SUMMARY APPRAISAL REPORT

PROPOSED SUSQUEHANNA ART MUSEUM

LOCATED AT
1407 NORTH THIRD STREET
CITY OF HARRISBURG, DAUPHIN COUNTY
HARRISBURG, PENNSYLVANIA 17102

FOR
MR. ANDREW J. GIORGIONE, ESQ.
S.A.M. BOARD OF TRUSTEES
409 NORTH SECOND STREET, SUITE 500
HARRISBURG, PA 17101
DATE OF REPORT
FEBRUARY 27, 2013
PREPARED BY
RSR APPRAISERS & ANALYSTS
3 LEMOYNE DRIVE, SUITE 100
LEMOYNE, PA 17043
(717) 763-1212

RSR FILE NO. 13-21GJ

February 27, 2013

Mr. Andrew J. Giorgione

Buchanan Ingersoll & Rooney, PC
409 North Second Street, Suite 500
Harrisburg, PA 17101
Dear Mr. Giorgione:
At your request we are transmitting this Summary Appraisal Report on the property known as:
1407 North Third Street
City of Harrisburg, Dauphin County
Harrisburg, Pennsylvania 17102
The subject property consists of eleven (11) parcels and is improved with a 7,520 square-foot, two-story
bank building situated on 0.44 acres in the City of Harrisburg, Dauphin County, Pennsylvania. The
subject site is going to be redeveloped into a two-story, 17,000 square-foot art museum. Part of the twostory bank will be renovated while all other improvements are expected to be demolished. The effective
date of the appraisal is February 18, 2013 the date on which the property was physically inspected by W.
Greg Rothman, MAI, MRICS, CPE, CCIM, Andrew Wolfe, Licensed Appraiser Trainee, and Jeremy
Heintzelman, Licensed Appraiser Trainee.
The report that follows provides a detailed description of the property, and the basis upon which the
estimated values have been developed. In this report, we have provided a value estimate which complies
with the regulations of 12 CFR 225 - FIRREA.
It is our opinion that the market value of the fee simple interest in the subject property, in its as is
condition as of February 18, 2013 is:

*** EIGHT HUNDRED TEN THOUSAND DOLLARS***

($810,000)
Although there did not appear to be any signs of environmentally hazardous materials on the site, it is
suggested that a Phase I environmental audit be conducted on the subject property if such materials are
suspected on the site.

Mr. Andrew J. Giorgione

Page -2-

This letter does not constitute a full appraisal of the subject property. The narrative which follows
contains the data and analyses from which this value conclusion was developed. This appraisal has been
developed as if the property were free and clear of any liens or encumbrances. This appraisal does not
include the value of any personal property which may be attached to the real estate.
This report has been completed in compliance with the Uniform Standards of Professional Appraisal
Practice adopted by the Appraisal Standards Board of the Appraisal Foundation on July 1, 2006,
including Standards Rule 2-2 (b) of a Complete Appraisal performed under Standard 1. This appraisal has
also been completed according to your instructions, which are included in the addenda to this report.
Our compensation is in no way contingent upon the value estimate and we will be available to discuss the
findings contained within the report with the respective parties at your request and convenience.
Respectfully submitted,
RSR APPRAISERS AND ANALYSTS

W. Greg Rothman, MAI, MRICS, CPE, CCIM

Certified General Appraiser
License # GA 001455 L
Expiration June 30, 2013

Jeremy D. Heintzelman
Licensed Appraiser Trainee
License # LAT000288
Expiration June 30, 2013

Andrew R. Wolfe
Licensed Appraiser Trainee
License # LAT000423
Expiration June 30, 2013

TABLE OF CONTENTS
SUMMARY APPRAISAL REPORT
REAL ESTATE APPRAISAL REPORT SUMMARY
SUBJECT PHOTOGRAPHS
AREA ANALYSIS
NEIGHBORHOOD ANALYSIS
SITE DATA
IMPROVEMENT DESCRIPTION
ZONING
TAXES AND ASSESSMENT
HIGHEST AND BEST USE
APPROACHES TO VALUE
SALES COMPARISON APPROACH
RECONCILIATION AND CORRELATION
CERTIFICATION
ASSUMPTIONS AND LIMITING CONDITIONS

ADDENDUM
-PROPERTY DEED
-ZONING ORDINANCE
-ZONING MAP
-PROPERTY CARDS
-QUALIFICATIONS OF APPRAISERS
-PRIVACY NOTICE

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11
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27
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SUMMARY APPRAISAL REPORT

This is a Summary Appraisal Report, which is intended to comply with the reporting requirements set
forth under Standards Rule 2-2(b) of the Uniform Standards of Professional Appraisal Practice for a
Summary Appraisal Report. As such, it presents only summary discussions of the data, reasoning, and
analyses that were used in the appraisal process to develop the appraiser's opinion of value. Supporting
documentation concerning the data, reasoning, and analyses is retained in the appraiser's file. The depth
of discussion contained in this report is specific to the needs of the client(s) and for the intended use
stated below. The appraisers are not responsible for unauthorized use of this report.

This report has been prepared in accordance with the Uniform Standards of Professional Appraisal
Practice of the Appraisal Foundation, and the Code of Ethics and Standards of Professional Practice of
the Appraisal Institute.

Client:

Mr. Andrew J. Giorgione

SAM Board of Trustees
409 North Second Street, Suite 500
Harrisburg, PA 17101

Appraisers:

RSR Appraisers & Analysts

W. Greg Rothman, MAI, MRICS, CPE, CCIM
Jeremy D. Heintzelman, Licensed Appraiser Trainee
Andrew R. Wolfe, Licensed Appraiser Trainee
3 Lemoyne Drive, Suite 100
Lemoyne, PA 17043

Subject:

1407 North Third Street, Harrisburg, PA 17102

Owner:

Third Street Development, LP

Date of Report: The date of the report is February 27, 2013.

Ownership and Sales History: The property is presently owned by Third Street Development, LP. This
group purchased the property from Fulton Bank on October 24, 2008 for a consideration of $550,000.
This sale is referenced by Instrument 20080039234 in the Dauphin County Courthouse and contains ten

(10) parcels. There were no other sales of the subject property in the previous three years. Also, the
group is expecting to acquire one (1) more parcel (06-015-010) for the Art Museum.

Agreement of Sale: There is currently an agreement of sale on the property between Third Street
Partners, LP and The Susquehanna Art Museum for $875,000. The seller has agreed to incur the cost of
demolition of Parcel 010. A copy of the agreement of sale is included in the addenda of this report.

Property Rights Appraised: The property rights under appraisal in this report are the Fee Simple
ownership in the subject property.

Fee Simple ownership is defined as "absolute ownership unencumbered by any other interest or estate,
subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police
power, and escheat.

Definition of Market Value: Market value is the major focus of most real property appraisal
assignments. Both economic and legal definitions of market value have been developed and refined. A
current economic definition agreed upon by federal financial institutions in the United States is:

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 are the consummation of a
sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

i)
ii)
iii)
iv)

buyer and seller are typically motivated;

both parties are well informed or well advised and acting in what they consider
their best interest;
a reasonable time is allowed for exposure in the open market;
payment is made in terms of cash in United States dollars or in terms of financial
arrangements compatible thereto; and

v)

the price represents the normal consideration for the property sold unaffected by
special or creative financing or sales concessions granted by anyone associated
1
with the sale.
Definition of Use Value: Use Value is the value a specific property has for a specific use. Use Value
focuses on the value the real estate contributes to the property as a whole, without regard to the
monetary amount that might be realized upon its sale.

Current Use: The subject property is currently vacant, but construction is expected to begin on the
Susquehanna Art Museum in 2013.

Scope of Work Rule

According to the Uniform Standards of Professional Appraisal Practice (USPAP) Scope of Work Rule:

For each appraisal, appraisal review, and appraisal consulting assignment, an appraiser must:
1. identify the problem to be solved;
2. determine and perform the scope of work necessary to develop credible
assignment results; and
3. disclose the scope of the work in the report.
An appraiser must properly identify the problem to be solved in order to determine the appropriate scope
of work. The appraiser must be prepared to demonstrate that the scope of work is sufficient to produce
credible assignment results.2
Problem Identification
We have identified the appraisal problem as determining the as is market value, for the clients internal
use.

Description of the Appraisal Process: The appraisal process included an inspection of the subject
property (accompanied by Matt Tunnell of GreenWorks Development) by W. Greg Rothman, MAI,
MRICS, CCIM, CPE, Jeremy Heintzelman, Licensed Appraiser Trainee, and Andrew Wolfe, Licensed
Appraiser Trainee, on February 18, 2013, verification of all information with buyers, sellers, brokers,
1Appraisal

Foundation, Uniform Standards of Professional Appraisal Practice of the Appraisal Institute, 2012-2013 Edition,
(Wash. D.C.: 2012)

public records, and/or with other knowledgeable sources; analysis of market conditions, locational
factors, physical attributes and other pertinent factors.

In this appraisal report, only the Sales Comparison Approach was used to value the subject property.

Scope of Work: The scope of this appraisal encompasses the research and analysis of data required to
prepare a reliable opinion of market value of the subject property. The procedures used in the appraisal
analysis of the subject property are as follows:

Regional and neighborhood data was gathered from various sources, including public data sources such
as the Pennsylvania State Data Center, CCIM Site to Do Business, and the United States Bureau of the
Census. We analyzed specific neighborhood conditions through a neighborhood inspection.

We have researched site data listed on the subjects tax assessment record, and the most recently
recorded legal description. A site inspection was conducted on February 18, 2013. Zoning information
was obtained from the City of Harrisburg. Flood Zone information was obtained from FEMA. Current
property assessment and millage information was obtained from the Dauphin County Tax Assessment
Office. All site information gathered is reasonable and considered accurate.

Site data was obtained from an inspection of the property conducted on February 18, 2013. Further
information gathered was obtained from the Dauphin County Tax Assessment records, and from in-house
appraisal files.

The Highest and Best Use Analysis as though vacant and as improved was determined through analysis
of uses that are legally permitted, physically possible, financially feasible and maximally productive. The
determination of the Highest and Best Use is a compilation of all relevant market conditions and
anticipated yield rates.

USPAP 2012-2013 Edition, The Appraisal Foundation, page U-13.

In determining the Approaches to Value the appraiser collected data from public records, interviews with
Dauphin County officials, municipal officials, buyers, sellers, residential builders, real estate
brokers/agents, residential property managers, and/or with other knowledgeable sources. In addition to
the above-mentioned sources, we have used data contained within our data bank from previous
assignments. A final reconciliation of value was determined based on my professional judgment of the
available data. In this appraisal report, the Sales Comparison Approach was utilized to form an opinion
of market value for the subject. This appraisal is to be used in whole and not in part. No part of this
appraisal shall be used in conjunction with any other appraisal report.

The current (effective date of appraisal) purchasing power of the dollar is the basis for the value opinion
stated within; no extreme fluctuations in economic cycles are anticipated.

This Summary Appraisal Report is a recapitulation of the appraiser's data, analyses, and conclusions.
Supporting documentation is retained in the appraiser's file.

The Income Capitalization Approach was considered, but was not developed due to the owner
occupied nature of the property.

The improvements are currently vacant and are not in leasable

condition.

The Cost Approach was considered, but was not applied due to the age of the existing improvements
and the difficulty in measuring depreciation. There is also a lack of comparable land sales that would
deem this approach applicable.

Exposure Time: Exposure time is different for various types of real estate and under various market
conditions. It is noted that the overall concept of reasonable exposure encompasses not only adequate,
sufficient and reasonable time but also adequate, sufficient and reasonable effort. Based on the
information presented in the body of the report, which follows, a reasonable exposure time for the subject
property at the indicated market value is eight to twelve months. [The reader should note that exposure
time is different than marketing time in that exposure time is always presumed to precede the effective

date of an appraisal, whereas marketing time is a time period immediately subsequent to the date of the
appraisal.]

Trends and Marketing Time: The economy in general has been strong for most all types of commercial
property, as it proliferates throughout all regions of the country and especially central Pennsylvania. A
reasonable marketing time assumes that the seller is motivated; the property is priced within a reasonable
percentage of an appraised market value and is actively advertised and marketed by a competent real
estate broker or the like. A reasonable marketing time also assumes that the sale of the property would
not require any unusual financing or seller concessions.

Consultations with area real estate professionals for their opinion indicated a range within a nine to
twelve month period of time in the central Pennsylvania area. It is the appraisers opinion; the subject
property would most likely experience a marketing time of nine to twelve months if placed on the market
for sale. The estimate of marketing time assumes that the property is exposed in the open market at a
reasonable asking price and that there are no distressed factors affecting its exposure in the market. If the
property is listed at a liquidation price, the estimated marketing period may be less than what the
appraisers have forecasted.

Intended Use of the Appraisal Report: The intended use of this report is to provide an estimate of
market value of the subject property for the clients internal purposes.

Intended Users of the Appraisal Report: The intended user of this report is the client, Mr. Andrew
Giorgione of the Susquehanna Art Museum.
Purpose of the Appraisal Report: The purpose of this report is to give an opinion of value for the fee
simple ownership of the subject property.
Function of the Appraisal Report: The function of the appraisal is for estimating the as is market
value of the property.

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REAL ESTATE APPRAISAL REPORT SUMMARY

Property Type:

Vacant Bank Building

Location:

1407 North Third Street, City of Harrisburg

Dauphin County, Pennsylvania 17102

Tax Map Parcel(s):

06-15-011, 06-15-012, 06-15-013, 06-15-014, 0615-15, 06-15-016, 06-15-017, 06-016-058, 06-016079, 06-016-080 (10 parcels total). Ownership is
expected to acquire parcel 06-015-010, as well.
This parcel is included in this appraisal report.

Owner of Record:

Third Street Development, LP

Deed Reference:

20080039234

Lot Size:

A combined 0.44 acres or 19,166 square-feet over

eleven (11) parcels.

Effective Date of the Appraisal:

February 18, 2013

Date of the Report:

February 27, 2013

Property Rights Appraised:

Fee Simple

Improvements:

A 7,520 square-foot, two-story bank building

located on 0.44 acres. The building was
constructed in 1923 and is considered to be in
average condition. All other improvements will
be demolished once construction begins.

Zoning:

Business General (BG)

Utilities:

Public water, sewer, electric, gas and telephone

Highest & Best Use of the Site as Vacant:

Commercial Retail Development

Highest & Best Use of the Site as Improved:

Redevelopment and renovation

improvements with some demolition.

11

of

current

FINAL VALUE ESTIMATES

As Is Value Estimates:
Sales Approach:
Cost Approach:
Income Approach:
Final Market Value Estimate:

Value
$810,000
Not Applicable
Not Applicable
$810,000

12

Effective Date
February 18, 2013
Not Applicable
Not Applicable
February 18, 2013

SUBJECT PHOTOGRAPHS

Subject Property: Front Elevation

Subject Property: Front Elevation

Subject Property: Rear Elevation

Subject Property: Side Elevation

Subject Property: Parking Lot

Subject Property: Parking Lot

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Subject Property: Parcel to be Acquired

Subject Property: Rear Parking Lot

Street View: North Third Street (North)

Street View: North Third Street (South)

Street View: James Street (North)

Street View: James Street (South)

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Interior: Entrance

Interior: Main Floor

Interior: Teller Area

Interior: Bank Vault

Interior: 2nd Floor

Interior: Basement

15

AERIAL PHOTOGRAPH

TAX MAP

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DAUPHIN COUNTY ANALYSIS

Regional Overview
The subject property is located in the city of Harrisburg in Dauphin County, Pennsylvania. Dauphin
County is bounded by Northumberland County to the north, Cumberland County across the Susquehanna
River to the west, Lancaster County to the south, and Lebanon County to the east. Dauphin County,
together with Cumberland and Perry Counties form the Harrisburg Metropolitan Statistical Area (MSA).
At the heart of the MSA is the City of Harrisburg, the Capitol of the Commonwealth of Pennsylvania,
which is located 70 miles from Allentown, 80 miles from Baltimore, 90 miles from Philadelphia, 110 miles
from Washington D.C. and 200 miles from Pittsburgh. Interstate highway routes 76, 78, 81 and 83 run
through the MSA and provide access to these markets.

Regional Transportation
The major traffic arteries and highway systems that run through the MSA provide important links to
other primary and secondary markets in Pennsylvania and the northeast. Approximately 25% of the
U.S. population lies within a 250-mile radius of the Harrisburg area.

Interstate 76, also known as the Pennsylvania Turnpike, links the area with Pittsburgh to the west and
Philadelphia to the east.

Interstate 78 runs from Interstate 81 in Lebanon County, eastward to

Allentown and northern New Jersey. Interstate 83 runs from Harrisburg to Baltimore, and Interstate 81
runs north to New York State and Canada, and south to Tennessee.

Other major roads in the area include PA Route 283, which runs from Harrisburg to Lancaster, U.S.
Routes 11 and 15, which run north to New York State and south to Maryland, and PA Route 581,
which runs from Harrisburg westward to the Naval Ships Parts Control Center in Mechanicsburg. Both
of these roads are four lane limited access highways. A six-mile extension of Route 581 was completed
in 1996, joining the road with Interstate 81.

Passenger rail service is provided by Amtrak on ConRail's main line (formerly Penn Central and Reading
Companies).

The train/rail terminal is located in downtown Harrisburg at the recently renovated

17

Harrisburg Transportation Center. Passenger rail service is available to Pittsburgh and other destinations
to the west, and also to Philadelphia along ConRail's northeast corridor. Freight service throughout the
area is provided by ConRail.

Continental Trailways and Greyhound buses run out of a terminal located in the same facility. Intercity
bus service is provided by the Capital Area Transit (CAT); with routes throughout the East and West
Shores of the Harrisburg MSA. The bus system provides important transportation services for many city
residents who work outside of Harrisburg proper.

The area is also served by the Harrisburg International Airport (HIA), which is located 10 miles south
of Harrisburg, along the Susquehanna River. Major carriers include Air Canada, American Eagle,
Continental Airlines, Delta Airlines, Northwest Airlines, Air Tran, United Airlines, and US Airways.
The Harrisburg area is well served with its own beltway. The combination of Route 581, I-83 and I-81
form a circle around the immediate East Shore areas, Harrisburg City, and near West Shore areas.
Larger cities such as Pittsburgh and Philadelphia do not have a full circle route around the core area.
This is a large advantage to assist in the ease of travel around the city.

The Harrisburg MSA employment base is centered on state and federal government and those
government-servicing industries. Located in the center of the Harrisburg MSA is the Pennsylvania State
Capitol and over a dozen state office buildings. Military installations are also prominent in the area and
include: 1) Mechanicsburg Naval Depot, aka Defense Distribution East; 2) New Cumberland Army
Depot; 3) the U.S. Army War College in Carlisle; and, 4) Fort Indiantown Gap.

The Harrisburg-Carlisle area's unemployment rate fell to 7.5 percent in August 2012, according to the
Pennsylvania Department of Labor & Industry. The area has seen several real estate construction projects
underway in the year 2012.

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MAP OF DAUPHIN COUNTY

19

NEIGHBORHOOD ANALYSIS CITY OF HARRISBURG

The neighborhood analysis provides a bridge between the Area Analysis and the study of the subject
property. As in the Area Analysis, the goal of the Neighborhood Analysis is to determine how the
operation of social, economic, governmental and environmental factors influence the value of real estate.

AREA MAP

The neighborhood analysis provides a bridge between the Regional Analysis and the study of the subject
property. As in the Regional Analysis, the goal of the Neighborhood Analysis is to determine how the
operation of social, economic, governmental and environmental factors influences the value of real estate.

Location
The subject property is located on the corner of North Third, James and Calder Streets, in the Midtown
district of Harrisburg.

The subjects local market area is the fifth and sixth wards of the City of

Harrisburg, Dauphin County, Pennsylvania. The area is often referred to as the Midtown market of
Harrisburg. The State Capitol building and the Central Business District are adjacent, to the South and
East of the neighborhood.

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Neighborhood Boundaries
The neighborhood boundaries are North Second Street to the West; Forster Street to the South; North
Sixth Street to the East; and Verbeke Street to the North.

Physical Description & Neighboring Uses

The neighboring uses include retail and commercial office space with a mix of residential buildings. The
Downtown district is adjacent to the subject property. The subject improvements are considered to be
compatible with the overall neighborhood development.

The local market area generally consists of

office, apartment, row homes, townhouses, and various commercial and retail uses. There is a small
grocery and convenience store, a pizza shop, a Sprint store, a gas station, an auto repair shop, an Italian
restaurant, and numerous other small retail stores.

Many buildings consist of first floor retail or

restaurant use with the upper floor(s) used as offices or residential apartments.

Overview
The neighborhood is experiencing the urban revitalization that started in the downtown of the city in
1998. Urban renewal has spread into the mid-town and uptown areas. This is a good sign for the subject
property.

Conclusion
The neighborhood will be a positive factor for the subject property.

The subject neighborhood is a

mature, fully developed, area of mixed use known as the Midtown Market District. The Third Street
Corridor is the secondary retail strip often characterized by start-up retail stores. The Midtown area
remains an attractive place for residential living. In conclusion, the neighborhood and local market area
represents a strong location for a school in an area that has experienced much of the citys revitalization.

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SITE DATA
The following site description is based upon a physical inspection conducted on February 18, 2013.

Size:

0.44 acres or 19,166 square feet

Shape:

The subject property consists of eleven (11) parcels. All parcels are
rectangular in shape.

Topography:

The topography is level at street grade.

Drainage:

Appears adequate.

Zoning:

The subject property is located in the Business General (BG) zoning

district of the City of Harrisburg.

Environmental Hazards:

None observed or reported. The appraiser is not an expert in environmental matters. A Phase I environmental test is suggested.

Seismic Hazards:

Not a recognized problem.

Soil Conditions:

The appraisers have not been made aware of any unusual or adverse soil
conditions.

Landscaping:

There is minimal landscaping on-site and is well-maintained.

Parking and Drives:

The site has an asphalt parking lot, which is in need of some repair. There
are 12 on-site parking spaces.

Yard Improvements:

Concrete curbing and sidewalks.

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Visibility:

The subject site has very good visibility from the corner of North Third
Street and Calder Street.

Access:

Vehicular access to the site is available off of North Third Street and
Calder Street. Access to the subject property is considered to be very
good.

Public Utilities:

Public water, sewer, electric, gas and telephone services

Favorable Site Attributes: The site has very good access & visibility at a corner lot.

Unfavorable Site Attributes: The small size of the site is the only unfavorable attribute.

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FEMA FLOOD MAP

According to Flood Hazard Map, Community Panel No. 42043C0319D, effective date August 2, 2012,
the subject property is located in Zone X, areas outside the floodplain. Flood insurance would not be
required at the subject property. The flood map can be seen below.

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IMPROVEMENT DESCRIPTION

Property Identification: The subject property is located at 1407 North Third Street in the City of
Harrisburg, Dauphin County, Pennsylvania. The property consists of eleven (11) total parcels.

Improvements:
Square Footage:

The two-story bank building contains 7,520 square feet.

Year Built:

1923

Foundation:

Concrete slab

Construction:

Masonry

Roof:

Flat rubber

Exterior Finish:

Masonry and stone

Interior Finish:

Carpet and vinyl tile flooring, finished drywall, plaster walls, and glass doors.

Ceiling:

Acoustic tile

Ceiling Height:

15 to 25 feet

Windows:

Stationary

HVAC:

Oil Furnace

Sprinkler:

None

Overall Condition:

Average

Physical Adequacy:

The design and layout of the improvements are physically adequate and the
construction quality of the building is average.

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ZONING

The subject property is located in the Business General (BG) zoning district of the City of Harrisburg,
Dauphin County, Pennsylvania. Permitted uses include the following: all uses, buildings and structures
permitted in any Residence zone, all uses, buildings and structures permitted in a BL zone, sales shops,
cigar making shops, fur and fabric storage buildings, lithography, radio broadcasting stations and studios,
storage or parking garages, express freight offices, recreation halls, filling stations, bar rooms, clubs or
fraternal homes, home and beverage distributors, Laundromats or dry-cleaning pick-up and delivery and
office buildings.

The subject property is considered a permitted use in this zoning district. Area

requirements include the following: maximum building height no height limitations, minimum front
setback 5 feet, minimum rear setback 5 feet, minimum side setback 10 feet.

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TAXES AND ASSESSMENT

The subject property consists of 11 parcels. The assessment values for each parcel can be seen below.

Parcel
06-015-010
06-015-011
06-015-012
06-015-013
06-015-014
06-015-015
06-015-016
06-015-017
06-016-058
06-016-079
06-016-080
Total

Acreage
0.08
0.01
0.01
0.03
0.04
0.04
0.04
0.08
0.02
0.07
0.02
0.44

Assessment (Land)
$19,800
$3,000
$3,000
$7,900
$11,100
$12,100
$12,100
$22,800
$3,900
$11,400
$3,300
$110,400

Assessment (Building)
$120,400
$300
$300
$800
$1,100
$33,300
$207,100
$398,100
$400
$1,200
$400
$763,400

Total Assessment
$140,200
$3,300
$3,300
$8,700
$12,200
$45,400
$219,200
$420,900
$4,300
$12,600
$3,700
$873,800

Total millage rates for Dauphin County and the City of Harrisburg are shown in the table below.

Land:
County Library
6.876
0.35

Municipal
30.97

School
26.965

Total
65.161

Municipal
5.16

School
26.965

Total
39.351

Improvements:
County Library
6.876
0.35

Applying this to the assessed value of the property results in an annual tax liability of $37,235 ($7,194 for
land and $30,040 for improvements). The current Common Level Factor (CLF) in Dauphin County,
effective July 1, 2012, is 1.38, translating into an implied market value of $1,205,844 ($873,800 x 1.38).
The subject property appears to be over-assessed.

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HIGHEST AND BEST USE

The highest and best use of a property is that use to which the land can be put which will create the
greatest utility for the land, be it in profit or in amenities, and that which is permitted or would be
permitted by the local municipal or township authorities, and that which would not be unduly
objectionable to the character of the surrounding property and keeping within the scope of the general
neighborhood development.

Elements affecting value, which depend on events or a combination of occurrences, which, while within
the realm of possibility are not fairly shown to be reasonably probable, should be excluded from
consideration. Also, if the intended use is dependent upon an uncertain act of another person, the
intention cannot be considered.

Highest and best use is considered as that use of the land, which may reasonably be expected to produce
the highest and best return to the land, over a given period of time. Highest and best use is that legal use
which will yield to the land the highest present value. It is sometimes referred to as "optimum use".
In estimating highest and best use, there are essentially three states of analysis:
A. Possible Use: Uses to which it is physically possible to put the site in
question.
B. Permissible Use: Legal uses permitted by zoning and deed restrictions
on the site in question.
C. Feasible Use: Possible and permissible uses that will produce the
highest net return or highest present worth.
The highest and best use of the land (site) if vacant and available for use may be different from the highest
and best use of the improved property. This is normally true when the improvement is not an appropriate
use and yet makes a contribution to the total property value in excess of the value of the site.
The following test must be passed in determining the highest and best use:
A. The use must be legal.

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B. The use must be probable, not speculative.

C. 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.

HIGHEST AND BEST USE AS VACANT:

The highest and best use of land as though vacant assumes that the site is vacant or can be made vacant
by demolishing the existing improvements. The questions to be answered in this analysis are: If the land
is, or were, vacant, what use should be made of it? What type of building or other improvement if any
should be constructed on the land, and when?

Legally Permissible: The subject property is located in the Business General (BG) zoning district of
the City of Harrisburg, Dauphin County, Pennsylvania. Permitted uses include the following: all uses,
buildings and structures permitted in any Residence zone, all uses, buildings and structures permitted in a
BL zone, sales shops, cigar making shops, fur and fabric storage buildings, lithography, radio
broadcasting stations and studios, storage or parking garages, express freight offices, recreation halls,
filling stations, bar rooms, clubs or fraternal homes, home and beverage distributors, Laundromats or drycleaning pick-up and delivery and office buildings.

Physically Possible: Here the shape, size, utility, and terrain of the site are taken into account. The
subject property contains eleven (11) parcels. The shape of the parcels is rectangular. The site contains a
total of 0.44 acres. The topography is level at street grade. The site has excellent visibility from North
Third Street, James Street, and Calder Street. There do not appear to be any apparent existing hazards
on the site. The site operates on all public utilities. According to Flood Hazard Map, Community Panel
No. 42043C0319D, the subject property is located in Zone X, areas outside the floodplain.

While no soil or engineering tests were reviewed, the surrounding improvements suggest that there are no
physical constraints on development of the subject site. Commercial retail development would be
physically possible.

29

Financially Feasible: Uses that meet the above two criteria must also be capable of providing sufficient
revenue to meet operation expenses, the required rate of return on investment, and the required rate of
return on the site. The neighborhood is urban in nature. Commercial retail development would be
financially feasible.

Maximally Productive: It is our opinion that the subject property is suited for commercial retail.
Therefore, the highest and best use as vacant is for commercial retail development.

HIGHEST AND BEST USE AS IMPROVED:

The highest and best use of the property as improved pertains to the use that should be made of an
improved property in light of its improvements. It is the use that maximizes an investment property's
value, consistent with the long-term rate of return and associated risk.

The subject property consists of a 7,520 square foot, two-story bank situated on 0.44 acres along North
Third Street. The other on-site improvements will be demolished once construction of the Susquehanna
Art Museum begins. Therefore, the highest and best use as improved is renovating and redeveloping the
bank building.

30

THE APPROACHES TO VALUE

Typically, after analyzing the physical characteristics of the subject and current conditions within the real
estate markets, three approaches to value are developed to arrive at three separate indications of the
subject's value.

These three approaches, the Sales Comparison Approach, Income Capitalization

Approach, and Cost Approach arrive at a value indication through dissimilar methods and the use of
different types of data. However, these three approaches are not always unrelated, and some aspects of
each approach may be applicable to the others.

In applying the Cost Approach to value, the appraiser attempts to estimate the difference in worth to a
buyer between the property being appraised and a newly constructed building with optimal utility. The
depreciated replacement cost of the improvements is estimated by analyzing three forms of depreciation;
physical deterioration, functional obsolescence and external or economic obsolescence. This depreciated
replacement cost is then added to the market value of the underlying site, to arrive at a value indication
for the subject. The Cost Approach was not developed due to the age of the improvements and the lack
of available land sales.

In the Sales Comparison Approach, market value is estimated by comparing the subject to similar
properties which have been sold recently, or to properties which are currently offered for sale. The
analysis of the sales relative to the subject focuses upon differences in legal, locational, physical and
economic characteristics. This approach is applicable to all types of real property when there is sufficient
data in the market.

Real estate which is capable of producing income through rents and leasing is often purchased as an
investment. From the buyer's point of view, the earning power of a property is the most significant
determinant of property value. The buyer is essentially trading present dollars for the right to receive
future income. Development of the Income Capitalization Approach involves estimating net operating
income by analyzing encumbering leases, market rents, market occupancy levels and absorption rates, and
expenses. This net operating income is then capitalized at an appropriate rate, which is also determined
by the market, to arrive at a single value estimate.

31

The Income Capitalization Approach was considered but was not developed due to the owner occupied
nature of the property. After developing each of the approaches to value, the three value estimates are
reconciled into a single estimate of value for the subject property. Since the approaches involve different
techniques, and the reliability of data involved in each technique may vary, the market value is usually
based upon the approach which utilized the strongest market evidence.

32

SALES COMPARISON APPROACH

The Sales Comparison Approach is a method of estimating market value where the subject property is
compared to similar properties which have been sold. The main premise of this approach is that the
market value of a particular property is directly related to the prices of similar, competing properties in
the market. The analysis of the comparable sales focuses upon differences in legal, physical, locational
and economic characteristics as well as differences in property rights conveyed, dates of sale, financing
and the motivations of the buyers and sellers.3

The principles of real estate appraisal involved in the Sales Comparison Approach include Supply and
Demand, Substitution, Balance and Externalities. The Principle of Supply and Demand suggests that if
demand for a property is high, prices will rise; if demand is low, prices will decline. Shifts in supply will
often lag shifts in demand since supply may only be created as fast as it takes to build a building, or
improve land suitable for developing housing. The premise of the Principle of Substitution is that the
value of a property tends to be set by the price that would be paid to acquire a substitute property of
similar utility and desirability. The Principle of Balance focuses upon the balance of supply and demand,
which tend toward equilibrium. The balance of supply and demand will change continually due to shifts
in population, purchasing power, and preferences. Construction of new buildings and demolition of old
ones cause supply to vary. Finally, the Principle of Externalities holds that external forces may positively
or negatively impact the value of a property. Changes in the economic climate, political climate, or just
the neighborhood in general will have an impact on values.

The application of the Sales Comparison Approach involves thorough analysis of sales in the market to
determine the most comparable properties to the subject. Once these sales are researched they are
compared to the subject property through appropriate elements of comparison.

Units of Comparison

The Appraisal of Real Estate, 13th Edition; The Appraisal Institute, 2008.

33

An important step in the Sales Comparison Approach is the selection of an appropriate unit of
comparison, i.e. the components into which a property may be divided for purposes of comparison. In
the analysis of the subject property, the price per square foot is the appropriate unit of comparison for
the building improvements.

The subject property consists of a 7,520 square foot, two-story bank building situated on 0.44 acres.

Elements of Comparison
Key value elements under scrutiny that may require adjustments are: property rights conveyed, financing
terms, conditions of sale, date of sale, location, and physical characteristics.

The following table shows some comparable office listings in Harrisburg:

Address

Location

List Price

321 N Front St.

Harrisburg

799,900

10,160 $

78.73

1995

1705 N Front St.

Harrisburg

495,000

10,285 $

48.13

1895

111 N Front St.

Harrisburg

500,000

10,764 $

46.45

1811

1707 S Cameron St.

Harrisburg

460,000

14,934 $

30.80

1987

126 Walnut St.

Harrisburg

394,000

13,000 $

30.31

1920

Comparable sales are presented on the following pages.

34

Square Ft.

$/SF

Year Built

COMPARABLE SALE ONE

Location:

325-327 North Front Street, City of Harrisburg

Dauphin County, Pennsylvania

Transaction Data:
Consideration:
Sale Date:
Grantor:
Grantee:
Parcel ID:
Deed Reference:
Conditions of Sale:
Property Rights:
Financing:
Verification:

$600,000
September 2012
KDR Investments, LLP
PARS Real Estate, LLC
04-037-008 and 04-037-009
20120029411
Arms Length
Fee Simple
Conventional Mortgage
Mark Santana (NAI CIR), grantor, Co-Star and Public Records

Improvement Data:
Gross Square Feet:
Age/Condition:
Construction:

8,372 SF
1850/Average
Masonry

Site Data:
Site Size:
Topography:
Access/Visibility:
Public Utilities:
Zoning:
Land-to-Building Ratio:

0.13 acres or 5,663 SF

Generally Level
Good/Good
All public available
RLB, Residential Limited Zone B
0.68 to 1

Appraisal Measures:
Sale Price per SF:

$71.67

Comments: This property overlooks the Susquehanna River. The property is a multi-story, semi-detached
professional office building configured with single occupant. This property was originally listed for $699,000 for a
17 months period with NAI CIR. There is no parking on-site.

35

COMPARABLE OFFICE SALE TWO

Location:

600 North 2nd Street, City of Harrisburg

Dauphin County, Pennsylvania

Transaction Data:
Consideration:
Date of Sale:
Grantor:
Grantee:
Tax Parcel:
Conditions of Sale:
Property Rights Conveyed:
Financing:
Verification:

$1,290,000
August 2012
Arcus Properties, LP
PA AFL CIO Building Association
27-04-025-013, 04-025-009, 04-026-001
Arms length
Leased Fee
Conventional
Richard Bloomingdale (grantor), Dan Alderman (NAI CIR), & Co-Star

Improvement Data:
Construction:
Quality of Construction:
Size:
Age:
Condition:

Five-story masonry
Average
17,600 SF
1926
Average

Site Data:
Lot Size:
Shape/Topography:
Public Utilities:
Zoning:
Land-to-Building Ratio:

0.23 acres or 9,808 SF

Rectangular/Level
All public available
CCL, Community Commercial Limited Zone
0.56 to 1

Appraisal Measures:
Sale Price per SF:

$73.30

Comments: Five-story, office building structure inclusive of 17,600 square feet gross or net 16,500 square feet and
an unfinished basement. This building was multi-tenant occupied and owner occupied on the first floor. The
building was originally constructed in 1926 and renovated throughout the years for tenant fit-out. Overall the
building was considered to be in average to good condition. There are 34 on-site parking spaces.

36

COMPARABLE SALE THREE

Location:

2701 North Front Street, City of Harrisburg

Dauphin County, Pennsylvania

Transaction Data:
Consideration:
Date of Sale:
Grantor:
Grantee:
Tax Parcel:
Conditions of Sale/Deed Ref:
Property Rights Conveyed:
Financing:
Verification:

$840,000 (Real Estate Only)

August 11, 2011
Robin Clemens and Sean Adams
Jonas Rupp House, LP
10-064-018
Arms length/2011-0021996
Fee Simple
Conventional
Greg Rothman (RSR Realtors, Broker) 717-763-1212

Improvement Data:
Construction:
Quality of Const./Condition:
Size:
Age/ Utility:

Two & a half-story brick/frame

Good/ Good
8,437 SF
1925/Good

Site Data:
Area:
Shape/ Topography:
Zoning:
Public Utilities:
Access/ Visibility:
Land-to-Building Ratio:

0.55 acres or 23,958 square feet

Rectangular/Level
Apartment Office Limited (A-O-L)
All public available
Good/Good
2.91 to 1

Appraisal Measures:
Sale Price per Square Foot:

$99.56

Comments: This is the sale of a two and a half-story office building located along North Front Street in the City of
Harrisburg. The building was originally constructed as a residence and used as an office building by the United
Way. It was converted back to a residential property and then a bed & breakfast. The new buyer will be using it
as an office building with some special events. The sale included allocation of $100,000 towards furniture,
fixtures, and equipment. There is no parking on-site.

37

COMPARABLE SALE FOUR

Location:

2 West High Street, Carlisle Borough 3rd Ward

Cumberland County, Pennsylvania

Transaction Data:
Consideration:
Sale Date:
Grantor:
Grantee:
Parcel ID:
Deed Reference:
Conditions of Sale:
Property Rights:
Financing:
Verification:

$875,000
February 5, 2009
Martin Equities, LLC
A & K Real Estate Holdings, LLC
04-21-0320-027
200903101
Arms Length
Fee Simple
Conventional Mortgage
Ray Wolfe Jr. (Broker of Wolfe & Co. Realtors), Public Records

Improvement Data:
Gross Square Feet:
Age/Condition:
Construction:

11,323 SF
1915/Average
Masonry & Glass

Site Data:
Site Size:
Topography:
Access/Visibility:
Public Utilities:
Zoning:
Land-to-Building Ratio:

0.27 acres or 11,761 SF

Generally Level
Good/Good
All public available
C1, Commercial Zoning District
1 to 1

Appraisal Measures:
Sale Price per SF:

$77.28

Comments: This is the sale of an old two-story bank building in Carlisle Borough. The bank was converted into a
law office, and significant renovations were completed after the sale. This was a private sale between the grantor
and grantee. There are ten (10) parking spaces on-site.

38

COMPARABLE SALES GRID

COMPARABLE SALES

SUBJECT

SALE 1

SALE 2

SALE 3

SALE 4

LOCATION
TOWNSHIP
COUNTY

1407 N 3rd St.

City of Harrisburg
Dauphin

325-327 N Front St.

City of Harrisburg
Dauphin

600 N 2nd St.

City of Harrisburg
Dauphin

2701 N Front St.

City of Harrisburg
Dauphin

2 W High St.
Carlisle Borough
Cumberland

DATE OF SALE
CONSIDERATION

N/A
N/A

Sep-12
$600,000

Aug-12
$1,290,000

Aug-12
$840,000

Feb-09
$875,000

SQUARE FEET

7,520

8,372

17,600

8,437

11,323

SIZE (ACRES)

0.44

0.13

0.23

0.55

0.27

PRICE PER SQUARE FOOT

N/A

$71.67

$73.30

$99.56

$77.28

PROPERTY RIGHTS
CONVEYED

N/A

Fee Simple

Leased Fee

Fee Simple

Fee Simple

FINANCING

N/A

Conventional

Conventional

Conventional

Conventional

CONDITIONS OF SALE

N/A

Arm's Length

Arm's Length

Arm's Length

Arm's Length

TIME

N/A

0%

0%

0%

5%

LOCATION
ACCESS & VISIBILITY
AGE & CONDITION
SITE CHARACTERISTICS
LAND-TO-BUILDING RATIO
PARKING

Urban
Very Good
1923/Average
Generally Level
2.55:1
12 Spaces
Business General
(BG)
7,520 SF

-10%
15%
0%
0%
25%
15%

-10%
15%
0%
0%
25%
-15%

-10%
15%
-5%
0%
0%
15%

0%
0%
0%
0%
15%
0%

0%
0%

0%
20%

0%
0%

0%
10%

45%
$103.92

35%
$98.95

15%
$114.50

30%
$100.46

ZONING
ECONOMIES OF SCALE
NET ADJUSTMENT
ADJUSTED PRICE PER SF

Comparable Sales

Adjusted $/SF

Comparable Sale Two

$98.95

Comparable Sale Four

$100.46

Comparable Sale One

$103.92

SUBJECT PROPERTY
Comparable Sale Three

$114.50

39

Sale One was adjusted downward to account for its superior location on N. Front Street. It was
adjusted upwards for inferior access & visibility; N. Front Street is a one-way street, and this property is
not located on a corner lot.

Upward adjustments were made for land-to-building ratio & parking

available.
Sale Two was adjusted downward for its superior location on North 2nd Street as well as on-site parking
available. An upward adjustment was made for access & visibility, land-to-building ratio, and economies
of scale.

Sale Three was adjusted downwards for superior location on North Front Street and superior age &
condition. This sale was adjusted upwards for inferior access & visibility and on-site parking available.

Sale Four was adjusted upwards for time, land-to-building ratio, and economies of scale.

Comparable
4
2
SUBJECT
1
3

RELATIVE COMPARISON ANALYSIS

Price/Sq. Ft.
x
Percentage Weighting
$100.46
20.00%
$98.95
20.00%
$103.92
$114.50
Column Totals

10.00%
50.00%
100.00%

Product
$20.09
$19.79
$10.39
$57.25
$107.52

Conclusion Sales Comparison Approach As Is

The comparable sales are indicated on the Sales Adjustment Grid. The adjusted price per square foot
ranged from $98.95 to $114.50 per square foot with a mean of $104.46. Sale Four is considered most
similar to the subject property is given greatest weight. A Relative Comparison Analysis was used to
appropriately weigh each comparable sales influence on the final price per square foot chosen for the
subject property. Based on the foregoing analysis, we estimate a price per square foot of $108.00 for
the subject property. Therefore, it is our opinion that the as is Fee Simple Value of the subject
property as of February 18, 2013 is $812,160 (7,520 SF x $108.00/SF), rounded to:
* * * EIGHT HUNDRED TEN THOUSAND DOLLARS* * *
($810,000)

40

RECONCILIATION AND CORRELATION

The Sales Comparison Approach has been developed in the analysis of the subject property, 1407 North
Third Street, City of Harrisburg, Dauphin County. The value conclusion from this approach is as
follows:
AS IS
Sales Comparison:

$810,000

Cost Approach:

N/A

Income Capitalization:

N/A

The Sales Comparison Approach is an approach to value wherein the appraiser seeks out sales of similar
type properties that have recently sold in the subject's market area. These sales are then compared to the
subject and adjusted for dissimilarities between the comparable properties and the subject to arrive at an
indication of value. Theoretically, the Sales Comparison Approach reflects the actions of both buyers and
sellers in the market. No two sales or properties are exactly alike. Therefore, numerous adjustments are
applied based on interpretations of market information. This approach is most reliable when there are
relatively homogeneous properties or when there are certain strong, similar traits, which transcend the
sales sample.

Due to the fact that land sales within the City of Harrisburg are very scarce, a significant upwards
adjustment was made to Comparable Sales 1, 2 and 4 for land-to-building ratio. Parcel 010 is currently
improved with a building that is inhabitable and must be demolished to make way for redevelopment for
the Susquehanna Art Museum. Demolition costs were not taken into account in the valuation of the
subject property due to the fact that the costs ($60,000) will be incurred by the seller. This is stated in
the agreement of sale.

The Cost Approach was considered, but was not developed for the subject property, due to the age of the
improvements and the lack of land sales. The Income Approach was considered but was not developed
for the subject property, due to its owner occupied nature. More weight is given to the Sales
Comparison Approach due to the availability of sales in the market.

41

Therefore, it is concluded that the market value of the fee simple interest in the subject property in its
as is condition, as of February 18, 2013 is:

***EIGHT HUNDRED TEN THOUSAND DOLLARS***

($810,000)

42

CERTIFICATION OF VALUE

I certify that, to the best of my knowledge and belief:

1.

The statements of fact contained in this report are true and correct.

2.

The reported analyses, opinions, and conclusions are limited only by the reported
assumptions and limiting conditions, and are my personal, unbiased professional analyses,
opinions, and conclusions.

3.

I have no present or prospective interest in the property that is the subject of this report,
and I have no personal interest or bias with respect to the parties involved.

4.

My compensation in not contingent upon the reporting of a predetermined value of

direction in value that favors the cause of the client, the amount of the value estimate, the
attainment of a stipulated result, or the occurrence of a subsequent event.

5.

My analyses, opinions, and conclusions were developed, and this report has been
prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.

6.

I have made a personal inspection of the property that is the subject of this report.

7.

Jeremy D. Heintzelman and Andrew Wolfe provided significant professional assistance to

the person signing this report.

8.

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 Appraisal Practice of the Appraisal Institute.

Signature:

_____________________
W. Greg Rothman, MAI, MRICS, CCIM, CPE
Pennsylvania Certified General Appraiser
License No. GA -001455-L
Expiration June 30, 2013

43

CERTIFICATION OF VALUE

I certify that, to the best of my knowledge and belief:

1.

The statements of fact contained in this report are true and correct.

2.

The reported analyses, opinions, and conclusions are limited only by the reported
assumptions and limiting conditions and are my personal, impartial, and unbiased
professional analyses, opinions, and conclusions.

3.

I have no (or the specified) present or prospective interest in the property that is the
subject of this report and no (or the specified) personal interest with respect to the parties
involved.

4.

I have no bias with respect to the property that is the subject of this report or to the
parties involved with this assignment. RSR Appraisers and Analysts have not appraised
this property before.

5.

My engagement in this assignment was not contingent upon developing or reporting

predetermined results.

6.

My compensation for completing this assignment is not contingent upon the development
or reporting of a predetermined value or direction in value that favors the cause of the
client, the amount of the value opinion, the attainment of a stipulated result, or the
occurrence of a subsequent event directly related to the intended use of this appraisal.

7.

My analyses, opinions, and conclusions were developed, and this report has been
prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.

8.

I have made a personal inspection of the property that is the subject of this report.

_____________________________
Jeremy D. Heintzelman
Licensed Appraiser Trainee
License #: LAT000288
Expires: June 30, 2013

44

CERTIFICATION
I certify that, to the best of my knowledge and belief:
1.

The statements of fact contained in this report are true and correct.

2.

The reported analyses, opinions, and conclusions are limited only by the reported
assumptions and limiting conditions and are my personal, impartial, and unbiased
professional analyses, opinions, and conclusions.

3.

I have no (or the specified) present or prospective interest in the property that is the
subject of this report and no (or the specified) personal interest with respect to the parties
involved.

4.

I have no bias with respect to the property that is the subject of this report or to the
parties involved with this assignment. RSR Appraisers and Analysts have not appraised
this property before.

5.

My engagement in this assignment was not contingent upon developing or reporting

predetermined results.

6.

My compensation for completing this assignment is not contingent upon the development
or reporting of a predetermined value or direction in value that favors the cause of the
client, the amount of the value opinion, the attainment of a stipulated result, or the
occurrence of a subsequent event directly related to the intended use of this appraisal.

7.

My analyses, opinions, and conclusions were developed, and this report has been
prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.

8.

I have made a personal inspection of the property that is the subject of this report.

Signature:
Andrew R. Wolfe
Licensed Appraiser Trainee
No: LAT000423
Expires: June 30, 2013

45

ASSUMPTIONS AND LIMITING CONDITIONS

1.

No responsibility is assumed for the legal descriptions provided or for matters pertaining
to legal or title considerations. Title to the property is assumed to be good and
marketable unless otherwise stated.

2.

The property is appraised free and clear of any or all liens or encumbrances unless
otherwise stated.

3.

Responsible ownership and competent property management are assumed.

4.

The information furnished by others is believed to be reliable, but no warranty is given for
accuracy.

5.

All engineering studies are assumed to be correct. The plot plans and illustrative material
in this report are included only to help the reader visualize the property.

6.

No survey has been made by the appraiser and no responsibility is assumed in connection
with such matters.

7.

It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or
structures that render it more or less valuable. No responsibility is assumed for such
conditions or for obtaining the engineering studies that may be required to discover them.

8.

It is assumed the property is in full compliance with all applicable federal, state, and local
environmental regulations and laws unless the lack of compliance is stated, described, and
considered in the appraisal report.

9.

It is assumed that the utilization of the land and improvements is within the boundaries or
property lines of the property described and that there is no encroachment or trespass
unless noted within the report.

10.

The distribution of the total valuation in this report between land and improvements
applies only under the stated program utilization. The separate allocations for land and
buildings must not be used in conjunction with any other appraisal and are invalid if so
used.

11.

Acceptance and/or use of this appraisal report constitutes acceptance of the foregoing
Assumptions and Limiting Conditions.

12.

The appraiser of this property will not be required to give testimony or appear in court
because of having made this appraisal, unless arrangements have been previously made.

46

ADDENDUM

47