICA nON I certify that, to the best of our knowledge and belief............ the statements of fact contained in this report are true and correct. my analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal unbiased professional analyses, opinion and conclusions. I have no present or prospective interest in the property that is the subject of this report, and we have no personal interest or bias with respect to the parties involved. neither my engagement to make this appraisal (or any future appraisals for this client) nor any compensation are contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event. my analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Uniform Standards of Professional Appraisal Practice. This report is written to conform to FIRREA guidelines. The Departure Provision was not utilized in the preparation of this report. I have made a personal inspection of the property that is the subject of this report. my research assistant Joe Sullivan provided professional assistance in gathering comparable and market data contributing to the information herein, however no one assisted the appraiser in the value estimate nor in the analysis of the value estimate. I certify that, to the best of my knowledge and belief, 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 and the Standards of Professional Practice of the Appraisal Institute. I am currently certified under the requirements of the State of Minnesota general certification and continuing education program of real estate appraisers. Based on the information contained in this report, and other data considered in this analysis, it is our opinion that the Market Value of the subject property" as platted ready for sale" and based on a one year marketing period, as of January 7, 2005 is: LOT 15: LOT 16: LOT 17: TWO HUNDRED NINETY THOUSAND DOLLARS THREE HUNDRED FIFTY THOUSAND DOLLARS THREE HUNDRED FORTY THOUSAND DOLLARS TOTAL: $290,000 $350,000 $340,000 $980,000 e, MSA é ral Real Property Appraiser 03373 ORION APPRAISALS, INC. 3495 Willow Lake Blvd., Suite 100· St. Paul, MN 55110 · (651)636-1339 ·1(800) 274-9677 · Fax (651)636-2133 ADDENDA Qualifications Engagement Letter Zoning Regulations Purchase Agreement FIRREA Statement 52 QUALIFICATIONS OF: Theo. J. Krammer, MSA Minnesota Certified General Real Property Appraiser #4003373 Wisconsin Certified General Real Property Appraiser #945 - 010 Iowa Certified Genèral Real Property Appraiser #CG02196 Twenty-four years commercial real estate brokerage and appraising. PROFESSIONAL ORGANIZATIONS Appraisal Institute, National Appraisal Institute, Metro-Minnesota Appraisal Institute Affiliate Member MAPA - Minn. Assoc. of Professional Appraisers NGF - National Golf Foundation NAMA - National Assoc. of Master Appraisers Member Dakota County Realtors Association Member Appraisal Data Network, Inc. (ADN) Member Real Estate Database, Inc. (RED!) Urban Land Institute TYPES OF APPRAISALS Single Family Residences Apartments & Multi-Family Residences Farm Properties CommerciallIndustrial Land Residential Subdivisions Industrial Properties Office/W arehouses Retail Centers or Buildings Office Buildings Partial & Full Takings Restaurants Banks Servicè Stations MoteJs and HoteJs Golf Courses BUSINESS EXPERIENCE Orion Appraisals, Inc., President, Owner T. J. Krammer Associates, President, Owner/Broker Licensed Commercial Real Estate Broker Licensed Certified General Real Property Appraiser Vice President Midway National Bank (until 1980) SPECIALIZED EDUCATION University of Wisconsin - Graduate School of Banking, Graduate American Institute of Banking, Commercial Consulting Brokerage, Buying Commercial Investment Real Estate, Commercial Investment and Taxation, Cash Flow Analysis, Real Estate Syndications, Liabilities of Commercial Real Estate TransaCtions, Tax Forecasting and Consideration, Property Exchanges, Commercial Construction Today, Real Estate Financing, Managing Properties, Leasing & Selling Commercial Properties, Commercial Location and Market Analysis, Real Estate Law, Appraisal Principles I & II, Appraisal Practices I & II, Appraisals Standards and Ethics (USP AP), FIRREA Application,Appraisal Review for Income Properties. Residential Construction, Appraising Income Properties, Investment and Financial Analysis, Advanced Yield Capitalization, Office and Retail Appraising, Writing a Narrative Appraisal. Numerous seminars and continuing education sponsored by various real estate education groups and schools. PARTIAL LIST OF CLIENTS Banks: Alliance, Bremers, Associated Banks, M&I, Central, Crown, Wells Fargo, EastBank, Franklin, University, Village, Premier, US, Highland, Northeast, TCF, Vermillion, Minnwest, First National, Anchor Bank, River Bank, First United, American, Riverview, BNC Boundary Waters, Lake Area, Lino Lakes, Preferred, Fidelity, Western, Voyager, Eagle Valley, and Prior Lake Nat'l Lenders: GE Capital, CIT (Newcourt - AT&T), KeyBank National, First Union Ca:pital, Central Park, Bank United, NorthMarq, Marquette Capital, Provident Capital, Northern Financial, Sears, GMAC, Thrivent Financial, Midland, Nichols Financial, and Welsh Çapital Law Finns & Dorsey Whitney, Barna Guzy, Parsinen Kaplan" Frommelt Eide, Rider Bennett, Briggs CPA's: & Morgan, McGladrey Pullen, Oppenheimer Wolff, Fetterly Gordon, and Faegre Bensen Government: Most 13 county area cities and counties, MNDOT, DNR, Metropolitan Council, Anny Corp of Engineers, Veterans Administration, and Port Authority Rev. 08/2004 ORION APPRAISALS, INC. 3495 Willow Lake Blvd., Suite 100· St. Paul, MN 55110 · (651)636-1339 ·1(800) 274-9677 . Fax (651)636-2133 -- State of Minnesota Department of Commerce 85 - 7th Place East, Suite 600 St. Paul, MN 55101-3165 Department of Commerce Licensing Division Telephone: (651) 296-8319 E-mail address:licensing.commerce@state.mn.us Website address: commerce.state.mn.us Certified General Real Property Appraiser License legal Name: THEODORE J KRAMMER SR Address: 4807 MOON LAKE CIRCL,.E WHITE BEAR TOWNSHIP~ MN 55127 license Identification Number: AP. 4003373 Ucense expiration Date: 8/31/2006 Continuing Education: 30 credits d\le by license expiration datè. A person licensed In this category can perform appraisals for federally-re!ated lransac1lons. . .. A person Uœnsed In this catego¡y may appraise aIIlypes of real property. 01/03/2005 12:00 5515352133 ORION APPRAISALS INC PAGE 01/01 lanuary'03,2005 ORlOl~' . Commercial 6' fndtl.Jtrial Md.chin~ & Equipment AppTaifal Sptriáli..rt¡ Mr, Todd Sinming Plowshares Development, LLC 1851 Lake Dr. W. Suite 550 Chanhassen, MN 55317 ENGAGEMENTIPROPOSAL LETTER Dear Mr. Simnìng; This letter is a proposal of understanding concerning the engagement of Orion Apprs1sals, Inc. for the purpose of rendering valuation consultation and/or appraisal reports. The repQt1: shall be prepared for Plowsh.ares "evelopment, LLC the "Chent", and js for the sole and exclusive use of the client. It is understood by both parties that the nature of the a.ssignment is as fonows: Property Location & Type: 2,8 acres/3 lots Iœown as Ou.tlot A of Pinehurst, Chanbassen, MN. Purpose of Assignment: To provide an opinion of "Ma.rket Value As Is in Fee Simple Interest of the 3 Jots (ready for sale)" for the purpose of corporate planning. The report shall comply with both Appraisal Institute standards and USP AI' regulations as required. . Type of Report: Land Narrative showing individuai lot values with a tota.l valne, Due Date:. Within 3-4 weeks from the date we receive.your letter of engagement and retainer. The agreed completion dite asswnes that written auth9'rizatíon is . received, supporting information is readily available and the appraiser will have ready access to the above property. If delayed Of the property is different than originally represented, an adjustment to the fee or time may be made. If this . agreement is canceled at any time prior to delivery, client agrees to pa.y for work performed. . Cost of Services Rendered; Two original copies ofthc report will be prov1ded for a fee of $2,900.00. Ifn.ccded, subsequent tim.c spent on the report will be billed at a rate of $J 50.00 per hour (i.e. court testim.ony). Additional onginal report copies are $200.00. Tenns: TIús agreem.ent and a retainer;n the amount of 51,450.00 must be received in this office prior to commencing with the engagement and the balancè of the fee is due prior to r.eport de1iveiy. ,You or your staff member will be notified 5 days prior to completion so you may forward Orion the final payment. We . agree that your final approval w11l be based solely upon the satisfaction that all regulations and standards bave been met and wi\] riot in any waY'bccontingent upon the client's satisfaction with the numerical results. . We will proceed with the assignment, upon receipt of the engagement letter and retainer fee. You will be . contacted by us shortly after engagement to inspect the subject property and gatoer necessary information. We look forward to working with you, . Agreed This Date: 1.'3,05 ~~ Todd Sìmnjng c..h~ c..f W\"N.V.... ORION.APPRAISALS. fNC. 3495 WilkJw Lake Bttld. · Suite 100 · St. .Paul. MN 55110 (651) 636·/339 · Fax (651) 636~2'33 · (80n) 171-.9617 . WtUw.ori,,;ap.prautJluom ARTICLE XI. "RR" RURAL RESIDENTIAL DISTRICT Page 1 of3 ARTICLE XI. "RR" RURAL RESIDENTIAL DISTRICT Sec. 20-591. Intent. The intent of the "RR" District is to provide for single-family residential subdivisions intended for large lot developments. (Ord. No. 80, Art. V, § 4(5-4-1), 12-15-86) Sec. 20-592. Permitted uses. The following uses are permitted in an "RR" District: (1) Single-family dwellings. (2) Public and private parks and open space. (3) State-licensed day care center for twelve (12) or fewer children. (4) State-licensed group home serving six (6) or fewer persons. (5) Utility services. (6) Temporary real estate office and model home. (7) Agriculture. (8) Antennas as regulated by article XXX of this chapter. (Ord. No. 80, Art. V, § 4(5-4-2), 12-15-86; Ord. No. 259, § 9, 11-12-96) Sec. 20-593. Permitted accessory uses. The following are permitted accessory uses in an "RR" District: (1) Garage. (2) Storage building. (3) Swimming pool. (4) Tennis court. (5) Signs. (6) Home occupation. (7) One (1) dock. (8) Roadside stand. (9) Private kennel. (Ord. No. 80, Art. V, § 4(5-4-3),12-15-86) Sec. 20-594. Conditional uses. http://libraryI2.municode.com!gateway.dll/MN/minnesota/784/868/879?f=templates$fn=d. .. 1/1 0/2005 ARTICLE XI. "RR" RURAL RESIDENTIAL DISTRICT Page 2 of3 The following are conditional uses in an "RR" District: (1) Churches. (2) Private stables. (3) Public buildings. (4) Recreational beach lots. (5) Towers as regulated by article XXX of this chapter. (Ord. No. 80, Art. V, § 4(5-4-4), 12-15-86; Ord. No. 120, § 4(3),2-12-90; Ord. No. 259,§ 10, 11- 12-96) State law references: Conditional uses, M.S. § 462.3595. Sec. 20-595. Lot requirements and setbacks, The following minimum requirements shall be observed in an "RR" District subject to additional requirements set forth in this chapter: (1) The minimum lot area is two and one-half (2 1/2) acres, subject to section 20-906. A one-unit per ten-acre gross density shall be maintained for proposed lots outside the approved Metropolitan Urban Services Area in effect at the time of a proposed development. This requirement shall not apply to lots of record in existence on January 15, 1987 or lots created thereafter if they were subject to a pending subdivision application on that date and the lots were created as a result of that application. The one-unit per ten-acre density applies to contiguous property under single ownership. Acreage under single ownership, which is not contiguous, cannot be combined for increased density/building eligibility on one of the parcels. Once a building eligibility has been used for a property, a development contract must be recorded with the county establishing the number of building eligibilities remaining or documenting that no building eligibility remains. (2) The minimum lot frontage is two hundred (200) feet, except that the minimum lot frontage of lots fronting on a cul-de-sac shall be at least two hundred (200) feet at the building setback line. (3) The minimum lot depth is two hundred (200) feet, except that lots fronting on a cul-de-sac shall be at least two hundred (200) feet at the building setback line. (4) The maximum lot coverage is twenty (20) percent. (5) The minimum setbacks are as follows: a. For front yards, fifty (50) feet. b. For rear yards, fifty (50) feet. c. For side yards, ten (10) feet. (6) The maximum height is as follows: a. For the principal structure, three (3) stories/forty (40) feet. b. For accessory structures, three (3) stories/forty (40) feet. (7) The minimum driveway separation is as follows: http://libraryI2.municode.com!gateway.dll/MN/minnesota/784/868/879?f=templates$fn=d. .. 1/10/2005 ARTICLE XI. "RR" RURAL RESIDENTIAL DISTRICT Page 3 of3 a. If the driveway is on a collector street, four hundred (400) feet. b. If the driveway is on an arterial street, one thousand two hundred fifty (1,250) feet. (Ord. No. 80, Art. V, § 4(5-4-5),12-15-86; Ord. No. 127, § 2,3-26-90; Ord. No. 170, § 2, 6-8-92; Ord. No. 194, § 2,10-11-93; Ord. No. 332, § 2,12-10-01) Sec. 20-596. Interim uses. The following are interim uses in the "RR" District: (1) Commercial kennels and stables. (Ord. No. 120, § 3, 2-12-90) Editor's note: Inasmuch as there exists a § 20-595, the provisions added by § 3 of Ord. No. 120 as § 20-595 have been redesignated as § 20-596. Sees. 20-597--20-610. Reserved. http://libraryI2.municode.com!gateway.dll/MN/minnesota/784/868/879?f=templates$fn=d. .. 1/10/2005 ARTICLE XII. "RSF" SINGLE-F AMIL Y RESIDENTIAL DISTRICT Page 1 of3 ARTICLE XII. "RSF" SINGLE-FAMILY RESIDENTIAL DISTRICT Sec. 20-611. Intent. The intent of the "RSF" District is to provide for single-family residential subdivisions. (Ord. No. 80, Art. V, § 5(5-5-1),12-15-86) See, 20-612. Permitted uses. The following uses are permitted in an "RSF" District: (1) Single-family dwellings. (2) Public and private open space. (3) State-licensed day care center for twelve (12) or fewer children. (4) State-licensed group home serving six (6) or fewer persons. (5) Utility services. (6) Temporary real estate office and model home. (7) Antennas as regulated by article XXX of this chapter. (Ord. No. 80, Art. V, § 5(5-5-2),12-15-86; Ord. No. 259, § 11,11-12-96) Sec. 20-613. Permitted accessory uses. The following are permitted accessory uses in an "RSF" District: (1) Garage. (2) Storage building. (3) Swimming pool. (4) Tennis court. (5) Signs. (6) Home occupations. (7) One (1) dock. (8) Private kennel. (Ord. No. 80, Art. V, § 5(5-5-3), 12-15-86) Sec. 20-614. Conditional uses. The following are conditional uses in an "RSF" District: (1) Churches. (2) Reserved. http://libraryI2.municode.com!gateway.dll/MN/minnesota/784/868/880?f=templates$ fn=d... 1/10/2005 ARTICLE XII. "RSF" SINGLE-FAMILY RESIDENTIAL DISTRICT Page 2 of3 (3) Recreational beach lots. (4) Towers as regulated by article XXX of this chapter. (Ord. No. 80, Art. V, § 5(5-5.4), 12-15-86; Ord. No. 120, § 4(4),2-12-90; Ord. No. 259, § 12, 11- 12-96) State law references: Conditional uses, M.S. § 462.3595. Sec. 20-615, Lot requirements and setbacks. The following minimum requirements shall be observed in an "RSF" District subject to additional requirements, exceptions and modifications set forth in this chapter and chapter 18: (1) The minimum lot area is fifteen thousand (15,000) square feet. For neck or flag lots, the lot area requirements shall be met after the area contained within the "neck" has been excluded from consideration. (2) The minimum lot frontage is ninety (90) feet, except that lots fronting on a cul-de-sac "bubble" or along the outside curve of curvilinear street sections shall be ninety (90) feet in width at the building setback line. The location of this lot is conceptually illustrated below. GRAPHIC LI N K: LºtsWbe,re,ErºJltªg~Js.MeªsJt.JJedªtSetbª_ckJ..ine (3) The minimum lot depth is one hundred twenty-five (125) feet. The location of these lots is conceptually illustrated below. Lot width on neck or flag lots and lots accessed by private streets shall be one hundred (100) feet as measured at the front building setback line. GRAPHIC UNK:~e!:klEIªgLºts (4) The maximum lot coverage for all structures and paved surfaces is twenty- five (25) percent. (5) The setbacks are as follows: a. For front yards, thirty (30) feet. b. For rear yards, thirty (30) feet. c. For side yards, ten (10) feet. (6) The setbacks for lots served by private streets and/or neck lots are as follows: a. For front yard, thirty (30) feet. The front yard shall be the lot line nearest the public right-of-way that provides access to the parcel. The rear yard lot line is to be located opposite from the front lot line with the remaining exposures treated as side lot lines. On neck lots the front yard setback shall be measured at the point nearest the front lot line where the lot achieves a one-hundred-foot minimum width. b. For rear yards, thirty (30) feet. c. For side yards, ten (10) feet. (7) The maximum height is as follows: a. For the principal structure, three (3) stories/forty (40) feet. http://libraryI2.municode.com/gateway.dll/MN/minnesota/784/868/880?f=templates$fn=d. .. 1/10/2005 ARTICLE XII. "RSF" SINGLE-FAMILY RESIDENTIAL DISTRICT Page 3 of3 b. For accessory structures, twenty (20) feet. (Ord. No. 80, Art. V, § 5(5-5-5),12-15-86; Ord. No. 90, § 1, 3-14-88; Ord. No. 127, § 3,3-26-90; Ord. No. 145, § 2, 4-8-91; Ord. No. 240, § 18, 7-24-95; Ord. No. 324, § 23,7-9-01) Editor's note: Section 2 of Ord. No. 145 purported to amend § 20-615(6)b. pertaining to accessory structures; such provision were contained in § 20-615(7)b., subsequent to amendment of the section by Ord. No. 127. Hence, the provisions of Ord. No. 145, § 2, were included as amending § 20-615(7)b. Sec. 20-616, Interim uses. The following are interim uses in the "RSF" District: (1) Private stables subject to provisions of chapter 5, article IV. (2) Commercial stables with a minimum lot size of five (5) acres. (Ord. No. 120, § 3, 2-12-90) Sees. 20-617--20-630. Reserved. http://libraryI2.municode.com/gateway.dlllMN/minnesota/784/868/880?f=templates$fn=d. .. 1/10/2005 If PURCHASEAGREEMŒNT This Purchase Agreement is made as 01~-f ~ 2004 (the "Effective Date"), between SAM J. AND NANCY K. MANCINO ("Seller"), and PLOWSHARES DEVELOPMENT, LLC, a limited liability company organized under the laws of the State of Minnesota ("Buyer"). In consideration of the mutual covenants and agreements hereinafter contained, Seller and Buyer agree as follows: 1.) SALE AND PURCHASE OF PROPERTY. Seller shall sell to Buyer, and Buyer shall purchase from Seller, a parcel of real property (the "Property") consisting of approximately twenty-three and 50/1 00 (23.5) acres, PID 255590020, in the city of Chanhassen (the "City"), in the County of Carver, State of Minnesota, described and shown in the diagram attached hereto as Exhibit A, together with easements, air rights and other rights benefiting or appurtenant to the Property. 2.) PURCHASE PRICE AND MANNER OF PAYMENT. The total purchase price ("Purchase Price") to be paid by Buyer to Seller for the Property shall be Six Million and Noll 00 Dollars ($6,000,000.00). The Purchase Price shall be payable as follows: (a) Earnest Money. Fifty Thousand Dollars ($50,000) earnest money paid upon execution of this Agreement (the "Earnest Money Deposit") to be released to Seller. The $50,000 Earnest Money shall be non-refundable to Buyer for any reason except in the case of tennination of this Agreement due to (i) Seller default or (ii) under Sections II or 12 of this Agreement. (b) Additional Earnest Money. If Buyer has not elected to tenninate this Agreement pursuant to any of the contingencies set forth in Section 3 below, Fifty Thousand Dollars ($50,000) additional earnest money paid on July 15, 2004 and to be released to Seller. The $50,000 Additional Earnest Money shall be non-refundable to Buyer for any reason except in the case of tennination of this Agreement due to (i) Seller default or (ii) under Sections lIar 12 of this Agreement; and, (c) 2nd Additional Earnest Money. Upon the earlier of Buyer's Preliminary Plat Application to the City of Chanhassen or Oct 16, 2004, One Hundred Thousand Dollars ($100,000) 2nd additional earnest money paid (the "2nd Additional Earnest Money Deposit") by Letter of Credit by Chanhassen Bank, Chanhassen, MN, and to be released to Seller. The $100,000 2nd Additional Earnest Money shall be non-refundable to Buyer for any reason except in the case of tennination of this Agreement due to (i) Seller default or (ii) under Sections 11 or 12 of this Agreement. The Earnest Money Deposit, Additional Earnest Money Deposit, 2nd Additional Earnest Money Deposit and any interest accrued thereon shall hereinafter be referred to as the "Earnest Money"; and (d) Balance. The balance of the Purchase Price (the difference between the Purchase Price minus the Earnest Money) plus or minus any prorations and other adjustments required hereunder in cash, wire transfer, or guaranteed funds on the Closing Date (as defmed in Section 6 herein)~ The balance of the Purchase Price shall be disbursed at Closing. 3.) CONDITIONS TO BUYER'S OBLIGATIONS. The obligations of Buyer under this Agreement are conditional upon satisfaction or waiver by Buyer of each of the following by the respective dates indicated: (a) Title. Title shall have been found acceptable by Buyer based on the Title Evidence (as hereinafter defined), or been made acceptable, in accordance with the requirements and tenns of Section 5 below. (b) Performance of Seller's Obligations. Seller shall have performed all of the obligations required to be performed by Seller under this Agreement, as and when required by this Agreement, including without limitation the following: (l) Access. Seller shall allow Buyer and Buyer's agents access to the Property without charge at all reasonable times between 7:30 AM and 6:00 PM Monday - Friday and no weekends without prior Seller written approval for the purpose of investigation and testing. Buyer shall pay all costs and expenses of such investigation and testing and shall hold Seller and the Property harmless from all costs and liabilities relating to Buyer's activities. Buyer shall further repair and restore any damage to the Property caused by or occurring as a result of Buyer's testing and return the Property to substantially the same condition as existed prior to such entry. (2) Cooperation. Seller shall, without charge to Buyer, cooperate in Buyer's attempts to obtain all governmental approvals and permits necessary in Buyer's judgment in order to allow the lawful use of the Property for Buyer's intended purposes, provided that zoning or other changes, if any, shall take effect and the Property shall not be further encumbered as a result of actions by Buyer until after Buyer's purchase on the Closing Date. Seller shall not incur any costs associated with government approvals or permits and Buyer shall pay all fees. (3) Consents. Seller shall have obtained before Closing all necessary consents, in a form reasonably acceptable to Buyer, to the assignments, if any, from Seller to Buyer contemplated in the Assignment of Contracts (as hereinafter defined). (4) Subdivision. If necessary, Seller shall cause the Property to be legally subdivided of record and classified by the City and County as a separately taxed parcel of land. Buyer to pay all associated fees for government approvals and permits. (5) Documents. Within ten (l0) days after the date of this Agreement, Seller shall deliver to Buyer true and correct copies of all of the Documents (as hereinafter defined) for Buyer's examination and analysis. (6) Wells/Septic Systems. Seller shall properly disclose the locations of wells or individual sewage treatment system (e.g. septic tank), if any, located on the Property within 30 days of the effective date. (7) Oil Storage Tank. Seller shall properly disclose the location of the home oil storage tank located on the property within 30 days of the effective date. (8) Easement with neighbor. Seller shall provide a copy of the existing easement for the shared driveway within 30 days of the effective date. (9) Lines of Occupation Disagreement. Seller will keep Buyer informed of all proceedings and outcome of mediation between the Abblett property and Seller in establishing a property boundary on the north side by the fence. (l0) Unknown Steel Trap Door. Seller shall properly disclose the location of the steel "trap door" located near the edge of their property within 30 days of the effective date. (c) Testing. By July 15,2004, Buyer shall have determined using methods consistent with general engineering practices instituted by Westwood Engineering PS, Inc., Braun Intertec, Inc. or any other qualified engineering company that Buyer engages that it is satisfied with the results of and matters 2. disclosed by soil tests, engineering inspections, hazardous waste and environmental reviews and other tests and inspections of the Property, as provided by Seller pursuant to Section 3(b)(5) above, if any, undertaken at Buyer's sole cost and expense, all to assure Buyer that the Property is suitable for its intended use as a single-family residential development. (d) Confirmation of Acreage. By July 15, 2004, Buyer shall have determined that the Property consists of approximately twenty-three and 50/1 00 (23.5) acres (gross) of which shall be suitable for the RSF development contemplated by Buyer. In connection with this contingency Buyer shall (at Buyer's expense) cause the Surveyor (as hereinafter defined) to delineate the wetlands located on the Property . (e) Document Review. By July 15,2004, Buyer shall have determined, that it is satisfied with its examination and analysis of all contracts, agreements, plans, warranties and all other documents in connection with the Property (together with any amendments thereto), including, without limitation, the following (all of which are collectively referred to herein as the "Documents"): (1) Tests. To the extent available, results of soil tests, percolation tests, structural engineering tests, masonry tests, water, oil, gas, mineral, asbestos, radon, formaldehyde, PCB or other environmental tests, inspection reports, market studies and core samples, if any, which relate to the Property or the business carried upon therein and which are either in the possession of Seller or owned by Seller. (2) Tax Statements. Statements for taxes and assessments payable in the current calendar year for the Property. (3) Plans. To the extent available, surveys, plats or other depictions relating to the Property and copies of all wetland analyses planning studies, aerial photographs, topographical maps or studies, engineering studies and plans and mylars. (4) Agreements. Leases, contracts, agreements or other instruments affecting all or any portion of the Property (the "Contracts"), including, without limitation, all warranties and guaranties given to, assigned to, or benefiting Seller or the Property. (5) Rent Roll. A current rent roll (certified by Seller), in form reasonably satisfactory to Buyer. Seller shall have the continuing obligation during the Executory Period (as hereinafter defined) to provide Buyer with any document described in this Section which comes into Seller's possession or is produced by Seller after the initial delivery of the Documents. If any condition set forth in this Section 3 has not been satisfied or waived by Buyer before the expiration of the time period specified therein, then Buyer may, at Buyer's option, terminate this Agreement at any time on or before the specified time period of July 15, 2004, as applicable, by written notice to Seller. Upon receipt of such notice from Buyer, Seller shall have the option to remedy the issue that Buyer identified in the notice within 30 days of receipt of notice. In the event Seller elects not to remedy the issue identified by Buyer, the Seller will retain the initial Earnest Money. In the event Buyer does not terminate this agreement as set forth in Section 3 and does not pay Seller the $50,000 Additional Earnest Money, Seller shall have the right to terminate this Agreement and retain the initial $50,000 Earnest Money. Upon such termination, neither Seller nor Buyer shall have any further rights or obligations under this Agreement, except for the covenants made in Sections 3(b)(I) and 3(b)(2), Section 7(e), Section 13 and Section 28, and the remedies provided in Section 26 hereof that shall survive termination of this Agreement, whether such termination is effected by Seller or Buyer (the "Surviving Covenants"). 3. 4.) SURVEY. Within thirty (30) days of the Effective Date, Buyer, at its own expense, shall engage Westwood Professional Services, Inc. to prepare an ALTAlACSM survey of the Property (the "Survey"), certified to date, showing: (a) Square Footage. The number of square feet contained in the Property, measured to the right-of-way line of public roads upon which it abuts and computed to the nearest one tenth (1/10) of a square foot; (b) Legal Description. The exact legal description and boundary lines of the Property; (c) Encroachments. Encroachments from or onto the Property, if any; (d) Lines of Occupation. Lines of occupation, if different from the boundaries thereof; (e) Utility Lines and Easements. Location of utility lines and easements of record or appearing thereupon, if any; (f) Assumed Bearings. Assumed bearings used by the surveyor; (g) Access. Direct legal access from a public road to the Property; (h) Water. Bodies of water upon, within two hundred (200) feet of the boundaries of, or flowing through the Property; and (i) Improvements. The location of any improvements on the Property. 5.) TITLE MATTERS. Title examination shall be conducted as follows: (a) Seller's Title Evidence. Unless Buyer is otherwise required to acquire any of the following, Seller shall, within fifteen (15) days of the Effective Date, furnish the following (collectively, the "Title Evidence") to Buyer: (1) Title Insurance Commitment. A commitment ("Title Commitment") for an AL T A Form B 1992 Owner's Policy of Title Insurance committing to insure a marketable title to the Property in Buyer; deleting so-called "standard exceptions" related to survey matters, parties in possession, and liens for labor, materials and services; including affirmative insurance regarding appurtenant easements, separate real estate taxation, and contiguity, in the amount of the Purchase Price, and issued by Carver County Abstract & Title (the "Title Insurer"). The Title Commitment shall include complete and accurate copies of all matters described in Schedule B thereof; and (2) Survey. The Survey. 4. (b) Buyer's Objections. Within thirty (15) days after receiving the last item of the Title Evidence or no later than July 15, 2004, Buyer shall notify Seller of any objections ("Objections") to matters disclosed in the Title Evidence. Seller shall use reasonable efforts to correct any Objections which shall include, without limitation, if applicable, payment of any mortgages, judgments, liens or other encumbrances that can be cured by the payment of money. At Closing, Buyer shall have the right to require endorsement(s) ensuring: (i) contiguity of parcels comprising the Real Property; (ii) access and egress rights; (iii) proper current zoning or the City's recommendation to re-zone; (iv) separate tax parcels; and (v) survey. If the Objections are not cured prior to the Closing Date, Buyer will have the option to do any of the following by notice provided to Seller: (1) Tennination. Terminate this Agreement pursuant to Section 3 herein, on or before the Closing Date, and upon such tennination, Buyer shall be entitled to the return of all Earnest Money, and after such return, neither Seller nor Buyer shall have any further rights or obligations under this Agreement, except for the Surviving Covenants; (2) Withhold Payment. Withhold from payment of the Purchase Price an amount that, in the reasonable judgment of the Title Insurer, is sufficient to insure cure of the Objections and deposit any amount so withheld in escrow with the Title Insurer, pending such cure. If Seller does not cure such Objections within thirty (30) days after such escrow is established, Buyer may then cure such Objections and charge the costs of such cure (including reasonable attorneys' fees) against the escrowed amount. If such an escrow is established, Seller and Buyer shall execute and deliver such documents as may be reasonably required by the Title Insurer, and Seller shall pay the charge of the Title Insurer to create and administer the escrow; or (3) Waiver. Waive the Objections and close the transaction contemplated by this Agreement as if such Objections had not been made. (c) Title Policy. Seller shall have furnished to Buyer an owner's title insurance policy ("Title Policy") issued by the Title Insurer pursuant to the Title Commitment, or a suitably marked up Title Commitment initiated by the Title Insurer undertaking to issue such a Title Policy within a reasonable time in the fonn required by the Title Commitment as approved by Buyer. 6.) CLOSING AND POSSESSION. The closing of the purchase and sale contemplated by this Agreement (the "Closing") shall occur on February 16, 2005, unless postponed or extended in writing by the parties hereto (the "Closing Date"). The Closing shall take place at 10:00 a.m. local time at the offices of the Title Insurer in Chaska, Minnesota, or at such other place as may be acceptable to Seller and Buyer. Seller may, at Seller's option, continue to live at the residence until April 15, 2005 provided Seller pays Buyer $1,000 per month (prorated for partial month) rent and maintains insurance on the property. Seller will notify Buyer in writing on or before January 31, 2005 of Sellers intent to rent back the Property. (a) Seller's Closing Documents. On the Closing Date, Seller shall execute and/or deliver to Buyer the following (collectively, the "Seller's Closing Documents"): (1) Deeds. A General Warranty Deed, in recordable form, from Seller conveying marketable title to the Property to Buyer, free and clear of all encumbrances, other than those encumbrances not objected to or waived pursuant to Section 5, and Quit Claim Deed(s), in recordable fonn, from each of the parties (other than Seller) that will receive a portion of the sale proceeds as contemplated in Section 29 below; 5. (2) Assignment of Contracts. One or more Assignment of Contracts, in form(s) reasonably satisfactory to Buyer, conveying certain of the Contracts, any other Documents, and any assignable licenses and permits regarding the Property that Buyer may desire; (3) Title Policy. The Title Policy, or a suitably marked-up Title Commitment, as provided for in Section 5, herein; (4) Wells and Septic Systems. A Well and Septic Disclosure Statement, properly executed and in recordable fonn, disclosing any wells or septic systems existing on the Property or, if no septic systems, a statement to that effect on the deed; (5) Seller's Affidavit. An Affidavit by Seller indicating that on the Closing Date there are no outstanding, unsatisfied judgments, tax liens, or bankruptcies against or involving Seller or the Property; that there has been no skill, labor, or material furnished to the Property for which payment has not been made or for which mechanics' liens could be filed; and there are no other unrecorded interests in the Property, together with whatever standard owner's affidavit as may be required by the Title Insurer to issue the Title Policy in the form required by Section 5 hereof; (6) Current Rent Roll. A current rent roll, in fonn reasonably satisfactory to Buyer, certified by Seller as of the Closing Date; (7) FIRPT A Affidavit. A nonforeign affidavit, properly executed and in recordable fonn, containing such infonnation as is required by IRC Section l445(b )(2) and its regulations; (8) Well Disclosure Statement. A Well Disclosure Statement, properly executed and in recordable fonn, disclosing any wells existing on the Property or, if no wells, a statement to that effect on the deed; (9) Original Documents. Seller shall deliver to Buyer all original Documents that may be necessary for Buyer to continue to operate the Property. Where necessary to comply with statutory record retention requirements, Seller may retain originals of records and provide copies to Buyer; and (10) Other Documents. All other documents reasonably determined by Buyer to be necessary to transfer the Property to Buyer fÌ'ee and clear of all encumbrances, except those encumbrances identified in the Title Commitment, and not objected to or waived pursuant to Section 5 herein. (b) Buyer's Closing Documents. On the Closing Date, Buyer will execute and/or deliver to Seller the following (collectively, "Buyer's Closing Documents"): (1) Purchase Price. The balance of the Purchase Price to be paid as required by Section 2 hereof; (2) Assumption Agreement. An Assumption Agreement, in form reasonably satisfactory to Seller, pursuant to which Buyer will assume all obligations of Seller that are assigned to Buyer under the Assignment of Contracts; (3) Title Documents. Such affidavits of Buyer or other documents as may be reasonably required by the Title Insurer in order to record Seller's Closing Documents and issue the Title Policy required by Section 5 of this Agreement. 6. 7.) Closing: (a) Title Insurance and Closing Fee. Except as otherwise provided for herein, Buyer shall pay the cost of the Title Evidence. Buyer shall pay the premium for the Title Policy. Buyer will pay any reasonable and customary closing fee or charge imposed by the Title Insurer or its designated closing agent. PRORATIONS. Seller and Buyer shall make the following prorations and allocations at (b) Deed Tax. Seller shall pay all state deed tax due on the deed to be delivered by Seller under this Agreement. (c) Real Estate Taxes and Special Assessments. Seller shall payor cause to be paid all general real estate taxes payable in all years prior to the year in which the closing occurs, and any deferred or Green Acres real estate taxes. Seller and Buyer shall prorate the general real estate taxes payable in the year of closing as of the Closing Date based upon the calendar year. Seller shall pay, on or before the Closing Date, all special assessments levied, "pending," deferred or constituting a lien against the Property, as of the Closing Date, including, without limitation, all installments of special assessments, including interest, payable in the year of closing. (d) Recording Costs. Seller will pay the cost of recording all documents necessary to place record title in Seller in the condition warranted by Seller in this Agreement. Buyer will pay the cost of recording all other documents. (e) Attorneys' Fees. Seller and Buyer shall each pay its own attorneys' fees in connection with the preparation and negotiation of this Agreement and the Closing, except that a party defaulting under this Agreement or any of its respective Closing Documents shall pay the reasonable attorneys' fees and court costs incurred by the nondefaulting party to enforce its rights regarding such default. 8.) OPERATION PRIOR TO CLOSING. During the period from the Effective Date through the Closing Date (the "Executory Period"), Seller shall keep and maintain the Property in a reasonably safe condition. Seller shall not alter or damage any part of the Property, except as required to keep the Property in a reasonably safe condition. Seller shall bear the risk of loss or damage to the Property through the Executory Period. However, during the Executory Period, Seller shall not execute any contracts, leases, or other agreements regarding the Property that are not terminated prior to the Closing Date, nor perform any act that would impair or encumber the title to the Property, without the prior written consent of Buyer. Buyer understands, however, that Seller may place a mortgage on the property for purposes of purchasing a new home. Any such mortgage will be satisfied at Closing. 9.) REPRESENTATIONS, WARRANTIES AND INDEMNITY BY SELLER. Seller represents and warrants to Buyer as follows: (a) Organization; Authority. Seller is: compromised of two (2) individuals residing in the State of Minnesota; duly qualified to transact business in the State of Minnesota; and is under no legal disability that would prevent it from executing and performing this Agreement and any Seller's Closing Documents to be signed by Seller. (b) Title to Property. Seller owns the Property free and clear of all encumbrances, except the encumbrances listed in the Title Commitment. (c) Mechanic's Liens. All labor and materials which have been provided to the Property have been fully paid for or will be fully paid for, or will be fully paid for, prior to the Closing Date. 7. (d) Compliance with Laws. To the best of Seller's knowledge, the Property and the current use thereof fully complies with all existing local, state, and federal regulations concerning the maintenance and operation of the Property, including zoning, building, health and safety, fire safety, and environmental codes and laws and such use is a legal conforming use. No notice of violations of the same have been received. ( e) Litigation and Other Matters. Seller has received no notice, and has no knowledge of any pending notice, of a violation of any statutes, ordinances, regulations, judicial decrees, or orders, or the pendency of any lawsuits, administrative or arbitration hearings, governmental investigations, proceedings, applications, petitioners, or other matters affecting the Property or the use thereof. (f) Rights of Others to Purchase Property. Seller has not entered into any other contracts, agreements or understandings, whether oral or written, for the sale of all or any portion of the Property, and there are no existing rights of first refusal or options to purchase all or any portion of the Property, or any other rights of others that might prevent the consummation of this Agreement. (g) Access. To the best of Seller's knowledge, the Property has direct legal access to, abuts, and is served by a publicly dedicated and maintained road that provides a valid means of ingress and egress to and from the Property and Seller has received no notice that any abutting roads are under threat of condemnation or temporary closings. (h) Private Restrictions. To the best of Seller's knowledge, there are no contracts, leases, private restrictions or agreements with any public authority that will not appear in the Title Commitment and that will affect the uses that may be made of the Property, including but not limited to size or cost of buildings or structures; limitation on use or restrictions in regard to fences, roofs, garages, and heights of buildings or structures, except for building and zoning codes; agreements to subject architectural plans to an association or other group; provisions requiring improvements; provisions requiring the joining of others in group actions; or restrictions imposed on the Property due to its historical significance. (i) Condemnation. Seller has not received any notice of any pending condemnation, eminent domain or other similar action, suit or proceeding that would affect the Property. To the best of Seller's knowledge, there are no such proceedings pending or threatened against the Property and there are no applications, ordinances, petitions, resolutions, or other matters pending before any governmental agency in regard to access routes, curb cuts, median strips, or other contemplated actions of public agencies that might tend to diminish or curtail the full flow of traffic proximate to the Property and access thereto. G) Hazardous Substances. To the best of Seller's knowledge and except as otherwise disclosed in Section 3 (b) (7) and (10) , no toxic or hazardous substances or wastes, pollutants, or contaminants (including, without limitation, asbestos, urea formaldehyde, the group of organic compounds known as polychlorinated biphenyls, petroleum products including gasoline, fuel oil, crude oil, and various constituents of such products, and any hazardous substance as defined in any federal, state or local law) (collectively "Hazardous Substances") have been generated, treated, stored, released, or disposed of, or otherwise placed, deposited in, or located on the Property. To the best of Seller's knowledge, no above-ground or underground tanks are located in or about the Property or have been located under, in, or about the Property and have subsequently been removed or filled. To the extent storage tanks exist on or under the Property, such storage tanks have been duly registered with all appropriate regulatory and governmental bodies and otherwise are in compliance with applicable federal, state, and local statutes, regulations, ordinances, and other regulatory requirements. 8. (k) Utilities. Water and sanitary sewer lines are already in place and available for extension onto the Property. (I) FIRPT A. Seller is not a "foreign person," "foreign partnership," "foreign trust" or "foreign estate," as those tenns are defined in Section 1445 of the Internal Revenue Code. (m) Assessments. Seller has not received any notice of any actual or proposed special assessments or reassessments of the Real Property. All of the representations and warranties of Seller contained in this Agreement will be true on the Effective Date and on the Closing Date as if made on the Closing Date. 10.) REPRESENTATIONS, WARRANTIES AND INDEMNITY BY BUYER. Buyer represents and warrants to Seller that Buyer is duly organized and in good standing under the laws of the State of Minnesota, that Buyer is duly qualified to transact business in the State of Minnesota; that Buyer has the power and authority to execute this Agreement and any Buyer's Closing Documents signed by it; that all such documents have been duly authorized by all necessary corporate action on the part of Buyer and at the Closing shall have been duly executed and delivered; that the execution, delivery, and performance by Buyer of such documents does not conflict with or violate Buyer's Articles of Organization, Bylaws, or any judgment, order or decree of any court or arbiter or any agreement by which Buyer is bound; and that all such documents are valid and binding obligations of Buyer and are enforceable in accordance with their terms. 11.) CONDEMNATION. If, prior to the Closing Date, any governmental entity commences any eminent domain proceedings ("Proceedings") against all or any part of the Property, Seller shall immediately give notice to Buyer of such fact, and, at Buyer's option (to be exercised by notice to Seller within thirty (30) days after Seller's notice), this Agreement shall tenninate and Buyer shall be entitled to the return of all Earnest Money. Upon such tennination and return, neither Seller nor Buyer shall have any further rights or obligations under this Agreement, except for the Surviving Covenants. If Buyer does not give such notice, then there shall be no reduction in the Purchase Price, Buyer agrees to assist Seller in opposing the condemnation, and Seller shall assign to Buyer at the Closing Date all of Seller's right, title, and interest in and to any award made or to be made in the Proceedings. Prior to the Closing Date, Seller shall not designate counsel, appear in, or otherwise act with respect to the Proceedings without Buyer's prior written consent. 12.) DAMAGE. If, prior to the Closing Date, all or any part of the Property excluding the residence, is substantially damaged by fire, casualty, the elements or any other cause, Seller shall immediately give notice to Buyer of such fact, and, at Buyer's option (to be exercised by notice to Seller within thirty (30) days after the date of Seller's notice), this Agreement shall tenninate and Buyer shall be entitled to the return of all Earnest Money. Upon such tennination and return, neither Seller nor Buyer shall have any further rights or obligations under this Agreement, except for the Surviving Covenants. If Buyer does not elect to tenninate this Agreement despite such damage, or if the Property is damaged but not substantially, Buyer will purchase the property As-Is and Seller will not be required to commence any repairs and there shall be no reduction in the Purchase Price. For purposes of this Section, the phrase "substantially damaged" shall mean damage that would cost (as so detennined by an independent expert) One Hundred Thousand and NolIOO Dollars ($100,000.00) or more to repair. 13.) BROKER'S COMMISSION. Seller represents to Buyer that it has engaged nla ("Seller's Broker") as a broker in connection with the transactions contemplated by this Agreement. Buyer represents to Seller that it has engaged nla ("Buyer's Broker") as a broker in connection with the transactions contemplated by this Agreement. All broker's fee, finder's fee, commissions, or other similar fee 9. to be paid to Seller's Broker, Buyer's Broker and/or any employees or agents thereof in connection with the transactions contemplated by this Agreement, shall be paid by Seller at the Closing from Seller's proceeds therefrom. Seller shall indemnify and hold Buyer harmless from and against any and all liability to which Buyer may be subjected by any broker's, finder's, or similar fee with respect to the transactions contemplated by this Agreement to the extent such fee is attributable to any action undertaken by or on behalf of Seller or any affiliate of Seller, including any claim by Seller's Broker or any employee or agent of Seller's Broker. Buyer shall indemnify and hold Seller harmless from and against any and all liability to which Seller may be subjected by reason of any broker's, finder's, or similar fee with respect to the transactions contemplated by this Agreement to the extent such fee is attributable to any action undertaken by or on behalf of Buyer, excluding any claim by Buyer's Broker or any employee or agent of Buyer's Broker whom shall be paid by Seller. 14.) ASSIGNMENT. Buyer reserves the right to, at Buyer's sole discretion, (i) transfer this Agreement to an affiliate of Buyer; or (ii) establish a separate entity to acquire or hold title to the Property and to transfer this Agreement to such entity for such purpose. Notwithstanding the foregoing, neither Seller nor Buyer may assign its rights under this Agreement for any other purpose, without the prior written consent of the other party. 15.) SUR VIV AL. All of the covenants, representations and warranties of this Agreement, or in any schedule, exhibit, certificate, or document delivered in connection with this Agreement will survive and be enforceable after the Closing. 16.) NOTICES. Any notice required or permitted to be given under any provIsIOn of this Agreement shall be in writing and shall be deemed to have been given in accordance with this Agreement, if it is mailed, by United States certified mail, return receipt requested, postage prepaid; or if deposited cost paid with a nationally recognized, reputable overnight courier, properly addressed as follows: Ifto Seller: Sam J. and Nancy K. Mancino 6620 Galpin Blvd. Excelsior, MN 55331 If to Buyer: Plowshares Development, LLC Attention: Todd M. Simning 1851 Lake Drive W., Suite 550 Chanhassen, MN 55317 with a copy to: Bassford Remele Suite 3800 33 South Sixth Street Minneapolis, MN 55402.3707 Attention: Stanford Hill with a copy to: Larkin, Hoffman, Daly & Lindgren, Ltd. 1500 Wells Fargo Plaza 7900 Xerxes Avenue South Bloomington, Minnesota 55431 Attention: Thomas F. Alexander Notice shall be effective, and the time for response to any notice by the other party shall commence to run, one (1) business day after any such mailing or deposit. Either Seller or Buyer may change its address for the service of notice by giving notice of such change to the other party, in any manner above specified, ten (10) days prior to the effective date of such change. 17.) CAPTIONS; EXHIBITS. The section and paragraph headings or captions appearing in this Agreement are for convenience only, are not a part of this Agreement, and are not to be considered in interpreting this Agreement. All schedules, exhibits, addenda or attachments referred to herein are hereby incorporated in and constitute a part of this Agreement. 18.) ENTIRE AGREEMENT; MODIFICATION. This written Agreement constitutes the complete agreement between Seller and Buyer and supersedes any prior oral or written agreements between them 10. regarding the Property. There are no oral agreements that change this Agreement, and no amendment of any of its terms will be effective unless in writing and executed by both Seller and Buyer. 19.) BINDING EFFECT. This Agreement binds and benefits Seller and Buyer and their respective successors and assigns. 20.) CONTROLLING LAW. This Agreement has been made under, and will be interpreted and controlled by, the laws of the State of Minnesota. 21. ) WAIVER. No waiver of the provisions ofthis Agreement shall be effective unless in writing, executed by the party to be charged with such waiver. No waiver shall be deemed a continuing waiver or waiver in respect of any subsequent breach or default, either of similar or different nature, unless expressly stated in writing. 22.) COUNTERPARTS. This Agreement may be executed in any number of counterparts and each such counterpart shall be deemed to be an original instrument, but all such counterparts together shall constitute but one Agreement. 23.) FACSIMILE SIGNATURES. This Agreement may be executed with signatures transmitted by facsimile and shall constitute a binding agreement with such signatures. Nonetheless, any party providing facsimile signatures shall provide the other party with the original signatures within five (5) business days after providing the facsimile signature page(s). 24.) SEVERABILITY. If any provIsiOn of this Agreement is invalid or unenforceable, such provision shall be deemed to be modified to be within the limits of enforceability or validity, if feasible; however, if the offending provision cannot be so modified, it shall be stricken and all other provisions of this Agreement in all other respects shall remain valid and enforceable. 25.) LIMITATION OF LIABILITY. Upon Closing, Buyer shall neither assume nor undertake to pay, satisfy or discharge any liabilities, obligations or commitments of any Seller other than those specifically agreed to between the parties and set forth in this Agreement. 26.) REMEDIES. Time is of the essence of this Agreement. If Seller fails to perform any of its obligations under this Agreement, Buyer may (i) terminate this Agreement and obtain a full refund of all Earnest Money; and/or (ii) seek and recover from Seller damages for nonperformance or specific performance of this Agreement. Buyer and Seller acknowledge that if Seller breaches this Agreement and refuses or fails to perform pursuant to the provisions of this Agreement, monetary damages alone would not be adequate to compensate Buyer, and Buyer shall be entitled, in addition to any remedies that may be available, including monetary damages, to obtain specific performance of the terms of this Agreement. If Buyer defaults in performance of its obligations under this Agreement, Seller shall have the right to terminate this Agreement in the manner provided by Minn. Stat. Sec. 559.21 and to obtain the Earnest Money as liquidated damages. Such termination of this Agreement and receipt of the Earnest Money will be the only remedies available to Seller for such default by Buyer, and Buyer will not be liable for damages or specific performance. 27.) FURTHER ASSURANCES. At any time and from time to time after the Closing Date, each party shall, upon request of another party, execute, acknowledge and deliver all such further and other assurances and documents, and will take such action consistent with the terms of this Agreement as may be reasonably requested to carry out the transactions contemplated herein, and to permit each party to enjoy its rights and benefits hereunder. 11. 28.) CONFIDENTIALITY. The parties hereto shall keep the existence of the terms of this Agreement and the proposed purchase confidential, except to the extent (i) that disclosure to accountants, prospective lenders, attorneys and/or consultants is necessary in connection with managing the development process, or (ii) required by law. This provision shall survive the expiration or earlier termination of this Agreement. 29.) POSSIBLE 1031 EXCHANGE. Buyer and Seller shall each have the right to structure the purchase and sale of the Property as part of an exchange under Section 1031 of the Internal Revenue Code. Neither Buyer nor Seller shall have any obligation to incur any costs or expenses in connection with facilitating the other party's 1031 exchange. Unless otherwise agreed, any such exchange shall be a deferred exchange using a "Qualified Intermediary" as defmed in the regulations issued under said Section 1031. The party requested to facilitate the exchange for the other party shall not be required to incur any additional obligations or liabilities, and shall not have any obligation to take title to any property other than the Property, and shall not be required to permit any delay in the Closing of this transaction as a result of the exchange transaction. The party requesting the exchange shall not be released from any obligations or liabilities under this Agreement. 12. SeHer and Buyer have executed this Agreement as of the date set forth on page 1 hereof. BUYER: PLO:S~~T'LLC Todd M. Simning (Print Name) Its: Chief Manager SELLE\ smnMan~~ ~ 11ÆCvv-~ Nancy Manci~ 821026.2 13. -' , Print Data/Map Page 1 of 1 .' ~>( ~'.~: \- PID# 255590020 A Legend Road Tut US It¡IIwIyt ¡l1IN1I;InyI ¡lew. County Roads Lakn PIIUIs Aerial PhaIo 2002 Map Created: 5019-2004 Parcel Information Property Address: 6620 GALPIN BLVD EXCELSIOR, MN Owner Information: NANCY K MANCINO 6620 GALPIN BLVD EXCELSIOR, MN 55331 Parcel Properties Tax Acres: 23.48 Homestead: Y School District: 0276 Parcel Location Section: 03 Township: 116 Range: 023 IPayable Year 2005 Residential Year Built: 1955 Residential Square Footage: 2174 Lot: 002 Block: 001 Platname: OLD SLOCUM TREE FARM IILast Sale Information Last Sale NOT ON FILE Est. Market Value Land: $775600 Est. Market Value Building: $224400 Est. Market Value Total: $100000o CARVER COUNTY GIS DISCLAIMER: This map was created using Carver County's Geographic Information Systems (GIS), it is a C compilation of information and data from various City. County. State. and Federal offices. This map is not a surveyed or legally recorded ma and is intended to be used as a reference. Carver Count is not res on sible for an inaccuracies contained herein. file:/ /C:\Documents %20and%20Settings\ T odd%20M. %20Simning\Desktop\Print... 5/19/2004 , ~ Legal Description: [AttachfInsert Legal Description Here] Diagram of Property: [Attach Diagram/Map of Property Here] EXHIBIT A FIRREA STATEMENT As per FIRREA bulletin #94-55, last updated June 7, 1994, the OCC, FRB, FDIC and OTS have agreed to reduce the original FIRREA supervisory appraisal standards from 14 to 5. The accompanying appraisal does meet or exceed the following FIRREA Standards: 1. Complies with Uniform Standards for Professional Appraisal Practice (USPAP). 2. Is sufficiently written and informative to support the institution's lending decision. 3. Analysis, deductions and/ or discounts are appropriately discussed, when necessary. 4. Is based on the definition of Market Value as stated earlier in this appraisal. 5. This appraisal was performed by a State licensed or Certified appraiser. 54