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STATE OF FLORIDA r-,,1
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DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULM ,
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FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION, DIVISION OF REAL ESTATE
Petitioner,
v. Case No. 2009030578
PATRICIA J. WHITTINGTON,
Respondent.
/
ADMINISTRATIVE COMPLAINT
Petitioner, Department Of Business and Professional Regulation ("Petitioner") files this Administrative Complaint
before • the Florida Real Estate Appraisal Board, against Respondent, Patricia J. Whittlngton ("Respondent"), and alleges:
Petitioner is the state agency charged with regulating the practice of real estate pursuant to Section 20.165, Florida Statutes, and Chapters 120, 455, and 475 of the Florida Statutes.
At all times material to this Complaint, Respondent was licensed as a state certified general real estate appraiser in the State of Florida, having been issued license 2535.
Respondent's address of record is 100 S. Hall Street, Labelle, Florida 33935.
FDBPR v. Patricia J. Whittington Administrative Complaint
2009030578
On or about July 10, 2008, Respondent developed and communicated an appraisal report ("Report") for a proposed subdivision located in Glades County about 15 miles east of
the City of Labelle. The property consists of parcel
;
numbers A29-42-31-A00-005B-0000, S29-42-31-001-0000-1040,
and S29-42-31-001-0000-0010("Subject Property"). Respondent estimated its value at $7,784,000. A copy of the Report is attached hereto and incorporated herein as Administrative Complaint Exhibit 1.
On or about June 9, 2010, Petitioner had a review done of Respondent's Report by Dennis J. Black. A copy of the review is attached hereto and incorporated herein as Administrative Complaint Exhibit 2.
The Subject Property is approximately 86.5 acres large, and is currently vacant land. The Subject Property is a proposed _residential subdivision of roughly 101 lots, and at the time of the Report was owned by Glades Riverfront Estates, LLC. The Subject Property is currently zoned Open Use Agriculture.
Respondent made numerous errors in several major areas of the Report, as detailed below:
Market/Housing Trends
Respondent failed to meaningfully discuss the market.
Respondent did not discuss growth trends, economic trends,
FDBPR v. Patricia J. Whittington 2009030578
Administrative Complaint
demographics, etc. Given the fact that the Subject Property is being valued as a proposed residential subdivision information relating to demand for housing, income levels, employment opportunities, etc. would all be typical, and should have been discussed in the Repo t.
Respondent also failed to address the housing trends in the Subject Property area. This is a significant omission as the Respondent claims in her Report that the highest and best use of the land is residential. According to the Glades County Community Development office, the demand for single family residence (SFR) permits have been declining. In the year of the Report the monthly average was one permit per month. The year prior to that, however, the monthly permit average was four per month. Respondent failed to disclose to the reader of the Report what the true market conditions were. A copy of the email from Glades County Community Development is attached hereto and incorporated herein as Administrative Complaint Exhibit 3.
Highest and Best Use
Respondent asserts that the highest and best use of the Subject Property is a residential one. However, the analysis the Respondent uses does not support this. Respondent states on page 25 of her Report the following:
FDBPR v. Patricia J. Whittington Administrative Complaint
2009030578
"The subject is zoned "OUA", open use agriculture by Glades County. Further, the property is designed as one dwelling per 20 acres by the Glades County Comprehensive Land Use Plan. Therefore, those physically possible uses which are also legally permissible on the property include the residential development with approval for a subdivision."
,
Respondent does not explain how, if the land is zoned agricultural, she makes the leap that a residential use is legally permissible. Respondent also does not explain how a residential use is physically possible when only one dwelling per 20 acres is allowed. The Subject Property is roughly 86 acres large, and there's a proposal to turn it into a subdivision of 101 lots. That translates into at least one lot per acre. Respondent does not explain how a residential use is physically possible, when only one dwelling per 20 acres is allowed.
Respondent also does not sufficiently explain why a residential use would be economically feasible. Respondent fails to discuss whether there was a need for 100+ homesites. Respondent also fails to analyze pent up demand, housing starts, or price point. As discussed earlier, Respondent also fails to meaningfully discuss the market, which would have been the foundation for an economic feasibility analysis in a Highest and Best Use context. Respondent also leaps to the conclusion that the
FDBPR v. Patricia J. Whittington Administrative Complaint
2009030578
old canals can be r dug and connected to the Caloosahatchee River, without any support for this conclusion.
Hypothetical Conditions and Extraordinary Assumptions
Respondent falsely states that there are no hypothetical assumptions in place, when in fact the whole Report values a subdivision which does not exist. Additionally, the zoning for the ·entire Subject Property would need to be changed for a 101 site subdivision, which is another hypothetical condition which is not mentioned. Respondent fails to disclose these hypothetical conditions.
Respondent also fails to describe or disclose the Extraordinary Assumption that the canals could be dredged and connected with the river.
Adjustments and Support for Same
the Respondent's report was a Self-Contained Appraisal Report, this information should have been in the Report. A Self-Contained Appraisal Report should describe the information analyzed, the appraisal methods and techniques
In her Report, the Respondent uses five canal sales as comparables, to come up with an estimated value per unit. This estimated value was used for 77 of the potential units in the Subject Property. Respondent adjusts the canal sales downward by 50% with no discussion about how such an adjustment is extracted from the market. Additionally, as
FDBPR v. Patricia J. Whittington Administrative Complaint
2009030578
employed, and the reasoning that supports the analyses, opinions, and conclusions. Respondent failed to do any of these things in her Report.
Scope of the Appraisal
;
In the Respondent's Scope of the Appraisal section, she states the following on page 19:
"The Sales Comparison Approach was utilized in estimating the value of the subject. This approach entailed searching the marketplace for sales of individual lots in competitive developments. After consideration of sales and listing of lots somewhat competitive with the subject, the appraiser estimated the market value for all of the individual lots.
There will more than likely be some differentiation of individual lot process once this project is actually put into a marketing program. Howe er, for this
· analysis purposes, the lots have been grouped into off water site, and canal front which are the premium sites. These values were then used in order to estimate their potential gross sell out value for the development. Consideration is given to the time value of money and increases in property values which may occur over the sell out period.
The appraiser estimated the projected sell out period for the development and itemized the sales of lots into the different cash flow period. From the gross sales for each projected sales period were deducted the attributable expenses as well as a portion of the entrepreneurial profit in order to estimate the net income from the sales. This net income from the sales for each sales period was then discounted back to a present value. The sum of these present values is the estimated market value of the subject property through the utilization of the Discounted Cash Flow technique."
In reality, Respondent did not discuss or analyze discounting (time value of money) or any type of support
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2009030578
for changes in property values during the holding period. This is contrary to what she said she would do in her 'Scope of Appraisal' section.
Valuation Methodology
Respondent determined a Land Value by Sales Comparison of $5,379,000 for 100 lots (It should be noted the title page of Respondent's Report states that there are 101 lots) then adds the cost of roads and such to that amount to arrive at a final estimate of value for the Subject Property. That amount is stated as being $7,784,000.
Given the fact that the lot values were already estimated by using sales which already were located on roads such costs should not have been added.
Respondent's estimated market value for the Subject Property consists of the total estimated sale prices of all lots plus the estimated cost of building the subdivision's infrastructure. Respondent ignored that standard appraisal practice calls for the absorption time to be estimated and the income stream to be discounted to the present value. Furthermore, the appropriate method calls for the discounting of the net sales proceeds. The Respondent fails to even consider expenses such as marketing costs and sales commissions.
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Respondent misstates that she was using a Sales Comparison approach, when what she completed was a Subdivision Analysis method of valuing vacant land.
Other Errors and Omissions
Respondent states in her Report that "Direct access to the site is provided by frontage on State Road 80." In fact, the site does not front State Road 80.
In her Report, Respondent included a subdivision plat.
Respondent fails to disclose that this plat was filed decades ago and had no approvals.
Respondent misstates that the Unit of Comparison is per net acre when in fact it is per lot.
Respondent on page 29 of her Report mentions a chart which displays:
"some basic information about each sale, including the sale number, O.R. Book and Page in which the deed for the transaction was recorded, the grantor and grantee, the sale date, the properties zoning, sale price, size (gross acres), and price per acre. Next, a comparative analysis is presented which qualitatively compares each sale property to the subject."
No such chart is contained in the Report.
Respondent states on Page 2 of her Report that she is going to estimate two values, as follows:
"This appraisal has multi uses which include 1) to estimate the fee simple interest in the property as it exists today which is equivalent to the value of the land, and 2) estimate the value of the project as if
FDBPR v. Patricia J. Whittington Administrative Complaint
2009030578
completed as of the effective date of the appraisal with no sales."
;
This is a misstatement, as the Respondent provided only one value, not two. The Respondent makes no effort to value the Subject Property "as it exists today". If she had attempted such an analysis the cost of infrastructure is cash out flow upfront.
Respondent used comparable sales from Cape Coral which have concrete bulkheading, whereas the subject lots would not have bulkheading. There is no showing in her Report that she adjusted for this.
Respondent fails to mention or cons der that the
subdivision would only be accessed by an unpaved easement. Respondent bases her lot values on properties that do not suffer such an external inadequacy. There is no showing in her Report that she adjusted for this.
Respondent misstates in her Report that the Subject Property is subject to real property taxes assessed by Hendry county, but the Subject Property is actually located in Glades County.
Respondent addresses in her Report on page 44 the waterfront market in Hendry County, when the Subject Property is actually located in Glades County.
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In the certification section of her Report, Respondent makes reference to the Hendry County Soil Survey, when the Subject Property is actually located in Glades County.
Respondent failed to sign the certification section.
i
Respondent failed to analyze the prior sale of the Subject Property, or determine if it was an arms-length transaction.
Respondent knew, or had reason to know, that she was not competent to accept or perform this Report.
COUNT ONE
Petitioner realleges and incorporates by reference the allegations set forth in paragraphs one (1) through thirty one (31) as set forth herein.
Section 475.624(15), Florida Statutes, subjects a real estate appraiser licensee to discipline for failing or refusing to exercise reasonable diligence in developing an appraisal or preparing an appraisal report.
As set forth above, Respondent failed to exercise reasonable diligence in one or more of the following ways:
By failing to meaningfully discuss the market, including growth trends, economic trends, and demographics.
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2009030578
By failing to address the housing trends in the Subject Property area, and by failing to disclose what the true market conditions were.
By failing to support her assertion that the highest
;
and best use of the Subject Property is a residential one.
By failing to sufficiently explain how she made the leap that a residential use is legally permissible.
By failing to sufficiently explain how a residential use is physically possible.
By failing to sufficiently explain why a residential use would be economically feasible. By failing to discuss whether there was a need for 100+ homesites, and failing to analyze pent up demand, housing starts, or price point..
By leaping to the conclusion that the old canals can be redug and connected to the Caloosahatchie River without any support for this conclusion.
By falsely stating that there are no hypothetical assumptions in place, when the whole Report values a subdivision which does not exist.
By failing to mention the hypothetical condition that the zoning would need to be changed for a 101 site subdivision.
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2009030578
By failing to describe or disclose the Extraordinary Assumption that the canals could be dredged and connected with the river.
By failing to discuss how she extracted from the
,
market a 50% downward adjustment for the canal sales.
1. By failing to discuss or analyze discounting (time value of money) or any type of support for changes in property values during the holding period, which is contrary to what she said she would do in her 'Scope of Appraisal' section.
By incorrectly adding costs of roads and such to the amount of $5,379,000 (the land value by sales comparison of the 100 lots) to arrive at her final value, when Respondent had used comparable sales which were already located on roads. Therefore such costs shouldn't have been added.
By ignoring that standard appraisal practice calls for the absorption time to be estimated and the income stream to be discounted to the present value. By not using the appropriate method, which calls for discounting of the net sales proceeds. By failing to consider expenses such as marketing costs and sales commissions.
FDBPR v. Patricia J. Whittington Administrative Complaint
2009030578
By misstating that she was using a Sales Comparison approach, when what she completed was a Subdivision Analysis method of valuing vacant land.
By misstating that the Subject Property had frontage on State Road 80, when it did not.
By failing to disclose that the subdivision plat included in her Report was filed decades ago and had no approvals.
By misstating that the Unit of Comparison was per net acre when in fact it is per lot.
By discussing at length a chart containing comparable sales information, and then failing to include that chart in the Report.
By stating that she is going to estimate two values in her Report, and then only estimating one value.
By incorrectly using, and failing to adjust for the fact, that the comparable sales from Cape Coral had concrete bulkheading while the Subject Property did not.
By failing to mention or consider that the subdivision would only be accessed by an unpaved easement. By incorrectly basing her lot values on properties that do not suffer such an external inadequacy. By failing to adjust for same.
FDBPR v. Patricia J. Whittington Administrative Complaint
2009030578
By misstating in her Report that the Subject Property is subject to real property taxes assessed by Hendry county, when the Subject Property is located in Glades County.
By addressing in her Report the waterfront market in Hendry county, when the Subject Property is located in Glades county.
By making reference in the certifLcation section to the Hendry County Soil Survey, when the Subject Property is located in Glades county.
By failing to sign the certification section. aa. By failing to analyze the prior sale of the
Subject Property, or determine if it was an arms length transaction.
Based on the foregoing, Respondent violated Section 475.624(15) when she failed to exercise reasonable diligence in developing and preparing her Report.
COUNT TWO
Petitioner realleges and incorporates by reference the allegations set forth in paragraphs one (1) through thirty one (31) as set forth herein.
Section 475.624(2), Florida Statutes, subjects a real estate appraiser licensee to discipline for committing fraud, misrepresentation, concealment, false promises,
FDBPR v. Patricia J. Whittington Administrative Complaint
2009030578
false pretenses, dishonest conduct, culpable negligence, or breach of trust in any business transaction.
As set forth above, Respondent committed fraud,
misrepresentation, concealment, false promises, false pretenses, dishonest conduct, culpable negligence or breach of trust in any business transaction in one or more of the following ways:
By failing to meaningfully discuss the market, including growth trends, economic trends, and demographics.
By failing to address the housing trends in the Subject Property area, and by failing to disclose what the true market conditions were.
By failing to support her assertion that the highest and best use of the Subject Property is a residential one.
By failing to sufficiently explain how she made the leap that a residential use is legally permissible.
By failing to sufficiently explain how a residential use is physically possible.
By failing to sufficiently explain why a residential use would be economically feasible. By failing to discuss whether there was a need for 100+ homesites,
FDBPR v. Patricia J. Whittington Administrative Complaint
2009030578
and failing to analyze pent up demand, housing starts, or price point.
By leaping to the conclusion that the old canals can be redug and connected to the Caloosahatchie River without any support for this conclusion.
By falsely stating that there are no hypothetical assumptions in place, when the whole Report values a subdivision which does not exist.
By failing to mention the hypothetical condition that the zoning would need to be changed for a 101 site subdivision.
By failing to describe or disclose the Extraordinary Assumption that the canals could be dredged and connected with the river.
By failing to discuss how she extracted from the market a 50% downward adjustment for the canal sales.
By failing to discuss or analyze discounting (time value of money) or any type of support for changes in property values during the holding period, which is contrary to what she said she would do in her 'Scope of Appraisal' section.
By incorrectly adding costs of roads and such to the amount of $5,379,000 (the land value by sales comparison of the 100 lots) to arrive at her final
FDBPR v. Patricia J. Whittington Administrative Complaint
2009030578
value, when Respondent had used comparable sales which were already located on roads. Therefore such costs shouldn't have been added.
By ignoring that standard appraisal practice calls for
;
the absorption time to be estimated and the income stream to be discounted to the present value. By not using the appropriate method, which calls for discounting of the net sales proceeds. By failing to consider expenses such as marketing costs and sales commissions.
By misstating that she was using a Sales Comparison approach, when what she completed was a Subdivision Analysis method of valuing vacant land.
By misstating that the Subject Property had frontage on State Road 80, when it did not.
By failing to disclose that the subdivision plat included in her Report was filed decades ago and had no approvals.
By misstating that the Unit of Comparison was per net acre when in fact it is per lot.
By discussing at length a chart containing comparable
sales information, and then failing to include that chart in the Report.
FDBPR v. Patricia J. Whittington Administrative Complaint
2009030578
By stating that she is going to estimate two values in her Report, and then only estimating one value.
By incorrectly using, and failing to adjust for the
fact, that the comparable sales from Cape Coral had
I
concrete bulkheading while the Subject Property did not.
By failing to mention or consider that the subdivision would only be accessed by an unpaved easement. By incorrectly basing her lot values on properties that
do not suffer such an external inadequacy. to adjust for same.
By failing
By misstating in her Report that the Subject Property is subject to real property taxes assessed by Hendry county, when the Subject Property is located in Glades County.
By addressing in her Report the waterfront market in Hendry county, when the Subject Property is located in Glades county.
By making reference in the certification section to the Hendry County Soil Survey, when the Subject Property is located in Glades county.
By failing to sign the certification section.
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2009030578
aa. By failing to analyze a prior sale of the Subject Property, or determine if it was an arms-length transaction.
Based on the foregoing, Respondent violated Section 475.624(2) by committing fraud, misrepresentation, concealment, false promises, false pretenses, dishonest conduct, culpable negligence, or breach of trust in any business transaction.
COUNT THREE
Petitioner realleges and incorporates by reference the allegations set forth in paragraphs one (1) through thirty one (31) as set forth herein.
Section 475.624(4), Florida Statutes, subjects a real estate appraiser licensee to discipline for violating any of the provisions of Chapter 475 or any lawful order or rule made or issued under the provisions of Chapter 455 or 475.
Section 455.227(1)(o) states that disciplinary action
may be taken for accepting or performing professional
responsibilities the licensee knows, or ha' s"
reason to know,
the licensee is not competent to perform.
As set forth above, Respondent violated this statute by accepting and performing an appraisal assignment she
FDBPR v. Patricia J. Whittington Administrative Complaint
2009030578
knew, or had reason to know, she was not competent to perform.
Based on the foregoing, Respondent violated Section
455.227(1) (o) and, therefore, Section 475.624(4), when she
,
accepted and performed an appraisal assignment that she knew, or had reason to know, she was not competent to perform.
WHEREFORE, Petitioner respectfully requests the Board of Real Estate Appraisal enter an order imposing one or more of the
following penalties: permanent revocation or suspension
Respondent's license, restriction of practice, imposition of an administrative fine, issuance of a reprimand, placement of Respondent on probation, assessment of costs, corrective action and/or any other relief that the Board deems appropriate.
FDBPR v. Patricia J. Whittington
Administrative Complaint
2009030578
Signed this \ 6 day of
1
h ._v.:....- 2
, '----' 2 o1 o.
CHARLIE LIEM, Secretary Department of Business and
Professional Regulation
y:
Leigh Blakeman Se or Attorney
orida Bar No. 0506877 Department of Business and
Professional Regulation Division of Real Estate
400 W. Robinson Street Suite 801-N
Orlando, FL 32801
(407) 481-5632 Telephone
(407) 317-7260 Facsimile
PCP Date: 8/4/2010 PCP Members: CW/PB
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2009030578
NOTICE TO RESPONDENT(S)
PLEASE BE ADVISED that mediation under Sectio 120.573 of the Florida Statutes is not available for administrative disputes involving this type of agency action.
PLEASE BE FURTHER ADVISED that pursuant to this Administrative Complaint you may request, within the tim allowed by law, a hearing to be conducted in this matter in accordance with Sections 120.569 and 120.57 of the Florida Statutes; that you have the right, at your option and expense, to be represented by counsel or other qualified representative in this matter; and that you have the right, at your option and expense, to take testimony, to call and cross-examine witnesses, and to· have subpoena and subpoena duces tecum issued on your behalf if a formal hearing is requested.
PLEASE BE FURTHER ADVISED that if you do not file an Election of Rights form or some other responsive pleading with the Petitioner within twenty-one (21) days of receipt of this Administrative Complaint, the Petitioner will file with the Florida Real Estate Commission a motion requesting an informal hearing and entry of an appropriate Final Order which may result in the suspension or revocation of your real estate license or registration. Please see the enclosed Explanation of Rights and Election of Rights form.
First Appraisal of S.W. Florida, Inc. . \ f\ o '\
100 S. Hall Street, LaBelle, FL 33935 \ U .
1-800-675-6157*1-863 675-6015*Fax-1-863-675-1005
SUM11AR.Y APPRAISAL REPORT
PARCEL NUMBERS A29-42-3 l-A00-005B-0000
-l S29-42-31-001-0000-1040
j
i S29-42-31-001-0000-0010
PROPOSED SUBDIVISION /
101 HOJ\1ESITES
GLADES COUNTY, FLORIDA 33935
/1 . . PREPARED FOR
- TRINITY LENDERS, LLC 10580 NW 2ih STREET MIAMI, FL 33172
DATE OF VALUATION: JULY 10, 2008
DATE o;F INSPECTION: JULY 10, 2008
DATE OF REPORT: JULY 14, 2008
080569.PWJ
AD,MINISTRATIVE COMPLAI.Nt
EXHIBIT# I .
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JULY 10, 2008
Norberto "Tito" Gil Director
Trinity Lenders, LLC 10580 NW 2i .11 Street
Miami, Florida 33172
RE: Appraisal Report.
Proposed 101 lot Subdivision Moore Haven, Florida
Dear Mr. Gil:
· As per your request and authorization, we have made a personal inspection and appraisal of a proposed 101 lot subdivision which will be located in Glades County 15 miles east ofLaBelle.. - ·
This appraisal has multi uses which 'include 1) to estimate the fee simple interest in the property as. it exists today which is equivalent to the value of the land, and ,2) estimate the value of the project as if completed as of the effective date of the appraisal with no sales. .,
It is my opinion that if the project was completed as of July 10, 2008 with no pre-sales including all infrastructure, roads and amenities, the project would have a value of:
SEVEN MILLION SEVEN HUNDRED EIGHTY-FOUR DOLLARS $7,784,000
#·_!../ ,_-.
AU,Ml!\llSTRATIVE COMPLA!.N"(
EXHIBIT
I DA.GE ---- OF tr--·
I certify that I have no past, present or future interest in the real estate and to-the best ofmy knowledge, the facts contained herein are true and correct. We appreciate the opportunity to be of service to you in this matter. Please do not hesitate to call if we may be of further assistance. '
Respectfully submitted,
FIRST APPRAISAL OF S.W. FLORIDA, INC.
Patricia W. Joyce .
State Certified Generai Appraiser #RZ2535
AUfVi!N!STRA.TlVE COM,PUl!NI
EXH!BlT #_, -Ji-
Table of Contents.
Summary of Important Conclusions ..........................................................................................................' 6
Location: 6
Date of Valuation: 6
Property Rights Appraised: 6
Land Size:.....................................:.................................................................................................' 6
Irnprovements:, 6
Zoning· ...................................................................................· 6
Highest and Best Use: 6
County Location Map......................................................................................................., 7
Location Map 8
Subdivision Plat: 9
Aerial View 10
General Underlying Assumptions and Limiting Conditions 13
Definitions ..........................................................., 15
Definition of Highest and Best Use ,16
Definition of Fee Simple Estate· 16
Introduction .......................................· 17
- Property Type and Location 17
Property Ownership 17
Five Year Title History ...................................................................................................................................17 /
Legal Description ..............................................................-................................:, 17
Property Rights Appraised ..............................................................................· 17
Purpose of Appraisal 18
;: °:o ::::::::::::::::::::::·:::::::::::::::::::::::::::::·::::::::::::::::::::::::::::::::::::::::::'.:::::::::::::::::::::::::::::::::::;::i!
Scope of Appraisal (Overview of The Appraisal Process) 18
Marke: Area Description and Analysis ....................................................:····................................................-21 Overview ....................................................................................................' 21
Transportation 21
Size arid Shape 21
Access and Exposure........................................._ 21
Topography 22
Flood Plain 22
Site Description Summary 22
LaBelle .....................................................................................................................,.....'. 22
Market Area Description Summary 23
Site Description ...............................:............................................, 23
Future Land Use Designation 23
Zoning ..................................................................: 23
, Real Estate Assessment and Taxes 23
Highest and Best Use ..........................................................., 24
Land Value Estimate 28
CANAL SALES ...:........................................................................, 30
Parcel Map 32
Sale #l 32
Parcel Map 33
Sale #2 33
:r
Parcel Map 34
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Sale #4...................................................................,.......................................... ;t. ;_..;. B;l+··#._.........._.·._··._.._.._...·...... ---- ,=11-
P.AGI:: OF
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Parcel Map .......................................:..................................................................................., 36
Sale #5 36
OFF WATER SALES 37
Plat Map .................................................· 38
Sale #1 Off Water Site 38
Plat Map 39
Sale #2 Off Water 39
PlatMap 40
:i
Sale #3 Off Water.......................................................................................•····:···...·····················..····•·······: 40
'J VALUE ESTIMATE BY T1IB COST APPROACH 42
Comments on Appraisal 44
Addenda 50
Resume ............, 53
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AUMlNISTF ATIVE COi\,1Pt..A\.NT
E)(HIBIT #_._I _
Summary of Important Conclusions
Location: .
The subject property i located along, the north side of State Road 80, and is south of the Caloosahatchee River. The subject is approximately 15 miles east of the City of LaBelle. Direct access t9 the site _is provided ·by
frontage on State Road 80.
Date of Valuation:
J July 10, 2008
Property Rights Appraised:
Fee Simple Interest
Land Size:
Approximately 86.5 +/- Acres
Improvements:
This is a 86.5 +/- acre vacant tract of land. The subject is a proposed subdivision.
Zoning:
Currently is zoned OUA open use agriculture.
J
Highest and Best Use:
"AS VACANT". Combination of commercial or residential uses,
:/ conforming to the propefo/' s zoning and future land use designations.
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AUfl/llN!STRJ-1.TlVE COMPLAINT
EXHIBIT#_-'--------- --.......
P.,t;.GE OF
County Location Map
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AUfVliNISTRAT!VE COMPLAINT
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General Underlying Assumptions and Limiting Conditions
This appraisal report has been made with the foliowing general assumptions.
No responsibility is assumed for the legal description or for matters including legal or title considerations. Title to the property is assumed to be good and marketable unless otherwise stated.
The property is ppraised free and clear of any or all liens or encumbrances unless otherwise stated.
Responsible ownership and competent property management are assumed.
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' , 4. The information furnished by others is believed to be reliable.
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However, no warranty is given for its accuracy.
All engineering is assumed to be correct. The plot plans and illustrative material in this report are included only to assist the reader in visualizing the property. ·
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 arranging studies that may be required to discover them.
It is assumed that there is full compliance with all applicable federal, state and local environmental regulations and laws unless noncompliance is stated, defined, and considered in the appraisal report.
It is l:),ssumed that all applicable zoning and use regulations and
.. restrictions have been compiled with, unless a non-conformity has been stated, designed, and considered in the appraisal report.
It is assumed that all required licenses, certificates· of occupancy, consents, or other legislative or administrative authority from any local, state, or national government 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.
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., 10: It is assumed that the utilization of the land and .improvement is
J within the boundaries of the property lines of the property described and that
there is no encroachment or trespass unless noted in the report.
This appraisal report has been made with the following general limiting conditions:
l. The distribution, if any of the total valuation of this report between land and improvements applies only under the stated program of utilization. The separate allocations for the land and buildings must not be used in conjunction with any other appraisal and are invalid if so used.
Possession of this report, or a copy thereof, does not carry with it · . the right of publication. It may not be used for any purpose by any person other than the party to whom it is addressed without the written consent of the appraiser,' and any event only with proper written qualification and only in its entirety.
The appraiser herein by reason of this appraisal is• not required to give further information, consultation, testimony, or be in attendance in court withreference to the property.in question unless arrangements have been previously made..
Neither all not any part of the contents of this report (especially any conclusion as to value, the identity of the appraiser, or the firm with which the appraiser is connected), shall be disseminated to the public through advertising, public relations, news, sales, or other media without the written consent and approval of e appraiser.
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Definitions
Definition of Market Value
The current definition of market value can be stated as follows:
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 knowledgably, 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.
Buyer and seller are typically motivated;
Both parties are well-informed or well-advised, and acting in what they considered their own best interest.
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A reasonable time is allowed for exposure in the open market.
Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements.
The price represents the normal consideration of the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.
This definition is from The Appraisal of Real Estate, Twelfth Edition, by the Appraisal Institute, and The Dictionary of Real Estate Appraisal, Appraisal Institute, Fourth Edition.
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Definition of Highest and Best Use
Highest and best use may be defined as:
The reasonable probable and legal use of vacant land or improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value.
The definition immediately above applies specifically to the highest and best use of the land. It is to be r cognized that in cases where a site has existing improvements on it, the highest and best use may very well b determined to 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.
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Source: The Appraisal of Real Estate, Twelfth Edition, by the Appraisal Institute. ·
Definition of Fee Simple Estate
Property rights appraised are those of the unencumbered fee simple interest of ownership: According to The Dictionary of Real Estate Appraisal, Fourth Edition, by the Appraisal Institute,
Fee Simple Estate -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.
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Introduction
Property Type and Location
The subject property is under parcel numbers
A29-42-3 l-A00-005B-0000 S29-42-31-001-0000-1040 S29-.-42-31-001-0000-0010
Property Ownership
As per the Glades County Property Appraisers Office, the subject property is currently owned by the following ownership entity:
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'1 Glades Riverfront Estates LLC
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Five Yea:r Title History
#A29-42-3 l-A00-005B-0000 9/14/2006 Sold for $1,670,000 OR258/107
#S29-42-31-001-0000-1040 9/2/2006 Sold $950,000 OR258/85
#S29-42-31-001-0000-0010
j 9/14/2006 Sold $950,000 OR258/85
Legal Description
The subject property is described by a legal description included as part of . some of the aforementioned documents recorded in the Public Records of 'Glades County, Florida.
P.rope_rty Rights Appraised
We have estimated the market value of the fee simple interest·in the subject
property.
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1 Purpose of Appraisal
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The purpose of this appraisal is to estimate the market value of the fee
simple interest in the subject property, as of July 10, 2008; tlie date of inspection.
Function of Appraisal
The function _of this appraisal is to assist the client, with market value and internal decision making.
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1 Purpose of Report
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The purpose of this report is to outline the results of out investigations and analyses concerning the subject property. This report is presented in a self contained format and, therefore, includes a narrative discussion of the information utilized by the-appraisers in reaching an estimate of market value and the.various factors affecting the valuation. In addition, the methodology used by the appraiser in arriying at an estimate of value is discussed and explained.
Scope of Appraisal (Overview of The Appraisal Process).
This Self-Contained appraisal report outlines a Complete appraisal process. A Complete appraisal process is one which estimated the value of the subject property without departure from the Standards of Professional Appraisal Practice. In other words, all applicable appraisal methods are exercised without any hypothetical assumptions in place.
The subject property consists of three parcels of land in south Glades County
.. with a proposed use of a subdivision. The sites are. currently zoned OUA, open use agriculture by the Glades County Planning and Zoning.
This analysis includes all the necessary infrastructure and amenities to make the project feasible and allow the lots to be sold to individual users of the sites. The analyst physically inspected the property on two different occasions. The later of which was July 10, 2008. This inspection was as detailed as permitted by conditions as of that date. At the time of inspection
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no improvements to any significant degree other than a narrow road providing access was present.
In the course of the analysis, all three approaches to value have been considered. The subject property is to be developed as a residential subdivision. The Income Approach to Value was not considered appropriate as vacant lots for residential purposes are not typically leased in this ' particular marketplace. The appraiser did analyze the subject based upon the Cost Analysis. This entailed the research and analysis of vacant site sales . similar to the subject. The sales were adjusted for differences between
themselves and the subject in order to arrive at a market value for the vacant
site. Next the- appraiser analyzed the improvement to be located on the site. To this was added the indirect costs associated with the development. The sum total of these numbers represents a value for the project upon completion of all roads and infrastructure with consideration given to those expenses occurred during,the sell out p·eriod.
The Sales Comparison Approach was utilized in estimating the value oftli.e subject. This approach entailed searching t)J.e marketplace for sales of individual lots in competitive developments. After consideration of sales and listing of lots·somewhat competitive with the subject, the appraiser estimated the market value for all of the-individual lots. There will more than likely be
j some differentiation of individual lot process once this project is actually put into a marketing program. However, for this analysis purposes, the lots have been grouped into off water site, and canal front which are the premium sites. These values were then used in order to estimate their potential gross sell out value for the development. Consideration is given to the time value· . of money and increases in property values which may occur over the sell out period.
The appraiser estimated the projected _sell out period for the development 'and itemized the sales of lots into the different cash flow periods. From the gross sales for each projected sales period were deducted the attributable expenses as well as a portion of the entrepreneurial profit in order to estimate the net income from the sales. This net income from the sales for each sales period was then discounted back to a present value. The sum of these present values is the estimated market value of the subject property through the utilization of the Discounted Cash Flow technique.
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Information relative to th sales was from parties to the transactions or reliable persons. Where this was not possible, the appraiser took data from the public records of Glades and Hendry County. The data utilized in this .
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l of the property is contained herein and should be relied upon by a user of this report only in its entirety. Any section of this analysis copied without the consent of the analyst would not be warranted.
If the analysis is prepared correctly, and if the potential gross sell out indicated a value higher than the value·as indicated the feasibility of the project. The difference between the potential gross sell out and the value as indicated in the Cost Approach would be attributable to additional entrepreneurial profit over and above 15% as used in the analysis.
Furthermore, the value indicated by the Sales Comparison Approach compared with the value indicated in the Cost Approach with deductions made to the Cost Approach Value for items such as sales commissions, advertising, marketing, overhead and a significant portion of the entrepreneurial profit should be somewhat similar. If these numbers are relatively similar it would further indicate _that accurateness of the analysi and the potential feasibility of the project.
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The primary methods of appraising real estate are the Cost Approach, the Sales Comparison Approach (Market Approach), and the Income Approach.
1 While all three approaches were not applied to the property independently, all of the approaches will be considered at some point during the report.
Our investigati(?nS include research of public records throughout Glades County to obtain comparable land information. Further investigations· include discussions with the buyers.and sellers of these properties, as well as other individuals familiar with properties similar to the subject.
•. It is our opinion that all of the research and analyses considered necessary to arrive at a reasonable estimate of market value for the subject has been accomplished.
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Market Area Description and Analysis
The rationale of the mar et area analysis is based upon the premise that what occurs in the surrounding market area has a direct and immediate impact on the value of the subject property. The market area is a portion of a larger community or an entire community in which there is a homogeneous grouping of inhabitants, buildings, or building enterprises.
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For the purpose ofthls analysis, the primary subject market area is considered to include riverfront along the Caloosahatchee River. The general subject market is considered a rural community in character with land uses consisting of large ranch/farm holding land and rural acreage home sites. Agricultural pursuits in the area include citrus groves, cattle grazing. , vegetable farming, sod farming, etc.
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The majority of the home sites are located along the main paved roads and secondary graded roads, and are scattered throughout the county. Homes sites are very desirable along the riverfront. .
Transportation
The primary north to south transportation route throughout the general and immediate supject market is State Road 27, which bisects the county and State Road 80 a primary east to west cross-state highway in this area of Florida. The subject has good access to all main roadways in the county.
Size and Shape
, The subject site consist of three parcels of land totaling 86.5 +/- gross acres: The parcels encompasses in Township 42, Range 31 Section 29. A preliminary plat of the subdivision was provided to the appraiser.
Access an_d Exposure
. Primary access to the property is provided by a secondary road from State Road 80. This road is located just east of State Road 29, which is a two-
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way, paved highway maintained in good condition. This highway connects to State Roa4 27 to the north which is a major highway bisecting through the State of Florida. Overall, access to and throughout the subject property is considered adequate.
Topography
The subject property is comprised of cleared land with some scattered Oaks, Pines and Palmetto .Generally, the subject property and surrounding are ·- slope downward from the south to north towards the lower elevations of adjacent properties.
Flood Plain
As shown on the Flood Plain map in the Addendum, a large portion of the subject property are located within Zone "C".
Site Description Summary
In summary, the subject property is physically suited for a variety of uses. The property's size, shape, access, topography, and soil characteristics lend themselves to a variety of commercial or residential•uses. This conclusion assumes that the soils of the site are suitable, given proper land planning d engmeenng.
LaBelle
LaBelle is located 15 miles.west of the area and provides supporting amenities to iliis area. LaBelle is an incorporated city within Hendry County. The city population is 3,400 and the county is 28,000. There are ten public schools and two non public. One general hospital is located in Clewiston which is 35 miles to the east.
LaBelle consist of an established community whi h is the county seat of Hendry County. LaBelle offers a historic downtown with the county courthouse, county administration office, other professional offices, and retail uses. T4e city lies mostly central in the county, according to LaBelle County Statistics. Agriculture remains the number one source of income.
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Many of the residents within the City of LaBelle and the swrounding rural
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area are employed in citrus, groves, ranches, and agribusiness endeavors. · LaBelle provides a variety of professional, industrial, service and agribusiness employment.
Market Area Description Summary
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In summary, the general surrounding market area is residential and
· agriculture. Commercial uses are primarily limited to the highway frontages of State Road 80, and State Road 27. Overall, growth within the general surrounding area has been relatively nominal over the past five to ten years. Current market conditions are slow in this area due to the current economic conditions in Southwest Florida.
. Site Description
Future Land Use Designation
As per a representative of the Glades County Planning Department, the- subject property is designated as "QUA" Qpen Use Agriculture.
· Zoning
The subject property is zoned "QUA", Open Use Agriculture. Minimum Lot size 20 Acres per dwelling. This appraisal is subject to a zoning change of a proposed subdivision.
Real Estate Assessment and Taxes
The subject property is-subject to real property taxes assessed by Hendry ·. County. The tax amount on the rolls shows the gross amount due in March of the following year. However, a discount of 4% is offered if taxes are paid
"in November of the current y ar. The prudent property owner normally takes advantage of this 4% discount.
Highest and Best Use
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According to The Appraisal of Real Estate, the highest and best use is defined as,
The reasonable and probable use that supports the highest present lanq value, as defined, as of the date of the appraisal. Alternatively, the highest and best use is the use, from among reasonable probable and legal alternative uses, found to be physically possible, appropriately supported, financially feasible, and that results in the highest present land value.
To estimate the highest_ and best use of the subject, we have considered those uses which are physically possible, legally permissible, economically feasible, and maximally productive. Consideration was given to the individual features of the land, such as size, shape, location, access to
roadways, and the availability- of utilitie . Consideration was also given to
the surrounding land uses and the demand for property in the current real estate market.
In cases where properties are improved, the highest and best use of the site, "as though vacant", and the highest and best use of the property, "as improved", may be different. This is due to the principle of "contribution", which holds that if an improvement adds value to the site over and above land value, the highest and best use of the property is as improved until such time as the improvements add no contributory value to the property.
"As Though Vacant"
The highest and best use of the property, "as though vacant", must be
-analyzed with regard to the different type of uses, both existing and potential· for the property. This is to determine which use would provide the highest land value. We will then use sales of comparable properties that have comparable highest and best uses to estimate the land value of the subject property. For this reason, we have to first estimate the highest and best use, "as though vacant".
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Physically Possible
The size, shape, area, and th terrain affect the use of the property for which it may be developed. The utility of the parcel may depend on its frontage and dept. For example, an irregular shaped parcel may cost more to develop and then, ,when developed, may have less utility than a rectangular shaped parcel..
The subject property is a proposed subdivision consisting of 86.5+/- acres. Access to the property is considered adequate for residential uses provided by a 60' roadway off of Hendry Boulevard.
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Since the land is vacant and located along the Caloosahatchee River in Glades County; the land is physically best suited for a residential endeavors.
Legally Permissible
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Under this criteria, we h'ave considere4 those uses that are physically - . possible and also legally permissible for _the subject property. Those uses are controlled by various aspects of zoning and other governmental regulations that affect the subject property. We have considered those uses which would be legally permitted on the subject site in accordance with the present zoning or under future rezoning, if such WEre determined to be probable. We would not consider a change in zoning, unless it could be shown that such a change is reasonable probable in the foreseeable future.
The subject is zoned "ODA", open use agriculture by Glades County. . Further, the property is designated as one dwelling per 20 acres by the Glades County Comprehensive Land Use Plan. Therefore, those physically possible uses which are also legally permissible on the property include the residential development with approval for a subdivision.
Economically Feasible
We have considered those uses which are physically possible and legally permissible. Considering those uses, we have analyzed those uses that would also be economically feasible. Iri considering the economically feasible uses for this property, one must give consideration to the
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surrounding land uses, access, as well as the site's general and specific locations.
In general, the subject market area is residential with agriculture_ uses dispersed throughout the area. In fact, the general area surrounding the subject is a long-established !lgriculture area in which nearly 60% of the area
. ' is dedicated to agriculture uses. New developments are occurring
throughout the riverfront and Hendry County du to the creased interest in this area and the riverfro:r:it has seen steady increase growth over the past several years. This growth is anticipated to continue however at a much slower pace due to current economic conditions.
The subject market area is·situated near the City of LaBelle, with the south central Florida growing region. Therefore, those potential uses for the subject property, which are considered physically possible and legally permissible, are also those uses which are economically feasible and reasonable probable as of the date of the appraisal. With the proper zoning, the property is well suited to various residential developments.
Reasonable Probable/Conclusion "As Though Vacant"
/1 With consideration given to the subject property's physical characteristics,
.J nature of surrounding land uses, and the location within the LaBelle area, it is our opinion, the highest and best use would be future residential development.
"As Improved"
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Therefore, with consideration given to all of the above factors, it is our opinion and conclusion that the highest and best use of the subject is a residential use.
Valuation Methodology
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Real estate appraisal practice ordinarily requires the use of three basic approaches to value. These approaches, commonly referred to as the Cost Approach, the Sales Comparison Approach, and the Income Approach,
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provide the basis for arriving at a final value estimate. An explanation of· each method and its appli ability to the subject's valuation is as follows:
Cost Approach
The Cost Approach is the sum of the land value and the depreciated cost new of the improvements. The Cost Approach is based on the premise that an informed, rational, investor/purchaser would pay no more for the subject prope than it would cost him to _produce a substitute property with the same utility and without undue delay.
Sales Comparison Approach
The Sales Comparison Approach is the process of comparing sales to the subject property and making adjustments to these sales for such differences as time, location, size, physical characteristics, and other pertinent factors. This approach is based on the principle that a prudent purchaser would pay no more to buy the subject property tht¥J it would cost to buy a comparaol substitute property with the same utility ap.d.without undue delay.
The Sales Comparison Approach is one of the primary approaches utilized to estimate the value of the subject property. Since the property consists of a combination of vacant riverfront land, we have considered comparables
sales similar in use to the subject and located along the Caloosahatchee River.
Income Approach
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The Income Approach is hased on the premise that a prudent investor would pay no more the subject property than he would for another investment property with similar risk and return characteristics. Since the value of an
" investment can be considered equal to the present worth of anticipated future benefits (dollar income or amenities), this approach first estimated the net income that the property is capable of producing and then "c.apitalized" this amount at a market derived rate which reflect the risk and return characteristics of the investment.
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Valuation Methodology Summary
In summary; only the market approach to value is·used to value the subject property. The Income Approach is not applicable.
Land Value Estimate
The Sales Comparison Approach I?-as been used to estimate the underlying land value of the subject, under its highest and best use. To complete this · approach, we have search d the Public Records of Glades County to disclose sale of lands_ considered similar to the subject with regards to general location, size, and highest and best use. As a result of out research, several sales were disclosed and investigated for initial consideration.
After some analysis, several of the sales were eliminated from further consideration for various·reasons, including condition of sales (some sales
were not arms length), potential use, arid location. Of the original groupof / sales, the sales which were considered th most similar to the subject were·. further investigated. Eight of the sales were chosen for a direct comparative
and analysis Analysis of each sale is included in the Addendum to this report.
Unit of Comparison
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As can be seen on the Land Sales Analysis Chart, the sales were analyzed on a price per net acre basis. When analyzing the sales, often several units of. comparison can be utilized, including price per square foot, price per acre, price per developable lot or unit, etc.
ADMINISTRATIVE COMPLA!Nt
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About the Chart
As can be seen on the chart, the chosen sales have been listed chronologically from the most recent to the. oldest. The chart displays some basic information about each sale, including the sale number., O.R. Book and Page in which the deed for the transaction was recorded, the grantor and grantee, the sale date, the properties zoning, sale price, size (gross acres),. and price per acre. Next, a comparative analysis is presented which qualitatively compares each sale property to the subject.
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CANAL SALES
Sale #1 4628 SW 22nd Place | Sale #2 3010 SW 41st Terrace | Sale #3 4106.SW 22nd Ct. | |
Cape Coral | Cape Coral | Cape Coral | |
Lee County | Lee County | Lee County | |
1/2008 | 7/2008 | 5/2008 | |
:rvILS#205049953 | 1\1LS#200824274 | 11LS#20080354Q | |
.25 +!- Acres Access to Gulf. By Boat Lock | .24 +/- Acres Access to·Gulf · By boat lock | .24 +/- Acres Access to Gulf By boat lock | |
Price $125,000 | Price $120,000 | Price $145,000 | |
Adjustments Location -50% | Adjustments Location -50% | Adjustments Location -50% | |
Adjusted Price $62,500 | Adjusted Price $60,000. | i | Adjusted Price _ \'·., $72,500 |
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. CANAL SALES
Sale #4 2927 SW 39th Terrace Cape Coral | Sale #5 4127 NW 33rd St. Cape Coral | |
6/2008 MLS#80209813 | 3/2008 J\,11,8#200804531 | |
.24 +/- Acres Access to Gulf By boat lock | .23 +/- Acres Access to Gulf ·By boat lock | |
Price $100,000 | Price $102,000 | |
Adjustments Location -50% | Adjustments Location -50% | - |
Adjusted Price $50,000 | Adjusted Price $51,000 | ' |
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Sale #1 4510 Fire Court Port LaBelle Hendry County | ·Sale #2 9036 E Broad Circle Port LaBelle Hendry County | Sale #3 3532 Sky Valley Lane Clewiston ·Hendry County |
4/2008 | 1/2008 | 12/2007 OR0779/0175 |
MLS#200823173 . OR078 l/18.66 | ||
.46 +!- Acres | .24 +/-Acres | Irregular .50 +/-Acre |
Price $32,500 | Price $35,000 | Price $45,000 |
Adjustments None Same County | Adjustment None Same County | Adjustment None Same County - |
Off Water Site | Off Water Site | Off Water Site |
OFF WATER SALES
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Plat Map
Sale #1 Off Water Site
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Comparisons
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The above analysis has focused on.sales of properties similar to the subject. Analysis: Canal Sales
The five sales found were all _canal front sites with boat lock access to the river or Gulf of Mexico. These sales are the only sales with a restricted access such as a boat lock or lift. The sales are located in Cape Coral which is 35 miles to the west. The sales are in a more populated area with supporting services readily available. Due to the higher population base and supporting amenities a -50% discount is applied to all five sales.
The sales above indicate a price range per lot of $50,000 to $72,500. Estimated value per unit is $60,000 X 77 canal lots= $4,620,000
In this analysis, consideration is given to the location and amenities.
Off Water Sites:
Sales #1 thru #3, are all off water sites located in subdivisions similar to the
j subject. Sale #1 Is located in Laurel Oaks which is just south of the river and offers a subdivision neighborhood with boat ramp access. Sale #2 is located just south of the subject in the Port LaBelle Area. Sale #3 is located 15 miles east in Clewiston in a subdivision known as Sky Valley. This subdivision has services readily available in the City of Clewiston.
The sales above indicated a price range per lot of $45,000 to $32,500.
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Estimated value per unit is$ 33,000 X 23 Off water unit=$ 759,000
Additio;nally, proposed zoning of the subject has been compared to all of the comparables which is considered similar but not identical and no - adjustments are made. The subject is proposed for a subdivision.
AUM.!NISTR.ATIVE COMPLAi.Nt
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VALUE ESTIMATE BY THE COST APPROACH
GRE - Development Cost Estimates
General Conditions
Architecture aI,d Design Insurance (General Uability) Temporary fencing and Security Temporary Utilities (Work Site) Entitlement Fees
Retainer
Cost
$ 20,000
$ ·10,000
$ 4,500
$ 8,000
$ 4,500 City Fees
Survey Fees
Due upo_n submittal of final plat Due upon schedu!rng plat for county
Due at time of recording
Application City Application Glades County Sheriff Appliqition Drainage Dist.
Application Glades County
$ City Fees
$ City Fees ,
$ City Fees
$ 9,600 City Fees
$ 460 City Fees
$ 460 CityFe /
$ 3,000 City Fees
Initial Surveys | $ . 7,000 | |
Final Surveying and Engineering | $ 90,000 | HL Bennett Proposal |
Phase I - Environmental | $ 2,500 | |
Geotechnical Services | $ '15;000 | Estimate.by HSQ |
Bo1ing and Soll Tests | $ 2,020 | |
\IVeUancls Evaluation by Consultant | $ 1,000 | |
Wetlands Glades County Application | $ 200 | |
Wetlands Cleanup l Consultant Fees | $ 750 | |
Engineering and Permitting | $ 40,0PO | Estimate by HSO |
Construction Inspections | $ 20,000 | Estimate by HSQ |
$ 238,990 | ||
Site Work | ||
Clearing and Grubbing Site grading | 86 acres / 500 acre $ 75,000 . $ 120,000 | Estimate !Jy HSQ |
Excavation and Backfill | $ . 60,000 |
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Canals Expansion | $ 150,000 | |
Curb and Gutters | $ 120,000 | |
Asphalt Paving Palomino 3700 LF (2o'Wide) | $ 222,000 | Estimate by HSQ |
Asphalt Paving Hendry Blvd 3000 LF (20 Wide) | $ 110,000 | Estimate by HSQ |
Asphalt Paving GolNiew Isles 4900 LF (20 Wide) | $ 170,000 | Estimate by HSO |
Landscaping . | $ 125,000 | |
Water and Sewer Package Plant (Discharge to ground) | $ 250,000 | EEC proposal· |
Underground Utilities Development Contingency | $ ·(65,000 $ 80,000 | 5% |
$ 1,647,000 | ||
Others | ||
Hoist Sysiem | $ 300,000 | |
rota/ Cost Others | $ 300,000 | |
Total Cost Development | $ 2,185,990 |
_GRE - Development Cost Estimates
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*Development cost provided by Fernando Carvajal Total Construction Costs | $2,185,990 |
Add: Builder Profit 10% | 218,599 |
Add: Land Value By Sales Comparison | $5,379,000 |
Total Direct Development Costs | $7,783_,589 |
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,f 1JNISTRAT}VE COMPLA1N_t
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Subject Project General Lot Pricing
For the purpose of this analysis, we have divided the subject property into
',,, ,'': twc:tiypes. This includes the canal and.off water lots. The most premium
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The estimated site values are as foilows:
Canal Sites
Off Water Sites
$60,000X77= $4,620,000
$33,000X23= $ 759,000
$5,379,000
Comments on Appraisal
The, waterfront market in Hendry County has dramatically slowed in the past year. Due to the current economic conditions. No new developments have· _ broken ground and none are anticipated for the near future. The subject's location is ten miles east of the City of LaBelle and 15 miles west of Clewiston. Services at this time are limited and the demand for new development in this area at this time is uniikely. US Sugar has recently announced its plan to sell the Refinery to the State of Florida. This refinery is a major employment b se for this area and may have an adverse effect on this market.
Overall conditions in the local real estate market, the residential sector is clearly the most seriously impaired. There is a significant over-supply of both single family homes and lot sales. Absorption has slowed and owners have been forced to reduce their prices. As a direct result, there is little or no new residential developing occurring in this market place. Development scheduled for breaking ground have been put on hold or sold·off.
' Thus, this appraisal has no data from which to develop a project gross sell" out of the project, absorption rate or cash flow analysis which would be considered reliable. No· reliable data is available in the Hendry County Area due to the current economic conditions. A property such as the subject would most likely be held for time in the future.
The value estimated is based on current lots sales in Cape Coral with similar access to the river or Gulf of Mexico by boat lift of boat lock. Plus the
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estimated cost to constructed this development. Limited data was provided by Fernando Carvajal. Based on a land value of $5,379,000, plus a
$2,404,589 development ·cost, the property would have a value of
$7,783,589 if completed. No indirect costs were analyzed due to the current market conditions and no data available in Hendry County from which to· develop this analysis.
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Reconciliation of Final Value Estimate
The above value estimated are based upon diverse approaches which pro ide unique indication of value in each particular analysis. The appraiser utilized
two approaches to value in order to result in an appropriately supported
value estimates.
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The first approach to value was the Cost Approach. This approach to value has as its appraisal principle, the (principal of substitution) which holds that a buyer will pay no more than the cost of producing a substitute property with the same features and utilities. When improvements· are relatively new and are in good condition, the Cost Approach is considered to be a good indicator o'fvalue. Also, for this approach to be effective there must be an active market of vacant sites so that the value of the subject site as if vacant and.available to be put to its highest and best use may be accurately determined. In the Cost Approach to value, the appraiser estimated the direct
replacement cost for the prop9sed development which include all the direct costs of development, and the value of the land.
The second technique uti ized in this analysis was a combination of the Sales Comparison Approach which was used to estimate the value of the individual sites.
Therefore, it is my opinion· the subject property warrants the above value estimated as of July 10, 2008 to be:
$7,784,000 rounded to most significant.
, First Appraisal of S.W.. Florida, Inc.
Patricia W. Joyce
State Certified General Appraiser#0002535
ADMrNISTRATlVE COM,PLA.JNlj
EXH1Bff # / · .
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Certificate of Appraisal
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This is a certified appraisal as defined in the provision of Part ..,.. ,. • w,•"'·0 ,,. ·• •
II, Chapter 475.501, Florida Statues. The undersigned do hereby certify that, to the best of our knowledge and belief:
The statements of fact contained in this appraisal
and
report are true anq correct. Further, the reported appraisal analyses, opinions . and conclusions are limited only by the reported Assumptions Limiting Conditions, and are our personal, unbiased, professional analyses, opinions and conclusions.
. 2) We have n9 present or prospective interest in the property that is the sul;>ject of this report, and we have no personal interest or bias with respect to the parties involved.
Our compensation is not contingent on an action or event resulting from the analyses, opinions, or conclusions that were developed herein, or by the use of this report. The appraisal assigpment is not based.on a requested minimum valuation, a specific valuation, or the approval of a loan.
Our appraisal analyses, opinions, and conclusion were developed and this report has been prepared in conformity with the Uniform Standards of Professional Appraisal Practice (USP.A;>) of the Appraisal Foundation with the requirements of the Code of Professional Ethics and the Standards of Professional Practice of the Appraisal Institute, and with the Requirements of the State of Florida for State-Certified Appraisers.
This report and its use is subject to the requirements of the . Appraisal Institute relation to review by its duly authorized representatives,
j and to the requirements of the State of Florida relating to review by its Real Estate Appraisal Board.
Patricia Whittington-Joyce, has the knowledge and experience on the type of property appraised in its geographic area to meet the USPAP competency requirements.
Patricia_ \Vhittingtori.-Joyce made a personal inspection of the subject property of this rep rt on July 10, 2008.
Except as noted herein, no one provided significant professional assistance to the persons signing this report. We have relied upon information provided by Florida Community Bank and Jim Green regarding the parcels, boundaries and improvements. This information is considered an integral part of the valuation and is assumed to be reliable and correct. ,
This appraisal was made subject to the following conditions and contingencies:
The property· was appraised as if free and clear of any existing short and/or long term leases on land or improvements.
We were not provided with a topographical survey or a soil/subsoil analysis of the subject property. Since the discovery of any
abnormal soil or subsoil conditions is beyond our area.of expertise, we have assumed that the site is suit'.1ble for the existing use and relat1; improvements. Further, we were not provided with an analysis of the property which describes a breakdown of the lands between pasture · lands, hayfields, building-sites and wetlands. This analysis of the land was c nducted by the appraiser with the use of scaled aerial photographs. Our independent identification·ofthe wetlands within the property is a result of our review of U.S.G.S. Topographical Surveys, the Hendry County Soil Survey, FEMA Flood Plain Maps, and aerial photographs.
This analysis is an integral part of the value estimate rendered herein, and is relied upon within this appraisal analysis. If any on-site topographical surveys are later conducted and presented to the appraisers, this appraisal will then be subject to review and possible modification.
This information is assumed to be reliable and correct, and is an·
integral part of the valuation analysis, herein.
Sale data and information regarding vacant sales were abstracted from public records from sale services, and from other sources. This informatio:i:i is assumed to be accurate and correct. ·
A, Uf\1.!N!STRI;\TIVE COfv1PlAIN]
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We do not have the required expertise ror determining the presence of absence ·
of ha'.? dous substances, defined as all hazardous or toxic material, wastes, pollutant or contaminants (including,, but not limited to asbestos, PCB, UFFI, or other raw materials or chemicals) used or otherwise present on the property. We assume no responsibility for the studies or analyses which
7 would be required to determine the presence of absence of such substahces·. The value estimate is based on the assumptions that the subject property is not so affected.
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Addenda
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52 OF
Resume
Qualifications of Appraiser Patricia Whittington-Joyce
State Certified General Real Estate Appraiser #RZ2535
Field Appraiser in lee, Collier, Charlotte, Hendry, Highlands, Okeechobee and Glades Counties for 20+ years. Experienced in all aspects of residential, agriculture, and commercial
., appraising. State Certified and VA/FHA approved. State of Florida Department of
/Environmental Protection Approved Appraiser and Member Appraisal Institute
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I Work History
First Appraisal of S.W. Florida, Inc. President of First Appraisal"of S.W. Florida Senior Commercial Appraiser
First Appraisal Services, Inc. Biggers And Associates Inc.
]
j licenses and Certifications MAI Candidate
State Certified General Real Estate Appraiser #RZ2535 Bachelor's of Business Administration
FHA Approved Appraiser
VA Approved Appraiser
State of Florida Approved Appraisal Environmental
Technical Training and Seminars Appraisal Institute Classes
Highest and Best Use Market Analysis #540 Report Writing Valuation
#510 Advance Income Capitalization #AB3 Certified General Appraisal Course #ACE 1511 Florida Core Law
#ACE 1261 USPAP Florida Law for Appraisers
#ACIE 2142 Residential Design and Functional Utility
#ACE 2131 Appraising From Blue Prints and Specifications #ACE 1781 Fair Lending Requirements
#ACE 1521 Environmental Risk- #ACE 1550 Appraisal Review
#ACE 1323 Small Residential Income Appraisal
1 #ACE 5248 Standards of Professional Practice, Part A
1994-Current
1988-1994
1986-1988
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#ACE 1009 Standards of Professional Practice, Part B FHA Appraisal Course
' VA Appraisal Course
Society of Real Estate Appraisers Course 101 Society of Real Estate Appraisers Course l 02
Society of Real !Estate Appraisers Course - Income Capitalization Appraisal Board Course AIBI!
Additional !Education/Training Accounting I and ii
!English Composition Statistics
Advanced Math Classes Taxes
!Expert Witness
AUN1l r i T Ri.llVE. COiviPLAiN.I
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EXHIBIT#-
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Review of Appraisal
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Performed by Patricia J. Whittington .
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Property
Glades Riverfront Estates Moore Haven
Parcel Numbers
A29-42-3l-A00-005B-0000 S29-42-31-001-0000-1040 S29-42-31-001-0000-0010
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On January 30, 2006
Reviewer
Dennis J. Black, ASA, IFAC St. Certified General REA# 2377 AQB Certified USPAP Instructor
ADMINISTRATIVE co . fi11
EXHIBIT #...;.?....,_. ==-.,.,..
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D.J. Black & Company
BROKERS APPRAISERS CONSULTANTS
1225 Tamiami Trail Unit A6
Port Charlotte, Fl. 33953 941-743-8613
June 9, 2010
Jennifer Blakeman Senior Attorney
: -! Division of Real Estate
L] 400 West Robinson Street N801 Orlando, FL 32801-1757
RE: DBPR v. Patricia J. Whittington Case # 2009-030578
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Dear Ms. Blakeman,
Contained herein is a review of the appraisal prepared by Patricia J. Whittington of several properties located in Glades County and dated July 10, 2008.
After reviewing the appraisal I find it to be of poor quality. I find the appraisal report is carelessly composed and the analysis lacks depth. Most notably the appraiser failed to employ recognized methods and techniques and did not properly analyze the property's highest and best use. In my professional opinion the appraiser violated several sections of the Uniform Standards of Professional Appraisal Practice and Florida Statute 475 part II. I wish to make it clear that the problems with the report are not minor technical or procedural matters, but rather substantial violations.
If you have any questions I can be reached at the above number.
Respectfully,
Dennis J. Black, ASA, IFAC
State Certified General Real Estate Appraiser # 2377 AQB Certified USPAP Instructor
1-UJMihH -1 r A! 1v1:. Gurvt!'Lf\1,Nl
EXHlBIT #.d._ Page2 of 21
PAGE . d- OF
DENNIS J. BLACK, IFAC, ASA
Mr. Black has twenty-nine years of experience in the real estate profession. He began his career as a salesperson and after five years I became a branch office manager for an eight office real estate brokerage firm. He then began performing residential appraisals for mortgage lending purposes. Over the next fifteen years, he completed thousands of residential valuations as well as hundreds of non-residential appraisals. These properties have included apartment and office buildings, marinas, private extraction sites, lumberyards, and recreational venues, such as health & pool clubs, bowling alleys, and miniature-golf courses. From July 1997 to May 1998 he was employed by the Charlotte County, Florida Property Appraiser's Office. He was part of the Commercial Property Section, and assigned to income producing properties. Since then, he has been active as an appraiser, broker and consultant, servicing the southwest Florida market.
NATIONAL ASSOCIATION OF INDEPENDENT FEE APPRAISER AWARDS
2008 National Instructor of the Year 2009 National Appraiser of the Year
LICENSES -PROFESSIONAL DESIGNATIONS:
Appraisal Qualifications Board-Nationally Certified U.S.P.A.P Instructor
Nat. Association of Independent Fee Appraisers- Councilor Member - IFAC (2008) National Association oflndependent Fee Appraisers - Senior Member - IFAS (1997) National Association oflndependent Fee Appraisers -Senior-Cert. Instructor (1998)
/ Accredited Member American Society of Appraisers - ASA (2007) American Society of Appraisers - Real Property Faculty Member (2008)
State of Florida - Certified General Real Estate Appraiser #RZ 0002377 (1998) State of Florida-Licensed Real Estate Broker# 0681814 (2002)
Member Florida Association of REALTORS
Marshall & Swift- Certified Instructor of Commercial Building Costs (1994) Marshall & Swift- Certified Instructor of Residential Building Costs (1994)
PROFESSIONAL OFFICES HELD:
NAIFA National Board of Directors 2001, 2002, 2003 NAIFA National Education Committee Chair 2002, 2009
NAIFA National Education Committee Member 2000, 2001, 2003 NAIFA National Professional Standards Committee Member 2008, 2009
NAIFA Education Liaison to American Society of Appraisers 2008 & 2009
NAIFA Regional Governor 1999
ii NAIFA Florida State Director 1999 & 2008
NAIFA Mid Gulf Coast Chapter President 1998
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••· i Qualifications of Dennis J. Black, ASA, IFAC (cont)
FEATURED REAL PROPERTY EDUCATOR
NAIFA ASA NAIFA
National Conference - St. Louis 1999 International Conference - Orlando 2009 National Conference-Atlantic City 2009
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' | NAIFA Valuing Undivided Fractional Interests | 4 hours | |
:. | i | Solving Tough Residential Appraisal Problems | 7 hours |
Construction Terms and Methods | 5 hours | ||
The Real Fannie Mae Guidelines | 5 hours | ||
L | The New Fannie Mae Forms | 7 hours | |
ANSI Standard Z 765 | 5 hours | ||
Florida Law Update | 3 hours | ||
Understanding Florida's Property Tax System | 3 hours |
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COURSES AUTHORED
Comprehensive Continuing Education for Appraisers NAIFA Marshall & Swift Residential Handbook NAIFA Marshall & Swift Commercial Handbook Valuing Real Estate in a Changing Market
23 hours
8 hours
8 hours
8 hours
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EX.H!BIT # :2, ·.., ..... age4 of21
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Qualifications of Dennis J. Black, ASA, IFAC (cont)
OTHER PUBLICATIONS
North Port Revealed-Released in March of2007 it is a self published comprehensive analysis of the City of North Port, Florida. It laid out the case that the city's rampant "spec" building was collapsing and that values would plummet. It led to the Sarasota Herald Tribune writing a story about me and the study. Because of this publication I was also featured in Florida Trend magazine, which is Florida's most circulated business magazine. This study was an outgrowth of the course Valuing Real Estate in a Changing Market. It should be noted single family real estate values have fallen by as much as 75% in some parts of the city.
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Analyzing Marinas and Boat Storage in Today's Market - Valuation Strategies, published by Thomson Reuters. This is a 2,800 word article scheduled for publication in the November 2009 issue. It is an outgrowth of my NAIFA -IF AC counseling designation thesis.
APPRAISER CERTIFICATION
I certify that, to the best of our knowledge and belief:
The facts and data reported by the reviewer and used in the review process are true and correct.
The analysis, opm10ns, and conclusions in this review report are limited only by the assumptions and limiting conditions stated in this review report and are my personal, impartial and unbiased professional analysis, opinions and conclusions.
I have no present or prospective interest in the property that is the work under review, and no personal interest with respect to the parties involved.
I have no bias with respect to the property that is the subject of the work under review, or to the parties involved with this assignment.
My engagement in this assignment 1s not contingent upon developing or reporting predetermined results.
My compensation is not contingent on an action or event ,resulting from the-analyses," --./
opinions, or conclusions in this review or from its use.
My analyses, opinions, and conclusions were developed, and this review report has been
/ prepared, in conformity with the Uniform Standards of Professional Appraisal Practice, the Code of Professional Ethics of the National Association of Independent Fee Appraisers, and the standards of the State of Florida for State-Certified appraisers.
I made an exterior personal inspection of the property that is the subject of this review report.
No one provided significant appraisal review assistance to the person signing this certification.
I have not provided any services related to this property within the past three years.
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Date Signed June 9, 2010
State Certified General Real Estate Appraiser #2377
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·· ..: This appraisal report is substandard and in my opinion many USPAP violations occurred in this assignment and the appraiser has failed or refused to exercise reasonable diligence in developing an appraisal or preparing an appraisal report as required by 475.624 (15).
Problems with the appraisal report
Summary of Important Conclusions
In the location section of this page (6) the appraiser states "Direct access to the site is provided by frontage on State Road 80". In fact, the subject site does not front State Road 80. An aerial image is provided on page 16 of this report showing this fact.
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Subdivision Plat
On page 9 of the report there is a subdivision plat. Nowhere does the appraiser state that this plat was filed decades ago and had no approvals at the time of appraisal. The appraiser obtained this information for Jenny Allen who also provided the data about single family housing permits.
Purpose of the Report - page 18
The appraiser states "This report is presented in a self contained format and, therefore,
/ includes a narrative discussion of the information utilized by the appraisers in reaching an estimate of market value and the various factors affecting the valuation. In addition, the
methodology used by the appraiser in arriving at an estimate of value is discussed and explained."
The Uniform Standards of Professional Appraisal Practice (USPAP) considers a Self Contained Report to be the most comprehensive type of report. In the 2008 edition of the USPAP 2-2 (a)
(viii) states
describe the information analyzed, the appraisal methods and techniques employed, and the reasoning that supports the analyses, opinions, and conclusions; exclusion of the sales comparison approach, cost approach, or income approach must be explained;
Comment: A Self Contained Appraisal Report must include sufficient information to indicate that the appraiser complied with requirements of STANDARD 1. The amount of detail required will vary with the significance of the information to the appraisal.
The appraiser must provide sufficient information to enable the client and intended users to understand the rationale for the opinions and conclusions, including reconciliation of the data and approaches, in accordance with Standards Rule 1-6.
When reporting an opinion of market value, a summary of the results of analyzing the subject sales, options, and listings in accordance with Standards Rule 1-5 is required. If such information is unobtainable, a statement on the efforts undertaken by the appraiser to obtain the information is required. If 'such information is irrelevant, a statement acknowledging the existence of the information and citing its lack of relevance is required.
This report fails to comply with Standard 2-2 (a) The two best examples of how the appraiser fails to comply are
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There is no meaningful description of the market. Such is required by 2-2 (a) (viii). There is no discussion about the growth trends, economic trends, demographics, etc There is a Overview statement and Transportation statement on page 21. On page 22 there are two short
paragraphs about LaBelle. Given the fact that the subject property is being valued as a proposed residential subdivision information relating to demand for housing, income levels, em_ployment .
opportunities, etc would all be typical. It not only would be typichl, but it is the foundation for the economically feasibility of the subject in the Highest and Best Use analysis.
Furthermore, by failing to analyze demand for new housing units the appraiser ignores the recognized professional methods. This is discussed on Page 344 of the text The Appraisal of Real Estate 12th Edition. The appraiser recognizes this text as a professional text as she cites it in her own report on page 15.
An excerpt from page 344 which is contained in a grey box reads as follows
Subdivision development analysis is Applied when subdivision and development represents the highest and best use of the land and when sales data on finished lots is availab\e. The number and size of the finished lots, their likely sale prices, the length of the development and marketing periods, and the absorption rate are estimated. Gross income and expenses are projected when they are expected to occur.
The resulting net sales proceeds are then discounted back to arrive at an indication of land value.
Housing trends in the area were not addressed in the report in any meaningful way. The reviewer contacted Glades County Community Development and easily obtained the following information. A copy of this email is contained in the addendum:
Number of SFR permits as requested
2005 | 47 |
2006 | 75 |
2007 | 43 |
2008 | 12 |
Jenny Allen, Office Manager
Glades County Community Development
P.O. Box 235
Moore Haven, Fl 33471
863-946-0533
This is evidence that the appraiser did not understand the level of demand, nor that absorption would take years and thus the discounting of the net cash flows would have been appropriate. In the year the appraisal the monthly average was 1 (one) permit per month. The prior year the average was 4 (four) per month. This information was concealed from the reader 8_!1-d it is a \ misrepresentation of the market conditions. It also means that rl.o level of due diligence was undertaken therefore the level undertaken cannot be considered reasonable.
/ In my opinion this means the appraiser has violated F.S. 475.624 (2) and 475.624 (15)
2) Has been guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest conduct, culpable negligence, or breach of trust in any business transaction in this state or any other state, nation, or territory; has violated a duty imposed upon her or him by law or by the terms of a contract, whether written, oral, express, or implied, in an appraisal assignment; has aided, assisted, or conspired with any other person engaged in any such misconduct and in furtherance thereof; or has formed an intent, design, or scheme to engage in such misconduct and committed an overt act in furtherance of such intent, design, or scheme. It is immaterial to the guilt of the registered trainee, licensee, or certi:ficateholder that the victim or intended victim of the misconduct has sustained no damage or loss; that the damage or loss has been settled and paid after discovery of the misconduct; or that such victim or intended victim was a customer or a person in confidential relation with the registered trainee, licensee, or certi:ficateholder, or was an identified member of the general public.
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F.S. 475.624 (15)
Has failed or refused to exercise reasonable diligence in developing an appraisal or preparing an appraisal report.
The Highest and Best Use section is inadequate to comply with 2-2 (a) (ix). There is considerable boilerplate but little meaningful discussion. For example, the appraiser states
Fl "The subject is zoned "OUA", open use agriculture by Glades County. Further the
td property is designated as one dwelling per 20 acres by the Glades County
Comprehensive Land Use Plan. Therefore, those physically possible uses which are legally permissible on the property include the residential development with approval for a subdivision"
This is nothing but confusing.
Then the appraiser addresses Economically Feasib!e. In this section there is no discussion of a
need for 100+ new homesites. There is no analysis of pent up demand, nor housing starts. There is no discussion of price point for such development which is the driving force behind something
/ being economically feasible. This is additional evidence the appraiser violated 475.624 (2) and
(15)
Furthermore, the appraiser just leaps to the conclusion that the old canals can be redug and connected to the Caloosahatchee River. Such actions are tightly regulated and typically discouraged by Florida DEP and the Army Corp of Engineers.
Scope of Appraisal page 18
This section is full of problems, and contradictions.
The appraiser states
"This Self Contained appraisal report outlines a Complete appraisal process. A Complete appraisal process is one which estimated the value of the subject property without departure from the Standards of Professional Appraisal Practice. In other words, all applicable appraisal methods are exercised without any hypothetical assumptions in place.
The subject property consists of three parcels of land in south Glades County with a proposed use of a subdivision. The sites are currently zoned OUA open use agriculture by the Glades County Planning and Zoning."
Within these two paragraphs the appraiser issues two misleading statements.
The appraiser states that she did not depart from the Standards of Professional Appraisal Practice. The Departure.Rule of the USPAP was removed as of July 1, 2006, more than two years prior to the appraisal. Therefore, the appraiser is eluding to something in the Standards which did not' even exist. -
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The appraiser states there are no hypothetical assumptions in place when in fact the whole appraisal is about valuing a subdivision which does not exist. The 2008-2009 Edition of the USPAP defines a Hypothetical Condition as "that
which is contrary to what exists but is supposed for the purpose of analysis." The term "hypothetical assumption" is no part of the appraisal profession's nomenclature. In fact, hypotheticals and assumptions have distinctly different meanings in order to distinguish them.
Furthermore, the zoning of the subject is such that it would need to be changed for a 1011 site subdivision which would be another hypothetical condition which is not mentioned. Such an omission is a concealment of facts and thus is a violation of 475.624 (2).
r 1 From appraiser's report page 2.
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Contained on page 19 of the appraiser's, about three quarters of the way down the page the appraiser states
"These values were then used in order to estimate their potential gross sell out value for the development. Consideration is given to the time value of money and increases in property values which may occur over the sell out period.
The appraiser estimated the projected sell out period for the development and itemized the sales of lots into different cash flow periods. From the gross 'sales for each projected sales period were deducted the attributable expenses as well as a portion of the entrepreneurial profit in order to estimate the net income from the sales. This net income from the sales from each sales period was then discounted back to a present value. The sum of these present values is the estimated market value of the subject property through the utilization of the Discounted Cash Flow technique."
The reality is that there is no discussion or analysis of discounting (time value of money) or any type of support for changes in property values during the holding period. What the Scope of Apprasial states and what occurred are two very different things. It is also interesting to note that on page 26 Valuation Methodology the appraiser makes no mention of Subdivision Analysis or
Discount Cash Flow. - ,,..,
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Valuation methodology
This part of the report is terribly flawed and misleading. The problems are as follows;
The appraiser states that she is using the Sales Comparison Approach, but then completes a Subdivision Analysis method of valuing vacant land.
The appraiser states the Unit of Comparison (page 28) is per net acre when in fact it is per lot.
On page 28 the appraiser mentions a chart which displays
"some basic information about each sales including the sale number, O.R. Book and Page in which the deed for the transaction was recorded, the grantor and grantee, the sale date, the properties (sp) zoning, sale price, size (gross acres), and price per acre. Next, a comparative analysis is presented which qualitatively compares each sale property to the subject"
No such chart is contained in the report. Furthermore, the analysis which is performed is based on price per lot not per acre. This appears to just be more boilerplate which the appraiser fails to check (lack of due diligence).
The canal sales are adjusted downward by 50% (page 30) with no discussion about how such an adjustment is extracted from the market. On page 41 the appraiser states "Due to
/ the higher population base and supporting amenities a 50% discount is applied to all five sales" Remember that a Self Contained Appraisal Report, which the appraiser says this
is, should "describe the information analyzed, the appraisal methods and techniques employed, and the reasoning that supports the analyses, opinions, and conclusions" Advisory Opinion 11 states "Describe is used to connote a comprehensive level of detail in the presentation of information"
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This is a violation ofF.S. 475.9624 (2)
The appraiser determines a Land Value by Sales Comparison2 of $5,379,000 for 100 lots (It should be noted the title page states there are 101 lots) then adds the cost of roads and such to that amount to arrive at a final estimate of value for the subject. That amount is stated as being $7,784,000. Given the fact that the lot values were already estimated by using sales which already were located on roads such costs should not have been added. If the 50% adjustment was meant to address that factor the appraiser clearly violated 2-2 (a) (viii) because that was not clear. That means this issue alone demonstrates the appraiser failed to comply with Standard Rule 1-1 (a) and (b) and/or Standard Rule 2-2 (a) (viii).
This is a violation ofF.S. 475.9624 (2) and 475.624 (15)
2 The appraiser's term not the reviewer's
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The appraiser had stated on page 2 "The appraisal has multi uses which include 1) to estimate the fee simple interest in the property as it exists today which is equivalent to the value of the land, and, 2) estimate the value of the project as if completed as of the effective date of the appraisal with no sales."
The appraiser then goes on to provide only one value which is nothing more than the total estimated sale prices of all lots plus the estimated cost of building the subdivision's infrastructure. This ignores that standard appraisal practice calls for the absorption time to be estimated and the income stream to be discounted to the present value.; To reiterate from earlier in this report, this is discussed on Page 344 of the text The Appraisal of Real Estate 12th Edition. The appraiser recognizes this text as a professional text as she cites it in her own report on page 15.
An excerpt from page 344 which is contained in a grey box reads as follows
Subdivision development analysis is Applied when subdivision and development represents the highest and best use of the land and when
sales 'data on finished lots is available. The
number and size of the finished lots, their likely sale prices, the length of the development and marketing periods, and the absorption rate are estimated. Gross income and expenses are projected when they are expected to occur.
The resulting net sales proceeds are then discounted back to arrive at an indication of land value.
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Furthermore, the method calls for the discounting of the net sales proceeds. The appraiser fails to even consider expenses such marketing costs and sales commissions.
The appraiser used sales from Cape Coral which have concrete bulkheading whereas the subject lots would not have bulkheading according to page 42 of the appraiser's report.
Also the appraiser makes no effort to value the property "as it exists today" which is something they said they were going to do on page 2. If the appraiser had attempted such an analysis the cost of infrastructure is cash out flow upfront.
Real Estate Assessment and Taxes
The appraiser states
"The subject property is subject to real property taxes assessed by Hendry County." The subject is actually located in Glades County.
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This is an aerial image from Google Earth. It demonstrates two serious flaws in the appraisal report. First it proves the subject does not front State Road 80 as stated by the appraiser.
Furthermore the appraiser makes no mention and fails to consider that the subdivision would only be accessed by an unpaved easement. Given the fact that the lot values are based on properties that do not suffer such an external inadequacy that constitutes failure to comply with 475.624 (15)
river
overgrown and would need to be dredged
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Reconciliation
The appraiser states "The first approach to value was the Cost Approach." The appraiser does not provide a Cost Approach, nor should they as the Cost Approach is not a recognized method to value vacant land. The appraiser then states "The second technique utilized in this analysis was a combination of the Sales Comparison Approach which was used to estimate the value of the individual sites." This is another example that the appraiser does not understand the recognized techniques as required by Standard Rule 1-1 (a). The appraiser actually made a bad attempt to complete a Subdivision Analysis which is a recognized land valuation technique.
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Extraordinary Assumptions
The appraiser makes no statements which clearly and conspicuously describe the Extraordinary Assumption that the canals could be dredged, and connected with the river: This is a violation of Standard Rule 2-2 (a) (x). Y
Comments on the Appraisal (page 44)
In this section the appraiser addresses the waterfront market in Hendry County (the subject is located in Glades County). · - ,
The appraiser recognizes that the market is in terrible shape and that no new construction is taking place and then uses that as an excuse to not project an absorption rate.
This section again exhibits the appraiser's lack of understanding of a property such as the
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Appraisal Certification (page 47)
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The certification states the appraiser the Hendry County Soil Survey. The subject is located in Glades County.
The certification is not signed which is a violation of USPAP Satndard 2-3
The appraiser signed page 3 as Patricia W. Joyce which is not the name attached to State· Certified General Appraiser# RZ 2535.
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t::.I Conclusion of Reviewer:
The violated F.S. 475.624 (2)
The violated F.S. 475.624 (15)
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The appraiser violated the Ethics Rule of USPAP
The appraiser violated the Competency Rule of USPAP. The appraiser violated USPAP Standard 1-1 (a) (b) and (c) The appraiser violated USPAP Standard 1-2 (f)
The appraiser violated USPAP Standard 1-3 (a) and (b) The appraiser violated USPAP Standard 1-4 (c) (i)
The appraiser violated USPAP Standard 1-4 (c) (ii)
i
The appraiser violated USPAP Standard 1-4 (c) (iii)
)
The appraiser violated USPAP Standard 1-4 (c) (iv)
/ The appraiser violated USPAP Standard 2-2 (a) (viii) The appraiser violated USPAP Standard 2-2 (a) (x) The appraiser violated USPAP Standard 2-3
Scope of Work: The reviewer visited the site. The reviewer obtained and viewed public records relating to the subject. The reviewer read the appraiser's report.
Intended Use and Users: The intended use of this report is to assist the Florida Department of Business and Professional Regulation (DPBR) in determining the compliance of the review µnder review with Florida Law and the Uniform Standards of Professional Appraisal Practice. The intended user is the State of Florida DPBR.
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From: Jenny Allen <jallen@MyGlades.com> , Add to Address Book , Add to Whitelist
· To: djb@djblackco.com , (Added to Address Book)
Sent: 07 Jun '10 20:54
bject: glades co sfr
lading: USA / Western European ( rso sss9-1 )
Pag, I of·
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. umber of SFR permits as requested
I_005 47
1
2006 75
007 43
008 12
lenny Allen, Office Manager
/ dlades County Community Development
l
P.O. Box 235
oore Haven, Fl 33471 63-946-0533
63-946-1535 fax
JNWW.myglades.com
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,., · From:
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Jenny Allen <jallen@MyGlades.com> , Add to Address Book , Add to Whitelist
To: djb@djblackco.com , (Added to Address Book)
! .1 Sent: 07 Jun '10 20:54
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r umber of SFR permits as requested
Uoo5 47
2006 75
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ri;.;f,,0;f0oo7s 43
lenny Allen, Office Manager
'\,lades County Community Development
/ P.O. Box 235
'" ·;,,1oore Haven, Fl 33471 ' 363-946-0533
L-663-946-1535 fax
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| Issue Date | Proceedings |
|---|---|
| Mar. 07, 2011 | Order Closing File. CASE CLOSED. |
| Mar. 02, 2011 | Motion to Relinquish Jurisdiction filed. |
| Feb. 01, 2011 | Notice of Taking Deposition (Patricia Whittington) filed. |
| Jan. 26, 2011 | Petitioner's Witness List filed. |
| Jan. 25, 2011 | Notice of Serving Request for Production filed. |
| Jan. 25, 2011 | Notice of Serving Interrogatories filed. |
| Jan. 14, 2011 | Order of Pre-hearing Instructions. |
| Jan. 14, 2011 | Notice of Hearing (hearing set for March 17, 2011; 9:00 a.m.; LaBelle, FL). |
| Jan. 12, 2011 | Respondent's First Interrogatories to Petitioner filed. |
| Jan. 12, 2011 | Notice of Serving Interrogatories filed. |
| Dec. 27, 2010 | (Petitioner's) Unilateral Response to Initial Order filed. |
| Dec. 27, 2010 | Unilateral Response to Initial Order filed. |
| Dec. 20, 2010 | Administrative Complaint filed. |
| Dec. 20, 2010 | Notice of Appearance and Request for Discovery (filed by D. Villazon). |
| Dec. 20, 2010 | Election of Rights filed. |
| Dec. 20, 2010 | Agency referral filed. |
| Dec. 20, 2010 | Initial Order. |
