Leeds Long Term Care Hampshire Park real estate appraisalREAL ESTATE APPRAISAL REPORT
Property: Part of Hampshire Park,
Northampton, Massachusetts
Total Property: 106.2 acres
Appraised area: 100+ acres
Map 5 Parcel 1 (part of)
Owner: Hampshire County LLC
Pennington Geis, Council Administrator
Hampshire Council of Governments
99 Main Street, Northampton, MA 01060
Effective Date: October 16, 2008
Date of the Report: October 16, 2008
File 10190
Prepared by:
Kim A. Levitch, SRA
MA Certified General Real Estate Appraiser Lic. #258
K. Levitch Associates
40 School Street, Greenfield, MA 01301
October 16, 2008
Pennington Geis,
Council Administrator
Hampshire Council of Governments
99 Main Street, Northampton, MA 01060
Dear Ms. Geis:
K. I EVITCH ASSO
CIA.1.�S
Real Estate A raisers
At your request, I have inspected and appraised the property on the west side of River Road at the city
line with Williamsburg owned by the Council. I am pleased to present the attached report of my appraisal
of the fee simple estate in the referenced parcel of real estate, as of "current date." I understand that this
parcel along with or separately from the nursing home may be sold and that the appraisal is support for
the value. The intended use of the appraisal is in asset planning and potential sale of the property. This
is a summary appraisal report that sets forth my opinion of market value along with supporting data and
reasoning which form the basis of my opinion.
The value opinion reported is qualified by certain assumptions, definitions, limiting conditions, and
certifications which are set forth in the report. The report is prepared for the Hampshire Council of
Governments, and is intended only for your use and other state officials that may be required to review
the valuation and supporting appraisal. It may not be distributed to or relied upon by other persons or
entities without my written permission.
The property that is the subject of this appraisal consists of a 100 acre section of the full 106.2 acre
property which includes the Hampshire Care facility. The 100 acres includes all but the nursing home
and a six acre exclusion area. The valuation of the nursing home is considered separately under a second
report by Mr. Kitchell Lee, MAI. A copy of a site map, with the assumed lot is included in the report
addenda. Since an actual plan of the six acres has not been made, the shape and layout is based on my
drawing as an extraordinary assumption. I have also assumed that the site would be buildable, and
comply with zoning by -laws and other site conditions and that it would be considered as presented in this
report. The property is considered without the existing nursing home on a site of 100 acres, excluding the
area around that building.
The valuation is based on the hypothetical condition that while the structure exists it is considered as if it
did not existing as of this date. Both terms, extraordinary assumption, and hypothetical condition, are
defined by USPAP and further commented upon in this report. The understanding of each is central to
the valuation conclusion.
Page 2
The following report has 60 pages. Based on my analysis and my experience as a real estate appraiser, I
have formed the opinion of the market value of the property, as of October 16, 2008, to be
NINE HUNDRED AND SEVENTY THOUSAND DOLLARS
($970,000)
I performed the analysis that is the basis for this valuation and did inspect the property. If you should
have any questions concerning the appraisal, please feel free to contact me.
Very truly yours,
Kim A. Levitch, SRA
MA Certified General Real Estate Appraiser, Lic. #258
P. O. Box 1553 40 School Street
Greenfield, MA 01302
(413) 774 -2959
TABLE OF CONTENTS
PART I INTRODUCTION
LETTER OF TRANSMITTAL 2
TABLE OF CONTENTS 4
CERTIFICATION 5
SUMMARY OF CLIENT FACTS AND CONCLUSIONS 6
PHOTOGRAPHS OF THE SUBJECT PROPERTY 7
STATEMENT OF ASSUMPTIONS AND LIMITING CONDITIONS 9
SCOPE OF THE APPRAISAL
10
PURPOSE AND INTENDED USE OF THE APPRAISAL 10
SUMMARY OF APPRAISAL PROBLEMS 11
MARKET VALUE DEFINITION 11
PART II FACTUAL DATA
LEGAL DESCRIPTION 12
AREA, CITY AND NEIGHBORHOOD DATA 12
PROPERTY DESCRIPTION 17
USE AND SALES HISTORY, RENTAL HISTORY 17
ASSESSED VALUE AND TAX BURDEN 18
ZONING AND LAND USE REGULATIONS 18
PART III DATA ANALYSIS AND CONCLUSIONS
THE APPRAISAL PROCESS AND VALUATION 20
HIGHEST AND BEST USE 21
THE COST APPROACH 22
THE INCOME APPROACH THE COST OF DEVELOPMENT 22
THE SALES COMPARISON APPROACH BULK SALES 28
CORRELATION AND FINAL VALUE OPINION 29
PART V EXHIBITS AND ADDENDA
LOCATION MAP NORTHAMPTON, MA iii
t ASSESSORS MAP W /OVERLAY iv
DETAIL OF COMPARABLE DATA
LEGAL DESCRIPTION BOOK 697 PAGE 161 xx
TOPOGRAPHIC MAP NORTHAMPTON, MA xxi
ASSESSORS MAP 5 Block 01 lot 1 xix
SARA CAMPBEL REPORT xxii
APPRAISER QUALIFICATIONS xxix
River Road, 101 acres October 16, 2008
Northampton, Massachusetts Page 5
CERTIFICATION
I, the undersigned appraiser, certify that, to the best of my knowledge and belief,...
the factual statements contained in this report are true and correct.
the reported analyses, opinions, and conclusions are limited only by the reported assumptions and
limiting conditions, and are my personal, unbiased professional analyses, opinions and conclusions.
I have no present or contemplated interest in the subject property, and I have no personal interest or bias
with respect to the parties involved.
the appraisal was not based on a requested minimum valuation, specific valuation, or the approval of a
loan.
the fee charged for this report is not contingent in any way on any action or event resulting from the
analyses, opinions, or conclusions in, or the use of, this report.
my analyses, opinions and conclusions were developed, and this report has been prepared, in conformity
with the Uniform Standards of Professional Appraisal Practice.
no one provided significant professional assistance to the person signing this report.
I, Kim A. Levitch, have made an inspection of the subject property located off River Road,
Northampton, Massachusetts.
The reported analyses, opinions and conclusions were developed, and this report has been prepared, in
conformity with requirement of the Appraisal Institute's Code of Professional Ethics and Standards of
Professional Appraisal Practice, which include the Uniform Standards of Professional Appraisal Practice.
The use of this report is subject to the requirements of the Appraisal Institute relating to review by its
duly authorized representative.
As of the date of this report, I have completed the continuing education program of the Appraisal
Institute.
Kim A. Levitch, SRA
MA Certified General Real Estate Appraiser, Lic. #258
PROPERTY LOCATION:
OWNER OF RECORD:
DEED REFERENCE:
ASSESSOR'S REFERENCE:
ZONING:
IMPROVEMENTS:
SITE:
HIGHEST AND BEST USE:
PRESENT USE:
INTERESTS APPRAISED:
EFFECTIVE DATE OF APPRAISAL:
DATE OF THE REPORT:
APPRAISER:
EXECUTIVE SUMMARY
River Road, Northampton, Massachusetts
Hampshire County Council of Governments, 99 Main Street,
Northampton, MA 01060
Hampshire County Registry of Deeds, Book 697, Page 161, (DD-
12/01/1913 for $2,774.20) full property
Map 5, Parcel 1 lot 1 (FY2007 assessment: $2,716,200), includes
the nursing home facility and site of 106 acres.
RR rural residential
None
Total property is 106.2 acres with the area under consideration
being 100 acres as drawn on plan as included in the report
addenda.
Potential subdivision development
Vacant woodland
Fee Simple
October 16, 2008
October 16, 2008
OPINION OF MARKET VALUE: $970,000 (100 acres)
HYPOTHETICAL CONDITIONS EXTRAORDINARY ASSUMPTIONS: I have considered the
property with and without the nursing home. This is done assuming a 6 acre exclusion area around the
nursing home. A copy of a site map, with this area drawn in is included in the report addenda. Since an
actual plan of the 6 acres has not been made, the shape and layout is based on this drawing as an
extraordinary assumption. Both terms, extraordinary assumption, and hypothetical condition, are
defined by USPAP and further commented upon in this report. The understanding of each is central to
the valuation conclusion.
PREPARED FOR AND AT THE REQUEST OF: Pennington Geis, Council Administrator
Hampshire Council Of Governments
99 Main Street, Northampton, MA 01060
PURPOSE AND INTENDED USE AND USERS AND USER OF THE APPRAISAL: To form an
opinion of market value of the fee simple interest of the property for use sole use of the council with
potential review for the sale of the property.
Kim A. Levitch, SRA
MA Certified General Real Estate Appraiser Lic. #258
K. Levitch Associates
P. O. Box 1553, 40 School Street, Greenfield, MA 01302
i
River Road, 101 acres
Northampton, Massachusetts
PHOTOGRAPHS OF THE SUBJECT PROPERTY by S. Campbell 10/24/2008
1. Entry driveway off of River Road.
October 16, 2008
Page 7
2. View looking westerly and southwesterly just from the east of the nursing home.
River Road, 101 acres
Northampton, Massachusetts
PHOTOGRAPHS OF THE SUBJECT PROPERTY by K. Levitch 10/24/2008
3. View of the northeast corner looking along the access road out to Williamsburg.
October 16, 2008
Page 8
4. View from the west of the nursing home, of the old nurses residence, the southwest corner of the
nursing home and the site looking southwesterly.
River Road, 101 acres
Northampton, Massachusetts
STATEMENT OF ASSUMPTIONS AND LIMITING CONDITIONS
The certification of the appraiser appearing in the appraisal report is subject to the following conditions
and to other specific and limiting conditions as are set forth by the appraiser in the report.
1. The appraiser assumes no responsibility for matters of a legal nature affecting the property appraised or
the title thereto, nor does the appraiser render any opinion as to the title, which is assumed to be good and
marketable. The property is appraised as though under responsible ownership.
2. Any sketch in the report may show approximate dimensions and is included to assist the reader in
visualizing the property. The appraiser has made no survey of the property.
3. The appraiser is not required to give testimony or to appear in court because of having made the
appraisal with reference to the property in question, unless arrangements have been made therefore.
4. Any distribution of the valuation in the report between land and improvements applies only under the
existing program of utilization. The separate valuations for land and building must not be used in
conjunction with any other appraisal and are invalid if so used.
5. The appraiser assumes that there are no hidden or unapparent conditions of the property, subsoil, or
structures which could render it more or less valuable. The appraiser assumes no responsibility for such
conditions or for engineering which might be required to discover such factors.
6. Information, estimates and opinions furnished to the appraiser, and contained in this report, were
obtained from sources considered reliable and believed to be true and correct. However, no responsibility
for accuracy of such items furnished to the appraiser can be assumed by the appraiser.
7. Disclosure of the contents of the appraisal report is governed by the Bylaws and Regulations ofthe
professional appraisal organizations with which the appraiser is affiliated.
8. Neither all, nor any part of the contents of this report, or any copy thereof (including conclusions as to
property value, the identity of the appraiser, professional designations, reference to any professional
appraisal organizations, or the firm with which the appraiser is connected) shall be used for any purposes
by anyone but the client specified in the report, the borrower if an appraisal fee is paid by the same, the
mortgagee or its successors and assigns, mortgage insurers, consultants, professional appraisal
organizations, any state or federally approved financial institution, any department, agency, instrumental-
ity of the United States or any state or the District of Columbia, without the previous written consent of
the appraiser; nor shall it be conveyed by anyone to the public through advertising, public relations,
news, sales or other media without the written consent and approval of the appraiser.
9. On all appraisals subject to satisfactory completion, repairs or alterations, the appraisal report and
value conclusion are contingent upon completion of the improvements in a workmanlike manner. This is
a prospective value opinion. The appraiser cannot be held responsible for unforeseeable events that alter
market conditions prior to the effective date of the appraisal.
10. The forecasts or projections included in this report are used to assist in the valuation process and are
based on current market conditions, anticipated short-term supply and demand factors, and a continued
stable economy. These forecasts are, therefore, subject to changes in future conditions which cannot be
accurately predicted by the appraiser and could affect, the future income and /or value forecasts.
October 16, 2008
Page 9
F
River Road, 101 acres
Northampton, Massachusetts
1
j
October 16, 2008
Page 10
SCOPE, INTENDED USE, INTENDED USERS OF THE APPRAISAL
The appraisal assignment includes an inspection of the property and valuation by the appropriate
approaches. The subject is part of a large tract of land that is mostly undeveloped woodlands. The total
lot is 106+ acres and includes the nursing home and a seasonal camp. The land is not surveyed, and is
not listed for sale.
I have begun my study with research into the market area, the subject location regarding the general and
specific real estate market. The subject is located in Hampshire County which is considered the specific
market with some spill over to surrounding areas. The focus for the subject is in the immediate area of
Northampton and south Williamsburg. For comparable sales, this is the first area that I have researched.
Research has been done using data bases from the Warren Information Service, from the Pioneer Valley
MLS, and from the Registry of Deeds through Mass Land Records.Com. In addition, I have used my
experience with many of the properties, buyers, sellers and brokers in the area. My focus for sales data
has been for the most recent sales. First I have looked at sales over the past year. Because specific types
of sales were needed for the analysis I have searched back over several years within the immediate market
area and extended this an additional several years if relevant sales were found. Sales to be used in the
appraisal have been researched.
For the sales comparison approach I have looked at sales of land that had potential or were already drawn
out and permitted as multi lot parcels of land. These sales are to be compared to the subject on a per lot
or unit basis. Because over a short period of time there are relatively few of these sales, a variety of
development types have been considered. This includes the traditional single building lots and several
slightly larger parcels with some potential to be subdivided. Differing indications of value are reconciled
and considered using quantitative and qualitative methods of comparison. A second valuation approach
that could be considered is the cost of development approach. This is appropriate for subdivision where
income is generated through sales of building lots, less expenses of developing and selling the lots over a
sell out period the absorption time discounting for time over this period. To arrive at a value for
individual lots the sales comparison approach has been used.
The intended use of the appraisal is to form an opinion of the market value of the 100 acre section for use
in the decision process to consider the option to sell the property. I have also assumed that the property
would be buildable, and comply with zoning by -laws and other site conditions needed to become building
lots. An extraordinary assumption as defined by USPAP is an assumption about uncertain information
that if found to be false could alter the appraiser's opinions or conclusions. I have relied upon a report
and conclusions form Sara E. Campbell, PE regarding the potential for development of the site. A copy
of her site analysis and conclusions as well as three preliminary plans, and her resume are included in the
report addenda. This report is the basis for my subdivisions assumptions.
HYPOTHETICAL CONDITIONS EXTRAORDINARY ASSUMPTIONS: I have considered the
property with and without the nursing home. This is done assuming a 6 acre exclusion area around the
nursing home. A copy of a site map, with this area drawn in is included in the report addenda. Since an
actual plan of the 6 acres has not been made, the shape and layout is based on this drawing as an
extraordinary assumption. There is the existence of the old nursing residence. This is assumed to be
either demolished prior to consideration of the subject 100 acres, or as a hypothetical condition that it is
not considered to be on the property when, in fact, it is. I have also considered the 100 acres to have a
separate highest and best use. While I believe this is a reasonable assumption there is some potential that
River Road, 101 acres October 16, 2008
Northampton, Massachusetts Page 11
this is not the case. As a result I have invoke and extraordinary assumption regarding this so if this
assumptions turns out not to be the case than my conclusions could be changed or altered.
These terms are defined in USPAP, 2008 -2009 edition, The Appraisal Foundation as follows:
An extraordinary assumption is "an assumption, directly related to a specific assignment, which, if
found to be false, could alter the appraiser's opinions or conclusions." (Page U -3, USPAP)
A hypothetical condition is "that which is contrary to what exist but is supposed for the purpose of
analysis." (Page U -3, USPAP)
MARKET VALUE DEFINITION'
Market value is defined as 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,
knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the
consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions
whereby:
(1) buyer and seller are typically motivated;
(2) both parties are well informed or well advised, and each acting in what he considers his own 'best
interest;
(3) a reasonable time is allowed for exposure in the open market;
(4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable
thereto; and
(5) the price represents the normal consideration for the property sold unaffected by special or creative
financing or sales concessions granted by anyone associated with the sale.
MARKET ANALYSIS MARKETING TIMES
Reasonable marketing times assume professional management and sales effort. A listing that is not openly
marketed or is priced so high as to be unrealistic is not considered to be representative of market
conditions. Properties that have been competitively marketed, which includes realistic pricing, have
drastically shorter marketing times.
Exposure Time: Exposure time is the time prior to the effective date of the appraisal. Commercial and
or special use properties tend to have longer than average marketing times because they occupy a small
market segment. Marketing times can vary substantially depending upon list price and the property. For
the subject both are estimated at between six months and one year.
SUMMARY OF APPRAISAL PROBLEMS
The subject property is part of land owned by the county. In the mid section of the lot is the nursing
home. Most of the balance of the property is undeveloped woodland. At the request of the property is to
be considered with and without the nursing home, should the highest and best use not result in a value for
the nursing home greater than the underlying land value. This appraisal has focused on the value of the
land with the nursing home remaining on the lot.
Rules and Regulations, Federal Register, Vol. 55, No. 165, Page 34696.
River Road, 101 acres
Northampton, Massachusetts
The key for the valuation is in the highest and best use conclusion. The client believes there may be some
potential for residential development of the parcel. This conclusion in the subject RR zone would most
probably be the highest and best use of this area. As such the highest and best use analysis conclusion is
the basis for the direction of the valuation. In this regard, I have looked at a number of proposed
development options. My analysis is compared to alternative uses and the different plans to determine
highest and best use.
The appraisal is to considered only part of the full property. The full property is 106 acres and of this 6
acres are considered necessary for the continued operation of the nursing home.
PART II FACTUAL DATA
LEGAL DESCRIPTION AND FIVE YEAR SALES HISTORY
The most recent sale of the subject was from recorded in Book 697 page 161 at the Hampshire County
Registry of Deeds on December 1, 1913 being from Byron Loomis to the inhabitants of the County of
Hampshire for a consideration of $2,700. A copy of the deed is included in the report addenda. The
deed references the total property as being 106.7 acres of land. A copy of the deed is included in the
report addenda.
IDENTIFICATION OF NON REALTY ITEMS
Non realty items are not included in the valuation.
October 16, 2008
Page 12
DISCUSSION OF POTENTIAL ENVIRONMENTAL ISSUES
The appraiser is not an expert in environmental matters. Questions regarding environmental compliance
are deferred to a qualified environmental engineer. There may be some concerns in the old nurses
residence which is ready for demolition. I believe costs estimates for this are being made at this time.
LOCATION
Hampshire County is located in western central Massachusetts. The county is small -town in character,
with most of the towns outside the Northampton Amherst influence being rural and residential. The
county had a population of 146,568, according to 1990 census data. This represents an increase of 7,755
persons over the decade or an increase of 5.6 Then in 2000 the population is listed at 152,251 up
3.88 form the 1990 figures. The county seat is Northampton which is near its geographic center.
Worcester County is to the east, on the south is Hamden County, on the west is Berkshire County and to
the north is Franklin County. The following shows overall population trends since 1970 with the latest
estimates as of 2007.
Hampshire County Population Change
U.S. Census 1970 123,981
U.S. Census 1980 138,813 +12.0%
U.S. Census 1990 146,568 +5.6%
U.S. Census 2000 152,251 +3.88%
U.S. Census* 2007 153,147 +.5%
*The most recent population numbers have been developed at the Donahue Institute at the University of
Massachusetts. The county wide estimates are based on the components of change which include
River Road, 101 acres October,16, 2008
Northampton, Massachusetts Page 13
mortality, birth rates and internal and external migration patters. These in turn are distributed in
estimates to individual communities.
Northampton is served by Interstate Route 91 (N /S), Route 5 and a number of state highways, including
Route 9 which bisects the county and connects the towns of Ware, Belchertown, Amherst, and
Northampton with its eastern and western neighbors.
The University of Massachusetts is the major employer in the county and the faculty, staff, and students
of that institution have a profound effect upon the local housing market and the economy in general. The
county's manufacturing employment has declined over the last 20 years, while the service and retail bases
have increased. Hampshire County has resisted the current economic slump to some degree. According
to the Massachusetts Department of Employment and Training, the county's unemployment rate was
3.5% at the end of December, 1995.
The City of Northampton is the county seat for Hampshire County and is the geographic center of the
county. The city contains approximately 36 square miles of land. Land use breakdown is as follows:
Residential 14.9% Undeveloped Land 57.2%
Commercial 1.7% Tilled Lane 14.0%
Industrial 2.2% Other Uses 8.4%
Transportation 1.6%
The urban character of the community is limited to a concentration of buildings in the city's downtown,
its village centers of Florence and Leeds, and along the main commercial strip, King Street. Otherwise,
the hilly topography to the west and the massive amounts of flood plain area along the Connecticut. and
Mill Rivers have limited development. Northampton's population has not risen or fallen more than 10%
in the last 100 years.
Northampton Population Change
U.S. Census 1970 29,664
U.S. Census 1980 29,286 -1.3%
U.S. Census 1990 29,289 +0.01%
U.S. Census 2000 28,978 -1.06%
U.S. Census* 2007 28,411 -2%
Interstate 91 has three exit and entrance ramps within the City for both north and southbound traffic. The
land around these interchanges has been fully developed with uses typical to automotive traffic, including
gasoline stations, fast food restaurants, hotels, and automobile dealerships except where physical
limitations prohibit development.
Northampton has had one of the strongest and most vibrant housing markets in this part of the state.
Despite a lack of growth and new housing opportunities according to statistics from the Franklin
Hampshire MLS, Northampton had more single family sales than any other community in the two county
area.
Other data from the Warren Information Service, which includes all sales and not just those that were
listed for sale with an MLS agent confirm this picture of Northampton. This shows a year to date average
single family sale to be $250,000 for single family compared to 2005 for the year at $275,000 and 2004 at
$232,300 and 2003 at $203,500. In 2002 the mean was $185,000 as compared to 2001 when the median
was $166,000. Warren calculates a 40.40% increase in the overall sales price in Northampton between
1998 and 2002. The change between 2002 and 2003 for single family housing was up 8.11% as
Year Permits
Year Permits
1997
45
2002
25
1998
33
2003
47
1999
64
2004
47
2000
21
2005
8
2001
16
2006
22
River Road, 101 acres
Northampton, Massachusetts
October 16, 2008
Page 14
compared to Hampshire County which was up 13.18% for single family housing. For 2004 2006 this
trend continued but for 2007 prices have stabilized. The number of single family sales were 251 for
2005, with 235 for 2004, with 226 for 2003, with 262 for 2001 and 206 for 2000. Northampton has a
healthy condominium market with there having been 129 sales in 2005. This is the highest level since
condo sales have been tracked in Northampton. Previous to this there were 107 sales in 2004, 99 in
2003, 66 in 2002 and 92 in both 2001 and 2000. The following is a list of permits for new single housing
in Northampton since 1998.
There were 22 single family permits reported for 2007 as well. Northampton remains one of the most
dynamic real estate markets in western Massachusetts. This includes some of the highest single family
prices, typically low inventory and relatively short marketing times. One of the factors driving the high
prices is the lack of affordable inventory for new single family housing and low "affordable" lot listings.
Land listings in the city tend to be high priced relative to existing single family prices.
Available land, relatively tough zoning and permitting are likely to keep the supply of available building
sites below demand. Most of the market participants reported feeling quite conservative going forward
and tended to see a downward trend for at least the several years. The lower levels of prices, and
increasing levels of inventory support these views.
On the following pages I have chart listed median sales prices as reported in the MSL since 1997 along
with average days on the market in table 1.1. The second table shows median vs. average sales prices in
Northampton over this type period. Table 1.3 on the following page shows new single family permitt
levels wince 1997 for the City. This is followed by a chart showing the total number of reported MLS
single family sales in the City also since 1997.
As can be seen and concluded there is a downward trend in sales prices, an increasing time on the market,
a downward trend in numbers of sales since 2006 and erratic but overall downward trend in single family
new construction permit levels.
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River Road, 101 acres
Northampton, Massachusetts
Tables 1.1 1.2
Year QQM Ava S, Price Median Price 1 $ates
yim
1997 DOM re S. Price
1997 116 157,994 131,500 195 1997 116 157.99
1998 135 164,768 149,000 217 1998 135 164.768
1999 97 178,365 145,000 225. 1999 97 178.365
2000 88 189,660 159,000 181 2000 88 189.66
2001 80 217,508 181,000 203 2001 80 217.508
2002 73 228,712 183,500 192 2002 73 228,712
2003 86 250,432 257,599 180 2003 86 250.432
2004 63 297,760 258,250 192 2004 63 297.76
2005 70 332,908 305,000 198 2005 70 332.908
2006 83 328,394 285,000 213 2006 83 328.394
2007 107 326,152 278,000 173 2007 107 326.152
2008 90 307,128 262,000 151 2008 90 307.13
350
300
250
200
150
100
50
0
/WWW ti �V5
Year
Table 1.2
$350,000
$300,000
5250,000
5200,000
5150,000
5100,000
550,000
5-
Days on Market Sales Price
Average v. Median S.Prices
r N N N N N N N N N
Year
-a DOM
--Avg S. Price
j --Avg S. Price
-'f- Median Price
October 16, 2008
Page 15
River Road, 101 acres
Northampton, Massachusetts
Tables 1.3 1.4
The record of single family building permits has varied greatly over the years. However comparing the first
three years in this data set with the last three shows a dramatic decline in adthrity.
Table 1.3
Year Permits
1997 45
1998 33
1999 64
2000 24
2001 16
2002 25
2003 47
2004 47
2005 8
2006 22
2007 22
250
200
150
100
50
70
60
50
40
30
20
10
0
Table 1.4
Permits Per Year
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Year
Annual sales have had a dramitc deline over the past several years. Sales have decline over the past three
years with 2008 looking to have even lower sales than 2007.
Annual Sales
0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Year
October 16, 2008
Page 16
River Road, 101 acres
Northampton, Massachusetts
October 16, 2008
Page 17
PROPERTY DESCRIPTION HISTORY:
The subject property is located in northwestern Northampton on the Williamsburg town line. West
Northampton is largely rural area but with scattered subdivisions. There is a newer subdivision north of
the subject about a quarter mile on Deer Lane in Williamsburg. This has been selling over the past
several years with prices between $125,000 and $165,000. Most of the area to the north, south and west
is undeveloped woodlands.
The subject, according to assessors records is a single parcel being 106+ acres. The assessors
department classifies and assesses the parcel it as commercial lot with development potential,
IMPROVEMENTS:
The improvements on site included the large nursing home, seasonal camp and the old nurses residence.
For this appraisal I have assumed that the nursing home and 6 acres are excluded since these are assumed
to have a separate highest and best use. I have also assumed that the nursing home has been demolished
prior to consideration of the land. As stated these are both hypothetical conditions that the appraisal and
valuation are subject to.
THE SITE -100 ACRES:
The subject is part of a 106+ acre lot on the west side of River Road at the town line with Williamsburg.
Location: The subject location is northwest Northampton along the Williamsburg town line. Just to the
east is the Mineral Hills Conservation area. This is a largely undeveloped area but there has been growth
pressure from the east with newer subdivisions moving to the west as the city expands. Over the past
several years several cluster developments have been added south of the subject in the western part of the
city at the east end of Turkey Hill Road. The city has recently acquired a 120 acre parcel in this area as
part of the Turkey Hill Preservation Project.
Current Use: The subject is a 100 acres is woodland that is unused at the present time.
Access: Access is from two existing driveways one from the north off of Fort Hill Road in Williamsburg
and the second off of River Road. The subject has long road frontage but due to the steep slopes along
River Road access is difficult up a long steeply sloped driveway. Upgrading this may include some
widening and addressing of grades at several points.
Area Shape: The parcel is irregular in shape. The topographic maps I references show only minor
grade changes except along River Road, where there is a steep drop off, and to the very south and west
sides. These are areas that can be utilized to provide dramatic settings with potential views.
Utilities: There is electric power and telephone service to the site from several directions. There is a
water line from Williamsburg. Extension of this does not appear to be a problem.
Soils and subsoil condition: Soils information is from the Soil Survey of Hampshire County, MA Central
part as published by the U.S. Department of Agriculture, Soil Conservation Service, issued December
1981.
Chapter classifications, including APR, CR: The land is not encumbered in Chapter 61, forest land
classifications or by APR.
River Road, 101 acres
Northampton, Massachusetts
IDENTIFICATION OF NON REALTY ITEMS AND FIXTURES
There are no non realty items included in the valuation.
October 16, 2008
Page 18
Timber and gravel etc. There is no timber cruise that I know of on the property. From my tour of the
site there is some timber value but this is not the primary value to the property.
History and indications of hazardous waste or contamination: On the day of inspection there were no
visible signs of soil contamination or hazardous waste on the property. Public offices did not indicate
contamination. The history of use does not indicate hazardous contamination. This is a woodland parcel.
Questions regarding environmental compliance are deferred to a qualified environmental engineer. There
is some potential for hazardous conditions in the disposal of the old nurses residence. There is the
existence of the old nursing residence. This is assumed to be either demolished prior to consideration of
the subject 100 acres, or as a hypothetical condition that is considered to not be on the property when in
fact it is.
ASSESSMENT AND TAX DATA SUMMARY
The subject 100 acres is not assessed separately but the full property assessment included the land
valuation for the 106 acres at $2,716,200. At the present tax rate of $11.20 per thousand for FY 2008
there would be a real estate tax burden for the land only at $30,421.44. Northampton has a single real
estate tax rate for all classifications of real property. The FY2006 rate was $11.73 per thousand and the
FY 2007 rate was $10.89 per thousand.
ZONING
The subject is zoned RR rural residential. In conjunction with Sara Campbell, PE I have drawn up
several interior subdivision plans. The subject has some long road frontage but all of it is up a steep hill.
There is an existing driveway but we believe that this would need to be upgraded for an interior
subdivision. With this in mind we the most likely development is for one of the interior subdivision
plans. An ANR development is not likely and a cluster development is not likely to generate enough
income to support the necessary costs of development. One option considered it the Open Space
Residential Development Zoning Bylaws. Details of each of the zoning options are shown in the by laws
including section 10.5 Open Space Residential Development. The by -laws can be reviewed on line at the
City's web site at www. northamptonplanning .org /indexl.html.
The by laws list the following dimensional and density regulations. These are a summary from page 6 -2
for the Rural Residential (RR) Zoning District and are for Residential uses being serviced by on -site water
and on -site sanitary sewage disposal.
Minimum Area 80,000 Sf
Ftg. /wd. 175' Flag lot with 50'
Depth 200'
Setbacks: Ft. /Sd /Rr 40'/20'/50' Max Bld. Height 35'
Max Bld Coverage 15% FAR none
Min Open Space 80
There also are flag lot options, lots with Residential Incentive Overlay Development, and Open Space
Residential Development. We have assumed that use of the existing sewer line and water lines would be
both required and permitted.
r
River Road, 101 acres
Northampton, Massachusetts
PERMITTING:
To date, no permitting has been done on this parcel.
October 16, 2008
Page 19
Wetland Regulations
The Massachusetts Wetlands Protection Act, Chapter 131 Section 40 of the Massachusetts General Laws,
apply to areas that are designated such land type. Development and use of areas classified as wetlands are
regulated by these laws. From maps and studies developed for the county, and from my inspection, it did
not appear that there were oblivious wetlands. There may be some wetlands areas on the west side of the
property in an area along a brook that I did not inspect. See my extraordinary assumptions statements
regarding physical characteristics of the site.
Rivers Protection Act:
The Massachusetts Rivers Protection Act has amended and expanded the state Wetlands Protection Act as
of August 7, 1996. The act authorizes the local conservation commission to regulate land use activities
within a 200' wide buffer area along the banks of perennial rivers and waterways in the State. Activity or
disturbance within the "river front area" is allowed only with issuance of a permit by the conservation
commission. Areas to the east of the subject probably fall within the Rivers areas. The eastern edge of
the site along River Road has a strip that is probably in this area. Since this is steep hill side it does not
appear that this further limits this part of the land.
State Sanitary Code (title 5) Board of Health Regulations
The nursing home is connected to the sanitary sewer system. Private septic systems are also common in
this part of the city and have no practical impact on value.
OTHER PUBLIC LAND USE CONTROLS:
Flood Plain Regulations
Northampton Flood Plain area is an overlay district that adds to the underlaying permitted rules and
regulations. Uses in this district must meet the Massachusetts State Building code dealing with
construction in flood plain. There may be some small areas along River Road that are in the flood zone.
These do not appear to impact the use of the subject. A copy of the flood map; #250167 -0001 A, dated
6 -01 -1978, is included in the report addenda.
Other Overlay or Floating Zones
The City has several overlays, with a section of the frontage in the WP water shed protection overlay.
The proposed development for the subject would be to the north and out of this area.
Natural Heritage Endangered Species Program: This program is under the Massachusetts
Endangered Species Act of 1978, 321 CMR 10. I have included in the report addenda a copy of the
subject area from the 12` Edition of the Massachusetts Natural Heritage Atlas. Also checked is the
Estimated Habitats of Rare Wildlife and Certified Vernal Pools. The entire area along River Road is
shown in the mapped areas. The exact impact of being in this area is not known at this time but any
development of this area would require application to the program to identify the exact species located in
the mapped areas. The type of species would then determine to a large extent the type and degree of
regulation and restrictions that would be placed on development. This would impact use of the site but
areas immediately along River Road have a steep slope so there already are limitations to use this area of
the site.
1
River Road, 101 acres _J
Northampton, Massachusetts
October 16, 2008
Page 20
PART III DATA ANALYSIS AND CONCLUSIONS
This section of the report includes the highest and best use analysis, the valuation and the final correlation
and final opinion of value.
THE VALUATION PROCESS
"The valuation process is a systematic procedure an appraiser follows to provide answers to a clients's
questions about real property value."
There are eight steps in the valuation process. They are the definition of the problem, a determination of
the scope of work, data collection and property description, data analysis, value opinion, application of
the approaches to value, reconciliation of value and final opinion of value, and finally reporting of the
defined value.
Valuation usually takes the form on one of the three traditional valuation methods. These are the cost
approach, the income capitalization approach and the sales comparison approach. Each can be applied in
a number of ways utilizing a wide range of techniques and procedures. Each shares the fact that they are
based on and supported by market data.
The first approach is the cost approach to value. This is an estimate of either the replacement or
reproduction cost of improvements, less depreciation, plus land value, plus site improvements, with the
resulting figure the conclusion of value. This is particularly useful in new construction, special use
properties, or in active markets where there is new construction going on to extract actual costs from.
The second approach is the income capitalization approach. This approach is based on the fact that there
is a relationship between the amount of income a property is forecast to earn and its value. Anticipated
net operating income of the property is either capitalized into a value estimate, if it is considered a
stabilized income stream, or using a discounted cash flow analysis, if it is not. In both cases a net
operating income before income taxes and debt service is forecast. The standard for the income, the
expense and the capitalization and discount rate estimates, is that they be market based with the best most
direct method being that they be extracted from other similar sales.
The third approach is the sales comparison approach. Recent sales of like property are compared to the
property and are either adjusted for differences with the subject or ranked by valuation elements to arrive
at a comparative value. The viability of the approach rests with the strength or weakness of the set of
sales used in the comparison.
After the three approaches are developed or considered the final step is reconciliation or correlation of the
value indications. In this part of the valuation process each approach is considered based on the relative
applicability and appropriateness of each with consideration of the quality and quantity of' market data
used to support each.
The valuation is presented in a report that complies with the reporting requirements and needs of the
client in compliance with the Uniform .Standards of Professional Appraisal Practice, USPAP, and any
other appropriate required reporting and valuation and reporting standards.
2 The Appraisal of Real Estate, 12` edition, Appraisal Institute, Chicago, Ill, page 49.
River Road, 101 acres October 16, 2008
Northampton, Massachusetts Page 21
HIGHEST AND BEST USE ANALYSIS
Highest and Best Use is defined in the, The Dictionary of Real Estate Appraisal, 4 Edition, 2002,
published by the Appraisal Institute, Chicago, Ill., page 135 as: "The reasonable, probable and legal use,
of vacant land or an improved property, which is physically possible, appropriately supported, financially
feasible, and that results in the highest value. The four criteria the highest and best use must meet are
legal permissibility, physical possibility, financial feasibility, and maximum productivity."
Property is considered "as vacant" because it is undeveloped. This is for the 100 acres excluding the 6
acre section that would go with the nursing home.
1. Physically Possible:
The property is a woodland parcel with long steep road frontage along River Road, and with two interior
roads. One road is off of River Road up a steep entry driveway that swings towards the west into the
center of the site. The second comes down off of Fort Hill Road, Williamsburg from the northeast corner
of the subject site. The site is improved with the nursing home, an old closed and condemned nurses
residence. The entry drive splits to the north of the site and the rear of the building with access into the
camp site area. To the south there is parking around the main entrance to the building. Off just to the
west of this is the old nurses residence. In terms of potential uses of the property the long steep driveway
is on major concern. This cuts through areas shown as priority habitat areas on the Natural Heritage
Maps. The slope of the drive is close to the maximum allowed by zoning and in several sections may
exceed the maximum by several degrees. Aside from the opens area around the nursing home almost all
of the balance of the site is woodland.
2. Legally Permitted:
Zoning is one of the main constraints to the potential use. There is the existing water tower, the sewer
line from the south, and the options allowed by the by -laws for development. I have looked at several
options for development using the existing driveway as part of an interior subdivision. Summary
comments and preliminary plans from S. Campbell, PE are included in the report addenda.
The subject property rural residential zoning has a minimum size requirement of 80,000 square feet and
175' of road frontage. Based on her conclusions there is the potential for a 46 lot subdivision. There
also are potentials for less dense development as well as some potential for a cluster development.
3. Financially Feasible:
Two main constraints to development are the large up front costs to upgrade the existing driveway into a
subdivision road and the rural location of the subject property.
Because of the large up -front cost of the driveway option a small lot subdivision is not feasible. There
simply are not enough lots in the low density option to offset this high initial road cost.
Also as can be seen along Deer Run and Deer Haven Drives, there is demand for moderate value lots in
this location. These lots are priced in the mid to upper price range for non -view lots in the area. This
plan also has the best relationship between cost and return since it would be relatively quick. Cost of
planning, engineering and hard costs such as the road construction are probably much lower for other
types of development. There is some concern over the Natural Heritage Mapping along the river on the
east section of the lot. I have assumed the option A plan with low impact for these areas. As a result I
River Road, 101 acres October 16, 2008
Northampton, Massachusetts Page 22
have reduced the 46 lot option to 40 lots, to allow for potential losses due to the Natural Heritage
limitations of the site and any potential due to wetlands and lack of setback from the brook on the west
side of the site.
4. Maximum Value:
For the subject "as is," the development into the straight forward interior residential subdivision. This is
the only alternative considered feasible with the existing improvements. Interior subdivision is the only
residential development use that would have sufficient sales and income to cover the large up -front costs
of the driveway upgrades to reach the developable section of the site.
Conclusion, Highest and Best Use
Of the potential and existing uses the 46 lot option A, with my modification, is considered to be the most
reasonable and likely plan to be accepted for development.
I have not considered the impact of the existing nursing home, the impact of demolition of the old nurses
residence and the potential for maintenance and repair of the water tower in my conclusion. These are
part of my hypothetical conditions of this appraisal.
VALUATION
The three traditional approaches to value, the cost, income capitalization and sales comparison approaches
are discussed as follows. The subject's value is for the property at its highest and best use as concluded
in that section of this report.
COST APPROACH
The cost approach is based on estimated cost new less depreciation. For the subject, the conclusion of
highest and best use is for development into a 3 lot cluster development. As such there are no existing
improvements so a cost analysis is not appropriate.
THE COST OF DEVELOPMENT APPROACH
The cost of development method is a variation of the income capitalization approach used in the valuation
of subdivisions. When the highest and best use is determined to be a subdivision, the anticipated income
stream from the lot sales less development expenses results in a net annual income that can be discounted
back to a present value or indication of market value. The higher the net income the higher the value.
Value is arrived at using the formula V I R, where V is the value, I is the net operating income and R
is the capitalization rate. In a discounted cash flow analysis each years net income is discounted
separately back to an indication of value.
This facilitates an analysis of the proposed property over the planned permitting time and absorption of
units into the market. This approach is based on market considerations for income and expenses. This is
looked at on a before debt service and income taxes basis.
The annual income for each year in the life of the project is dependent upon the absorption rate, or sale
of, condominium units. Annual expenses are dependent upon the development costs associated with the
development schedule of the project. The net income before debt service and income taxes is discounted
by a factor that reflects the cost of funds and the relative risk of the project to arrive at an opinion of
Location
S. Date
S. Price
Size
DOM
1. Lot 5 Fort Hill, Williamsburg
10/12/05
$150,000
1.61
721
2. Lot 4, Fort Hill, Williamsburg
9/24/06
$135,000
1.49
58
3. Lot 10,Deer Haven, Williamsburg
6/22/07
$138,000
1.49
416
5. Lot 7, Deer Haven, Williamsburg
10/26/08
$162,000
1.49ac
41
Items Option
Option A
Option B
Option C.
Total costs (SC)
$2,275,000
$2,645,000
$1,525,000
New existing roads
5,000'
6,400'
2,600'/1,600'
1,900'
1,600'
River Road, 101 acres
Northampton, Massachusetts
October 16, 2008
Page 23
value. The following shows the formula for discounting cash flows over an absorption period as
presented in this analysis:
CF CF CF CF,
PV- (1 +1 (1 +Y) (1 +Y) (1 Y)"
The market analysis of residential lot sales indicates that a six or seven year sell out period would be
reasonable for this subdivision. This is estimated with a level number of sales after year one when
permitting would be accomplished and no sales would take place. This should follow the tend in the
market with that has a projected long term lack of adequate supply on the market that has driven the
Northampton new house construction market over the past several years.
INCOME
Income in the subdivision analysis is from the sales of building lots over the absorption period. A single
lot is compared to other lot sales in Northampton as a base line for value of each of the lots. This lot
value is used to adjusted to the proposed lots to arrive at a total sell out price. Similar lot sales are
included in this comparison approach and are summarized as follows:
At the current time there are 29 land listings, (as of 11/12/2008). They have an average list price of
$191,390 and have had an average of 233 days on the market. There are several listed for sale at the
Ridge for $169,000 which is just south west of the subject. There are only three land listings under one
hundred thousand dollars and seven listed under one hundred thirty five thousand dollars.
The Fort Hill and Deer Haven lots are located about 200 yards north of the subject just over the line in
Williamsburg. There have been slow selling but they while they are about the same size as some of the
subject lots they are plan, open and without some of the amenities that the subject is likely to have. As
part of the attempt to maintain a level of sales to sustain the development I have forecast the subject at an
average of $130,000. This would allow for some smaller more affordable lots at between one hundred to
one twenty thousand dollars and some of the larger lots with potential for views at one fifty to one seventy
thousand dollars.
Expenses
These include the planning, or so- called soft costs, and the hard costs, that include the infrastructure items
including roads and so on. Some of the hard and soft costs have been developed by the consulting
engine
Year
Listings
DOM
Year
Listings
DOM
2007
71
119
2002
54
104
2006
80
132
2001
50
175
2005
90
82
2000
61
123
2004
47
119
1999
55
174
2003
39
87
1998
80
156
Total lots
46
50
61
Cost per lot
S49,457
$52,900
$25,000
Expenses
J l
River Road, 101 acres
Northampton, Massachusetts
October 16, 2008
Page 24
Absorption and capture rate:
The absorption rate is based on the current and past number of sales and building permit activity in
Chicopee. This as is seen is an active market. There is a lack of supply of building lots and existing
condominiums supply about five month inventory. However there are a number of developments mid
stage that are building. In the upper price ranges, over two hundred and seventy five thousand to three
hundred thousand dollars there is a clear over supply of units being marketed.
The following shows numbers of land listings as shown in the MLS as of November of the year along
with average days on the market as of that time.
Table 1.3 sh
annual average of 32 per year. The above table shows land listing activity since 1998. There was an
average of 63 active listings at this time of year. Based on the average number of sales there was an
average of almost 24 months inventory at one time. This obviously varied greatly over this time period
with for example 1998 when there were 64 MLS land sales in that year based on average listings there
would have been about a one year supply. The actual was slightly longer since at that time there were 80
listings or for that time period about a 16 month supply based. At the current time there are 29 listings.
Based on last years permit levels of 22 there is about a 16 month supply of unsold inventory. With the
subject estimated at another 40 lots this would stretch out to another 33 month supply without the addition
of more inventory or increase in sales. With these factors in mind think it reasonable that the subject
could capture about 25 of the annual sales or even on down year about 6 sales.
For the first year of the project I have shown no sales since this would be a permitting year prior to any
infrastructure development. It is also forecast to be one of the bottom years in the current recession.
This results in a seven year project length.
Real Estate Taxes
Real estate taxes are based on the likely assessment of the lots over the sales period. Year one is based on
the estimates based on a per lot basis at $17,000 in year one based on a proration of the current land
assessment between the exiting use, and the division of the land as I have assumed for this appraisal. I
River Road, 101 acres October 16, 2008
Northampton, Massachusetts Page 25
have increased this slightly for year two and then decreased the real estate taxes during the remaining sell
out period as lots are forecast to sell out.
Sales Expense
Sales expenses are estimated at 10% of the gross annual sales. In general, real estate brokers in the area
quote 6% to 10% sales commission with the upper costs to land.
Surveys and Engineering
Included in a development proposal would be survey and engineering costs. The subject is a complex
parcel with some grade changes, several easements, changes in soils conditions, potential and probably
wetlands areas as well as access questions and some questions regarding the engineering for the extension
of water and sewer lines. Also the scale of the project is such that there is some complexity to laying out
this may units over the site. I have estimated $100,000 in year one, and an additional $50,000 in year
two towards permitting and engineering.
Road Costs
Road costs are taken from the estimates developed by the consulting PE. In addition I have considered
road costs are based on estimates for the subject type of road work from a number of contractors. These
included the Warner Brothers Construction in Sunderland, MA and Davenport of Greenfield along with
the figures from the Phyllis Lane project and Fargo Lane projects in Greenfield. At the time of
construction the estimates were from $150 to $175 for average road costs with water and sewer. There
have risen over the past two years and now are about $200 to $250 per foot. Work to the existing
roadway would of course be somewhat less.
Legal Fees
Legal fees are the costs to the property owner for deed preparation and cost costs. These are estimated at
$1,000 per sale. I have consulted with several attorneys regarding these costs.
Developers Profit
The developers profit is estimated at 15% of gross sales. In general, developers would like to maximize
their profit on any project. The subject is in an active area with demand for developable parcels. Two
recent developments included the Phyllis Lane project and the Fargo Road project. In both cases, the
developers indicated their anticipated and actual returns. Another development was in Deerfield, MA.
The developer, Mr. Stephen Upton, indicated that he was willing to except a minimal return on his lots at
the Ridge crest subdivision in return for profit on the house construction. Most developers report
earnings at 10% to 15% of gross sales. Based on this, I have estimated the subject at 15% because of the
changing uncertain nature of the market going forward at this time.
Rate of Discount
The discount rate is used to account for the time value of money for the sales over the absorption period.
The discount amount is the present worth of the future income from the sales of these lots. The discount
rate is based on comparisons with alternative investments, condition of the economy and relative risk of
the investment.
I have also considered results from use of a mortgage equity analysis. This is supported with data from a
national survey of key rates of return. The study is from the Korpacz National Market Indicators, as
written in the Valuation Insights Perspectives Journal, which is published by the Appraisal Institute.
River Road, 101 acres
Northampton, Massachusetts
Sale
Cl. 136 Main St., GFD
Date
2/05/07
C2. 60 Wells St., GFD
C3. 108 Ave. A. T.F.
C4. 8 -16 Federal St. GFD
2/28/07
6/06/07
4/25/07
Price
$240,000
$520,000
$226,000
$220,000
Mean
Cap Rate
10.83%
5.97%
10.62%
11.8%
9.81%
October 16, 2008
Page 26
The 2nd quarter 2008 survey, of 1st quarter data, shows mean overall cap rate at 6.63 for CBD office
space. The local rates tend to be higher than these national investments, but as can be seen form the
extracted capitalization rates there are several that are around the range from the study.
The discount rate is the IRR, or return on all cash transactions based on annual year -end compounding.
The difference between the capitalization rate and discount rate is best described in the formula: Y Ro
CR, where Y is the discount rate, Ro is the going in rate, and CR is the income growth factor. If the
going in rate is 9% and the growth factor is 2% then the discount rate would be 11%. For the subject I
have shown no income growth over this short time period. With this in mind I have kept the discount rate
the same as would be typical for the going in rate. The following rates are from the recent survey of
National Market Indicators from the Korpacz Real Estate Investor Survey, by PricewaterhouseCoopers,
LLP:
Source
Mortgage Equity
Sales
Valuation Insights Perspectives
Valuation Insights Perspectives
Rate
8.68
5.97% -11.8%
6.63
7.84% &7.41%
Comments
7.00% loan rate, 12% equity yield, cap rate
Mixed commercial uses, cap rates
CBD office 1 Q, 2008 mean, cap rate
Mean discount rate, Mean residual cap rate
Local capitalization rates show what alternative investments are expecting. These give a base to he cap
rate estimation since they are a variety of investment types with some safer and some risker than the
subject.
The subject discount rate should be above the loan rate of 7% or so since the equity return is more risky
than the mortgage portion of the investment. Also the subject, being considered as a complex interior
condominium or residential subdivision complex, is considerably more risky than many of the alternative
real estate investments. Northampton has had some relatively strong sales but with the current recession
looking worse almost daily I have looked at a slightly more conservative rate of return. As a result I have
used at 8 discount rate. This results in a valuation of $970,000. The following page shows a spread
sheet with these calculations.
r
River Road, 101 acres October 16, 2008
Northampton, Massachusetts Page 27
COST OF DEVELOPMENT
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Location
S. Date
S. Price
lots
$/Lot
Sub. Appr'd
1. Barts Ave., Belchertown
1/29/08
$420,000
14
$30,000
Permitted
2. Newton St., S. Hadley
3/07
$725,000
34
$21,324
3. Fuller Road, Chicopee
10/06
$610,000
36
$16,944
Not permitted
4. 717 Northampton St., Holyoke
10/06
$450,000
41
$10,976
5. 20 Bridge St., Northampton
7/06
$1,005,000
42
$23,929
Permitted /2002
6. Granville Rd., Westfield
10/06 7/07
$1,200,000
42
$28,571
7. South Street, Agawam
11/05 8/07
$1,180,000
44
$26,818
8. Brush Hill, W. Springfield
01/08
$875,000
50
$17,500
Permitted
9 .The Oaks, B. Pit, Northampton
1/22/04
$1,500,000
54
$27,778
Permitted
10. 359 Main St., Easthampton
12/04
$1,098,000
60
$18,300
Not permitted
11. 939 Piper Rd., W. Springfield
10/04, 1/05,4/06
$860,000
65
$13,231
12. East Street, Ludlow
9/06
$2,809,000
80
$35,113
Not permitted
13.Daniel Shays. Belchertown
10/05
$1,200,000
90
$13,333
14. Chestnut St., E. Longmeadow
11/06
$3,562,500
118
$30,191
Permitted
Mean
$1,249,607
55
$22,429
River Road, 101 acres
Northampton, Massachusetts
October 16, 2008
Page 28
THE SALES COMPARISON APPROACH
In the sales comparison approach, market value is estimated by comparing the subject property to similar
properties which have recently been sold. The accuracy of the approach is based on the availability of
similar sales and sufficient data which will allow the appraiser to quantify and explain differences between
the subject and the comparable sales.
This lot value is used to adjusted to the proposed lots to arrive at a total sell out price. Similar lot sales
are included in this com approach and are summarized as fol
An additional sale considered is the property located on Chesterfield Road, Northampton, that sold on 6-
01-05 for $390,000. This is a 29.2 acres lot that was from sold by Sovereign Builders to Lee Sproull.
This was a parcel that was thought to be large enough for a small subdivision but eventually the developer
sold it as a single "view" lot. The property did have very good view and is located nearby to the subject.
This is a large rural lot that had been marketed by a broker but had a marketing time of only eight days. I
have not included in the comparison table because I could not confirm the conditions of sale but is
interesting as a larger single view lot. There are four or more other sales along Deer Run and Deer
Haven Roads just to the north of the subject. The two considered at the most recent and they are similar
to others sold in the development. A recently constructed single family house on Deer Haven is listed as
"under agreement." The list price was $644,000 and was listed as on the market for one day. A lot
listed a lot 3, Fort Hill Road, is listed for sale at $150,00 and as being level with street grade and part
open.
River Road, 101 acres October 16, 2008
Northampton, Massachusetts Page 29
SALES COMPARISON ADJUSTMENTS AND VALUE CONCLUSION
Property Rights and Conditions of the Sale: Each of the properties was sold in fee, therefore no
adjustment is given to the sales. Conditions of the sale reflect the motivations of the buyer and seller.
The adjustment is made when a sale is considered a liquidation, foreclosure, or had some other condition
that affected the sale price other than conditions typical to market forces. None of the sales were
considered to be distressed or required any adjustments.
Market Conditions: Market condition adjustments, typically referred to as time adjustments, are for
changes in the market over the time period between a sale and the effective date of the appraisal. For the
time period covered in this appraisal, market conditions have been stable for land sales. While in many
market segments there have been some slight drop off in prices land has remained stable. Marketing time
has increase as the number of sales has dropped over the past year. No adjustment is made.
Location: Several sales are located in Northampton. There are some great variations in location.
Physical Conditions: The physical conditions adjustment is for factors such as topography, soil
conditions, views, type of woodland, slopes and other physical factors.
Using sale 5 less 20% results in an adjusted price of $19,143 per unit.
41 lots x $19,143 $784,863
46 lots x $19,143 $880,587
At the mean of the sales:
46 lots x $22,429 $1,031,734
41 lots x $22,429 $912,209 Rounded to $910,000
The mean of the sales is for a 68 lot subdivisions, many of these are condominium projects to the south of
the subject in Hampden County. Also many are of over 55 age restricted developments. The subject is
likely most similar to sale 9 which is located in Northampton. The buyer /developer is a well know local
building who is now marketing these lots afer several years of permitting and development of the property
infrastructure. He is the type of most likely developer of the subject parcel. With a time, or market
conditions adjustment for the general declining market conditions as well as for the coming oversupply in
Northampton. This sale, if adjusted downward 10% for each factor, results in an adjusted price per lot of
$22,222. Using this with the most likely number of lots at 41 results in an indication of value at
$911,102 which I have rounded to $920,000.
CORRELATION AND FINAL VALUE OPINION
Cost of Development approach $970,000
Sales comparison approach $920,000
The subject is considered at its highest and best use but subject to the stated hypothetical conditions and
extraordinary assumptions stated in this report. I have looked at 100 acres of the subject site which is just
over 106 acres. I have assumed that the old nurses residence is not on this parcel and that the nursing
home facility is excluded with all parking and surrounding roadways. Further I have assumed that the
water tower is suitable for use at this time. Plans for the hypothetical subdivision that is the basis for the
River Road, 101 acres J
Northampton, Massachusetts
October 16, 2008
Page i
cost of development valuation approach were drawn by Sarah Campbell, PE. A copy of three preliminary
sketches along with comments regarding the potential development costs and a resume are included in the
report addenda. Ms. Campbell has consulted with my self on numerous other subdivisions over the past
twenty years.
I have developed the sales comparison approach. I searched for subdivision sales in Hampshire County
and Hampden County. The sales that have been listed are culled from a large list of subdivision sales in
this area with consideration of several sales in Franklin County. These areas are sufficiently similar to
help give an indication of value for the subject. However as is typical of this property type there are a
wide range and variety of subdivisions sold. These also have been sold some prior to any approvals and
many with full approvals. With this variety of sales I have been able to "bracket" the subject for a
number of factors. There are sales that are large and some smaller than the subject both on an acreage
basis and on a potential lot basis. Several sales were to be developed into condominium developments
and a number into over 55 developments. These also help "bracket" the subject value. Two of the
primary concerns that I have addressed is the location, and the current state of the market. Some of the
sales were sold several years ago in "hot" markets. As such they would set a ceiling for value. Also of
major concern is the degenerating current market both on a national basis and a more local basis. With
these factors in mind I have adjusted the sales on a per lot basis to arrive at an appropriately supported
conclusion from this approach.
Also developed is the cost of development approach. For this I have consulted with S. Campbell and
developed a likely or potential development scenario. With this approach the future condition of the
market is of prime concern since sales of lots would take place in the future. Like all current market
participants I have concern regarding the recession and current degrading housing market. I have factored
this into the calculation of value by using conservative discount rates, longer term absorption period and a
reduction for potential of some of the lots not being approached. Northampton has proved over a long
period to time to be more stable and somewhat more resistant to downturns than many of the more margin
locations and competiting market areas. None the less the current downturn is severe enough that many
market participants have indicated grave concerns regarding the short term housing prospects. Finally I
have tried to consider the impact of the newly offer and proposed units, lots and housing options at the
Village Hill project in Northampton. The builder developed is now offering 32 units of a variety of types
for sale and according to press reports 100 units are planned in the first stages of development. This is a
huge number of units for a market the size of Northampton. This should have negative impact on
competition in the market for like type units. With these considerations in mind I have concluded there is
sufficient support for the conclusion of value at $970,000 from this approach.
Therefore, as of October 16, 2008, it is my opinion that the market value of the property as described in
this report, subject to the stated hypothetical conditions and extraordinary assumptions listed in this
report, off 100 acres located off River Road, Northampton, Massachusetts, to be is: $970,000.
River Road, 101 acres
Northampton, Massachusetts
PART IV EXHIBITS AND ADDENDA
October 16, 2008
Page_ii
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River Road, 101 acres J
Northampton, Massachusetts
LOCATION MAP NORTHAMPTON, MA
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River Road, 101 acres
Northampton, Massachusetts
ASSESSORS MAP WITH ZONING OVERLAY
October 16, 2008
Page iv
River Road, 101 acres
Northampton, Massachusetts
SALE #1
Location:
Sale Price:
Barton Avenue, Belchertown, MA
$420,000, ($30,000 per lot 14units)
Sale Date: January 29, 2008
Grantor: Breezy Acres LLC, Gill, MA
Grantee: Crestview Acres, Inc, of Chicopee, MA
Legal Reference: Book 9381, Page 140
Financing: $750,000 form Chicopee Savings Bank
No prior sales in the three years prior.
Financing:
Property Details
Land Area: 32.72 acres Zoning:
Frontage: Fuller Road Topography:
Utilities: El., but no public water or sewer Units: 14
October 16, 2008
Page v
Descriptions
This property is was survey and approved as a definitive subdivisions prior to the sale. A plan was
completed and recorded on January 2007 by Ecotec Environmental Associates, of East Longmeadow.
The plan is recorded in Plan Book 217 page 95 at the registry. There are 15 lots but of these 14 are
building lots. The property is located on the east side of Barton Avenue. None of the infrastructure had
been completed as of the date of sale. The grantor owns abutting remaining land. He reserved the right to
use Crestview Drive, for access to his land and to use any utility connections along at this road. Several
lots are now listed for sale. Lot F and K, both being .94 acres are listed at $109,900 and have been on
the market 248 days, on the high end lots I and G are listed at $119,900 and are 3.47 and 3.49 acres.
River Road, 101 acres
Northampton, Massachusetts
SALE #2
Location:
Sale Price:
Effective Sale Price:
Sale Date:
Grantor:
Grantee:
Legal Reference:
Financing:
Land Area: 10.55 acres
Zoning: Business C
Topography: Level
Newton Street, South Hadley, MA
$900,000
$725,000 ($20,714 per unit)
March 28, 2007 (no sales within the past three years)
Frank and Rita Falcetti, Elvina Labrie and Linda Bernier
Whispering Pines at Root Road, LLC
Book 9075 Page 244 and 251
$4,100,000 to Florence Savings Bank
Frontage: 560.16 linear feet on Bridge Road
Utilities: Water, Sewer, Gas and Electricity
Units: 34
October 16, 2008
Page vi
Newton Street is Route 116, which is a mixed use area with both commercial and residential uses nearby.
addition to the many commercial uses. Mount Holyoke College campus is about one mile north of this
property. The site is 10.55 acres and has a road frontage of 560.16'. There was a single family house
on site. This has an estimated value of $175,000. This should be divided off from the subdivision. The
site is permitted for 34 residential condos and one business condo. It is irregular in shape but is mostly
level with street grade and is mostly open land. There is the Stony Brook that runs though part of the site
and there are wetlands along this area.
The property had been listed for sale with Macmillian and Sons, Inca for about a year for $1,100,000 but
had been on the market for many years, over 10, before this last listing and sale. The broker at
Macmillian was Ed Umbrasas.
River Road, 101 acres
Northampton, Massachusetts
SALE #3
October 16, 2008
Page vii
Location: 144 Fuller Road, Chicopee, MA
Sale Price: $600,000
Effective Sale Price: $610,000 ($16,944 per unit 36 units)
Sale Date: October 5, 2006
Grantor: Helen Kulig, Executrix of the Estate of Alphonsa E. Kulig
Grantee: Carle E. Anderson
Legal Reference: Book 16240, Page 3
The property was immediately transferred to a related party a consideration of $1.00 subsequent to the
aforementioned book and page. This transaction can be found in the Hampden County Registry of Deeds,
Book 16240, Page 5.
After this sale there was a form of ownership change from to A.H.H Inc. on the same date to Oakhill
Condominiums Inc. as recorded in Book 16240, Page 6. Latter there was a corrective deed recorded in
Book 17344, Page 317 on 6/13/08.
Financing: $450,000 to Chicopee Savings Bank
Land Area: 5.72 acres Zoning: Residential Al
Frontage: 752.70' Fuller Road Topography: Level
Utilities: W, G E Units: 36
This is the Oakhill Estates condominium project. The property is just south of the Massachusetts
Turnpike, with the Chicopee River just south and I -91 to the east and west by Memorial Avenue (Route
33). This is a heavily traveled road with a mix of commercial and residential uses.
The sale included a single family ranch house of 1,525 square feet with both a single and three car
garages. The structures were demolished. The cost of this is estimated at $10,000. The plans for the
property were for 36 condominium units. Final approval was granted on May 8, 2007 by the Chicopee
Planning Board. Plans are for the units to be garden style priced at $205,000 to $230,000.
River Road, 101 acres
Northampton, Massachusetts
SALE #4
Location:
Sale Price:
Sale Date:
Grantor:
Grantee:
Legal Reference:
No prior sales within the last t
Financing:
Land Area: 8.71 acres
Zoning: RM -20
Topography: Steeply Sloping.
717 Northampton Street, Holyoke, MA
$450,000, ($10,976 per unit 41 total)
October 27, 2006
Patricia A. Davignon
Riverview Estates, LLP
Book 16286, Page 359
hree years
Not available
Frontage: 367' linear feet on Northampton St.
Utilities: Water, Sewer, Gas, and Electricity
Units: 41
October 16, 2008
Page viii
This property is located near the Mount Tom Reservation area of Holyoke, on Northampton Street, also
known as Route 5. This runs next to I -91 and is north and west of the city center. It tends to be a more
suburban rural area. The property is on the west side of the highway. There is a total size of 8.71 acres
with a road frontage of 367'. There was a single family house and two barns on the property at the time
of sale. Northampton street.
This is an irregularly shaped wooded parcel that slopes up moderately from the street. From the higher
sections there are long range expansive views of the pioneer valley to the east and the Connecticut. River.
There is a wetland area in the southwester corner of the lot. There also is some traffic noise from I -91.
River Road, 101 acres
Northampton, Massachusetts
SALE #5
Location:
Sale Price:
Sale Date:
Grantor:
Grantee:
Legal Reference:
No prior sales within
Financing: Not available
20 Bridge Road, Northampton, MA
$1,005,000 ($23,929 per unit)
July 12, 2006
Erwin C. Warner
Bridge Road, LLC
Book 8791, Page 26
the last three years
October 16, 2008
Page ix
Land Area: 22.92 acres Frontage: 559.66 linear feet on Bridge Road
Zoning: Urban Residential A Utilities: Water, Sewer, Gas and Electricity
Topography: Slopes upward from Bridge Road. Units: 42
This property is located near the intersection of Bridge Road and Route 9, in Florence which is to the
northwest of the center of Northampton. The property is next to the middle school near Look Park. It is
22.92 aces and had been permitted for 42 age restricted over 55 condominium units. The plans are for
the units to range between 1,791 square feet and 2,187 square feet. When the property was purchases it
was improved with a single family house. The house was to remain with the seller as a life estate but the
development is to be built around the house but the house is to be considered part of the development so it
would comply with zoning. There is a total of 559.66 feet of road frontage on Bridge Road. At the
upper levels there are long range expansive views of the pioneer valley.
This is a woodland parcel. The house is setback uphill from the road, 700 feet or so. According to the
seller the sale had been negotiated in 2002 but took until 2006 to close.
River Road, 101 acres
Northampton, Massachusetts
SALE #6
Location:
Sale Price:
Effective Sale Price:
Sale Date:
Grantor:
Grantee:
Legal Reference:
No prior sales within the last
Financing:
Land Area: 20.99 acres
Zoning: Residence A
Utilities: Water, Sewer, Gas and Elec.
78 Granville Road, Westfield, MA
$1,475,000
$1,200,000, ($28,571 per unit, 42)
November 10, 2006 and July 13, 2007
Various
Granville Road, LLC
Book 16319, Page 200 and Book 16806, Page 574
three years
$4,540,000 to Chicopee Savings
Frontage: 200 on Granville Road
Topography: Mostly Level
Units: 42
October 16, 2008
Page x
This property is located on Granville Road in southwestern Westfield. This is a residential area off of
Route 20 and Route 202. portion of the City. This was an assemblage of three parcels. The first was
purchased in November of 2006 for $275,000. This is a 20,000 square foot site that was improved with a
single family cape house of 1,800 square feet. The single family will be retained and sold off as a condo
unit but was important to the project to help the other parcels meet the minimum frontage requirement of
125 feet. The value of the cape style house is estimated at $275,000. The other two parcels were
purchased for a total of $1,200,000. They are located behind the house. They have a total size of 20.5
acres. The site is irregular in shape with some elevation in the site.
Towards the rear of the property there is steep drop off. From this area is some potential for good
views. There is plans for 42 condominium units, including the one which is the single family home. Of
these 23 are to be freestanding units, nine duplex units and the converted single family dwelling. They
are to be garden style units with lofts. A special permit and site plan approval was granted on May 3,
2007 from the Westfield City Council. The rear land sale was contingent on the project getting full
approval from the City Council.
River Road, 101 acres
Northampton, Massachusetts
SALE #7
Location:
Sale Price:
Effective Sale Price:
Sale Date:
Grantor:
Grantee:
Legal Reference:
No prior sales within
Financing:
Land area: 30.07 acres
Topography: Mostly Level
Units: 44
164 194 South Street, Agawam, MA
$1,150,000
$1,180,000 $26,818 per unit 44 units)
November 4 2005 and August 30, 2007
Various
John E. Drost Jr., Trustee of 194 South St. Nominee Trust
Book 15471, Page 561 and Book 16898, Page 130
the last three years
$900,000 to Bank of Western Mass
Zoning: Residential RA -5
Utilities: Water, Sewer, Gas and Electricity
October 16, 2008
Page xi
The total project cost was $1,150,000 for the two parcels of land plus an addition $30,000 to one seller.
This was the option cost over about one year. The property is located off of South Street, in southeastern
Agawam. This is a residential area, but there are some spot commercial uses nearby. This was an
assemblage of two parcels. The first parcel was purchased fro $650,000 on November 4, 2005 for
$650,000. This is a 5.7 acre parcel with a single story commercial building occupied by the VGW. The
building was 2,646 square feet in size. The building was to be renovated and used as a community center
for the project. The second parcel was purchased for $500,000. This property was 24.37 acres and was
vacant. They were being re -zoned from Residential /Agricultural to the Over 55 Zoning district.
A zone change from AG and RA -2 to RA -5 (age restricted zone) that limits density to three units /acre was
obtained. The site has some wetlands, endangered species issues, and topography issues which limited
the project from the original plan of 78 units to 44.
The final plan was for 22 duplex units plus the converted community house. The units are to be 2,000
square foot units of townhouse style. The initial offering of the units was for about $375,000.
River Road, 101 acres
Northampton, Massachusetts
SALE #8
Location:
Sale Price:
Sale Date:
Grantor:
Grantee:
Legal Reference:
No prior sales within the last
Financing:
Land Area: 19.71
Topography: Gentle Slope
Units: 50
Brush Hill Road, West Springfield, MA
$875,000 ($17,500 per unit 50 units)
January 4, 2008
Quinnehtuk Company
Beech Hill Development, Inc.
Land Court Certificate 33555
three years
$656,250 to United Bank
Zoning: Residence SU -M
Utilities: Water, Sewer, Gas, and Electricity
October 16, 2008
Page xii
DESCRIPTIONS
This property is located in a residential section of Brush Hill Avenue, West Springfield. Before the sale
the buyer petitioned the town for a zone change to allow an age restricted condominium project. Prior to
the sale the property was zoned Industrial Park but it was then re -zoned to Special Use -Multi Family (SU-
M). This change was approved November 11, 2007. The sale was contingent upon the zone change plus
all approval for the 50 unit condominium development.
Beech Hill Development, Inc, is a well known local builder who has developed another age restricted
condominium projects in the area. One was known as Cedar Woods.
River Road, 101 acres
Northampton, Massachusetts
SALE #9
Location:
Sale Price:
Effective Sale Price:
Sale Date:
Grantor:
Grantee:
Legal Reference:
Financing:
Property Details
Land Area: 53.57 acres
Frontage:
Utilities: W, G E
The Oaks, Birts Pit Road, Northampton, MA
$1,500,000
($27,778 per unit 54 units)
1/22/2004
Northampton Oaks, LLC
Oak Ridge Road, LLC
Book 7344, Page 37
Unavailable
Zoning: SR semi residential
Topography: slightly sloping up to the south
Units: 54
October 16, 2008
Page xiii
Descriptions
This property is off the south side of Burts Pit Road, in a SR suburban residential zone. This is a
planned cluster development with open spaces along the road and west and south sides. There are two
entrances planned off the road frontage. There also is a wetland and common areas in the center of the
site. All of the lots are for single family development but with ten having the potential to be for two
family units and eight being reserved for affordable housing. The total inter road is to be 3,650 linear
feet. Twenty eight lots were to be service by the city water and sewer system with twenty six lots having
private water and sewer systems.
SALE #10
River Road, 101 acres October 16, 2008
Northampton, Massachusetts Page xiv
Location: 359 East Street (Hampton Village Condos) Easthampton, MA
Sale Price: $1,098,000, ($18,300 per unit 60)
Sale Date: December 10` 22n of 2004
Grantor: Richard Lafond Arlene B. Shaeffer
Grantee: Hampton East, LLC
Legal Reference: Book 8110, Page 204 216
No prior sales in past three years.
Financing: $2,450,000 to Chicopee Savings Bank
Land Area: 45.32 acres Frontage: 160 linear feet on Main St. 115 on Paul St.
Zoning: R -10, R -15, R -35 Topography: Level
Utilities: Water, Elec., Gas, Sewer Units: 60
The property is located off of Route 10, Main Street in south of the town center.- There is some heavy
traffic in the area.
The lot is of 45.32 acres as an assembledge with about 3.39 acres in wetlands. The total property was
then permitted for a 60 unit condominium project. Of the total 44 units were to be age restricted for 55
and older. The units are to be between 1,700 square feet and 2,300 square feet. They are to be all two
bedroom units with anticipated sale prices ranging from $200,000 to $310,000. The property was not
permitted prior to the sale.
River Road, 101 acres
Northampton, Massachusetts
SALE #11
Location:
Sale Price:
Effective Sale Price:
Sale Date:
Grantor:
Grantee:
Legal Reference:
No prior sales within the last
Financing:
Land Area: 19.876 acres
Zoning: Residence A 1
Utilities: Water, S, Gas Elc.
939 Piper Road, West Springfield, MA
$945,000
$860,000, ($13,231 per unit 65)
10/12/2004, 1/27/05, 4/04/06
Various
Cedar Woods Development, Inc.
Book 14549, Page 300
three years
United Bank
Frontage: 291.12' on Piper Road
Topography: Slight slope
Units: 65
October 16, 2008
Page xv
The property is located in a residential section of West Springfield off of Piper Road. This is a residential
property that is somewhat rural.
The development is an assemblage of three parcels. Overall this is an irregular shaped parcel with only
slight slopes. The property was improved with a farm stand, and nursery that was to be demolished.
From the total property a single family building lot was to be surveyed out and sold off. The value of this
is estimated at $90,000.
The buyer, the proposed developer, had petitioned the town for a zone change to allow the construction of
the condominium project. The proposal was to re -zone the property from Residence A 1 to Special Use
Multi Family (SU -M). The re -zone was requested on September 6, 2004 and approval was approved on
October 18, 2004. The planned for developed was for 65 garden style units. These were to be age
restricted condominium units. The units were planned to be two bedrooms with sizes ranging from 1,268
to 1,728 square feet. The prince range of the units was to range from $255,000 to $305,000.
River Road, 101 acres October 16, 2008
Northampton, Massachusetts Page xvi
SALE #12
Location: East Street Miller Street, Ludlow, MA
Sale Price: $3,200,000
Effective Sale Price: $2,809,000, ($35,113 per unit -80)
Sale Date: September 16, 2006
Grantor: GM M Realty Trust
Grantee: Miller Street Nominee Trust
Legal Reference: Book 16190, Page 281
No prior sales within the last three years
Financing: $1,250,000 to Chicopee Savings Bank and $1,400,000 to the sellers
Land Area: 30.83 acres Frontage: 1,393 linear feet on East Street
Zoning: Residential B 441' on Miller Street and 290' on Tower Road
-Utilities: Water, Sewer, G, Ele. Units: 80
Topography: Mostly level at street grade
The property is located in Ludlow at the corner of Miller and East Street. Because the property had been
zoned agricultural the buyer had to apply for a zone change from to residential to allow for the
development of the parcel. The plan was for a total of 80 age restricted condominiums. This zone
change was approved.
There are three curb cuts into the parcel off of East Street. Access off of Miller Street is not possible.
This is a former storage yard that was vacant at the time of sale except for a small building. This was
removed after the sale. There is a culvert along the road frontage and a wetlands area off the frontage. A
further limitation to use is a gas line that runs across the entire parcel.
According to the appraiser of the property the sale was to include an initial payment of $1,800,000 at
closing with the sellers to give a second mortgage of $1,400,000 at %5. The second is to be repaid in
$20,000 increments, at the time of each condo sale for the first 60 units. The condominium units are to
have a price range between $250,000 to $350,000. I have spoke with the appraiser at Crowley Associates
in Springfield and he discounted the sales price because the $3,200,000 would not be received all at once.
His calculation of the effective sale price was based on an assumption of a five year sell out, and a
discount of the loan at 12% over the five -year term. This results in an adjusted value of the second loan
of $1,009,352. This with the first payment results in an adjusted sales price of $2,809,000.
River Road, 101 acres
Northampton, Massachusetts
SALE #13
Location:
Sale Price:
Sale Date:
Grantor:
Grantee:
Legal Reference:
No prior sales within
Financing:
Land Area: 34.03 acres
Zoning: Rural Residential
Utilities: Water, Sewer, G& E
Summer Hill Condos, Daniel Shays Highway, Belchertown, MA
$1,200,000, $13,333 per unit 90 units)
October 17, 2005
Clifford, Lawrence, Janice Gretta Tucker
Summer Hill Estates Development, LLC
Book 8480, Page 323
the last three years
$2,550,000 to Country Bank
Frontage: See Below
Topography: Sloping
Units: 90
October 16, 2008
Page xvii
This is located just off Route 9 and Route 202 to the north of the center of Belchertown. This is a growth
area with several subdivisions nearby and an active residential market with population growth. The
property was permitted for 90 units and was to be an over 55 age restricted development. The plan was
for this to be a two stage development.
The property has a size of 34.03 acres and has frontage on Daniel Shays Highway of 200.72' and on
Federal Street of 223.07. It is shown on the assessors map as 238 lot 57 and map 231/238 parcel 56 with
a section of map 238 parcel 32. This is an irregular shaped parcel that slopes up from the road frontage
and is all wooded and there is a small wetlands area.
River Road, 101 acres October 16, 2008
Northampton, Massachusetts Page xviii
SALE #14
Location: Chestnut Street and Benton Drive, East Longmeadow, MA
Sale Price: $3,562,500, ($30,191 per unit 118 units)
Sale Date: November 2, 2006
Grantor: Rugby Properties, LLC
Grantee: D.R. Chestnut, LLC
Legal Reference: Book 16302, Page 279
No prior sales within the last three years
Financing: $7,090,000 to Bank of Western Mass
Land Area: 54.12 acres Frontage: 527.63' on Chestnut Street and 77.84 on Benton Drive
Zoning: Residential Topography: Mostly Level
Utilities: Water, Sewer, Gas and El. Units: 118
This property is in west Longmeadow on Chestnut Street and Benton Drive. This is a residential area.
The property had been zoned Industrial Garden District so re- zoning was required for development. The
project is known as the Fields at Chestnut. This is an age- restricted 55 and over housing development.
After the sale there had been some delay in construction because part of the site was in the Natural
Heritage Priority Habitat area. The development was to be in several stages with Phase I being on 10
acres with 28 units. Phase II was to have 17 units. The forecast range of sales prices was to be between
$369,000 and $429,000.
River Road, 101 acres
Northampton, Massachusetts
ASSESSORS MAP 5 BLOCK 1 LOT 1
River Road, 101 acres October 16, 2008
Northampton, Massachusetts Page xx
LEGAL DESCRIPTION BOOK 697 PAGE 161 HAMPSHIRE COUNTY REGISTRY OF DEEDS
Bonk 69
Know all Men by these Presents, That
I, Eyroo !coils of ■iIliaceburg le the County of 6spshire and Cos
eaneealtb of iiaesehtuetta
IN CUNSIDEnAT1f1N Cc Twenty eves Rtndred seventy four and 6 /19A.dollara.
p.uh. She InhabLt4at..of the COO11t7 of Lap.hire of tha.sald.Cossoonsalth.of
Niasachusetta
...rM l.wr1 441.1. r1a..11 .1'J. d. aaetr) err, val
tai, I..,a.i...a 4 .wna7 aw. J.r rid
Inhabitant., of the County of Ea.¢ahlre a oertcfn tract of land situate In
the City of Jortbaaptoa lo the said County of Hampshire bounded and des-
cribed as follows to eft; Beginning it it narked Locust tree on tts northwesterly
side of the bighwgy leading trop Leeds to ilsydenville.knowa as The River Road'
the said tree staading at the soutttrly corner of land of the Venotuet S11k
Company; thence 32 deb. 40 win. W. along load of the .aid Company .boot wiz
hundred eighty three dad five tenths (683.5) feet to a anrted Elreh tree;thenee
1. 88 deg. :i0 min. W. along land of the astd CacFay two hundred slaves (211)
feet to an iron pin; thence 1. 6? deg. 15 sin. V. along land eopi.oaed to belong
to one Simonsen nleeteon hundred seventy one (1971) feet to A1y Brook; thence
&utterly tollowieg the general ling of tot said brook shout two thousand
sixty six (2066) feet; thence 8. 88 deg. 10 min. E. along lead of one Clark
seven hundred ninety six and acne teatte (t96.9) feet; thence continuing along
land of the maid Clark S. 87 deg. t. nine hundred four and sit tsothe feet
(804.6) to an iron ;in at the northea terly corner of land of the sold Clark;
thence K. 86 deg. 10 min. 1. along land of one Eeney about flee hundred sixty
seven and vie tenth, (867.6) feet to the said highway; thence lortterly slung
tit easterly aide of the said hig ?sty about fifteen hundred fifty (1550) feet
to the place of Legiraleg LM containing one hundred sir and seven tenths
(108.7) scree of land. Being the save premises conveyed to Luther Lounge.
Byron Looms and /deio 7. 7111er by deed of Josiah Parson' and Chsmoney T.
Parsons dated November let 1881 recorded with Hampshire County Leeds In boot
367 page 473. See also deed of Edwin 7. Killer to this grantor dated April 13th
1988 recorded as above in bock 418 page 484. See also Eat. of Lather Woe*
late of E11)ias'burg entered in the Probate Court for the said County of
Hampshire.
The above property is shown oa Exhibit B.
Site I.D. BS33%C084- -River Rd., Leeds, MA- (1203)
I61
Byron load.
Luther Loomis'
Estate,
To
Inhabitants of
County of Saw
shire,
106.7 A. The ply
Road. Leeds.
Northampton
River Road, 101 acres
Northampton, Massachusetts
COPY OF THE MASSACHUSETTS NATURAL HERITAGE ATLAS MAP 12 EDITION,
SHOWING THE SUBJECT AREA WITH PRIORITY HABITAT AND ENDANGERED SPECIES
OVERLAY
October 16, 2008
Page xxi
River Road, 101 acres
Northampton, Massachusetts
S. CAMPBELL REPORT WITH COMMENTS, THREE PRELIMINARY DEVELOPMENT OPTIONS
AND RESUME 6 pages
Resume
Sara E. Campbell, PE
Professional Experience
Sara E. Campbell, PE Consulting Civil Engineer 1999 Present
Corer Colantonio, Inc. South Deerfield, MA
Engineering Manager 1997 -1999
Sara E. Campbell,PE Consulting Civil Engineer- Millers Falls, MA 1992 -1996
Greenfield Community College Greenfield, MA
Adjunct Engineering Instructor 1993
C.T. Male Associates Greenfield, MA
Staff Engineer 1987 -1991
Langan Engineering Associates Elmwood Park, NJ
Staff Engineer 1980 -1991
Professional Affiliations
Engineering Mentor, 2008 Future City Competition, Northeast Region
Engineers Without Borders Member
Society of Women Engineers Member, regional conference committee 2005, panelist 2008
Boston Society of Civil Engineers Member, former Board of Government, former Senior VP
Westem Massachusetts Branch, American Society of Civil Engineers Past President
Women in Engineering Program, Worcester Polytechnic Institute Member 2003 -2006
College and Industry Advisory Council, Women in Engineering Program, UMass Amherst 1994 -6
Civic Activities
Girl Scout Leader and Service Unit Management team 2004 present
Polish Genealogical Society of Massachusetts Secretary, Webmaster 1993 present
The Country Players Business Manager, Webmaster 2007 present
Montague Economic Development and Industrial Corporation Chairman 1990 -2000
Franklin County Community Development Corporation Board of Directors 1993 -1999
Education
Master of Business Administration Western New England College
Master of Engineering, Civil Comell University
One semester program in British history and culture University of Bath, England
Bachelor of Science, Civil Engineering Union College
16 Prospect Street Millers Falls, MA 01344 413 -423 -3581 saranoh(Jol,com
October 16, 2008
Page xxii
River Road, 101 acres
Northampton, Massachusetts
Sara E. Campbell, PE
Consulting Civil Engineer
Site Analysis for Hampshire COG
River Road Property
The subject property is a nearly square 106 acre parcel with approximately 1,550 ft of
frontage on River Road as its eastern boundary. The northern boundary is the town line of
Williamsburg, with Fort Hill Drive ending at the property line. On the west the property is
bounded by Day Brook flowing from the north. The southern property line is a straight line
with woods to the south.
Both the east and west sides of the project are defined by flowing streams, which carry a 200
ft. protective zone under the Massachusetts Wetland Protection Act. The site is also on the
Natural Heritage map of endangered species. It is not known how this zone along the Mill
River would impact potential development.
The central portion of the land is improved with a nursing home (long term care facility) with
associated parking. A wood -frame residence that predates the construction of the current
facility is unoccupied. The former "County Sanitorium" was located just to the south of the
current facility. It is not known if demolition debris remain. An elevated water storage tank
which serves the site is to the west of the building. Seasonal buildings and a swimming pool
comprise a day camping facility in the northwest quadrant of the property.
Development of the property is constrained by the need for adequate access. Along River
Road, slopes at the frontage are steep and the existing site driveway winds along the
contours. This makes dividing new lots off the frontage impractical. The driveway climbs
for approximately 1,500 ft laterally to reach the central area. The slope appears to be between
8 and 10% grade. The paved width is 21 to 24 feet. From the north, approximately 700 f3 of
driveway extend from Fort Hill Drive in Williamsburg to provide a secondary access. This
driveway is at a 3 to 5% grade and approximately 18 ft. wide. Although both provide
vehicular access, neither are roads in the legal sense of creating frontage for new lots.
The site currently is home to two unrelated uses on one lot. This is not acceptable under
zoning. Redevelopment of the property would require compliance with all pertinent codes
and rules such as establishing frontage for individual subdivided Tots.
Based on previous analysis of the sanitary sewer from the facility to the City system in River
Road, upgrading this line would be necessary for new development, and recommended for
continued use of the current facility. This cost would apply to any use of the land. Budget
estimate of replacement cost is $375,000. The water supply, which comes from
Williamsburg appears to be adequate for new development. The elevated 140,000 gallon
water storage tank, owned by the facility, which provides reliable pressure and fire
suppression supply, will be a necessary part of the new development. New development
would have to work around the tank or replace it.
16 Prospect Street Millers Falls, MA 01344 saranoh@ao►.com 413 -423 -3581
October 16, 2008
Page xxiii
River Road, 101 acres
Northampton, Massachusetts
Sara E. Campbell, PE
Consulting Civil Engineer
We have considered the site for residential development. It is advantageous to provide a
range of lots to provide various sizes and amenities. In this case, those closest to the existing
nursing home could be seen to be less desirable to potential purchasers, unless they were
targeted to the elderly and shared services could be provided at the nursing home, such as
meals or social activities. The lots on the central plateau are flat, while views on the slopes
to the east and west could be a selling point.
The Rural Residential zoning of the property stipulates minimum residential lot sizes of
40,000 s.f. (just under an acre) and I75 ft. of road frontage. The zoning code also contains a
provision for a cluster development, allowing 1.1 unit/acre, excluding roads and steep slopes.
This analysis assumes that the existing site driveway could be improved as a subdivision
road, given the existing slopes of approximately 8 -10 with the maximum allowable slope
8% under Northampton Subdivision Regulations.
It appears that the most likely traffic pattern would be predominantly from the south, with
most employment and shopping opportunities in that direction. The site is approximately
equidistant between Leeds and Haydenville villages. Either provides basic needs such as
post office and convenience stores. In any case, both access points should be maintained and
developed to insure access to /from the site in case of emergency.
The first development scenario considers residential development of the remaining land
around the existing facility. The camp would not be preserved. It would be necessary to
upgrade the two access drives (2,200 If) and gain approval from the Northampton Planning
Board as Subdivision Roads, then a loop road could be constructed around the existing
facility. Approximately 46 one -acre lots could be subdivided from the new loop, 5,000 feet
in length. Site geometry dictates smaller lots near the existing nursing home. These could be
individual homes, screened from the parking areas, or a more dense cluster if this is
marketable. The larger lots on the perimeter would enjoy more varied terrain, views,
streams, and potentially carry a higher price.
Budget costs to prepare lots for sale Option A would include:
Sewer replacement 375,000
Upgrade 1,900 If road w/ drainage 300,000
New Road w /water and sewer line 5,000 ft $1,500,000
Soft costs: engineering, legal 100,000
Total $50,000 per lot, with the nursing home remaining; no costs attributed to maintaining or
improving the nursing home.
If the existing use were to be discontinued, the development plan would be more
flexible. Road alignment would not be dependant on the existing facility. It could be more
feasible to cluster groups of residential units and potentially offer a wider range of lot sizes
and characteristics. A grid pattern of new streets would yield at least 50 lots ranging in size
from 1 to 4 acres. The water tower would pose the largest impediment to at least two of the
lots shown.
16 Prospect Street Millers Falls, MA 01344 saranoh @aol.com 413 423 -3581
October 16, 2008
Page xxiv
River Road, 101 acres
Northampton, Massachusetts
Option B budget estimate is:
Sewer Replacement 375,000
Improve existing drives 1,600 ft 250,000
New Road 6,400 ft $1,920,000
Soft costs 100,000
Cost $53,000 per lot plus the cost of demolition.
More dense clustering would decrease the length of road required, but would result in less
dedicated Large lots and increased common space. A park could be developed around the
water tower and playing fields established.
Option C budget estimate.
Sewer replacement
Improve existing drives 1,600 ft
New road 2,600 ft
Soft costs
Cost $25,000 per lot plus the cost of demolition
These costs are budget estimates only, and are not based on precise measurements or designs.
The number of units could vary based on topography, wetlands, or endangered species
constraints.
Hmnpshirecare.doc
375,000
250,000
800,000
100,000
Sara E. Campbell PE
Consulting Civil Engineer
16 Prospect Street Millers Falls, MA 01344 saranoh@aol.com 413 423 -3581
October 16, 2008
Page xxv
River Road, 101 acres
Northampton, Massachusetts
October 16, 2008
Page xxvi
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River Road, 101 acres
Northampton, Massachusetts
October 16, 2008
Page xxvii
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River Road, 101 acres
Northampton, Massachusetts
October 16, 2008
Page xxviii
F
River Road, 101 acres
J October 16, 2008
Northampton, Massachusetts
Page xxix
QUALIFICATIONS KIM A. LEVITCH, SRA
MA Certified General Real Estate Appraiser, lic #258, Exp. 12/05/08
State of Vermont License #80- 0000064, Exp. 05/31/09
New Hampshire, Certified General Appraiser, NHCG -663, exp. 12/10
Owner: K. Levitch Associates, 40 School Street, Greenfield, MA 01301
General Education: Graduate of Ohio University, Athens, Ohio, BGS, 1971
Professional Designations Associations:
SRA The Appraisal Institute, Chicago, Ill.
GRI Graduate Realtors Institute, National Association of Realtors
Realtor, Pioneer Valley Association of Realtors, National Association of Realtors
Marshall Swift Licensed User #1229559 (Cost Data)
Appraisal Education:
Advanced Residential Applications Case Studies, Pt 1 and 2, Appraisal Institute, 2007
Highest Best Use Analysis and Market Analysis, 520 Appraisal Institute, 2006
Yellow Book Seminar, Federal Land Acquisitions, 2004
Supporting Capitalization Rates, Appraisal Institute, 2004
Regression Analysis in Appraisal Practice, Appraisal Institute, 2003
Standards of Professional Practice, Course 430, Appraisal Institute, 2001
Highest and Best Use Analysis, Appraisal Institute, 2001
Partial Interest Valuation, Divided, Appraisal Institute, 1999
Partial Interest Valuation, Undivided, Appraisal Institute, 1999
Small Retail Property Valuation, Appraisal Institute, 1998
Office Building Valuation, Appraisal Institute, November 1995
USPAP Update, Appraisal Institute, October 1995
Subdivision Analysis, Appraisal Institute, 1994
Discounted Cash Flow Analysis, Appraisal Institute, August 1994
Report Writing and Valuation Analysis, Athens, GA, 1992
Massachusetts Graduate Realtors Institute Course 1, 1978
Massachusetts Graduate Realtors Institute Course 2, 1979
Massachusetts Graduate Realtors Institute Course 3, 1979
American Institute of Real Estate Appraisers:
Principles of Real Estate Appraisal, 1982
Basic Valuation, 1982
Standards of Professional Practice, 1985
Capitalization, Part A, 1985, Capitalization, Part B, 1985
Investment Analysis, 1986
Industrial Valuation, 1986
Case Studies, 1986
Report Writing, 1987
Litigation Valuation, 1988
Society of Real Estate Appraisers:
1070 Fannie Mae Report Seminar, 1983
Developments in Income, Property Valuation, 1983
River Road, 101 acres
Northampton, Massachusetts
Principles of Income Property Appraising 201, 1984
Market and Marketability Analysis, 1984
R -41B Seminar, 1986
R-41C Seminar, 1987
Introductory Commercial Real Estate, 1984
Massachusetts Association of Realtors The Cost Approach to Value, Seminar, 1985
Massachusetts Association of Appraisers:
USPAP Appraisal Institute 1991
Teacher of Appraisal Courses
Greenfield Community College:
Instructor, Real Estate Appraisal, 1985
Instructor, Real Estate Investment Analysis, 1986
Instructor, Introduction to Real Estate Appraisal, 1987, 1988, 1989
Other Courses and Seminars:
Reviewing the URAR
Professional Associations and Affiliations
Pioneer Valley Plan for Progress, Trustee, 1995 -2002
Franklin County Chamber of Commerce, Board of Directors 1996 present
Greenfield Housing Partnership
Shelburne Housing Authority, Chairman of the Board, 2000 present
Franklin County Housing Partnership
Franklin County Community Development, Industrial Advisory Committee
Franklin County Chamber of Commerce, Mall Study Committee
Franklin County Chamber of Commerce, Technical Services Advisory Committee
Franklin County Planning Commission 1995, to present
Franklin County Board of Realtors:
Education Chairman, 1979
Franklin- Hampshire Board of Realtors:
Secretary 1983, 1984
Education Chairman, 1984
Director, 1985, 1986, 1987
Society of Real Estate Appraisers:
Board of Directors, Chapter 104, 1987
Chairman, Candidate Guidance Committee
Court Experience Qualified Witness:
Superior Court, Hampshire and Franlin Counties
Family and Probate Court, Franklin, Worcester Counties
MA Appellate Tax Court Northampton
Federal Bankruptcy Court, Worcester, MA
Federal District Court, Boston, MA
PARTIAL CLIENT LIST BANKS AND FINANCIAL INSTITUTIONS
Fleet Bank of Massachusetts, N.A.
Bank of America, Greenfield and Boston, MA
October 16, 2008
Page xxx
River Road, 101 acres
Northampton, Massachusetts
Greenfield Cooperative Bank, Greenfield
Greenfield Savings Bank, Greenfield
The Bank of Western Massachusetts
United Savings Bank, Greenfield, Shelburne Falls
Bank of Boston, Greenfield, Springfield, Pittsfield, Boston
Beneficial Finance Company, Greenfield
Home Equity, Danbury, Connecticut
Multibank National of Western Massachusetts, Northampton
Florence Savings Bank, Florence
Chicopee Co- Operative Bank, West Springfield
RECOLL Management Corporation, Hartford, Connecticut
OTHER CLIENTS
Olchowski and Olchowski, Attorneys, Greenfield
Thomas T. Merrigan, Attorney, Greenfield
Curtis, Callahan and Gates, Attorneys, Greenfield
Levy Winer, Attorneys, Greenfield
Northfield Mount Hermon School, Northfield
Deerfield Academy, Deerfield, MA
Bement School, Deerfield, MA
Stoneleigh Burnham School, Greenfield, MA
Northfield Mt. Herman School, Northfield, MA
The Academy at Charlemont, Charlemont, MA
The University of Massachusetts, Amherst, MA
Hampshire College, Amherst, MA
Farren Memorial Hospital, Montague
Franklin Medical Center, Greenfield
Franklin Land Trust, Buckland, MA
Mt. Grace Land Conservation Trust, Athol, MA
Rattlesnake Gutter Land Trust, Leverett, MA
YMCA, Greenfield, MA
Bulkley, Richardson and Gelinas, Springfield
Cooley, Shrair, Alpert, Labovitz, Dambrov, P.C., Springfield
GOVERNMENT AGENCIES
US Fish and Wildlife Service, Regional Office, Hadley, MA
Franklin County Regional Housing Authority, Greenfield, MA
Franklin County Development Corporation, Greenfield, MA
Massachusetts Land Bank
Massachusetts Highway Department
Department of Environmental Management, Comm, of MA
Department of Fisheries and Wildlife Management, Comm. of MA
Massachusetts Department of Capital Asset Management, Boston, MA
Massachusetts Housing Partnership, Boston, MA
Towns Cities: Amherst, Athol, Ashfield, Bernardston, Buckland, Belchertown, Conway, Colrain,
Deerfield, Erving, Greenfield, Gill, Heath, Deerfield, Leverett, Montague, Monroe, Northampton,
Northfield, Orange, Pittsfield, Shelburne, Shutesbury, Sunderland, Whately, Wendell,
October 16, 2008
Page xxxi